AMENDMENT NO. 2 TO THE AGREEMENT TO MERGE
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THIS AMENDMENT NO. 2 to that certain Agreement to Merge the Businesses of
Xxxxx Securities Corporation, a Delaware corporation ("Xxxxx"), Franklin Mutual
Advisers, Inc. (f/k/a Xxxxxx Securities Corporation), a Delaware corporation
("FMAI"), and Franklin Resources, Inc., a Delaware corporation ("Buyer Parent"),
dated as of June 25, 1996, as amended by Amendment No. 1 thereto dated as of
August 28, 1996 (the "Agreement"), is made and entered into as of the 31st day
of October, 1996, by and among Xxxxx, FMAI, Buyer Parent, T.G.H. Holdings Ltd.,
a Bahamian company and indirect wholly-owned subsidiary of Buyer Parent
("T.G.H." and, collectively with Buyer Parent and FMAI, the "Buyer Entities"),
Orion Fund Management Limited, a Bermuda company ("Orion"), and the stockholders
of Orion executing a signature page hereto (the "Orion Stockholders").
W I T N E S S E T H:
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WHEREAS, the Orion Stockholders own all of the issued and outstanding
shares of share capital in Orion (the "Shares"); and
WHEREAS, the Orion Stockholders desire to sell the Shares to T.G.H., and
T.G.H. desires to purchase such Shares contemporaneously with FMAI's purchase of
the other Purchased Assets as provided in the Agreement, and the parties desire
to set forth herein their agreements with respect to such sale and purchase.
NOW, THEREFORE, in consideration of the foregoing premises, the
undersigned hereby agree as follows:
1. DEFINITIONS. Capitalized terms used and not otherwise defined herein
are used herein as defined in the Agreement.
2. SALE AND PURCHASE OF THE SHARES.
(a) Sale and Purchase. Upon the terms and subject to the conditions
contained in the Agreement, as amended hereby, on the Closing Date the Orion
Stockholders shall sell, assign, transfer, convey and deliver to T.G.H., and
T.G.H. shall purchase from the Orion Stockholders, 100% of the Shares.
(b) Consideration. The parties agree that Fourteen Million Five
Hundred Thousand Dollars (U.S.$14,500,000) of the Purchase Price payable by the
Buyer
Entities for the Purchased Assets pursuant to the Agreement shall be allocated
as consideration in full for the Shares, it being understood that T.G.H.'s
purchase of the Shares shall not in any way increase the aggregate consideration
otherwise payable by the Buyer Entities pursuant to Article II of the Agreement.
(c) Closing. Upon satisfaction or written waiver of the conditions
to the Closing set forth in Article VII of the Agreement, at the Closing the
Orion Stockholders shall deliver to T.G.H.:
(i) certificates representing 100% of the Shares, duly
endorsed for transfer, with all requisite stock powers and stock transfer
stamps attached;
(ii) a certificate signed on behalf of Orion by its Chief
Executive Officer and by MFP and each Orion Stockholder stating that (A)
the representations and warranties of Orion, the Orion Stockholders, Xxxxx
and MFP set forth herein were true and correct as of the date hereof and,
except to the extent such representations and warranties speak as of an
earlier date, as of the Closing Date as though made on and as of the
Closing Date; and (B) Orion, the Orion Stockholders, Xxxxx and MFP have
performed and complied in all material respects with all agreements,
covenants, obligations and conditions required to be performed or complied
with by them at or prior to the Closing Date as contemplated hereby;
(iii) an opinion of counsel in such form and addressing such
matters relating to Orion, the Shares and the Agreement (as amended
hereby) as shall be reasonably acceptable to Buyer Parent; and
(iv) such other documents and instruments relating to Orion or
the Shares as the Buyer Entities may reasonably request.
3. REPRESENTATIONS AND WARRANTIES. The Orion Stockholders, Orion, MFP and
Xxxxx hereby jointly and severally represent and warrant to the Buyer Entities
that:
(a) Representations and Warranties Contained in the Agreement. Each
of the representations and warranties made by Xxxxx and/or MFP in Article IV of
the Agreement are also true and correct in all respects with respect to Orion as
if "Orion" had been substituted for "Seller," "the Orion Stockholders" had been
substituted for "the Shareholder,"
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and "the Shares, business, operations, liabilities, properties and assets of
Orion" had been substituted for "the Purchased Assets" and "the Assumed
Liabilities" (as appropriate) in such representations and warranties (and in the
definitions of defined terms used therein); provided, however, that for purposes
of this Section 3(a), none of such representations or warranties shall be
limited or qualified by reference to any Person's knowledge, materiality, having
a material adverse affect, or similar language set forth in the Agreement
limiting or qualifying such representations or warranties.
(b) Capitalization; No Subsidiaries. The authorized capital of Orion
consists of U.S.$12,000, divided into 12,000 shares of U.S.$1.00 each (the
"Stock"), all of which shares have equal voting rights, and Orion has no other
authorized class or series of equity securities. 12,000 shares of Stock are
issued and outstanding, all of which shares were duly authorized for issuance
and are validly issued, fully paid and non-assessable. There are no options,
warrants, calls, rights, commitments or other agreements of any character
requiring, and there are no securities which upon conversion or exchange would
require, the issuance, sale or transfer of any shares of capital stock or other
equity securities of Orion or other securities convertible into, exchangeable
for or evidencing the right to subscribe for or purchase shares of capital stock
or other equity securities of Orion. None of the Orion Stockholders is a party
to any voting trust or other voting agreement with respect to any of the Stock,
or to any agreement relating to the issuance, sale, redemption, transfer or
other disposition of the capital stock of Orion. Orion does not, directly or
indirectly, own any stock or other equity interest in any other Person.
(c) Ownership and Transfer of Shares. MFP is the record and
beneficial owner, and the 1992 Price Family Trust is the record holder in trust
for the minor children of MFP (who are the beneficial owners of such trust and
the Shares owned by it), of all of the Shares indicated as being respectively
owned by such Orion Stockholders on Exhibit A, free and clear of any and all
Encumbrances. Each Orion Stockholder has the legal capacity, power and authority
to sell, transfer, assign and deliver such Shares to T.G.H. as provided herein,
and such delivery will convey to T.G.H. good and marketable title to such
Shares, free and clear of any and all Encumbrances.
(d) No Undisclosed Liabilities. Orion has no indebtedness,
obligations or liabilities of any kind
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(whether accrued, absolute, contingent or otherwise, and whether due or to
become due).
4. COVENANTS.
(a) Orion and the Orion Stockholders shall comply with and perform
all applicable covenants set forth in Article VI of the Agreement as if "Orion"
had been substituted for "Seller," "the Orion Stockholders" had been substituted
for "the Shareholder," and "the Shares, business, operations, liabilities,
properties and assets of Orion" had been substituted for "the Purchased Assets"
and "the Assumed Liabilities" (as appropriate) in such covenants (and in the
definitions of defined terms used therein).
In addition, prior to the Closing the Orion Stockholders, Xxxxx
and MFP shall, and shall cause Orion to, (i) take such actions as are required
to obtain the consent and approval of all relevant Governmental Authorities
(including, without limitation, the Bermuda Monetary Authority) to the
transactions contemplated hereby; (ii) amend the prospectus of each fund managed
or advised by Orion to reflect the transactions contemplated hereby in
accordance with the requirements of relevant Governmental Authorities in the
United Kingdom, Bermuda and elsewhere, and shall give all requisite notice
thereof to such funds, their stockholders and such Governmental Authorities; and
(iii) keep Buyer Parent timely apprised of all such actions and shall deliver to
Buyer Parent copies of all correspondence with such funds, stockholders and
Governmental Authorities.
(b) Pending the Closing, Orion shall, and the Orion Stockholders
shall cause Orion to, conduct its business only in the ordinary course
consistent with past custom and practice. Without limiting the generality of the
foregoing, Orion shall not, and the Orion Stockholders shall cause Orion not to,
issue any additional shares of its capital stock or grant or issue options or
rights to subscribe for or acquire any such shares or securities convertible or
exchangeable therefor.
(c) The Orion Stockholders hereby agree not to sell, transfer,
pledge or otherwise encumber, grant options on, or otherwise dispose of any of
the Shares except as contemplated by Section 2 hereof, and any purported
transfer in contravention of this Section shall be null, void and of no effect.
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5. INDEMNIFICATION. From and after the Closing, each Orion Stockholder,
MFP and Xxxxx hereby agree, jointly and severally, to indemnify, defend and hold
harmless the Buyer Entities and their respective directors, officers, employees,
partners and other Affiliates (collectively, "Buyer Indemnified Parties") from
and against any and all Losses or Taxes which any of them may suffer, incur or
sustain arising out of, attributable to, or resulting from (a) any inaccuracy in
or breach of any of the representations or warranties of Orion or the Orion
Stockholders made pursuant to Section 3 above; (b) any breach or nonperformance
of any of the covenants or other agreements made by Orion or the Orion
Stockholders pursuant to Section 4 hereof; or (c) the business, operations or
properties of Orion up to and including the Closing Date. For purposes of clause
(a) hereof, all representations and warranties of Orion and the Orion
Stockholders shall survive the Closing through and until the sixth anniversary
of the Closing Date. All such indemnification shall be pursued in accordance
with the procedures set forth in Sections 8.4 and 8.9 (or, with respect to
claims for Taxes, Article IX) of the Agreement. The parties agree that the
provisions of Section 8.1, Section 8.5 and (subject to the last sentence of this
paragraph) Section 8.6 of the Agreement shall not apply to limit the
indemnification provided for in this Section 5 or set a minimum amount for
Losses before indemnification may be sought hereunder, except that the maximum
amount which MFP, the Orion Stockholders and Xxxxx shall collectively be
obligated to indemnify the Buyer Indemnified Parties pursuant to this Section 5
shall not exceed $14,500,000 in the aggregate; it being understood and agreed
that (i) except as otherwise contemplated by Section 8.7 of the Agreement, any
indemnification payments paid pursuant to this Section 5 shall count toward the
total limit of indemnification payments payable to Buyer Indemnified Parties
pursuant to Section 8.7 of the Agreement, and (ii) the provisions of this
Section 5 shall only apply to Losses or Taxes suffered, incurred, arising out
of, attributable to, or resulting from Orion, its business, operations or
properties, the Shares or the transactions contemplated by this Amendment.
Notwithstanding the foregoing, this Section 5 shall not increase the liability
of Xxxxx and MFP under Section 8.6 of the Agreement with respect to Losses or
Taxes relating to the provision of investment advisory services by Xxxxx to
Orion prior to the Closing.
6. DESIGNATION OF REPRESENTATIVE. Orion and the Orion Stockholders hereby
designate MFP as their representative and true and lawful attorney-in-fact to
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receive all notices relating to, and to execute and deliver all amendments to,
the Agreement on their behalf.
7. MISCELLANEOUS.
(a) Binding Effect; No Assignment. The Agreement, as amended hereby,
shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns. Nothing herein is intended or shall be
construed to confer upon any Person other than the parties hereto and their
respective successors and permitted assigns any right, remedy or claim under or
by reason of their Agreement or any part hereof. The Agreement may not be
assigned by any of the parties hereto without the prior written consent of each
of the other parties hereto; provided, however, that the Buyer Entities may
assign all of the right to acquire the Purchased Assets, the Assumed Liabilities
and/or the Shares to any of their directly or indirectly owned subsidiaries or
to any of their Affiliates at any time without the consent of any other party.
(b) Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument, it being understood that
all of the parties need not sign the same counterpart.
(c) Governing Law; Service; Jurisdiction. The Agreement, as amended
hereby, the legal relations between the parties and the adjudication and the
enforcement thereof, shall be governed by and interpreted and construed
exclusively in accordance with the substantive laws of the State of Delaware,
without regard to applicable choice of law provisions thereof. Each of the
parties hereto agrees to: (i) the irrevocable designation of the Secretary of
State of Delaware as its agent upon whom process against it may be served and
(ii) the exercise of personal jurisdiction over it by the Courts of the State of
Delaware or the United States District Court for the State of Delaware in any
action brought in respect of matters arising hereunder and within the subject
matter jurisdiction of such courts.
(d) Specific Performance. Each of the parties hereto acknowledges
that, in view of the uniqueness of the Shares and the transactions contemplated
hereby, each party would not have an adequate remedy at law for money damages if
the covenants and agreements to be performed hereunder have not been performed
in accordance with their terms, and therefore agree that the other parties shall
be entitled to specific enforcement of the terms hereof in addition to
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indemnification hereunder and any other equitable remedy to which such parties
may be entitled.
(e) Agreement in Full Force As Amended. Except as expressly amended
hereby, the Agreement shall survive and continue pursuant to its terms, in full
force and effect.
[signature page follows]
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IN WITNESS WHEREOF, the undersigned have, as appropriate, executed this
Amendment or caused this Amendment to be executed by their respective duly
authorized representatives, as of the 31st day of October, 1996.
FRANKLIN RESOURCES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Vice President
FRANKLIN MUTUAL ADVISERS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Vice President
T.G.H. HOLDINGS LTD.
By: /s/ Xxxxxxx XxXxxxx
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Name: Xxxxxxx XxXxxxx
Title: Executive Vice President
XXXXX SECURITIES CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: President
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
ORION FUND MANAGEMENT LIMITED
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
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ORION STOCKHOLDERS:
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
1992 PRICE FAMILY TRUST
By: /s/ Xxxxxx Xxxxxxxxx
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Xxxxxx Xxxxxxxxx, Trustee
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