Exhibit 2.1
EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
by and among
BGC PARTNERS, L.P.,
MAGNET ACQUISITION CORP.,
and
MAXCOR FINANCIAL GROUP INC.
Dated as of April 4, 2005
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TABLE OF CONTENTS
ARTICLE I THE MERGER
Page
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SECTION 1.01 The Merger....................................................2
SECTION 1.02 Closing.......................................................2
SECTION 1.03 Effective Time................................................2
SECTION 1.04 Effects of the Merger.........................................2
SECTION 1.05 Certificate of Incorporation and By-laws......................2
SECTION 1.06 Directors and Officers........................................2
ARTICLE II EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS
SECTION 2.01 Effect on Capital Stock.......................................3
SECTION 2.02 Surrender and Payment.........................................3
ARTICLE III REPRESENTATIONS AND WARRANTIES
SECTION 3.01 Representations and Warranties of the Company.................6
SECTION 3.02 Representations and Warranties of Parent and Sub.............20
ARTICLE IV COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 4.01 Conduct of Business by the Company...........................22
SECTION 4.02 No Solicitation by the Company...............................25
ARTICLE V ADDITIONAL AGREEMENTS
SECTION 5.01 Preparation of the Proxy Statement; Stockholders Meeting.....27
SECTION 5.02 Access to Information; Confidentiality.......................28
SECTION 5.03 Reasonable Best Efforts; Cooperation.........................29
SECTION 5.04 Stock Options................................................29
SECTION 5.05 Indemnification, Exculpation and Insurance...................30
SECTION 5.06 Fees and Expenses............................................31
SECTION 5.07 Public Announcements.........................................33
SECTION 5.08 Stockholder Litigation.......................................33
SECTION 5.09 Employee Benefit Plans.......................................33
SECTION 5.10 Sub Compliance...............................................34
SECTION 5.11 Advice of Changes............................................34
SECTION 5.12 Company Employees............................................34
ARTICLE VI CONDITIONS PRECEDENT
SECTION 6.01 Conditions to Each Party's Obligation to Effect the Merger...35
SECTION 6.02 Conditions to Obligation of Parent and Sub...................35
SECTION 6.03 Conditions to Obligations of the Company.....................36
SECTION 6.04 Frustration of Closing Conditions............................37
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER
SECTION 7.01 Termination..................................................37
SECTION 7.02 Effect of Termination........................................38
SECTION 7.03 Amendment....................................................38
SECTION 7.04 Extension; Waiver............................................39
ARTICLE VIII GENERAL PROVISIONS
SECTION 8.01 Nonsurvival of Representations and Warranties................39
SECTION 8.02 Notices......................................................39
SECTION 8.03 Definitions..................................................40
SECTION 8.04 Interpretation...............................................41
SECTION 8.05 Counterparts.................................................42
SECTION 8.06 Entire Agreement; No Third-Party Beneficiaries...............42
SECTION 8.07 Governing Law................................................42
SECTION 8.08 Assignment...................................................42
SECTION 8.09 Consent to Jurisdiction......................................42
SECTION 8.10 Table of Contents; Headings..................................42
SECTION 8.11 Severability.................................................42
SECTION 8.12 Disclosure...................................................43
SECTION 8.13 WAIVER OF JURY TRIAL.........................................43
SECTION 8.14 Specific Performance.........................................43
INDEX OF DEFINED TERMS
Page
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Affected Employees.........................................................33
affiliate..................................................................41
Agreement...................................................................1
Antitrust Laws..............................................................9
business day...............................................................41
Certificate of Merger.......................................................2
Certificates................................................................4
Change in the Company Recommendation.......................................27
Closing.....................................................................2
Closing Date................................................................2
Code.......................................................................13
Company.....................................................................1
Company Acquisition Agreement..............................................27
Company Capital Stock.......................................................7
Company Common Stock........................................................1
Company Disclosure Schedule.................................................6
Company Employees..........................................................16
Company Intellectual Property..............................................19
Company Investment..........................................................7
Company Permits............................................................11
Company Preferred Stock.....................................................7
Company Recommendation.....................................................27
Company Regulatory Agreement...............................................12
Company Rights..............................................................3
Company Rights Plan.........................................................3
Company SEC Documents.......................................................9
Company Stock Option Plans..................................................7
Company Stock Options.......................................................7
Company Stockholder Approval...............................................18
Company Stockholders Meeting...............................................28
Company Superior Proposal..................................................26
Company Takeover Proposal..................................................26
DGCL........................................................................2
Dissenting Shares...........................................................6
Effective Time..............................................................2
Employee Termination Event.................................................38
ERISA......................................................................13
ERISA Affiliate............................................................13
Exchange Act................................................................9
FSA.........................................................................9
GAAP.......................................................................10
Governmental Entity.........................................................9
HSR Act.....................................................................9
Intellectual Property......................................................19
Investment Company Act......................................................5
knowledge..................................................................41
Liens.......................................................................7
material adverse change....................................................41
material adverse effect....................................................41
material adverse effect on Parent..........................................20
Merger......................................................................1
Merger Consideration........................................................3
MFI........................................................................10
Multiemployer Plan.........................................................14
Multiply Employer Plan.....................................................14
NASD........................................................................9
Orders.....................................................................12
Parent......................................................................1
Parties.....................................................................1
Paying Agent................................................................4
person.....................................................................42
Pre-Termination Takeover Proposal Event....................................32
Principal Stockholder.......................................................1
Principal Stockholders......................................................1
Proxy Statement.............................................................9
Restraints.................................................................36
SEC.........................................................................9
Securities Act..............................................................9
Sub.........................................................................1
subsidiary.................................................................42
Support Agreement...........................................................1
Surviving Corporation.......................................................2
Taxes......................................................................18
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of April 4,
2005, by and among BGC Partners, L.P., a Delaware limited partnership
("Parent"), Magnet Acquisition Corp., a Delaware corporation and a direct
wholly owned subsidiary of Parent ("Sub"), and Maxcor Financial Group Inc., a
Delaware corporation (the "Company"). Parent, Sub and the Company are
collectively referred to herein as the "Parties."
W I T N E S S E T H:
WHEREAS, each of Parent, Sub and the Company desire to enter into a
transaction whereby Sub will merge with and into the Company (the "Merger"),
upon the terms and subject to the conditions set forth in this Agreement,
whereby each issued and outstanding share of common stock, par value $0.001 per
share, of the Company ("Company Common Stock"), other than shares owned by
Parent, the Company or their respective subsidiaries (as defined in Section
8.03), will be converted into the right to receive the Merger Consideration (as
defined in Section 2.01(c));
WHEREAS, the respective Boards of Directors of Parent, Sub and the
Company have each approved this Agreement and the Merger and determined that
the Merger is advisable, and Parent has adopted this Agreement and the Merger
as the sole stockholder of Sub;
WHEREAS, as a condition to, and simultaneously with, the execution of
this Agreement, each of Xxxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxx, Xxxxx X. Xxxxx,
Xxxxx X. Xxxxx and Xxxxx X. Xxxxxx (each a "Principal Stockholder" and,
collectively, the "Principal Stockholders") is entering into an agreement with
Parent in the form attached as Exhibit A (the "Support Agreement"), pursuant
to which, among other things, each Principal Stockholder has agreed to vote
all shares of Company Common Stock held by such Principal Stockholder in favor
of adoption of this Agreement, not to vote in favor of any other Company
Takeover Proposal (as defined in Section 4.02(a)) and not to sell or otherwise
transfer any shares of Company Common Stock;
WHEREAS, as a condition to Parent's willingness to enter into this
Agreement, prior to the date of this Agreement, the Company has entered into
new employment agreements with, or has received reaffirmations of existing
employment agreements from, certain employees of the Company and its
subsidiaries who Parent and the Company consider to be important to the
business of the Company and its subsidiaries; and
WHEREAS, the parties desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and also to
prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, and intending to be
legally bound, the Parties agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01. The Merger. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the Delaware General
Corporation Law (the "DGCL"), Sub shall be merged with and into the Company at
the Effective Time (as defined in Section 1.03). Following the Effective Time,
the separate corporate existence of Sub shall cease and the Company shall be
the surviving corporation (the "Surviving Corporation").
SECTION 1.02 Closing. The closing of the Merger (the "Closing") will
take place at 10:00 a.m. on a date to be specified by the Parties (the "Closing
Date"), which shall be no later than the second business day (as defined in
Section 8.03) after satisfaction or waiver of each of the conditions set forth
in Article VI (other than those conditions that, by their terms, are to be
satisfied at the Closing, but subject to the satisfaction or waiver of such
conditions), unless another time or date is agreed to by the Parties. The
Closing will be held at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx
LLP, Xxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such other location as
is agreed to by the Parties.
SECTION 1.03 Effective Time. Subject to the provisions of this
Agreement, as soon as practicable on the Closing Date, the Parties shall file
or cause to be filed a certificate of merger (the "Certificate of Merger")
executed in accordance with the relevant provisions of the DGCL and shall make
all other filings or recordings required under the DGCL to effectuate the
Merger. The Merger shall become effective at such time as the Certificate of
Merger is duly filed with the Secretary of State of the State of Delaware, or
at such subsequent date or time as Sub and the Company shall agree and specify
in the Certificate of Merger (the time the Merger becomes effective being
hereinafter referred to as the "Effective Time").
SECTION 1.04 Effects of the Merger. The Merger shall have the effects
set forth in Section 259 of the DGCL. Without limiting the generality of the
foregoing, and subject thereto, from and after the Effective Time, the
Surviving Corporation shall possess all the rights, privileges, immunities,
powers and purposes and shall assume and be liable for all the liabilities,
obligations and penalties of the Company and Sub.
SECTION 1.05 Certificate of Incorporation and By-laws. The certificate
of incorporation of Sub as in effect immediately prior to the Effective Time
shall be the certificate of incorporation of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable law. The
by-laws of Sub as in effect immediately prior to the Effective Time shall be
the by-laws of the Surviving Corporation until thereafter changed or amended as
provided therein and applicable law.
SECTION 1.06 Directors and Officers. Immediately following the
Effective Time, those individuals set forth on Exhibit 1.06 shall hold the
offices of the Surviving Corporation set forth opposite such individuals name
on such Exhibit until their successors shall have been duly elected, appointed
or qualified or until their earlier death, resignation or removal in accordance
with the certificate of incorporation and by-laws of the Surviving Corporation.
The initial Board of Directors of the Surviving Corporation shall be the
directors of Sub until their successors shall have been duly elected, appointed
or qualified or until their earlier death, resignation or removal in accordance
with the DGCL, the certificate of incorporation and by-laws of the Surviving
Corporation.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS
SECTION 2.01 Effect on Capital Stock. As of the Effective Time, by
virtue of the Merger and without any action on the part of the holder of any
shares of Company Common Stock or capital stock of Sub:
(a) Capital Stock of Sub. Each issued and outstanding share of the
common stock, par value $0.01 per share, of Sub issued and outstanding
immediately prior to the Effective Time shall be converted into and become one
fully paid and nonassessable share of common stock, par value $0.01 per share,
of the Surviving Corporation.
(b) Cancellation of Treasury Stock. Each share of Company Common Stock
held in the Company's treasury or by any of the Company's subsidiaries, Parent
or any of Parent's subsidiaries shall automatically be cancelled and retired
and shall cease to exist, and no consideration shall be delivered in exchange
therefor.
(c) Conversion of Company Common Stock. Each issued and outstanding
share of Company Common Stock (other than shares to be cancelled in accordance
with Section 2.01(b) and other than Dissenting Shares (as defined in Section
2.02(h)), together with the rights (the "Company Rights") issued pursuant to
the Rights Agreement, dated as of December 6, 1996, between the Company and
Continental Stock Transfer & Trust Company, as rights agent, as amended by
Amendment No. 1, dated as of July 26, 2001, and as modified by the agreement on
removal of rights agent and appointment of successor rights agent by and among
the Company, Continental Stock Transfer & Trust Company and the Bank of New
York, dated as of September 9, 2003 (together, the "Company Rights Plan"),
shall be converted into the right to receive an amount in cash equal to $14.00,
without interest (the "Merger Consideration").
SECTION 2.02 Surrender and Payment.
(a) Paying Agent. As of the Effective Time, Parent shall enter into an
agreement with such bank or trust company mutually agreeable to Parent and the
Company (the "Paying Agent"), which shall provide that Parent shall deposit
with the Paying Agent as of the Effective Time, for the benefit of the holders
of shares of Company Common Stock, by wire transfer of immediately available
funds, cash sufficient to make the cash payments contemplated by Section
2.01(c), and Parent shall comply with its obligations under such agreement in
accordance with the terms thereof and hereof.
(b) Payment Procedures. As soon as reasonably practicable after the
Effective Time, but in any event no later than three business days after the
Effective Time, Parent shall cause the Paying Agent to mail to each holder of
record of a certificate or certificates which immediately prior to the
Effective Time represented outstanding shares of Company Common Stock (the
"Certificates") whose shares were converted into the right to receive the
Merger Consideration pursuant to Section 2.01, (i) a letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and
title to the Certificates shall pass, only upon delivery of the Certificates to
the Paying Agent and shall be in such form and have such other provisions not
inconsistent with this Agreement as Parent and the Company may reasonably
specify) and (ii) instructions for use in surrendering the Certificates in
exchange for the Merger Consideration. Upon surrender of a Certificate for
cancellation to the Paying Agent, together with such letter of transmittal,
duly executed, and such other documents as may reasonably be required by the
Paying Agent, the holder of such Certificate shall be entitled to receive in
exchange therefor the Merger Consideration in respect of the shares of Company
Common Stock represented by such Certificate, and the Certificate so
surrendered shall forthwith be cancelled. If any portion of the Merger
Consideration is to be paid to a person other than the person in whose name the
applicable surrendered Certificate is registered, it shall be a condition to
the payment of such Merger Consideration that (i) the surrendered Certificate
shall be properly endorsed or otherwise be in proper form for transfer and (ii)
the person requesting such payment of the Merger Consideration shall (A) pay to
the Paying Agent any transfer or other taxes required as a result of such
payment to a person other than the registered holder of such Certificate or (B)
establish to the reasonable satisfaction of Parent that such tax either has
been paid or is not payable. Until surrendered as contemplated by this Section
2.02, each Certificate shall be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender the amounts which the
holder thereof has the right to receive in respect of such Certificate pursuant
to the provisions of this Article II. No interest shall be paid or will accrue
on the Merger Consideration. Each of the Surviving Corporation, Parent and the
Paying Agent shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of shares of Company
Common Stock such amounts as it is required to deduct and withhold with respect
to the making of such payment under the Code (as defined in Section
3.01(i)(ii)) or any provision of Tax (as defined in Section 3.01(j)(xiii)) law.
To the extent that amounts are so withheld by the Surviving Corporation, Parent
or the Paying Agent, as the case may be, and to the extent that Parent and Sub
promptly pay such withheld amounts to the appropriate Governmental Entity on
behalf of the applicable holder(s), such withheld amounts shall be treated for
all purposes of this Agreement as having been paid to the holder of the shares
of Company Common Stock, in respect of which such deduction and withholding was
made by the Surviving Corporation, Parent or the Paying Agent, as the case may
be.
(c) No Further Ownership Rights in Company Common Stock. All Merger
Consideration to be paid upon the surrender of Certificates in accordance with
the terms of this Article II shall be deemed to have been paid in full
satisfaction of all rights pertaining to the shares of Company Common Stock
represented by such Certificates, subject, however, to the Surviving
Corporation's obligation to pay any dividends or make any other distributions
with a record date prior to the Effective Time which may have been declared or
made by the Company on such shares of Company Common Stock to the extent such
dividend or other distribution remains unpaid at the Effective Time, and after
the Effective Time, there shall be no further registration of transfers of
shares of Company Common Stock on the stock records of, or relating to, the
Company. If, after the Effective Time, Certificates are presented to the Paying
Agent, the Surviving Corporation or Parent, they shall be cancelled and
exchanged for the Merger Consideration provided for, and in accordance with the
procedures and subject to the limitations set forth, in this Article II.
(d) Undistributed Merger Consideration. Any portion of the funds made
available to the Paying Agent pursuant to Section 2.02(a) that remains
unclaimed by the holders of Certificates six months after the Effective Time
shall be returned to Parent and any such holder who has not exchanged such
holder's Certificates for the Merger Consideration in accordance with this
Section 2.02 prior to that time shall thereafter look only to Parent for
delivery of the Merger Consideration in respect of such holder's Certificates
without any interest thereon.
(e) Escheat. None of Parent, Sub, the Company or the Paying Agent or
their respective representatives shall be liable to any person for any Merger
Consideration delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws. If any Certificate shall not have been
surrendered immediately prior to such date on which any Merger Consideration
would otherwise escheat to or become the property of any Governmental Entity
(as defined in Section 3.01(d)), any such Merger Consideration shall, to the
extent permitted by applicable law, become the property of the Surviving
Corporation, free and clear of all claims or interests of any person previously
entitled thereto.
(f) Investment of Merger Consideration. Parent shall cause the Paying
Agent to invest the funds deposited with the Paying Agent in accordance with
Section 2.02(a) in a money market fund registered under the Investment Company
Act of 1940 (as amended, the "Investment Company Act"), the principal of which
is invested solely in obligations issued or guaranteed by the U.S. Government
and repurchase agreements in respect of such obligations. Any interest and
other income resulting from such investment shall be the property of, and shall
be paid to, Parent. Any losses resulting from such investment shall not in any
way diminish Parent's and Sub's payment obligation under Section 2.01(c).
(g) Lost Certificates. If any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Surviving Corporation, the posting by such person of a bond in such
reasonable amount as the Surviving Corporation may direct as indemnity against
any claim that may be made against it with respect to such Certificate, the
Paying Agent shall issue in exchange for such lost, stolen or destroyed
Certificate the Merger Consideration to be paid with respect to such
Certificate pursuant to Section 2.01(c).
(h) Dissenting Shares. Notwithstanding Section 2.01(c), shares of
Company Common Stock outstanding immediately prior to the Effective Time and
held by a holder who has not voted in favor of the Merger or consented thereto
in writing and who has demanded appraisal for such shares in accordance with
the DGCL shall not be converted into a right to receive the Merger
Consideration, unless such holder fails to perfect, withdraws or otherwise
loses such holder's right to appraisal. If, after Closing, such holder fails to
perfect, withdraws or loses such holder's right to appraisal, such shares of
Company Common Stock shall be treated as if they had been converted as of the
Closing into a right to receive the Merger Consideration. The Company shall
give Parent prompt notice of any demands received by the Company for appraisal
of shares of Company Common Stock, and Parent shall have the right to
participate in all negotiations and proceedings with respect to such demands.
Except with the prior written consent of Parent, the Company shall not make any
payment with respect to, or settle or offer to settle, any such demands. A
portion of the funds delivered to the Paying Agent pursuant to Section 2.02(a)
that are not distributed to holders of shares of Company Common Stock pursuant
to this Section 2.02 because the holders thereof properly exercised and
perfected their dissenters' rights with respect thereto under the DGCL (such
shares, "Dissenting Shares") may be paid to the holders of Dissenting Shares
upon written instruction from Parent to the Paying Agent.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01 Representations and Warranties of the Company. Except as
set forth on the Disclosure Schedule delivered by the Company to Parent prior
to the execution of this Agreement (the "Company Disclosure Schedule"), the
Company represents and warrants to Parent as follows:
(a) Organization, Standing and Corporate Power. Each of the Company
and its subsidiaries is a corporation or other legal entity duly organized,
validly existing and in good standing (with respect to jurisdictions which
recognize such concept) under the laws of the jurisdiction in which it is
organized and has the requisite corporate or other power, as the case may be,
and authority to carry on its business as now being conducted in all material
respects, except, as to subsidiaries, for those jurisdictions where the failure
to be so organized, existing or in good standing individually or in the
aggregate would not have a material adverse effect (as defined in Section 8.03)
on the Company and except for certain subsidiaries that have discontinued all
business operations prior to the date hereof. Each of the Company and its
subsidiaries is duly qualified or licensed to do business and is in good
standing (with respect to jurisdictions which recognize such concept) in each
jurisdiction in which the nature of its business or the ownership, leasing or
operation of its properties makes such qualification or licensing necessary,
except for those jurisdictions where the failure to be so qualified or licensed
or to be in good standing individually or in the aggregate would not have a
material adverse effect on the Company. The Company has provided to Parent
prior to the execution of this Agreement complete and correct copies of its
certificate of incorporation and by-laws, and the charter documents, by-laws,
organizational documents and partnership, limited liability company and joint
venture agreements of each of the Company's subsidiaries (excluding such
subsidiaries that have discontinued all business operations prior to the date
hereof), each as amended to date.
(b) Subsidiaries. Section 3.01(b) of the Company Disclosure Schedule
lists all subsidiaries of the Company that have not discontinued all business
operations prior to the date hereof and specifies which of the Company's
subsidiaries are "Significant Subsidiaries" within the meaning of Rule 1-02 of
Regulation S-X under the Exchange Act. All the outstanding shares of capital
stock of, or other ownership interests in, each subsidiary (i) have been
validly issued and are fully paid and nonassessable, (ii) except for director
qualifying shares, are owned directly or indirectly by the Company, free and
clear of all material pledges, claims, liens, charges, encumbrances and
security interests of any kind or nature whatsoever (collectively, "Liens") and
(iii) are free of any other material restriction (including any restriction on
the right to vote, sell or otherwise dispose of such capital stock or other
ownership interests). Except for its interests in such subsidiaries, neither
the Company nor any such subsidiary (i) owns, has any right to, or is involved
in negotiations to acquire, directly or indirectly, any capital stock,
membership interest, partnership interest, joint venture interest or other
equity interest in any person, except for any such capital stock or interests
held by the Company and such subsidiaries pursuant to their business activities
conducted in the ordinary and usual course of business, or (ii) has the ability
to control (whether through the ownership of voting securities or otherwise)
any other person (any of such interests under clause (i) or (ii) other than a
subsidiary of the Company, a "Company Investment"). No Company Investment is,
individually or when taken together with all other Company Investments,
material to the business of the Company and its subsidiaries taken as a whole.
(c) Capital Structure. The authorized capital stock of the Company
consists of 30,000,000 shares of Company Common Stock and 1,000,000 shares of
preferred stock, par value $0.001 per share (the "Company Preferred Stock" and
collectively with the Company Common Stock, "Company Capital Stock"). As of
March 20, 2005, (i) 6,812,232 shares of Company Common Stock and no shares of
Company Preferred Stock were issued and outstanding, (ii) 6,073,144 shares of
Company Common Stock and no shares of Company Preferred Stock were held by the
Company in its treasury, and (iii) 1,592,188 shares of Company Common Stock
were subject to outstanding options to purchase Company Common Stock ("Company
Stock Options") granted under the Company's 1996 Stock Option Plan and the
Company's 2002 Stock Option Plan (collectively, the "Company Stock Option
Plans"). Section 3.01(c) of the Company Disclosure Schedule sets forth, as of
the date hereof, the holders of all outstanding Company Stock Options and the
number of shares of Company Common Stock purchasable upon exercise of, the
exercise price of, the vesting schedule of and expiration date of all Company
Stock Options. All outstanding shares of capital stock of the Company are, and
all shares which may be issued will be, when issued, duly authorized, validly
issued, fully paid and nonassessable and not subject to preemptive rights.
Except as set forth in this Section 3.01(c), except for changes since March 20,
2005 resulting from the issuance of shares of Company Common Stock pursuant to
the Company Stock Option Plans or the issuance of Company Capital Stock
pursuant to the Company Rights Plan, (x) there are not issued, reserved for
issuance or outstanding (A) any shares of Company Capital Stock or other voting
securities of the Company, (B) any securities of the Company convertible into
or exchangeable or exercisable for shares of Company Capital Stock or voting
securities of the Company and (C) any warrants, calls, or options to acquire
from the Company or any Company subsidiary, or obligation of the Company or any
Company subsidiary to issue, any capital stock, voting securities or securities
convertible into or exchangeable or exercisable for capital stock or voting
securities of the Company, and (y) there are no outstanding obligations of the
Company or any Company subsidiary to repurchase, redeem or otherwise acquire
any such securities or to issue, deliver or sell, or cause to be issued,
delivered or sold, any such securities. Neither the Company nor any Company
subsidiary is a party to any voting agreement with respect to the voting of any
such securities. There are no outstanding (A) securities of the Company or any
Company subsidiary convertible into or exchangeable or exercisable for shares
of capital stock or other voting securities or ownership interests in any
Company subsidiary, (B) warrants, calls, options or other rights to acquire
from the Company or any Company subsidiary, or obligation of the Company or any
Company subsidiary to issue, any capital stock, voting securities or other
ownership interests in, or any securities convertible into or exchangeable or
exercisable for any capital stock, voting securities or ownership interests in,
any Company subsidiary or (C) obligations of the Company or any Company
subsidiary to repurchase, redeem or otherwise acquire any such outstanding
securities of the Company subsidiaries or to issue, deliver or sell, or cause
to be issued, delivered or sold, any such securities. There are no agreements,
arrangements or commitments of any character (contingent or otherwise) entered
into in connection with acquisitions pursuant to which any person is or may be
entitled to any payment based on revenues, earnings or financial performance of
the Company or any of its subsidiaries or assets or calculated in accordance
therewith.
(d) Authority; Noncontravention. The Company has all requisite
corporate power and authority to enter into this Agreement and, subject to the
Company Stockholder Approval (as defined in Section 3.01(k)), to consummate the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company, subject, in the case of the
Merger, to the Company Stockholder Approval. This Agreement has been duly
executed and delivered by the Company and, assuming the due authorization,
execution and delivery by Parent and Sub, constitutes a legal, valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except to the extent that enforceability may be
limited by applicable bankruptcy, insolvency, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and subject to general
principles of equity. The execution and delivery of this Agreement and the
Support Agreements do not, and the consummation of the transactions
contemplated by this Agreement and compliance with the provisions of this
Agreement and the Support Agreements will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or loss of a benefit under, or result in the creation of any
material Lien upon any of the properties or assets of the Company or any of its
subsidiaries under, (i) the certificate of incorporation or by-laws of the
Company or the comparable organizational documents of any of its subsidiaries,
(ii) any loan or credit agreement, note, bond, mortgage, indenture, lease or
other agreement, instrument, permit, concession, franchise, license or similar
authorization applicable to the Company or any of its subsidiaries or their
respective properties or assets or (iii) subject to the governmental filings
and other matters referred to in the following sentence, any Company Permits or
any judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to the Company or any of its subsidiaries or their respective
properties or assets, other than, in the case of clauses (ii) and (iii), any
such conflicts, violations, defaults, rights, losses or Liens that individually
or in the aggregate (x) are not material to the Company and its subsidiaries
taken as a whole or (y) would not reasonably be expected to materially impair
or delay the ability of the Company to perform its obligations under this
Agreement. No consent, approval, order or authorization of, action by, or in
respect of, or registration, declaration or filing with, any federal, state,
local or foreign government, any court, administrative, regulatory or other
governmental agency, commission or authority or any non-governmental U.S. or
foreign self-regulatory agency, commission or authority or any arbitral
tribunal (each, a "Governmental Entity") is required by the Company or any of
its subsidiaries in connection with the execution and delivery of this
Agreement by the Company or the consummation by the Company of the transactions
contemplated hereby, except for: (1) the filing with the U.S. Securities and
Exchange Commission (the "SEC") of (A) a proxy statement relating to the
Company Stockholders Meeting (such proxy statement, as amended or supplemented
from time to time, the "Proxy Statement"), and (B) such reports under Section
13(a), 13(d), 15(d) or 16(a) of the Securities Exchange Act of 1934 (the
"Exchange Act"), as may be required in connection with this Agreement and the
transactions contemplated hereby; (2) the filing of the Certificate of Merger
with the Secretary of State of the State of Delaware and appropriate documents
with the relevant authorities of other states in which the Company is qualified
to do business; (3) the filing of a pre-merger notification and report form
under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), and the expiration or termination of the waiting period thereunder
and the filing of comparable pre-merger notifications in non-U.S. jurisdictions
pursuant to comparable antitrust or competition laws (together with the HSR
Act, the "Antitrust Laws"), if applicable, and the expiration of any mandatory
waiting periods thereunder; (4) compliance with the applicable requirements of
the National Association of Securities Dealers, Inc. (the "NASD") and the U.K.
Financial Services Authority (the "FSA"), and (5) such consents, approvals,
orders or authorizations (y) the failure of which to be made or obtained
individually or in the aggregate would not be material to the Company and its
subsidiaries taken as whole.
(e) Reports; Financial Statements.
(i) The Company has filed all required reports, schedules, forms
and statements (including exhibits and all other information incorporated
therein) with the SEC since December 31, 2001 (the "Company SEC
Documents"). As of their respective dates, the Company SEC Documents
complied in all material respects with the requirements of the Securities
Act of 1933 (the "Securities Act"), or the Exchange Act, as the case may
be, and the rules and regulations of the SEC promulgated thereunder
applicable to such Company SEC Documents, and none of the Company SEC
Documents when filed (as amended and restated and as supplemented by
subsequently filed Company SEC Documents) contained any untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
financial statements of the Company included in the Company SEC Documents
comply as to form, as of their respective dates of filing with the SEC, in
all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with U.S. generally accepted accounting principles
as in effect from time to time, applied on a consistent basis ("GAAP")
(except, in the case of unaudited statements, as permitted by Form 10-Q of
the SEC), during the periods involved (except as may be indicated in the
notes thereto) and fairly present in all material respects the
consolidated financial position of the Company and its consolidated
subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (subject, in the case
of unaudited statements, to normal recurring year-end audit adjustments).
Except (A) as reflected in such financial statements or in the notes
thereto, (B) for liabilities incurred in connection with this Agreement or
the transactions contemplated hereby or (C) for liabilities (whether
direct, contingent or otherwise) incurred in the ordinary course of
business consistent with past practice since the respective dates of such
financial statements, neither the Company nor any of its subsidiaries has
any material liabilities.
(ii) The audited financial statements of Maxcor Financial Inc.
("MFI") for the year ended December 31, 2004 set forth on Section
3.01(e)(ii) of the Company Disclosure Schedule have been prepared in
accordance with GAAP and fairly present in all material respects the
financial position of MFI as of the date thereof and the results of its
operations and cash flows for the period then ended.
(iii) The unaudited consolidating balance sheet of the Company and
its subsidiaries as of February 28, 2005 and the related consolidating
income statement for the Company and its subsidiaries for the two months
then ended, in each case as set forth on Section 3.01(e)(iii) of the
Company Disclosure Schedule, to the Company's knowledge, fairly present in
all material respects the consolidated financial position of the Company
and its subsidiaries as of the date thereof and the consolidated results
of their operations for the period then ended (subject to the absence of
footnotes and to normal recurring year-end audit adjustments).
(f) Information Supplied. None of the information supplied or to be
supplied by the Company specifically for inclusion or incorporation by
reference in the Proxy Statement will, at the date it is first mailed to the
Company's stockholders or at the time of the Company Stockholders Meeting (as
hereinafter defined), contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
are made, not misleading, except that no representation or warranty is made by
the Company with respect to information that Parent or Sub supplied to the
Company for inclusion therein or for incorporation by reference therein. The
Proxy Statement will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder.
(g) Absence of Certain Changes or Events. Since December 31, 2004, (i)
the Company and its subsidiaries have conducted their business only in the
ordinary and usual course of business consistent with past practice, and
neither the Company nor any of its subsidiaries has engaged in any transaction
material to the Company and its subsidiaries, taken as a whole (other than this
Agreement and the documents related to this Agreement and the transactions
contemplated hereby and thereby), (ii) none of the Company or any of its
subsidiaries has experienced or been affected by any event, change, effect or
development that, individually or in the aggregate, has had a material adverse
effect on the Company, (iii) neither the Company nor any of its subsidiaries
has taken any action that, if taken after the date hereof, would not be
permitted by Section 4.01.
(h) Compliance with Applicable Laws; Litigation.
(i) The Company and its subsidiaries hold all permits, licenses,
exemptions, orders, registrations and approvals of all Governmental
Entities which are required for the operation of the businesses of the
Company and its subsidiaries as currently conducted (collectively, the
"Company Permits"), except where the failure to have any such Company
Permits individually or in the aggregate would not be material to the
Company and its subsidiaries taken as a whole. None of the Company or any
of its subsidiaries has received notice that any Company Permit will be
terminated or modified in any respect material to the Company and its
subsidiaries taken as a whole or cannot be renewed in the ordinary course
of business, and to the Company's knowledge, there is no reasonable basis
for any such termination, modification or nonrenewal. The Company and its
subsidiaries are and have been since December 31, 2001 in compliance with
the terms of the Company Permits and all applicable statutes, laws,
ordinances, rules and regulations, except where the failure to so comply
individually or in the aggregate have not been, and would not reasonably
expected to be, material to the Company and its subsidiaries taken as a
whole. No material disciplinary proceeding or order by any Governmental
Entity with respect to the Company or any of its subsidiaries or any of
their respective properties, is pending or, to the knowledge (as defined
in Section 8.03) of the Company, threatened.
(ii) As of the date of this Agreement, no material action, demand,
requirement or investigation by any Governmental Entity and no material
suit, action or proceeding by any person, in each case with respect to the
Company or any of its subsidiaries or any of their respective properties
is pending or, to the knowledge of the Company, threatened.
(iii) Section 3.01(h)(iii) of the Company Disclosure Schedule sets
forth each Governmental Entity with which the Company or any of its
subsidiaries or any of their respective officers, directors, employees or
affiliates are required to be registered as a broker-dealer, an investment
advisor, registered representative or other applicable regulatory
category. None of the Company or any of its registered subsidiaries, or to
the knowledge of the Company, any of their respective officers, directors,
employees or affiliates, has exceeded in any material manner the business
activities enumerated in any membership agreement or other limitation
imposed in connection with its respective registrations filed with the
NASD, FSA or any other Governmental Entity. The Company has delivered or
made available to Parent a true and complete copy of currently effective
Forms BD and ADV as filed with the NASD or SEC, as applicable, by it and
by each applicable subsidiary of the Company, and all such forms were
true, correct and complete in all material respects as of the date of
filing thereof and omit no material facts required to be stated therein.
Each such registration is in full force and effect and all fees and
assessments due and payable in connection therewith have been paid.
(iv) None of the Company, any of its subsidiaries or, to the
knowledge of the Company, any of their directors, officers, employees, or
"associated persons" (as defined in the Exchange Act) has been the subject
of any (A) disciplinary proceedings of any Governmental Entity or (B)
continuing decisions, judgments, stipulations, orders, rulings, decrees or
injunctions issued, made or rendered by any Governmental Entity
(collectively, "Orders") arising under applicable laws which would be
required to be disclosed on Forms ADV or BD. No such disciplinary
proceeding or Order, to the knowledge of the Company, is threatened. None
of the Company, any Company subsidiary or, to the knowledge of the
Company, any of their directors, officers, employees or associated persons
is or has been ineligible to serve as a broker-dealer or an associated
person of a broker-dealer under Section 15(b) of the Exchange Act
(including being subject to any "statutory disqualification" as defined in
Section 3(a)(39) of the Exchange Act), and, to the Company's knowledge,
there is no reasonable basis for a proceeding or investigation that is
reasonably likely to result in any such ineligibility.
(v) Neither the Company nor any of its subsidiaries is party to or
otherwise subject to any written agreement, consent agreement or
memorandum of understanding with, or a party to any commitment letter or
similar undertaking to, or has been ordered to pay any civil penalty by,
or is a recipient of any supervisory letter from, or has adopted any board
or member resolutions at the request or suggestion of, any Governmental
Entity that materially restricts the conduct of its business or that in
any material manner relates to its capital adequacy, its ability to pay
dividends, its credit or risk management policies, its management, its
trading privileges or its business (each, a "Company Regulatory
Agreement"), nor has the Company or any of its subsidiaries been advised
in writing or, to the knowledge of the Company, in any other manner by any
Governmental Entity that it is considering issuing or requesting such a
Company Regulatory Agreement.
(vi) Neither the Company nor any of its subsidiaries is, or is
required to register as, (C) an "investment company" within the meaning of
the Investment Company Act or (B) an exchange or transfer agent, a
clearing agency, a municipal securities dealer under the Exchange Act.
(vii) Section 3.01(h)(vii) of the Company Disclosure Schedule sets
forth as of the date hereof a complete list of all securities exchanges,
commodities exchanges, boards of trade, clearing organizations, trade
associations and similar organizations in which the Company and each of
its subsidiaries hold membership or have been granted trading privileges.
(viii) Except as set forth on Section 3.01(h)(vii) of the Company
Disclosure Schedule, none of the Company nor any of its subsidiaries is,
or is required to be, registered as a futures commission merchant,
commodities trading adviser, commodity pool operator or introducing broker
under the Commodities Futures Trading Act or any similar state laws.
(ix) The Company has no knowledge of any facts or circumstances
that (other than facts or circumstances that are particular to Parent and
its affiliates and not the Company or any of its subsidiaries) that would
reasonably be expected to cause the NASD, the FSA or any other
Governmental Entity to not approve the transfer of control or ownership of
the Company and its subsidiaries to Parent.
(i) ERISA Compliance; Employees.
(i) Section 3.01(i) of the Company Disclosure Schedule contains a
true and complete list of each material Plan. As used in this Agreement,
the term "Plans" shall mean each deferred compensation, bonus, other
incentive compensation, stock purchase, stock option, and other equity
compensation plan; each severance or termination pay, medical, surgical,
hospitalization, life insurance and other "welfare" plan, fund or program
(within the meaning of section 3(1) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")); each profit-sharing, stock
bonus or other "pension" plan (within the meaning of section 3(2) of
ERISA); and each other employee benefit plan, in each case, that is
sponsored, maintained or contributed to or required to be contributed to
by the Company or by any trade or business, whether or not incorporated
(an "ERISA Affiliate"), that together with the Company would be deemed a
"single employer" within the meaning of section 4001(b) of ERISA, for the
benefit of any employee or former employee of the Company or any of its
subsidiaries.
(ii) With respect to each material Plan, the Company has delivered
or made available to Buyer true and complete copies of (A) the Plan and
any amendments thereto; (B) the two most recent annual reports and
actuarial reports, if required under ERISA, and the most recent report
prepared with respect thereto in accordance with Statement of Financial
Accounting Standards No. 87; (C) the most recent Summary Plan Description
required under ERISA with respect thereto; (D) if the Plan is funded
through a trust or any third party funding vehicle, a copy of the trust or
other funding agreement and the latest financial statements thereof; (E)
the most recent determination letter received from the Internal Revenue
Service with respect to each Plan intended to qualify under section 401 of
the Internal Revenue Code of 1986, as amended (the "Code"); and (F) all
material communications with respect to the Plan.
(iii) No Plan is subject to Title IV or Section 302 of ERISA or
Section 412 of the Code. No liability under Title IV or section 302 of
ERISA has been incurred by the Company or any ERISA Affiliate that has not
been satisfied in full, and no condition exists that presents a material
risk to the Company or any ERISA Affiliate of incurring any such
liability, other than liability for premiums due the Pension Benefit
Guaranty Corporation (which premiums have been paid when due). Insofar as
the representation made in this Section 3.01(i)(iii) applies to sections
4064, 4069 or 4204 of Title IV of ERISA, it is made with respect to any
employee benefit plan, program, agreement or arrangement subject to Title
IV of ERISA to which the Company or any ERISA Affiliate made, or was ever
required to make, contributions. No Plan is a "multiemployer plan" subject
to Title IV of ERISA (a "Multiemployer Plan") or a plan that has two or
more contributing sponsors at least two of whom are not under common
control, subject to Title IV of ERISA (a "Multiple Employer Plan" ). None
of the Company or any of its subsidiaries or any of their respective ERISA
Affiliates has, at any time since December 31, 2001, contributed to or
been obligated to contribute to any Multiemployer Plan or any Multiple
Employer Plan. None of the Company or any of its subsidiaries or any of
their respective ERISA Affiliates has incurred any liability to any
Multiemployer Plan as a result of a complete or partial withdrawal from
such Multiemployer Plan, as those terms are defined in Part I of Subtitle
E of Title IV or ERISA that has not been satisfied in full. There does not
now exist, nor do any circumstances exist that could reasonably likely
result in, any Controlled Group Liability that would be a liability of the
Company or any of its subsidiaries following the Closing. "Controlled
Group Liability" means any and all liabilities (A) under Title IV of
ERISA, (B) under Section 302 of ERISA, (C) under Sections 412 or 4971 of
the Code, (D) as a result of a failure to company with the continuations
coverage requirements of Section 601 et seq. of ERISA or 4980B of the
Code, or (E) under corresponding or similar provisions of foreign laws or
regulations.
(iv) Each Plan complies by its terms in all material respects with
applicable law, including ERISA and the Code, and has been operated and
administered in all material respects in accordance with its terms and
applicable law, including but not limited to ERISA and the Code.
(v) None of the Company, any of its subsidiaries or affiliates, any
Plan, any trust created thereunder, or any trustee or administrator
thereof have engaged in a transaction in connection with which the Company
or any subsidiary of the Company, any Plan, any such trust or any trustee
or administrator thereof, or any party dealing with any Plan or any such
trust could be subject to either a material civil penalty assessed
pursuant to section 409 or 502(i) of ERISA or a material tax imposed
pursuant to section 4975 or 4976 of the Code.
(vi) With respect to each Plan intended to be "qualified" within
the meaning of section 401(a) of the Code, the Company has received a
determination letter from the Internal Revenue Service to the effect that
such Plan is so qualified and that the trust maintained thereunder is
exempt from taxation under section 501(a) of the Code; and to the
knowledge of the Company no event has occurred and no condition exists
that would reasonably be expected to adversely affect such qualification.
(vii) No Plan provides medical, surgical, hospitalization, death,
welfare or similar benefits (whether or not insured) for employees or
former employees of the Company or any of its subsidiaries for periods
extending beyond their retirement or other termination of service, other
than (A) coverage mandated by applicable law, (B) death benefits under any
"pension plan" or (C) benefits the full cost of which is borne by the
current or former employee (or his beneficiary).
(viii) None of the execution of this Agreement, the receipt of
Company Stockholder Approval or the consummation of the transactions
contemplated by this Agreement will, either alone or in combination with
another event, (A) entitle any current or former employee or officer of
the Company or any ERISA Affiliate to severance pay, unemployment
compensation or any other payment, except as expressly provided in this
Agreement, (B) accelerate the time of payment or vesting, or increase the
amount of compensation due any such employee or officer or (C) limit the
right of the Company or any of its subsidiaries to amend, merge, terminate
or receive a reversion of assets from any Plan or related trust. Prior to
the date of this Agreement, the Company has delivered to Parent a report
that sets forth the Company's good faith estimate, as of the date of such
report, of the amount of the "parachute payments" within the meaning of
Section 280G of the Code that could become payable (and gross-ups in
respect of any applicable taxes) (subject to the exceptions described in
such report and based upon the assumptions described in such report) to
the current executive officers of the Company and its subsidiaries in
connection with (i) the execution and delivery of this Agreement, (ii) the
obtaining of the Company Stockholder Approval, (iii) the consummation of
the Merger or any other transaction contemplated by this Agreement or (iv)
the termination or constructive termination of the employment of such
officers following one of the events set forth in clauses (i) through
(iii) of this Section 3.01(i)(viii).
(ix) There are no pending, threatened or anticipated claims by or
on behalf of any Plan, by any employee or beneficiary covered under any
such Plan, or otherwise involving any such Plan or trust under any such
Plan (other than routine claims for benefits), and, to the Company's
knowledge, no circumstances exist that could reasonably be expected to
give rise to a claim or lawsuit against any Plan, any fiduciary thereof,
the assets thereof or any trust thereunder (other than routine claims for
benefits).
(x) Each Plan subject to the laws of any jurisdiction outside of
the United States (A) has been maintained in all material respects in
accordance with applicable law, (B) to the extent such Plan is intended to
qualify for special tax treatment, meets all requirements for such
treatment, and (C) to the extent such Plan is intended to be funded or
book-reserved, is fully funded or book-reversed, as applicable, based on
reasonable actuarial assumptions or, if applicable, the actuarial
assumptions required by applicable law or the terms of any such Plan.
(xi) Each individual who renders services to the Company or any of
its subsidiaries who is classified by the Company or such subsidiary, as
applicable, as having the status of independent contractor or other
non-employee status for any purpose (including for purposes of taxation or
tax reporting or under any Plan) is properly so characterized.
(xii) Neither the Company nor any of its subsidiaries is a party or
otherwise bound by any collective bargaining agreement or similar contract
with a labor union or labor organization. Neither the Company nor any of
its subsidiaries is subject to a material lockout, strike or work
stoppage. To the knowledge of the Company, as of the date hereof, there
are no organizational efforts with respect to the formation of a
collective bargaining unit presently being made or threatened involving
employees of the Company or any of its subsidiaries.
(xiii) Section 3.01(i)(xiii) of the Company Disclosure Schedule
lists the name of each officer, director, employee or independent
contractor of the Company or any of its subsidiaries whose annual cash
compensation in 2004 exceeded $100,000 or, with respect to employees
located at the Company's London office, whose annual cash compensation in
2004 exceeded (pound)100,000. To the knowledge of the Company, no such
individual is a party to, or is otherwise bound by, any nondisclosure,
confidentiality, noncompetition, proprietary rights, employment,
consulting or similar agreement, between such officer or director and any
other person (other than Parent, the Company or one of their respective
affiliates) or is subject to any judgment, decree or order of any court or
administrative agency that materially adversely affects or will affect the
performance of his or her duties as an officer, director, employee or
independent contractor of the Company or any of its subsidiaries, and, to
the knowledge of the Company, as of the date hereof, no such individual
has communicated to the Company or any of its subsidiaries any intention
to terminate his or her employment.
(xiv) No material compensation payments made by the Company or any
of its subsidiaries have failed to be deductible pursuant to Section
162(m) of the Code.
(xv) Section 3.01(i)(xv) of the Company Disclosure Schedule sets
forth a list, as of the date of this Agreement, of the cost and level of
benefit of each (i) grant or agreement to grant or provide any increase in
compensation or benefits applicable to any employee or former employee of
the Company or any of its subsidiaries (the "Company Employees") or (ii)
Plan or other agreement or arrangement providing for benefits or
compensation to Company Employees that has been adopted, entered into,
amended or terminated or agreed to be adopted, entered into, amended or
terminated, in each case since February 1, 2005.
(xvi) As of the date hereof, the Company has not taken any action
that would result in the forfeiture of any restricted shares of Company
Common Stock or Company Stock Options of the individual listed on Section
3.01(i)(xvi) of the Company Disclosure Schedule.
(j) Taxes.
(i) The Company and each of its subsidiaries have timely filed
(after giving effect to any extensions of time to file which were obtained
and have not expired) all material Tax (as defined below) returns required
to be filed by them and all such filed returns are complete and correct in
all material respects. The Company and each of its subsidiaries have paid
(or the Company has paid on its behalf) all Taxes shown as due on such
returns, and the most recent financial statements contained in the Company
Filed SEC Documents reflect an adequate reserve (calculated in accordance
with GAAP) for all Taxes payable by the Company and its subsidiaries for
all taxable periods and portions thereof accrued through the date of such
financial statements.
(ii) No deficiencies for any material amount of Taxes have been
proposed in writing against the Company or any of its subsidiaries that
are not adequately reserved for (in accordance with GAAP).
(iii) None of the Company or any of its subsidiaries has waived any
statute of limitations with respect to the assessment or collection of any
Tax, or agreed to any extension of time within which to file any income or
other material Tax return, which such statute of limitations has not
expired or Tax return has not since been timely filed.
(iv) There is no audit, examination, refund litigation, or matter
in controversy with respect to any Taxes of the Company or any of its
subsidiaries pending or proposed in writing.
(v) All assessments for material amounts of Taxes of the Company or
any of its subsidiaries with respect to completed and settled examinations
or concluded litigation have been paid.
(vi) Neither the Company nor any of its subsidiaries is a party to
or bound by any tax indemnity agreement, tax sharing agreement or other
agreement under which the Company or any of its subsidiaries could become
liable to another person (except the Company or any of its subsidiaries)
as a result of the imposition of a Tax upon any person, or the assessment
or collection of a Tax.
(vii) The Company and each of its subsidiaries have complied in all
material respects with all rules and regulations relating to the
withholding and paying over of Taxes.
(viii) No power of attorney with respect to Taxes of the Company or
any of its subsidiaries has been executed or filed with any taxing
authority.
(ix) The Company has made available to Parent complete copies of
(a) all income or other material Tax returns of the Company and each of
its subsidiaries relating to the taxable periods ended since December 31,
2002 and (b) any audit report issued within the last three (3) years
relating to any Taxes due from or with respect to the Company or any of
its subsidiaries.
(x) Neither the Company nor any of its subsidiaries has received
any written notice of any claim by a taxing authority in a jurisdiction
where the Company or any of its subsidiaries does not file Tax returns to
the effect that the Company or any of its subsidiaries is, or may be,
subject to taxation by that jurisdiction.
(xi) The Company has never been a member of a group filing
consolidated, combined or unitary Tax returns, other than a group of which
the Company is the common parent.
(xii) The Company has not participated in a reportable transaction
within the meaning of Treasury Regulation section 1.6011-4(b)(2).
(xiii) As used in this Agreement, "Taxes" shall include all
federal, state, local or foreign income, property, sales, excise, use,
occupation, service, transfer, payroll, franchise, withholding and other
taxes or similar governmental charges, fees, levies or other assessments
including any interest, penalties or additions with respect thereto.
(k) Voting Requirements. The affirmative vote of the holders of a
majority of the outstanding shares of Company Common Stock at the Company
Stockholders Meeting called to adopt this Agreement (the "Company Stockholder
Approval") is the only vote of the holders of any class or series of the
Company Capital Stock necessary to approve and adopt this Agreement and the
transactions contemplated hereby.
(l) State Takeover Statutes; Company Rights Plan. The Board of
Directors of the Company has approved this Agreement, the Support Agreements
and the consummation of the Merger and the other transactions contemplated
hereby and, assuming the accuracy of Parent's representation and warranty
contained in Section 3.02(g), such approval constitutes all necessary action
such that Section 203 of the DGCL does not apply to the Merger, the Support
Agreements or the other transactions contemplated by this Agreement. To the
knowledge of the Company, no other state takeover statute is applicable to the
Merger or the other transactions contemplated by this Agreement. The Company
has taken all actions necessary to render the Company Rights inapplicable to
this Agreement, the Support Agreements and the transactions contemplated hereby
and to cause the Company Rights Plan to terminate as of the Effective Time. The
Company has delivered to Parent true, correct and complete copies of all
resolutions of the Board of Directors of the Company relating to the
applicability of any state takeover statute to this Agreement, the Support
Agreements or the transactions contemplated hereby.
(m) Brokers. Except for Xxxxx X. Xxxxxxx Company, L.P., no broker,
investment banker, financial advisor or other person is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company. The Company has delivered to
Parent true, correct and complete copies of all agreements related to the
engagement of Xxxxx X. Xxxxxxx Company, L.P. or under which Xxxxx X. Xxxxxxx
Company, L.P. may be entitled to any fees or commissions in connection with the
transactions contemplated by this Agreement.
(n) Intellectual Property.
(i) The Company and its subsidiaries own or have the valid right to
use all U.S. and foreign patents, trademarks, service marks, trade names,
trade dress, corporate names, domain names, copyrights, trade secrets,
know-how and other confidential or proprietary technical and business
information, inventions (patentable or unpatentable), processes, formulae
and software of any kind (including any and all documentation,
information, materials, licenses, other agreements or rights, or
registrations or applications for registration, relating to any of the
foregoing), as well as all goodwill symbolized by any of the foregoing
(collectively, "Intellectual Property") necessary to carry on the business
of the Company and its subsidiaries substantially as currently conducted
in material respects (collectively, the "Company Intellectual Property").
(ii) (i) Except as would not reasonably be expected to have,
individually or in the aggregate, a material adverse effect on the Company
the activities, products and services of the Company and its subsidiaries
do not infringe upon, to the knowledge of the Company, the Intellectual
Property of any other person or entity; (ii) there are not material claims
or suits pending or for which notice has been provided or, to the
knowledge of the Company, threatened (A) alleging that the Company's or
any of its subsidiaries' activities, products or services infringe upon or
constitute the unauthorized use of any other person's or entity's
Intellectual Property or (B) challenging the Company's or any of its
subsidiaries' ownership of, right to use, or the validity of
enforceability of any license or other agreement relating to, any Company
Intellectual Property; (iii) to the knowledge of the Company, there are
not material infringements by third parties of any Company Intellectual
Property owned by the Company and it subsidiaries.
(iii) The consummation of the Merger and the other transactions
contemplated by this Agreement will not result in the loss by the Company
or its subsidiaries of any rights to any material Company Intellectual
Property.
(o) Certain Contracts. Each contract material to the Company and its
subsidiaries is valid and binding on the Company, and to the knowledge of the
Company, on each other party thereto, and in full force and effect, and neither
the Company nor any of its subsidiaries is in material violation of or in
material default under (nor does there exist any condition which upon the
passage of time or notice or both would cause such a material violation or
material default under) any such material contract. Neither the Company nor any
of its subsidiaries is a party to or bound by (i) any agreement relating to the
incurring of indebtedness (including sale and leaseback and capitalized lease
transactions and other similar financing transactions) providing for payment or
repayment to a person that is not the Company or any of its subsidiaries in
excess of $100,000 (excluding employment arrangements or agreements that are
the subject of Section 3.01(i)) or (ii) any non-competition agreement or any
other agreement or obligation which purports to limit in any material respect
the manner in which, or the localities in which, all or any substantial portion
of the business of the Company and its subsidiaries, taken as a whole, is or
would be conducted.
(p) Securities. The Company and its subsidiaries have good and
marketable title to all securities owned by it (except securities sold under
repurchase agreements or held in any fiduciary or agency capacity), free and
clear of any Liens, except to the extent such securities are pledged in the
ordinary course of business consistent with prudent business practices to
secure obligations of the Company or any of its subsidiaries and except as
would not be material.
(q) Opinion of Financial Advisor. The Company has received the opinion
of Xxxxx X. Xxxxxxx Company, L.P., dated the date hereof, to the effect that,
as of April 1, 2005, the Merger Consideration is fair from a financial point
of view to the stockholders of the Company.
SECTION 3.02 Representations and Warranties of Parent and Sub. Parent
and Sub jointly and severally represent and warrant to the Company as follows:
(a) Organization, Standing and Corporate Power. Each of Parent and Sub
is a entity duly organized, validly existing and in good standing (with respect
to jurisdictions which recognize such concept) under the laws of the
jurisdiction in which it is organized and has the requisite corporate or other
power and authority to carry on its business as now being conducted. Each of
Parent and Sub is duly qualified or licensed to do business and is in good
standing (with respect to jurisdictions which recognize such concept) in each
jurisdiction in which the nature of its business or the ownership, leasing or
operation of its properties makes such qualification or licensing necessary,
except for those jurisdictions where the failure to be so qualified or licensed
or to be in good standing individually or in the aggregate would not reasonably
be expected to materially impair or delay the ability of Parent or Sub to
perform its respective obligations under this Agreement (a "material adverse
effect on Parent").
(b) Sub. Since the date of its incorporation, Sub has not carried on
any business or conducted any operations other than the execution of this
Agreement, the performance of its obligations hereunder and matters ancillary
thereto. All of the outstanding shares of capital stock of, and other equity
interests in, Sub are owned directly or indirectly by Parent.
(c) Financing. Parent has or has readily available to it, and will
make available to Sub, all funds necessary to consummate all the transactions
contemplated by this Agreement and pay the related fees and expenses of Parent
and Sub.
(d) Authority; Noncontravention. Each of Parent and Sub has all
requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated by this Agreement. The execution and
delivery of this Agreement by Parent and Sub and the consummation by Parent and
Sub of the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Parent and Sub. This Agreement has
been duly executed and delivered by Parent and Sub and, assuming the due
authorization, execution and delivery by the Company, constitutes a legal,
valid and binding obligation of Parent and Sub, enforceable against Parent and
Sub in accordance with its terms, except to the extent that enforceability may
be limited by applicable bankruptcy, insolvency, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and subject to
general principles of equity. The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated by this Agreement
and compliance with the provisions of this Agreement will not, conflict with,
or result in any violation of, or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of a benefit under, or result in the
creation of any Lien upon any of the properties or assets of Parent or any of
its subsidiaries under, (i) the certificate of incorporation or by-laws of
Parent or the comparable organizational documents of any of its subsidiaries,
(ii) any loan or credit agreement, note, bond, mortgage, indenture, lease or
other agreement, instrument, permit, concession, franchise, license or similar
authorization applicable to Parent or any of its subsidiaries or their
respective properties or assets or (iii) subject to the governmental filings
and other matters referred to in the following sentence, any judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to Parent or any
of its subsidiaries or their respective properties or assets, other than, in
the case of clauses (ii) and (iii), any such conflicts, violations, defaults,
rights, losses or Liens that individually or in the aggregate would not
reasonably be expected to have a material adverse effect on Parent. No consent,
approval, order or authorization of, action by, or in respect of, or
registration, declaration or filing with, any Governmental Entity is required
by Parent or any of its subsidiaries in connection with the execution and
delivery of this Agreement by Parent or Sub or the consummation by Parent or
Sub of the transactions contemplated hereby, except for: (1) the filing with
the SEC of such reports under Section 13(a), 13(d), 15(d) or 16(a) of the
Exchange Act as may be required in connection with this Agreement and the
transactions contemplated hereby; (2) the filing of the Certificate of Merger
with the Secretary of State of the State of Delaware; (3) the filing of a
pre-merger notification and report form by Parent under the HSR Act and the
expiration or termination of the waiting period thereunder and the filing of
comparable pre-merger notifications in non-U.S. jurisdictions pursuant to other
Antitrust Laws, if applicable, and the expiration of any mandatory waiting
periods thereunder; (4) compliance with the applicable requirements of the NASD
and the FSA, and (5) such consents, approvals, orders or authorizations the
failure of which to be made or obtained individually or in the aggregate would
not reasonably be expected to have a material adverse effect on Parent.
(e) Information Supplied. None of the information supplied or to be
supplied by Parent specifically for inclusion or incorporation by reference in
the Proxy Statement will, at the date it is first mailed to the Company's
stockholders or at the time of the Company Stockholders Meeting, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading.
(f) Litigation. As of the date of this Agreement, no action, demand,
requirement or investigation by any Governmental Entity and no suit, action or
proceeding by any person, in each case with respect to Parent or any of its
subsidiaries or any of their respective properties is pending or, to the
knowledge of Parent, threatened, other than, in each case, those the outcome of
which individually or in the aggregate would not reasonably be expected to have
a material adverse effect on Parent.
(g) Ownership of Company Capital Stock. Neither Parent nor any of its
subsidiaries, (i) beneficially owns (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, or (ii) is party to any agreement,
arrangement or understanding for the purpose of acquiring, holding, voting or
disposing of, in each case, shares of capital stock of the Company.
(h) No Parent Vote Required. No vote or other action of the
stockholders of Parent is required by applicable law, the certificate of
incorporation or by-laws of Parent, or otherwise in order for Parent and Sub to
approve this Agreement and to consummate the Merger and the transactions
contemplated hereby.
(i) Regulatory Issues. Parent has no knowledge of any facts or
circumstances that (other than facts or circumstances that are particular to
the Company or any of its affiliates and not Parent or any of its affiliates)
that would reasonably be expected to cause the NASD, the FSA or any other
Governmental Entity to not approve the transfer of control or ownership of the
Company and its subsidiaries to Parent.
(j) Net Worth. The total assets of Parent and its subsidiaries exceed
the total liabilities of Parent and its subsidiaries by at least the amount set
forth on Exhibit 3.02, with both assets and liabilities determined in
accordance with GAAP.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 4.01 Conduct of Business by the Company. Except as set forth
in Section 4.01 of the Company Disclosure Schedule, except as otherwise
expressly contemplated by this Agreement or except as consented to in writing
by Parent during the period from the date of this Agreement to the Effective
Time, the Company shall, and shall cause its subsidiaries to, carry on their
respective businesses in the ordinary course consistent with past practice and
to the extent consistent therewith, use reasonable best efforts to preserve
intact their current business organizations (other than internal organizational
realignments), keep available the services of their current officers, employees
and consultants and preserve their relationships with those persons having
business dealings with them to the end that their goodwill and ongoing
businesses shall be unimpaired at the Effective Time. Without limiting the
generality of the foregoing (but subject to the above exceptions), during the
period from the date of this Agreement to the Effective Time, the Company shall
not, and shall not permit any of its subsidiaries to:
(i) other than dividends and distributions (including liquidating
distributions) by a direct or indirect wholly owned subsidiary of the
Company to its parent, or by a subsidiary that is partially owned by the
Company or any of its subsidiaries, provided that the Company or any such
subsidiary receives or is to receive its proportionate share thereof, (x)
declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of its capital stock, (y) split, combine
or reclassify any of its capital stock or issue or authorize the issuance
of any other securities in respect of, in lieu of or in substitution for
shares of its capital stock, except for issuances of Company Common Stock
upon the exercise of Company Stock Options under the Company Stock Option
Plans outstanding as of the date hereof in accordance with their present
terms or the issuance of capital stock of the Company pursuant to the
Company Rights Plan or (z) purchase, redeem or otherwise acquire, directly
or indirectly, any shares of capital stock of the Company or any of its
subsidiaries or any other securities thereof or any rights, warrants or
options to acquire any such shares or other securities;
(ii) issue, deliver, sell, pledge or otherwise encumber or subject
to any Lien any shares of its capital stock, any other voting securities
or any securities convertible into, or any rights, warrants or options to
acquire, any such shares, voting securities or convertible securities
(other than the issuance of Company Common Stock upon the exercise of
Company Stock Options outstanding as of the date hereof in accordance with
their present terms and other than the issuance of capital stock of the
Company pursuant to the Company Rights Plan);
(iii) adopt a plan of complete or partial liquidation or
resolutions providing for or authorizing such liquidation or a
dissolution, merger, consolidation, restructuring, recapitalization or
reorganization of the Company or any of its subsidiaries;
(iv) amend its certificate of incorporation, by-laws or other
comparable organizational documents;
(v) except for investments as provided in clause (vii)(c) below,
acquire by merging or consolidating with, or by purchasing a substantial
portion of the equity interests or the assets of, or by any other manner,
any business or any person;
(vi) sell, lease, license, mortgage or otherwise encumber or
subject to any Lien or otherwise dispose of any of its properties or
assets that are material to the continued operation of the business of the
Company and its subsidiaries taken as a whole (including securitizations),
other than in the ordinary course of business consistent with past
practice;
(vii) (a) except for borrowings under existing credit facilities or
lines of credit in the ordinary course of business consistent with past
practice which shall not in the aggregate exceed $6,000,000 at any one
time, incur any indebtedness for borrowed money or issue any debt
securities, (b) assume, guarantee or endorse, or otherwise become
responsible for the obligations of any person, or (c) make any loans,
advances or capital contributions to, or, except in the ordinary course of
business consistent with past practice, make investments in, any person
other than its wholly owned subsidiaries;
(viii) make any change in accounting methods, principles or
practices affecting the reported consolidated assets, liabilities or
results of operations of the Company, except insofar as may have been
required by a change in GAAP or applicable law;
(ix) make or agree to make any new capital expenditure or
expenditures that, individually or in the aggregate, are in excess of
$750,000;
(x) except as contemplated by Section 5.09 and except for retention
related awards or payments made after consultation with Parent which do
not exceed the amounts permitted in Section 4.01 of the Company Disclosure
Schedule, (A) increase the compensation or benefits (including any bonus,
option, incentive or deferred compensation, salary, severance, welfare or
retirement benefits) of any director, officer, employee or consultant, pay
any benefit or set any new performance goals under any bonus or incentive
plan of the Company or any of its subsidiaries, in each case, not required
by any contract, plan, arrangement or commitment as in effect as of the
date hereof or enter into or renew any contract, agreement, commitment or
arrangement providing for the payment to any such individual, except for
increases to annual base salary not to exceed $10,000 for non-front office
employees who are not officers or directors of the Company or any of its
subsidiaries in the ordinary course of business consistent with past
practice, (B) adopt, enter into, amend or terminate any material provision
of any Plan or any other employee benefit plan or any agreement,
arrangement, plan or policy between the Company or any of its subsidiaries
and one or more if its directors, officers, employees or consultants, (C)
accelerate the vesting or payment of the compensation payable or the
benefits provided or to become payable or provided to any of its, or any
of its subsidiaries', current or former directors, officers, employees or
consultants, or otherwise pay any amounts not due such individual under an
existing Plan, (D) establish, adopt or enter into any collective
bargaining agreement, or (E) take any action set forth in Section
4.01(x)(E) of the Company Disclosure Schedule;
(xi) make or revoke any material Tax election, settle or compromise
any material Tax liability, amend any income or other material Tax return,
file any income or other material Tax return prepared in a manner
inconsistent with past practice (except as otherwise required by law),
make or surrender any claim for a material refund of Taxes, or change (or
request to change) any material aspect of Tax accounting;
(xii) satisfy any material pending or threatened claims or
liabilities, or settle or compromise any material pending or threatened
litigation or arbitration, except in the ordinary course of business
consistent with past practice;
(xiii) (A) waive any of its rights under, or release any other
person from, amend, fail to enforce its rights under, any provision of any
standstill agreement or any confidentiality agreement in connection with
any Company Takeover Proposal, except to the extent permitted by Section
4.02(a); or (B) amend, or amend the rights issued under, the Company
Rights Plan or otherwise take any action to exempt any person (other than
Parent and its affiliates) or any action taken by any person (other than
Parent and its affiliates) from the Company Rights Plan (other than to
delay the occurrence of a "Triggering Event," a "Stock Acquisition Date"
or a "Distribution Date" under the Company Rights Plan) or any state
takeover statute;
(xiv) other than in the ordinary course of business consistent with
past practice, (A) modify, amend or terminate any contract material to the
Company and its subsidiaries taken as a whole (except as otherwise
permitted by clause (x) above or as contemplated by Section 5.09), (B)
affirmatively waive, release, relinquish or assign any contract material
to the Company and its subsidiaries taken as a whole (or any of the
Company's or any of its subsidiaries' rights thereunder), or (C) cancel or
forgive any amount of indebtedness owed to the Company or any of its
subsidiaries; provided, however, that the Company may not under any
circumstance affirmatively waive any of its material rights under any
confidentiality, noncompetition, nonsolicitation, garden leave or similar
provision in any contract;
(xv) enter into any contract that, if in effect as of the date
hereof, would be required pursuant to the second sentence of Section
3.01(o) to be set forth on Section 3.01(o) of the Company Disclosure
Schedule;
(xvi) take any action that would or is reasonably likely to result
in any of the conditions set forth in Article VI not being satisfied or
that would materially impair the ability of the Company, Parent or Sub to
consummate the Merger in accordance with the terms hereof or materially
delay such consummation; or
(xvii) authorize, or commit or agree to take, any of the foregoing
actions;
provided that the limitations set forth in this Section 4.01 (other than clause
(iv)) shall not apply to any transaction solely between the Company and any
wholly owned subsidiary or solely between any wholly owned subsidiaries of the
Company.
SECTION 4.02 No Solicitation by the Company.
(a) Except as otherwise provided in this Section 4.02, until the
earlier of the Effective Time and the date of termination of this Agreement,
neither the Company, nor any of its subsidiaries or any of the officers,
directors, agents, representatives or affiliates of it or its subsidiaries
(including any investment banker, attorney or accountant retained by it or any
of its subsidiaries) shall (i) solicit, initiate or encourage (including by way
of furnishing information), or take any other action to facilitate, any
inquiries or the making of any proposal regarding a Company Takeover Proposal
(as defined below), (ii) participate in any discussions or negotiations
regarding any Company Takeover Proposal, (iii) enter into any agreement
regarding any Company Takeover Proposal or (iv) make or authorize any
statement, recommendation or solicitation in support of any Company Takeover
Proposal. If and only to the extent that (i) the Company Stockholders Meeting
shall not have occurred, (ii) the Board of Directors of the Company determines
in good faith, after consultation with outside counsel, that it is necessary to
do so in order to comply with its fiduciary duties to the Company's
stockholders under applicable law, (iii) the Company's Board of Directors
concludes in good faith that such Company Takeover Proposal would reasonably
likely result in a Company Superior Proposal (as defined below), (iv) such
Company Takeover Proposal was not solicited by it after the date hereof or did
not otherwise result from a breach of this Section 4.02(a), and (v) the Company
provides prior written notice to Parent of its decision to take such action,
the Company shall be permitted to (A) furnish information with respect to the
Company and any of its subsidiaries to such person pursuant to a customary
confidentiality agreement no less favorable to the Company than the
Confidentiality Agreement (as defined in Section 5.02) and which shall, if such
furnished information includes detailed information as to contractual terms
with, or production levels of, individual brokers of the Company and its
subsidiaries, include customary non-solicitation and non-hire provisions
effective for a period of not less than three months from execution of such
agreement, (B) participate in discussions and negotiations with such person,
(C) subject to first complying with the provisions of Section 5.06 hereof,
enter into a Company Acquisition Agreement (as defined below) and (D) effect a
Change in the Company Recommendation (as defined below); provided, that at
least three business days prior to taking any actions set forth in clause (C)
or (D) above, the Company's Board of Directors provides Parent written notice
advising Parent that the Company's Board of Directors is prepared to conclude
that such Company Takeover Proposal constitutes a Company Superior Proposal and
during such three business day period the Company and its advisors shall have
negotiated in good faith with Parent to make adjustments in the terms and
conditions of this Agreement such that such Company Takeover Proposal would no
longer constitute a Company Superior Proposal and the Company's Board of
Directors fully considers any such adjustment and nonetheless concludes in good
faith that such Company Takeover Proposal constitutes a Company Superior
Proposal. The Company, its subsidiaries and their representatives immediately
shall cease and cause to be terminated any existing activities, discussions or
negotiations with any parties with respect to any Company Takeover Proposal.
For purposes of this Agreement, "Company Takeover Proposal" means any
inquiry, proposal or offer from any person relating to any direct or indirect
acquisition or purchase of a business that constitutes 20% or more of the net
revenues, net income or assets of the Company and its subsidiaries, taken as a
whole, or 20% or more of any class of equity securities of the Company, any
tender offer or exchange offer that if consummated would result in any person
beneficially owning 20% or more of any class of any equity securities of the
Company, or any merger, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving the Company (or any
subsidiary of the Company whose business constitutes 20% or more of the net
revenues, net income or assets of the Company and its subsidiaries, taken as a
whole), other than the transactions contemplated by this Agreement. For
purposes of this Agreement, a "Company Superior Proposal" means any proposal
made by a third party (A) to acquire, directly or indirectly, including
pursuant to a tender offer, exchange offer, merger, consolidation, business
combination, recapitalization, liquidation, sale, lease, exchange, transfer or
other disposition (including a contribution to a joint venture), dissolution or
similar transaction, for consideration consisting of cash and/or securities,
100% of the combined voting power of the shares of the Company's capital stock
then outstanding or 100% of the net revenues, net income or assets of the
Company and its subsidiaries, taken as a whole and (B) which is otherwise on
terms which the Board of Directors of the Company determines in its good faith
judgment (after consultation with (i) its investment banking firm and (ii)
outside counsel), taking into account, among other things, all legal,
financial, regulatory and other aspects of the proposal and the person making
the proposal, that the proposal, (i) if consummated would result in a
transaction that is more favorable to the Company's stockholders than the
Merger and the other transactions contemplated hereby and (ii) is reasonably
capable of being completed on the terms proposed, including to the extent
required, financing which is then committed or which, in the good faith
judgment of the Board of Directors of the Company, is reasonably capable of
being obtained by such third party.
(b) Except as expressly permitted by this Section 4.02, neither the
Board of Directors of the Company nor any committee thereof shall (i) withdraw,
modify or qualify, or propose publicly to withdraw, modify or qualify, in a
manner adverse to Parent, the approval of the Agreement, the Merger or the
recommendation of the Company's Board of Directors to the Company's
stockholders that they approve and adopt this Agreement, the Merger and the
other transactions contemplated hereby (the "Company Recommendation") or take
any action or make any statement in connection with the Company Stockholders
Meeting inconsistent with such approval or Company Recommendation
(collectively, a "Change in the Company Recommendation"), (ii) approve or
recommend, or propose publicly to approve or recommend, any Company Takeover
Proposal, or (iii) cause the Company to enter into any letter of intent,
agreement in principle, acquisition agreement or other similar agreement (each,
a "Company Acquisition Agreement") related to any Company Takeover Proposal.
For purposes of this Agreement, a Change in the Company Recommendation shall
include any approval or recommendation (or public proposal to approve or
recommend), by the Company Board of a Company Takeover Proposal, or any failure
by the Board of Directors of the Company to recommend against a Company
Takeover Proposal. Notwithstanding the foregoing, the Board of Directors of the
Company, to the extent that it determines in good faith, after consultation
with outside counsel, that in light of a Company Superior Proposal it is
necessary to do so in order to comply with its fiduciary duties to the
Company's stockholders under applicable law, may terminate this Agreement
solely in order to concurrently enter into a Company Acquisition Agreement with
respect to any Company Superior Proposal, but only at a time that is after the
third business day following Parent's receipt of the written notice specified
in Section 4.02(a) and compliance by the Company with the terms of Sections
4.02(a) and 5.06.
(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) of this Section 4.02, the Company shall immediately
advise Parent orally and in writing of any request for information relating to
a Company Takeover Proposal, or of any Company Takeover Proposal, the material
terms and conditions of such request or Company Takeover Proposal and the
identity of the person making such request or Company Takeover Proposal, and
shall promptly provide a copy of any written request or Company Takeover
Proposal to Parent. The Company will keep Parent promptly informed of the
status and details (including amendments or proposed amendments) of any such
request or Company Takeover Proposal.
(d) Nothing contained in this Section 4.02 shall prohibit the Company
from taking and disclosing to its stockholders a position contemplated by Rule
14e-2(a) promulgated under the Exchange Act or from making any disclosure if,
in the good faith judgment of the Board of Directors of the Company, after
consultation with outside counsel, failure so to disclose would be reasonably
likely to result in a violation of its obligations under applicable law;
provided, however, any such disclosure relating to a Company Takeover Proposal
shall be deemed to be a Change in the Company Recommendation unless the Board
of Directors of the Company reaffirms the Company Recommendation in such
disclosure.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.01 Preparation of the Proxy Statement; Stockholders Meeting.
(a) As soon as reasonably practicable following the date of this
Agreement, but in no event later than 15 business days following the date of
this Agreement, the Company shall prepare and file with the SEC the Proxy
Statement, and Parent and Sub shall, on a timely basis, cooperate with and
assist the Company in such preparation and filing. The Company shall use its
reasonable best efforts to have the Proxy Statement cleared by the SEC as
promptly as practicable following the date of this Agreement. The Company will
cause the Proxy Statement to be mailed to the Company's stockholders as
promptly as practicable after the Proxy Statement is cleared by the SEC. No
filing of, or amendment or supplement to, the Proxy Statement will be made by
the Company without providing Parent the reasonable opportunity to review and
comment thereon. If at any time prior to the Effective Time any information
relating to the Company or Parent, or any of their respective affiliates,
officers or directors, should be discovered by the Company or Parent which
should be set forth in an amendment or supplement to the Proxy Statement so
that such document would not include any misstatement of a material fact or
omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, the
Party which discovers such information shall promptly notify the other Parties
and the Company shall promptly file with the SEC an appropriate amendment or
supplement describing such information and, to the extent required by law,
disseminate such amended or supplement to the stockholders of the Company.
(b) The Company shall, as soon as practicable following the date of
this Agreement, duly call, give notice of, convene and hold a meeting of its
stockholders (the "Company Stockholders Meeting") for the purpose of obtaining
the Company Stockholder Approval and, subject to the terms of Section 4.02,
shall, through its Board of Directors, recommend to its stockholders the
approval and adoption of this Agreement, the Merger and the other transactions
contemplated hereby.
SECTION 5.02 Access to Information; Confidentiality. To the extent
permitted by applicable law and subject to the Agreement dated March 9, 2005,
between Parent and the Company (the "Confidentiality Agreement"), the Company
shall, and shall cause its subsidiaries to, afford Parent and its officers,
employees, accountants, counsel, financial advisors and other representatives,
full access during normal business hours during the period prior to the
Effective Time to all the properties, books, contracts, commitments and records
of the Company and its subsidiaries and, during such period, the Company shall,
and shall cause each of its subsidiaries to, furnish promptly to Parent (a) a
copy of each report, schedule, registration statement and other document filed
by it during such period pursuant to the requirements of federal or state
securities laws and (b) all other information concerning its business,
properties and personnel as Parent may reasonably request. Parent will use
commercially reasonable efforts to minimize any disruption to the businesses of
the Company and its subsidiaries that may result from requests for access, data
and information hereunder. Parent will hold, and will cause its officers,
employees, accountants, counsel, financial advisors and other representatives
and affiliates to hold, any nonpublic information relating to the Company or
any of its subsidiaries in accordance with the terms of the Confidentiality
Agreement. Notwithstanding the foregoing, the Company shall not be required to
provide any information that it reasonably believes it may not provide to
Parent by reason of contractual or legal restrictions, including applicable
laws.
SECTION 5.03 Reasonable Best Efforts; Cooperation.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the Parties agrees to use reasonable best efforts to take,
or cause to be taken, all actions, and to do, or cause to be done, and to
assist and cooperate with the other Parties in doing, all things necessary,
proper or advisable to consummate and make effective, in the most expeditious
manner practicable, the Merger and the other transactions contemplated by this
Agreement, including (i) the obtaining of all necessary actions or nonactions,
waivers, consents and approvals from Governmental Entities and the making of
all necessary registrations and filings and the taking of all steps as may be
necessary to obtain an approval or waiver from, or to avoid an action or
proceeding by, any Governmental Entity, (ii) the obtaining of all necessary
consents, approvals or waivers from third parties, (iii) the defending of any
lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the transactions contemplated
hereby, including seeking to have any stay or temporary restraining order
entered by any court or other Governmental Entity vacated or reversed, and (iv)
the execution and delivery of any additional instruments necessary to
consummate the transactions contemplated by, and to fully carry out the
purposes of, this Agreement. Nothing set forth in this Section 5.03(a) will
limit or affect actions permitted to be taken pursuant to Section 4.02.
(b) The Company and Parent shall coordinate in advance of sending any
communications to or scheduling any meetings with any Governmental Entity
relating to this Agreement, the Merger or the transactions contemplated hereby
and shall promptly share all correspondences or other communication received
from any Governmental Entity relating to this Agreement, the Merger or the
other transactions contemplated hereby.
(c) In connection with and without limiting the foregoing, the Company
and Parent shall (i) take all action necessary to ensure that no state takeover
statute or similar statute or regulation is or becomes applicable to the
Merger, this Agreement or any of the other transactions contemplated hereby and
(ii) if any state takeover statute or similar statute or regulation becomes
applicable to the Merger, this Agreement or any of the other transactions
contemplated hereby, take all action necessary to ensure that the Merger and
the other transactions contemplated hereby may be consummated as promptly as
practicable on the terms contemplated by this Agreement and otherwise to
minimize the effect of such statute or regulation on the Merger and the other
transactions contemplated by this Agreement.
SECTION 5.04 Stock Options.
(a) As soon as practicable following the date of this Agreement, the
Board of Directors of the Company (or, if appropriate, any committee
administering the Company Stock Options Plans) shall adopt such resolutions or
take such other actions as are required to adjust the terms of all outstanding
Company Stock Options under any Company Stock Option Plan or otherwise, to
provide that each Company Stock Option outstanding immediately prior to the
Effective Time shall be canceled on the Closing Date in exchange for a cash
payment by the Company to be made as soon as reasonably practicable following
the Closing Date (but in no event later than three business days after the
Closing Date) of an amount equal to (i) the excess, if any, of (x) the Merger
Consideration over (y) the exercise price per share of Company Common Stock
subject to such Company Stock Option, multiplied by (ii) the number of shares
of Company Common Stock subject to such Company Stock Option for which such
Company Stock Option shall not theretofore have been exercised.
(b) All amounts payable pursuant to this Section 5.04 shall be subject
to any required withholding of Taxes and shall be paid without interest. The
Company shall use its reasonable best efforts to obtain all consents of the
holders of the Company Stock Options as shall be necessary to effectuate the
foregoing.
(c) The Company Stock Option Plans shall terminate as of the Effective
Time, and the provisions in any other benefit plan providing for the issuance,
transfer or grant of any capital stock of the Company or any interest in
respect of any capital stock of the Company shall be deleted as of the
Effective Time, and the Company shall ensure that following the Effective Time
no holder of a Company Stock Option or any participant in any Company Stock
Option Plan or other benefit plan shall have any right thereunder to acquire
any capital stock of the Company or the Surviving Corporation. Prior to the
Effective Time, the Company shall take all actions necessary to effectuate the
foregoing.
SECTION 5.05 Indemnification, Exculpation and Insurance.
(a) The certificates of incorporation and bylaws (or comparable
organizational documents) of the Surviving Corporation and the subsidiaries of
the Company shall contain the provisions with respect to indemnification,
exculpation from liability and advancement of expenses set forth in such
certificates of incorporation, bylaws and other organizational documents as in
effect on the date hereof for the Company (in the case of the Surviving
Corporation), and for each subsidiary of the Company (in the case of each such
subsidiary), which provisions shall not be amended, repealed or otherwise
modified for a period of six years from the Effective Time in any manner that
would adversely affect the rights thereunder of individuals who on or prior to
the Effective Time are among those classes of persons currently entitled to
indemnification from the Company and its subsidiaries as provided in their
respective certificates of incorporation or by-laws (or comparable
organizational documents) and to cause the Surviving Corporation to assume,
without further action, as of the Effective Time any indemnification agreements
of the Company in effect as of the date hereof. Parent shall guarantee the
obligations of the Surviving Corporation and the subsidiaries of the Company
with respect to the indemnification provisions contained in the certificate of
incorporation, bylaws or other organizational documents of the Surviving
Corporation and the subsidiaries of the Company.
(b) In the event that the Surviving Corporation or any of its
successors or assigns (i) consolidates with or merges into any other person and
is not the continuing or surviving corporation or entity of such consolidation
or merger or (ii) transfers or conveys all or substantially all of its
properties and assets to any person, then, and in each such case, proper
provision will be made so that the successors and assigns of the Surviving
Corporation assume the obligations set forth in this Section 5.05.
(c) For six years after the Effective Time, Parent shall maintain in
effect directors' and officers' liability insurance covering acts or omissions
occurring prior to the Effective Time with respect to those persons who are
currently covered by the Company's directors' and officers' liability insurance
policy (a copy of which has heretofore been provided to Parent) on terms with
respect to such coverage and amount no less favorable than those of such policy
in effect on the date hereof; provided, however, that in no event shall Parent
be required to pay in any one year aggregate premiums for insurance under this
Section 5.05(c) in excess of 175% of the aggregate premiums paid by the Company
in fiscal 2004 for such purpose (which amount is set forth in Section 5.05 of
the Company Disclosure Schedule).
(d) The provisions of this Section 5.05 (i) are intended to be for the
benefit of, and will be enforceable by, each indemnified party, his or her
heirs and his or her representatives and (ii) are in addition to, and not in
substitution for, any other rights to indemnification or contribution that any
such person may have by contract or otherwise.
SECTION 5.06 Fees and Expenses.
(a) Except as provided in this Section 5.06, all fees and expenses
incurred in connection with the Merger, this Agreement and the transactions
contemplated hereby shall be paid by the Party incurring such fees or expenses,
whether or not the Merger is consummated.
(b) In the event that this Agreement is terminated by (i) Parent
pursuant to Section 7.01(d) (provided that neither Parent nor Sub are in
material breach of any of their respective representations, warranties,
covenants or agreement in this Agreement at the time of such termination) or
(ii) the Company pursuant to Section 7.01(f), then within two business days of
any such termination, the Company shall pay Parent a fee of $4,000,000 by wire
transfer of same day funds to such account or accounts as Parent may designate
and, provided that the employee who is party to the employment agreement
identified in Section 5.06(b) of the Company Disclosure Schedule effectively
waives any and all rights to any severance or change-in-control payments or
benefits to which such employee could become entitled, (A) the Company shall
waive any restrictive covenants, garden leave provisions, confidentiality and
non-solicitation provisions in favor of the Company or any of its subsidiaries
contained in the employment agreement identified in Section 5.06(b) of the
Company Disclosure Schedule, so as to permit the employee covered by such
employment agreement to commence immediately employment with the Parent or any
its subsidiaries unimpeded by any such covenants, and (B) the Company shall
waive any claims that the Company or any of its subsidiaries may have through
such date against Parent, its affiliates or such employee relating to such
employee's employment with Parent.
(c) In the event that (A) a Pre-Termination Takeover Proposal Event
(as defined below) shall occur and thereafter this Agreement is terminated (i)
by either Parent or the Company pursuant to Section 7.01(b)(i) (provided that
neither Parent nor Sub are in material breach of any of their respective
representations, warranties, covenants or agreement in this Agreement at the
time of such termination) or 7.01(b)(ii) and (B) within one year following such
termination the Company enters into a Company Acquisition Agreement (provided
that for purposes of this Section 5.06(c), the percentage referred to in the
definition of Company Takeover Proposal shall be 50%, and any references to
liquidation or dissolution shall not include any such transaction not
undertaken in connection with any third-party transaction of the type
contemplated above), then the Company shall, on the date the Company enters
into such Company Acquisition Agreement or the date on which such Company
Takeover Proposal is consummated, pay Parent a fee equal to $4,000,000 by wire
transfer of same day funds to such account or accounts as Parent may designate.
A "Pre-Termination Takeover Proposal Event" shall be deemed to occur if, prior
to the event giving rise to the right to terminate this Agreement, a Company
Takeover Proposal shall have been made known to the Company or any of its
subsidiaries or has been made directly to its stockholders generally or any
person shall have publicly announced an intention (whether or not conditional)
to make a Company Takeover Proposal.
(d) In the event that this Agreement is terminated by either the
Company or Parent pursuant to Section 7.01(b)(iv) (provided that neither Parent
nor Sub are in material breach of any of their respective representations,
warranties, covenants or agreement in this Agreement at the time of such
termination), then within two business days of such termination, the Company
shall pay Parent $1,000,000, such amount representing an estimate of the
reasonable out-of-pocket expenses, including all fees and expenses of counsel,
accountants, investment bankers, experts and consultants, incurred by Parent or
on its behalf in connection with or related to the authorization, preparation,
negotiation, execution and performance of this Agreement and the transactions
contemplated hereby, by wire transfer of same day funds to such account or
accounts as Parent may designate. In addition, (i) if within one year following
such eligible termination (A) the Company enters into a Company Acquisition
Agreement (provided that for purposes of this Section 5.06(d), the percentage
referred to in the definition of Company Takeover Proposal shall be 50%, and
any references to liquidation or dissolution shall not include any such
transaction not undertaken in connection with any third-party transaction of
the type contemplated above), or (B) the Company shall request the employee who
is a party to the employment agreement set forth in Section 5.06(b) of the
Company Disclosure Schedule to engage in any discussions (other than
incidental, non-substantive contacts) with any third party that has made or has
informed the Company that it intends to make a Company Takeover Proposal, then
the Company shall (1) on the date the Company enters into such Company
Acquisition Agreement, pay Parent a fee equal to $3,000,000 by wire transfer of
same day funds to such account or accounts as Parent may designate, and (2)
provided that the employee who is party to the employment agreement identified
in Section 5.06(b) of the Company Disclosure Schedule effectively waives any
and all rights to any severance or change-in-control payments or benefits to
which such employee could become entitled, (x) waive any restrictive covenants,
garden leave provisions, confidentiality and non-solicitation provisions in
favor of the Company or any of its subsidiaries contained in such employment
agreement, so as to permit such employee covered by such employment agreement
to commence immediately employment with the Parent or any its subsidiaries
unimpeded by any such covenants, and (y) waive any claims that the Company or
any of its subsidiaries may have through such date against Parent, its
affiliates or such employee relating to such employee's employment with Parent,
and (ii) if within three months following such eligible termination, the
Company intends to enter into a Company Acquisition Agreement (provided that
for purposes of this Section 5.06(d), the percentage referred to in the
definition of Company Takeover Proposal shall be 50%, and any references to
liquidation or dissolution shall not include any such transaction not
undertaken in connection with any third-party transaction of the type
contemplated above), the Company shall, at least three business days prior to
entering into such Company Acquisition Agreement, provide Parent written notice
advising Parent that the Company intends to enter into such Company Acquisition
Agreement and the price and terms set forth in such proposed Company
Acquisition Agreement.
SECTION 5.07 Public Announcements. Parent and the Company will consult
with each other before issuing, and provide each other the reasonable
opportunity to review, comment upon and concur with, any press release or other
public statements with respect to the transactions contemplated by this
Agreement, including the Merger, and shall not issue any such press release or
make any such public statement prior to such consultation, except as either
Party may determine is required by applicable law, court process or by
obligations pursuant to any listing agreement with any national securities
exchange. The Parties agree that the initial press release to be issued with
respect to the transactions contemplated by this Agreement shall be in the form
heretofore agreed to by the Parties.
SECTION 5.08 Stockholder Litigation. Each of the Company and Parent
shall give the other the reasonable opportunity to participate in the defense
of any stockholder litigation against the Company or Parent, as applicable, and
its directors relating to this Agreement, the Support Agreements or the
transactions contemplated by this Agreement.
SECTION 5.09 Employee Benefit Plans.
(a) Following the Closing and for at least one year thereafter, Parent
shall cause to be provided to individuals who are employed by the Company and
its subsidiaries immediately prior to the Closing who remain employed with the
Surviving Corporation or any subsidiary of Parent ("Affected Employees"),
employee benefits (other than equity compensation) (i) pursuant to the
Company's or the subsidiaries' employee benefit plans, programs, policies and
arrangements as provided to such employees immediately prior to the Effective
Time or (ii) pursuant to employee benefit plans, programs, policies or
arrangements maintained by Parent or any subsidiary of Parent providing
coverage and benefits which, in the aggregate, are no less favorable than those
provided to similarly situated employees of Parent or its subsidiaries;
provided, that, with respect to clause (ii) of this Section 5.09(a), incentive
compensation shall be subject to the achievement of performance goals which
shall be consistent with the performance goals applicable to similarly situated
employees of Parent or its subsidiaries..
(b) Parent shall, or shall cause the Surviving Corporation to, give
Affected Employees full credit for purposes of eligibility, vesting, and
determination of the level of benefits (other than benefit accruals under
defined benefit pension plans) under any employee benefit plans or arrangements
maintained by Parent or any subsidiary of Parent for such Affected Employees'
service with the Company or any subsidiary of the Company to the same extent
recognized immediately prior to the Effective Time; provided, however, that
such crediting of service shall not operate to duplicate any benefit or the
funding of any such benefit and shall not be provided if service for prior
years is not credited to other employees of Parent or any of its subsidiaries
with similar years of prior service with Parent or its subsidiaries.
(c) Parent shall, or shall cause the Surviving Corporation to, (i)
waive all limitations as to preexisting conditions, exclusions and waiting
periods with respect to participation and coverage requirements applicable to
the Affected Employees under any welfare benefit plans in which such employees
may be eligible to participate after the Closing, other than limitations or
waiting periods that are already in effect with respect to such employees and
that have not been satisfied as of the Closing under any welfare plan
maintained for the Affected Employees immediately prior to the Closing, and
(ii) provide each Affected Employee with credit for any co-payments and
deductibles paid in the calendar year in which the Closing occurs for purposes
of satisfying any applicable deductible or out-of-pocket requirements for such
year under any welfare plans in which Affected Employees are eligible to
participate after the Effective Time.
(d) From and after the Effective Time, Parent shall honor or cause the
Surviving Corporation to honor, in accordance with their terms, all Plans.
Parent acknowledges that the consummation of the Merger shall constitute a
"change of control" for purposes of each Plan listed on Section 3.01(i)(viii)
of the Company Disclosure Schedule.
(e) Subject to Section 5.09(d), following the Closing Date and for a
period of three months thereafter, Parent shall, or shall cause the Surviving
Corporation to, provide to eligible Affected Employees whose employment is
terminated, severance benefits comparable to the severance benefits that such
employee would have received based on the formula described in Section 5.09(e)
of the Company Disclosure Schedule. The eligibility of each Affected Employee
for severance benefits described in this Section 5.09(e) shall be determined by
Parent in its reasonable discretion (based on (i) the circumstances surrounding
the termination of employment of such Affected Employee, (ii) such Affected
Employee's general job performance and (iii) the cooperation provided by such
Affected Employee in connection with the transition of control of the Company
and its subsidiaries to Parent).
SECTION 5.10 Sub Compliance. Parent shall cause Sub to comply with all
its obligations under or relating to this Agreement.
SECTION 5.11 Advice of Changes. The Company and Parent shall promptly
advise each other orally and in writing to the extent that it has knowledge of
any change or event having, or which could reasonably be expected to have, a
material adverse effect on the Company or Parent, as the case may be, on the
truth of their respective representations and warranties or the ability of the
conditions set forth in Article VI to be satisfied, including the condition set
forth in Section 6.02(c).
SECTION 5.12 Company Employees. From the date hereof, the Parties
shall cooperate and work together in good faith in connection with the
transactions contemplated hereby to coordinate matters in respect of employees
of the Company and its subsidiaries, and, in furtherance of the foregoing,
Parent shall not, and shall cause its subsidiaries and its and their respective
affiliates and representatives not to, without the prior written consent of the
Company, hire or caused to be hired (including by means of forward start
contracts or arrangements) any employee of the Company or any of its
subsidiaries.
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.01 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation of each party to effect the Merger is subject
to the satisfaction or waiver by each of Parent and the Company on or prior to
the Closing Date of the following conditions:
(a) Stockholder Approval. The Company Stockholder Approval shall have
been obtained.
(b) Governmental and Regulatory Approvals. Other than the filing of
the Certificate of Merger and the waiting periods pursuant to the HSR Act and
any other applicable Antitrust Laws (which are addressed in Section 6.01(d)),
all consents, approvals and actions of, filings with and notices to any
Governmental Entity required by the Company, Parent or any of their
subsidiaries under applicable law or regulation to consummate the Merger and
the other transactions contemplated hereby, the failure of which to be obtained
or made would materially and adversely effect Parent's ability to conduct the
business of the Company in substantially the same manner as presently
conducted, shall have been obtained or made.
(c) No Injunctions or Restraints. No judgment, order, decree, statute,
law, ordinance, rule or regulation, entered, enacted, promulgated, enforced or
issued by any court or other Governmental Entity of competent jurisdiction or
other legal restraint or prohibition (collectively, "Restraints") shall be in
effect preventing the consummation of the Merger or limiting the ownership or
operation by Parent, the Company or any of their respective subsidiaries of any
material portion of the business or assets of Parent or the Company.
(d) Antitrust Laws. The waiting periods (and any extensions thereof)
applicable to the Merger under the HSR Act and any other applicable Antitrust
Laws shall have been terminated or shall have expired.
SECTION 6.02 Conditions to Obligation of Parent and Sub. The
obligation of Parent and Sub to effect the Merger is further subject to
satisfaction or waiver of the following conditions:
(a) Representations and Warranties. The representations and warranties
of the Company set forth in the second sentence of Section 3.01(c) shall be
true and correct in all respects (other than immaterial inaccuracies) both when
made and as of the Closing Date as though made on and as of the Closing Date,
and all other representations and warranties set forth herein shall be true and
correct at and as of the Closing Date, as if made at and as of such time
(except to the extent expressly made as of an earlier date, in which case as of
such date), provided that no representation or warranty of the Company shall be
deemed untrue or incorrect for purposes hereunder as a consequence of the
existence of any fact, event or circumstance inconsistent with such
representation or warranty, unless such fact, event or circumstance,
individually or taken together with all other facts, events or circumstances
inconsistent with any representation or warranty of the Company, has had or
would result in a material adverse effect on the Company, disregarding for
these purposes (x) any qualification or exception for, or reference to,
materiality in any such representation or warranty and (y) any use of the terms
"material," "materially," "in all material respects," "material adverse
change," "material adverse effect" or similar terms or phrases in any such
representation or warranty.
(b) Performance of Obligations of the Company. The Company shall have
performed in all material respects all obligations required to be performed by
it at or prior to the Closing Date under this Agreement.
(c) Employee Matters. The requirements regarding employment matters
set forth on Section 6.02(c) of the Company Disclosure Schedule shall have been
satisfied as of the Closing Date.
(d) Officer's Certificate. The Company shall have furnished Parent
with a certificate dated the Closing Date signed on its behalf by an executive
officer to the effect that the conditions set forth in Sections 6.02(a) and
6.02(b) shall have been satisfied.
SECTION 6.03 Conditions to Obligations of the Company. The obligation
of the Company to effect the Merger is further subject to satisfaction or
waiver of the following conditions:
(a) Representations and Warranties. The representations and warranties
of Parent and Sub set forth herein shall be true and correct at and as of the
Closing Date, as if made at and as of such time (except to the extent expressly
made as of an earlier date, in which case as of such date), provided that no
representation or warranty of Parent or Sub shall be deemed untrue or incorrect
for purposes hereunder as a consequence of the existence of any fact, event or
circumstance inconsistent with such representation or warranty, unless such
fact, event or circumstance, individually or taken together with all other
facts, events or circumstances inconsistent with any representation or warranty
of Parent or Sub, has had or would result in a material adverse effect on
Parent, disregarding for these purposes (x) any qualification or exception for,
or reference to, materiality in any such representation or warranty and (y) any
use of the terms "material," "materially," "in all material respects,"
"material adverse change," "material adverse effect" or similar terms or
phrases in any such representation or warranty.
(b) Performance of Obligations of Parent. Parent shall have performed
in all material respects all obligations required to be performed by it at or
prior to the Closing Date under this Agreement.
(c) Officer's Certificate. Parent shall have furnished the Company
with a certificate dated the Closing Date signed on its behalf by an executive
officer to the effect that the conditions set forth in Sections 6.02(a) and
6.02(b) shall have been satisfied.
SECTION 6.04 Frustration of Closing Conditions. Neither Parent nor the
Company may rely on the failure of any condition set forth in Section 6.01,
6.02 or 6.03, as the case may be, to be satisfied if such failure was caused by
such party's failure to comply with its obligations to consummate the Merger
and the other transactions contemplated by this Agreement, as required by and
subject to Section 5.03.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.01 Termination. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after the Company Stockholder
Approval:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company:
(i) if the Merger shall not have been consummated by August 31,
2005; provided, however, that the right to terminate this Agreement
pursuant to this Section 7.01(b)(i) shall not be available to any party
whose failure to perform any of its obligations under this Agreement
results in the failure of the Merger to be consummated by such time;
(ii) if the Company Stockholder Approval shall not have been
obtained at a Company Stockholders Meeting duly convened therefor or at
any adjournment or postponement thereof; or
(iii) if any Restraint having any of the effects set forth in
Section 6.01(c) shall be in effect and shall have become final and
nonappealable; provided, that the right to terminate this Agreement
pursuant to this Section 7.01(b)(iii) shall not be available to any party
whose failure to perform any of its obligations under this Agreement
results in such Restraint;
(iv) if an event occurs which prevents (disregarding for these
purposes the possibility that the notice or other action giving rise to
such event may be withdrawn or otherwise cured) the condition set forth in
Section 6.02(c) from being satisfied (each such event, an "Employee
Termination Event"); provided, however, that the Company shall not have
the right to exercise its termination right hereunder with respect to an
Employee Termination Event unless and until twenty business days (which
period shall be thirty business days in the event that prior to such
Employee Termination Event (A) the Company has taken any action as
permitted by the second sentence of Section 4.02 (a) or (B) any bona fide
Company Takeover Proposal shall have been made known to the Company or any
of its subsidiaries or any bona fide Company Takeover Proposal shall have
been made directly to its stockholders generally or any person shall have
publicly announced an intention (whether or not conditional) to make a
bona fide Company Takeover Proposal) have passed since the Company has
provided written notice to Parent in accordance with Section 8.02 of the
occurrence of such Employee Termination Event and only if during such
twenty business day (or thirty business day, as the case may be) period
Parent has not delivered written notice to the Company in accordance with
Section 8.02 that it is irrevocably waiving its right to terminate this
Agreement with respect to such Employee Termination Event; provided,
further, the Company shall work with Parent during such twenty day period
to convince the employees responsible for causing the Employee Termination
Event to resume employment with the Company or its applicable subsidiary
or to rescind the applicable notices;
(c) by Parent, if the Company shall have breached or failed to perform
in any material respect any of its representations, warranties, covenants or
other agreements contained in this Agreement, which breach or failure to
perform (i) would prevent the condition set forth in Section 6.02(a) from being
satisfied and (ii) is not cured by the Company within 30 days after written
notice thereof or is incapable of being cured by the Company;
(d) by Parent, if the Company shall have effected a Change in Company
Recommendation;
(e) by the Company, if Parent shall have breached or failed to perform
in any material respect any of its representations, warranties, covenants or
other agreements contained in this Agreement, which breach or failure to
perform (i) would prevent the condition set forth in Section 6.03(a) from being
satisfied and (B) is not cured by Parent within 30 days after written notice
there or is incapable of being cured by Parent; or
(f) by the Company if the Board of Directors of the Company shall have
exercised its termination rights set forth in Section 4.02(b); provided that,
in order for the termination of this Agreement pursuant to this paragraph (f)
to be deemed effective, the Company shall have complied with all provisions of
Section 4.02, including the notice provisions therein.
SECTION 7.02 Effect of Termination. In the event of termination of
this Agreement by either the Company or Parent as provided in Section 7.01,
this Agreement shall forthwith become void and have no effect, without any
liability or obligation on the part of Parent or the Company, other than the
provisions of the second to last sentence of Section 5.02, Section 5.06, this
Section 7.02 and Article VIII, which provisions survive such termination,
provided, however, that nothing herein shall relieve any party from any
liability for any willful and material breach by such party of any of its
representations, warranties, covenants or agreements set forth in this
Agreement.
SECTION 7.03 Amendment. This Agreement may be amended by the Parties
at any time before or after the Company Stockholder Approval; provided,
however, that after receipt of the Company Stockholder Approval, there shall
not be made any amendment that by law requires further approval by the
stockholders of the Company without the further approval of such stockholders.
This Agreement may not be amended except by an instrument in writing signed on
behalf of each of the Parties and expressly referencing this Agreement.
SECTION 7.04 Extension; Waiver. At any time prior to the Effective
Time, a Party may (a) extend the time for the performance of any of the
obligations or other acts of any other Party, (b) waive any inaccuracies in the
representations and warranties of any other Party contained in this Agreement
or in any document delivered pursuant to this Agreement or (c) subject to the
proviso of Section 7.03, waive compliance by any other Party with any of the
agreements or conditions contained in this Agreement, provided, that Parent may
not do any of the foregoing with respect to Sub and Sub may not do any of the
foregoing with respect to Parent. Any agreement on the part of a Party to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such Party and expressly referencing this
Agreement. The failure of any Party to assert any of its rights under this
Agreement or otherwise shall not constitute a waiver of such rights.
ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.01 Nonsurvival of Representations and Warranties. None of
the representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Time. This
Section 8.01 shall not limit any covenant or agreement of the parties which by
its terms contemplates performance after the Effective Time or this Article
VIII.
SECTION 8.02 Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally, telecopied (which is confirmed by telephone) or
sent by reputable overnight courier (providing proof of delivery) to the
Parties at the following addresses (or at such other address for a Party as
shall be specified by like notice):
(a) if to Parent or Sub, to:
BGC Partners, L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxx
(b) if to the Company, to
Maxcor Financial Group Inc.
Xxx Xxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxx
with copies to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx
SECTION 8.03 Definitions. For purposes of this Agreement:
(a) an "affiliate" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person, where "control" means, with
respect to any person, the possession, directly or indirectly, of the power to
direct or cause the direction of the management policies of such person,
whether through the ownership of voting securities, by contract, as trustee or
executor, or otherwise;
(b) "business day" means a day other than a Saturday, Sunday or legal
holiday for commercial banking institutions in the State of New York.
(c) "knowledge" of any person (other than the Company) which is not an
individual means the actual knowledge of such person's officers, and, with
respect to the Company, the actual knowledge of those directors, officers and
employees of the Company and its subsidiaries listed in Section 8.03(c) of the
Company Disclosure Schedule, after reasonable inquiry.
(d) "material adverse change" or "material adverse effect" means, when
used in connection with the Company, any change, effect, event, occurrence or
state of facts that is, or would reasonably be expected to be, materially
adverse to the business, financial condition or results of operations of the
Company and its subsidiaries taken as a whole, other than (i) any change,
effect, event or occurrence relating to the United States economy or financial
or securities markets in general to the extent not affecting the Company and
its subsidiaries to a materially greater extent than it affects other persons
in industries in which the Company and its subsidiaries compete, (ii) any
change, effect, event or occurrence relating to the financial services industry
to the extent not affecting the Company and its subsidiaries to a materially
greater extent than it affects other persons in industries in which the Company
and its subsidiaries compete, (iii) any change, effect, event or occurrence
resulting from or otherwise relating to the announcement of this Agreement and
the transactions contemplated hereby or performance of the Parties' respective
obligations under this Agreement or the consummation of the transactions
contemplated hereby (including without limitation the impact thereof on
relationships with customers, suppliers or employees), (iv) any change, effect,
event or occurrence relating to the departure or planned departure of any
employees of the Company or any of its subsidiaries (unless such departure is
directly related to a material failure by the Company to comply with applicable
law), (v) any change in broker-dealer, investment advisor and similar laws,
rules or regulations of general applicability or interpretations thereof by
courts or Governmental Entities, and (vi) any change in GAAP or regulatory
accounting requirements applicable generally to financial services companies.
(e) "person" means an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization, Governmental Entity or other entity;
(f) a "subsidiary" of any person means another person, an amount of
the voting securities or other voting ownership or partnership interests of
which is sufficient to elect at least a majority of its Board of Directors or
other governing body (or, if there are no such voting securities or interests,
50% or more of the equity interests of which) is owned directly or indirectly
by such first person.
SECTION 8.04 Interpretation. When a reference is made in this
Agreement to an Article, Section or Exhibit, such reference shall be to an
Article or Section of, or an Exhibit to, this Agreement unless otherwise
indicated. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation." The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. All terms defined in this
Agreement shall have the defined meanings when used in any certificate or other
document made or delivered pursuant hereto unless otherwise defined therein.
The definitions contained in this Agreement are applicable to the singular as
well as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such term. Any agreement, instrument or statute
defined or referred to herein or in any agreement or instrument that is
referred to herein means such agreement, instrument or statute as from time to
time amended, modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by succession
of comparable successor statutes and references to all attachments thereto and
instruments incorporated therein. References to a person are also to its
permitted successors and assigns.
SECTION 8.05 Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the Parties and delivered to each of the other Parties.
SECTION 8.06 Entire Agreement; No Third-Party Beneficiaries. This
Agreement (including the documents and instruments referred to herein) and the
Confidentiality Agreement (a) constitute the entire agreement, and supersede
all prior agreements and understandings, both written and oral, among the
Parties with respect to the subject matter of this Agreement and (b) except for
the provisions of Article II and Sections 5.04(a) and 5.05, are not intended to
confer upon any person other than the Parties any rights or remedies.
SECTION 8.07 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, REGARDLESS OF
THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICT OF
LAWS THEREOF.
SECTION 8.08 Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise by either of the Parties without the
prior written consent of the other Party; provided, however, that either Parent
or Sub may assign its rights hereunder to any direct or indirect wholly owned
subsidiary; provided, further, that no such assignment shall relieve Parent or
Sub, as the case may be, of any of its obligations hereunder. Any assignment in
violation of the preceding sentence shall be void. Subject to the preceding two
sentences, this Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and permitted
assigns.
SECTION 8.09 Consent to Jurisdiction. Each of the Parties (a) consents
to submit itself to the personal jurisdiction of any federal court located in
the State of Delaware or any Delaware state court in the event any dispute
arises out of this Agreement or any of the transactions contemplated by this
Agreement, (b) agrees that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court, and (c)
agrees that it will not bring any action relating to this Agreement or any of
the transactions contemplated by this Agreement in any court other than a
federal court sitting in the State of Delaware or a Delaware state court.
SECTION 8.10 Table of Contents; Headings. The table of contents and
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
SECTION 8.11 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
Parties shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the Parties as closely as possible to the fullest extent
permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
SECTION 8.12 Disclosure. Any fact or item that is disclosed in any
section of the Company Disclosure Schedule in a way as to make its relevance or
applicability to information called for by any other representation and
warranty reasonably apparent shall be deemed to be disclosed as a exception to
such other representation and warranty, notwithstanding the good faith omission
of a reference or cross-reference thereto or a reference in the particular
representation and warranty to the Company Disclosure Schedule.
SECTION 8.13 WAIVER OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES
THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES AND THEREFORE EACH PARTY HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 8.14 Specific Performance. The Parties agree that irreparable
damage would occur if any of the provisions hereof were not performed in
accordance with their specific terms or were otherwise breached. The Parties
accordingly agree that the Parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement, this being in addition to any other
remedy to which any Party may be entitled at law or in equity.
IN WITNESS WHEREOF, the Parties have caused this Agreement and Plan of
Merger to be signed by their respective officers thereunto duly authorized, all
as of the date first written above.
BGC PARTNERS, L.P.
By: /s/ Xxx Xxxxxxx
-----------------------------------------
Name: Xxx Xxxxxxx
Title:
MAGNET ACQUISITION CORP.
By: /s/ Xxx Xxxxxxx
-----------------------------------------
Name: Xxx Xxxxxxx
Title:
MAXCOR FINANCIAL GROUP INC.
By: /s/ Xxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Operating Officer
