Exhibit 2(e)
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT is entered into as of the 31st
day of December, 1995 by and among FLEET FINANCIAL GROUP, INC., a Rhode Island
corporation ("Fleet"), FLEET BANKING GROUP, INC., a Rhode Island corporation
("FBG"), WHITEHALL ASSOCIATES, L.P., a Delaware limited partnership and KKR
PARTNERS II, L.P., a Delaware limited partnership (collectively, the
"Partnerships").
WITNESSETH THAT:
WHEREAS, the Partnerships collectively own 1,415,000
shares of Fleet's Dual Convertible Preferred Stock (the "DCP Shares") and
rights to purchase (the "Rights") 6,500,000 shares of Fleet's common stock,
$.01 par value (the "Common Stock"); and
WHEREAS, pursuant to the terms of the Stock Purchase
Agreement dated as of July 12, 1991 among Fleet, FBG and the Partnerships (the
"Stock Purchase Agreement"), the Certificate of Designations establishing the
DCP Shares (the "Certificate of Designations") and this Agreement, Fleet and
the Partnerships desire to issue 19,885,890 shares of Common Stock (the
"Exchanged Common Stock") in exchange for the DCP Shares, in accordance with
the terms set forth herein and therein; and
WHEREAS, the parties hereto intend that the
transaction contemplated by this Agreement be treated as a reorganization
within the meaning of Section 368(a)(1)(E) of the Internal Revenue Code of
1986, as amended; and
WHEREAS, Fleet, FBG and the Partnerships are entering
into this Agreement to set forth their agreement as to certain matters relating
to the Rights and the Exchanged Common Stock.
NOW, THEREFORE, in consideration of the premises and
the agreements herein contained and intending to be legally bound hereby, the
parties hereby agree as follows:
1. Exchange. The Partnerships hereby exchange the DCP
Shares for the Exchanged Common Stock, and hereby deliver the certificates
representing the DCP Shares to Fleet for cancellation. Fleet hereby agrees to
issue certificates evidencing such Exchanged Common Stock in the names of the
Partnerships in the same proportion as the DCP Shares are currently held by the
Partnerships. The certificates evidencing the Exchanged Common Stock will be
issued the date of this Agreement.
2. Amendment of Stock Purchase Agreement. The Stock
Purchase Agreement is hereby amended as follows:
(a) Section 1.01 of the Stock Purchase Agreement is
hereby amended to add a new definition as follows:
"Exchange Agreement" shall mean the Exchange Agreement dated
December 31, 1995 among the Company, Holding and the Purchasers.
(b) All references in the Stock Purchase Agreement to
"Common Stock received by Purchasers upon conversion of the DCP Shares", or
similar wording, shall be deemed amended to include the Exchanged Common Stock.
(c) Section 4.04(a) of the Stock Purchase Agreement is
hereby amended to read in its entirety as follows:
"Section 4.04. Transfer Restrictions. (a) (i)
Purchasers, and any Permitted Transferees, shall not sell, transfer, or
otherwise dispose of beneficial ownership of the Rights to any Person other
than a Permitted Transferee. Purchasers agree that they shall not directly or
indirectly sell, pledge, transfer, or otherwise dispose of or agree to sell,
pledge, transfer or dispose of, all or any portion of the beneficial or
economic ownership of the Exchanged Common Stock or the Common Stock to be
issued upon exercise of the Rights, including in a Distribution (as such term
was defined in the Certificate of Designations), at any time prior to January
22, 1996 (whether directly or indirectly through a put, call, option, short
sale, warrant, convertible security, stock appreciation right, derivative
security or by means of any other agreement, commitment or instrument having
the effect of disposing of an interest in said securities) except to any
Affiliate of the Purchasers, provided that such Affiliate agrees in writing to
be bound by the provisions of this Agreement and the provisions of the Exchange
Agreement. From and after January 22, 1996, Purchasers shall not sell,
transfer, or otherwise dispose of beneficial ownership of the Exchanged Common
Stock or any shares of Common Stock received by Purchasers upon exercise of the
Rights to any Person other than a Permitted Transferee (each such occurrence, a
"Disposition"), in any transaction or series of transactions, if, at the time
of agreement to effect such Disposition, to such Purchaser's knowledge, such
Person and its Affiliates then beneficially own, or as a result of such
Disposition would beneficially own, as the case may be, 5% or more of the
Common Stock, unless such Purchaser shall have received the prior approval of
the Board of Directors of the Company. NOTWITHSTANDING A PURCHASER' S LACK OF
KNOWLEDGE AS TO A TRANSFEREE'S VIOLATION OF THE PERCENTAGE OWNERSHIP
LIMITATIONS OF THE PRECEDING SENTENCE, ANY PURPORTED TRANSFER IN VIOLATION OF
THESE PROVISIONS SHALL BE VOID AND OF NO FORCE OR EFFECT.
(ii) In making any such sales of Common Stock, the
Partnerships shall give prior notice to, and consult with, Fleet as to the
manner and timing of such sales so as to avoid undue disruption in the trading
market for Fleet's Common Stock.
(d) Section 4.04(d) of the Stock Purchase Agreement is
hereby amended to read in its entirety as follows:
"(d) (i) Purchasers covenant to and agree with the
Company that until the later to occur of July 15, 1997 or the date on which the
Purchasers Beneficially Own less than three percent (3%) of the outstanding
Common Stock (the "Standstill Period"), without the Company's prior written
consent, neither the Purchasers nor their respective Affiliates will, directly
or indirectly:
(A) In any way acquire, offer or propose to
acquire or agree to acquire Beneficial Ownership of any Voting
Securities or any direct or indirect rights or options to
acquire Beneficial Ownership of any Voting Securities other
than those acquired by Purchasers from the Company pursuant to
the Rights or pursuant to a stock split, stock dividend or
similar corporate action initiated by the Company;
(B) Make any public announcement with respect to
(except as otherwise required by applicable law), or submit to
the Company or any of its directors, officers, representatives,
trustees, employees, attorneys, advisors, agents or Affiliates,
any proposal for, the acquisition of any Voting Securities or
with respect to any merger, consolidation, business combination
or purchase of any substantial portion of the assets of the
Company, whether or not any parties other than Purchasers and
their Affiliates are involved, and whether or not such proposal
might require the making of a public announcement by the
Company, unless (X) such proposal is directed and disclosed
only to the Board of Directors of the Company, and (Y) the
Company shall have made a prior written request to Purchasers
to submit such proposal;
(C) Make, or in any way participate in, any
"solicitation" of "proxies" (as such terms are defined or used
in Regulation 14A under the Exchange Act) to vote any Voting
Securities or become a "participant" in any "election contest"
as such terms are defined and used in Rule 14a-11 under the
Exchange Act);
(D) Deposit any Voting Securities in a voting
trust or subject any Voting Securities to any arrangement or
agreement (other than this Agreement) with respect to the
voting of such Voting Securities or other agreement having
similar effect, except that the Purchasers may grant any
revocable proxy in connection with proxy solicitations under
the Exchange Act; or
(E) Form or join a partnership, limited
partnership, syndicate or other group (as defined in Xxxxxxx 00
(x) (0) xx xxx Xxxxxxxx Xxx) with respect to any Voting
Securities (other than a group of which only the Purchasers
and Purchasers' Affiliates are members).
(ii) Purchasers further covenant to and agree with the
Company that during the Standstill Period, the Purchasers will comply with
commitments numbered 1-7 and 9 made by the Purchasers to the Board of Governors
of the Federal Reserve System (the "Federal Reserve Board") and set forth on
pages one and two of the Appendix to the letter of the Federal Reserve Board
dated July 12, 1991 addressed to Xxx Xxxxxxxx of Xxxxxxx Xxxxxxx & Xxxxxxxx
(the "Passivity Commitments") as if such Passivity Commitments were set forth
in this Agreement, regardless of whether the Passivity Commitments are
terminated by the Federal Reserve Board.
(iii) Purchasers further covenant to and agree with the
Company that if, during the Standstill Period, the Purchasers' Beneficial
Ownership of the Common Stock of the Company would be such as to cause the
Purchasers to constitute an "affiliate" for pooling of interests accounting
purposes, and the Company proposes to enter into a business combination to be
accounted for by the pooling of interests accounting method, the Purchasers
will execute and deliver to the Company an affiliate letter pursuant to which
the Purchasers agree not to dispose of their Common Stock in any disposition
which would cause the Company to fail to obtain such accounting treatment.
(iv) For purposes of this Section 4.01(d), a Person shall be
deemed to "Beneficially Own" any securities of which such Person or any such
Person's Affiliates is considered to be a "Beneficial Owner" under Rule 13(d)-3
of the Exchange Act as in effect on the date hereof or of which such Person or
any of such Person's Affiliates or associates, directly or indirectly, has the
right to acquire (whether such right is exercisable immediately or only after
the passage of time or upon the satisfaction of conditions) pursuant to any
agreement, arrangement or understanding (whether or not in writing) or upon the
exercise of conversion rights, exchange rights, rights, warrants or options, or
otherwise and "Voting Securities" shall mean at any time shares of any class of
capital stock of the Company which are then entitled to vote generally in the
election of directors."
(c) Section 4.08(b) of the Stock Purchase Agreement is
hereby amended to read in its entirety as follows:
"Section 4.08. Legends. (b) Certificates for the
Common Stock to be issued to the Purchasers shall bear legends in substantially
the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT
WHILE SUCH A REGISTRATION IS IN EFFECT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS. THIS
CERTIFICATE IS ISSUED PURSUANT TO AND SUBJECT TO THE
RESTRICTIONS ON TRANSFER, AND OTHER PROVISIONS OF A STOCK
PURCHASE AGREEMENT DATED AS OF JULY 12, 1991 (AS AMENDED BY AN
EXCHANGE AGREEMENT DATED AS OF DECEMBER 31, 1995) AMONG THE
COMPANY, FLEET BANKING GROUP, INC. (FORMERLY FLEET/NORSTAR
HOLDING COMPANY, INC.) AND THE PURCHASERS REFERRED TO THEREIN,
A COPY OF WHICH IS ON FILE WITH THE COMPANY. EXCEPT AS
PROVIDED IN SUCH STOCK PURCHASE AGREEMENT, AS AMENDED, THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE NOT TRANSFERABLE
AND ANY PURPORTED TRANSFER IN VIOLATION OF THE PROVISIONS OF
SUCH STOCK PURCHASE AGREEMENT, AS AMENDED, SHALL BE VOID AND OF
NO FORCE AND EFFECT."
(d) Except as amended hereby, the Stock Purchase Agreement
shall remain in full force and effect. The parties hereto confirm that all
matters set forth therein which speak as of a prior date are specifically not
brought forward and revived as part of this Agreement. All references in the
Stock Purchase Agreement and the Ancillary Documents to "this Agreement" or the
"Stock Purchase Agreement" shall be deemed to be references to the Stock
Purchase Agreement, as amended hereby.
3. Amendment of Registration Rights Agreement. The
Registration Rights Agreement dated as of July 12, 1991 among Fleet, FBG and
the Partnerships (the "Registration Rights Agreement") is hereby amended to
include the Exchanged Common Stock as Registrable Securities thereunder. All
references in the Registration Rights Agreement, the Stock Purchase Agreement
and the Ancillary Documents to the "Registration Rights Agreement" shall be
deemed to be references to the Registration Rights Agreement, as amended
hereby.
4. Representations and Warranties. (a) Fleet hereby
represents and warrants to the Partnerships that (i) each of Fleet and FBG has
full corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby; (ii) the execution, delivery
and performance of this Agreement by each of Fleet and FBG has been duly
authorized by all necessary corporate action; (iii) this Agreement has been
duly and validly executed and delivered by Fleet and FBG, and constitutes the
valid and binding obligation of Fleet and FBG, enforceable against them in
accordance with its terms, except as (A) the enforceability hereof may be
limited by bankruptcy, insolvency, moratorium or other similar laws affecting
the enforcement of creditors' rights generally and (B) the enforceability of
equitable remedies may be limited by equitable principles of general
applicability; (iv) the execution, delivery and performance of this Agreement,
the consummation of the transactions by Fleet and FBG contemplated hereby and
the compliance by Fleet and FBG with any of the provisions hereof will not
conflict with, violate or result in a breach of any provision of, or constitute
a default (or an event which, with notice or lapse of time or both would
constitute a default) under, or result in the termination of or accelerate the
performance required by, or result in a right of termination or acceleration
under, (1) any provision of the articles of incorporation, by-laws or other
governing instrument of Fleet and FBG or (2)(x) any mortgage, note, indenture,
deed of trust, lease, loan agreement or other agreement or instrument or, (y)
any permit, concession, grant, franchise, license, judgment, order, decree,
ruling, injunction, statute, law, ordinance, rule or regulation, in the case of
(x) or (y), applicable to Fleet, FBG or their respective properties or assets,
except for such conflicts, violations, breaches, defaults, terminations and
accelerations which do not have, or could not be reasonably expected to have, a
Material Adverse Effect (as defined in the Stock Purchase Agreement); (v) no
consent, approval, order or filing with, any governmental authority is required
in connection with the execution, delivery and performance of this Agreement by
Fleet and FBG and the consummation of the transactions by Fleet and FBG
hereunder; and (vi) the Exchanged Common Stock has been duly authorized by all
necessary corporate action, is validly issued, fully paid and nonassessable,
will not subject the holders thereof to personal liability and will not be
subject to preemptive rights of any other stockholder of Fleet.
(b) The Partnerships hereby represent and warrant to Fleet
and FBG that (i) each of the Partnerships has full partnership power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby; (ii) the execution, delivery and performance of this
Agreement by each of the Partnerships has been duly authorized by all
necessary partnership action; (iii) this Agreement has been duly and
validly executed and delivered by the Partnerships, and constitutes the
valid and binding obligation of the Partnerships, enforceable against them
in accordance with its terms, except as (A) the enforceability hereof may
be limited by bankruptcy, insolvency, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and (B) the
enforceability of equitable remedies may be limited by equitable principles
of general applicability; (iv) the execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated
hereby and the compliance by the Partnerships with any of the provisions hereof
will not conflict with, violate or result in a breach of any provision of,
or constitute a default (or an event, which, with notice or lapse of time or
both would constitute a default) under, (1) any organizational document
of the Partnerships or the General Partner (as defined in the Stock
Purchase Agreement) or (2) any mortgage, note, indenture, deed of trust, lease,
loan agreement or other agreement or instrument of the Partnerships or the
General Partner or any permit, concession, grant, franchise, license, judgment,
order, decree, ruling, injunction, statute, law, ordinance, rule or regulation
applicable to the Partnerships or the General Partner or their respective
properties other than any such conflict, violation, breach or default under
clause (2) which will not materially and adversely affect the consummation of
the transactions contemplated hereby; (v) no consent, approval, order or
authorization of, or registration, declaration or filing with, any governmental
authority is required on the part of the Partnerships or the General Partner in
connection with the execution, delivery and performance of this Agreement by
the Partnerships and the consummation of the transactions by the Partnerships
hereunder; (vi) the Partnerships are acquiring the Exchanged Common Stock
solely for the purpose of investment and not with a view to, or for resale in
connection with, any distribution thereof in violation of the Securities Act;
and (vii) the Partnerships have been provided full access to all information
deemed relevant by the Partnerships relating to their investment in the
Exchanged Common Stock and Fleet has made available to the Partnerships the
opportunity to ask questions and receive answers and to obtain information
which Fleet possesses or can acquire without unreasonable effort or expense.
5. Miscellaneous.
a. Notices. All notices and other communications
hereunder shall be in writing and delivered in accordance with the provisions
of the Stock Purchase Agreement.
b. Entire Agreement; Amendments. This Agreement, the
Stock Purchase Agreement (as amended hereby), the Registration Rights Agreement
(as amended hereby), and the Rights and the documents described herein and
therein or attached or delivered pursuant hereto or thereto set forth the
entire agreement between the parties hereto with respect to the transactions
contemplated by this Agreement. Any provision of this Agreement may be amended
or modified in whole or in part at any time by an agreement in writing among
the parties hereto executed in the same manner as this Agreement. No failure
on the part of any party to exercise, and no delay in exercising, any right
shall operate as a waiver thereof nor shall any single or partial exercise by
any party of any right preclude any other or future exercise thereof or the
exercise of any other right. No investigation by the Partnerships of Fleet or
FBG prior to or after the date hereof shall stop or prevent the Partnerships
from exercising any right hereunder or be deemed to be a waiver of any such
right.
c. Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed to constitute an original,
but all of which together shall constitute one and the same document.
d. Governing Law. This Agreement shall be governed by,
and interpreted in accordance with, the laws of the State of Rhode Island
applicable to contracts made and to be performed in that State.
e. Public Announcements. Subject to each party's
disclosure obligations imposed by law and the confidentiality provisions
contained in the Stock Purchase Agreement, each of the parties hereto will
cooperate with each other in the development and distribution of all news
releases and other public information disclosures with respect to this
Agreement and any of the transactions contemplated hereby, and no party hereto
will make any news release or disclosure without first consulting with each
other party hereto.
f. Expenses. Each party hereto shall bear its own costs
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby, including the fees and expenses of its financial advisors,
accountants and counsel.
g. Successors and Assigns. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, Fleet's successors and assigns and each Partnership's successors
and assigns. The provisions hereof shall also inure to the benefit of each
limited and general partner in the Partnerships. Subject to applicable law,
the Partnerships may assign their rights under this Agreement to any Affiliate,
but no such assignment shall relieve such Partnership of its obligations
hereunder.
h. Captions. The captions contained in this Agreement
are for reference purposes only and are not part of this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed
by the parties hereto or by their respective duly authorized officers, all as
of the date first above written.
FLEET FINANCIAL GROUP, INC.
By:_____________________________________
Name:
Title:
FLEET BANKING GROUP, INC.
By:_____________________________________
Name:
Title:
KKR PARTNERS II, L.P.
By: KKR ASSOCIATES, its General Partner
By:_____________________________________
Name:
Title:
WHITEHALL ASSOCIATES, L.P.
By: KKR ASSOCIATES, its General Partner
By:_____________________________________
Name:
Title:
