Exhibit 99.2
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AGREEMENT AND PLAN OF MERGER
dated as of June 4, 2001
among
LIBERTY MUTUAL INSURANCE COMPANY,
LFC ACQUISITION CORPORATION,
and
LIBERTY FINANCIAL COMPANIES, INC.
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ARTICLE 1 THE MERGER..........................................................................................2
1.1 The Merger.............................................................................................2
1.2 Effect of the Merger...................................................................................2
1.3 Closing and Consummation of the Merger.................................................................2
1.4 Articles of Organization; By-Laws; Directors and Officers..............................................3
1.5 Conversion of Securities...............................................................................3
1.6 Company Stock Options and Plans........................................................................5
1.7 Exchange of Certificates...............................................................................5
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND ACQUISITION SUB.................................8
2.1 Organization and Qualification.........................................................................8
2.2 Authority..............................................................................................8
2.3 Status of Acquisition Sub..............................................................................8
2.4 Litigation.............................................................................................8
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY.......................................................9
3.1 Organization and Qualification.........................................................................9
3.2 Authority..............................................................................................9
3.3 Fairness Opinion, Brokers.............................................................................10
ARTICLE 4 CONDUCT OF BUSINESS................................................................................10
4.1 Conduct Prior to Effective Time.......................................................................10
4.2 Notification of Certain Matters.......................................................................10
4.3 Conduct of Business by Purchaser......................................................................11
ARTICLE 5 ADDITIONAL AGREEMENTS..............................................................................11
5.1 Preparation of Proxy Statement........................................................................11
5.2 Board Recommendation..................................................................................11
5.3 Fees and Expenses.....................................................................................12
5.4 Additional Agreements.................................................................................12
5.5 Governmental Filings..................................................................................12
5.6 Indemnification and Insurance.........................................................................12
5.7 Employee Benefit Matters..............................................................................14
5.8 Joint and Several Obligations.........................................................................14
5.9 Exemption from Liability Under Section 16.............................................................14
ARTICLE 6 CONDITIONS.........................................................................................14
6.1 Conditions to Obligation of Each Party to Effect the Merger...........................................14
ARTICLE 7 TERMINATION, AMENDMENT AND WAIVER..................................................................15
7.1 Termination...........................................................................................15
7.2 Effect of Termination.................................................................................16
7.3 Amendment.............................................................................................16
7.4 Waiver................................................................................................16
ARTICLE 8 GENERAL PROVISIONS.................................................................................16
8.1 Publicity.............................................................................................16
8.2 Notices...............................................................................................17
8.3 Interpretation........................................................................................18
8.4 Representations and Warranties; etc...................................................................18
8.5 Miscellaneous.........................................................................................19
8.6 Validity..............................................................................................19
Index of Defined Terms
TERM PAGE
Acquisition Sub.....................................................................................................1
affiliates.........................................................................................................17
Agreement...........................................................................................................1
Annuity Agreement...................................................................................................1
Annuity Buyer.......................................................................................................1
Annuity Sale........................................................................................................1
Articles of Merger..................................................................................................2
AUM Agreement.......................................................................................................1
AUM Buyer...........................................................................................................1
AUM Sale............................................................................................................1
Certificates........................................................................................................5
Code................................................................................................................7
Company.............................................................................................................1
Company Material Adverse Effect.....................................................................................8
Company Stockholders' Meeting......................................................................................11
Disclosure Schedule.................................................................................................8
Dissenting Shares...................................................................................................5
Effective Time......................................................................................................2
Financial Advisor...................................................................................................9
Indemnified Parties................................................................................................12
LFS.................................................................................................................1
MBCL................................................................................................................2
Merger..............................................................................................................1
Payment Agent.......................................................................................................5
Payment Fund........................................................................................................5
Purchaser...........................................................................................................1
Sales...............................................................................................................1
SEC................................................................................................................10
Segment Buyers......................................................................................................1
Segment Purchase Agreements.........................................................................................1
Stockholders........................................................................................................7
subsidiaries.......................................................................................................17
subsidiary.........................................................................................................17
Surviving Corporation...............................................................................................2
Transactions........................................................................................................1
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of June
4, 2001, is by and among LIBERTY MUTUAL INSURANCE COMPANY, a Massachusetts
mutual insurance company (the "Purchaser"), LFC ACQUISITION CORPORATION, a
Massachusetts corporation and wholly-owned subsidiary of the Purchaser
("Acquisition Sub"), and LIBERTY FINANCIAL COMPANIES, INC., a Massachusetts
corporation (the "Company").
BACKGROUND
A. The Purchaser, indirectly, owns approximately 70% of the outstanding
shares of common stock of the Company. The Purchaser wishes to acquire all of
the outstanding shares of the Company's capital stock not owned by the Purchaser
or its subsidiaries.
B. The Purchaser has formed Acquisition Sub as a subsidiary with the
intent of causing it to merge with and into the Company.
C. The Company and Liberty Financial Services, Inc., a wholly owned
subsidiary of the Company ("LFS"), entered into a Stock Purchase Agreement dated
as of May 2, 2001 (the "Annuity Agreement") with Sun Life Assurance Company of
Canada (the "Annuity Buyer") pursuant to which the Company and LFS intend to
sell and the Annuity Buyer intends to buy the direct and indirect subsidiaries
of the Company which represent substantially all of the Company's annuity
segment (the "Annuity Sale"). Simultaneously with the execution of this
Agreement, the Company and LFS are entering into a Stock Purchase Agreement
dated as of the date hereof (the "AUM Agreement") with FleetBoston Financial
Corporation (the "AUM Buyer") pursuant to which the Company and LFS intend to
sell and the AUM Buyer intends to buy the direct and indirect subsidiaries of
the Company which represent substantially all of the Company's asset management
business segment (the "AUM Sale"). The Annuity Agreement and the AUM Agreement
are sometimes hereinafter referred to herein collectively as the "Segment
Purchase Agreements", the Annuity Buyer and the AUM Buyer are sometimes
hereinafter referred to herein collectively as the "Segment Buyers" and the
Annuity Sale and the AUM Sale are sometimes hereinafter referred to herein
collectively as the "Sales."
D. The respective Boards of Directors of the Purchaser, Acquisition Sub
and the Company have each duly approved the merger of Acquisition Sub with and
into the Company on the terms and subject to the conditions of this Agreement
(the "Merger") and the Board of Directors of the Company has resolved to
recommend approval of the Merger and the Sales by the Company's stockholders.
The Sales and the Merger are hereinafter sometimes referred to herein
collectively as the "Transactions."
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E. The respective Boards of Directors of the Purchaser, Acquisition Sub
and the Company have each duly approved all of the other transactions
contemplated by this Agreement.
F. The consummation of the Sales is a condition precedent to the
consummation of the Merger.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and for other good and valuable consideration the
receipt and adequacy of which are hereby acknowledged, the Purchaser,
Acquisition Sub and the Company hereby agree as follows:
ARTICLE 1
THE MERGER
1.1 THE MERGER. At the Effective Time (as hereinafter defined), and
subject to and in accordance with this Agreement and the Massachusetts Business
Corporation Law (the "MBCL"), Acquisition Sub shall be merged with and into the
Company, the separate existence of Acquisition Sub shall cease and the Company
shall continue as the surviving corporation. The Company as it will exist at and
after the Effective Time is hereinafter sometimes referred to as the "Surviving
Corporation."
1.2 EFFECT OF THE MERGER. Upon the effectiveness of the Merger, the
Surviving Corporation shall continue its corporate existence under the laws of
Massachusetts and the Merger shall have the effects set forth in Section 80 of
the MBCL.
1.3 CLOSING AND CONSUMMATION OF THE MERGER. As soon as is practicable
following the approval of the Merger at the Company Stockholders' Meeting (as
defined below) and the satisfaction of the conditions specified in Section 6.1
upon a date agreed to by the Purchaser and the Company (but in any event not
later than 60 days following the later to occur of the consummation of the
Annuity Sale and the AUM Sale), the parties shall meet at the offices of Xxxxxx,
Xxxx & Xxxxxxx, Exchange Place, 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, or at
such other time and place as the parties may mutually agree, to determine the
satisfaction of the remaining conditions in Article 6 and, if all conditions
have been satisfied or waived, to execute Articles of Merger in accordance with
the MBCL (the "Articles of Merger"). As soon as is practicable after execution
of the Articles of Xxxxxx, and subject to the satisfaction or waiver of all
conditions in Article 6, the parties will cause the Merger to be consummated by
delivering the Articles of Merger to the Massachusetts Secretary of State for
filing in accordance with the MBCL, and shall make all other filings and
recordings required by the MBCL in connection with the Merger. The Merger shall
become effective when the Articles of Merger are filed with the Massachusetts
Secretary of the State (or at such later time, which shall be as soon as
reasonably practicable thereafter, specified as the effective time in the
Articles of Merger). The term "Effective Time" shall mean the date and time when
the Merger becomes effective.
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1.4 ARTICLES OF ORGANIZATION; BY-LAWS; DIRECTORS AND OFFICERS. The
Articles of Organization and By-laws of the Company as in effect immediately
prior to the Effective Time shall be the Articles of Organization and By-laws of
the Surviving Corporation until thereafter amended as provided under the MBCL.
The directors of Acquisition Sub immediately prior to the Effective Time will be
the directors of the Surviving Corporation as of the Effective Time, and the
officers of Acquisition Sub immediately prior to the Effective Time will
continue as the officers of the Surviving Corporation as of the Effective Time,
in each case until such time as changed in accordance with the provisions of
MBCL and the By-laws of the Surviving Corporation or until their successors are
duly elected and qualified.
1.5 CONVERSION OF SECURITIES.
(a) At the Effective Time, by virtue of the Merger and without any
action on the part of the Purchaser, Acquisition Sub, the Company, the
Surviving Corporation or the holder of any of the following securities:
(i) COMPANY CAPITAL STOCK. Subject to Section 1.5(b), the shares of the
Company's capital stock (the "Shares") issued and outstanding immediately prior
to the Effective Time (other than Shares to be cancelled pursuant to clause (ii)
below and any Dissenting Shares (as defined below)) shall be cancelled and
retired and be converted into and become a right to receive solely an amount per
share in cash, without any interest thereon, equal to $33.44, subject to
adjustment in accordance with the following formula (such amount, as adjusted,
is hereinafter referred to as the "Cash Consideration"):
(A) ADJUSTMENTS TO CASH CONSIDERATION. The Cash Consideration shall be
appropriately increased or decreased, as applicable, by an amount per share
equal to the Pro Rata Share (as defined below) of the sum (without duplication)
of the following:
(1) Any increase or decrease, as applicable, in the estimated net
after tax proceeds to the Company from the Sales included in the Closing
Adjustment (as defined below) from those estimated on the date hereof and set
forth on SCHEDULE A attached hereto; PLUS
(2) Any increase or decrease, as applicable, in the estimated net
after tax costs of the Company with respect to stock options granted by the
Company and outstanding at the Effective Time included in the Closing Adjustment
from those estimated on the date hereof and set forth on SCHEDULE A attached
hereto (including any change resulting from any purchase price adjustment
provided for in Section 1.2 of the AUM Agreement); PLUS
(3) Any increase or decrease, as applicable, in the estimated net
after tax costs of the Company with respect to transaction expenses paid or
payable by the Company to third parties in connection with the
Transactions("Transaction Expenses") included in the Closing Adjustment from
those estimated on the date hereof and set forth on SCHEDULE A attached hereto,
PLUS
(4) Any increase or decrease, as applicable, in the estimated net
after tax deduction for the net corporate liabilities from those estimated on
the date hereof and set forth on SCHEDULE A attached hereto, PLUS
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(5) Any increase or decrease, as applicable, in the net tax
adjustment with respect to eliminating the estimated taxes on the AUM Sale net
of the estimated tax benefit inuring to the AUM Buyer for the Section 338(h)(10)
election from those estimated on the date hereof and set forth on SCHEDULE A
attached hereto.
(B) CERTAIN DEFINITIONS AND PROCEDURES. As used herein, the term "Pro
Rata Share" shall mean a fraction, expressed as a percentage, the numerator of
which is one and the denominator of which is the number of shares of the
Company's common stock issued and outstanding as of the Effective Time.
Not less than three (3) and not more than ten (10) Business Days prior
to the Effective Time, the Company shall deliver to the Purchaser a certificate
(the "Closing Price Certificate") setting forth the Company's then current
estimate of each of the following:
(1) The net after tax proceeds to the Company from the Sales and
the amount, if any, by which such estimated proceeds are different from the
estimate thereof set forth on SCHEDULE A;
(2) The net after tax costs of the Company with respect to all
stock options granted by the Company and outstanding at the Effective Time, and
the amount, if any, by which such estimated costs are different from the
estimate thereof set forth on SCHEDULE A;
(3) The net after tax costs of the Company of all Transaction
Expenses paid or payable by the Company to third parties in connection with the
Transactions and the amount, if any, by which such estimated costs are different
from the estimate thereof set forth on SCHEDULE A;
(4) The after tax deduction for the net corporate liabilities and
the amount, if any, by which such estimated deduction is different from the
estimate thereof set forth on SCHEDULE A;
(5) The net tax adjustment with respect to eliminating the
estimated taxes on the AUM Sale net of the estimated tax benefit inuring to the
AUM Buyer for the Section 338(h)(10) election from the estimate thereof set
forth on SCHEDULE A; and
(6) Based on the foregoing, the amount of the final Cash
Consideration.
The applicable estimated amount reflected in the Closing Price Certificate for
any item is referred to herein as the "Closing Adjustment". The calculations in
the Closing Price Certificate will be subject to the review and reasonable
approval of the Purchaser.
(ii) TREASURY STOCK; ETC. Each Share held in the treasury of the
Company and each Share that is issued and outstanding immediately prior to the
Effective Time and owned by the Purchaser, Acquisition Sub or the Company or any
direct or indirect subsidiary of the Purchaser, Acquisition Sub or the Company,
shall be cancelled and retired, and no payment shall be made with respect
thereto; and
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(iii) ACQUISITION SUB STOCK. Each share of Acquisition Sub's capital
stock issued and outstanding immediately prior to the Effective Time shall be
converted into and become a number of validly issued, fully paid and
nonassessable shares of common stock of the Surviving Corporation such that the
number of shares issued to Acquisition Sub in the aggregate is equal to
100,000,000 shares.
(b) Notwithstanding Section 1.5(a) or any other provision of
this Agreement, Shares outstanding immediately prior to the Effective
Time and held by a holder which has properly perfected such holder's
rights of appraisal for such Shares in connection with the
Transactions in accordance with the MBCL ("Dissenting Shares") shall
not be converted into a right to receive the applicable Cash
Consideration, unless such holder withdraws or otherwise loses his
right to demand payment for his Shares, but the holder thereof shall
only be entitled to such rights as are provided by the MBCL. If, after
the Effective Time, such holder withdraws or loses (through failure to
perfect or otherwise) such holder's right to demand payment for such
holder's Shares in connection with the Transactions, such Shares shall
be treated as if they had been converted as of the Effective Time into
the right to receive the Cash Consideration payable in respect of such
Shares pursuant to Section 1.5(a)(i), without interest.
(c) The Company shall give the Purchaser and Acquisition Sub
prompt notice of any demands for payment, or notices of intent to
demand payment, received by the Company with respect to Shares or in
connection with the Transactions in accordance with Section 86 of the
MBCL, and the Purchaser and Acquisition Sub shall have the right to
participate in all negotiations and proceedings with respect to such
demands. The Company shall not, except with the prior written consent
of the Purchaser and Acquisition Sub or as otherwise required by law
or pursuant to a final order of a court of competent jurisdiction,
make any payment with respect to, or settle, or offer to settle, any
such demands.
1.6 COMPANY STOCK OPTIONS AND PLANS. The Company shall take all actions
necessary to ensure that (a) all options outstanding under the Company's 1990
Stock Option Plan or Amended and Restated 1995 Stock Incentive Plan
(collectively, the "Stock Plans"), to the extent not exercised prior to the
Effective Time, shall be cancelled in return for the appropriate cash payment
under the applicable Stock Plan, and (b) all restricted common stock granted
under any Stock Plan shall, if not currently vested, be fully vested immediately
prior to the Effective Time to the extent provided and otherwise in accordance
with the Liberty Financial Companies, Inc. and Subsidiaries Non-Commissioned
Employee Severance and Retention Plan and the Liberty Financial Companies, Inc.
and Subsidiaries Commissioned Employees Severance and Retention Plan.
1.7 EXCHANGE OF CERTIFICATES.
(a) From and after the Effective Time, a bank or trust company to
be designated by the Purchaser not less than 10 days prior to the
Effective Time and consented to by the Company (such consent not to be
unreasonably withheld, delayed or conditioned) (the
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"Payment Agent") shall act as payment agent in effecting the exchange
for the applicable Cash Consideration of certificates that, immediately
prior to the Effective Time, represented Shares entitled to payment
pursuant to Section 1.5(a)(i) (the "Certificates"). At the Effective
Time, the Purchaser shall, or shall cause Acquisition Sub to, deposit
with the Payment Agent in trust for the benefit of the holders of
Certificates, such amounts in immediately available funds as may be
needed to pay promptly for surrendered Shares as provided in this
Section 1.7 (the "Payment Fund"). The Purchaser and the Surviving
Corporation shall cause the Payment Agent to mail to each record holder
of Certificates, promptly after the Effective Time (but in any event
within two business days thereof), a form of letter of transmittal (in
form and substance reasonably satisfactory to the Purchaser) and
instructions for use in surrendering such Certificates and receiving
the applicable Cash Consideration therefor. Upon the surrender of each
Certificate together with a duly completed and executed letter of
transmittal, the Payment Agent shall pay the holder of such Certificate
the applicable Cash Consideration multiplied by the number of Shares
formerly represented by such Certificate, without any interest thereon,
and such Certificate shall be cancelled. Delivery shall be effected,
and risk of loss and title to the Certificate shall pass, only upon
proper delivery of the Certificate to the Payment Agent, and the letter
of transmittal shall so reflect. If any cash is to be paid to a person
other than the holder in whose name the Certificate representing Shares
surrendered in exchange therefor is registered, it shall be a condition
to such payment that the Certificates so surrendered shall be properly
endorsed or otherwise in proper form for transfer and that the person
requesting such payment shall pay to the Payment Agent any transfer or
other taxes required by reason of the payment of such cash to a person
other than the registered holder of the Certificate surrendered, or
such person shall establish to the satisfaction of the Payment Agent
that such tax has been paid or is not applicable. Notwithstanding the
foregoing, neither the Payment Agent nor any party hereto shall be
liable to a holder of Shares for any Cash Consideration delivered to a
public official pursuant to applicable abandoned property, escheat and
similar laws.
(b) To the extent not immediately required for payment for
surrendered Shares as provided in Section 1.7(a), the Payment Fund
shall be invested by the Payment Agent, as directed by the Purchaser
(so long as such directions do not impair the rights of holders of
Shares), for the account of the Purchaser, in direct obligations of the
United States of America, obligations for which the full faith and
credit of the United States of America is pledged to provide for the
payment of principal and interest, commercial paper rated of the
highest quality by Xxxxx'x Investors Services, Inc. or Standard &
Poor's Ratings Group, or certificates of deposit issued by a commercial
bank having at least $5,000,000,000 in capital and surplus, in each
case maturing within 60 days; and any net earnings with respect thereto
shall be paid to the Purchaser as and when requested by the Purchaser.
(c) The Payment Agent shall, pursuant to irrevocable instructions
from the Purchaser and the Surviving Corporation, make the payments
referred to in Section 1.5(a)(i) out of the Payment Fund. Nine months
after the Effective Time, the Payment Agent shall deliver to the
Purchaser all cash, certificates and other documents in its possession
relating to the transactions described in this Agreement, and the
Payment
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Agent's duties shall terminate. Thereafter, each holder of a
Certificate formerly representing a Share may surrender such
Certificate to the Surviving Corporation or the Purchaser and (subject
to applicable abandoned property, escheat and similar laws) receive in
exchange therefor the applicable Cash Consideration, without any
interest thereon, but shall have no greater rights against the
Surviving Corporation or the Purchaser than may be accorded to general
creditors of the Surviving Corporation or the Purchaser under
applicable law.
(d) After the Effective Time, there shall be no transfers on the
stock transfer books of the Surviving Corporation of any Shares. If,
after the Effective Time, Certificates formerly representing Shares are
presented to the Surviving Corporation or the Payment Agent, they shall
be cancelled and exchanged for the applicable Cash Consideration, as
provided in this Article 1, subject to applicable law in the case of
Dissenting Shares.
(e) From and after the Effective Time, holders of Certificates
theretofore evidencing Shares shall cease to have any rights as
stockholders of the Company (the "Stockholders"), except as provided
herein or by law.
(f) Each of the Surviving Corporation and the Purchaser, or the
Payment Agent on their behalf, shall be entitled to deduct and withhold
from the Cash Consideration payable to any holder of Shares such
amounts as it is required to deduct and withhold with respect to the
making of such payment under the Internal Revenue Code of 1986, as
amended (the "Code"), or any applicable provision of state, local or
foreign tax law. To the extent that amounts are so withheld by the
Surviving Corporation or the Purchaser, as the case may be, such
withheld amounts shall be treated for all purposes of this Agreement as
having been paid to the holder of the Shares in respect of which such
deduction and withholding was made by the Surviving Corporation or the
Purchaser, as the case may be, and shall promptly be paid by the
Purchaser or Acquisition Sub, as the case may be, to the applicable
taxing authority.
(g) 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 commercially reasonable amount and on such commercially reasonable
terms as the Surviving Corporation may direct, as indemnity against any
claim that may be made against it with respect to such Certificate, the
Purchaser shall pay in exchange for such lost, stolen or destroyed
Certificate, the applicable Cash Consideration.
(h) The Cash Consideration shall be appropriately adjusted to
reflect any stock split, reverse stock split, stock dividend,
recapitalization, exchange, subdivision, combination of, or other
similar change in the Shares that shall be effective after the date of
this Agreement and prior to the Effective Time.
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ARTICLE 2
REPRESENTATIONS AND WARRANTIES
OF THE PURCHASER AND ACQUISITION SUB
The Purchaser and Acquisition Sub each represents and warrants to the
Company that:
2.1 ORGANIZATION AND QUALIFICATION. Each of the Purchaser and
Acquisition Sub is an entity duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization and has all
requisite power and authority to carry on its business as now conducted or
contemplated to be conducted. Each of the Purchaser and Acquisition Sub is duly
qualified as a foreign corporation to do business, and is in good standing, in
each jurisdiction where the character of its properties owned or leased or the
nature of its activities makes such qualification necessary, except for failures
to be so qualified or in good standing which would not, individually or in the
aggregate, materially impair the Purchaser's financial condition or the ability
of the Purchaser and Acquisition Sub to perform their obligations hereunder.
2.2 AUTHORITY. Each of the Purchaser and Acquisition Sub has the
requisite corporate power and authority to enter into this Agreement and to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by the
Purchaser and Acquisition Sub, and the consummation by the Purchaser and
Acquisition Sub of the transactions contemplated hereby have been duly
authorized by the respective Boards of Directors of the Purchaser (including as
sole shareholder of Acquisition Sub) and Acquisition Sub and no other corporate
proceedings on the part of the Purchaser or Acquisition Sub (including without
limitation shareholder actions) are necessary to authorize the execution,
delivery and performance of this Agreement and the transactions contemplated
hereby. This Agreement has been duly executed and delivered by the Purchaser and
Acquisition Sub and constitutes a legal, valid and binding obligation of the
Purchaser and Acquisition Sub, respectively, enforceable against them in
accordance with its terms.
2.3 STATUS OF ACQUISITION SUB. Acquisition Sub was formed for the
purpose of merging into the Company as contemplated by this Agreement, and has
not carried on any other business. The Purchaser owns all of the outstanding
capital stock of Acquisition Sub. -
2.4 LITIGATION. There is no suit, action or legal, administrative,
arbitration or order, proceeding or governmental investigation pending or, to
the knowledge of the Purchaser, threatened, to which the Purchaser or
Acquisition Sub is a party which, considered individually or in the aggregate,
would reasonably be expected to materially impair the ability of the Purchaser,
Acquisition Sub or the Surviving Corporation to perform its obligations under
this Agreement.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchaser and Acquisition
Sub that except as set forth on a disclosure schedule previously delivered to
the Purchaser (the "Disclosure Schedule"):
3.1 ORGANIZATION AND QUALIFICATION. The Company is a corporation duly
organized, validly existing and in good standing under the laws of Massachusetts
and has all requisite corporate power and authority to carry on its business as
it is now being conducted. The Company is duly qualified as a foreign
corporation to do business, and is in good standing, in each jurisdiction where
the character of its properties owned or leased or the nature of its activities
makes such qualification necessary, except for failures to be so qualified or in
good standing which would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect (as defined below). Copies of
the Articles of Organization and By-Laws of the Company have been made available
to the Purchaser and such copies are accurate and complete as of the date
hereof. For purposes of this Agreement, "Company Material Adverse Effect" shall
mean any change, effect or circumstance that is materially adverse to the
assets, financial condition, business or operations of the Company and its
subsidiaries taken as a whole, other than (1) changes, effects or circumstances
that (x) result from changes in general economic or debt or equity market
conditions or (y) are the result of factors generally affecting the annuity or
asset management industries or are the result of any regulatory or statutory
matter that has or may have an industry-wide effect in the jurisdictions within
which the Company's annuity Subsidiaries are domiciled, or (2) changes in
generally accepted accounting principles or changes in laws or regulations or
the interpretation thereof by courts or governmental authorities; provided, that
(i) Company Material Adverse Effect shall not include any adverse change, effect
or circumstance arising out of or resulting from actions contemplated by the
parties in connection with this Agreement or the Segment Purchase Agreements or
that is attributable to the announcement, pending status or performance of this
Agreement or the Segment Purchase Agreements and (ii) any adverse change in the
Company's stock price shall not be taken into account in determining whether
there has been a Company Material Adverse Effect.
3.2 AUTHORITY.
(a) The Company has all requisite corporate power and authority to
enter into this Agreement, subject to the approval of its Stockholders
referred to in Section 6.1 of this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated
hereby.
(b) The Company's Board of Directors has duly adopted resolutions
(i) authorizing the execution and delivery of this Agreement and the
Segment Purchase Agreements by the Company, (ii) approving the Merger
and the Sales, and the transactions contemplated hereby and thereby,
(iii) determining that each of the transactions contemplated by this
Agreement and the Segment Purchase Agreements, including the Merger and
the Sales, are fair to, advisable and in the best interests of the
Stockholders, and (iv) recommending adoption and approval of the Merger
and the Sales by the Stockholders.
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(c) Except for the approval of its Stockholders referred to in
Section 6.1 of this Agreement, no further corporate proceedings on the
part of the Company are necessary to authorize the execution, delivery
and performance of this Agreement and the transactions contemplated
hereby.
(d) This Agreement has been duly executed and delivered by the
Company and constitutes a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms.
3.3 OPINION OF FINANCIAL ADVISOR; BROKERS.
(a) The Board of Directors of the Company has received the opinion
of Credit Suisse First Boston Corporation (the "Financial Advisor"),
dated the date of this Agreement, to the effect that, as of such date,
(i) the consideration to be received by the Company and LFS pursuant to
the Annuity Agreement is fair, from a financial point of view, to the
Company and (ii) the cash consideration to be received pursuant to this
Agreement is fair, from a financial point of view, to the holders of
common stock of the Company other than the Purchaser and its
affiliates.
(b) Except for the Financial Advisor (the fees of which will be
paid by the Company), no agent, broker, person or firm acting on behalf
of the Company is or will be entitled to any advisory commission or
broker's or finder's fee from any of the parties hereto in connection
with any of the transactions contemplated herein.
ARTICLE 4
CONDUCT OF BUSINESS
4.1 CONDUCT PRIOR TO EFFECTIVE TIME. The Company covenants and agrees
that, unless the Purchaser shall otherwise consent during the period from the
date of this Agreement until the earlier of the termination of this Agreement or
the Effective Time, the Company shall comply in all material respects with the
covenants set forth in, and the Company shall not amend, modify or waive any
provision contained in, the Segment Purchase Agreements.
4.2 NOTIFICATION OF CERTAIN MATTERS. The Company shall give prompt
notice to the Purchaser, upon obtaining knowledge of the occurrence, or failure
to occur, of any event which occurrence or failure to occur causes (x) any
representation or warranty made by the Company and contained in this Agreement
to be untrue or inaccurate at any time from the date hereof to the Effective
Time to the extent that any such failure to be true or accurate would,
individually or in the aggregate, be reasonably expected to have a Company
Material Adverse Effect, or (y) any material failure of the Company or of any
officer, director, employee or agent thereof, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it under
this
10
Agreement; provided, however, that no such notification shall be deemed to cure
any breach or otherwise affect the representations, warranties, covenants,
conditions or agreements of the Company or the conditions to the obligations of
the parties hereunder. The Purchaser shall give prompt notice to the Company,
upon obtaining knowledge of the occurrence, or failure to occur, of any event
which occurrence or failure to occur causes (x) any representation or warranty
made by the Purchaser or Acquisition Sub contained in this Agreement to be
untrue or inaccurate at any time from the date hereof to the Effective Time to
the extent any such failure to be true or accurate would, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
Purchaser's financial condition or its ability to consummate the transactions
contemplated by this Agreement, or (y) any material failure of the Purchaser or
Acquisition Sub, or of any officer, director, employee or agent thereof, to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it under this Agreement; provided, however, that no such
notification shall be deemed to cure any breach or otherwise affect the
representations, warranties, covenants, conditions or agreements of the
Purchaser or Acquisition Sub or the conditions to the obligations of the parties
hereunder.
4.3 CONDUCT OF BUSINESS BY PURCHASER. During the period from the date
of this Agreement and continuing until the earlier of the termination of this
Agreement or the Effective Time and subject to the terms and conditions of this
Agreement, neither the Company nor the Purchaser shall not take any action which
would cause any of its representations and warranties contained herein to be
untrue or incorrect in any material respect or cause it not to be in compliance
in all material respects with any covenant set forth herein.
ARTICLE 5
ADDITIONAL AGREEMENTS
5.1 PREPARATION OF PROXY STATEMENT. The Company and the Purchaser shall
jointly prepare the Proxy Statement and the Schedule 13E-3 and use their
respective commercially reasonable efforts to obtain and furnish the information
required to be included in the Proxy Statement and the Schedule 13E-3, and
respond promptly to any comments made by the Securities and Exchange Commission
(the "SEC") with respect to the Proxy Statement and the Schedule 13E-3 and any
preliminary version thereof and cause the Proxy Statement to be mailed to its
Stockholders at the earliest practicable time following the execution of this
Agreement. Each party will notify the other promptly upon the receipt of any
comments from the SEC staff. If prior to the Effective Time any event shall
occur which is required to be set forth in an amendment or a supplement to the
Proxy Statement, the Company will promptly prepare and mail such an amendment or
supplement, PROVIDED that, with respect to any event or information relating to
the Purchaser or Acquisition Sub or one of the Segment Buyers giving rise to
such requirement, the Purchaser or the applicable Segment Buyer shall have
notified the Company thereof in a timely fashion.
5.2 BOARD RECOMMENDATION. Except and to the extent that the Company's
Board of Directors determines that it must take or refrain from taking an action
in order to comply with its fiduciary duties to the Stockholders under
applicable law, the Company through its Board of
11
Directors shall recommend approval and adoption of this Agreement and the Merger
and use its commercially reasonable efforts to obtain the necessary approval of
the Merger by its Stockholders at a Stockholders' meeting (the "Company
Stockholders' Meeting") as promptly as practicable following the execution of
this Agreement.
5.3 FEES AND EXPENSES.
(a) Each party shall bear all of the fees and expenses incurred by
it in connection with the negotiation and performance of this
Agreement, and neither party may recover any such fees and expenses
from the other party upon any termination of this Agreement.
(b) The provisions contained in this Section 5.3 shall survive any
termination of this Agreement.
5.4 ADDITIONAL AGREEMENTS. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use commercially reasonable
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable to consummate and make effective
as promptly as practicable the transactions contemplated by this Agreement, and
to cooperate with each of the other parties hereto in connection with the
foregoing, including using commercially reasonable efforts: (A) to obtain all
authorizations, consents and approvals required by the Applicable Laws; (B) to
lift or rescind any injunction or restraining order or other order adversely
affecting the ability of the parties to consummate the transactions contemplated
hereby; and (C) to fulfill all conditions to this Agreement. For purposes of the
foregoing, the obligation of the Company, the Purchaser and Acquisition Sub to
use "commercially reasonable efforts" or "reasonable efforts" to obtain waivers,
consents and approvals to loan agreements, leases and other contracts shall not
include any obligation to agree to a modification of the terms of such
documents, except as expressly contemplated hereby, or to make any guaranty or
monetary payment in consideration of such waiver, consent or approval.
5.5 GOVERNMENTAL FILINGS. Each of the Company and the Purchaser shall
promptly provide the other (or its counsel) with copies of all filings made by
it with the SEC or any other state or federal governmental entity in connection
with this Agreement and the transactions contemplated hereby. Subject to
applicable laws relating to the exchange of information, the Company and the
Purchaser shall have the right to review in advance, and to the extent
practicable each will consult the other with respect to all information relating
to the Company or the Purchaser, as the case may be, and any of their respective
subsidiaries, that appear in any filing made with, or written materials
submitted to, any third party and/or governmental entity in connection with the
Merger and the other transactions contemplated by this Agreement.
5.6 INDEMNIFICATION AND INSURANCE. The Purchaser and Acquisition Sub
agree that all rights to indemnification, advancement of expenses, exculpation,
limitation of liability and any and
12
all similar rights now existing in favor of the employees, agents, directors or
officers of the Company and its subsidiaries (the "Indemnified Parties") as
provided in the charter or by-laws or other agreements of the Company in effect
on the date hereof (copies of which have been made available to the Purchaser),
shall survive the Merger and shall continue in full force and effect for a
period of six years from the Effective Time; provided, however, that if any
claim or claims are asserted or made within such six-year period, all rights to
indemnification in respect to any such claim or claims shall continue until the
disposition of any and all such claims. The Purchaser shall cause the Surviving
Corporation to honor and fulfill in all respects the indemnification obligations
of the Company pursuant to the Company's charter, by-laws and such other
agreements. The Purchaser and the Surviving Corporation shall pay to such
Indemnified Party in advance of final disposition any expenses, including but
not limited to counsel fees and disbursements, incurred by any such Indemnified
Party in defending any action, suit or proceeding upon receipt of an undertaking
(which need not be secured or subject to bond or other requirement) by or on
behalf of such Indemnified Party to repay the amounts so paid if it shall
ultimately be determined that indemnification of such expenses is not authorized
under such charter, bylaws or other agreement referred to above. The Purchaser
agrees to provide each individual who served as a director or officer of the
Company or the subsidiaries at any time prior to the Effective Time with
liability insurance, either directly or through the Purchaser's umbrella policy,
for a period of six years after the Effective Time on terms no less favorable in
coverage and amount than any applicable insurance in effect immediately prior to
the Effective Time (including any insurance maintained by Purchaser); provided,
however, that the Purchaser may reduce the coverage and amount of liability
insurance to the extent that the cost thereof would exceed 300% of the cost of
any such insurance in effect immediately prior to the Effective Time, as
adjusted for inflation each year; provided, further, however, that such coverage
and amount of liability insurance shall not be reduced below the corresponding
coverage and amount of liability insurance then provided for the Purchaser's own
officers and directors. If at any time after the Effective Time the Surviving
Corporation or a subsidiary fails to provide an Indemnified Party with
indemnification and other benefits as contemplated in this Section 5.6, the
Purchaser shall provide such indemnification and other benefits to such
Indemnified Party directly (it being understood that applicable law may permit
the Purchaser to indemnify/advance expenses under circumstances in which the
Company, the Surviving Corporation or a subsidiary could not do so). In addition
to the foregoing, the Purchaser and the Company, jointly and severally, shall,
to the fullest extent permitted by applicable law, indemnify and hold harmless
the Indemnified Parties against all costs and expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages, liabilities and
settlement amounts paid in
13
connection with any claim, action, suit, proceeding or investigation arising out
of actions or omissions in the applicable Indemnified Party's capacity as an
agent, employee, officer or director of the Company or a subsidiary prior to the
Effective Time until the expiration of the applicable statute of limitations
relating thereto (and shall pay any expenses in advance of the final disposition
of such action or proceeding to the Indemnified Party) to repay the advanced
expenses if it shall ultimately be determined that the Indemnified Party is not
entitled to be indemnified against such expenses). Notwithstanding the
foregoing, to the extent the by-laws, charter, or other agreements of the
Company do not otherwise provide the Indemnified Parties with rights to
indemnification, advancement of expenses, exculpation, and the limitation of
liability, the Purchaser pursuant to this Section 5.6 hereby acknowledges and
agrees to indemnify and hold harmless the Indemnified Parties against all costs
and expenses (including reasonable attorney's fees), judgements, fines, loses,
claims, damages, liabilities and settlement amounts paid in connection with any
claim action, suit, proceeding or investigation arising out of actions or
omissions of the Indemnified Parties in connection with the Transactions until
the expiration of the applicable statute of limitations relating thereto (and
shall pay any expenses in advance of the final disposition of such action or
proceeding to the Indemnified Parties). The provisions of this Section 5.6 shall
survive the Effective Time, and the Indemnified Parties shall be deemed third
party beneficiaries of this Section 5.6 and shall be entitled to bring actions
to enforce the obligations of the Purchaser and Acquisition Sub under this
Section 5.6. The rights of the Indemnified Parties under this Section 5.6 are
not exclusive, but shall be cumulative with any other rights of the Indemnified
Parties.
5.7 EMPLOYEE BENEFIT MATTERS.
(a) As of the Effective Time, the Purchaser and the Acquisition Sub
shall assume and shall perform all obligations that are not expressly assumed by
the Segment Buyers under the Segment Purchase Agreements with respect to the
employees and former employees of the Company and its subsidiaries and former
subsidiaries under the Liberty Financial Companies, Inc. and Subsidiaries
Non-Commissioned Employee Severance and Retention Plan and the Liberty Financial
Companies, Inc. and Subsidiaries Commissioned Employees Severance and Retention
Plan (including, without limitation, under Sections 4 and 5 thereof).
(b) The Purchaser shall cooperate and negotiate in good faith with the
Company and the Segment Buyers to achieve agreements relating to the
establishment of and/or transition or transfer of employee benefit plans as
contemplated by the Segment Purchase Agreements.
5.8 JOINT AND SEVERAL OBLIGATIONS. All obligations of the Purchaser
and/or Acquisition Sub under this Agreement shall be joint and several.
5.9 EXEMPTION FROM LIABILITY UNDER SECTION 16. The Purchaser,
Acquisition Sub and the Company shall take all such steps as may be required or
reasonably requested to cause the transactions contemplated by this Agreement
and any other dispositions of Company equity securities (including derivative
securities) in connection with this Agreement by each individual who is a
director or officer of the Company to be exempt under Rule 16b-3 promulgated
under the Exchange Act and the rules and regulations promulgated thereunder,
such steps to be taken in accordance with the No-Action Letter dated January 12,
1999, issued by the SEC to Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, or as may
otherwise be reasonably requested by the Company.
ARTICLE 6
CONDITIONS
6.1 CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE MERGER. The
respective obligations of each party to effect the Merger shall be subject to
the fulfillment or waiver at or prior to the Effective Time of each of the
following conditions:
14
(a) This Agreement, the Merger and the Sales shall have been approved
and adopted by the requisite vote or consent of the Stockholders required by the
MBCL and the Company's Articles of Organization;
(b) Any waiting period (and any extension thereof) applicable to the
consummation of the Merger under the Xxxx-Xxxxx-Xxxxxx Act shall have expired or
been terminated and the Company or the Purchaser shall have received the
consents or approvals required under Applicable Law;
(c) No order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission nor any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority shall be in effect that would prohibit the
Merger or make illegal the acquisition or ownership of the Surviving Corporation
by the Purchaser or otherwise prevent the consummation of the Merger; provided,
that the party seeking to assert this condition shall have complied with its
obligations under Section 5.4; and
(d) The Sales shall have been consummated in accordance with the terms
of the Segment Purchase Agreements (as the same may be amended from time to time
with the Purchaser's consent) and the Company shall have received the
consideration contemplated thereunder.
ARTICLE 7
TERMINATION, AMENDMENT AND WAIVER
7.1 TERMINATION. This Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time, whether prior to or after
approval by the Stockholders, as follows:
(a) [intentionally omitted];
(b) by either the Purchaser or the Company if (i) the Effective
Time shall not have occurred on or before June 30, 2002; provided,
however, that the right to terminate this Agreement under this Section
7.1(b) shall not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of, or resulted in,
the failure of the Effective Time to occur on or before such date or
(ii) there shall be any order which is final and nonappealable
preventing the consummation of the Merger;
(c) by the Purchaser or the Company if (i) the Board of Directors
of the Company withdraws, modifies or changes its recommendation of
this Agreement or the Transactions in a manner adverse to the Purchaser
or (ii) the Board of Directors of the
15
Company shall otherwise have determined in good faith that it must
terminate this Agreement to comply with its fiduciary duties to the
Stockholders under applicable law;
(d) by either the Purchaser or the Company if this Agreement
shall fail to receive the affirmative vote of the required holders of
its capital stock, under the MBCL and the Company's Articles of
Organization, for approval when voted on by the Stockholders at the
Company Stockholders' Meeting (or any permitted adjournment thereof);
or
(e) by the Purchaser or the Company if either of the
Segment Purchase Agreements shall have been terminated for any
reason.
7.2 EFFECT OF TERMINATION. On termination of this Agreement as
provided in Section 7.1, all obligations and agreements of the parties set
forth in Articles 1 through 6, except Section 5.3, shall forthwith terminate
and be of no further force or effect; provided that the foregoing shall not
relieve any party of liability for damages actually incurred as a result of
any willful breach of any of such provisions prior to such termination.
7.3 AMENDMENT. This Agreement may not be amended except by action of
each of the parties hereto set forth in an instrument in writing signed on
behalf of each of the parties hereto; provided, however, that after approval
of the Merger by the Stockholders, without the further approval of the
Stockholders, no amendment may be made that would: (i) reduce the Cash
Consideration or change the form thereof; or (ii) change any other terms and
conditions of this Agreement if any of the changes, alone or in the
aggregate, would materially adversely affect the Stockholders (other than the
Purchaser and its affiliates).
7.4 WAIVER. At any time prior to the Effective Time, whether before
or after the Company Stockholders' Meeting, any party hereto, by action taken
by its Board of Directors, may (i) extend the time for the performance of any
of the obligations to the waiving party of any other party hereto, or (ii)
subject to the proviso contained in Section 7.3, waive compliance by any
other party with any agreements of such other party (but only to the extent
they relate to the waiving party) or waive any conditions to its own
obligations. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party by a duly authorized officer. The
failure of any party to assert any of its rights under this Agreement shall
not constitute a waiver of such rights.
ARTICLE 8
GENERAL PROVISIONS
8.1 PUBLICITY. The initial press release with respect to the
transactions contemplated by this Agreement shall be a joint release. Thereafter
and for so long as this Agreement is in effect, except as such party may be
required by applicable law or applicable national stock exchange, SEC or NASD or
other regulatory requirements, neither the Company nor the Purchaser shall, nor
shall either permit any of its subsidiaries to, issue or cause the publication
of any press release or other public announcement with respect to the
transactions contemplated by this Agreement without the
16
consent of the other party, which consent shall not be unreasonably withheld or
delayed. Whenever the Company or the Purchaser proposes to make a required press
release or public announcement, it shall use its reasonable efforts to allow the
other reasonable time to comment on such release or announcement in advance, but
the final form and content of any such required release or announcement shall be
at the discretion of the disclosing party.
8.2 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been properly given if (i) delivered
personally, (ii) sent by certified or registered mail, return receipt requested,
(iii) sent by overnight courier for delivery on the next business day, or (iv)
sent by confirmed telecopy, provided that a hard copy of all such telecopied
materials is thereafter sent within 24 hours in the manner described in clauses
(i), (ii) or (iii), to the parties at the following addresses or at such other
addresses as shall be specified by the parties by like notice:
(a) If to the Purchaser or Acquisition Sub:
Liberty Mutual Insurance Company
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxxxxxx X. Xxxxxxxxx, Senior Vice President and
General Counsel
Telecopy No.: (000) 000-0000
with copies to:
XxXxxxxxx, Will & Xxxxx
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx, Esq.
Telecopy No.: (000) 000-0000
(b) If to the Company:
Liberty Financial Companies, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attention: Xxxxxxx Xxxx, Executive Vice President
Telecopy No.: (000) 000-0000
and
Liberty Financial Companies, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxx, Senior Vice President and
General Counsel
Telecopy No.: (000) 000-0000
17
with a copy to:
Xxxxxx, Xxxx & Xxxxxxx
Exchange Place
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
Notices provided in accordance with this Section 8.2 shall be
deemed delivered (i) on the date of personal delivery, (ii) on the date
such notice is actually received or delivery thereof is refused at the
specified address, or (iii) on the date of confirmation of receipt of
the telecopy transmission, as the case may be.
8.3 INTERPRETATION. When a reference is made in this Agreement to
subsidiaries of the Purchaser, Acquisition Sub or the Company, the word
"subsidiary" or "subsidiaries" means any corporation more than 50% of whose
outstanding voting securities, or partnership, joint venture or other entity
more than 50% of whose total equity interests are, directly or indirectly, owned
by the Purchaser or the Company, as the case may be; and the word "affiliates"
shall have the meaning assigned to such term under Rule 405 of the Securities
Act. For purposes of this Agreement, the Company shall not be deemed to be an
affiliate or subsidiary of Acquisition Sub or the Purchaser, and the Surviving
Corporation shall be deemed to be an affiliate of the Purchaser. The headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Inclusion of
information in the Disclosure Schedule shall not be taken as an admission or
acknowledgment of the materiality of such information.
8.4 REPRESENTATIONS AND WARRANTIES; ETC. The representations and
warranties of the Company, the Purchaser and Acquisition Sub contained herein
shall expire with, and be terminated and extinguished upon, consummation of the
Merger. This Section 8.4 shall have no effect upon any other obligation of the
parties hereto, whether to be performed before or after the consummation of the
Merger.
18
8.5 MISCELLANEOUS. This Agreement constitutes the entire agreement and
supersedes all other prior agreements and undertakings, both written and oral,
among the parties, or any of them, with respect to the subject matter hereof.
This Agreement is not intended to confer upon any other person any rights or
remedies hereunder, create any agreement of employment with any person or
otherwise (except for Section 5.6) create any third-party beneficiary hereto.
The rights of the parties under this Agreement shall not be assigned prior to
the consummation of the Merger, or a termination pursuant to Article 7. This
Agreement shall be governed in all respects, including validity, interpretation
and effect, by the internal laws of Massachusetts, without giving effect to the
principles of conflict of laws. This Agreement may be executed in one or more
counterparts (including by facsimile transmission) which together shall
constitute a single agreement.
8.6 VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect so
long as the economic substance of the transactions contemplated hereby is not
affected in any manner adverse to any party.
[REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY.]
19
IN WITNESS WHEREOF, the Purchaser, Acquisition Sub and the Company have
caused this Agreement to be executed and their corporate seals affixed as of the
date first written above by their respective officers thereunto duly authorized.
LIBERTY MUTUAL INSURANCE LIBERTY FINANCIAL COMPANIES, INC.
COMPANY
By: /s/ XXXXXX X. XXXXX By: /s/ XXXX X. XXXXXXXXXX
----------------------- ----------------------
President President
and and
By: /s/ XXXXXX X. XXXXXXXX By: /s/ XXXXXX X. XXXXXXXX
----------------------- ----------------------
Treasurer Treasurer
LFC ACQUISITION CORPORATION
By: /s/ XXXXXX X. XXXXX
-----------------------
President
and
By: /s/ X. XXXX XXXXXXX
-----------------------
Treasurer
