EXHIBIT 2(b)
ESCROW AGREEMENT
This ESCROW AGREEMENT (this "Agreement") dated as of ____________, 2000, is
entered into by and among SUMMIT BANCORP., a New Jersey banking corporation
("Summit"), with an address at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
each of the individuals listed the signature page of the Reorganization
Agreement (as defined below) (individually, a "Principal Shareholder;"
collectively, "Principal Shareholders") and MANCHESTER TRUST BANK, a New Jersey
banking corporation having an office at ▇▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ("Escrow Agent").
W I T N E S S E T H:
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WHEREAS, Summit, the Principal Shareholders and MSFG, Inc. ("MSFG") have
executed and delivered that certain Agreement and Plan of Reorganization, dated
as of December 31, 1999 (the "Reorganization Agreement"), providing, among other
things, for the merger of a wholly-owned subsidiary of Summit with and into
MSFG, pursuant to which MSFG will become a wholly-owned subsidiary of Summit,
upon the terms and conditions set forth in the Reorganization Agreement; and
WHEREAS, the Reorganization Agreement provides for certain of the shares of
Summit Stock (as defined in the Reorganization Agreement) received by the
Principal Shareholders in the Reorganization (as defined in the Reorganization
Agreement) to be deposited into escrow and administered pursuant to the terms of
this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, Summit, the Principal Shareholders and the
Escrow Agent hereby agree as follows:
1. Certain Defined Terms.
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(a) Capitalized terms in this Agreement, unless specifically defined
herein, shall have the same meanings herein as ascribed to them in the
Reorganization Agreement.
(b) For purposes of this Agreement:
(i) "Cash Consideration" means any one or more of the following,
individually or collectively: (i) cash; (ii) Cash Equivalents (as defined at
Section 4(f) below); and (iii) following any exercise of the Substitution Right
(as defined at Section 4(d) below) or the Sale Right (as defined at Section 4(e)
below), the cash proceeds of a redemption of money market mutual fund shares
purchased pursuant to Section 4(k).
(ii) "Deposited Shares" means the shares of Summit Stock
delivered to the Escrow Agent at the Closing in accordance with the
Reorganization Agreement.
(iii) "Escrow Shares" means the Deposited Shares and any stock
received by the Escrow Agent on account of the Deposited Shares by reason of
stock dividends, stock splits, reverse stock splits or recapitalizations.
(iv) "Escrow Fund" shall mean the Escrow Shares, any cash or
other property other than stock received by the Escrow Agent on account of the
Escrow Shares by reason of stock dividends, stock splits, reverse stock splits
or recapitalizations, any cash proceeds received by the Escrow Agent from a sale
of some or all of the Escrow Shares, any cash delivered to the Escrow Agent
pursuant to and in accordance with Section 4(a) hereof, any Cash Consideration
delivered to or received by the Escrow Agent pursuant to and in accordance with
Section 4(d), 4(e) and 4(k) and any cash representing insurance proceeds or as a
result of any tax or other cash benefit paid to the Escrow Agent by Summit
pursuant to Section 5.09(c) of the Reorganization Agreement.
(v) "Percentage Interest" shall mean with respect to an
individual Principal Shareholder the percentage obtained by dividing (A) by (B),
where (A) is the number of shares of Summit Stock registered in the particular
Principal Shareholder's name delivered to the Escrow Agent at Closing, and (B)
is the number of Deposited Shares.
2. Appointment of Escrow Agent; Escrow Account. Summit and the Principal
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Shareholders hereby appoint and designate Manchester Trust Bank as the Escrow
Agent, and the Escrow Agent accepts such appointment and designation upon the
terms and conditions and for the purposes set forth in this Agreement. The
Escrow Agent shall hold the Escrow Fund and all stock powers duly signed in
blank by a Principal Shareholder delivered to the Escrow Agent at Closing or
pursuant to this Agreement in escrow pursuant to this Agreement in an account
titled the "MSFG Escrow Account" (the "Escrow Account").
3. Distributions from the Escrow Fund.
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(a) To exercise the rights of one or more Summit Indemnitees under Section
5.09 of the Reorganization Agreement (the "Indemnification Rights"):
(i) Summit shall notify the Principal Shareholders and the Escrow
Agent that it intends to exercise the indemnification right provided for by the
Reorganization Agreement ("Indemnification Notice") and shall specify in the
Indemnification Notice its reasonable estimate of the amount sought (such
amount, as it may be revised from time to time, being referred to herein as the
"Claim Amount") and the nature of and basis for the claim, damage, liability or
expense ("Claim") giving rise to the exercise of the Indemnification Right;
(ii) In the event the Principal Shareholders do not pay the Claim
Amount to Summit in accordance with Section 3(d) below within 15 days of receipt
of the Indemnification Notice (a "Refusal"), Summit shall notify the Principal
Shareholders and the Escrow Agent of its selection of an arbitrator, giving name
and address and telephone number where the arbitrator can be reached during
normal business hours (the "Arbitrator Notice");
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(iii) Within 30 days of receipt of the Arbitrator Notice, the
Principal Shareholders shall notify Summit and the Escrow Agent of their
selection of an arbitrator, giving name and address and telephone where the
arbitrator can be reached during normal business hours (the "Second Arbitrator
Notice");
(iv) The arbitrators so designated shall meet within 10 days
after Summit's receipt of the Second Arbitrator Notice and shall designate a
third arbitrator who shall serve as chairman of the board of arbitrators. If for
any reason the two selected arbitrators fail to agree upon such third
arbitrator, either Summit or the Principal Shareholders may request such
appointment by the American Arbitration Association (or any successor
organization);
(v) Arbitration shall be conducted in Princeton, New Jersey, or
at another location mutually agreed to by all three arbitrators. All arbitration
shall be governed (except as expressly modified herein) in accordance with the
Rules of the American Arbitration Association (or any successor organization)
pertaining to commercial arbitration before three arbitrators. After such
hearings as the arbitrators determine to be useful in their consideration of the
dispute, the arbitrators shall resolve the dispute and make such award as the
arbitrators shall determine. The decision of the arbitrators shall be binding on
all parties and may be entered as a judgment in any court having jurisdiction;
and
(vi) Summit and the Principal Shareholders shall pay the fees and
expenses of the arbitrator appointed by or on behalf of it or them, as the case
may be, and Summit and the Principal Shareholders shall each (the Principal
Shareholders being considered a single entity for all purposes of this
Agreement) pay one-half of the fees and expenses of the third arbitrator, unless
(A) the board of arbitration in the certified final award in arbitration that it
shall issue ("Certified Arbitration Award") shall find that either the exercise
of the Indemnification Right by Summit or the Refusal by the Principal
Shareholders to have been frivolous or without merit, in which case the party
found to have acted frivolously or without merit shall be responsible for all
fees and expenses of all arbitrators, or (B) the board of arbitration shall find
otherwise in its Certified Arbitration Award, in which case the fees and
expenses of the arbitrators shall be the responsibility of the parties as
specified in the Certified Arbitration Award.
(b) Promptly upon receipt of a Certified Arbitration Award providing for
an award to a Summit Indemnitee, the Escrow Agent shall:
(i) disburse to Summit out of the Escrow Fund Cash Consideration
in an amount equal to the award specified in the Certified Arbitration Award
(the "Award Amount"); or
(ii) if there shall be insufficient Cash Consideration in the
Escrow Fund to pay an amount equal to the Award Amount, the Escrow Agent shall
sell Escrow Shares in sufficient number to produce, after all costs and expenses
of sale are deducted, sale proceeds which together with any other cash in the
Escrow Fund are at least equal to the Award Amount (an "Award Sale") and shall
disburse to Summit out of the Escrow Fund Cash Consideration equal to the Award
Amount.
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(c) Promptly upon a failure of the Principal Shareholders to provide the
Second Arbitrator Notice to both Summit and the Escrow Agent within the 30-day
period provided for such notice in Section 3(a)(iii) above, the Escrow Agent
shall:
(i) disburse to Summit out of the Escrow Fund Cash Consideration
in an amount equal to the Claim Amount; or
(ii) if there shall be insufficient Cash Consideration in the
Escrow Fund to pay an amount equal to the Claim Amount, the Escrow Agent shall
sell Escrow Shares in sufficient number to produce, after all costs and expenses
of sale are deducted, sale proceeds which together with any other Cash
Consideration in the Escrow Fund are at least equal to the Claim Amount (a
"Claim Sale") and shall disburse to Summit out of the Escrow Fund Cash
Consideration equal to the Claim Amount.
(d) The Principal Shareholders may pay the Claim Amount, as such action is
contemplated by Section 3(a)(ii) above, either by delivering a certified or bank
cashier's check, money order or wire transfer to Summit in an amount equal to
the Claim Amount within the 15 days provided for such prepayment by said Section
3(a)(ii) or by delivering written instructions within such 15 day period to the
Escrow Agent, with a copy simultaneously transmitted to Summit, directing the
Escrow Agent to satisfy the relevant Claim from the Escrow Fund ("Payment
Instructions") by (i) delivering to Summit Cash Consideration from the Escrow
Fund in an amount equal to the Claim Amount, (ii) by delivering to Summit a
number of whole Escrow Shares which have a Fair Market Value (as defined below)
as of the date of delivery as nearly equal to, but not less than, the Claim
Amount, or (iii) delivering to Summit Cash Consideration in such amount and
whole Escrow Shares having such Fair Market Value that when combined such amount
and such Fair Market Value equal the relevant Claim Amount, subject in all cases
to the following conditions:
(1) In the event Payment Instructions shall instruct the Escrow
Agent pursuant to clause (i) of this Section 3(d) to deliver to Summit Cash
Consideration equal to the Claim Amount and if there is insufficient Cash
Consideration in the Escrow Fund to satisfy the Claim, the Escrow Agent shall
sell as soon as practicable after receipt of the Payment Instructions a
sufficient number of Escrow Shares to produce, after all costs and expenses of
sale are deducted, sale proceeds which together with any other Cash
Consideration in the Escrow Fund are at least equal to the Claim Amount and
shall pay Cash Consideration equal to the Claim Amount to Summit.
(2) In the event Payment Instructions shall instruct the Escrow
Agent pursuant to clause (iii) of this Section 3(d) to deliver to Summit Cash
Consideration and whole Escrow Shares equal to the Claim Amount but there is
insufficient Cash Consideration in the Escrow Fund to carry out the Payment
Instructions, the Escrow Agent shall deliver to Summit a number of whole Escrow
Shares which have a Fair Market Value as of the date of delivery as nearly as
equal as possible to, but not less than, the Claim Amount.
(3) Upon its receipt of Payment Instructions, the Escrow Agent
shall pay to Summit as soon as practicable thereafter, subject to and in
accordance with this Section 3(d), such Cash Consideration, if any, and such
whole Escrow Shares, if any, as directed in the Payment Instructions.
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(e) In lieu of the disbursement of Escrow Shares to Summit from the Escrow
Fund pursuant to this Section 3, a Principal Shareholder may pay the Claim
Amount at any time prior to the disbursement of such Escrow Shares by delivering
a certified or bank cashier's check, money order or wire transfer to Summit in
an amount equal to the Claim Amount. In the event of such payment by a Principal
Shareholder pursuant to this Section 3(e), the Escrow Agent shall release to
such Principal Shareholder such number of Escrow Shares which have a Fair Market
Value as of the date of such payment as nearly as equal to, but not more than,
the Claim Amount. Such release shall be credited solely against such Principal
Shareholder's Subaccount (as defined in Section 4(g) below).
(f) "Fair Market Value" as of a particular date of delivery or other date
of determination thereof, for purposes of this Agreement, means the product
obtained by multiplying (Y) times (Z), where (Y) is the number of whole Escrow
Shares with respect to which the Fair Market Value determination is being made,
and (Z) is the closing sale price of a share of Summit Common Stock (as defined
in the Reorganization Agreement) as reported on the New York Stock Exchange
Composite Transactions List (the "NYSE List") on the last day immediately
preceding the date of delivery that a share of Summit Common Stock is reported
on the NYSE List as having been traded.
4. Certain Additional Rights and Duties.
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(a) During such period as the Principal Shareholders shall not have yet
exercised their Substitution Right or Sale Right, the Principal Shareholders may
collectively maintain cash in the Escrow Fund in an amount not to exceed $100 by
delivering to the Escrow Agent from time to time and at any time a certified or
bank cashier's check, money order or wire transfer (a "Cash Contribution"), and
the Escrow Agent shall credit each Subaccount (as defined in Section 4(g) below)
in accordance with any directions received with the Cash Contribution or, if no
directions are received, pursuant to the Principal Shareholders' respective
Percentage Interests; provided, however, that the Escrow Agent shall reject and
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return to the Principal Shareholders in full any Cash Contribution which would
cause the amount of cash in the Escrow Fund to exceed $100 and any Cash
Contribution received when the amount of cash in the Escrow Fund already equals
or exceeds $100.
(b) Each Principal Shareholder shall be entitled to vote and to receive
direct payment of cash dividends from Summit's dividend disbursing agent for
Escrow Shares held by the Escrow Agent in certificated form and registered in
the name of such Principal Shareholder in accordance with the procedures in
effect for Summit's regular shareholders of record. The Principal Shareholders
shall not be entitled to vote or to receive direct payments of cash dividends
with respect to Escrow Shares held by the Escrow Agent in nominee name should
such occur pursuant to the terms of this Section 4(b). The Escrow Agent shall
hold the Escrow Shares in certificated, registered form until such time as a
sale of some or all of the Escrow Shares is required pursuant to this Agreement
whereupon following such sale the Escrow Agent shall hold all Escrow Shares
remaining after such sale in its own name or the name of a nominee and
thereafter cash dividends received by the Escrow Agent on account of the Escrow
Shares shall be forwarded by the Escrow Agent to the Principal Shareholders as
soon as practicable following such receipt, with the amount of such dividend
paid to each Principal Shareholder to be based on the number of Escrow Shares
held in the Subaccount of such
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Principal Shareholder, minus the Principal Shareholder's allocable portion of
any fees or charges imposed or expenses incurred by the Escrow Agent in
connection with the dividend distribution contemplated hereby; provided,
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however, that the Escrow Agent shall cause the Escrow Shares remaining in the
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Escrow Account after the relevant sale to be reissued in certificated form and
registered appropriately in the name of particular Principal Shareholders if all
(but not less than all) Principal Shareholders deliver to the Escrow Agent
replacement stock powers duly signed in blank as follows: (i) prior to any Award
Sale occurring pursuant to Section 3(b) hereof or any Claim Sale occurring
pursuant to Section 3(c) hereof, or (ii) simultaneously with the delivery to the
Escrow Agent of Payment Instructions pursuant to Section 3(d) hereof pursuant to
which a sale of Escrow Shares must occur.
(c) In the event the Escrow Agent becomes required under any provision in
Section 3 to satisfy an obligation thereunder by delivering whole Escrow Shares
to Summit (a "Section 3 Obligation"):
(1) the Escrow Agent shall deliver to Summit's General Counsel at
the address listed in Section 8 the certificates representing each Principal
Shareholder's Escrow Shares with instructions indicating the number of whole
shares from each certificate intended to satisfy the particular Section 3
Obligation and, upon receipt of such, Summit shall cause new certificates for
the appropriate number of shares of Summit Common Stock remaining in the Escrow
Account, if any, as indicated in the Escrow Agent's instructions to be issued in
the name of particular Principal Shareholders and shall send such new
certificates to the Escrow Agent; and
(2) Each Principal Shareholder hereby directs First Chicago Trust
Company of New York (or any successor transfer agent or co-transfer agent of
Summit) ("Transfer Agent") to accept such certificates for Summit Common Stock
delivered to it in accordance with this Section 4(c) for transfer without an
endorsement thereto or signed stock powers covering such certificates without
liability of any nature whatsoever to the Principal Shareholders or anyone
claiming through a Principal Shareholder and each Principal Shareholder hereby
irrevocably waives any right he may have for the Transfer Agent to require an
endorsement on such certificates or signed stock powers covering such
certificates and each Principal Shareholder hereby indemnifies and holds
harmless Summit, Summit Bank and the Transfer Agent for any claims, losses,
costs, damages or expenses incurred in acting in accordance with the directions
contained in this Section 4(c)(2).
(d) On any day other than a Saturday or Sunday or a day designated as a
banking holiday under New Jersey law (a "Business Day"), the Principal
Shareholders may collectively (but not individually) substitute cash or Cash
Equivalents for all Escrow Shares by delivering (i) notice to the Escrow Agent
that they are exercising the right provided for in this Section 4(d)
("Substitution Right"), and (ii) either (Y) cash in an amount equal to the
product obtained by multiplying the number of Deposited Shares by $29.7563 (the
"Cash Substitution Amount"), or (Z) Cash Equivalents having a face value equal
to the Cash Substitution Amount. As soon as practicable after a delivery of
cash, or after a delivery of Cash Equivalents and after all operational
considerations required in the opinion of the Escrow Agent to take effective
possession of the Cash Equivalents have been satisfied in the judgement of the
Escrow Agent, the Escrow Agent shall deliver the Escrow Shares to the Principal
Shareholders as indicated by the Subaccounts.
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(e) On any Business Day following the date which is the first anniversary
of this Agreement, the Principal Shareholders may collectively (but not
individually) cause the Escrow Agent to sell all Escrow Shares for the account
of the Escrow Fund by delivering notice to the Escrow Agent that they therewith
are exercising the right provided for in this Section 4(e), and the Escrow Agent
shall so sell the Escrow Shares but if and only if (i) in the opinion of the
Escrow Agent the cash proceeds of such a sale (after satisfaction of all fees,
charges, commissions and other expenses associated with the sale and
satisfaction of any other fees, reimbursements and indemnification that may be
due from the Principal Shareholders) together with any other cash that may be in
the Escrow Account will equal or exceed the Cash Substitution Amount, and (ii)
the sale occurs in compliance with all applicable securities laws ("Sale
Right"). The Escrow Agent shall hold an amount equal to the Cash Substitution
Amount from the proceeds of such sale in the Escrow Account and shall distribute
any proceeds in excess of such amount to the Principal Shareholders in
accordance with their respective entitlements as reflected in the Subaccounts.
(f) "Cash Equivalents" means U.S. Treasury Securities maturing 9 months or
less from the date the face amount thereof is to be determined for purposes of
this Agreement. The Escrow Agent shall be the record owner of all Cash
Equivalents held by it under Section 4(d) and shall, and shall have the
exclusive right to, collect and hold all interest and redemption payments made
with respect to Cash Equivalents for which it is the record owner.
(g) The Escrow Agent shall maintain one subaccount for the Escrow Account
for each Principal Shareholder (the "Subaccounts"). In each Subaccount, the
Escrow Agent shall provide an accounting for all transactions occurring pursuant
to this Agreement involving the Deposited Shares and other assets in the Escrow
Fund following the Closing Date.
(h) The Escrow Agent shall cause sales of Escrow Shares and disbursements
from the Escrow Fund where required or directed pursuant to this Agreement to be
made from each Subaccount as closely as practicable according to the respective
entitlements as reflected in the Subaccounts of the Principal Shareholders
unless with respect to individual Payment Instructions the Principal
Shareholders shall indicate a different percentage or allocation in such
instructions; provided, however, that only sales of whole shares shall occur
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from the Subaccounts.
(i) The Escrow Agent shall disburse the entire remaining Escrow Fund, if
any, as soon as practicable after the later of (i) February __, 2003, or (ii) if
prior to February __, 2003, Summit shall have given an Indemnification Notice
with respect to a Claim which has not been satisfied in accordance with the
terms of this Agreement and which has not been the subject of a Certified
Arbitration Award denying the Claim in whole, then the date all such Claims
shall have been finally resolved. At such time, the Escrow Agent shall disburse
the Escrow Fund to the Principal Shareholders in accordance with their
respective entitlements as reflected in the Subaccounts.
(j) No notice or other communication from the Principal Shareholders
required or permitted pursuant to this Agreement shall be valid for any purpose
under this Agreement and may not be relied on by the Escrow Agent unless signed
by all Principal Shareholders or by Sellers Representatives (as defined in the
Reorganization Agreement).
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(k) During such period as the Principal Shareholders shall not have yet
exercised their Substitution Right or Sale Right, the Escrow Agent shall have no
obligation to invest any cash in the Escrow Account. After such time as the
Principal Shareholders may have exercised either the Substitution Right or the
Sale Right, the Principal Shareholders may from time to time instruct the Escrow
Agent to invest such cash as may be in the Escrow Account in "Permitted
Investments" in such amounts and in such proportions as they shall determine and
the Escrow Agent shall to the extent practicable and reasonable act upon the
instructions of the Principal Shareholders as their agent in purchasing the
"Permitted Investments" directed by them. "Permitted Investments" means money
market mutual funds registered with the U.S. Securities and Exchange Commission
and Cash Equivalents. After such time as the Principal Shareholders may have
exercised either the Substitution Right or the Sale Right, the Principal
Shareholders may request no more frequently than once every 90 days, provided on
the date of the request the value of Cash Consideration in the Escrow Account
exceeds an amount equal to the Cash Substitution Amount, that the Escrow Agent
distribute to the Principal Shareholders in accordance with their respective
entitlements as reflected in the Subaccounts any cash in the Escrow Account up
to the amount of such excess and provided further that all fees, charges,
commissions, expenses, reimbursements and indemnification due to the Escrow
Agent from the Principal Shareholders have been paid.
5. Limitation of Escrow Agent's Liability; Indemnification.
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(a) The Escrow Agent assumes no responsibility other than to perform this
Agreement in accordance with its terms. The Escrow Agent shall not be liable to
any party for any error in judgment or for any act or omission by the Escrow
Agent done in good faith.
(b) The Escrow Agent may rely upon any instrument or writing reasonably
believed by it to be genuine and sufficient and properly presented, and shall
not be liable for any action taken or omitted in good faith in accordance with
the provisions of any such instrument or writing except for its gross negligence
or willful misconduct.
(c) In case the Escrow Fund shall be attached, garnished or levied upon or
under any order of court, or the delivery of any portion of the Escrow Fund
shall be stayed or enjoined by any order of court, or any other order, judgment
or decree shall be made or entered by any court affecting the Escrow Fund or any
act of the Escrow Agent, then the Escrow Agent is expressly authorized, in its
sole discretion, to obey and comply with all writs, orders, judgments or decrees
so entered or issued, whether with or without jurisdiction, and the Escrow Agent
shall not be liable to any other party hereto for its compliance with any such
writ, order, judgment or decree notwithstanding the fact that the same is
subsequently reversed, modified, annulled, set aside or vacated.
(d) Summit and the Principal Shareholders hereby agree, jointly and
severally, to indemnify and hold harmless the Escrow Agent from and against any
and all expenses, losses, claims, damages or liabilities to which the Escrow
Agent may become subject insofar as such expenses, losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
act taken or omitted to be taken by the Escrow Agent pursuant to this Agreement
or pursuant to written notices or other communications provided for by this
Agreement given in accordance with this
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Agreement, except if such expenses, losses, claims, damages or liabilities
result from the gross negligence or willful misconduct of the Escrow Agent.
(e) In the event of any dispute or question arising hereunder, the Escrow
Agent shall not be liable to any party if it acts, or takes no action, in
accordance with the opinion of its independent legal counsel, and during the
pendency of any such dispute or question, the Escrow Agent shall be entitled to
continue in such action or inaction:
(i) Until all rights of adverse claimants have been finally
adjudicated by a court having jurisdiction over the parties and the matters
affected thereby, and there shall have been delivered to the parties hereto a
certified copy of a final order of such court together with the written opinion
of independent legal counsel to the Escrow Agent stating that no appeal may
lawfully be taken from said order or that the time to appeal said order has
passed and no appeal has been taken, after which time the Escrow Agent shall be
entitled to act in conformity with such adjudication; or
(ii) Until all differences shall have been adjusted by agreement
and the Escrow Agent shall have been notified thereof and shall have been
directed in writing jointly by Summit and the Principal Shareholders, at which
time the Escrow Agent shall be protected in acting in compliance therewith.
(f) The parties agree that the Escrow Agent may seek adjudication of any
adverse claim in either the Superior Court of the State of New Jersey or the
Federal District Court for the District of New Jersey and agree to the
jurisdiction of either of said courts over their persons as well as the Escrow
Fund, waive personal service of any process, and agree that service of process
by certified or registered mail, return receipt requested, to the address of
each party provided for notices under this Agreement shall constitute adequate
service.
(g) The Escrow Agent may employ independent accountants and attorneys as
reasonably necessary to advise it as to matters related to its duties,
responsibilities and obligations hereunder and the reasonable fees and expenses
of such independent accountants and attorneys shall be included within the
indemnifiable expenses of the Escrow Agent pursuant to Section 5(d).
(h) The Escrow Agent agrees that all information regarding this
transaction shall be kept confidential by the Escrow Agent and no such
information will be released outside the corporate trust division of the Escrow
Agent or used by the Escrow Agent for any purpose other than fulfilling its
obligations under this Agreement.
6. Fees.
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(a) The annual maintenance fee of the Escrow Agent, any expenses incurred
by the Escrow Agent in performing its obligations under Section 4(c), all
reasonable fees and charges of independent accountants and attorneys incurred by
the Escrow Agent pursuant to Section 5(g) and all costs and expenses of
furnishing the Escrow Agent with the indemnification provided for in Section
5(d) shall be shared equally by Summit on one hand (i.e., fifty percent (50%) of
such amounts), and the Principal Shareholders as a group on the other hand
(i.e., fifty percent (50%) of
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such amounts). All fees and charges imposed or expenses incurred by the Escrow
Agent in performing its obligations under Sections 3(b), 3(c), 3(d), 4(a), 4(b),
4(d), 4(e) and 4(k) of this Agreement, in addition to the fees, charges, and
expenses expressly provided for therein, shall be the exclusive responsibility
of the Principal Shareholders.
(b) Summit and the Principal Shareholders shall pay to the Escrow Agent
all amounts that the Escrow Agent is entitled to receive from them pursuant to
their respective obligations under Section 6(a) within a reasonable period
following the receipt of a written invoice for same from the Escrow Agent which
itemizes in reasonable detail the fees, charges and expenses for which payment
is sought. The Escrow Agent shall have a lien on the Escrow Fund in the amount
of any fees, charges or expenses owed by the Principal Shareholders pursuant to
this Section 6 but not paid by the Principal Shareholders within 30 days of
receipt of the invoice for same and shall have the right, notwithstanding any
other provision of this Agreement, (i) to retain possession of a portion of the
Escrow Fund sufficient in value in the reasonable judgment of the Escrow Agent
to satisfy any such lien, (ii) to debit the Subaccounts (based on the Percentage
Interests) and credit its own account in satisfaction of some or all of the
payment obligation giving rise to any such lien, up to the amount of any cash in
the Escrow Fund, (iii) to sell a sufficient number of Escrow Shares to produce,
after all costs and expenses of sale are deducted, sale proceeds at least equal
to the payment obligation giving rise to any such lien and to pay to its own
account the amount which satisfies such lien in full. Summit and the Principal
Shareholders shall have the right to pursue any legal remedy available to it or
them at law, equity, contract or otherwise to recover from the other any fees,
costs or expenses paid by it or them to the Escrow Agent hereunder in excess of
any allocable portion provided for herein.
7. Amendment or Waiver. This Agreement may not be amended except by an
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instrument in writing signed on behalf of Summit, the Escrow Agent and each
Principal Shareholder (or the respective survivor) or one or both of the Sellers
Representatives and no term hereof may be waived, except by an instrument in
writing signed on behalf of the party or parties waiving compliance or such
party's or parties' authorized representative. The failure of any party at any
time or times to require performance of any provision hereof shall in no manner
affect the right to enforce the same. No waiver by any party of any breach of
any term of this Agreement, whether by conduct or otherwise, shall be deemed to
be a further or continuing waiver of any such breach or a waiver of any breach
of any other term of this Agreement.
8. Notices. Each notice, request, demand and other communication required or
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permitted hereunder shall not satisfy the requirements of the section of this
Agreement requiring or permitting such notice, request, demand or other
communication unless the notice, request, demand or other communication is in
writing. Such notices and other communications hereunder shall be given to the
parties at their respective addresses set forth below and shall be sent by (i)
hand delivery, (ii) certified mail, return receipt requested, postage prepaid,
(iii) a recognized overnight delivery service, or (iv) telecopy provided written
confirmation of receipt of the telecopy is received from the recipient (by
telecopy or as otherwise permitted herein) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice). Notices sent by hand delivery shall be deemed received when delivered
to the address and person set forth below; notices sent by certified mail shall
be deemed received when accepted; notices sent by overnight delivery service
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shall be deemed received when delivered and notices sent by telecopy shall be
deemed received upon receipt of the confirmation as required by this Section 8:
If to Summit, to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
Executive Vice President and General Counsel
Summit Bancorp.
301 Carnegie Center - ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to: Summit Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
If to the Escrow Agent: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chairman and CEO
Manchester Trust Bank
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
If to the Principal Shareholders:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
#▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Garrubbo, Romankow & Rinaldo
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
11
▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
Middleton, New Jersey 07748
9. Miscellaneous. This Agreement (a) constitutes the entire agreement and
-------------
supersedes all other prior agreements and undertakings, both written and oral,
among the parties, or any of them, with respect to the subject matter hereof,
(b) shall not confer upon any other person any rights or remedies hereunder, (c)
shall not be assigned by operation of law or otherwise, and (d) shall be
governed in all respects, including validity, interpretation and effect, by the
law of the state of New Jersey (regardless of the law which may be applicable
under principles of conflicts of law). This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective permitted
successors and assigns, heirs at law, next of kin, distributees, executors,
administrators, legatees and other legal representatives. This Agreement may be
executed in two or more counterparts which together shall constitute a single
agreement. The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
[Remainder of Page Intentionally Blank]
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IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties
hereto have caused this Escrow Agreement to be signed by their respective
officers thereunto duly authorized as of the date specified on the first page
hereof.
SUMMIT BANCORP. PRINCIPAL SHAREHOLDERS
_______________________________
By: ___________________________ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Name:______________________
Title:_____________________ _______________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
MANCHESTER TRUST BANK _______________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By: __________________________
Name:_____________________ _______________________________
Title:____________________ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
BLOODY FORELAND, L.P.
By:____________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.,
its General Partner
_______________________________
▇▇▇ ▇▇▇▇▇▇▇▇▇
_______________________________
▇▇▇▇▇ Del ▇▇▇▇▇
_______________________________
▇▇▇▇▇ ▇▇▇▇▇
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