AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated October 3, 1999 between Summit
Bancorp., a New Jersey business corporation ("Summit"), and NMBT CORP, a
Delaware corporation ("NMBT").
W I T N E S S E T H :
WHEREAS, the respective boards of directors of Summit and NMBT deem it
advisable and in the best interests of their respective shareholders to adopt a
plan of reorganization in accordance with the provisions of Section 368 of the
Internal Revenue Code of 1986, as amended ( "Code") providing for the
acquisition of NMBT by Summit on the terms and conditions provided for in this
Agreement and Plan of Merger ("Agreement");
WHEREAS, the Board of Directors of Summit and NMBT have each determined
that the reorganization contemplated by this Agreement ("Reorganization") is
consistent with, and in furtherance of, their respective business strategies and
goals;
WHEREAS, Summit and NMBT intend on the day after the date of this
Agreement and in consideration of this Agreement to enter into the Stock Option
Agreement ("Option Agreement") attached hereto as Exhibit B; and
WHEREAS, the parties desire to make certain representations, warranties
and agreements in connection with the Reorganization and also to prescribe
certain other terms and conditions of the Reorganization.
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements contained herein and in the Option
Agreement, the parties hereto, intending to be legally bound, agree as follows:
ARTICLE I.
GENERAL PROVISIONS
Section 1.01. The Reorganization.
(a) Upon the terms and subject to the conditions contained in this
Agreement, at the Effective Time (as defined at Section 1.06), the
Reorganization shall be effected as follows:
(1) NMBT shall be merged with and into Summit pursuant to and in
accordance with the provisions of, and with the effect provided in, the New
Jersey Business Corporation Act, as amended ("New Jersey Act") and the Delaware
General Corporation Law, as amended ("Delaware Law"); or
(2) NMBT shall be merged into a wholly owned subsidiary of Summit
or a wholly owned subsidiary of Summit shall be merged into NMBT, in either case
pursuant to and in accordance with the provisions of, and with the effect
provided in, the corporate laws of the jurisdiction of incorporation of each of
the constituent corporations in such merger ("Applicable Corporation Laws").
(b) Summit shall prior to the Effective Time elect the method for
carrying out the Reorganization from among those methods set forth at Section
1.01(a) ("Reorganization Election")
and following an election of the Reorganization method provided for at Section
1.01(a)(2) Summit shall (i) cause the wholly owned subsidiary of Summit
designated as the constituent corporation in the Reorganization ("Designated
Summit Subsidiary") to approve, execute and deliver this Agreement in accordance
with all Applicable Corporation Laws, (ii) cause this Agreement to be approved
by the sole shareholder of the Designated Summit Subsidiary, (iii) attach as
Exhibit A to this Agreement (A) any additional terms and conditions to this
Agreement required by Applicable Corporation Laws to effect the Reorganization
and other transactions contemplated by this Agreement, (B) the terms and
conditions of any agreement or plan of merger required by Applicable Corporation
Laws, (C) the date and time that the merger shall be effective or the mechanism
for determining the date and time that the merger shall be effective and (D)
such other terms and conditions as Summit shall determine in its discretion to
be desirable and not contrary to this Agreement or Applicable Corporation Laws
regarding the corporate governance of the corporation surviving the merger
contemplated by Section 1.01(a), including without limitation terms and
conditions governing certificates or articles of incorporation and amendments
thereto or restatements thereof, by-laws of the corporation surviving the merger
and amendments thereto, and directors and officers of the corporation surviving
the merger; provided, however, that no provision of Exhibit A shall (x) alter or
change the amount or kind of consideration to be received by NMBT Shareholders
(as defined at Section 1.07(c) below) as provided for in this Agreement on the
date hereof, (y) adversely affect the tax treatment of the Reorganization
Consideration (as defined in Section 1.03(a)(2) below) to be received by NMBT
Shareholders or (z) materially impede or delay consummation of the transactions
contemplated by this Agreement and (iv) cause the Designated Summit Subsidiary
to take all actions appropriate to accomplish the Reorganization and the other
transactions contemplated by this Agreement. Exhibit A as so constituted shall
constitute a part of this Agreement as fully as if attached hereto on the date
hereof without separate execution by Summit or NMBT.
Section 1.02. Capital Stock of Summit. All shares of the capital stock of
Summit issued or issued and outstanding immediately prior to the Effective Time,
including the Common Stock, par value $.80 per share, of Summit and the rights
attached thereto ("Summit Rights") pursuant to the Rights Agreement dated as of
June 16, 1999 between Summit and First Chicago Trust Company of New York, as
Rights Agent ("Summit Rights Agreement") (references to "Summit Stock" herein
shall mean the Common Stock of Summit with Summit Rights attached thereto),
shall be unaffected by the Reorganization and shall remain issued or issued and
outstanding, as the case may be, immediately thereafter.
Section 1.03. Terms of Conversion of NMBT Capital Stock.
(a) At the Effective Time, by virtue of the Reorganization and without
any action on the part of any shareholder of NMBT:
(1) All shares of the Common Stock, par value $0.01 per share, of
NMBT ("NMBT Stock") which immediately prior to the Effective Time are
beneficially owned either directly, or indirectly through a bank, broker or
other nominee, by Summit or a subsidiary of Summit or NMBT or a subsidiary of
NMBT (other than NMBT Stock held as a result of foreclosures or debts previously
contracted and NMBT Stock held in fiduciary, discretionary and custodial
accounts and other representative capacities), if any, or held in the treasury
of NMBT, if any, shall be canceled and retired and no cash, securities or other
consideration shall be payable or paid or delivered under this Agreement in
exchange for such NMBT Stock; and
(2) Subject to Section 1.03(a)(1), outstanding shares of NMBT
Stock held as of the
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Effective Time by each NMBT Shareholder shall be converted in accordance with
the New Jersey Act and the Delaware Law into the right to receive whole shares
of Summit Stock and cash in lieu of fractional shares of Summit Stock as
follows: the aggregate number of shares of NMBT Stock held by each NMBT
Shareholder shall be multiplied by the Exchange Ratio (as defined at Section
1.03(c) below) and (i) a NMBT Shareholder shall become entitled to receive whole
shares of Summit Stock pursuant to this Section 1.03(a)(2) equal in number to
the whole number which results from the foregoing multiplication, and (ii) an
NMBT Shareholder shall become entitled to receive cash pursuant to this Section
1.03(a)(2) in lieu of a fractional share of Summit Stock, if any, equal in
amount to the product obtained by multiplying the fraction, if any, which
results from the foregoing multiplication by the closing price of one share of
Summit Stock on the New York Stock Exchange ("NYSE") Composite Transactions List
(as reported in The Wall Street Journal or, in the absence thereof, as reported
by another authoritative source mutually agreed upon by NMBT and Summit) on the
last trading day ending prior to the Effective Time ("Cash In Lieu Amount").
(The shares of Summit Stock issuable in accordance with this Section 1.03(a)(2)
are sometimes referred to herein as the "Shares"). (The Shares and any Cash In
Lieu Amounts payable in the Reorganization, both adjusted as and if necessary in
accordance with Section 1.03(b), are sometimes collectively referred to herein
as the "Reorganization Consideration").
(b) In the event that, from the date hereof to the Effective Time, the
outstanding Summit Stock shall have been increased, decreased, changed into or
exchanged for a different number or kind of shares or securities through
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split or there occur other like changes in the outstanding shares
of Summit Stock ("Capital Change"), the Exchange Ratio and, if necessary, the
form and amount of Summit capital stock issuable in the Reorganization in
exchange for NMBT Stock shall be appropriately adjusted to give effect to the
Capital Change.
(c) The "Exchange Ratio" is hereby defined to be the number determined in
accordance with the following provisions of this Section 1.03(c):
(A) If the Summit Price (as defined at Section 9.02(e)(ii)
below) is greater than $37.01563, the Exchange Ratio shall
be 0.7024;
(B) If the Summit Price is equal to or greater than $27.35938
and equal to or less than $37.01563, the Exchange Ratio
shall be equal to the quotient obtained by dividing $26.00
by the Summit Price; and
(C) If the Summit Price is less than $27.35938, the Exchange
Ratio shall be 0.9503.
Section 1.04. Reservation of Summit Stock; Issuance of Shares Pursuant to
the Reorganization. Summit shall reserve and make available for issuance to
holders of NMBT Stock in connection with the Reorganization, on the terms and
subject to the conditions of this Agreement, sufficient shares of Summit Stock
to effect the conversion contemplated by Section 1.03 and related terms of this
Agreement, which shares, when issued and delivered, will be duly authorized,
legally and validly issued, fully paid and non-assessable and subject to no
preemptive rights. Upon the terms and subject to the conditions of this
Agreement, particularly Sections 1.03 and 1.07, Summit shall issue the Shares
after the Effective Time to NMBT Shareholders.
Section 1.05. Exchange Agent Arrangements. Prior to the Effective Time,
Summit shall
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appoint Equiserve - First Chicago Trust Division, or another entity reasonably
satisfactory to NMBT, as the exchange agent ("Exchange Agent") responsible for
exchanging, in connection with and upon consummation of the Reorganization and
subject to Sections 1.03 and 1.07, certificates representing whole shares of
Summit Stock ("Summit Certificates") and Cash In Lieu Amounts for certificates
representing shares of NMBT Stock ("NMBT Certificates") and Summit shall deliver
to the Exchange Agent sufficient Summit Certificates and cash as shall be
required to satisfy Summit's obligations to NMBT Shareholders under Section
1.07(c), prior to the time such obligations arise.
Section 1.06. Effective Time. In the event that pursuant to the
Reorganization Election Summit elects the Reorganization method provided for at
Section 1.01(a)(1), the "Effective Time" of the Reorganization shall be the hour
and the date specified in the certificate of merger of Summit and NMBT filed
with the Secretary of State of the State of New Jersey in accordance with
Section 14A:10-4.1 of the New Jersey Act ("NJ Certificate") and the certificate
of merger of Summit and NMBT filed with the Secretary of State of the State of
Delaware ("Delaware Certificate") filed in accordance with Section 252 of the
Delaware Law, which such hour and date shall be identical in both the NJ
Certificate and the Delaware Certificate. In the event that pursuant to the
Reorganization Election Summit elects the Reorganization method provided for at
Section 1.01(a)(2), the "Effective Time" of the Reorganization shall be the date
and time specified in Exhibit A or determined in accordance with Exhibit A.
Section 1.07. Exchange of NMBT Certificates.
(a) After the Effective Time and subject to Section 1.07(c) below, each
NMBT Shareholder (except as provided otherwise in Section 1.03(a)(1) above),
upon surrender to the Exchange Agent of all NMBT Certificates registered to the
NMBT Shareholder, shall be entitled to receive in exchange therefor a Summit
Certificate representing the number of whole shares of Summit Stock such NMBT
Shareholder becomes entitled to receive pursuant to Section 1.03(a)(2) and the
Cash In Lieu Amount, payable by check, such NMBT Shareholder may become entitled
to receive pursuant to Section 1.03(a)(2). Until so surrendered, outstanding
NMBT Certificates held by each NMBT Shareholder, other than NMBT Certificates
governed by Section 1.03(a)(1), shall be deemed for all purposes (other than as
provided below with respect to unsurrendered NMBT Certificates and Summit's
right to refuse payment of dividends or other distributions, if any, in respect
of Summit Stock) to represent only the right to receive the number of whole
shares of Summit Stock and the Cash In Lieu Amount, if any, without interest,
determined in accordance with Section 1.03(a)(2). Until so surrendered, Summit
may, at its option, refuse to pay to the holders of the unsurrendered NMBT
Certificates dividends or other distributions, if any, on Summit Stock declared
after the Effective Time; provided, however, that upon the surrender and
exchange of NMBT Certificates following a dividend or other distribution on
Summit Stock there shall be paid to such NMBT Shareholders the amount, without
interest, of dividends and other distributions, if any, which became payable
prior to such surrender and exchange but which were not paid.
(b) Holders of NMBT Certificates as of the Effective Time shall cease to
be, and shall have no further rights as, shareholders of NMBT.
(c) As promptly as practicable, but in no event more than 10 days, after
the Exchange Agent receives an accurate and complete list of all holders of
record of outstanding NMBT Stock as of the Effective Time ("NMBT Shareholders")
(including the address and social security number of and the number of shares of
NMBT Stock held by each NMBT Shareholder) from NMBT ("Final Shareholder List"),
Summit shall cause the Exchange Agent to send to each NMBT Shareholder
instructions and transmittal materials for use in surrendering and exchanging
NMBT Certificates for
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the Reorganization Consideration. If NMBT Certificates are properly presented to
the Exchange Agent (with proper presentation including satisfaction of all
requirements of the letter of transmittal), Summit shall as soon as practicable,
but in no event more than 10 days, after the later to occur of such presentment
or the receipt by the Exchange Agent of an accurate and complete Final
Shareholder List from NMBT cause the Exchange Agent to cancel and exchange NMBT
Certificates for Summit Certificates and Cash In Lieu Amounts, if any; provided,
however, that if the Exchange Agent, in order to satisfy its obligations under
the Code with respect to the reporting of dividend income to former shareholders
of NMBT, must suspend the exchange process provided for in the second sentence
of this Section 1.07(c) in order to preserve and report the required reporting
information, the 10-day exchange requirement shall be extended 5 business days
for exchanges being processed by the Exchange Agent at the commencement of, or
which are received during, the period of the suspension.
(d) At and after the Effective Time there shall be no transfers on the
stock transfer books of NMBT of the shares of NMBT Stock which were outstanding
immediately prior to the Effective Time.
Section 1.08. Restated Certificate of Incorporation and By-Laws. In the
event that pursuant to the Reorganization Election Summit elects the
Reorganization method provided for at Section 1.01(a)(1): the Restated
Certificate of Incorporation of Summit in effect immediately prior to the
Effective Time shall be the Restated Certificate of Incorporation of the
corporation surviving the Reorganization ("Surviving Corporation"), except as
duly amended thereafter and except to the extent such is deemed by law to be
affected by the NJ Certificate; and the By-Laws of Summit in effect immediately
prior to the Effective Time shall be the By-Laws of the Surviving Corporation,
except as duly amended thereafter. In the event that pursuant to the
Reorganization Election Summit elects the Reorganization method provided for at
Section 1.01(a)(2), the certificate or articles of incorporation and by-laws of
the Surviving Corporation shall be as set forth in Exhibit A.
Section 1.09. Board of Directors and Officers. In the event that pursuant
to the Reorganization Election Summit elects the Reorganization method provided
for at Section 1.01(a)(1): the Board of Directors of the Surviving Corporation
shall consist of the members of the Board of Directors of Summit at the
Effective Time; the officers of the Surviving Corporation shall consist of the
officers of Summit at the Effective Time; and such directors and officers shall
serve as such for the terms prescribed in the Restated Certificate of
Incorporation and By-Laws of Summit, or as otherwise provided by law or until
their earlier deaths, resignation or removal. In the event that pursuant to the
Reorganization Election Summit elects the Reorganization method provided for at
Section 1.01(a)(2), the members of the Board of Directors and the officers of
the Surviving Corporation shall be as set forth in Exhibit A.
Section 1.10. NMBT Stock Options.
(a) At the Effective Time, each NMBT Option (as defined in Section
1.10(b) below) shall be deemed to constitute, and shall automatically be
converted on the terms set forth in this Section 1.10 into, options to purchase
Summit Stock ("Converted Options") and each Converted Option (i) shall
immediately vest to the extent the related NMBT Option was vested or as provided
in the NMBT Stock Compensation Plan (as defined at Section 2.01(d)(3) below)
under which the related NMBT Option was granted and in the stock option
agreement by which it was evidenced, and (ii) shall be administered in all
material respects in accordance with the terms and conditions provided for in
the NMBT Stock Compensation Plan under which the related NMBT Option was granted
and in the stock option agreement by which it was evidenced; provided, however,
that the following two
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revisions shall be made: (A) Converted Options held by any Converted Option
holder whose employment with Summit terminates within one year of the Effective
Time, other than due to a termination by Summit for cause, shall remain
exercisable until the later to occur of the exercisability termination date
provided for in the particular Converted Option or the first anniversary of the
Effective Date; provided further, however, that no Converted Option may be
exercised beyond the expiration date of the particular Converted Option; and (B)
Converted Option holders shall have the right, exercisable only for 30 days
following the Effective Time, in lieu of exercising all Converted Options then
outstanding, to elect to receive from Summit, with respect to all outstanding
Converted Options then held by such holders, a cash lump sum representing the
aggregate difference between the exercise price of their Converted Options and
the Summit Price. The number of shares of Summit Stock which may be purchased
upon exercise of a particular Converted Option shall be the number of shares of
NMBT Stock which would have been issuable upon exercise in full of the related
NMBT Option multiplied by the Exchange Ratio and rounded down to the nearest
whole number ("Converted Number"). The exercise price per share of Summit Stock
purchasable upon exercise of a Converted Option shall equal the aggregate
exercise price that would have been payable upon an exercise in full of the
related NMBT Option divided by the Converted Number and rounded up to the
nearest ten-thousandth of a dollar. In the event a Capital Change shall occur
prior to the Effective Time, an appropriate adjustment shall be made to the
terms of the NMBT Options at the time of the foregoing conversion so that
Converted Options give effect to the Capital Change. Within 45 days after the
receipt by Summit of an accurate and complete list of all holders of NMBT
Options, all information about the NMBT Options and the holders thereof
(including the address and social security number of each such holder and a
description of the NMBT Options held by such holder specifying, at a minimum,
the plan under which issued, type (incentive or nonqualified), grant date,
expiration date, exercise price and the number of shares of NMBT Stock subject
thereto) and copies of each form of option agreement, warrant agreement or
letter agreement entered into between NMBT and a holder of a NMBT Option (all of
the foregoing being collectively referred to as the "Final Option List and
Materials"), Summit shall issue to the holders of such NMBT Options appropriate
instruments confirming the rights of such holders with respect to Summit Stock,
on the terms and conditions provided by this Section 1.10, upon surrender of the
outstanding instruments representing such NMBT Options; provided, however, that
Summit shall not be obligated to issue any such confirming instruments which
relate to the issuance of Summit Stock, or issue any shares of Summit Stock,
until such time as the shares of Summit Stock issuable upon exercise of
Converted Options shall have been registered with the Securities and Exchange
Commission (the "SEC") pursuant to an effective registration statement and
authorized for listing on the NYSE and for sale by any appropriate state
securities regulators, which such registrations and authorizations Summit shall
use its best efforts to effect within 45 days after NMBT shall have delivered to
Summit the Final Option List and Materials. Summit shall use its best efforts to
maintain the effectiveness of such registration statement (and maintain the
current status of the prospectus or prospectuses contained therein) for so long
as any Converted Options remain outstanding. Summit shall take all corporate
action necessary to reserve for issuance a sufficient number of shares of Summit
Stock for delivery upon exercise of Converted Options. Notwithstanding anything
in the foregoing to the contrary, NMBT Options intended to qualify as "incentive
stock options" under the Code shall be converted into Converted Options in a
manner consistent with the preservation of such qualification under the Code.
(b) For purposes of this Section 1.10, "NMBT Option" is hereby defined to
mean an option relating to the purchase of NMBT Stock, and any rights
appurtenant thereto including Equity Based Rights (as defined at Section
2.01(d)(2) below), granted under a NMBT Stock Compensation Plan (as defined at
Section 2.01(d)(3) below), outstanding both on the date hereof and at the
Effective Time.
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Section 1.11. Additional Actions. If, at any time after the Effective
Time, the Surviving Corporation shall consider or be advised that any deeds,
bills of sale, assignments, assurances or any other actions or things are
necessary or desirable to vest, perfect or confirm of record or otherwise in the
Surviving Corporation its right, title or interest in, to or under any of the
rights, properties or assets of NMBT acquired or to be acquired by the Surviving
Corporation as a result of, or in connection with, the Reorganization or
otherwise to carry out this Agreement, the officers and directors of the
Surviving Corporation shall be authorized to execute and deliver, in the name
and on behalf of NMBT or otherwise, all such deeds, bills of sale, assignments
and assurances and to take, in the name and on behalf of NMBT, all such other
actions and things as may be necessary or desirable to vest, perfect or confirm
any and all right, title and interest in, to and under such rights, properties
or assets in the Surviving Corporation or otherwise to carry out this Agreement.
Section 1.12. Unclaimed Reorganization Consideration. If, upon the
expiration of one year following the Effective Time, Reorganization
Consideration remains with the Exchange Agent due to the failure of NMBT
Shareholders to surrender and exchange NMBT Certificates for Reorganization
Consideration, Summit may, at its election, continue to retain the Exchange
Agent for purposes of the surrender and exchange of NMBT Certificates or take
possession of such unclaimed Reorganization Consideration, in which such latter
case, NMBT Shareholders who have theretofore failed to surrender and exchange
NMBT Certificates shall thereafter look only to Summit for payment of the
Reorganization Consideration and the unpaid dividends and distributions on
Summit Stock declared after the Effective Time, without any interest thereon.
Notwithstanding the foregoing, none of Summit, NMBT, the Exchange Agent or any
other person shall be liable to any former holder of shares of NMBT Stock for
any property properly delivered to a public official pursuant to applicable
abandoned property, escheat or similar laws.
Section 1.13. Lost NMBT Certificates. In the event any NMBT Certificate
shall have been lost, stolen or destroyed, upon the making of an affidavit of
that fact by the person claiming such NMBT Certificate to be lost, stolen or
destroyed and the posting by such person of a personal, nonsurety bond in such
amount as Summit may determine is reasonably necessary as indemnity against any
claim that may be made against it with respect to such NMBT Certificate, the
Exchange Agent will issue in exchange for such lost, stolen or destroyed NMBT
Certificate the Reorganization Consideration deliverable in respect thereof
pursuant to this Agreement.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF NMBT
NMBT represents and warrants to Summit as follows (where an item required
to be disclosed on a NMBT Schedule is required to be disclosed on one or more
additional NMBT Schedules, or where a copy of an item required to be attached to
a NMBT Schedule is required to be attached to one or more additional NMBT
Schedules, such disclosure or copy need not be provided on more than one NMBT
Schedule provided the NMBT Schedules with respect to which the disclosure or
copy is required but not provided contain a cross reference to the location of
the required disclosure or copy in the NMBT Schedules which is clear and
unambiguous):
Section 2.01. Organization, Capital Stock.
(a) Each of NMBT and its nonbank subsidiaries, if any, including any
nonbank subsidiaries of Bank (as defined at Section 2.01(e) below), if any (the
term "subsidiary", as used in this Agreement, shall mean any corporation or
other organization of which 10% or more of the shares
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or other interests having by their terms ordinary voting power to elect a
majority of the Board of Directors or other group performing similar functions
with respect to such corporation or other organization is directly or indirectly
owned by NMBT or a "subsidiary" of NMBT; the term "indirect" ownership means
ownership through a succession of one or more other subsidiaries), all of which
are listed, together with their respective states of incorporation and direct
and indirect beneficial owners, on NMBT Schedule 2.01(a), is a corporation duly
organized, validly existing and in good standing under the laws of the state of
its incorporation, qualified to transact business under the laws of all
jurisdictions where it transacts business, except where the failure to be so
qualified is not reasonably be expected to have a material adverse effect on (i)
the business, results of operations, assets or financial condition of NMBT and
its subsidiaries on a consolidated basis, or (ii) the ability of NMBT to perform
its obligations under, and to consummate the transactions contemplated by, this
Agreement ("NMBT Material Adverse Effect"). However, a NMBT Material Adverse
Effect or NMBT Material Adverse Change (as defined at Section 2.03 below) will
not include a change resulting from a change in law, rule, regulation, generally
accepted or regulatory accounting principle or other matter affecting banking
institutions or their holding companies generally or from charges or expenses
incident to the Reorganization. Each of NMBT and its nonbank subsidiaries has
all corporate power and authority and all material licenses, franchises,
certificates, permits and other governmental authorizations which are legally
required to own and lease its properties and assets, to occupy its premises and
to engage in its business and activities as presently engaged in, and each has
complied in all material respects with all applicable laws, regulations and
orders.
(b) NMBT is registered as a bank holding company under the Bank Holding
Company Act of 1956, as amended ("BHCA").
(c) NMBT or one of its subsidiaries is the holder and beneficial owner of
all of the outstanding capital stock of all of NMBT's direct and indirect
nonbank subsidiaries.
(d) (1) The authorized capital stock of NMBT consists of 8,000,000 shares
of Common Stock, par value $0.01 per share, of which 2,668,558 shares are issued
and outstanding as of the date hereof, and 2,000,000 shares of Serial Preferred
Stock, par value $0.01 per share, of which no shares are issued or outstanding
as of the date hereof. All issued and outstanding shares of the capital stock of
NMBT and of each of its nonbank subsidiaries have been fully paid, were duly
authorized and validly issued, are nonassessable and have been issued pursuant
to an effective registration statement under the Securities Act of 1933, as
amended (the "Securities Act") or an appropriate exemption from registration
under the Securities Act and were not issued in violation of the preemptive
rights of any shareholder.
(2) Except as set forth in Section 2.01(d)(1), all Equity
Securities (as defined at Section 2.01(d)(4) below) of NMBT and its nonbank
subsidiaries outstanding, in existence, the subject of an agreement or reserved
for issuance ("Current Equity Securities"), and all rights or entitlements
appurtenant to, based upon, derived from or valued based on the performance or
value of Equity Securities of NMBT outstanding, in existence, the subject of an
agreement or reserved for issuance ("Equity Based Rights") are listed on NMBT
Schedule 2.01(d)(2) and all significant information relating to such Current
Equity Securities (other than Common Stock) and Equity Based Rights is listed on
NMBT Schedule 2.01(d)(2) including without limitation, where applicable, name of
holder, address and relationship to NMBT if not an employee of NMBT or a
subsidiary, date of grant, award or issuance, expiration dates, vesting dates,
the NMBT Stock Plan (as defined in Section 2.01(d)(3) below) under which
granted, awarded or issued, any intended qualification or nonqualification or
other status under the Code, those Current Equity Securities or Equity Based
Rights granted in
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tandem with other Current Equity Securities or Equity Based Rights, exercise
price, number of shares, valuation formula and performance goals. All Current
Equity Securities have been (to the extent such is capital stock or similar
equity interest) fully paid, were duly authorized and validly issued, are (to
the extent such is capital stock or similar equity interest) nonassessable and
have been issued pursuant to an effective registration statement under the
Securities Act or an appropriate exemption from registration under the
Securities Act and were not issued in violation of the preemptive rights of any
shareholder.
(3) All agreements, contracts, plans and arrangements, whether
oral or written or formal or informal, pursuant to which Current Equity
Securities or Equity Based Rights were granted, awarded or issued or which
provide for the granting, awarding or issuance of Equity Securities or Equity
Based Rights or are relevant in any fashion to Current Equity Securities or
Equity Based Rights ("NMBT Stock Plan") are listed on NMBT Schedule 2.01(d)(3).
All NMBT Stock Plans constituting a compensatory contract, plan or arrangement
("NMBT Stock Compensation Plan"), including all amendments thereto, are
separately identified on NMBT Schedule 2.01(d)(3) and have been duly approved by
the shareholders of NMBT where required by applicable law.
(4) "Equity Securities" of an issuer means (i) the capital stock
or other equity securities or equity interests of such issuer, (ii) options,
warrants, scrip, interests in, rights (including preemptive rights) to subscribe
to, purchase or acquire, calls on or commitments of any character whatsoever
relating to, or securities or rights convertible into or exchangeable for,
capital stock or other equity securities or equity interests or any security or
right convertible into or exchangeable for the capital stock or other equity
security or equity interests of such issuer, and (iii) contracts, commitments,
obligations, agreements, understandings or arrangements entitling anyone to
acquire from the issuer, or by which such issuer is or may become bound to
issue, capital stock or other equity security or equity interest or any security
or right convertible into or exchangeable for the capital stock or other equity
security or equity interest of such issuer.
(e) NMBT CORP owns a bank subsidiary named "NMBT" ("Bank"). NMBT CORP
owns no bank subsidiary other than Bank ("bank" is hereby defined to include
commercial banks, savings banks, private banks, trust companies, savings and
loan associations, building and loan associations and similar institutions
receiving deposits and making loans). Bank is a bank duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
organization and is qualified to transact business under the laws of all
jurisdictions where it transacts business, except where the failure to be so
qualified is not reasonably be expected to have a NMBT Material Adverse Effect.
Bank is duly authorized to conduct all activities and exercise all powers of a
commercial bank contemplated by the laws of its jurisdiction of organization.
Bank is an insured bank as defined in the Federal Deposit Insurance Act, and has
all corporate power and authority and all material licenses, franchises,
certificates, permits and other governmental authorizations which are legally
required to own and lease its properties and assets, to occupy its premises, and
to engage in its business and activities as presently engaged in, and has
complied in all material respects with all applicable laws, regulations and
orders.
(f) The authorized and outstanding capital stock of Bank is as set forth
on NMBT Schedule 2.01(f). NMBT is the holder and beneficial owner of all of the
issued and outstanding Equity Securities of Bank. All issued and outstanding
shares of the capital stock of Bank have been fully paid, were duly authorized
and validly issued, are non-assessable, and were not issued in violation of the
preemptive rights of any shareholder. All Equity Securities of Bank outstanding,
in existence, the subject of an agreement or reserved for issuance are described
in all material respects on NMBT Schedule 2.01(f).
9
(g) All Equity Securities of its direct and indirect subsidiaries
beneficially owned by NMBT or a subsidiary of NMBT are held free and clear of
any claims, liens, encumbrances or security interests.
Section 2.02. Financial Statements. The financial statements (and related
notes and schedules thereto) contained in or incorporated by reference into
NMBT's (a) annual report to shareholders for the fiscal year ended December 31,
1998, (b) annual report on Form 10-K filed pursuant to the Securities Exchange
Act of 1934, as amended ("Exchange Act") for the fiscal year ended December 31,
1998 and (c) quarterly reports on Form 10-Q filed pursuant to the Exchange Act
for the fiscal quarters ended March 31, 1999 and June 30, 1999 (the "NMBT
Financial Statements") are true and correct in all material respects as of their
respective dates and each fairly presents (subject, in the case of unaudited
statements, to recurring audit adjustments normal in nature and amount), in
accordance with generally accepted accounting principles, the consolidated
statements of condition, income, changes in stockholders' equity and cash flows
of NMBT and its subsidiaries at its respective date and for the period to which
it relates, except as may otherwise be described therein and except that, in the
case of unaudited statements, no consolidated statements of changes in
stockholders' equity are included. The NMBT Financial Statements do not, as of
the dates thereof, include any material asset or omit any material liability,
absolute or contingent, or other fact, the inclusion or omission of which
renders the NMBT Financial Statements, in light of the circumstances under which
they were made, misleading in any respect.
Section 2.03. No Conflicts. Except as set forth on NMBT Schedule 2.03,
NMBT and each of its subsidiaries is not in violation or breach of or default
under, and has received no notice of violation, breach, revocation or threatened
or contemplated revocation of or default or denial of approval under, nor will
the execution, delivery and performance of this Agreement by NMBT, or the
consummation of the transactions contemplated hereby including the
Reorganization by NMBT upon the terms provided herein (assuming receipt of the
Required Consents, as that term is defined in Section 4.01), violate, conflict
with, result in the breach of, constitute a default under, give rise to a claim
or right of termination, cancellation, revocation of, or acceleration under, or
result in the creation or imposition of any lien, charge or encumbrance upon any
of the material rights, permits, licenses, assets or properties of NMBT or any
of its subsidiaries or upon any of the Equity Securities of NMBT or any of its
subsidiaries, or constitute an event which could, with the lapse of time, action
or inaction by NMBT or any of its subsidiaries or a third party, or the giving
of notice and failure to cure, result in any of the foregoing, under any of the
terms, conditions or provisions, as the case may be, of:
(i) the certificate or articles of incorporation or articles of
association, as appropriate, or by-laws of NMBT or any of its
subsidiaries;
(ii) any applicable law, statute, rule, ruling, determination,
ordinance or regulation of or agreement with any governmental or
regulatory authority;
(iii) any judgment, order, writ, award, injunction or decree of any
court or other governmental authority; or
(iv) any material note, bond, mortgage, indenture, lease, policy of
insurance or indemnity, license, contract, agreement or other
instrument;
to which NMBT or any of its subsidiaries is a party or by which NMBT or any of
its subsidiaries or any of their assets or properties are bound or committed,
the consequences of which individually or
10
in the aggregate could reasonably be expected to result in a material adverse
change in the business, results of operations, assets or financial condition of
NMBT and its subsidiaries, on a consolidated basis, from that reflected in the
NMBT Financial Statements as of and for the six months ended June 30, 1999
("NMBT Material Adverse Change"), or enable any person to enjoin the
transactions contemplated hereby.
Section 2.04. Absence of Undisclosed Liabilities. NMBT and its
subsidiaries have no liabilities, whether contingent or absolute, direct or
indirect, matured or unmatured (including but not limited to liabilities for
federal, state and local taxes, penalties, assessments, lawsuits or claims
against NMBT or any of its subsidiaries), and no loss contingency (as defined in
Statement of Financial Accounting Standards No. 5), other than (a) those
reflected in the NMBT Financial Statements or disclosed in the notes thereto,
(b) commitments made by NMBT or any of its subsidiaries in the ordinary course
of its business which are not in the aggregate material to NMBT and its
subsidiaries, on a consolidated basis, and (c) liabilities arising in the
ordinary course of its business since June 30, 1999, which are not in the
aggregate material to NMBT and its subsidiaries, on a consolidated basis. Other
than as may be set forth on NMBT Schedule 2.04, neither NMBT nor any of its
subsidiaries has, since June 30, 1999, become obligated on any debt due in more
than one year from the date of this Agreement in excess of $100,000, other than
intra-corporate debt and deposits received, repurchase agreements and borrowings
from the Federal Home Loan Bank of Boston entered into in the ordinary course of
business.
Section 2.05. Absence of Litigation; Agreements with Bank Regulators.
There is no outstanding order, injunction or decree of any court or governmental
or self-regulatory body against or affecting NMBT or any of its subsidiaries
which materially and adversely affects NMBT and its subsidiaries, on a
consolidated basis, and there are no actions, arbitrations, claims, charges,
suits, investigations or proceedings (formal or informal) material to NMBT and
its subsidiaries, on a consolidated basis, pending or, to NMBT's knowledge,
threatened, against or involving NMBT or any of its subsidiaries or their
officers or directors (in their capacity as such) in law or equity or before any
court, panel or governmental agency, except as may be disclosed in the Forms
10-K and 10-Q of NMBT referred to in Section 2.02. Neither NMBT nor any
subsidiary of NMBT is a party to any agreement or memorandum of understanding
with, or is a party to any commitment letter to, or has submitted a board of
directors resolution or similar undertaking to, or is subject to any order or
directive by, or is a recipient of any extraordinary supervisory letter from,
any governmental or regulatory authority which restricts materially the conduct
of its business, or in any manner relates to material statutory or regulatory
noncompliance discovered in any regulatory examinations, its capital adequacy,
its credit or reserve policies or its management. Neither NMBT nor any
subsidiary of NMBT has been advised by any governmental or regulatory authority
that it is contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any of the foregoing. Neither NMBT nor
any subsidiary of NMBT has failed to resolve to the satisfaction of the
applicable regulatory agency any significant deficiencies cited by any such
agency in its most recently completed examination of each aspect of NMBT's or a
NMBT subsidiary's business nor has NMBT or any subsidiary of NMBT been advised
of any significant deficiencies by any such agency in connection with any
current examination of either NMBT or a subsidiary of NMBT by any such agency.
Section 2.06. Brokers' Fees. NMBT has entered into this Agreement with
Summit as a result of direct negotiations without the assistance or efforts of
any finder, broker, financial advisor or investment banker, other than Advest,
Inc. ("Advest"). NMBT Schedule 2.06 consists of true and complete copies of all
agreements between NMBT and Advest with respect to the transactions contemplated
by this Agreement or similar transactions.
11
Section 2.07. Regulatory Filings. All filings made by NMBT and its
subsidiaries after December 31, 1995 with the SEC and the appropriate bank
regulatory authorities did not contain any untrue statement of a material fact
and did not omit to state any material fact required to be stated herein or
therein or necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading. To the extent such
filings were subject to the Securities Act or Exchange Act, such filings
complied in all material respects with the Securities Act or Exchange Act, as
appropriate, and all applicable rules and regulations thereunder of the SEC or
the Federal bank regulatory agency having securities regulatory jurisdiction, as
appropriate. Each of the financial statements (including related notes and
schedules thereto) contained in or incorporated by reference into such filings
are true and correct in all material respects as of their respective dates and
each fairly presents (subject, in the case of unaudited statements, to recurring
audit adjustments normal in nature and amount), in accordance with generally
accepted accounting principles, the consolidated statements of condition,
income, changes in stockholders' equity and cash flows of NMBT and its
subsidiaries at its respective date or for the period to which it relates,
except as may otherwise be described therein and except that, in the case of
unaudited statements, no consolidated statements of changes in stockholders'
equity are included. NMBT and its subsidiaries have since December 31, 1995, to
the extent legally required, timely made all filings required by the Securities
Act and the Exchange Act, Federal and state banking laws and regulations and the
rules and regulations of the NASD and any other self-regulatory organization,
and have paid all fees and assessments due and payable in connection therewith.
Section 2.08. Corporate Action. Assuming due execution and delivery by
Summit, and subject to the requisite approval by the shareholders of NMBT of
this Agreement, the Reorganization and the other transactions contemplated
hereby in accordance with NMBT's Amended and Restated Certificate Incorporation
and the Delaware Law at a meeting of such holders to be duly called and held,
NMBT has the corporate power and is duly authorized by all necessary corporate
action to execute, deliver and perform this Agreement. The Board of Directors of
NMBT has taken all action required by law, its Amended and Restated Certificate
Incorporation, its By-Laws or otherwise (i) to authorize the execution and
delivery of this Agreement and (ii) for shareholders of NMBT to approve this
Agreement and the transactions contemplated hereby including the Reorganization
by a simple majority of the shares entitled to vote at the meeting held in
accordance with Section 4.03. Assuming due execution and delivery by and the
enforceability against Summit of this Agreement, this Agreement is a valid and
binding agreement of NMBT enforceable in accordance with its terms except as
such enforcement may be limited by applicable principles of equity, and by
bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or other
laws of general applicability presently or hereafter in effect affecting the
enforcement of creditors' rights generally or institutions the deposits of which
are insured by the Federal Deposit Insurance Corporation, or the affiliates of
such institutions. The Board of Directors of NMBT in authorizing the execution
of this Agreement has determined to recommend to the shareholders of NMBT the
approval of this Agreement, the Reorganization and the other transactions
contemplated hereby, subject to the proviso appearing in the last sentence of
Section 4.03 hereof.
Section 2.09. Absence of Changes. There has not been, since June 30,
1999, any NMBT Material Adverse Change. Except as may be set forth in NMBT
Schedule 2.09, neither NMBT nor any of its subsidiaries has since June 30, 1999:
(a) (i) declared, set aside or paid any dividend or other distribution in
respect of its Equity Securities, other than dividends from subsidiaries to NMBT
or other subsidiaries of NMBT, an ordinary cash dividend to NMBT shareholders of
$0.10 per share or less per fiscal quarter and the dividends provided for
herein, or, (ii) directly or indirectly purchased, redeemed or otherwise
acquired any shares of any Equity Securities; (b) incurred current liabilities
since that date other than in the ordinary course of business; (c) sold,
exchanged or
12
otherwise disposed of any of their assets except in the ordinary course of
business; (d) made any officers' salary increase or wage increase not consistent
with past practices, entered into any employment, consulting, severance or
change of control contract with any present or former director, officer or
salaried employee, or instituted any employee or director welfare, bonus, stock
option, profit-sharing, retirement, severance or other benefit plan or
arrangement or modified any of the foregoing so as to increase its obligations
thereunder in any material respect; (e) suffered any taking by condemnation or
eminent domain or other damage, destruction or loss in excess of $50,000,
whether or not covered by insurance, adversely affecting its business, property
or assets, or waived any rights of value in excess of $50,000; (f) entered into
transactions other than in the ordinary course of business which in the
aggregate exceeded $100,000; or (g) acquired assets or capital stock of another
company of whatsoever amount, except in a fiduciary capacity or in the course of
securing or collecting loans or leases.
Section 2.10. Allowance for Credit Losses. At June 30, 1999 and
thereafter the allowances for credit losses of NMBT and its subsidiaries were
and are adequate in all material respects to provide for all losses on loans and
leases outstanding and, to the best of NMBT's knowledge, the loan and lease
portfolios of NMBT in excess of such allowances are collectible in the ordinary
course of business. NMBT Schedule 2.10 constitutes a list of all loans and
leases made by NMBT or any of its subsidiaries that have been "classified" as to
quality by any internal or external auditor, accountant or examiner, and such
list is accurate and complete in all material respects.
Section 2.11. Taxes and Tax Returns. Neither NMBT nor any of its
subsidiaries has at any time filed a consent pursuant to Section 341(f) of the
Code or consented to have the provisions of Section 341(f)(2) of the Code apply
to any disposition of a subsection (f) asset (as such term is defined in Section
341(f)(4) of the Code) owned by NMBT or any of its subsidiaries. None of the
property being acquired by Summit or its subsidiaries in the Reorganization is
property which Summit or its subsidiaries will be required to treat as being
owned by any other person pursuant to the provisions of Section 168(f)(8) of the
Internal Revenue Code of 1954, as amended and in effect immediately prior to the
enactment of the Tax Reform Act of 1986 or is "tax-exempt use property" within
the meaning of Section 168(h)(1) of the Code. All amounts required to be
withheld have been withheld from employees by NMBT and each of its subsidiaries
for all periods in compliance with the tax, social security, unemployment and
other applicable withholding provisions of applicable federal, state and local
law. All federal, state and local returns (as defined below) required to be
filed have been timely filed by NMBT and each of its subsidiaries for all
periods for which returns were due, including with respect to employee income
tax withholding, social security, unemployment and other applicable taxes (as
defined below), are accurate, and the amounts shown thereon to be due and
payable, as well as any interest, additions, and penalties due with respect to
completed and settled examinations or concluded litigation relating to NMBT or
any of its subsidiaries, have been paid in full or adequate provision therefor
has been included on the books of NMBT or its appropriate subsidiary. Other than
franchise tax returns filed by NMBT with the State of Delaware, neither NMBT nor
any of its subsidiaries is required to file tax returns with any state other
than the State of Connecticut. Provision has been made on the books of NMBT or
its appropriate subsidiary for all unpaid taxes, whether or not disputed, that
may become due and payable by NMBT or any of its subsidiaries in future periods
in respect of transactions, sales or services occurring or performed prior to
the date of this Agreement. Neither the Internal Revenue Service ("IRS") nor the
State of Connecticut has audited any income tax returns of NMBT or its
subsidiaries. Neither NMBT nor any of its subsidiaries is subject to an audit or
review of its tax returns by any state other than the State of Connecticut. NMBT
is not and has not been a United States real property holding corporation as
defined in Section 897(c)(2) of the Code during the applicable period specified
in Section 897(c)(1)(A)(ii) of the Code. Neither NMBT nor any of its
subsidiaries is currently a party
13
to any tax sharing or similar agreement with any third party. There are no
material matters, claims, assessments, examinations, notices of deficiency,
demands for taxes, refund litigation, proceedings, audits or proposed
deficiencies pending or, to NMBT's knowledge, threatened against NMBT or any of
its subsidiaries, including a claim or assessment by any authority in a
jurisdiction where NMBT or any of its subsidiaries do not file tax returns and
NMBT or any such subsidiary is subject to taxation, and there have been no
waivers of statutes of limitations or agreements related to assessments or
collection in respect of any federal, state or local taxes. Neither NMBT nor any
of its subsidiaries has agreed to or is required to make any adjustment pursuant
to Section 481(a) of the Code by reason of a change in accounting method
initiated by NMBT or any of its subsidiaries, and neither NMBT nor any of its
subsidiaries has any knowledge that the IRS has proposed any such adjustment or
change in accounting method. NMBT and its subsidiaries have complied in all
material respects with all requirements relating to information reporting,
including tax identification number reporting, and withholding (including
back-up withholding) and other requirements relating to the reporting of
interest, dividends and other reportable payments under the Code and state and
local tax laws and the regulations promulgated thereunder and other requirements
relating to reporting under federal law including record keeping and reporting
on monetary instruments transactions.
For purposes of this Agreement, "taxes" shall mean all taxes, charges,
fees, levies, penalties or other assessments imposed by any United States
Federal, state, local, or foreign taxing authority, including, but not limited
to, income, excise, property, sales, transfer, franchise, payroll, withholding,
social security or other taxes, including any interest, penalties or additions
attributable thereto; and "return" shall mean any return, report, information
return or other documents (including any related or supporting information) with
respect to taxes.
Section 2.12. Properties. NMBT has, directly or through its subsidiaries,
good and marketable title to all of its properties and assets, tangible and
intangible, including those reflected in the NMBT Financial Statements (except
individual properties and assets disposed of since June 30, 1999 in the ordinary
course of business), which properties and assets are not subject to any
mortgage, pledge, lien, charge or encumbrance other than as reflected in the
NMBT Financial Statements or which in the aggregate do not materially adversely
affect or impair the operation of NMBT and its subsidiaries on a consolidated
basis. NMBT and each of its subsidiaries enjoys peaceful and undisturbed
possession under all material leases under which it is the lessee, where the
failure to enjoy such peaceful and undisturbed possession would be likely to
have a NMBT Material Adverse Effect, and none of such leases contains any
unusual or burdensome provision which would be likely to materially and
adversely affect or impair the operations of NMBT and its subsidiaries, on a
consolidated basis.
Section 2.13. Condition of Properties; Insurance. All real and tangible
personal properties owned or leased by NMBT or any of its subsidiaries are in a
good state of maintenance and repair, are in good operating condition, subject
to normal wear and tear, conform (as to owned properties only) in all material
respects to all applicable ordinances, regulations and zoning laws, and are
adequate for the business conducted by NMBT or such subsidiary subject to
exceptions which are not, in the aggregate, material to NMBT and its
subsidiaries, on a consolidated basis. NMBT and each of its subsidiaries
maintains insurance (with companies which, to the best of NMBT's knowledge, are
approved by all appropriate state insurance regulators to sell such insurance
where purchased by NMBT) against loss relating to such properties and such other
risks as companies engaged in similar business located in Connecticut, would, in
accordance with good business practice, be customarily insured in amounts which
are customary, usual and prudent for corporations or banks, as the case may be,
of their size. Such policies are in full force and effect and are carried
14
in an amount and form and are otherwise adequate to protect NMBT and each of its
subsidiaries from any adverse loss resulting from risks and liabilities
reasonably foreseeable at the date hereof, and are disclosed on NMBT Schedule
2.13. All material claims thereunder have been filed in a due and timely
fashion. Since December 31, 1994, neither NMBT nor any of its subsidiaries has
been refused insurance for which it has applied or had any policy of insurance
terminated (other than at its request) nor has NMBT or any subsidiary received
notice from any insurance carrier that (i) such insurance will be canceled or
that coverage thereunder will be reduced or eliminated or (ii) premium costs
with respect to such insurance will be increased, other than premium increases
in the ordinary course of business applicable on their terms to all insureds.
Section 2.14. Contracts.
(a) Except as set forth in NMBT Schedule 2.14(a), neither NMBT nor any of
its subsidiaries is a party to and neither they nor any of their assets are
bound by any written or oral lease or license with respect to any property, real
or personal, as tenant or licensee involving an annual consideration in excess
of $50,000.
(b) Except as set forth in NMBT Schedule 2.14(b), neither NMBT nor any of
its subsidiaries is a party to and neither they nor any of their assets are
bound by any written or oral: (i) employment or severance contract (including,
without limitation, any NMBT bargaining contract or union agreement) or other
agreement with any director or any officer or other employee of NMBT or any
subsidiary, the benefits of which are contingent, or the terms of which are
materially altered, upon the occurrence of a transaction involving NMBT or any
of its subsidiaries of the nature contemplated by this Agreement which is not
terminable without penalty by NMBT or a subsidiary, as appropriate, on 60 days
or less notice; (ii) contract or commitment for capital expenditures in excess
of $50,000 for any one project or in excess of $100,000 in the aggregate for all
projects; (iii) contract or commitment whether for the purchase of materials or
supplies or for the performance of services involving consideration in excess of
$50,000 (including advertising and consulting agreements, data processing
agreements, and retainer agreements with attorneys, accountants, actuaries, or
other professionals); (iv) contract or option to purchase or sell any real or
personal property, other than to sell OREO property, involving consideration in
excess of $50,000; (v) agreement or plan, including any stock option plan, stock
appreciation rights plan, restricted stock plan, stock purchase plan, or any
other non-qualified compensation 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 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, (vi) agreement containing
covenants that limit the ability of NMBT or any of its subsidiaries to compete
in any line of business or with any person, or that involve any restriction on
the geographic area in which or method by which NMBT (including any successor
thereof) or any of its subsidiaries may carry on its business (other than as may
be required by law or any regulatory agency), (vii) agreement which by its terms
limits the payment of dividends by NMBT or any of its subsidiaries, (viii)
contract (other than this Agreement) limiting the freedom of NMBT or its
subsidiaries to engage in any type of banking or bank-related business
permissible under law; (ix) contract, plan or arrangement which provides for
payments of benefits payable to any participant therein or party thereto, and
which might render any portion of any such payments or benefits subject to
disallowance of deduction therefor as a result of the application of Section
280G of the Code or (x) any other contract material to the business of NMBT and
its subsidiaries, on a consolidated basis, and not made in the ordinary course
of business.
(c) Neither NMBT nor any of its subsidiaries is a party to or otherwise
bound by any contract, agreement, plan, lease, license, commitment or
undertaking which, in the reasonable
15
opinion of management of NMBT, is materially adverse, onerous, or harmful to any
aspect of the business of NMBT and its subsidiaries, on a consolidated basis.
Section 2.15. Pension and Benefit Plans.
(a) Neither NMBT nor any of its subsidiaries maintains an employee
pension benefit plan, within the meaning of Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or has made any
contributions to any such employee pension benefit plan maintained after
December 31, 1995, except employee pension benefit plans listed in NMBT Schedule
2.15(a) (individually a "NMBT Pension Plan" and collectively the "NMBT Pension
Plans"). In its present form each NMBT Pension Plan complies in all material
respects with all applicable requirements under ERISA and the Code (except for
amendments, if any, required by legislative or regulatory changes but for which
the applicable remedial amendment period has not yet expired). Each NMBT Pension
Plan which is intended to be qualified and exempt under Sections 401(a) and
501(a) of the Code, and the trust created thereunder, are so qualified and
exempt and NMBT or the subsidiary whose employees are covered by such NMBT
Pension Plan has received from the IRS a determination letter or opinion letter
to that effect and such determination letter or opinion letter may still be
relied on. No event has occurred and there has been no omission or failure to
act which would adversely affect such qualification or exemption (other than the
failure of NMBT or a NMBT subsidiary, or prototype plan sponsors, if applicable,
to adopt amendments, if any, required by legislative or regulatory changes but
for which the applicable remedial amendment period has not yet expired). Each
NMBT Pension Plan has been administered and communicated to the participants and
beneficiaries in accordance with its terms and ERISA, except for defects,
failures or omissions in administration or operation that could not reasonably
be expected to result in a material adverse effect. No employee or agent of NMBT
or any subsidiary whose employees are covered by a NMBT Pension Plan has engaged
in any action or failed to act in such manner that, as a result of such action
or failure, (i) the IRS could revoke, or refuse to issue (as the case may be), a
favorable determination as to such NMBT Pension Plan's qualification and the
associated trust's exemption (other than the failure to adopt amendments, if
any, required by legislative or regulatory changes but for which the applicable
remedial amendment period has not yet expired) or impose any material liability
or material penalty under the Code, or (ii) a participant or beneficiary or a
nonparticipating employee has been denied benefits properly due under such NMBT
Pension Plan in a manner that could reasonably be expected to result in a
material liability being imposed on NMBT or any NMBT subsidiary. No NMBT Pension
Plan is currently or has at any time after December 31, 1995 been subject to
Section 412 of the Code or Title IV of ERISA. To NMBT's knowledge, no person has
engaged in any prohibited transaction involving any NMBT Pension Plan or
associated trust within the meaning of Section 406 of ERISA or Section 4975 of
the Code. There are no pending, or to NMBT's knowledge, threatened claims (other
than routine claims for benefits) against the NMBT Pension Plans or any
fiduciary thereof which would subject NMBT or any of its subsidiaries to a
material liability. All reports, filings, returns and disclosures and other
communications relating to any NMBT Pension Plan which have been required to be
made to the participants and beneficiaries, the SEC, the IRS, the U.S.
Department of Labor or any other governmental agency pursuant to the Code,
ERISA, or other applicable statute or regulation have been made in a timely
manner and all such reports, communications, filings, returns and disclosures
were true and correct in all material respects. "ERISA Affiliate" where used in
this Agreement means any trade or business (whether or not incorporated) which
is a member of a group of which NMBT is a member and which is under common
control within the meaning of Section 414 of the Code. Neither NMBT nor any of
its subsidiaries has any material liability under ERISA or the Code as a result
of its being a member of a group described in Sections 414(b), (c), (m) or (o)
of the Code.
16
There are no unfunded benefit or pension plans or arrangements, or any
individual agreements whether qualified or not, to which NMBT or any of its
subsidiaries or ERISA Affiliates has any obligation to contribute. No NMBT
Pension Plan is a "multiemployer plan" as that term is defined in Section 3(37)
of ERISA. There has been no change in control of any NMBT Pension Plan.
(b) All bonus, deferred compensation, profit-sharing, retirement,
pension, stock option, stock award and stock purchase plans and all other
employee benefit, health and welfare plans, arrangements or agreements,
including without limitation the NMBT Stock Compensation Plans and medical,
major medical, disability, life insurance or dental plans covering employees
generally, other than the NMBT Pension Plans, maintained by NMBT or any of its
subsidiaries with an annual cost in excess of $50,000 (collectively "NMBT
Benefit Plans") are listed in NMBT Schedule 2.15(b) (unless already listed in
NMBT Schedule 2.15(a) or NMBT Schedule 2.01(d)(3)) and comply in all material
respects with all applicable requirements imposed by the Securities Act, the
Exchange Act, ERISA, the Code, and all applicable rules and regulations
thereunder. The NMBT Benefit Plans have been administered and communicated to
the participants and beneficiaries in accordance with their terms and ERISA,
except for defects, failures or omissions in administration or operations that
could not reasonably be expected to result in a material adverse effect. No
employee or agent of NMBT or any of its subsidiaries has engaged in any action
or failed to act in such manner that, as a result of such action or failure, a
participant or beneficiary or a nonparticipating employee has been denied
benefits properly due under the NMBT Benefit Plans in a manner that could
reasonably be expected to result in a material liability being imposed on NMBT
or any NMBT subsidiary. There are no pending, or to NMBT's knowledge, threatened
claims (other than routine claims for benefits) against the NMBT Benefit Plans
which would subject NMBT or any of its subsidiaries to a material liability. Any
trust which is intended to be tax-exempt has received a determination letter
from the IRS to that effect and no event has occurred which would adversely
affect such exemption. All reports, filings, returns and disclosures relating to
the NMBT Benefit Plans required to be made to the participants and
beneficiaries, the SEC, the IRS, the U.S. Department of Labor and any other
governmental agency pursuant to the Code, ERISA, or other applicable statute or
regulation, if any, have been made in a timely manner and all such reports,
filings, returns and disclosures were true and correct in all material respects.
(c) There is no pending or, to NMBT's knowledge, threatened litigation,
administrative action or proceeding relating to any NMBT Benefit Plan or NMBT
Pension Plan. There has been no announcement or commitment by NMBT or any
subsidiary of NMBT to create an additional NMBT Benefit Plan or NMBT Pension
Plan, or to amend a NMBT Benefit Plan or NMBT Pension Plan, except for
amendments required by applicable law, which would materially increase the cost
of such NMBT Benefit Plan or NMBT Pension Plan. Except for any plans or
amendments expressly described on NMBT Schedule 2.01(d)(3), NMBT Schedule
2.15(a) or NMBT Schedule 2.15(b), NMBT and its subsidiaries do not have any
obligations for post-retirement or post-employment benefits under any NMBT
Benefit Plan (exclusive of any coverage mandated by the Consolidated Omnibus
Reconciliation Act of 1986 ("COBRA") or any similar state law that cannot be
amended or terminated upon more than sixty (60) days' notice without incurring
any liability thereunder. NMBT Schedule 2.15(c) consists of the following with
respect to each NMBT Benefit Plan and NMBT Pension Plan, to the extent
applicable: (A) the most recent annual report on the applicable form of the Form
5500 series filed with the IRS with all the attachments filed, (B) such NMBT
Benefit Plan or NMBT Pension Plan, including all amendments thereto, (C) each
trust agreement and insurance contract relating to such plan, including
amendments thereto, (D) the most recent summary plan description for such plan,
including amendments thereto, if the plan is subject to Title I of ERISA, and
(E) the most recent determination letter issued by the IRS if such plan is
qualified under Section 401(a) of the Code.
17
Section 2.16. Fidelity Bonds. Since December 31, 1992, NMBT and each of
its subsidiaries has continuously maintained fidelity bonds insuring them
against acts of dishonesty in such amounts as are customary, usual and prudent
for organizations of its size and business. All material claims thereunder have
been filed in a due and timely fashion. Since December 31, 1992, the aggregate
amount of all claims under such bonds has not exceeded the policy limits of such
bonds (excluding, except in the case of excess coverage, an amount equal to the
deductible in effect with respect to the claim, which such deductible did not
exceed $150,000) and neither NMBT nor any of its subsidiaries is aware of any
facts which would form the basis of a claim or claims under such bonds
aggregating in excess of the applicable deductible amounts under such bonds.
Neither NMBT nor any of its subsidiaries has reason to believe that its
respective fidelity coverage will not be renewed by its carrier on substantially
the same terms as the existing coverage, except for possible premium increases
unrelated to NMBT's and its subsidiaries' past claim experience.
Section 2.17. Labor Matters. Hours worked by and payment made to
employees of NMBT and each of its subsidiaries have not been in violation of the
Fair Labor Standards Act or any applicable law dealing with such matters; and
all payments due from NMBT and each of its subsidiaries on account of employee
health and welfare insurance have been paid or accrued as a liability on the
books of NMBT or its appropriate subsidiary. NMBT is in compliance in all
material respects with all other laws and regulations relating to the employment
of labor, including all such laws and regulations relating to NMBT bargaining,
discrimination, civil rights, safety and health, plant closing (including the
Worker Adjustment Retraining and Notification Act), workers' compensation and
the collection and payment of withholding and Social Security and similar taxes.
No labor dispute, strike or other work stoppage has occurred and is continuing
or is to its knowledge threatened with respect to NMBT or any of its
subsidiaries. Since December 31, 1994, no employee of NMBT or any of its
subsidiaries has been terminated, suspended, disciplined or dismissed under
circumstances which could constitute a material claim, suit, action, complaint
or proceeding likely to result in a material liability. No employees of NMBT or
any of its subsidiaries are unionized nor has union representation been
requested by any group of employees or any other person within the last two
years. There are no organizing activities involving NMBT pending with, or, to
the knowledge of NMBT, threatened by, any labor organization or group of
employees of NMBT.
Section 2.18. Books and Records. The minute books of NMBT and each of its
subsidiaries contain complete and accurate records of and fairly reflect all
actions taken at all meetings of the shareholders and of the boards of directors
and committees thereof and accurately reflect all other corporate action of the
shareholders and the boards of directors and each committee thereof. The books
and records of NMBT and each of its subsidiaries fairly and accurately reflect
the transactions to which NMBT and each of its subsidiaries is or has been a
party or by which their properties are subject or bound, and such books and
records have been properly kept and maintained.
Section 2.19. Concentrations of Credit. No customer or affiliated group
of customers (a) is owed by NMBT or any subsidiary of NMBT an aggregate amount
equal to more than 5% of the shareholders' equity of NMBT or such subsidiary
(including deposits, other debts and contingent liabilities) or (b) owes to NMBT
or any of its subsidiaries an aggregate amount equal to more than 5% of the
shareholders' equity of NMBT or such subsidiary (including loans and other
debts, guarantees of debts of third parties, and other contingent liabilities).
Section 2.20. Trademarks and Copyrights. Neither NMBT nor any of its
subsidiaries has received information that the manner in which NMBT or any of
its subsidiaries conducts its business including its current use of any material
trademark, trade name, service xxxx or copyright could be in violation of the
asserted rights of others in any trademark, trade name, service xxxx, copyright
or
18
other proprietary right.
Section 2.21. Equity Interests. Neither NMBT nor any of its subsidiaries
owns, directly or indirectly, except for the equity interests of NMBT in Bank
and the equity interests disclosed on NMBT Schedule 2.01(a), any equity
interest, other than by virtue of a security interest securing an obligation not
presently in default, in any bank, corporation, partnership or other entity,
except: (a) in a fiduciary capacity; or (b) an interest valued at less than
$25,000 acquired in connection with a foreclosure or debt previously contracted.
None of the investments reflected in the consolidated balance sheet of NMBT as
of June 30, 1999, and none of such investments made by it or any of its
subsidiaries since June 30, 1999, is subject to any restriction (contractual or
statutory), other than applicable securities laws, that would materially impair
the ability of the entity holding such investment freely to dispose of such
investment at any time, except to the extent any such investments are pledged in
the ordinary course of business (including in connection with hedging
arrangements or programs or reverse repurchase arrangements) consistent with
prudent banking practice to secure obligations of NMBT or any of its
subsidiaries.
Section 2.22. Environmental Matters.
(a) Except as disclosed on NMBT Schedule 2.22 or as may be disclosed in
the Forms 10-K and 10-Q of NMBT referred to in Section 2.02 hereof:
(1) To NMBT's actual knowledge, and except in compliance with
applicable law, no Hazardous Substances (as hereinafter defined) have been
stored, treated, dumped, spilled, disposed, discharged, released or deposited
at, under or on (1) any property now owned, occupied, leased or held or managed
in a representative or fiduciary capacity ("Present Property") by NMBT or any of
its subsidiaries, (2) any property previously owned, occupied, leased or held or
managed in a representative or fiduciary capacity ("Former Property") by NMBT or
any of its subsidiaries during the time of such previous ownership, occupancy,
lease; holding or management or (3) any Participation Facility (as hereinafter
defined) during the time that NMBT or any of its subsidiaries participated in
the management of, or may be deemed to be or to have been an owner or operator
of, such Participation Facility;
(2) Except in compliance with applicable law, neither NMBT nor any
of its subsidiaries has disposed of, or arranged for the disposal of, Hazardous
Substances from any Present Property, Former Property or Participation Facility,
and to NMBT's actual knowledge, and except in compliance with applicable law, no
owner or operator of a Participation Facility disposed of, or arranged for the
disposal of, Hazardous Substances from a Participation Facility during the time
that NMBT or any of its subsidiaries participated in the management of, or may
be deemed to be or to have been an owner or operator of, such Participation
Facility;
(3) To NMBT's actual knowledge, no Hazardous Substances have been
stored, treated, dumped, spilled, disposed, discharged, released or deposited
at, under or on any Loan Property (as hereinafter defined), nor is there, with
respect to any such Loan Property, any violation of environmental law which
could materially adversely affect the value of such Loan Property to an extent
which could prevent or delay NMBT or any of its subsidiaries from recovering the
full value of its loan in the event of a foreclosure on such Loan Property.
(b) Neither NMBT nor any subsidiary (i) is aware of any investigations
contemplated, pending or completed by any environmental regulatory authority
with respect to any Present Property, Former Property, Loan Property or
Participation Facility, (ii) has received any information
19
requests from any environmental regulatory authority, or (iii) been named as a
potentially responsible or liable party in any Superfund, Resource Conservation
and Recovery Act, Toxic Substances Control Act or Clean Water Act proceeding or
other equivalent state or federal proceeding.
(c) As used in this Agreement, (a) "Participation Facility" shall mean
any property or facility of which the relevant person or entity (i) has at any
time participated in the management or (ii) may be deemed to be or to have been
an owner or operator, (b) "Loan Property" shall mean any real property in which
the relevant person or entity holds a security interest in an amount greater
than $50,000 and (c) "Hazardous Substances" shall mean (i) any flammable
substances, explosives, radioactive materials, hazardous materials, hazardous
substances, hazardous wastes, toxic substances, pollutants or contaminants
defined as such in any applicable Federal or state law or regulation relating to
pollution or protection of human health or the environment (including, without
limitation, ambient or indoor air, surface water, groundwater, land surface or
subsurface strata) and (ii) friable asbestos, polychlorinated biphenyls, urea
formaldehyde, and petroleum and petroleum-containing products and wastes.
Section 2.23. Accounting, Tax and Regulatory Matters. Neither NMBT nor
any of its subsidiaries has taken or agreed to take any action or has any
knowledge of any fact or circumstance that would (i) prevent the transactions
contemplated hereby from qualifying as a reorganization within the meaning of
Section 368(a) of the Code, or (ii) materially impede or delay receipt of any
approval referred to in Section 4.01 or the consummation of the transactions
contemplated by this Agreement.
Section 2.24. Interest of Management and Affiliates.
(a) All loans presently on the books of NMBT or any of its subsidiaries
to present or former directors or executive officers of NMBT or any subsidiary
of NMBT, or their associates, or any members of their immediate families, have
been made in the ordinary course of business and on the same terms and interest
rates as those prevailing for comparable transactions with others and do not
involve more than the normal risk of repayment or present other unfavorable
features.
(b) Except as set forth and described in NMBT Schedule 2.24(b), no
present or former officer or director of NMBT or any of its subsidiaries or any
Associated Person (as defined in Section 2.24(d) below):
(1) has any interest in any property, real or personal, tangible
or intangible, used in or pertaining to the business of NMBT or any of its
subsidiaries except for the normal rights of a shareholder;
(2) has an agreement, understanding, contract, commitment or
pending transaction relating to the purchase, sale or lease of real or personal
property, goods, materials, supplies or services, whether or not in the ordinary
course of business, with NMBT or any of its subsidiaries ("Insider Agreements");
(3) has received from NMBT or any of its subsidiaries any
commitment, whether written or oral, to lend any funds to any such person;
(4) is owed any amounts by NMBT or any of its subsidiaries except
for deposits taken in the ordinary course of business and amounts due for normal
compensation or reimbursement of expenses incurred in furtherance of the
business of such person's employer and reimbursable
20
according to a policy of NMBT or such subsidiary, as appropriate, as in effect
immediately prior to the date hereof ("Insider Indebtedness").
(c) The consummation of the transactions contemplated hereby will not
(either alone, or upon the occurrence of any act or event, the lapse of time, or
the giving of notice and failure to cure) result in any payment (severance or
other) or provision of a benefit becoming due from NMBT or any of its
subsidiaries or any successor or assign thereof to any director, officer or
employee of NMBT or any of its subsidiaries or any successor or assign of such
subsidiary, other than payments and benefits due under the contracts and
agreements set forth in NMBT Schedule 2.14(a).
(d) "Associated Person" means (i) any holder of 10% of more of the
outstanding shares of NMBT Stock, (ii) any associate (as "associate" is defined
at Rule 14a-1(a) of the SEC) or relative ("relative" for purposes of this
Section 2.24 is defined as any person having a family relationship with the
subject person, as family relationship is defined in the Instruction to
Paragraph 401(d) of Regulation S-K of the SEC) of a present or former director
or executive officer of NMBT or any of its subsidiaries, (iii) any entity
controlled, directly or indirectly, individually or in the aggregate, by any
present or former director or executive officer of NMBT or any of its
subsidiaries or any relative or associate of any of such persons and (iv) any
entity 25% or more or the equity interests of which are owned individually or in
the aggregate by any present or former director or executive officer of NMBT or
any of its subsidiaries or any relative or associate of any of such persons.
Section 2.25 Registration Obligations. Neither the NMBT nor any of its
subsidiaries is under any contractual obligation, contingent or otherwise, to
register any of its securities under the Securities Act.
Section 2.26 Corporate Documents. The articles or certificate of
incorporation and by-laws, as amended to date, of NMBT and of each of its
subsidiaries previously provided to Summit constitute true and complete copies
of all articles or certificates of incorporation and by-laws, as amended to
date, which are currently in full force and effect for NMBT and of each of its
subsidiaries.
Section 2.27 Community Reinvestment Act Compliance. NMBT and its
subsidiaries are in substantial compliance with the applicable provisions of the
Community Reinvestment Act of 1977 and the regulations promulgated thereunder,
and received a CRA rating of at least satisfactory as of their last completed
examination. As of the date of this Agreement, NMBT has not been advised of the
existence of any fact or circumstance or set of facts or circumstances which, if
true, would cause NMBT or any subsidiary to fail to be in substantial compliance
with such provisions.
Section 2.28 Business of NMBT. Since June 30, 1999, NMBT has conducted
its business only in the ordinary course. For purposes of the foregoing, NMBT
has not, since June 30, 1999, controlled expenses through (i) elimination of
employee benefits, (ii) deferral of routine maintenance of real property or
leased premises, (iii) elimination of reserves where the liability related to
such reserve has remained, (iv) reduction of capital improvements from previous
levels, (v) failure to depreciate capital assets in accordance with past
practice or to eliminate capital assets which are no longer used in the business
of NMBT, (vi) capitalized loan production expenses other than in accordance with
Statement of Financial Accounting Standard No. 91, or (vii) extraordinary
reduction or deferral of ordinary or necessary expenses.
Section 2.29 Interest Rate Risk Management Instruments.
21
(a) Set forth on NMBT Schedule 2.29(a) is a list as of the date hereof of
all interest rate swaps, caps, floors and option agreements, and other interest
rate risk management arrangements to which NMBT or any of its subsidiaries is a
party or by which any of their properties or assets may be bound.
(b) All such interest rate swaps, caps, floors and option agreements and
other interest rate risk management arrangements to which NMBT or any of its
subsidiaries is a party or by which any of their properties or assets may be
bound were entered into the ordinary course of business and, in accordance with
prudent banking practice and applicable rules, regulations and policies of
regulatory authorities and with counterparties believed, at the time entered
into and at the date of this Agreement, to be financially responsible and are
legal, valid and binding obligations of NMBT or a subsidiary and are in full
force and effect. NMBT and each of its subsidiaries has duly performed in all
material respects all of its obligations thereunder to the extent that such
obligations to perform have accrued, and there are no material breaches,
violations or defaults or allegations or assertions of such by any party
thereunder.
Section 2.30. Takeover Laws; Dissenters' Rights. NMBT has taken all
action required to be taken by it in order to exempt this Agreement, the Option
Agreement and the transactions contemplated by each from, and this Agreement,
the Option Agreement and the transactions contemplated by each are exempt from,
the requirements of any "moratorium", "control share", "fair price", "affiliate
transaction", "control transaction", business combination" or other antitakeover
(i) laws and regulations of the State of Delaware, or (ii) provisions in the
Amended and Restated Certificate of Incorporation or By-Laws of NMBT. Holders of
NMBT Stock do not have dissenters' or appraisal rights in connection with the
execution of this Agreement or the consummation of any of the transactions
contemplated hereby.
Section 2.31. Year 2000 Compliant. To the best knowledge of NMBT, all
material computer software and hardware owned or licensed by NMBT or any of its
subsidiaries is, or NMBT has taken all required steps to be, Year 2000
compliant, which, for purposes of this Agreement, shall mean that the data
outside the range 1900-1999 will be correctly processed in any level of computer
hardware or software including, but not limited to, microcode, firmware,
applications programs, files and databases. All material computer software owned
or licensed by NMBT is, or NMBT has taken steps (including obtaining warranties
from the vendors thereof in respect of compliance) to ensure that all such
computer software will be, designed to be used prior to, during and after the
calendar year 2000 AD and such software will operate during each such time
period, without error relating to date data, specifically including any error
relating to, or the product of, date data that represents or references
different centuries or more than one century.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SUMMIT
Summit represents and warrants to NMBT as follows:
Section 3.01. Organization, Capital Stock.
(a) Summit is a corporation duly organized, validly existing and in good
standing under the laws of the State of New Jersey with authorized capital stock
consisting of (i) 390,000,000 shares of Common Stock, par value $.80 per share,
with the Summit Rights attached thereto pursuant to the Rights Agreement, of
which 177,061,084 shares were issued and outstanding as of August 1, 1999
22
and (ii) 6,000,000 shares of Preferred Stock, each without par value, of which
no shares are issued and outstanding and 1,500,000 shares of Series R Preferred
Stock are reserved for issuance as of the date hereof
(b) Summit is qualified to transact business in and is in good standing
under the laws of all jurisdictions where the failure to be so qualified could
reasonably be expected to have a material adverse effect on (i) the business,
results of operations, assets or financial condition of Summit and its
subsidiaries on a consolidated basis, or (ii) the ability of Summit to perform
its obligations under, and to consummate the transactions contemplated by, this
Agreement (a "Summit Material Adverse Effect"). However, a Summit Material
Adverse Effect or Summit Material Adverse Change (as defined at Section 3.03)
will not include a change resulting from a change in law, rule, regulation,
generally accepted or regulatory accounting principle or other matter affecting
financial institutions or their holding companies generally or from charges or
expenses incident to the Reorganization. The bank subsidiaries of Summit are
duly organized, validly existing and in good standing under the laws of their
jurisdiction of organization. Summit and its bank subsidiaries have all
corporate power and authority and all material licenses, franchises,
certificates, permits and other governmental authorizations which are legally
required to own and lease their respective properties, occupy their respective
premises, and to engage in their respective businesses and activities as
presently engaged in, except where the failure of such would not have a Summit
Material Adverse Effect. Summit and its bank subsidiaries have each complied
with all applicable laws, regulations and orders except where the failure to so
comply would not have a Summit Material Adverse Effect. Summit is duly
registered as a bank holding company under the BHCA.
(c) All issued shares of the capital stock of Summit and of each of its
bank subsidiaries have been fully paid, were duly authorized and validly issued,
are non-assessable, have been issued pursuant to an effective registration
statement under the Securities Act or an appropriate exemption from registration
under the Securities Act and were not issued in violation of the preemptive
rights of any shareholder. Summit or one of its subsidiaries is the holder and
beneficial owner of all of the issued and outstanding Equity Securities of its
bank subsidiaries. There are no Equity Securities of Summit outstanding, in
existence, the subject of an agreement, or reserved for issuance, except as set
forth at Section 3.01(a) and except for Summit Stock issuable upon the exercise
of employee stock options granted under stock option plans of Summit, Summit
Stock issuable pursuant to Summit's Dividend Reinvestment and Stock Purchase
Plan, Savings Incentive Plan, 1993 Incentive Stock and Option Plan, 1999
Non-Executive Option Plan and Series R Preferred Stock issuable pursuant to the
Summit Rights Agreement.
(d) All Equity Securities of its direct and indirect subsidiaries
beneficially owned by Summit or a subsidiary of Summit are held free and clear
of any claims, liens, encumbrances or security interests.
(e) Each bank subsidiary of Summit is duly authorized to conduct all
activities and exercise all powers of a commercial bank or savings bank
contemplated by the laws of its jurisdiction of organization. Each such bank
subsidiary is an insured bank as defined in the Federal Deposit Insurance Act.
Section 3.02. Financial Statements. The financial statements (and related
notes and schedules thereto) contained in or incorporated by reference into
Summit's (a) annual report to shareholders for the fiscal year ended December
31, 1998, (b) annual report on Form 10-K pursuant to the Exchange Act for the
fiscal year ended December 31, 1998 and (c) quarterly reports on Form 10-Q filed
pursuant to the Exchange Act for the fiscal quarters ended March 31, 1999 and
June 30,
23
1998 (the "Summit Financial Statements") are true and correct in all material
respects as of their respective dates and each fairly presents (subject, in the
case of unaudited statements, to recurring audit adjustments normal in nature
and amount), in accordance with generally accepted accounting principles
consistently applied, the consolidated balance sheets, statements of income,
statements of shareholders' equity and statements of cash flows of Summit and
its subsidiaries at its respective date or for the period to which it relates,
except as may otherwise be described therein and except that, in the case of
unaudited statements, no consolidated statements of changes in stockholders'
equity are included. The Summit Financial Statements do not, as of the dates
thereof, include any material asset or omit any material liability, absolute or
contingent, or other fact, the inclusion or omission of which renders the Summit
Financial Statements, in light of the circumstances under which they were made,
misleading in any respect.
Section 3.03. No Conflicts. Summit is not in violation or breach of or
default under, and has received no notice of violation, breach, revocation or
threatened or contemplated revocation of or default or denial of approval under,
nor will the execution, delivery and performance of this Agreement by Summit, or
the consummation of the Reorganization by Summit upon the terms and conditions
provided herein (assuming receipt of the Required Consents), violate, conflict
with, result in the breach of, constitute a default under, give rise to a claim
or right of termination, cancellation, revocation of, or acceleration under, or
result in the creation or imposition of any lien, charge or encumbrance upon any
rights, permits, licenses, assets or properties material to Summit and its
subsidiaries, on a consolidated basis, or upon any of the capital stock of
Summit, or constitute an event which could, with the lapse of time, action or
inaction by Summit, or a third party, or the giving of notice and failure to
cure, result in any of the foregoing, under any of the terms, conditions or
provisions, as the case may be, of:
(i) the Restated Certificate of Incorporation or the By-Laws of Summit;
(ii) any law, statute, rule, ruling, determination, ordinance, or
regulation of any governmental or regulatory authority;
(iii) any judgment, order, writ, award, injunction, or decree of any
court or other governmental authority; or
(iv) any material note, bond, mortgage, indenture, lease, policy of
insurance or indemnity, license, contract, agreement, or other
instrument;
to which Summit is a party or by which Summit or any of its assets or properties
are bound or committed, the consequences of which would be a material adverse
change in the business, results of operations, assets or financial condition of
Summit and its subsidiaries, on a consolidated basis, from that reflected in the
Summit Financial Statements as of and for the six months ended June 30, 1999 (a
"Summit Material Adverse Change"), or enable any person to enjoin the
transactions contemplated hereby.
Section 3.04. Absence of Litigation, Agreements with Bank Regulators.
There is no outstanding order, injunction, or decree of any court or
governmental or self-regulatory body against or affecting Summit or its
subsidiaries which materially and adversely affects Summit and its subsidiaries,
on a consolidated basis, and there are no actions, arbitrations, claims,
charges, suits, investigations or proceedings (formal or informal) material to
Summit and its subsidiaries, on a consolidated basis, pending or, to Summit's
knowledge, threatened, against or involving Summit or their officers or
directors (in their capacity as such) in law or equity or before any court,
panel or
24
governmental agency, except as may be disclosed in the Forms 10-K and 10-Q of
Summit referred to in Section 3.02. Neither Summit nor any bank subsidiary of
Summit is a party to any agreement or memorandum of understanding with, or is a
party to any commitment letter to, or has submitted a board of directors
resolution or similar undertaking to, or is subject to any order or directive
by, or is a recipient of any extraordinary supervisory letter from, any
governmental or regulatory authority which restricts materially the conduct of
its business, or in any manner relates to its capital adequacy, its credit or
reserve policies or its management. Neither Summit nor any bank subsidiary of
Summit, has been advised by any governmental or regulatory authority that it is
contemplating issuing or requesting (or is considering the appropriateness of
issuing or requesting) any of the foregoing. Summit and the bank subsidiaries of
Summit have resolved to the satisfaction of the applicable regulatory agency any
significant deficiencies cited by any such agency in its most recent
examinations of each aspect of Summit or such bank subsidiary's business except
for examinations, if any, received within the 30 days prior to the date hereof.
Section 3.05. Regulatory Filings. At the time of filing, all filings made
by Summit and its subsidiaries after December 31, 1995 with the SEC and
appropriate bank regulatory authorities did not contain any untrue statement of
a material fact and did not omit to state any material fact required to be
stated herein or therein or necessary to make the statements contained herein or
therein, in light of the circumstances under which they were made, not
misleading. To the extent such filings were subject to the Securities Act or
Exchange Act, such filings complied in all material respects with the Securities
Act or Exchange Act, as appropriate, and all applicable rules and regulations
thereunder of the SEC. Summit has since December 31, 1995 timely made all
filings required by the Securities Act and the Exchange Act, as appropriate, and
all applicable rules and regulations thereunder of the SEC or the Federal bank
regulatory agency having securities regulatory jurisdiction, as appropriate.
Each of the financial statements (including related notes and schedules thereto)
contained in or incorporated by reference into such filings are true and correct
in all material respects as of their respective dates and each fairly presents
(subject, in the case of unaudited statements, to recurring audit adjustments
normal in nature and amount), in accordance with generally accepted accounting
principles, the consolidated statements of condition, income, changes in
stockholders' equity and cash flows of Summit and its subsidiaries at its
respective date and for the period to which it relates, except as may otherwise
be described therein and except that in the case of unaudited statements, no
consolidated statements of changes in stockholders equity is included.
Section 3.06. Corporate Action.
(a) Assuming due execution and delivery by NMBT, Summit has the corporate
power and is duly authorized by all necessary corporate action to execute,
deliver, and perform this Agreement. The Board of Directors of Summit has taken
all action required by law or by the Restated Certificate of Incorporation or
By-Laws of Summit or otherwise to authorize the execution and delivery of this
Agreement. Approval by the shareholders of Summit of this Agreement, the
Reorganization or the transactions contemplated by this Agreement is not
required by applicable law. Assuming due execution and delivery by and the
enforceability against NMBT of this Agreement, this Agreement is a valid and
binding agreement of Summit enforceable in accordance with its terms except as
such enforcement may be limited by applicable principles of equity, and by
bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or other
laws of general applicability presently or hereafter in effect affecting the
enforcement of creditors' rights generally or institutions the deposits of which
are insured by the Federal Deposit Insurance Corporation, or the affiliates of
such institutions.
(b) In the event that pursuant to the Reorganization Election Summit
elects the Reorganization
25
method provided for at Section 1.01(a)(2), the Designated Summit Subsidiary will
prior to Closing (i) have the corporate power and be duly authorized by all
necessary corporation action to execute, deliver and perform this Agreement and
(ii) the Board of Directors and sole shareholder of the Designated Summit
Subsidiary will have taken all action required by law, its certificate or
articles of incorporation and by-laws and otherwise to authorize the execution
and delivery of this Agreement and to approve this Agreement and the
transactions contemplated hereby including the Reorganization. Assuming due
execution and delivery by and the enforceability against each of the other
parties hereto, this Agreement will be a valid and binding agreement of the
Designated Summit Subsidiary enforceable in accordance with its terms except as
such enforcement may be limited by applicable principles of equity, and by
bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or other
laws of general applicability presently or hereafter in effect affecting the
enforcement of creditors' rights generally or institutions, the deposits of
which are insured by the Federal Deposit Insurance Corporation, or the
affiliates of such institutions.
Section 3.07. Absence of Changes. There has not been, since June 30,
1999, any Summit Material Adverse Change and there is no matter or fact known to
Summit which may result in any such Summit Material Adverse Change in the
future.
Section 3.08 Absence of Undisclosed Liabilities. There are no
liabilities, whether contingent or absolute, direct or indirect, or loss
contingencies (as defined in Statement of Financial Accounting Standards No. 5)
other than (a) disclosed in the Summit Financial Statements or disclosed in the
notes thereto, (b) commitments made by Summit or any of its subsidiaries in the
ordinary course of its business which are not in the aggregate material to
Summit and its subsidiaries, on a consolidated basis, and (c) liabilities
arising in the ordinary course of its business since June 30, 1999 which are not
in the aggregate material to Summit and its subsidiaries, on a consolidated
basis.
Section 3.09. Allowance for Credit Losses. At June 30, 1999 and
thereafter, the allowances for credit losses of Summit and its subsidiaries are
adequate in all material respects to provide for all losses on loans and leases
outstanding, and to the best of Summit's knowledge, the loan and lease
portfolios of Summit and its subsidiaries in excess of such allowances are
collectible in the ordinary course of business.
Section 3.10. Accounting, Tax and Regulatory Matters. Neither Summit nor
any of its subsidiaries has taken or agreed to take any action or has any
knowledge of any fact or circumstance that would (i) prevent the transactions
contemplated hereby from qualifying as a reorganization within the meaning of
Section 368(a) the Code, or (ii) materially impede or delay receipt of any
approval referred to in Section 4.01 or the consummation of the transactions
contemplated by this Agreement.
Section 3.11. Community Reinvestment Act Compliance. Summit and its
subsidiaries are in substantial compliance with the applicable provisions of the
Community Reinvestment Act of 1977 and the regulations promulgated thereunder,
and received a CRA rating of at least satisfactory as of their last completed
examination. As of the date of this Agreement, Summit and its subsidiaries have
not been advised of the existence of any fact or circumstance or set of facts or
circumstances which, if true, would cause Summit or any bank subsidiary to fail
to be in substantial compliance with such provisions.
Section 3.12. Year 2000 Compliant. To the best knowledge of Summit, all
computer software and hardware owned or licensed by Summit or any of its
subsidiaries is, or Summit has
26
taken or is taking all required steps to be, Year 2000 compliant, which, for
purposes of this Agreement, shall mean that the data outside the range 1900-1999
will be correctly processed in any level of computer hardware or software
including, but not limited to, microcode, firmware, applications programs, files
and databases, except where the failure to be so compliant would not have a
Summit Material Adverse Effect. All computer software owned or licensed by
Summit is, or Summit has taken steps or is taking steps (including obtaining
warranties from the vendors thereof in respect of compliance) to ensure that all
computer software will be designed to be used prior to, during and after the
calendar year 2000 AD and that such software will operate during each such time
period, without error relating to date data, specifically including any error
relating to, or the product of, date data that represents or references
different centuries or more than one century, except where the failure to be so
designed or to so operate would not have a Summit Material Adverse Effect.
ARTICLE IV.
COVENANTS OF NMBT
NMBT hereby covenants and agrees with Summit that:
Section 4.01. Preparation of Registration Statement and Applications for
Required Consents. NMBT will cooperate with Summit in the preparation of a
Registration Statement on Form S-4 (the "Registration Statement") to be filed
with the SEC under the Securities Act for the registration of the offering of
Summit Stock to be issued as Reorganization Consideration and the proxy
statement-prospectus constituting part of the Registration Statement
("Proxy-Prospectus") that will be used by NMBT to solicit shareholders of NMBT
for approval of the Reorganization. In connection therewith, NMBT will furnish
all financial or other information, including using best efforts to obtain
customary consents, certificates, opinions of counsel and other items concerning
NMBT, deemed necessary by counsel to Summit for the filing or preparation for
filing under the Securities Act and the Exchange Act of the Registration
Statement (including the Proxy-Prospectus). NMBT will cooperate with Summit and
provide such information as may be advisable in obtaining an order of
effectiveness for the Registration Statement, appropriate permits or approvals
under state securities and "blue sky" laws, the required approval under the BHCA
of the Board of Governors of the Federal Reserve System (the "Federal Reserve
Board") and any other governmental or regulatory consents or approvals or the
taking of any other governmental or regulatory action necessary to consummate
the Reorganization that would not have a Summit Material Adverse Effect
following the Reorganization (the "Required Consents"). Summit, reasonably in
advance of making such filings, will provide NMBT and its counsel a reasonable
opportunity to comment on such filings and regulatory applications and will give
due consideration to any comments of NMBT and its counsel before making any such
filing or application, and Summit will provide NMBT and its counsel with copies
of all such filings and applications at the time filed if such filings and
applications are made at any time before the Effective Time. NMBT covenants and
agrees that all information furnished by NMBT for inclusion in the Registration
Statement, the Proxy-Prospectus, and all applications to appropriate regulatory
agencies for approval of the Reorganization will comply in all material respects
with the provisions of applicable law, including the Securities Act and the
Exchange Act and the rules and regulations of the SEC thereunder, and together
with all information furnished by NMBT to Summit pursuant to this Agreement or
in connection with obtaining Required Consents will not contain any untrue
statement of a material fact and will not omit to state any material fact
required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading. NMBT will furnish to Advest such information about NMBT reasonably
available to it as Advest may reasonably request for purposes
27
of the opinion referred to in Section 8.07.
Section 4.02. Notice of Adverse Changes. NMBT will promptly advise Summit
in writing of (a) any event occurring subsequent to the date of this Agreement
which would render any representation or warranty of NMBT contained in this
Agreement or the NMBT Schedules or the materials furnished pursuant to the
Post-Signing Document List (as defined in Section 4.09), if made on or as of the
date of such event or the Closing Date, untrue or inaccurate in any material
respect, (b) any NMBT Material Adverse Change, (c) any inability or perceived
inability of NMBT to perform or comply with the terms or conditions of this
Agreement, (d) the institution or threat of institution of litigation or
administrative proceedings involving NMBT or any of its subsidiaries or assets,
which, if determined adversely to NMBT or any of its subsidiaries, would have a
NMBT Material Adverse Effect or an adverse material effect on the ability of the
parties to timely consummate the Reorganization and the related transactions,
(e) any governmental complaint, investigation, hearing, or communication
indicating that such litigation or administrative proceeding is contemplated,
(f) any written notice of, or other communication relating to, a default or
event which, with notice or lapse of time or both, would become a default,
received by NMBT or a subsidiary subsequent to the date hereof and prior to the
Effective Time, under any agreement, indenture or instrument to which NMBT or a
subsidiary is a party or is subject and which is material to the business,
operation or condition (financial or otherwise) of NMBT and its subsidiaries on
a consolidated basis, and (g) any written notice or other communication from any
third party alleging that the consent of such third party is or may be required
in connection with the transactions contemplated by this Agreement including the
Reorganization. NMBT agrees that the delivery of such notice shall not
constitute a waiver by Summit of any of the provisions of Articles VI or VII.
Section 4.03. Meeting of Shareholders. NMBT will call a meeting of its
shareholders for the purpose of voting upon this Agreement, the Reorganization
and the transactions contemplated hereby. The meeting of shareholders
contemplated by this Section 4.03 will be held as promptly as practicable and,
in connection therewith, will comply with the Delaware Law and the Exchange Act
and all regulations promulgated thereunder governing shareholder meetings and
proxy solicitations. In connection with such meeting, NMBT shall mail the
Proxy-Prospectus to NMBT shareholders and use its best efforts to obtain
shareholder approval of this Agreement, the Reorganization and the transactions
contemplated hereby; provided, however, that no director of NMBT shall be
obligated to take an action under this Section 4.03 in such person's capacity as
a director if such person has been advised in writing by counsel that such
action is contrary to the fiduciary duty owed as a director.
Section 4.04. Copies of Filings. Without limiting the provisions of
Section 4.01, NMBT will deliver to Summit, at least 48 hours prior to an
anticipated date of filing or distribution or as soon thereafter as practicable,
all documents to be filed with the SEC or any bank regulatory authority or to be
distributed in any manner to the shareholders of NMBT or to the news media or to
the public, other than the press releases and other information subject to
Section 10.01.
Section 4.05. No Material Transactions. Until the Effective Time, NMBT
will not and will not allow any of its subsidiaries to, without the prior
written consent of Summit:
(a) pay (or make a declaration which creates an obligation to pay) any
cash dividends, other than dividends from subsidiaries of NMBT to NMBT or other
subsidiaries of NMBT except that NMBT may declare, set aside and pay dividends
with record dates and payment dates set in accordance with NMBT's customary and
established current practice and, with respect to individual
28
dividends, at a rate at the time of declaration equal to the rate most recently
declared by Summit multiplied by 0.7024;
(b) declare or distribute any stock dividend or authorize or effect a
stock split;
(c) merge with, consolidate with, or sell any material asset to any other
corporation, bank, or person (except for mergers of subsidiaries of NMBT into
other subsidiaries of NMBT) or enter into any other transaction not in the
ordinary course of the banking business;
(d) incur any liability or obligation other than intracompany
obligations, make or agree to make any commitment or disbursement, acquire or
dispose or agree to acquire or dispose of any property or asset (tangible or
intangible), make or agree to make any contract or agreement or engage or agree
to engage in any other transaction, except (i) transactions in the ordinary
course of business, (ii) transactions not in the ordinary course of business
involving not more than $50,000, and (iii) costs and expenses incurred in
connection with the Reorganization and other transactions contemplated by this
Agreement;
(e) subject any of its properties or assets to any lien, claim, charge,
option or encumbrance, except in the ordinary course of business and for amounts
not material in the aggregate to NMBT and its subsidiaries, on a consolidated
basis;
(f) except as permitted by Schedule 4.05(f), pay any employee bonuses or
increase or enter into any agreement to increase the rate of compensation of any
employee at the date hereof which is not consistent with past practices and
policies and which when considered with all such increases or agreements to
increase constitutes an average annualized rate not exceeding four percent (4%);
(g) create, adopt or modify any employment, termination, severance
pension, supplemental pension, profit sharing, bonus, deferred compensation,
death benefit, retirement, stock option, stock award, stock purchase or other
employee or director benefit or welfare plan, arrangement or agreement of
whatsoever nature, including without limitation the NMBT Pension Plans and the
NMBT Benefit Plans (collectively, "NMBT Plans"), or change the level of
benefits, reduce eligibility, performance or participation standards, increase
any payment or benefit under any NMBT Plan;
(h) distribute, issue, sell, award, grant, permit to become outstanding
or enter into any agreement respecting any Equity Securities or any Equity Based
Rights except pursuant to the Option Agreement or pursuant to the exercise of
director and employee stock options and warrants granted prior to the date
hereof under the NMBT Stock Compensation Plans and exercisable and outstanding
under the terms of a NMBT Stock Compensation Plan at the date of such exercise;
(i) except in a fiduciary capacity, purchase, redeem, retire, repurchase,
or exchange, or otherwise acquire or dispose of, directly or indirectly, any of
its Equity Securities or Equity Based Rights, whether pursuant to the terms of
such Equity Securities or Equity Based Rights or otherwise, or enter into any
agreement providing for any of the foregoing transactions;
(j) amend its certificate or articles of incorporation or articles of
association, as appropriate, charter or by-laws;
(k) modify, amend or cancel any of its existing material borrowings other
than intra-corporate
29
borrowings and borrowings of federal funds from correspondent banks and the
Federal Home Loan Bank of Boston or enter into any contract, agreement, lease or
understanding, or any contracts, agreements, leases or understandings other than
those in the ordinary course of business or which do not involve the creation of
any material obligation or release of any material right of NMBT or any of its
subsidiaries, on a consolidated basis;
(l) create, amend, increase, enhance, accelerate the exercisability of,
or release or waive any forfeitures, terminations or expirations of or
restrictions on any rights, awards, benefits, entitlements, options or warrants
under the NMBT Plans including Equity Securities and Equity Based Rights
outstanding ;
(m) except as permitted by Schedule 4.05(m), make any employer
contribution to a NMBT Plan which under the terms of the particular plan is
voluntary and within the discretion of NMBT to make;
(n) make any determination or take any action, discretionary or
otherwise, under or with respect to any NMBT Plan other than routine
administration in accordance with past precedent;
(o) notwithstanding any other provision of this Agreement, enter into or
amend, renew, extend, give any notice or consent with respect to, waive any
provision under, or accept any new fees, rates or other costs or charges of
whatsoever nature, schedule, exhibit or other attachment under (whether through
an action or inaction) any Insider Agreement or any agreement, understanding,
contract, commitment or transaction relating to any Insider Indebtedness, except
to the extent permitted by Section 4.12 or disclosed in NMBT Schedule 2.24(b);
(p) other than in the ordinary course of business and in compliance with
applicable laws and regulations, enter into, increase or renew any loan or
credit commitment (including standby letters of credit) to any executive officer
or director of NMBT or any of its subsidiaries, any holder of 10% of more of the
outstanding shares of NMBT Stock, or any entity controlled, directly or
indirectly, by any of the foregoing or engage in any transaction with any of the
foregoing which is of the type or nature sought to be regulated in 12 U.S.C.
ss.371c and 12 U.S.C. ss.371c-1. For purposes of this Section 4.05(p), "control"
shall have the meaning associated with that term under 12 U.S.C. ss.371c; or
(q) take or fail to take any discretionary action provided for under the
terms of any plan or agreement affecting one or more directors or employees or
any affiliates of such where the effect of such act or failure to act is or
would be to give or confer a right or benefit not existing on the date hereof.
Section 4.06. Operation of Business in Ordinary Course. NMBT, on behalf
of itself and its subsidiaries, covenants and agrees that from and after the
date hereof and until the Effective Time, it and its subsidiaries: (a) will
carry on their business substantially in the same manner as heretofore and will
not institute any unusual or novel methods of management or operation of their
properties or business and will maintain such in their customary manner; (b)
will use their best efforts to continue in effect their present insurance
coverage on all properties, assets, business and personnel; (c) will use their
best efforts to preserve their business organization intact, preserve their
present relationships with customers, suppliers, and others having business
dealings with them, and keep available their present employees, provided,
however, that NMBT or any of its subsidiaries may terminate any employee for
unsatisfactory performance or other reasonable business purpose, and provided
further, however, that NMBT will notify and consult with Summit prior to
terminating any
30
of the five highest paid employees of NMBT; (d) will use their best efforts to
continue to maintain fidelity bonds insuring NMBT and its subsidiaries against
acts of dishonesty by each of their employees in such amounts (not less than
present coverage) as are customary, usual and prudent for corporations or banks,
as the case may be, of their size; and (e) will not change their methods of
accounting in effect at June 30, 1999, or change any of their methods of
reporting income and deductions for Federal income tax purposes from those
employed in the preparation of their Federal income tax returns for the taxable
year ended December 31, 1998, except as required by changes in laws, regulations
or generally accepted accounting principles or changes that are to a preferable
accounting method, and approved in writing by NMBT's independent certified
public accountants.
Section 4.07. Further Actions. NMBT will: (a) execute and deliver such
instruments and take such other actions as Summit may reasonably require to
carry out the intent of this Agreement; (b) use all reasonable efforts to obtain
consents of all third parties and governmental bodies necessary or reasonably
desirable for the consummation of the transactions contemplated by this
Agreement; (c) diligently support this Agreement in any proceeding before any
regulatory authority whose approval of any of the transactions contemplated
hereby is required or reasonably desirable or before any court in which
litigation in respect thereof is pending; and (d) use its best efforts so that
the other conditions precedent to the obligations of Summit set forth in
Articles VI and VII hereof are satisfied.
Section 4.08. Cooperation. Until the Effective Time, NMBT will give to
Summit and to its representatives, including its accountants, KPMG Peat Marwick
LLP, and its legal counsel, full access during normal business hours to all of
its property, documents, contracts and records relevant to this Agreement and
the Reorganization, will provide such information with respect to its business
affairs and properties as Summit from time to time may reasonably request, and
will cause its managerial employees, and will use its best efforts to cause its
counsel and independent certified public accountants, to be available on
reasonable request to answer questions of Summit's representatives covering the
business and affairs of NMBT or any of its subsidiaries.
Section 4.09. Copies of Documents. As promptly as practicable, but not
later than 30 days after the date hereof, NMBT will furnish to or make available
to Summit all the documents, contracts, agreements, papers, and writings
referred to in the NMBT Schedules or called for by the list attached hereto as
Exhibit C (the "Post-Signing Document List").
Section 4.10. Applicable Laws. NMBT and its subsidiaries will use their
best efforts to comply promptly with all requirements which federal or state law
may impose on NMBT or any of its subsidiaries with respect to the Reorganization
and will promptly cooperate with and furnish information to Summit in connection
with any such requirements imposed upon Summit or on any of its subsidiaries in
connection with the Reorganization.
Section 4.11. Agreements of Affiliated Shareholders. NMBT agrees to
furnish to Summit, not later than 10 business days prior to the date of mailing
of the Proxy-Prospectus, a writing setting forth the names of those persons
(which will include all individual and beneficial ownership of NMBT Stock by
such persons and also identifies the manner in which all such beneficially owned
shares of NMBT Stock are registered on the stock record books of NMBT) who in
the written opinion of counsel to NMBT (which opinion need not be furnished to
Summit), constitute all the affiliates of NMBT for the purposes of Rule 145
under the Securities Act (an "NMBT Affiliate"). NMBT agrees to use its best
efforts (i) to cause each NMBT Affiliate to enter into an agreement effective
upon the execution thereof, satisfactory in form and substance to Summit and (y)
substantially in the form of Exhibit D-1 with respect to Affiliates who are
directors or officers of
31
NMBT or a subsidiary of NMBT, or (z) substantially in the form of Exhibit D-2
with respect to Affiliates who are not directors or officers of NMBT or a
subsidiary of NMBT (an "Affiliate Agreement"), and (ii) to furnish such
Affiliate Agreements to Summit no later than 5 business days prior to the date
of mailing of the Proxy-Prospectus.
Section 4.12. Loans and Leases to Affiliates. All loans and leases
hereafter made by NMBT or any of its subsidiaries to any of its present or
former directors or executive officers or their respective related interests
shall be made only in the ordinary course of business and on the same terms and
at the same interest rates as those prevailing for comparable transactions with
others and shall not involve more than the normal risk of repayment or present
other unfavorable features.
Section 4.13. Confidentiality. All information furnished by Summit to
NMBT or its representatives pursuant hereto shall be treated as the sole
property of Summit and, if the Reorganization shall not occur, NMBT and its
representatives shall return to Summit all of such written information and all
documents, notes, summaries or other materials containing, reflecting or
referring to, or derived from, such information, except that any such
confidential information or notes or abstracts therefrom presented to the Board
of Directors of NMBT or any committee thereof for the purpose of considering
this Agreement, the Reorganization and the related transactions may be kept and
maintained by NMBT with other records of Board, and Board committee, meetings
subject to a continuing obligation of confidentiality. NMBT shall, and shall use
its best efforts to cause its representatives to, keep confidential all such
information, and shall not directly or indirectly use such information for any
purposes other than the performance of this Agreement. The obligation to keep
such information confidential shall continue for five years from the date the
proposed Reorganization is abandoned and shall not apply to: (i) any information
which (x) was legally in NMBT's possession prior to the disclosure thereof by
Summit, (y) was then generally known to the public, or (z) was disclosed to NMBT
by a third party not bound by an obligation of confidentiality; or (ii)
disclosures made as required by law. It is further agreed that if, in the
absence of a protective order or the receipt of a waiver hereunder, NMBT is
nonetheless, in the written opinion of its outside counsel, compelled to
disclose information concerning Summit to any tribunal or governmental body or
agency or else stand liable for contempt or suffer other censure or penalty,
NMBT may disclose such information to such tribunal or governmental body or
agency without liability hereunder and shall so notify Summit in advance to the
extent practicable. This Section 4.13 shall survive any termination of this
Agreement.
Section 4.14. Dividends. NMBT will coordinate with Summit the declaration
of any dividends and the record and payment dates thereof so that the holders of
NMBT Stock will not be paid two dividends for a single calendar quarter with
respect to their shares of NMBT Stock and any shares of Summit Stock they become
entitled to receive in the Reorganization or fail to be paid one dividend in
each calendar quarter between the date hereof and the Effective Time. NMBT will
notify Summit at least five business days prior to any proposed dividend
declaration date.
Section 4.15. Acquisition Proposals. NMBT agrees that neither NMBT nor
any of its subsidiaries nor any of the respective officers and directors of NMBT
or its subsidiaries shall, and NMBT shall direct and use its best effort to
cause its employees, affiliates, agents and representatives (including, without
limitation, any investment banker, broker, financial or investment advisor,
attorney or accountant retained by NMBT or any of its subsidiaries) not to,
initiate, solicit or encourage, directly or indirectly, any inquiries, proposals
or offers with respect to, or engage in any negotiations or discussions with any
person, provide any nonpublic information, or authorize or enter into any
agreement or agreement in principle concerning, or recommend, endorse or
otherwise facilitate any effort or attempt to induce or implement, any
Acquisition Proposal (as defined below);
32
provided however, that the Board of Directors of NMBT may furnish or cause to be
furnished nonpublic information directly or through its representatives
concerning an Acquisition Proposal, if such Board of Directors has determined,
after having consulted with outside counsel and been advised of its legal rights
to the effect, that the failure to provide such nonpublic information would
cause the members of such Board of Directors to breach their fiduciary duties
under applicable laws, and, provided, further, that NMBT shall first obtain a
confidentiality agreement in customary form and containing at least the
confidentiality provisions set forth at Sections 4.13 and 5.08. "Acquisition
Proposal" is hereby defined to be any offer, including an exchange offer or
tender offer, or proposal concerning a merger, consolidation, or other business
combination or takeover transaction involving NMBT or any of its subsidiaries or
the acquisition of any assets (otherwise than as permitted by Section 4.05) or
securities of NMBT or any of its subsidiaries. NMBT will immediately cease and
cause to be terminated any existing activities, discussion or negotiations with
any parties conducted heretofore with respect to any of the foregoing. NMBT will
take the necessary steps to inform the individuals or entities referred to in
the first sentence hereof of the obligations undertaken in this Section. In
addition, NMBT will notify Summit by telephone to its chief executive officer or
general counsel promptly upon receipt of any communication with respect to a
proposed Acquisition Proposal with another person or receipt of a request for
information from any governmental or regulatory authority with respect to a
proposed acquisition of NMBT or any of its subsidiaries or assets by another
party, and will immediately deliver as soon as possible by facsimile
transmission, receipt acknowledged, to the Summit officer notified as required
above a copy of any document relating thereto promptly after any such document
is received by NMBT.
Section 4.16 Tax Opinion Certificates. NMBT shall execute and deliver to
Xxxxxxxx Xxxxxx any tax opinion certificate reasonably required by Xxxxxxxx
Xxxxxx in connection with the issuance of the Tax Opinions (as defined at
Section 6.03), dated as of the date of effectiveness of the Registration
Statement and as of the Closing Date (and as of the date the Closing occurs if
different than the Closing Date), and NMBT shall use its best efforts to cause
each of its executive officers, directors and holders of five percent (5%) or
more of outstanding NMBT Stock (including shares beneficially held) to execute
and deliver to Xxxxxxxx Xxxxxx any tax opinion certificate reasonably required
by Xxxxxxxx Xxxxxx in connection with the issuance of one or more of the Tax
Opinions, dated as of the date of effectiveness of the Registration Statement
and as of the Closing Date (and as of the date the Closing occurs if different
than the Closing Date).
Section 4.17. Directors' and Officers' Insurance. NMBT and each of its
subsidiaries has taken or will take all requisite action (including, without
limitation, the making of claims and the giving of notices) pursuant to its
directors' and officers' liability insurance policy or policies ("D&O
Insurance") in order to preserve all rights thereunder with respect to all
matters (other than matters arising in connection with this Agreement and the
transactions contemplated hereby) occurring prior to the Effective Time that are
known to NMBT. NMBT shall renew any existing D&O Insurance or purchase any
"discovery period" D&O Insurance provided for thereunder at Summit's request.
Section 4.18. Conforming Entries.
(a) Notwithstanding that NMBT believes that NMBT and its subsidiaries
have established reserves and taken all provisions for possible loan and lease
losses required by generally accepted accounting principles and applicable laws,
rules and regulations, NMBT recognizes that Summit may have adopted different
loan, accrual and reserve policies (including loan classification and levels of
reserves for possible loan and lease losses). From and after the date of this
Agreement, NMBT and Summit shall consult and cooperate with each other with
respect to conforming the loan, accrual and reserve policies of NMBT and its
subsidiaries to those policies of Summit, as specified in each case
33
in writing to NMBT, based upon such consultation and as hereinafter provided.
(b) In addition, from and after the date of this Agreement, NMBT and
Summit shall consult and cooperate with each other with respect to determining
appropriate accruals, reserves and charges for NMBT to establish and take in
respect of excess equipment write-off or write-down of various assets and other
appropriate charges and accounting adjustments taking into account the parties'
business plan following the Reorganization, as specified in each case in writing
to NMBT, based upon such consultation and as hereinafter provided.
(c) NMBT and Summit shall consult and cooperate with each other with
respect to determining the amount and the timing for recognizing for financial
accounting purposes NMBT's expenses of the Reorganization and the restructuring
charges, if any, related to or to be incurred in connection with the
Reorganization.
(d) With respect to clauses (a) through (c) of this Section 4.18, (i) it
is the objective of NMBT and Summit that such reserves, accruals, charges and
divestitures, if any, to be taken shall be consistent with generally accepted
accounting principles, and (ii) NMBT shall not be obligated to make a particular
conforming entry (A) effecting financial statements as at or for periods ending
December 31, 1999 or earlier, or (B) if the particular entry is not capable of
being reversed upon a termination of this Agreement or if the entry would have a
material adverse effect on NMBT.
Section 4.19 Cooperation with Policies and Procedures. NMBT, prior to the
Effective Time, shall (i) consult and cooperate with Summit regarding the
implementation of those policies and procedures established by Summit for its
governance and that of its subsidiaries and not otherwise referenced in Section
4.18 of this Agreement, including, without limitation, policies and procedures
pertaining to the accounting, asset/liability management, audit, credit, human
resources, treasury and legal functions, and (ii) at the reasonable request of
Summit, conform NMBT's existing policies and procedures in respect thereof,
provided that NMBT shall not be required to conform a policy or procedure (y) if
such would cause NMBT or any of its subsidiaries to be in violation of any law,
rule, regulation or requirement of any governmental regulatory authority having
jurisdiction over NMBT or any of its subsidiaries affected thereby, or (z) if
such conforming change is not capable of being reversed upon a termination of
this Agreement or if the change would have a material adverse effect on NMBT's
financial statements.
Section 4.20 Environmental Reports. NMBT shall disclose to Summit all
matters of the types described in Section 2.22 hereof which NMBT would have been
required to disclose to Summit on the date hereof if known to NMBT on the date
hereof, as such become known to NMBT between the date hereof and the Effective
Time. In addition, Summit may at its expense perform, or cause to be performed,
a phase one environmental investigation, an asbestos survey, or both of the
foregoing, (i) within 90 days following the date of this Agreement, on all real
property owned, leased or operated by NMBT or any of its subsidiaries as of the
date of this Agreement (but excluding space in retail or similar establishments
leased by NMBT for automatic teller machines or leased bank branch facilities
where the space leased by NMBT comprises less than 20% of the total space leased
to all tenants of such property), and (ii) within 15 days after being notified
by NMBT of the acquisition or lease of any real property by it or its
subsidiaries after the date of this Agreement, on the real property so acquired
or leased (but excluding space in retail or similar establishments leased by
NMBT for automatic teller machines or leased bank branch facilities where the
space leased by NMBT comprises less than 20% of the total space leased to all
tenants of such property). If the results of a phase one investigation (whether
requested by NMBT or Summit) indicate, in the reasonable opinion of Summit, that
additional investigation is warranted, Summit may at its expense,
34
within 15 days after receipt of the particular phase one report, perform or
cause to be performed a phase two investigation on the property or properties
deemed by Summit to warrant such additional study or notify NMBT and an
environmental consulting firm within 15 days after the receipt of the particular
phase one report that the environmental consulting firm should promptly commence
a phase two investigation. If the cost of taking all remedial or other
corrective actions and measures (as required by applicable law, as reasonably
recommended by phase one or phase two investigation reports (without regard to
who requested such reports) or as may be prudent in light of serious life,
health or safety concerns), if any, is in the aggregate in excess of $1,000,000,
as reasonably estimated by an environmental expert retained for such purpose by
Summit at its sole expense, or if the cost of such actions and measures cannot
be so reasonably estimated by such expert to be such amount or less with any
reasonable degree of certainty, Summit shall have the right pursuant to Section
9.02(d)(3) of this Agreement to terminate this Agreement.
Section 4.21 [Reserved]
Section 4.22. Dividend Equivalency. In the event the number determined
pursuant to Section 1.03(c) to be the Exchange Ratio is greater than the
multiplier set forth at Section 4.05(a), shareholders of record of NMBT at the
Effective Time shall become entitled to receive a cash payment per share of NMBT
Stock held by them at the Effective Time equal in amount to the difference
between (i) the dividends per share NMBT would be able to pay pursuant to
Section 4.05(a) if the multiplier stated therein were such number, and (ii) the
dividends per share actually paid by NMBT pursuant to Section 4.05(a). Any
payment which NMBT shareholders may become entitled to receive pursuant to this
Section 4.22 shall be distributed by Summit simultaneously with the distribution
of the Reorganization Consideration provided for in Article I.
ARTICLE V.
COVENANTS OF SUMMIT
Summit hereby covenants and agrees with NMBT that:
Section 5.01. Approvals and Registrations. Based on such assistance and
cooperation of NMBT as Summit shall reasonably request, Summit will use its best
efforts to prepare and file (a) with the SEC, the Registration Statement, (b)
with the Federal Reserve Board, an application for approval of the
Reorganization, and (c) with the NYSE, an application for the listing of the
shares of Summit Stock issuable upon the Reorganization, subject to official
notice of issuance, and (d) with any state regulatory authority having
jurisdiction over the Reorganization, applications for such consents or
approvals as may be required for consummation of the transactions contemplated
by this Agreement, except that Summit shall have no obligation to file a new
registration statement or a post-effective amendment to the Registration
Statement covering any reoffering of Summit Stock by NMBT Affiliates. Summit
covenants and agrees that all information furnished by Summit for inclusion in
the Registration Statement, the Proxy-Prospectus, and all applications and
submissions for the Required Consents will comply in all material respects with
the provisions of applicable law, including the Securities Act and the Exchange
Act and the rules and regulations of the SEC and the Federal Reserve Board and
will not contain any untrue statement of a material fact and will not omit to
state any material fact required to be stated therein or necessary to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading. Summit will use its reasonable best efforts to seek
the effectiveness of the Registration Statement. Summit will
35
furnish to Advest such information about Summit reasonably available to it as
Advest may reasonably request for purposes of the opinion referred to in Section
8.07.
Section 5.02. Notice of Adverse Changes. Summit will promptly advise NMBT
in writing of (a) any event occurring subsequent to the date of this Agreement
which would render any representation or warranty of Summit contained in this
Agreement or the Summit Schedules, if made on or as of the date of such event or
the Closing Date, untrue or inaccurate in any material respect, (b) any Summit
Material Adverse Change, (c) any inability or perceived inability of Summit to
perform or comply with the terms or conditions of this Agreement, (d) the
institution or threat of institution of litigation or administrative proceeding
involving Summit or its assets which, if determined adversely to Summit, would
have a Summit Material Adverse Effect or a material adverse effect on the
Reorganization, (e) any governmental complaint, investigation, or hearing or
communication indicating that such litigation or administrative proceeding is
contemplated, (f) any written notice of, or other communication relating to, a
default or event which, with notice or lapse of time or both, would become a
default, received by Summit subsequent to the date hereof and prior to the
Effective Time, under any agreement, indenture or instrument to which Summit is
a party or is subject and which is material to the business, operation or
condition (financial or otherwise) of Summit and its subsidiaries on a
consolidated basis, and (g) any written notice or other communication from any
third party alleging that the consent of such third party is or may be required
in connection with the transactions contemplated by this Agreement including the
Reorganization. Summit agrees that the delivery of such notice shall not
constitute a waiver by NMBT of any of the provisions of Articles VI or VIII.
Section 5.03. Copies of Filings. Summit shall promptly provide to NMBT
and its counsel copies of the application filed with the Federal Reserve Board,
all reports filed by it with the SEC on Forms 10-Q, 8-K and 10-K and all
documents to be distributed in any manner to the shareholders of Summit.
Section 5.04. Further Actions. Summit will: (a) execute and deliver such
instruments and take such other actions as NMBT may reasonably require to carry
out the intent of this Agreement; (b) use all reasonable efforts to obtain
consents of all third parties and governmental bodies necessary or reasonably
desirable for the consummation of the transactions contemplated by this
Agreement; (c) diligently support this Agreement in any proceeding before any
regulatory authority whose approval of any of the transactions contemplated
hereby is required or reasonably desirable or before any court in which
litigation in respect thereof is pending; and (d) use its best efforts so that
the other conditions precedent to the obligations of NMBT set forth in Articles
VI and VIII hereof are satisfied.
Section 5.05. Applicable Laws. Summit will use its best efforts to comply
promptly with all requirements which federal or state law may impose on Summit
with respect to the Reorganization and will promptly cooperate with and furnish
information to NMBT in connection with any such requirements imposed upon NMBT
or on any of its subsidiaries in connection with the Reorganization.
Section 5.06. Unpaid NMBT Dividends. By virtue of the Reorganization and
without further action on anyone's part, Summit shall assume the obligation of
NMBT to pay dividends, if any, on NMBT Stock which have a record date prior to
the Effective Time but which are not payable until after the Effective Time.
Section 5.07. Cooperation. Until the Effective Time, Summit will provide
such information
36
with respect to its business affairs and properties as NMBT from time to time
may reasonably request, and will cause its managerial employees, counsel and
independent certified public accountants to be available on reasonable request
to answer questions of NMBT's representatives covering the business and affairs
of Summit or any of its subsidiaries.
Section 5.08. Confidentiality. All information furnished by NMBT to
Summit or its representatives pursuant hereto shall be treated as the sole
property of NMBT and, if the Reorganization shall not occur, Summit and its
representatives shall return to NMBT all of such written information and all
documents, notes, summaries or other materials containing, reflecting or
referring to, or derived from, such information, except that any such
confidential information or notes or abstracts therefrom presented to the Board
of Directors of Summit or any committee thereof for the purpose of considering
this Agreement, the Reorganization and the related transactions may be kept and
maintained by Summit with other records of Board, and Board committee, meetings
subject to a continuing obligation of confidentiality. Summit shall, and shall
use its best efforts, to cause its representatives to, keep confidential all
such information, and shall not directly or indirectly use such information for
any purposes other than the performance of this Agreement. The obligation to
keep such information confidential shall continue for five years from the date
the proposed Reorganization is abandoned and shall not apply to: (i) any
information which (x) was legally in Summit's possession prior to the disclosure
thereof by NMBT, (y) was then generally known to the public, or (z) was
disclosed to Summit by a third party not bound by an obligation of
confidentiality; or (ii) disclosures made as required by law. It is further
agreed that if, in the absence of a protective order or the receipt of a waiver
hereunder, Summit is nonetheless, in the written opinion of its counsel,
compelled to disclose information concerning NMBT to any tribunal or
governmental body or agency or else stand liable for contempt or suffer other
censure or penalty, Summit may disclose such information to such tribunal or
governmental body or agency without liability hereunder and shall so notify NMBT
in advance to the extent practicable. This Section 5.08 shall survive any
termination of this Agreement.
Section 5.09. Further Transactions. Summit continually evaluates possible
acquisitions and may prior to the Effective Time enter into one or more
agreements providing for, and may consummate the acquisition by it of another
bank, association, bank holding company, savings and loan holding company or
other company (or the assets thereof) for consideration that may include Summit
Stock. In addition, prior to the Effective Time, Summit may, depending on market
conditions and other factors, otherwise determine to issue Equity Securities or
other securities for financing purposes. Notwithstanding the foregoing, Summit
will not take any such action that would (i) prevent the transactions
contemplated hereby from qualifying as a reorganization within the meaning of
Section 368(a) of the Code or (ii) materially impede or delay receipt of any
Required Consent or the consummation of the transactions contemplated by this
Agreement for more than 60 days.
Section 5.10. Indemnification.
(a) Summit shall indemnify persons who served as directors and officers
of NMBT or any subsidiary of NMBT on or before the Effective Time with respect
to liabilities and claims (and related expenses, including fees and
disbursements of counsel) made against them resulting from their service as such
prior to the Effective Time in accordance with and subject to the requirements
and other provisions of the Restated Certificate of Incorporation and By-Laws of
Summit and the certificate or articles of incorporation and by-laws of NMBT or
the applicable subsidiary of NMBT, all as in effect on the date of this
Agreement and to the extent permitted by law, and Summit shall advance expenses
in matters that may be subject to indemnification in accordance with its
Restated
37
Certificate of Incorporation and By-Laws in effect on the date of this Agreement
and any applicable provisions of law.
(b) Subject to NMBT's obligation set forth at Section 4.17: For a period
of six (6) years after the Effective Time, Summit will use its best efforts to
provide to the persons who served as directors or officers of NMBT or any
subsidiary of NMBT on or before the Effective Time insurance against liabilities
and claims (and related expenses) made against them resulting from their service
as such prior to the Effective Time comparable in coverage to that provided by
Summit to its own directors and officers, but, if not available on commercially
reasonable terms, then coverage substantially similar in all material respects
to the insurance coverage provided to them in such capacities at the date
hereof; provided, however, that in no event shall Summit be required to expend
more than 200% of the current amount expended by NMBT on an annual basis (the
"Insurance Amount") to maintain or procure insurance coverage pursuant hereto,
and, further provided, that if Summit is unable to maintain or obtain the
insurance called for by this Section 5.10, Summit shall use its best efforts to
obtain as much comparable insurance as is available for the Insurance Amount.
(c) This Section 5.10 shall be construed as an agreement as to which the
directors and officers of NMBT and its subsidiaries referred to herein are
intended to be third party beneficiaries and shall be enforceable by the such
persons and their heirs and representatives.
Section 5.11. Employee Matters.
(a) After the Effective Time, Summit may in its discretion maintain,
terminate, merge or dispose of the NMBT Plans; provided, however, that any
action taken by Summit shall comply with ERISA and any other applicable laws,
including laws regarding the preservation of employee pension benefit plan
benefits and, provided further, that if Summit maintains a defined contribution
plan, defined benefit plan or health and welfare plan available to all its
employees generally which is similar to a NMBT Plan which is, respectively, a
defined contribution plan, defined benefit plan or health and welfare plan
available to all NMBT employees generally, then, if such NMBT Plan is terminated
by Summit or is otherwise rendered inactive by Summit, Summit shall offer to the
former employees of NMBT affected by such plan termination or cessation of
activity the opportunity to participate in the similar plan of Summit.
(b) Summit assumes all obligations under deferred compensation plans of
NMBT but shall have the right to terminate such plans following the Effective
Time with respect to future compensation deferrals.
(c) Summit agrees that the severance plan of NMBT shall remain in effect
following the Effective Time notwithstanding the provisions of Section 5.11 and
shall apply according to its terms to persons employed by NMBT at the Effective
Time.
Section 5.12. Tax Opinion Certificates. Summit shall execute and deliver
to Xxxxxxxx Xxxxxx any tax opinion certificate reasonably required by Xxxxxxxx
Xxxxxx in connection with the issuance of the Tax Opinions, dated as of the date
of effectiveness of the Registration Statement and as of the Closing Date (and
as of the date the Closing occurs if different than the Closing Date).
Section 5.13. Additional Tax Opinion. NMBT shall be entitled to seek a
tax opinion satisfactory to it in form and content from legal counsel of its
choice in addition to the Tax Opinion, but receipt of such tax opinion shall not
be a condition to NMBT's closing of the Reorganization or to any other
obligation of NMBT hereunder.
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ARTICLE VI.
CONDITIONS PRECEDENT TO THE RESPECTIVE OBLIGATIONS OF
SUMMIT AND NMBT
The respective obligations of Summit and NMBT under this Agreement to
consummate the Reorganization are subject to the simultaneous satisfaction of
all the following conditions, compliance with which or the occurrence of which
may only be waived in whole or in part in writing by Summit and NMBT in
accordance with Section 10.09:
Section 6.01. Receipt of Required Consents. Summit and NMBT shall have
received the Required Consents; the Required Consents shall not, in the
reasonable opinion of Summit, contain restrictions or limitations which would
materially adversely affect the financial condition of Summit after consummation
of the Reorganization; the Required Consents and the transactions contemplated
hereby shall not be contested by any federal or state governmental authority;
and the Required Consents needed for the Reorganization shall have been obtained
and shall not have been withdrawn or suspended.
Section 6.02. Effective Registration Statement. The Registration
Statement shall have been declared effective by the SEC; no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and remain in effect; and no proceeding for that purpose shall have been
initiated or, to the knowledge of Summit or NMBT, shall be contemplated or
threatened by the SEC.
Section 6.03. Tax Matters. At the time of effectiveness of the
Registration Statement and at the Closing Date (and at the date the Closing
occurs if different than the Closing Date), Summit and NMBT shall have received
from Xxxxxxxx Xxxxxx an opinion (the "Tax Opinion"), substantially in the form
of Exhibit E to the effect that (a) the Reorganization will constitute a
tax-free reorganization within the meaning of Section 368(a) of the Code, (b)
except with respect to fractional share interests, holders of NMBT Stock who
receive solely Summit Stock in the Reorganization will not recognize gain or
loss for federal income tax purposes, (c) the basis of such Summit Stock
(including any fractional share for which cash is received) will equal the basis
of the NMBT Stock for which it is exchanged and (d) the holding period of such
Summit Stock (including any fractional share for which cash is received) will
include the holding period of the NMBT Stock for which it is exchanged, assuming
that such NMBT Stock is a capital asset in the hands of the holder thereof at
the Effective Time.
In addition, no condition or set of facts or circumstances shall exist which
will either (y) preclude any of the parties to this Agreement from satisfying
the terms or conditions of, or assumptions made in, the Tax Opinion, as the case
may be, or (z) result in any of the factual assumptions contained in the Tax
Opinion being untrue.
Section 6.04. Absence of Litigation. No investigation by any state or
federal agency, and no action, suit, arbitration or proceeding before any court,
state or federal agency, panel or governmental or regulatory body or authority,
shall have been instituted or threatened against Summit or any of its
subsidiaries, or NMBT or any of its subsidiaries, that is material to the
Reorganization or to the financial condition of Summit and its subsidiaries on a
consolidated basis or NMBT and its subsidiaries on a consolidated basis, as the
case may be. No order, decree, judgment, or regulation shall have been entered
or law or regulation adopted by any such agency, panel, body or authority which
enjoined or has a material adverse effect upon the Reorganization or
39
on the financial condition of Summit and its subsidiaries on a consolidated
basis or NMBT and its subsidiaries on a consolidated basis, as the case may be.
Section 6.05. NYSE Listing. The NYSE shall have indicated that the shares
of Summit Stock to be issued in the Reorganization are to be listed on the NYSE,
subject to official notice of issuance.
ARTICLE VII.
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SUMMIT
The obligation of Summit to consummate the Reorganization is subject to
the simultaneous satisfaction of all of the following conditions, compliance
with which or the occurrence of which may be waived in whole or in part by
Summit in writing in accordance with Section 10.09:
Section 7.01. No Adverse Changes. There shall not have occurred at any
time after June 30, 1999 any NMBT Material Adverse Change or any material loss
or damage to the properties of NMBT or any of its subsidiaries, whether or not
insured, which materially affects the ability of NMBT and its subsidiaries, on a
consolidated basis, to conduct their business.
Section 7.02. Representations and Covenants. Except with respect to (i)
matters resulting from transactions specifically contemplated by this Agreement,
(ii) matters resulting from transactions or actions permitted or required by
this Agreement, and (iii) changes resulting from a change in law, rule,
regulation, generally accepted or regulatory accounting principle or other
matter affecting banking institutions or their holding companies generally or
from charges or expenses incident to the Reorganization: all representations and
warranties made by NMBT in this Agreement and the NMBT Schedules and the
material furnished pursuant to the Post-Signing Document List shall be true and
correct in all material respects on the date of this Agreement and on the date
the Closing occurs with the same force and effect as if such representations and
warranties were being made on such date. NMBT shall have complied in all
material respects with all covenants and agreements contained herein to be
performed by NMBT.
Section 7.03. Secretary's Certificate. NMBT shall have furnished to
Summit a certificate dated the date the Closing occurs to which shall be
attached copies of all resolutions adopted or minutes of actions taken by the
Board of Directors (including committees thereof) and shareholders of NMBT
relating to this Agreement, the Option Agreement and the Reorganization and
related transactions, which such certificate shall be signed by the Secretary of
NMBT and certify to the satisfaction of the condition set forth in Section 7.09
and the truth, correctness, completeness and continuing effectiveness of all
resolutions and actions contained or referenced in the aforementioned
attachments.
Section 7.04. Officer's Certificate. NMBT shall have furnished to Summit
a certificate signed by the Chief Executive Officer of NMBT, dated the date the
Closing occurs, certifying to the satisfaction of the conditions set forth at
Sections 6.01, 6.02 (last clause), 6.03 (last paragraph) and Section 6.04, as
they relate to NMBT, and at Sections 7.01, 7.02, 7.07 and 7.10.
Section 7.05. Opinion of NMBT's Counsel. Summit shall have received an
opinion of counsel to NMBT, dated the date the Closing occurs and reasonably
satisfactory in form and substance to counsel for Summit.
40
Section 7.06. [Reserved].
Section 7.07. Consents to NMBT Contracts. All consents, approvals or
waivers, in form and substance reasonably satisfactory to Summit, required to be
obtained in connection with the Reorganization from other parties to each
mortgage, note, lease, permit, franchise, loan or other agreement or contract to
which NMBT or any of its subsidiaries is a party or by which they or any of
their assets or properties may be bound or committed, which contract is material
to the business, franchises, operations, assets or condition (financial or
otherwise) of NMBT and its subsidiaries on a consolidated basis, shall have been
obtained.
Section 7.08. FIRPTA Affidavit. NMBT shall have delivered to Summit an
affidavit of an executive officer of NMBT dated the date the Closing occurs
stating, under penalties of perjury, that NMBT is not and has not been a United
States real property holding company (as defined in Section 897(c)(2) of the
Code) during the applicable period specified in Section 897(c)(1)(A)(ii) of the
Code.
Section 7.09. Shareholder Approval. The shareholders of NMBT, at the
meeting contemplated by this Agreement, shall have authorized and approved the
Reorganization and this Agreement and all transactions contemplated by this
Agreement as and to the extent required by all applicable laws and regulations
and the provisions of NMBT's Amended and Restated Certificate of Incorporation
and By-Laws.
Section 7.10. Absence of Regulatory Agreements. Neither NMBT nor any NMBT
subsidiary shall be a party to any agreement or memorandum of understanding
with, or commitment letter to, or board of directors resolution submitted to or
similar undertaking made to, or be subject to any order or directive by, or be a
recipient of any extraordinary supervisory letter from, any governmental or
regulatory authority which restricts materially the conduct of its respective
business or has a material adverse effect upon the Reorganization or upon the
financial condition of Bank or of NMBT and its subsidiaries on a consolidated
basis, and neither NMBT nor Bank shall have been advised by any governmental or
regulatory authority that such authority is contemplating issuing or requesting,
or considering the appropriateness of issuing or requesting, any of the
foregoing.
The receipt of the documents required by this Article VII by Summit shall in no
way constitute a waiver by Summit of any of the provisions of or its rights
under this Agreement.
ARTICLE VIII
CONDITIONS PRECEDENT TO THE OBLIGATION OF NMBT
The obligation of NMBT to consummate the Reorganization is subject to the
simultaneous satisfaction of all of the following conditions, compliance with
which or the occurrence of which may be waived in whole or in part by NMBT in
writing in accordance with Section 10.09:
Section 8.01. No Adverse Changes. There shall not have occurred at any
time after June 30, 1999 any Summit Material Adverse Change or any material loss
or damage to the properties of Summit or its subsidiaries, whether or not
insured, which materially affects the ability of Summit and its subsidiaries, on
a consolidated basis, to conduct their business.
Section 8.02. Representations and Covenants. Except with respect to (i)
matters resulting from transactions specifically contemplated by this Agreement,
(ii) transactions or actions permitted or required by this Agreement, (iii)
changes resulting from a change in law, rule, regulation,
41
generally accepted or regulatory accounting principle or other matter affecting
banking institutions or their holding companies generally or from charges or
expenses incident to the Reorganization: all representations and warranties made
by Summit in this Agreement and in the Summit Schedules shall be true and
correct in all material respects on the date of this Agreement and on the date
the Closing occurs with the same force and effect as if such representations and
warranties were made on such date and Summit shall have complied in all material
respects with all covenants and agreements contained herein or therein to be
performed by Summit; provided, however, that no representation, warranty or
covenant of Summit shall be construed to limit or prohibit any business or
financing activities of Summit including by way of illustration and not
limitation, the entry by Summit after the date hereof into any agreement to
acquire any assets or any company or other entity, the issuance of any debt or
equity securities in public or private offerings, the issuance of Series R
Preferred Stock pursuant to the Summit Rights Agreement, the redemption or
repurchase by Summit of its capital stock, the Summit Rights or the Series R
Preferred Stock issuable pursuant to the Summit Rights Agreement, and any
transactions reasonably necessary or appropriate in connection therewith, and no
such business or financing activity shall constitute a breach of any
representation, warranty or covenant of Summit; provided further, however, that
Summit agrees that it will not permit any such transaction to cause any
unreasonable delay in the consummation of the Reorganization.
Section 8.03. Secretary's Certificate.
(a) Summit shall have furnished to NMBT a certificate dated the date the
Closing occurs to which shall be attached copies of all resolutions adopted or
minutes of actions taken by the Board of Directors (including committees
thereof) of Summit relating to this Agreement, the Option Agreement and the
Reorganization and related transactions, which such certificate shall be signed
by the Secretary of Summit and certify to the truth, correctness, completeness
and continuing effectiveness of all resolutions and actions contained or
referenced in the aforementioned attachments.
(b) In the event that pursuant to the Reorganization Election Summit
elects the Reorganization method provided for at Section 1.01(a)(2), the
Designated Summit Subsidiary shall have furnished to NMBT a certificate dated
the date the Closing occurs to which shall be attached copies of all resolutions
adopted or minutes of actions taken by the Board of Directors (including
committees thereof) and shareholders of the Designated Summit Subsidiary
relating to this Agreement, the Reorganization and related transactions, which
such certificate shall be signed by the Secretary of the Designated Summit
Subsidiary and certify to the satisfaction of the condition set forth at Section
8.09 applicable to the Designated Summit Subsidiary and to the truth,
correctness, completeness and continuing effectiveness of all resolutions and
actions contained or referenced in the aforementioned attachments.
Section 8.04. Officer's Certificate. Summit shall have furnished to NMBT
a certificate signed by the Chairman, Vice Chairman, President or an Executive
Vice President of Summit, dated the date the Closing occurs, certifying to the
satisfaction of the conditions set forth at Sections 6.01 and 6.02, the last
paragraph of Section 6.03, and Sections 6.04 and 6.05, as they relate to Summit,
and Sections 8.01, 8.02 and 8.08.
Section 8.05. Opinion of Summit Counsel. NMBT shall have received an
opinion of the General Counsel of Summit, dated the date the Closing occurs and
reasonably satisfactory in form and substance to counsel for NMBT.
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Section 8.06. [Reserved]
Section 8.07. Fairness Opinion. The Proxy-Prospectus shall have contained
the favorable signed opinion of Advest, dated the date of the Proxy-Prospectus
or a date not more than five business days prior thereto, regarding the fairness
from a financial point of view of the Exchange Ratio to the shareholders of NMBT
in the Reorganization.
Section 8.08. Absence of Regulatory Agreements. Neither Summit nor any of
its bank subsidiaries shall be a party to any agreement or memorandum of
understanding with, or commitment letter to, or board of directors resolution
submitted to or similar undertaking made to, or be subject to any order or
directive by, or be a recipient of any extraordinary supervisory letter from,
any governmental or regulatory authority which restricts materially the conduct
of Summit's business or has a material adverse effect upon the Reorganization or
upon the financial condition of Summit and its subsidiaries on a consolidated
basis, and neither Summit nor any of its bank subsidiaries shall have been
advised by any governmental or regulatory authority that such authority is
contemplating issuing or requesting, or considering the appropriateness of
issuing or requesting, any of the foregoing.
Section 8.09. NMBT Shareholder Approval. The shareholders of NMBT, at the
meeting contemplated by this Agreement, shall have authorized and approved the
Reorganization and this Agreement and all transactions contemplated by this
Agreement as and to the extent required by all applicable laws and regulations
and the provisions of NMBT's Amended and Restated Certificate Incorporation and
By-laws and in the event that pursuant to the Reorganization Election Summit
elects the Reorganization method provided for at Section 1.01(a)(2) the sole
shareholder of the Designated Summit Subsidiary shall have authorized and
approved the Reorganization and this Agreement and all transactions contemplated
by this Agreement as and to the extent required by all applicable laws and
regulations and the provisions of the Designated Summit Subsidiary's certificate
or articles of incorporation and by-laws.
The receipt of the documents required by this Article VIII by NMBT shall in no
way constitute a waiver by NMBT of any of the provisions of or its rights under
this Agreement.
ARTICLE IX
CLOSING; TERMINATION RIGHTS
Section 9.01. Closing. The closing of the Reorganization (the "Closing")
shall take place on the date which is 45 business days after the last to occur
of the following ("Scheduled Date"), unless Summit shall designate a date for
the Closing which is prior to the Scheduled Date in a writing ("Closing Notice")
designating a Determination Date in accordance with Section 9.02(e)(i) below and
delivered to NMBT at least five (5) business days prior to the date designated
therein for Closing, or unless prior to the Scheduled Date the parties agree to
a different date:
(i) the date of the approval of the Reorganization by the
shareholders of NMBT in accordance with Section 7.09;
(ii) if the transactions contemplated by this Agreement are being
contested in any legal proceeding, the date that such proceeding
has been brought to a conclusion favorable, in the judgment of
Summit and NMBT, to the consummation of the transactions
contemplated herein or such prior date as Summit and NMBT shall
elect, whether or not
43
such proceeding has been brought to a conclusion; or
(iii) the date of receipt of the last of the Required Consents or the
date that all waiting periods required by statute or
incorporated into such Required Consents have expired;
and the date of Closing determined in accordance with the foregoing provisions
is referred to herein as the "Closing Date". The Closing shall take place at the
office of Summit, 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx, commencing at
10:00 a.m. on the date the Closing is held, unless the parties agree to a
different place or commencement time. At the Closing, the parties will exchange
certificates, legal opinions and other documents for the purpose of determining
whether the conditions precedent to the obligations of the parties set forth
herein have been satisfied or waived. In the event that pursuant to the
Reorganization Election Summit elected the Reorganization method provided for at
Section 1.01(a)(1), Summit shall, after all such conditions to Closing have been
satisfied or waived, cause the NJ Certificate to be filed with the Secretary of
State of the State of New Jersey and the Delaware Certificate to be filed with
the Secretary of State of the State of Delaware. In the event that pursuant to
the Reorganization Election Summit elected the Reorganization method provided
for at Section 1.01(a)(2), Summit shall, after all such conditions to Closing
have been satisfied or waived, cause the appropriate certificate of merger,
articles of merger, or both to be filed with the proper state jurisdictional
authorities to effect the Reorganization intended by this Agreement. All
proceedings to be taken and all documents to be executed and delivered by all
parties at the Closing shall be deemed so taken, executed and delivered
simultaneously, and no proceedings shall be deemed taken or any documents
executed or delivered until all have been taken, executed or delivered.
Section 9.02. Termination Rights.
(a) The Board of Directors of NMBT or Summit may terminate this Agreement
in the event that:
(1) the shareholders of NMBT at the meeting of shareholders
contemplated by Section 4.03, called for the purpose of approving the
Reorganization, this Agreement and the transactions contemplated by this
Agreement, upon voting, shall have failed to approve the Reorganization, this
Agreement and the transactions contemplated hereby by the requisite vote;
(2) a material breach of a warranty, representation, covenant or
agreement made by the other party in this Agreement shall have occurred and such
breach has not been cured, or is not capable of being cured, within 30 days
after written notice of the existence thereof shall have been given to the other
party (a "Material Breach") (provided that the terminating party is not then in
Material Breach of this Agreement);
(3) NMBT's investment banker is unable to deliver to NMBT by
January 31, 2000 the opinion required by Section 8.07; or
(4) the Closing is not consummated on or before the later of (i)
July 1, 2000, unless the failure of such occurrence shall be due solely to a
Material Breach by the party seeking to terminate this Agreement or the failure
of such party to fulfill a condition to Closing provided for herein, or (ii) the
Scheduled Date, if the last event required to occur pursuant to the first
sentence of Section 9.01 for the setting of the Scheduled Date shall have
occurred on or before August 1, 2000.
(b) If either party shall refuse to close on the Closing Date because all
the conditions to its
44
obligation to close set forth in Article VI shall not have been met, the parties
shall conduct the Closing as promptly as practicable after all such conditions
have been satisfied. In the event the failure of such a condition is due to one
or more Material Breaches, the Board of Directors of a party not in Material
Breach may, during the period any such Material Breach remains uncured,
terminate this Agreement by giving written notice of such termination to the
other party.
(c) If either party shall refuse to close on the Closing Date because all
the conditions to its obligation to close set forth in Article VII or VIII shall
not have been met (other than a failure of the condition set forth at Section
7.09 or 8.09 due to the circumstances set forth in Section 9.02(a)(1) hereof or
a failure of the condition set forth at Section 8.07 due to the circumstances
set forth at Section 9.02(a)(3) hereof): (i) the parties shall conduct the
Closing as promptly as practicable after all such conditions have been
satisfied, and (ii) the Board of Directors of such party may, during the period
the failed condition continues, terminate this Agreement by giving written
notice of such termination to the other party unless such party itself has
failed to satisfy a condition to the other party's Closing obligation or is in
Material Breach.
(d) The Board of Directors of Summit may terminate this Agreement:
(1) at any time if NMBT does not execute and deliver the Option
Agreement by the day immediately following the date hereof;
(2) at any time prior to the meeting of NMBT shareholders
contemplated by Section 4.03, if the Board of Directors of NMBT fails to
recommend approval of this Agreement and the Reorganization and other
transactions contemplated hereby in the Proxy-Prospectus ("Recommendation") or
withdraws, modifies or changes, or votes to withdraw, modify or change, its
Recommendation or its intention to make the Recommendation as represented and
warranted at Section 2.08; and
(3) as provided at Section 4.20.
(e) In the event the Summit Price is less than $26.39 and the quotient
obtained by dividing the Summit Price by $32.1875 is more than .15 less than the
quotient obtained by dividing the Determination Date Index Price (as defined at
(iii) below) by the Starting Date Index Price (as defined at (iv) below), the
Board of Directors of NMBT shall have the right, exercisable only until 11:59
p.m. on the third business day following the Determination Date to terminate
this Agreement by giving Summit notice of such termination, referring to this
Section 9.02(e), and this Agreement shall be terminated provided Summit receives
such notice prior to the time and day set forth above in this Section 9.02(e).
For purposes of this Section 9.02(e):
(i) "Determination Date" means the date which is seven business days
prior to the Scheduled Date or, if Summit delivers a Closing
Notice to Bank pursuant to Section 9.01, the date specifically
designated by Summit as the Determination Date in such Closing
Notice, which date shall be not more than ten business days prior
to the Closing Date.
(ii) "Summit Price" means the average of the closing prices of a share
of Summit Stock on the NYSE Composite Transactions List (as
reported in The Wall Street Journal or, in the absence thereof, as
reported by another authoritative source mutually agreed upon by
NMBT and Summit) for the 10 consecutive full trading days, ending
on the
45
Determination Date, on which one share of Summit Stock is traded.
(iii) "Determination Date Index Price" means the average of the closing
prices of the common stock of the companies in the Index Group (as
defined at (v) below) on the NYSE Composite Transactions List (as
reported in The Wall Street Journal or, in the absence thereof, as
reported by another authoritative source mutually agreed upon by
NMBT and Summit) for the 10 consecutive full trading days ending
on the Determination Date.
(iv) "Starting Date Index Price" means the average of the closing
prices on the Starting Date (as defined at (vi) below) of the
common stock of the companies in the Index Group on the NYSE
Composite Transactions List (as reported in The Wall Street
Journal) as of the Determination Date.
(v) "Index Group" means the bank holding companies listed below;
provided, however, that if between the Starting Date and the
Determination Date the common stock of any such company ceases to
be publicly traded, an announcement is made of a proposal for such
company to be acquired or an announcement is made of a proposal by
such company to acquire another company or companies in
transactions with a value exceeding 25% of such acquiror's market
capitalization as of the Starting Date, then, in such event, for
purposes of calculating the Index Price in all cases, such company
will be removed from the Index Group. If any company in the Index
Group or Summit declares or effects a stock dividend,
reclassification, recapitalization, split-up, combination,
exchange of shares or similar transaction between the Starting
Date and the Determination Date, the closing price of the common
stock of such company or Summit, as the case may be, on the
Starting Date shall be appropriately adjusted for the purposes of
applying this Section 9.02(e). The bank holding companies in the
Index Group are as follows:
Bank Holding Companies
AmSouth Bancorp
BB&T Corporation
Comerica Incorporated
Fifth Third Bancorp
Huntington Bancshares, Inc.
Keystone Financial, Inc.
North Fork Bancorporation, Inc.
Northern Trust Corporation
Old Kent Financial Corporation
Regions Financial Corporation
SouthTrust Corporation
Union Planters Corp.
Wilmington Trust Corporation
Zions Bancorp
(vi) "Starting Date" means the date of the last trading day ending before
the public announcement of the execution of this Agreement.
Section 9.03. Effects of a Termination; Certain Expenses.
(a) Upon a termination of this Agreement pursuant to this Section 9.02
hereof:
46
(1) the obligations of the parties under this Agreement (except
for those under this Section 9.03 and Sections 4.13 and 5.08) shall terminate
and be of no further force or effect and each party shall be mutually released
and discharged from liability to the other party or to any third parties
hereunder, and
(2) no party shall be liable to any other party for any costs or
expenses paid or incurred in connection herewith by such other party, except
that expenses incurred in connection with printing the Proxy-Prospectus and the
Registration Statement, and the filing fees of regulatory authorities or
self-regulatory organizations, shall be borne equally by Summit and NMBT;
provided, however, that: (A) if NMBT terminates this Agreement pursuant to
Section 9.02(a)(2) or Section 9.02(c), Summit shall reimburse NMBT for its
out-of-pocket expenses reasonably incurred in connection with this Agreement,
including counsel fees and the printing and filing fees referred to above, but
excluding any brokers', finders' or investment bankers' fees; and (B) if Summit
terminates this Agreement pursuant to Section 9.02(a)(2), Section 9.02(c) or
Section 9.02(d), NMBT shall reimburse Summit for its out-of-pocket expenses
reasonably incurred in connection with this Agreement, including counsel fees
and the printing and filing fees referred to above, but excluding any brokers',
finders' or investment bankers' fees.
(b) Notwithstanding any termination of this Agreement, (i) NMBT shall
indemnify and hold Summit harmless from and against any claim by any broker or
finder asserting a right to brokerage commissions or finders' fees as a result
of any action allegedly taken by or understanding allegedly reached with NMBT
and (ii) Summit shall indemnify and hold NMBT harmless from and against any
claim by any broker or finder asserting a right to brokerage commissions or
finders' fees as a result of any action allegedly taken by or understanding
allegedly reached with Summit.
(c) Except as provided otherwise herein in the event of a termination of
this Agreement, NMBT and its subsidiaries shall bear their own expenses incident
to preparing, entering into and carrying out this Agreement and to consummating
the Reorganization, provided, however, that Summit shall pay all printing
expenses and filing fees associated with the Registration Statement, the
Proxy-Prospectus and regulatory applications.
ARTICLE X
MISCELLANEOUS
Section 10.01. Press Releases. At all times until the Closing Date or the
termination of this Agreement, each party shall promptly advise and consult with
the other prior to issuing, or permitting any of its subsidiaries, directors,
officers, employees or agents to issue, any press release or other information
to the press or any third party with respect to this Agreement or the
transactions contemplated hereby.
Section 10.02. Article and Section Headings. Article and section headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
Section 10.03. Entire Agreement; Amendments. This Agreement, the NMBT
Schedules and the Exhibits hereto and the Option Agreement to be entered into by
the parties hereto constitute the entire agreement between the parties
pertaining to the subject matter hereof and supersede all prior and
contemporaneous agreements, understandings, negotiations and discussions,
whether oral or written, of the parties, and there are no warranties,
representations or other agreements between the
47
parties in connection with the subject matter hereof except as specifically set
forth herein or therein. No supplement, modification, waiver or termination of
this Agreement shall be binding unless executed in writing by the party to be
bound thereby (or in the case of a termination occurring pursuant to Section
9.02 hereof by the party exercising a right to terminate this Agreement). No
waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provision hereof or thereof (whether or not
similar), nor shall any waiver constitute a continuing waiver unless otherwise
expressly provided in the instrument granting such waiver. The parties hereto
may amend or modify this Agreement in such manner as may be agreed upon by a
written instrument executed by the parties, except that, after the meeting
described in Section 7.09 hereof, no such amendment or modification shall reduce
the amount of, or change the forms of consideration to be received by the
shareholders of NMBT contemplated by this Agreement, unless such modification is
submitted to a vote of the shareholders of NMBT.
Section 10.04. Survival of Representations, Warranties and Covenants. No
investigation made by the parties hereto made heretofore or hereafter shall
affect the representations and warranties of the parties which are contained
herein and each such representation and warranty shall survive such
investigation. None of the representations, warranties, covenants and agreements
in this Agreement or in any instrument delivered pursuant to this Agreement
shall survive the Effective Time, except for those representations, covenants
and agreements contained herein and therein which by their terms apply in whole
or in part after the Effective Time.
Section 10.05. Notices. Any notice or other communication required or
permitted hereunder shall be in writing, and shall be deemed to have been given,
unless otherwise specified in a particular provision of this Agreement, if
placed in the mail, registered or certified, postage prepaid, or if delivered
personally or by courier, receipt requested, or by facsimile transmission,
receipt acknowledged addressed as follows:
Summit: Summit Bancorp.
Attn: Xxxx X. Xxxxxxx
000 Xxxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxx, XX 00000-0000
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
With a copy to: Xxxxxxx X. Xxxx, Xx., Esq.
Summit Bancorp.
000 Xxxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxx, XX 00000-0000
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
NMBT: NMBT CORP
Attention: Xxxxxxx X. Xxxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxxx 00000
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
48
With a copy to: Stanford X. Xxxxxxx, Xx., Esq.
Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, PC
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone No.: 000-000-0000
Facsimile No.: 617-542-2241
or to such other address as such party may designate by notice to the others,
which change of address shall be deemed to have been given upon receipt.
A notice or other communication hereunder shall be deemed delivered (i)
if mailed by certified or registered mail to the proper address, with adequate
postage prepaid, on the fifth business day following posting, (ii) if hand
delivered, when received by the person to whom directed, (iii) if delivered by
overnight courier, on the next business day following shipment, or (iv) if
delivered via facsimile, on the business day transmitted.
Section 10.06. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New Jersey,
without giving effect to the provisions, policies or principles thereof relating
to choice or conflict of laws.
Section 10.07. Counterparts. This Agreement is being executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same agreement.
Section 10.08. Binding Effect. All of the terms and provisions of this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns.
Section 10.09. Extensions; Waivers and Consents. Either party hereto, by
written instrument signed by its Chairman, Vice Chairman, President, or Chief
Financial Officer, may extend the time for the performance of any of the
obligations of the other party hereto, and may waive, at any time before or
after approval of this Agreement and the transactions contemplated hereby by the
shareholders of NMBT, subject to the provisions of Section 10.03 hereof: (i) any
inaccuracies of the other party in the representations and warranties in this
Agreement or any other document delivered pursuant hereto or thereto; (ii)
compliance with any of the covenants or agreements of the other party contained
in this Agreement; (iii) the performance (including performance to the
satisfaction of a party or its counsel) by the other party of any of its
obligations hereunder or thereunder; and (iv) the satisfaction of any conditions
to the obligations of the waiving party hereunder or thereunder. Any consent or
approval of a party hereunder shall be effective only if signed by the Chairman,
Vice Chairman, President or Chief Financial Officer of such party.
49
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
in counterparts by their duly authorized officers as of the date first above
written.
SUMMIT BANCORP.
By: /s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
Vice Chairman
NMBT CORP
By: /s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
President and Chief Executive Officer
In the event that pursuant to the Reorganization Election Summit elects the
Reorganization method provided for at Section 1.01(a)(2), the Designated Summit
Subsidiary indicated below agrees to be legally bound by all terms of this
Agreement and Plan of Merger as if an original party hereto.
Designated Summit Subsidiary: ___________________________________
By __________________________________
Name: _______________________________
Title:_________________________________
Date: ________________________________
50
EXHIBIT A
[RESERVED FOR ADDITIONAL TERMS PURSUANT TO SECTION 1.01(b)]
EXHIBIT B
An executed copy of Exhibit B is filed herewith as Exhibit 10(b) to this
Schedule 13D.
EXHIBIT C
POST-SIGNING DOCUMENT LIST
INSTRUCTIONS
1. Copies of documents rather than originals should be delivered.
2. The requested information and documents should be provided by NMBT CORP
("NMBT") and by all subsidiaries of NMBT unless an item refers by name to
a specific entity, in which case the information and documents may be
furnished solely by the named entity. References to "the Corporation"
means NMBT and each of its subsidiaries.
3. The information and documents should be provided separately by each
entity. Please do not mix information or documents from one entity with
that of another. Please clearly segregate materials when delivering them
to Summit.
4. Please xxxx each item of information and each document furnished pursuant
to this List in the upper right corner with the letter and number of the
item in this List to which it corresponds.
5. Send all information and documentation requested herein to the attention
of Xxxxxx X. Xxxxxxxx, Senior Vice President and Group Counsel, Summit
Bancorp., 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000.
6. To the extent you believe an item of information or document was
furnished pursuant to a NMBT Schedule under the Merger Agreement between
NMBT and Summit, please indicate all such items of information and
documents on a list, cross-referencing the item from this List to the
appropriate NMBT Schedule.
Thank you.
1
POST-SIGNING DOCUMENT LIST
A. LEGAL
1. Original Certificate or Articles of Incorporation or Articles of
Association, as appropriate, certified by Secretary.
2. All Amendments to Certificate or Articles of Incorporation or
Articles of Association, as appropriate, certified by Secretary.
3. Current By-Laws and any Amendments certified by Secretary.
4. Copies of Annual Reports to Shareholders (6 years).
* 5. Original Minute Books containing all minutes of Shareholder,
Director and Committee meetings.
* 6. Original Stock Certificate Records.
7. (Reserved)
8. List of any outstanding options, warrants, presently exercisable
rights, buyout arrangements, voting trusts, or liens affecting the
Corporation's stock, with copies of pertinent documentation and
details of any such arrangements.
9. Documentation of all long-term (over one year) indebtedness or credit
lines of the Corporation including guarantees and other contingent
liabilities in excess of $50,000.
10. List of all officers, directors, and holder of 1% or more of stock of
the Corporation showing:
a) Full name.
b) Titles.
c) Number of Shares of Stock held.
* 11. List of all shareholders with addresses and holdings.
12. Address and description of each office and whether building is owned
or leased.
13. As to any land and buildings owned, provide most recent available
accounting or tax schedules reflecting any of the following: the
original cost, date of acquisition, age of building, depreciation
rates used and allowed by the Internal Revenue Service, depreciation
reserve, net book value, and property and other taxes currently being
paid for each building. To the extent available, provide copies of:
title papers, title insurance policies, abstracts, title opinions,
appraisals, surveys and all agreements relating to or affecting the
real property. List mortgages, and, to the extent available,
encumbrances and liens of all kinds.
14. List of real estate acquired as salvage on uncollected loans and
"other real estate owned" - address and date acquired, loan value,
most recent appraised value.
15. List all facilities financed with tax-exempt financing. Specify
whether the facility is owned or leased and, if leased, the
percentage of space in the facility under lease. Please provide all
documentation relating to the tax-exempt financing and all documents
relating to the facility currently in force or in effect.
16. Leases for current premises, whether as tenant or landlord, and any
prior premises for which the Corporation retains liabilities. List of
any directors or officers with whom the Corporation has a lease.
* Not to be delivered; to be made available for examination on site.
2
17. Leases for all leased equipment with annual rentals over $50,000,
including, but not limited to:
a) Alarm system
b) Telephone system
c) Computers
d) Office equipment
18. All maintenance contracts with annual costs exceeding $50,000,
including but not limited to:
a) Equipment
b) Cleaning
19. All contracts with advertising agencies and contracts or commitments
for media.
20. All agreements, registrations or other filings relating to
trademarks, trade names, copyrights, licenses, patents or other
proprietary rights, including books or articles authorized by
officers and other employees.
21. Agreements for the purchase of materials or supplies involving
payments in excess of $50,000 per year or for more than one year.
22. Agreements for the performance of services involving payments in
excess of $50,000 per year or for more than one year related to the
business, including but not limited to:
a) Messenger Service
b) Mortgage Servicing
c) Data Processing
d) BankCard Servicing
e) Automated Teller Machines Networks
f) Insurance, annuities, mutual fund or securities sales or
brokerage
g) Credit Life & A & H
23. All contracts or commitments for capital expenditures involving
payments in excess of $50,000.
24. All contracts or options to purchase or sell any real or personal
property.
25. All contracts, agreements, consultant arrangements, retainers, or
written or oral commitments (other than those relating to normal
customer transactions) currently in effect not listed above in
Insurance or Personnel Lists, including but not limited to lawyers,
accountants, actuaries, insurance agents or brokers involving
payments in excess of $50,000 per year or for more than one year.
26. List of all lawsuits, claims, proceedings or arbitrations involving
customers, federal or state government agencies, departments or
bureaus, insurance carries or others affecting the Corporation or its
officers and employees, whether current or past but not yet
conclusively terminated or barred by the statue of limitations,
whether as plaintiff, defendant or third party, providing:
a) a full statement of the issues involved,
b) nature of the litigation
c) amount involved or maximum total liability or recovery
involved,
d) court or other body where matter is to be heard, docket
number and date of last filing.
e) last available reply to accountants or opinion of counsel
as to the probable outcome of such litigation,
f) availability of insurance coverage, if any.
3
NOTE: The following may be excluded:
(i) Actions by the Corporation to collect loans made in
the ordinary course of business where the principal
amount is less than $50,000 and there are no
counterclaims.
(ii) Actions against the Corporation
(A) for personal injuries where there is adequate
insurance coverage and the claim is less than
$50,000. Provide a list reflecting the aggregate
exposure for deductibles under insurance policies for
claims of $50,000 or less. (B) for losses due to
alleged check processing errors (forged signatures,
stop payment missed, etc.) where the alleged loss is
less than $2,500 per claimant.
27. All filings with Comptroller of the Currency, Federal Reserve Board,
Federal Financial Institutions Examination Counsel, FDIC, Office of
Thrift Supervision, and all other regulatory agencies (including but
not limited to Forms FFIEC-003 and FFIEC-004, F-2, F-3, F-4 and F-20,
FDIC insurance premium reports, and Call Reports with all
supplements, for all interim and full-year periods from 1/l/96 to
date).
28. All written policies and procedures governing operation of business
including loan policies.
29. All pricing schedules made available to customers for service
charges, etc. and product brochures in effect currently and
for last two years.
30. All advertising materials used in the last two years.
31. All standard purchasing forms.
32. All agreements with competitors.
33. List of all relationships between (i) NMBT and (ii) Summit and its
officers, directors and affiliates, including without limitation:
a) Loans; and
b) Purchases or sales of products or services (except from
public utility companies).
34. Director and officer Questionnaires for directors and executive
officers for last 2 years.
35. Any covenants not to compete affecting officers or employees of NMBT
36. CRA public file.
37. CRA Small Business Data (3 years)
38. BSA Compliance Program
39. Most recent Consumer Affairs Examination Report
40. Insider loan compliance procedures.
41. List of insiders (Regulation O).
42. List of related interests (as defined in Regulation O).
43. Correspondent bank list (as defined in Regulation O).
44. Reports of executive officer indebtedness in excess of $100,000.
45. Records relating to insider overdrafts.
46. Copy of Home Mortgage Disclosure Statements (Regulation C) for 3
years.
47. All filings by the Corporation with the SEC for the period specified
below, including but not limited to:
Registration Statements - 6 years
Proxy Statements - 6 years
Statements under Section 16(a) of the Securities Exchange Act
of 1934 - 1 year Reports on Forms 10-K, 10-Q and 8-K - 3 years
4
SEC Forms 13G, 13D and MSD - 3 years Other - 3 years
including all Exhibits and Amendments to the foregoing.
48. List of any unregistered sales of securities (including private
placements) in the last 6 years and applicable exemptions and
opinions of counsel.
49. All applications to and filings with the NASD in the last 3 years,
other than those supplied in response to item A.47.
5
B. PERSONNEL
1. Corporation's Table of organization.
* 2. List of all officers and directors of the Corporation, showing:
a) Full name.
b) Titles.
c) Date of birth.
d) Current salary, bonus and other compensation, and method
of calculation and payment.
e) Salary, bonus and other compensation for 1997, 1998 and
1999 to date.
f) Date of first employment and any gaps in
service.
3. All employment contracts.
4. All pension and retirement plans and IRS rulings and opinions of
counsel thereon.
5. All bonus plans.
6. All deferred compensation plans.
7. All profit-sharing plans and IRS rulings and opinions of counsel
thereon.
8. All stock option plans.
9. All dividend reinvestment plans and stock purchase plans.
10. All annuity plans.
11. All stock award plans.
12. All actuarial and trustees reports for pension, profit-sharing
and other benefit plans for 3 years.
13. Summaries of separate payment arrangements for terminated or
retired employees.
14. Summaries of strategies regarding healthcare:
- cost management
- employee contributions
15. Statements of Investment Policy and summaries of investment
strategies for Pension, 401(k), and Profit Sharing Plans, etc.
16. Loan Agreements and special trust agreements for leveraged benefits
(e.g. ESOP, etc.)
17. Consulting or servicing agreements, for consulting services and
outsourced services.
18. List of all employee benefits in force, with copies of all relevant
documentation, including plan documents, trust agreements, funding
arrangements, summary plan descriptions benefits or policy manuals,
insurance policies, etc., and a schedule or agents or brokers,
expiration date, premiums paid and claims made during the last three
years, including but not limited to:
a) Pension, bonus, profit-sharing, stock option, stock
purchase and annuity plans.
b) Medical plans i.e., Blue Cross-Blue Shield, Major
Medical, Health Maintenance organizations, commercial
health insurance policies.
c) Dental plans.
d) Vacation policy.
e) Education reimbursement policy.
f) Short-term disability.
g) Long-term disability.
h) Sick day policy.
i) Emergency leave policy.
j) Grievance policy.
k) Employee discount policy.
6
1) Life insurance.
m) Business travel accident insurance.
n) Personal accidental death and disability insurance.
o) Salary continuation program.
p) Retirement policy.
q) AD&D
r) Dependent Life
s) Spending Accounts
t) Employee Assistance Policy
u) Adoption Policy
v) Work/life initiatives
w) Employee referral policy
* 14. List of unemployment compensation claims and results for 3 prior
years and current year.
15. All hiring procedures and policies, including methods of solicitation
of applicants, media or agencies used, nepotism policy, etc.
16. Information regarding who prepares payroll and all contracts
regarding payroll preparation.
17. Informal pension, consulting, or benefits continuance arrangements
with retired employees.
* Not to be delivered; to be made available for examination on site.
7
C. INSURANCE
1. Copies of all Liability Insurance Contracts and applications and
insurance company audits for current and three prior years, including
but not limited to:
a) Comprehensive General Liability.
b) Auto Liability.
c) Umbrella Liability.
d) Worker's Compensation.
2. List of paid and open Liability claims for current and 6 prior
years, indicating:
a) Type of claim and whether open or closed.
b) Amount of loss or claim (paid and incurred).
c) Date of occurrence.
d) Description of occurrence.
3. List of self-insured or non-insured risk program.
4. Any written safety programs.
* 5. Copies of latest loss prevention inspections and reports on all
liability, fire/loss prevention, worker's compensation exposures.
6. Copies of OSHA Summary Accident Reports for current and 3 prior
years, along with citations, fines assessed and cost of compliance.
7. Complete copies of all property insurance policies for current
and 3 prior years including:
a) Bank Real and Personal Property, Fire & Extended
Coverage, All-Risk Coverage including Flood &
Earthquake.
b) Boiler and Machinery.
c) Mortgage Properties/Forced Placed/Foreclosed/Other
Real Estate Owned.
d) Trust Properties.
e) Aircraft and/or Watercraft Coverages
8. List of all paid and open Property losses for current and 6 prior
years, indicating:
a) Type of claims and whether open or closed.
b) Amount of loss or claim (paid and incurred)
c) Date of loss.
d) Description of loss.
e) Address where loss occurred, Bank location/mortgage
property/OREO/Trust
9. Copies of latest fire/loss prevention inspection reports.
10. Complete copies of all other insurance coverages with applications
and loss history for current and 3 years prior
a) Fidelity Bond and Computer Crime Coverages (6 year
history).
b) Directors & Officers Liability.
c) Professional Liability, i.e. Bankers Professional, Trust
Errors & Omissions, EDP Errors & Omissions, Insurance
Agents Errors & Omissions, etc.
d) Mail Insurance.
e) Loss Instrument Bonds.
f) Miscellaneous Bonds, i.e. Performance, Maintenance,
Securities Transfer Agents (STAMP).
g) Mortgage Impairment/Errors & Omissions Coverage
8
h) Kidnap/Xxxxxx
i) ERISA/Pension Trust/Fiduciary Coverage
10. Description of Risk Management Information System
11. List of Insurance Agent & Broker contracts.
12. Summaries of litigation involving general liability coverage.
* Not to be delivered; to be made available for examination on site.
9
D. ACCOUNTING AND TAX
1. Access to 1997, 1998 and 1999 general ledger.
2. Federal tax returns of Corporation for 4 years.
3. State sales, use, income and personal property tax returns for
4 years.
4. Certified balance sheets and income statements of NMBT for 4 prior
years, and most recent period available, including accountant's
reports.
* 5. All audit reports of IRS in last 4 years.
6. All audit reports of state taxing authorities in last 4 years.
7. List setting forth status of all open tax returns, noting status of
each years return, i.e., whether liability settled, not yet
determined or in controversy. Status of all claims for refund.
8. List of all bank accounts in other banks with:
a) copy of most recent statement and reconciliation to general
ledger.
b) copy of bank account resolution.
c) copy of current signature cards.
9. List of all loans to Corporation officers, directors, employees, and
members of their families currently outstanding or made during the
past three years, including cash advances or payments or personal
expenses not reimbursed within 30 days in excess of $1,000, including
the following information:
a) Loan date.
b) Amount.
c) Term.
d) Interest rate.
e) Highest outstanding balance.
f) Current balance.
g) Has the loan been in default and is it currently in
default? If yes, details.
* 10. Verification of current payment of all estimated tax for NMBT,
withholding and FICA for employees.
11. List all commissions or other payments made to obtain business.
12. List of all contingent liabilities and assets, whether recorded
or unrecorded in excess of $50,000.
13. Schedule showing date and amount of
each dividend paid since 1/l/96.
14. List of loan commitments greater than $50,000.
15. List of bank obligations other than deposits and deposit
liabilities greater than $50,000.
16. List of transactions over past 2 years greater than $25,000 with
officers, directors and employees.
17. List of bankruptcy accounts.
* Not to be delivered; to be made available for examination on site.
10
E. AUDIT
1. Management letters issued by independent CPA for prior year.
2. Internal Audit Reports for 1 year
F. CREDIT RISK MANAGEMENT (To the extent it is not practicable to deliver
may be made available on site)
1. Most recent Federal and State safety and soundness exam
2. All latest Board approved Loan Policies and Risk Management Policies
including Appraisal, Real Estate, OREO, and all Lines of Business.
3. Lending Philosophy - copy of the companies culture statement
4. Concentrations - standards and specialties such as Healthcare, etc.
supported by latest quarterly reporting
5. Last Quarterly Portfolio Stratification and Trend Analysis
6. Loan Grading Methodology and Stratification
7. Financial Statement requirements for underwriting
8. Credit Investigation and Analysis process
9. Credit Underwriting process and standards
- Credit files - composition and structure
10. Documentation process and standards
a) Fee philosophy
b) House documents and dollar threshold
c) Insurance standards
11. Participation/Syndication - copy of latest quarterly report
a) Shared National Credits
b) HLT Reports
12. Problem Asset Management Standards
a) Identification
b) Notification
c) Assignment
d) Management (LMS System) Watchlist
e) Approval
f) Reporting requirements
g) Delinquency - copy of latest quarterly report
h) Non-Performing Assets - copy of latest quarterly report
- NPL's by size
- NPL's by type
i) Accrued interest on NPL
j) Budget for NPA's
k) List of TDR's
l) Charge offs/Recoveries - copy of latest quarterly report
m) ALLR - methodology and copy of latest report
11
n) Listing of Loans 90 days past due - copy of latest quarterly
report broken down by product/line of business.
13. Off Balance Sheet Activities - copy of latest quarterly report
14. International Activities - Sovereign Risk
15. Domestic and Foreign Bank (Reg F) - copy of latest Board reporting
16. Residential Mortgage - loan standards, commitments and outstandings
17. Installment - loan standards, commitments and outstandings
- Dealerships - commitments and outstandings,
copy of latest quarterly report
18. Corporate Finance standards, commitments and outstandings
19. FDICIA 304 - copy of latest Board reporting
20. Reg O - copy of latest Board reporting
21. Approval Process and Authorities for Lending Authority
22. Environmental Standards
23. Appraisal
a) Copy of approved appraisal listing
b) Process for Commercial and Residential Appraisals
- Pending litigation involving valuation issues
24. Real Estate Standards
25. Personal Property - copy of standards
26. Hold Limits - copy of standards
27. Outside Counsel methodology and process
28. Privity Standards
29. SIC Reports and Methodology - copy of latest quarterly reporting
30. Counterparty Risk - latest assessment of risk profile
31. Leasing - standards, outstandings and commitments and copy of
latest quarterly report
32. Large Corporation standards, outstandings and commitments
latest quarterly report
33. Correspondent Banking standards, outstandings and commitments
and copy of latest quarterly report
34. Asset Based Lending standards, outstandings and commitments and
copy of latest quarterly report
35. Exception to Policy - process and copy of latest report and
methodology
36. OREO Accounting process and copy of latest quarterly report
12
EXHIBIT D-1
Name of Affiliate:______________________
Summit Bancorp.
301 Carnegie Center
X.X. Xxx 0000
Xxxxxxxxx, Xxx Xxxxxx 00000
Gentlemen:
This letter agreement is being entered into pursuant to the terms of
the Agreement and Plan of Merger, dated October __, 1999 (the "Merger
Agreement"), between Summit Bancorp. ("Summit") and NMBT Corp ("NMBT"), which
provides, among other things, for the merger of NMBT with and into Summit (the
"Merger") and the conversion at the Exchange Ratio provided for in the Merger
Agreement of shares of the common stock, par value $.01 per share, of NMBT
("NMBT Common Stock") outstanding at the Effective Time (as defined in the
Merger Agreement) held in the aggregate by each NMBT Shareholder into whole
shares of the Common Stock, par value $.80 per share, of Summit (the "Summit
Common Stock") and cash in lieu of a fractional share of Summit Common Stock.
Shares of NMBT Common Stock owned on the date hereof or at any time
hereafter solely, jointly or in a custodial or other representative capacity by
me, by a minor child of mine, by a relative sharing the same household as me, or
by an entity (for example, trusts, estates, partnerships, corporations,
charitable organizations, foundations) I control, whether such shares are owned
directly (of record) or indirectly (through a bank, broker or other nominee),
and any other shares of NMBT Common Stock over which I or such other persons or
entities hold investment or voting powers, either alone or with others, are
referred to collectively herein as the "NMBT Shares". Shares of Summit Common
Stock to be received in exchange for the NMBT Shares together with any other
shares of Summit Common Stock owned solely, jointly or in a custodial or other
representative capacity after the time of the Merger by me, by a minor child of
mine, by a relative sharing the same household as me, or by an entity I control
whether such shares are owned directly or indirectly, and any other shares of
Summit Common Stock over which I or such persons or entities hold investment or
voting powers, either alone or with others, are referred to collectively herein
as the "Summit Shares".
I have been advised that, in the opinion of counsel, I may be deemed to
be, at the time the Merger is submitted for a vote of the shareholders of NMBT
an "affiliate" of NMBT as that term is 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 "SEC") under the Securities Act
of 1933, as amended (the "Act") and that the Merger Agreement requires that
persons so characterized make the representations, warranties, covenants and
agreements set forth below as a condition to Summit closing the Merger.
Capitalized terms used herein but not specifically defined herein shall
have the meaning ascribed to them in the Merger Agreement.
In consideration of the premises, I represent, warrant, covenant and
agree as follows:
A. I will not make or permit any sale, transfer or other disposition of
the Summit Shares, or make or permit any offer to sell, transfer or otherwise
dispose of the Summit Shares, in violation of the Act or the Rules and
Regulations.
B. I have been advised that the issuance of the Summit Shares pursuant
to the Merger has been registered with the SEC pursuant to a registration
statement under the Act. However, I have also been advised that a secondary
distribution of the Summit Shares has not been registered under the Act and
that, because I may be deemed to be, at the time the Merger is submitted for a
vote of the shareholders of NMBT, an "affiliate" of NMBT, I may not make or
permit any sale, transfer or other disposition of any of such Summit Shares
unless and until (i) an offer and sale of such Summit Shares has been registered
under the Act, (ii) such disposition of such Summit Shares is made in conformity
with Rule 145 under the Act, or (iii) an exemption from registration, in the
written opinion of counsel acceptable to Summit, is available with respect to
such disposition of such Summit Shares. In the event of a transfer of Summit
Shares permitted by this Agreement, I agree that I will obtain, and deliver to
you a copy of, an agreement substantially similar to this agreement from each
transferee of the Summit Shares who, in the written opinion of counsel
acceptable to Summit, may not under the Act dispose of the Summit Shares so
transferred without registration under the Act.
C. I understand that Summit is under no obligation to register the
sale, transfer or other disposition of the Summit Shares or to take any other
action necessary in order to make compliance with an exemption from registration
available.
D. I understand that stop transfer instructions may be given to
Summit's transfer agent with respect to the Summit Shares and that there may be
placed on the certificates for such Summit Shares, or any substitutions
therefor, a legend stating in substance:
The shares represented by this certificate were issued in a transaction
to which Rule 145 promulgated under the Securities Act of 1933 applies.
The shares represented by this certificate may not be sold, transferred,
or otherwise disposed of unless pursuant to (i) an effective
registration statement under the Securities Act of 1933, (ii) Rule 145
or (iii) an exemption from registration under the said Act which is
available in the opinion of counsel acceptable to Summit Bancorp.
The legend set forth above and any similar legend placed on any share
certificate issued upon the transfer of any of the Summit Shares will be removed
by delivery of substitute certificates without such legend if the undersigned,
or any person who acquired, directly or indirectly, such Summit Shares, shall
have delivered to Summit a copy of a letter from the staff of the SEC, or a
written opinion of counsel acceptable to Summit, to the effect that the
restrictions on sale, transfer
2
or other disposition referred to in this letter are no longer necessary under
the Act or otherwise in order to effect such sale, transfer or other disposition
pursuant to law.
E. I will vote all of the NMBT Shares I now own of record or have
voting control with respect to or hereafter acquire, in favor of the Merger at
the meeting of shareholders of NMBT to be called for the purpose of approving
the Merger (the "Meeting"). In addition, I will not vote any of my NMBT Shares
in favor of any other merger or sale of all or substantially all the assets of
NMBT to any person other than Summit or its affiliates until the termination of
the Merger Agreement or abandonment of the Merger by the mutual agreement of
NMBT and Summit, whichever comes NMBT, nor will I transfer my NMBT Shares unless
the transferee, prior to such transfer, executes a voting agreement with respect
to the transferred shares substantially to the effect of this agreement and
satisfactory to Summit.
F. By reason of my knowledge and experience in financial and business
matters and in my capacity as a director and/or executive officer of a financial
institution, I believe myself capable of evaluating the merits and risks of the
potential investment in Summit Common Stock contemplated by the Merger
Agreement. I further acknowledge having reviewed the Merger Agreement and its
attachments and that reports, proxy statements and other information with
respect to Summit filed with the Securities and Exchange Commission (the
"Commission") were, prior to my execution of this agreement, available for
inspection and copying at the Offices of the Commission and that Summit
delivered the following such documents to NMBT:
(a) Summit's Annual Report on Form 10-K for the year ended December
31, 1998; and
(b) Summit's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1999 (as amended) and June 30, 1999.
(c) Summit Current Reports on Form 8-K dated April 27, 1999 and June
16, 1999.
G. Summit agrees, by accepting this letter, (a) that for a period of
two years after the Effective Time (or such shorter period as may be permitted
by amendments to Rule 145) and thereafter until three months after I have ceased
to be an affiliate of Summit and so long as Summit has equity securities
registered pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended, Summit will make available with respect to itself "adequate current
public information" as defined in paragraph (c) of Rule 144 of the Rules and
Regulations under the Act.
3
I have carefully read this letter and, to the extent I felt
necessary, discussed with my counsel the requirements of this letter and its
impact upon the ability to dispose of the NMBT Shares and the Summit Shares.
Very truly yours,
Accepted this _______ day of __________________, 199__
by Summit Bancorp.
__________________________
By:____________________________ Signature
Name:____________________________ __________________________
Title:____________________________ Printed Name
Dated as of ______, 199__
4
EXHIBIT D-2
Name of Affiliate:________________________
Summit Bancorp.
301 Carnegie Center
X.X. Xxx 0000
Xxxxxxxxx, Xxx Xxxxxx 00000
Gentlemen:
This letter agreement is being entered into pursuant to the terms of
the Agreement and Plan of Merger, dated October __, 1999 (the "Merger
Agreement"), between Summit Bancorp. ("Summit") and NMBT Corp ("NMBT"), which
provides, among other things, for the merger of NMBT with and into Summit (the
"Merger") and the conversion at the Exchange Ratio provided for in the Merger
Agreement of shares of the common stock, par value $.01 per share, of NMBT
("NMBT Common Stock") outstanding at the Effective Time (as defined in the
Merger Agreement) held in the aggregate by each NMBT Shareholder into whole
shares of the Common Stock, par value $.80 per share, of Summit (the "Summit
Common Stock") and cash in lieu of a fractional share of Summit Common Stock.
Shares of NMBT Common Stock owned on the date hereof or at any time
hereafter solely, jointly or in a custodial or other representative capacity by
me, by a minor child of mine, by a relative sharing the same household as me, or
by an entity (for example, trusts, estates, partnerships, corporations,
charitable organizations, foundations) I control, whether such shares are owned
directly (of record) or indirectly (through a bank, broker or other nominee),
and any other shares of NMBT Common Stock over which I or such other persons or
entities hold investment or voting powers, either alone or with others, are
referred to collectively herein as the "NMBT Shares". Shares of Summit Common
Stock to be received in exchange for the NMBT Shares together with any other
shares of Summit Common Stock owned solely, jointly or in a custodial or other
representative capacity after the time of the Merger by me, by a minor child of
mine, by a relative sharing the same household as me, or by an entity I control
whether such shares are owned directly or indirectly, and any other shares of
Summit Common Stock over which I or such persons or entities hold investment or
voting powers, either alone or with others, are referred to collectively herein
as the "Summit Shares".
I have been advised that, in the opinion of counsel, I may be deemed to
be, at the time the Merger is submitted for a vote of the shareholders of NMBT,
an "affiliate" of NMBT as that term is 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 "SEC") under the Securities Act
of 1933, as amended (the "Act") and that the Merger Agreement requires that
persons so characterized make the representations, warranties, covenants and
agreements set forth
below as a condition to Summit closing the Merger.
Capitalized terms used herein but not specifically defined herein shall
have the meaning ascribed to them in the Merger Agreement.
In consideration of the premises, I represent, warrant, covenant and
agree as follows:
A. I will not make or permit any sale, transfer or other disposition of
the Summit Shares, or make or permit any offer to sell, transfer or otherwise
dispose of the Summit Shares, in violation of the Act or the Rules and
Regulations.
B. I have been advised that the issuance of the Summit Shares pursuant
to the Merger has been registered with the SEC pursuant to a registration
statement under the Act. However, I have also been advised that a secondary
distribution of the Summit Shares has not been registered under the Act and
that, because I may be deemed to be, at the time the Merger is submitted for a
vote of the shareholders of NMBT, an "affiliate" of NMBT, I may not make or
permit any sale, transfer or other disposition of any of such Summit Shares
unless and until (i) an offer and sale of such Summit Shares has been registered
under the Act, (ii) such disposition of such Summit Shares is made in conformity
with Rule 145 under the Act, or (iii) an exemption from registration, in the
written opinion of counsel acceptable to Summit, is available with respect to
such disposition of such Summit Shares. In the event of a transfer of Summit
Shares permitted by this Agreement, I agree that I will obtain, and deliver to
you a copy of, an agreement substantially similar to this agreement from each
transferee of the Summit Shares who, in the written opinion of counsel
acceptable to Summit, may not under the Act dispose of the Summit Shares so
transferred without registration under the Act.
C. I understand that Summit is under no obligation to register the
sale, transfer or other disposition of the Summit Shares or to take any other
action necessary in order to make compliance with an exemption from registration
available.
D. I understand that stop transfer instructions may be given to
Summit's transfer agent with respect to the Summit Shares and that there may be
placed on the certificates for such Summit Shares, or any substitutions
therefor, a legend stating in substance:
The shares represented by this certificate were issued in a transaction
to which Rule 145 promulgated under the Securities Act of 1933 applies.
The shares represented by this certificate may not be sold, transferred,
or otherwise disposed of unless pursuant to (i) an effective
registration statement under the Securities Act of 1933, (ii) Rule 145
or (iii) an exemption from registration under the said Act which is
available in the opinion of counsel acceptable to Summit Bancorp.
The legend set forth above and any similar legend placed on any share
certificate issued upon the transfer of any of the Summit Shares will be removed
by delivery of substitute certificates without such legend if the undersigned,
or any person who acquired, directly or indirectly, such
2
Summit Shares, shall have delivered to Summit a copy of a letter from the staff
of the SEC, or a written opinion of counsel acceptable to Summit, to the effect
that the restrictions on sale, transfer or other disposition referred to in this
letter are no longer necessary under the Act or otherwise in order to effect
such sale, transfer or other disposition pursuant to law.
E. Summit agrees, by accepting this letter, (a) that for a period of
two years after the Effective Time (or such shorter period as may be permitted
by amendments to Rule 145) and thereafter until three months after I have ceased
to be an affiliate of Summit and so long as Summit has equity securities
registered pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended, Summit will make available with respect to itself "adequate current
public information" as defined in paragraph (c) of Rule 144 of the Rules and
Regulations under the Act.
I have carefully read this letter and, to the extent I felt
necessary, discussed with my counsel the requirements of this letter and its
impact upon the ability to dispose of the NMBT Shares and the Summit Shares.
Accepted this __ day of _____, 199__ Very truly yours,
by Summit Bancorp.
By: Signature
Name:
Title: Printed Name
Dated as of ________, 199__
3
Exhibit E
Board of Directors Board of Directors
ABCD Corp Summit Bancorp.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx
Ladies and Gentlemen:
You have requested our opinion with regard to certain federal
income tax consequences of the proposed merger (the "Merger") of ABCD Corp
("ABCD") with and into First Valley Corporation ("First Valley"), a wholly owned
subsidiary of Summit Bancorp. ("Summit").
In connection with the preparation of our opinion, we have
examined and have relied upon the following:
(i) The Agreement and Plan of Merger by and among Summit,
First Valley, and ABCD dated October __, 1999, including the
schedules and exhibits thereto (the "Agreement"), and the
"Reorganization Election" (as the quoted term is defined in
the Agreement);
(ii) Summit's Registration Statement on Form S-4, including
the Proxy Statement/Prospectus contained therein, filed with
the Securities and Exchange Commission on October __, 1999, as
supplemented and amended to the date hereof (the "Registration
Statement");
(iii) The representations and undertaking of Summit
substantially in the form of Exhibit A hereto;
(iv) The representations and undertakings of ABCD
substantially in the form of Exhibit B hereto; and
(v) The Shareholder Rights Plan between Summit (formerly UJB
Financial Corp.) and First Chicago Trust Company of New York,
as rights agent, dated as of August 16, 1989, and the Rights
Agreement between Summit and First Chicago Trust Company of
New York, as rights agent, dated as of June 16, 1999
(collectively, the "Rights Agreements").
Our opinion is based solely upon applicable law and the
factual information and undertakings contained in the above-mentioned documents.
In rendering our opinion, we have assumed the accuracy of all information and
the performance of all undertakings contained in each of such documents, and we
have assumed that all representations made to the knowledge of any person or
entity or with similar qualification will be true and correct as if made without
such qualification. We also have assumed the authenticity of all original
documents, the conformity of all copies to the original documents, and the
genuineness of all signatures. We have not attempted to verify independently the
accuracy of any information
Page 2
in any such document, and we have assumed that such documents accurately and
completely set forth all material facts relevant to this opinion. All of our
assumptions were made with your consent. If any fact or assumption described
herein or below is incorrect, any or all of the federal income tax consequences
described herein may be inapplicable.
OPINION
Subject to the foregoing, to the conditions and limitations
expressed elsewhere herein, and assuming that the Merger is consummated in
accordance with the Agreement, we are of the opinion that for federal income tax
purposes:
1. The Merger will constitute a reorganization within the
meaning of sections 368(a)(1)(A) and 368(a)(2)(D) of the Internal Revenue Code
of 1986, as amended to the date hereof (the "Code"). Each of Summit, First
Valley and ABCD will be a "party to a reorganization" within the meaning of
Section 368(b) of the Code.
2. Each shareholder of ABCD who exchanges, in the Merger,
shares of ABCD common stock, par value $1.00 per share ("ABCD Common Stock")
solely for shares of Summit common stock, par value $0.80 per share, including
the rights associated therewith under the Rights Agreements ("Summit Common
Stock"):
a) will recognize no gain or loss as a result of the
exchange, except with regard to cash received in lieu of a
fractional share, as discussed below (Code section 354(a)(1));
b) will have an aggregate basis for the shares of
Summit Common Stock received (including any fractional share
of Summit Common Stock deemed to be received, as described in
paragraph 3, below) equal to the aggregate adjusted tax basis
of the shares of ABCD Common Stock surrendered (Code section
358(a)(1)); and
c) will have a holding period for the shares of
Summit Common Stock received (including any fractional share
of Summit Common Stock deemed to be received, as described in
paragraph 3, below) which includes the holding period of the
shares of ABCD Common Stock surrendered, provided that the
shares of ABCD Common Stock surrendered are held as capital
assets at the time of the Merger (Code section 1223(1)).
3. Each shareholder of ABCD who receives, in the Merger, cash
in lieu of a fractional share of Summit Common Stock will be treated as if the
fractional share had been received in the Merger and then redeemed by Summit.
Provided that the shares of ABCD Common Stock surrendered are held as capital
assets at the time of the Merger, the receipt of such cash will cause the
recipient to recognize capital gain or loss, equal to the difference between the
amount of cash received and the portion of such holder's basis in the shares of
Summit Common Stock allocable to the fractional share (Code sections 1001 and
1222; Rev. Rul. 66-365, 1966-2 C.B. 116; Rev. Proc. 77-41, 1977-2 C.B. 574).
Page 3
* * * * * * * * * * * *
We express no opinion with regard to: (1) the federal income
tax consequences of the Merger not addressed expressly by this opinion,
including without limitation, (i) the tax consequences, if any, to those
shareholders of ABCD who acquired shares of ABCD Common Stock pursuant to the
exercise of employee stock options or otherwise as compensation, and (ii) the
tax consequences to special classes of shareholders, if any, including without
limitation, foreign persons, insurance companies, tax-exempt entities,
retirement plans, and dealers in securities; and (2) federal, state, local, or
foreign taxes (or any other federal, state, local, or foreign laws) not
specifically referred to and discussed herein. Further, our opinion is based
upon the Code, Treasury Regulations proposed or promulgated thereunder, and
administrative interpretations and judicial precedents relating thereto, all of
which are subject to change at any time, possibly with retroactive effect, and
we assume no obligation to advise you of any subsequent change thereto. If there
is any change in the applicable law or regulations, or if there is any new
administrative or judicial interpretation of the applicable law or regulations,
any or all of the federal income tax consequences described herein may become
inapplicable.
The foregoing opinion reflects our legal judgment solely on
the issues presented and discussed herein. This opinion has no official status
or binding effect of any kind. Accordingly, we cannot assure you that the
Internal Revenue Service or any court of competent jurisdiction will agree with
this opinion.
We hereby consent to the filing of this letter as an exhibit
to the Registration Statement and to all references made to this letter and to
this firm in the Registration Statement.
Very truly yours,
