AGREEMENT AND PLAN OF MERGER
BY AND AMONG
THE XXXXXXX XXXXXX CORPORATION,
SHAKESPEARE MERGER CORPORATION
AND
SOUNDVIEW TECHNOLOGY GROUP, INC.
DATED AS OF NOVEMBER 18, 2003
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER ("Agreement"), dated as of November 18, 2003,
by and among The Xxxxxxx Xxxxxx Corporation, a Delaware corporation ("Parent"),
Shakespeare Merger Corporation, a Delaware corporation and a wholly-owned
subsidiary of Parent ("Merger Sub"), and SoundView Technology Group, Inc., a
Delaware corporation (the "Company"). Certain capitalized terms have the
meanings given to such terms in Article IX.
RECITALS
A. The Board of Directors of the Company has determined that it is
advisable, and in the best interests of the Company and its stockholders for
Parent to acquire the Company upon the terms and subject to the conditions set
forth in this Agreement.
B. In furtherance of the acquisition of the Company by Parent, it is
proposed: (i) that Merger Sub make a cash tender offer for any and all of the
outstanding shares of Company Common Stock and Company Class B Common Stock at a
price of $15.50 per share (such dollar amount, or any greater dollar amount per
share paid pursuant to the Offer, subject to adjustment pursuant to Section
1.1(e), being referred to in this Agreement as the "Offer Price"), net to the
seller in cash, upon the terms and subject to the conditions set forth in this
Agreement (such cash tender offer, as it may be amended from time to time, being
referred to in this Agreement as the "Offer"); and (ii) that, after acquiring
shares of Company Common Stock and Company Class B Common Stock pursuant to the
Offer, Merger Sub merge with and into the Company, with the Company being the
surviving corporation, on the terms and subject to the conditions set forth in
this Agreement (the merger of Merger Sub into the Company being referred to in
this Agreement as the "Merger").
C. The Board of Directors of the Company has (i) determined that this
Agreement and the transactions contemplated by this Agreement, including the
Offer and the Merger, are advisable and in the best interests of the Company and
its stockholders, (ii) approved this Agreement, and the transactions
contemplated hereby, including the Offer and the Merger, and (iii) resolved to
recommend that the stockholders of the Company accept the Offer, tender their
shares of Company Common Stock and Company Class B Common Stock pursuant to the
Offer and (if required by applicable law) adopt this Agreement and approve the
Merger.
D. The Board of Directors of Parent has (i) determined that the Merger is
advisable, and in the best interests of, Parent and its stockholders and (ii)
approved this Agreement, the Offer, the Merger and the other transactions
contemplated hereby.
E. Following consummation of the Offer, pursuant to the Merger, among other
things, the outstanding shares of Company Common Stock and Company Class B
Common Stock, other than the Appraisal Shares and the Tendered Restricted
Shares, will be converted into the right to receive the Merger Consideration as
set forth herein.
NOW THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements set forth herein, and for other good and
valuable
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consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound, the parties hereto agree as follows:
ARTICLE I
THE OFFER
1.1 CONDUCT OF THE OFFER.
(a) Provided that each of the conditions set forth in clauses "(a)",
"(b)," and "(d)" of Annex I are satisfied as of the commencement of the Offer,
Parent shall cause Merger Sub to commence (within the meaning of Rule 14d-2
under the Exchange Act) the Offer as promptly as practicable after the date of
this Agreement, and in any event (provided that the Company has fulfilled its
obligation to provide information to Parent and Merger Sub on a timely basis as
contemplated by Section 1.1(d)) Parent shall use reasonable best efforts to
cause Merger Sub to commence the Offer within ten business days after the date
of this Agreement.
(b) The obligation of Merger Sub to accept for payment and to pay for
any shares of Company Common Stock and Company Class B Common Stock validly
tendered pursuant to the Offer shall be subject to (i) the condition that there
shall be validly tendered (and not withdrawn) a number of shares of Company
Common Stock and Company Class B Common Stock that, together with any shares of
Company Common Stock and Company Class B Common Stock owned by Parent or any
wholly-owned Subsidiary of Parent immediately prior to the acceptance for
payment of shares of Company Common Stock and Company Class B Common Stock
pursuant to the Offer, represents more than fifty and one-tenth percent (50.1%)
of the Adjusted Outstanding Share Number (the "Minimum Condition") and (ii) the
other conditions set forth in Annex I. (The Minimum Condition and the other
conditions set forth in Annex I are referred to collectively in this Agreement
as the "Offer Conditions.") Merger Sub expressly reserves the right, in its sole
discretion, to increase the Offer Price and to waive or make any other changes
to the terms and conditions of the Offer; PROVIDED, HOWEVER, that without the
prior written consent of the Company: (i) the Minimum Condition may not be
amended or waived; and (ii) no change may be made to the Offer that (A) changes
the form of consideration to be paid pursuant to the Offer, (B) decreases the
Offer Price or the number of shares of Company Common Stock and Company Class B
Common Stock sought to be purchased in the Offer, (C) imposes conditions to the
Offer in addition to the Offer Conditions, (D) except as provided in Section
1.1(c), extends the expiration date of the Offer beyond the initial expiration
date of the Offer, (E) amends any other term of the Offer in a manner adverse to
the holders of Company Common Stock and Company Class B Common Stock or (F)
reduces the time period during which the Offer shall remain open. Subject to the
terms and conditions of the Offer and this Agreement, Parent shall cause Merger
Sub to, and Merger Sub shall, accept for payment all shares of Company Common
Stock and Company Class B Common Stock validly tendered pursuant to the Offer
(and not withdrawn) as soon as practicable after Merger Sub is permitted to do
so under all applicable legal requirements, and Parent shall cause Merger Sub to
pay for such shares promptly thereafter, and in any event in compliance with
Rule 14e-1(c) under the Exchange Act. Parent shall provide, or cause to be
provided to Merger Sub, on a timely basis, the funds necessary to pay for any
shares of Company Common Stock and Company Class
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B Common Stock that Merger Sub accepts or is obligated to accept for payment
pursuant to the Offer.
(c) The Offer shall initially be scheduled to expire twenty (20)
business days following the date of the commencement thereof. Notwithstanding
anything to the contrary contained in this Agreement, but subject to the
parties' respective termination rights under Section 8.1: (i) if, on any date as
of which the Offer is scheduled to expire, any Offer Condition has not been
satisfied or waived, Merger Sub may, in its discretion (and without the consent
of the Company or any other Person), extend the Offer from time to time for such
period of time as Merger Sub reasonably determines to be necessary to permit
such Offer Condition to be satisfied; (ii) Merger Sub may, in its discretion
(and without the consent of the Company or any other Person), extend the Offer
from time to time for any period of time required by any rule or regulation of
the SEC applicable to the Offer; (iii) if, on any date as of which the Offer is
scheduled to expire, the Minimum Condition has been satisfied but the sum of the
number of shares of Company Common Stock and Company Class B Common Stock that
have been validly tendered pursuant to the Offer (and not withdrawn) plus the
number of shares of Company Common Stock and Company Class B Common Stock owned
by Parent or any wholly-owned Subsidiary of Parent is less than 90% of the
number of shares of Company Common Stock and Company Class B Common Stock
outstanding, then Merger Sub may, in its discretion (and without the consent of
the Company or any other Person), on one occasion, extend the offer for one
additional period of not more than ten business days; (iv) Merger Sub may, in
its discretion (and without the consent of the Company or any other Person),
elect to provide for a subsequent offering period (and one or more extensions
thereof) in accordance with Rule 14d-11 under the Exchange Act and in compliance
with all other provisions of applicable securities laws; and (v) if any Offer
Condition shall not be satisfied, Parent agrees to cause Merger Sub to extend
the Offer from time to time in accordance with this Section 1.1(c) for the
shortest time periods which it reasonably believes are necessary until
consummation of the Offer if the conditions of the Offer shall not have been
satisfied or waived.
(d) On the date of commencement of the Offer, Parent and Merger Sub
shall (i) file with the SEC a Tender Offer Statement on Schedule TO with respect
to the Offer, which will contain or incorporate by reference the offer to
purchase shares of Company Common Stock and Company Class B Common Stock
pursuant to the Offer (the "Offer to Purchase") and the forms of the related
letter of transmittal and summary advertisement and (ii) cause the Offer to
Purchase and related documents to be disseminated to holders of shares of
Company Common Stock and Company Class B Common Stock in accordance with all
applicable Legal Requirements. (Said Tender Offer Statement on Schedule TO and
all exhibits, amendments and supplements thereto are referred to collectively in
this Agreement as the "Offer Documents.") Parent and Merger Sub shall use
reasonable best efforts to cause the Offer Documents to comply in all material
respects with the Exchange Act and the rules and regulations thereunder. Each of
Parent, Merger Sub and the Company shall use reasonable best efforts to respond
promptly to any comments of the SEC or its staff with respect to the Offer
Documents or the Offer, to correct promptly any information provided by it for
use in the Offer Documents if and to the extent that such information shall have
become false or misleading in any material respect, and to take all steps
necessary to cause the Offer Documents, as supplemented or amended to correct
such information, to be filed with the SEC and to be disseminated to holders of
shares of Company Common Stock and Company Class B Common Stock to the extent
required by applicable
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federal securities laws. The Company shall promptly furnish to Parent and Merger
Sub all information concerning the Company and its Subsidiaries and the
Company's stockholders that may be required or reasonably requested in
connection with any action contemplated by this Section 1.1(d). The Company and
its counsel shall be given reasonable opportunity to review and comment on the
Offer Documents prior to the filing thereof with the SEC. Parent and Merger Sub
shall provide the Company and its counsel with any comments Parent, Merger Sub
or their counsel may receive from the SEC or its staff with respect to the Offer
Documents promptly after receipt of such comments.
(e) If, between the date of this Agreement and the date on which any
particular share of Company Common Stock and Company Class B Common Stock is
accepted for payment and paid for pursuant to the Offer, the outstanding shares
of Company Common Stock or Company Class B Common Stock are changed into a
different number or class of shares by reason of any stock split, division or
subdivision of shares, stock dividend, reverse stock split, consolidation of
shares, reclassification, recapitalization or other similar transaction, then
the Offer Price applicable to such share shall be appropriately adjusted.
(f) Parent shall allow holders of shares of restricted and unvested
Company Common Stock ("Restricted Shares") to tender such shares pursuant to the
Offer and any such Restricted Shares (the "Tendered Restricted Shares") shall be
treated in the same manner as any other share of Company Common Stock; provided,
however, that the Offer Price paid for the portion which remains unvested
following consummation of the Offer, if any, of the Tendered Restricted Shares
at the time of acceptance and payment pursuant to the Offer shall be credited as
an opening balance of a deferred compensation account for each such holder
choosing to tender, which balance, and any earnings thereon, shall be
non-transferable and forfeitable subject to all restrictions of the original
Restricted Shares (including restrictions on transfer) until the Tendered
Restricted Shares vest in accordance with the terms and conditions (including
those related to accelerated vesting) included in the original grant. Following
acceptance, Merger Sub or Parent will hold such Tendered Restricted Shares
subject to all of the restrictions of the original Restricted Shares (including
provisions related to vesting and restrictions on transfer) until the Tendered
Restricted Shares vest in accordance with the terms and conditions (including
those related to accelerated vesting) included in the original grant. If the
unvested portion of the Tendered Restricted Shares tendered by any individual
holder of Restricted Shares and accepted and paid pursuant to the Offer relates
to at least 10,000 shares of Company Common Stock (excluding any Restricted
Shares that vest immediately prior to consummation of the Offer), the Company
shall establish a grantor "rabbi" trust and deposit therein an amount of cash
equal to the amount of deferred compensation credited to each such holder's
account pursuant to the terms of the holder's restricted stock agreement. A
single trust may be established for the benefit of each holder and other
employees with similar rights to deferred compensation, but the trustee must
maintain an account for each holder identifying trust assets relating to the
Company's deferred compensation obligations to each holder. Initially, the
trustee of the trust shall be the Chief Financial Officer of the Company
immediately prior to the Effective Time (such individual being the "Designated
Officer," who shall continue in this capacity even if no longer Chief Financial
Officer of the Company) or such other trustee as the Designated Officer may
designate, and any successor to the trustee shall be subject to the approval of
the Designated Officer. If the portion of the Tendered Restricted Stock not
vested immediately prior to the consummation of the Offer relates to less than
10,000 shares of
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Company Common Stock (excluding any Restricted Shares that vest immediately
prior to consummation of the Offer), the Company shall not be required to
establish a grantor "rabbi" trust with respect to its obligation to the holder.
All amounts in each holder's deferred compensation account shall be deemed
invested in a registered money market fund, except that such amounts may be
instead deemed invested in alternative investment vehicles as agreed to from
time to time by the Company and the holder. Upon vesting of the account, each
holder shall be entitled to payment, in settlement of his or her deferred
compensation account, of a cash amount equal to the then-value of such holder's
deferred compensation account, based on the performance of such deemed
investments. Each holder's deferred compensation account shall at all times be
guaranteed by the Parent. To the extent the Tendered Restricted Shares vest
immediately prior to or upon consummation of the Offer, the Offer Price paid
with respect to such Tendered Restricted Shares shall be free and clear of all
restrictions and paid to the holder thereof at the same time and in the same
manner as payments made under Section 1.1(b). Subject to the immediately
following sentence, Parent hereby expressly agrees that the Company may make
such determinations as may be necessary under the Company Stock Plans in order
to effectuate the transferability of the Restricted Shares as required by this
Section 1.1(f). Except as expressly provided otherwise in this Agreement, the
Board of Directors of the Company shall not accelerate the vesting of any
Restricted Shares unless such acceleration is required by the terms of the
Company Stock Plans or the agreements under which the Restricted Shares were
granted.
1.2 COMPANY ACTIONS.
(a) The Company hereby consents to the Offer and represents that its
Board of Directors, at a meeting duly called and held, has (i) determined that
this Agreement and the transactions contemplated by this Agreement, including
the Offer and the Merger, are in the best interests of the Company's
stockholders, (ii) approved this Agreement and the transactions contemplated by
this Agreement, including the Offer and the Merger, in accordance with the
requirements of the Delaware Law, (iii) declared that this Agreement is
advisable, (iv) resolved to recommend that stockholders of the Company accept
the Offer, tender their shares of Company Common Stock and Company Class B
Common Stock pursuant to the Offer and (if required by applicable law) adopt
this Agreement (the recommendation of the Company's Board of Directors that the
stockholders of the Company accept the Offer, tender their shares of Company
Common Stock and Company Class B Common Stock pursuant to the Offer and (if
required by applicable law) adopt this Agreement being referred to as the
"Company Board Recommendation"), and (v) to the extent necessary, adopted a
resolution for the purpose of causing the Company not to be subject to any
restriction set forth in any state takeover law or similar Legal Requirement
that might otherwise apply to the Offer, the Merger or any of the other
transactions contemplated by this Agreement. Subject to Section 1.2(b): (A) the
Company consents to the inclusion of the Company Board Recommendation in the
Offer Documents in a form and manner reasonably determined by the Company to be
acceptable; and (B) subject to Section 5.3, the Company Board Recommendation
shall not be withdrawn or modified in a manner adverse to Parent or Merger Sub,
and no resolution by the Board of Directors of the Company or any committee
thereof to withdraw or modify the Company Board Recommendation in a manner
adverse to Parent or Merger Sub shall be adopted.
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(b) On the date of commencement of the Offer, the Company shall file
with the SEC and (following or contemporaneously with the dissemination of the
Offer to Purchase and related documents) disseminate to holders of shares of
Company Common Stock and Company Class B Common Stock a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with any
amendments or supplements thereto, the "Schedule 14D-9") that, subject only to
this Section 1.2(b), shall reflect the Company Board Recommendation. Each of
Parent and Merger Sub shall promptly furnish to the Company all information
concerning Parent and Merger Sub that is required or reasonably requested by the
Company in connection with any action contemplated by this Section 1.2(b). The
Company shall use reasonable best efforts to cause the Schedule 14D-9 to comply
in all material respects with the Exchange Act and the rules and regulations
thereunder and other applicable Legal Requirements. Each of Parent, Merger Sub
and the Company agrees promptly to correct any information provided by it for
use in the Schedule 14D-9 if and to the extent that such information shall have
become false or misleading in any material respect, and the Company further
agrees to take all steps necessary to cause the Schedule 14D-9, as supplemented
or amended to correct such information, to be filed with the SEC and to be
disseminated to holders of shares of Company Common Stock and Company Class B
Common Stock to the extent required by applicable federal securities laws. The
Company shall give Parent and its counsel reasonable opportunity to review and
comment on the Schedule 14D-9 (including any amendment thereto) prior to the
filing thereof with the SEC. The Company shall provide Parent and its counsel
with any comments the Company or its counsel may receive from the SEC or its
staff with respect to the Schedule 14D-9 promptly after receipt of such
comments.
(c) The Company shall, or shall cause its transfer agent to, (i)
promptly furnish Parent with an accurate and complete list of its stockholders
as of the most recent practicable date, mailing labels and an accurate and
complete copy of the most recent available listing or computer file containing
the names and addresses of all record holders of shares of Company Common Stock
and Company Class B Common Stock and lists of securities positions of shares of
Company Common Stock and Company Class B Common Stock held in stock
depositories, and (ii) provide to Parent such additional information (including
updated lists of stockholders, mailing labels and lists of securities positions)
and such other assistance as Parent may reasonably request in order to
disseminate and otherwise communicate the Offer and the Merger to the holders of
shares of Company Common Stock and Company Class B Common Stock. Except as
required by all applicable legal requirements or legal process, and except as
necessary to disseminate the Offer Documents, Parent and Merger Sub shall hold
in confidence the information contained in any such listings and files to the
extent required by the Confidentiality Agreement and shall use and return such
information in the manner set forth in the Confidentiality Agreement.
1.3 DIRECTORS.
(a) Effective as of the Acceptance Date, Parent shall be entitled to
designate to serve on the Company's Board of Directors (the "Post-Acceptance
Board") the number of directors, rounded up to the next whole number, equal to
the product of: (i) the total number of directors on the Company's Board of
Directors (giving effect to the election of any additional directors pursuant to
this Section); and (ii) a fraction having a numerator equal to the aggregate
number of shares of Company Common Stock and Company Class B Common Stock
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then beneficially owned by Parent or Merger Sub (including all shares of Company
Common Stock and Company Class B Common Stock purchased pursuant to the Offer)
and having a denominator equal to the total number of shares of Company Common
Stock and Company Class B Common Stock then outstanding. At Parent's request on
or after the Acceptance Date, the Company shall take all actions (including, to
the extent necessary, obtaining resignations of incumbent directors and
increasing the number of authorized directors) necessary to cause Parent's
designees to be elected or appointed to the Company's Board of Directors. In
connection with the designation by Parent of individuals to serve on the
Company's Board of Directors, the Company shall (to the extent requested by
Parent) use its reasonable best efforts to cause individuals designated by
Parent to constitute the number of members, rounded up to the next whole number,
on (A) each committee of the Company's Board of Directors and (B) the board of
directors of each Subsidiary of the Company (and each committee thereof) that
represents at least the same percentage as individuals designated by Parent
represent on the Company's Board of Directors. Notwithstanding the provisions of
this Section 1.3, the Company shall use its reasonable best efforts to ensure
that, at all times prior to the Effective Time (as defined in Section 2.3), at
least three of the members of the Company's Board of Directors are individuals
who were directors of the Company on the date of this Agreement, to be selected
by such directors, including at least two directors who are independent
directors for purposes of the continued listing requirements of The Nasdaq
National Market (the "Continuing Directors"); PROVIDED, HOWEVER, that (1) if at
any time prior to the Effective Time there shall be only one Continuing Director
serving as a director of the Company for any reason, then the Company's Board of
Directors shall cause an individual selected by the remaining Continuing
Director to be designated to serve on the Company's Board of Directors (and such
individual shall be deemed to be a Continuing Director for all purposes under
this Agreement), and (2) if at any time prior to the Effective Time no
Continuing Directors then remain, then the Company's Board of Directors shall
designate two individuals to serve on the Company's Board of Directors who are
not officers, employees or affiliates of the Company, Parent or Merger Sub (and
such individuals shall be deemed to be Continuing Directors for all purposes
under this Agreement).
(b) The Company's obligation to appoint Parent's designees to the
Company's Board of Directors shall be subject to Section 14(f) of the Exchange
Act and Rule 14f-1 thereunder. The Company shall promptly take all actions, and
shall include in the Schedule 14D-9 such information with respect to the Company
and its officers and directors, as Section 14(f) of the Exchange Act and Rule
14f-1 thereunder require in order to fulfill its obligations under this Section
1.3, so long as Parent shall have provided to the Company on a timely basis the
information and consents with respect to Parent and its nominees, officers,
directors and affiliates required by Section 14(f) of the Exchange Act and Rule
14f-1 thereunder. The provisions of this Section 1.3 are in addition to, and
shall not limit, any right that Merger Sub, Parent or any affiliate of Merger
Sub or Parent may have (with respect to the election of directors or otherwise)
under applicable Legal Requirements as a holder or beneficial owner of shares of
Company Common Stock and Company Class B Common Stock.
(c) Following the election or appointment of Parent's designees
pursuant to Section 1.3(a) and until the Effective Time, the approval of a
majority of the Continuing Directors shall be required to authorize any Adverse
Action (as defined below). For purposes of this Section 1.3(c), "Adverse Action"
shall mean any of the following actions of the Company, to the extent the action
in question could reasonably be expected to affect adversely the holders of
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shares of Company Common Stock and Company Class B Common Stock (other than
Parent or Merger Sub): (i) any action by the Company with respect to any
amendment or waiver of any term or condition of this Agreement, the Merger or
the Certificate of Incorporation or Bylaws of the Company; (ii) any termination
or rescission of this Agreement by the Company; (iii) any extension by the
Company of the time for the performance of any of the obligations or other acts
of Parent or Merger Sub, or any waiver or assertion of any of the Company's
rights under this Agreement; (iv) any termination of employment of Xxxx Xxxxx,
Xxxx Xxxxxx, Xxxxxx Xxxxx, Xxxx Xxxxxxxxx, Xxxx Xxxxxxxxx or Xxxxxx Xxxx or (v)
any other consent or action by the Company's Board of Directors with respect to
this Agreement or the Merger.
1.4 TOP-UP OPTION.
(a) The Company hereby grants to Parent and Merger Sub an irrevocable
option (the "Top-Up Option") to purchase, at a price per share equal to the
Offer Price, a number of shares of Company Common Stock (the "Top-Up Option
Shares") that, when added to the number of shares of Company Common Stock and
Company Class B Common Stock owned by Parent or any wholly-owned Subsidiary of
Parent at the time of exercise of the Top-Up Option, constitutes one share of
Company Common Stock and Company Class B Common Stock more than 90% of the
number of shares of Company Common Stock and Company Class B Common Stock that
will be outstanding immediately after the issuance of the Top-Up Option Shares.
The Top-Up Option may be exercised by Parent or Merger Sub, in whole but not in
part, at any time on or after the date on which Parent, Merger Sub and their
Affiliates own beneficially at least 80% of the outstanding shares of Company
Common Stock and Company Class B Common Stock and on or prior to the tenth
business day after the later of (i) the Acceptance Date or (ii) the expiration
of any subsequent offering period; PROVIDED, HOWEVER, that the obligation of the
Company to deliver Top-Up Option Shares on the exercise of the Top-Up Option is
subject to the condition that no provision of any applicable law and no
judgment, injunction, order or decree shall prohibit the exercise of the Top-Up
Option or the delivery of the Top-Up Option Shares in respect of such exercise.
The parties shall cooperate to ensure that the issuance of the Top-Up Option
Shares is accomplished consistent with all applicable legal requirements,
including compliance with an applicable exemption from registration of the
Top-Up Option Shares under the Securities Act. In the event Parent or Merger Sub
exercises the Top-Up Option, Parent and Merger Sub shall, and shall cause their
Subsidiaries (including the Company) to, use their reasonable best efforts to
consummate the Merger pursuant to Section 253 of the Delaware Law. The Top-Up
Option shall not be exercisable if the number of shares of Company Common Stock
subject thereto exceeds the number of authorized shares of Company Common Stock
available for issuance.
(b) In the event Parent or Merger Sub wishes to exercise the Top-Up
Option, Parent shall so notify the Company and shall set forth in such notice
(i) the number of shares of Company Common Stock and Company Class B Common
Stock that are expected to be owned by Parent or any wholly-owned Subsidiary of
Parent immediately preceding the purchase of the Top-Up Option Shares and (ii) a
place and time for the closing of the purchase of the Top-Up Option Shares. The
Company shall, as soon as practicable following receipt of such notice, notify
Parent of the number of shares of Company Common Stock and Company Class B
Common Stock then outstanding and the number of Top-Up Option Shares. At the
closing of the purchase of the Top-Up Option Shares, Parent or Merger Sub, as
the case may be, shall pay the
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Company the aggregate price required to be paid for the Top-Up Option Shares,
and the Company shall cause to be issued to Parent or Merger Sub a certificate
representing the Top-Up Option Shares.
ARTICLE II
THE MERGER
2.1 THE MERGER. At the Effective Time, and subject to and upon the terms
and conditions of this Agreement and the applicable provisions of Delaware Law,
Merger Sub shall merge with and into the Company. The Company shall be the
Surviving Corporation in the Merger and shall continue its corporate existence
under the laws of the State of Delaware. Upon consummation of the Merger, the
separate corporate existence of Merger Sub shall terminate.
2.2 CLOSING; EFFECTIVE TIME. The Closing shall take place as soon as
practicable, and in any event not later than two (2) business days after the
satisfaction or waiver of each of the conditions set forth in Article VII hereof
or at such other time as the parties hereto may agree (the "Closing Date"). The
Closing shall take place at the offices of Xxxxxx Xxxx Nemerovski Xxxxxx Xxxx &
Xxxxxx, a Professional Corporation, or at such other location as the parties
hereto may agree in writing. The Merger shall become effective at the Effective
Time as set forth in the Certificate of Merger which shall be filed with the
Secretary of State of the State of Delaware on the Closing Date.
2.3 EFFECTS OF THE MERGER. At and after the Effective Time, the Merger
shall have the effects set forth in Sections 259 and 261 of the Delaware Law.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time, all the property, rights, privileges, powers and franchises of
the Company and Merger Sub shall vest in the Surviving Corporation, and all
debts, liabilities and duties of the Company and Merger Sub shall become the
debts, liabilities and duties of the Surviving Corporation.
2.4 CONVERSION OF COMPANY CAPITAL STOCK. At the Effective Time, by virtue
of the Merger and without any action on the part of Parent, the Company or the
holder of any of the following securities:
(a) Each share of Company Common Stock and Company Class B Common
Stock issued and outstanding immediately prior to the Effective Time (other than
shares of Company Common Stock and Company Class B Common Stock held by Merger
Sub or the Company, Company Dissenting Shares and Restricted Shares cancelled in
accordance with Section 2.8) together with the Rights attached thereto pursuant
to the Company Rights Agreement shall be converted into the right to receive
$15.50 per share, subject to adjustment as provided in Section 2.4(c) (the
"Merger Consideration"). All shares of Company Common Stock and Company Class B
Common Stock issued and outstanding immediately prior to the Effective Time held
by Merger Sub or the Company shall be cancelled and shall cease to exist as of
the Effective Time. Notwithstanding the preceding sentence, all Tendered
Restricted Shares held by Merger Sub immediately prior to the Effective Time
shall not be cancelled, shall remain outstanding following the Effective Time
and shall be transferred to Parent and Parent shall hold such Tendered
Restricted Shares subject to all of the restrictions of the original Restricted
Shares
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(including provisions related to vesting and restrictions on transfer) until the
Tendered Restricted Shares vest in accordance with the terms and conditions
(including those related to accelerated vesting) included in the original grant.
(b) All shares of Company Common Stock and Company Class B Common
Stock converted into Merger Consideration pursuant to this Section 2.4 shall no
longer be outstanding and shall automatically be cancelled and shall cease to
exist as of the Effective Time, and each certificate previously representing any
such shares of Company Common Stock and Company Class B Common Stock shall
thereafter represent the right to receive with respect to each underlying share
of Company Common Stock and Company Class B Common Stock the Merger
Consideration.
(c) If, prior to the Effective Time, the outstanding shares of Company
Common Stock or Company Class B Common Stock shall have been increased,
decreased, changed into or exchanged for a different number or kind of shares or
securities as a result of a reorganization, recapitalization, reclassification,
stock dividend, stock split, reverse stock split, or other similar change in
capitalization, then an appropriate and proportionate adjustment shall be made
to the Merger Consideration.
2.5 MERGER SUB COMMON STOCK. At the Effective Time, by virtue of the Merger
and without any action on the part of Parent or the Company, each share of the
common stock, $.01 par value, of Merger Sub shall be converted into 25,000
shares of Company Common Stock (which shares of Company Common Stock shall be
deemed not to be outstanding immediately prior to the Effective Time for
purposes of this Agreement).
2.6 PARENT COMMON STOCK. At and after the Effective Time, each share of
Parent Common Stock issued and outstanding immediately prior to the Effective
Time shall remain an issued and outstanding share of Parent Common Stock and
shall not be affected by the Merger.
2.7 COMPANY DISSENTING SHARES. Holders of Company Dissenting Shares shall
have those rights, but only those rights, of holders who perfect their appraisal
rights under Section 262 of the Delaware Law. The Company shall give Parent
prompt notice of any demand, purported demand, objection, notice, petition, or
other communication received from stockholders or provided to stockholders by
the Company with respect to any Company Dissenting Shares or shares claimed to
be Company Dissenting Shares, and Parent shall have the right to participate in
all negotiations and proceedings with respect to such shares. Payment of any
amount payable to the holders of Company Dissenting Shares shall be the
obligation of the Company. However, the Company agrees that, without the prior
written consent of Parent, it shall not voluntarily make any payment with
respect to, or settle or offer to settle, any demand or purported demand
respecting such shares.
2.8 OPTIONS AND WARRANTS.
(a) WARRANTS. At the Effective Time, each outstanding Warrant, whether
vested or unvested, shall continue to be subject to the same terms and
conditions as were in effect immediately prior to the Effective Time, except
that each such Warrant will cease to represent a warrant to purchase shares of
the Company Common Stock or Company Class B
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Common Stock, as applicable and will be automatically converted into the right
to receive the Merger Consideration which the holder of such Warrant would have
been entitled to receive upon the Effective Time pursuant to Section 2.4,
assuming that such holder had exercised such holder's Warrant immediately prior
to the Effective Time.
(b) COMPANY OPTIONS. At the Effective Time, each outstanding Company
Option that is vested as of the Effective Time (a "Vested Company Option"),
shall, subject to the proviso of this sentence, automatically be cancelled at
the Effective Time and converted into the right to receive, at the Effective
Time, a lump sum cash payment equal to the product of (i) the number of shares
subject to such Vested Company Option and (ii) the excess, if any, of (A) the
Merger Consideration over (B) the exercise price per share of such Vested
Company Option (the product of such amounts, the "Cash Payment"), PROVIDED that
in lieu of the Cash Payment, a holder of a Vested Company Option may elect at
any time prior to such date determined by the Company that is in advance of the
Effective Time and communicated to the holders of Vested Company Options to
convert his or her Vested Company Option at the Effective Time into an option to
purchase the Merger Consideration at the same exercise price, and otherwise
subject to such terms and conditions (including those related to accelerated
vesting) as set forth in the Company Stock Plans and the related option
agreement under which it was granted immediately prior to the Effective Time.
With respect to any Vested Company Options for which the holder thereof has not
elected to receive the Cash Payment, Parent shall take all necessary action to
provide that, from and after the Effective Time, the holder of such Vested
Company Option shall be permitted to exercise such Vested Company Option by
means of delivering a properly executed exercise notice to Parent, together with
a copy of irrevocable instructions to a broker to deliver promptly to Parent the
amount of sale or loan proceeds necessary to pay the exercise price of such
Vested Company Option, and, if requested, the amount of any federal, state,
local or foreign withholding taxes. Each outstanding Company Option other than a
Vested Company Option (each, an "Unvested Company Option") shall automatically
be cancelled at the Effective Time, and an amount equal to the product of (i)
the number of shares subject to such Unvested Company Option and (ii) the
excess, if any, of (A) the Merger Consideration over (B) the exercise price per
share of such Unvested Company Option shall be credited as an opening balance of
a deferred compensation account for each of the holders of such Unvested Company
Options, which balance, and any earnings thereon, shall be non-transferable and
forfeitable until the Unvested Company Options vest in accordance with the terms
and conditions (including those related to accelerated vesting) included in the
original grant. If the Unvested Company Option held by any individual holder of
a Company Option as of immediately prior to the Effective Time relates to at
least 10,000 shares of Company Common Stock, the Company shall establish a
grantor "rabbi" trust and deposit therein an amount of cash equal to the amount
of deferred compensation credited to each such holder's account pursuant to the
terms of the holder's option agreement. A single trust may be established for
the benefit of each holder and other employees with similar rights to deferred
compensation, but the trustee must maintain an account for each holder
identifying trust assets relating to the Company's deferred compensation
obligations to each holder. Initially, the trustee of the trust shall be the
Designated Officer or such other trustee as the Designated Officer may
designate, and any successor to the trustee shall be subject to the approval of
the Designated Officer. If the portion of the Unvested Company Option
immediately prior to the Effective Time relates to less than 10,000 shares of
Company Common Stock, the Company shall not be required to establish a grantor
"rabbi" trust with respect to its obligation to the holder. All amounts in each
holder's deferred compensation
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account shall be deemed invested in a registered money market fund, except that
such amounts may be instead deemed invested in alternative investment vehicles
as agreed to from time to time by the Company and the holder. Upon vesting of
the account, each holder shall be entitled to payment, in settlement of his or
her deferred compensation account, of a cash amount equal to the then-value of
such holder's deferred compensation account, based on the performance of such
deemed investments. Each holder's deferred compensation account shall at all
times be guaranteed by the Parent. Except as expressly provided otherwise in
this Agreement, the Board of Directors of the Company shall not accelerate the
vesting of any Company Options unless such acceleration is required by the terms
of the Company Stock Plans or the agreements under which the Company Options
were granted, provided, that, any resignation by any incumbent Company director
required under Section 1.3(a) shall be treated as termination of service without
cause (solely for purposes of vesting). For purposes of the foregoing, to the
extent a particular Company Option is only partially vested, the vested portion
of such Company Option will be treated as a Vested Company Option and the
unvested portion of such Company Option will be treated as an Unvested Company
Option.
(c) RESTRICTED SHARES. At the Effective Time, each outstanding
Restricted Share granted under any of the Company Stock Plans that has not been
purchased by Parent pursuant to the Offer shall automatically be cancelled at
the Effective Time, and the Merger Consideration shall be credited with respect
to each Restricted Share so cancelled as an opening balance of a deferred
compensation account for each of the holders of such Restricted Shares, which
balance, and any earnings thereon, shall be non-transferable and forfeitable
until the Restricted Shares vest in accordance with the terms and conditions
(including those related to accelerated vesting) included in the original grant.
If the unvested portion of the Restricted Shares held by any individual holder
of Restricted Shares as of immediately prior to the Effective Time (including
any Tendered Restricted Shares tendered by such holder and accepted and paid
pursuant to the Offer and Section 1(f) for which a deferred compensation account
was established pursuant to Section 1(f)) relates to at least 10,000 shares of
Company Common Stock, the Company shall establish a grantor "rabbi" trust and
deposit therein an amount of cash equal to the amount of deferred compensation
credited to each such holder's account pursuant to the terms of the holder's
restricted stock agreement. A single trust may be established for the benefit of
each holder and other employees with similar rights to deferred compensation,
but the trustee must maintain an account for each holder identifying trust
assets relating to the Company's deferred compensation obligations to each
holder. Initially, the trustee of the trust shall be the Designated Officer or
such other trustee as the Designated Officer may designate, and any successor to
the trustee shall be subject to the approval of the Designated Officer. If the
portion of the Restricted Stock not vested immediately prior to the Effective
Time (including any Tendered Restricted Shares tendered by such holder and
accepted and paid pursuant to the Offer and Section 1(f) for which a deferred
compensation account was established pursuant to Section 1(f)) relates to less
than 10,000 shares of Company Common Stock, the Company shall not be required to
establish a grantor "rabbi" trust with respect to its obligation to the holder.
All amounts in each holder's deferred compensation account shall be deemed
invested in a registered money market fund, except that such amounts may be
instead deemed invested in alternative investment vehicles as agreed to from
time to time by the Company and the holder. Upon vesting of the account, each
holder shall be entitled to payment, in settlement of his or her deferred
compensation account, of a cash amount equal to the then-value of such holder's
deferred compensation account, based on the performance of such deemed
investments. Each
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holder's deferred compensation account shall at all times be guaranteed by the
Parent. Except as expressly provided otherwise in this Agreement, the Board of
Directors of the Company shall not accelerate the vesting of any Restricted
Shares unless such acceleration is required by the terms of the Company Stock
Plans or the agreements under which the Restricted Shares were granted.
(d) ACTIONS. Prior to the Effective Time, Company shall deliver
appropriate notices (which notices shall have been approved by the Parent) to
each holder of Restricted Shares or Company Options setting forth each holder's
rights pursuant to the respective Company Stock Plans, stating that such
Restricted Shares and Company Options shall be treated in the manner set forth
in this Section 2.8. In addition, Company shall cause the administrator of the
Company Stock Plans to take such actions under the Company Stock Plans as are
necessary to accomplish the provisions of this Section 2.8.
2.9 CERTIFICATE OF INCORPORATION. At the Effective Time, the Certificate of
Incorporation of the Company, as in effect immediately prior to the Effective
Time, shall be the Certificate of Incorporation of the Surviving Corporation.
2.10 BYLAWS. The Bylaws of the Company, as in effect immediately prior to
the Effective Time, shall be the Bylaws of the Surviving Corporation.
2.11 DIRECTORS OF SURVIVING CORPORATION. At the Effective Time, the
directors of the Surviving Corporation shall be the existing members of the
Board of Directors of Merger Sub.
2.12 TAKING OF NECESSARY ACTION; FURTHER ACTION. If, at any time after the
Effective Time, any further action is necessary or desirable to carry out the
purposes of this Agreement or to vest the Surviving Corporation with full right,
title and possession to all assets, property, rights, privileges, powers and
franchises of the Company and Merger Sub, the Company, Parent and Merger Sub
shall cause their respective officers to take all such lawful and necessary
action, so long as such action is not inconsistent with this Agreement.
2.13 PARENT TO MAKE CASH AVAILABLE. At or prior to the Effective Time,
Parent shall deposit in an Exchange Fund with the Exchange Agent for the benefit
of the holders of Company Common Stock and Company Class B Common Stock the cash
to be exchanged for outstanding shares of Company Common Stock and Company Class
B Common Stock.
2.14 EXCHANGE OF SHARES.
(a) As soon as practicable after the Effective Time, the Exchange
Agent shall mail to each holder of record of one or more certificates of Company
Common Stock or Company Class B Common Stock whose shares are being converted
into the Merger Consideration pursuant to Section 2.4 a letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and title
to the certificates of Company Common Stock or Company Class B Common Stock
shall pass, only upon delivery of the certificates of Company Common Stock or
Company Class B Common Stock to the Exchange Agent) and instructions for use in
effecting the surrender of the certificates of Company Common Stock or Company
Class B Common Stock in exchange for the Merger Consideration. Upon proper
surrender of a certificate of Company Common Stock or Company Class B Common
Stock for exchange and
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cancellation to the Exchange Agent, together with such properly completed letter
of transmittal, duly executed, the holder of such certificate of Company Common
Stock or Company Class B Common Stock shall be entitled to receive in exchange
therefor the amount of Merger Consideration provided in Section 2.4, and the
certificate of Company Common Stock or Company Class B Common Stock so
surrendered shall forthwith be cancelled. No interest shall be paid or accrued
on any cash or on any unpaid dividends or distributions payable to holders of
certificates of Company Common Stock and/or Company Class B Common Stock.
(b) After the Effective Time, there shall be no transfers on the stock
transfer books of the Company of the shares of Company Common Stock and Company
Class B Common Stock which were issued and outstanding immediately prior to the
Effective Time. If, after the Effective Time, any certificates of Company Common
Stock or Company Class B Common Stock representing such shares are presented for
transfer to the Exchange Agent, each such share shall be cancelled and exchanged
for the Merger Consideration provided in Section 2.14. In the event of a
transfer of ownership of any share of Company Common Stock prior to the
Effective Time that has not been registered in the transfer records of the
Company, the Merger Consideration payable in respect of such share of Company
Common Stock shall be paid to the transferee of such share if the certificate
that previously represented such share is presented to the Exchange Agent
accompanied by all documents required to evidence and effect such transfer and
to evidence that any applicable stock transfer taxes have been paid.
(c) Any portion of the Exchange Fund that remains unclaimed by the
stockholders of the Company for 12 months after the Effective Time shall be paid
to Parent. Any stockholders of the Company who have not theretofore complied
with this Article II shall thereafter look only to Parent for payment of the
Merger Consideration deliverable in respect of each share of Company Common
Stock or Company Class B Common Stock such stockholder holds as determined
pursuant to this Agreement without any interest thereon. Notwithstanding the
foregoing, none of the Company, Parent, the Exchange Agent or any other person
shall be liable to any former holder of shares of Company Common Stock or
Company Class B Common Stock for any amount delivered in good faith to a public
official pursuant to applicable abandoned property, escheat or similar laws.
(d) In the event any certificate of Company Common Stock shall have
been lost, stolen or destroyed, upon the making of an affidavit of that fact by
the person claiming such certificate of Company Common Stock or Company Class B
Common Stock to be lost, stolen or destroyed and, if reasonably required by
Parent, the posting by such person of a bond in such amount as Parent may
determine is reasonably necessary as indemnity against any claim that may be
made against it with respect to such certificate of Company Common Stock or
Company Class B Common Stock, the Exchange Agent shall issue in exchange for
such lost, stolen or destroyed certificate of Company Common Stock or Company
Class B Common Stock the Merger Consideration such holder has a right to receive
pursuant to this Article II.
2.15 WITHHOLDING. Parent and the Surviving Corporation shall be entitled to
deduct and withhold from the Merger Consideration deliverable under this
Agreement, and from any other payments made pursuant to this Agreement, such
amounts as Parent and the Surviving Corporation are required to deduct and
withhold with respect to such delivery and payment under the Code or any
provision of state, local, provincial or foreign tax law. To the extent that
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amounts are so withheld, such withheld amounts shall be treated for all purposes
of this Agreement as having been delivered and paid to the holder of shares of
Company Common Stock or Company Class B Common Stock in respect of which such
deduction and withholding was made by Parent and the Surviving Corporation.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as disclosed in the Company Disclosure Schedule or in the Company's
SEC Documents filed since January 1, 2001 (or incorporated by reference
therein), the Company represents and warrants to Parent and Merger Sub as
follows:
3.1 CORPORATE ORGANIZATION, STANDING AND POWER. Each of the Company and its
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization. Each of the Company
and its Subsidiaries has the corporate power to own its properties and to carry
on its business as now being conducted and is duly qualified to do business and
is in good standing in each jurisdiction in which the failure to be so qualified
and in good standing would have a Company Material Adverse Effect. The Company
has furnished or made available to Parent a true and correct copy of the
certificate or articles of incorporation, as amended, and bylaws, as amended,
and any other charter or organizational documents, each as amended, of the
Company and each of its Subsidiaries. Neither the Company nor any of its
Subsidiaries is in violation of any of the provisions of its certificate or
articles of incorporation or bylaws or other charter or organizational
documents, each as amended.
3.2 CAPITALIZATION.
(a) The authorized capital stock of the Company consists of
500,000,000 shares of Company Common Stock; 75,000,000 shares of Company Class B
Common Stock; and 30,000,000 shares of Company Preferred Stock. As of November
17, 2003, (i) 20,728,016 shares of Company Common Stock are issued and
outstanding, all of which are duly authorized, validly issued, fully paid and
nonassessable, (ii) 2,863,288 shares of Company Common Stock are reserved for
issuance upon the exercise of outstanding Company Options, (iii) 21,392 shares
of Company Common Stock and 1,127,460 shares of Company Class B Common Stock are
reserved for issuance upon exercise of the outstanding Warrants, (iv) 4,678,508
shares of Company Common Stock are held in the treasury of the Company, (v)
2,277,089 shares of Company Common Stock are reserved for issuance pursuant to
Company Options not yet granted and (vi) 13,500,000 shares of the Company's
Class 1 Series A Junior Participating Preferred Stock and 1,500,000 shares of
the Company's Class 2 Series A Junior Participating Preferred Stock shares are
reserved for issuance upon exercise of the Rights issued pursuant to the Company
Rights Agreement. As of the date hereof, no shares of Company Class B Common
Stock or Company Preferred Stock are outstanding. There are no bonds,
debentures, notes or other indebtedness or securities of the Company that have
the right to vote (or that are convertible into, or exchangeable for, securities
having the right to vote) on any matters on which stockholders of the Company
may vote. Except as set forth above, as of the date hereof,
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no shares of capital stock or other voting securities of the Company are issued,
reserved for issuance or outstanding and no shares of capital stock or other
voting securities of the Company shall be issued or become outstanding after the
date hereof other than upon exercise of Company Options and Warrants outstanding
as of the date hereof. Section 3.2(a) of the Company Disclosure Schedule sets
forth a true and correct list, as of the date hereof, of all rights of any
character (other than the Warrants) relating to the issued or unissued capital
stock of the Company and each of its Subsidiaries, or obligating the Company or
any of its Subsidiaries to issue, grant or sell any shares of capital stock of,
or other equity interests in, or securities convertible into equity interests
in, the Company or any of its Subsidiaries. Such list sets forth the name of
each holder and the number of shares of Company Common Stock subject to each
such option, the date of grant, the exercise or vesting schedule, the exercise
price per share and the term of each such option. On the Acceptance Date and the
Closing Date, the Company shall deliver to Parent an updated Section 3.2(a) of
the Company Disclosure Schedule hereto current as of such date. Since November
17, 2003, the Company has not issued any shares of its capital stock or Company
Options in respect thereof, except upon the conversion of the securities or the
exercise of the Company Options and Warrants referred to above. All shares of
Company Common Stock and Company Class B Common Stock subject to issuance as
described above shall, upon issuance on the terms and conditions specified in
the instruments pursuant to which they are issuable, be duly authorized, validly
issued, fully paid and nonassessable.
(b) Except as set forth in Section 3.2(b) of the Company Disclosure
Schedule, none of the Company or any of its Subsidiaries has any contract or
other obligation to repurchase, redeem or otherwise acquire any shares of
Company Common Stock or any capital stock of any of the Company's Subsidiaries,
or make any investment (in the form of a loan, capital contribution or
otherwise) in any of the Company's Subsidiaries or any other Person. All of the
outstanding shares of capital stock and voting securities of each Subsidiary of
the Company are owned, directly or indirectly, by the Company and are duly
authorized, validly issued, fully paid and nonassessable, and those shares of
capital stock and voting securities of each of the Company's Subsidiaries owned
by the Company, directly or indirectly, are free and clear of all Liens. There
are no outstanding subscriptions, options, warrants, puts, calls, rights,
exchangeable or convertible securities or other commitments or agreements of any
character relating to the issued or unissued capital stock or other securities
of any such Subsidiary, or otherwise obligating the Company or any such
Subsidiary to issue, transfer, sell, purchase, redeem or otherwise acquire any
such securities.
(c) Except as set forth in Section 3.2(c) of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries owns, or has any
contract or other obligation to acquire, any equity securities or other
securities of any Person (other than Subsidiaries of the Company) or any direct
or indirect equity or ownership interest in any other business. Neither the
Company nor any Subsidiary is a general partner of any general or limited
partnership or the managing member of any limited liability company.
3.3 AUTHORITY; NO VIOLATION.
(a) The Company has full corporate power and authority to execute and
deliver this Agreement and subject to receipt of the Company Stockholder
Approval to consummate the transactions contemplated hereby. The execution and
delivery of this
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Agreement and the consummation of the Merger and the transactions contemplated
hereby have been duly and validly approved and adopted by the Board of Directors
of the Company. If required under any applicable legal requirements, the Company
Stockholder Approval is the only vote of the holders of any class or series of
the Company's capital stock necessary to adopt this Agreement, approve the
Merger or consummate any of the other transactions contemplated by this
Agreement. This Agreement has been duly and validly executed and delivered by
the Company. Assuming due authorization, execution and delivery by Parent and
Merger Sub, this Agreement constitutes the valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as
such enforcement may be limited by (i) the effect of bankruptcy, insolvency,
reorganization, receivership, conservatorship, arrangement, moratorium or other
laws affecting or relating to the rights of creditors generally, or (ii) the
rules governing the availability of specific performance, injunctive relief or
other equitable remedies and general principles of equity, regardless of whether
considered in a proceeding in equity or at law.
(b) Neither the execution and delivery of this Agreement by the
Company nor the consummation by the Company of the transactions contemplated
hereby, nor compliance by the Company with any of the terms or provisions
hereof, will (i) violate any provision of the Certificates of Incorporation or
bylaws or other charter or organizational documents of the Company or any of its
Subsidiaries or (ii) assuming that the consents and approvals referred to in
Section 3.4 are duly obtained, (x) violate any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or injunction applicable to the
Company or any of its Subsidiaries or any of their respective properties or
assets or (y) violate, conflict with, result in a breach of any provision of or
the loss of any benefit under, constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, result in
the termination of or a right of termination or cancellation under, accelerate
the performance required by or rights or obligations under, or result in the
creation of any Lien upon any of the respective properties or assets of the
Company or any of its Subsidiaries under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement, contract, or other instrument or obligation to which the
Company or any of its Subsidiaries is a party, or by which they or any of their
respective properties, assets or business activities may be bound or affected,
except (in the case of clauses (ii) (x) and (y) above) for such violations,
conflicts, breaches, defaults or the loss of benefits which, either individually
or in the aggregate, would not be a Company Material Adverse Effect.
3.4 CONSENTS AND APPROVALS. Except for (i) any approvals or filings
required by the Xxxx-Xxxxx-Xxxxxx Anti-Trust Improvements Act of 1976, as
amended (the "HSR Act"), (ii) the Company Stockholder Approval, if required by
applicable legal requirements, (iii) the NASD, (iv) the NYSE, (v) the AMEX and
(vi) the consents, notices and approvals set forth in Section 3.4 of the Company
Disclosure Schedule, no consents or approvals of any Governmental Entity or any
third party are necessary in connection with (A) the execution and delivery by
the Company of this Agreement and (B) the consummation by the Company of the
Merger and the other transactions contemplated hereby.
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3.5 SEC DOCUMENTS; FINANCIAL STATEMENTS.
(a) The Company has furnished or made available to Parent a true and
complete copy of the Company SEC Documents filed with the SEC (including via
XXXXX) by the Company since January 1, 2001, and, prior to the Effective Time,
the Company shall have furnished or made available to Parent true and complete
copies of any Company SEC Documents filed with the SEC (including via XXXXX) by
the Company after the date hereof and prior to the Effective Time. As of their
respective filing dates, the Company SEC Documents complied in all material
respects with the requirements of the Securities Exchange Act and the Securities
Act, and none of the 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 to make the statements made therein, in light of the circumstances
under which they were made, not misleading, except to the extent amended or
superseded by a subsequently filed Company SEC Document.
(b) The financial statements of the Company, including the notes
thereto, included in the Company SEC Documents and the financial statements of
the Company furnished to Parent for the quarter ended September 30, 2003
(collectively, the "Company Financial Statements") complied in all material
respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto as of their respective dates,
and have been prepared in accordance with GAAP applied on a basis consistent
throughout the periods indicated. The Company Financial Statements fairly
present in all material respects the consolidated financial condition and
operating results of the Company and its Subsidiaries at the dates and during
the periods indicated therein (subject, in the case of unaudited statements, to
normal and recurring year-end adjustments).
(c) As of the close of business on September 30, 2003 and November 14,
2003, the amount of the Company's cash, cash equivalents and other short term
investments, as defined in the Company Financial Statements was $129,948,755 and
$131,977,875, respectively.
3.6 ABSENCE OF CERTAIN CHANGES OR EVENTS.
(a) Since June 30, 2003, the Company and each of its Subsidiaries has,
in all material respects, conducted its business in the ordinary course
consistent with past practice and there has not occurred:
(i) any change, event or condition that is a Company Material
Adverse Effect;
(ii) any acquisition, sale or transfer of any material asset of
the Company or any of its Subsidiaries other than in the ordinary course of
business consistent with past practice;
(iii) any change in the Company's accounting methods or practices
(including any change in depreciation or amortization policies or rates)
materially affecting the Company's assets or any of its Subsidiaries' assets,
except as set forth in any Company SEC Document (but only to the extent set
forth therein) or as have been required by a change in GAAP;
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(iv) other than for the Company's June 30, 2003, 1-for-5, reverse
stock split, any declaration, setting aside, or payment of a dividend or other
distribution with respect to the shares of the Company, or any direct or
indirect redemption, purchase or other acquisition by the Company of any of its
shares of capital stock;
(v) any material contract entered into by the Company or any of
its Subsidiaries, other than in the ordinary course of business consistent with
past practice or made available to Parent, or any material amendment or
termination of, or default under, any material contract to which the Company or
any of its Subsidiaries is a party or by which it is bound;
(vi) any amendment or change to the Certificate of Incorporation
or bylaws of the Company;
(vii) any material change in the risk management and hedging
policies, procedures or practices of the Company or any of its Subsidiaries, or
any failure to comply with such policies, procedures and practices;
(viii) any material election with respect to taxes or material
changes in tax accounting methods; or
(ix) any agreement by the Company or any of its Subsidiaries to
do any of the things described in the preceding clauses (i) through (viii)
(other than negotiations with Parent and its representatives regarding the
transactions contemplated by this Agreement).
(b) Except as permitted by this Agreement, since December 31, 2002,
neither the Company nor any of its Subsidiaries has, except for such actions as
are in the ordinary course of business consistent with past practice or as
required by applicable law, (x) increased the wages, salaries, compensation,
pension, or other fringe benefits or perquisites payable to any executive
officer or director from the amount thereof in effect as of December 31, 2002,
(y) granted any severance or termination pay to, entered into any contract to
make or grant any severance or termination pay to, or paid any bonus other than
customary mid-year bonuses and year-end bonuses for fiscal 2002 and for fiscal
2003 to, any executive officer or director or (z) granted any stock appreciation
rights or rights to acquire any shares of its capital stock to any officer or
director, other than grants made in the ordinary course of business consistent
with past practice pursuant to the Company Stock Plans.
3.7 UNDISCLOSED LIABILITIES. Neither the Company nor any of its
Subsidiaries has any material obligations or liabilities of any nature (matured
or unmatured, fixed or contingent) other than (i) those set forth or adequately
provided for in the consolidated balance sheet (and the related notes thereto)
of the Company and its Subsidiaries included in the Company SEC Documents , (ii)
those incurred in the ordinary course of business consistent with past practice
since December 31, 2002, and (iii) those incurred in connection with the
execution of this Agreement.
3.8 LEGAL PROCEEDINGS. Except as set forth in Section 3.8 of the Company
Disclosure Schedule, neither the Company nor any of its Subsidiaries is a party
to any, and there are no pending or, to the knowledge of the Company,
threatened, legal, administrative, arbitral or other proceedings, claims,
actions or governmental or regulatory investigations of any nature
-19-
against the Company or any of its Subsidiaries which has a Company Material
Adverse Effect, nor, to the knowledge of the Company, is there any basis for any
proceeding, claim or any action against the Company or any of its Subsidiaries
that would have a Company Material Adverse Effect; provided that, any litigation
brought by a party other than a Governmental Entity challenging the validity or
propriety of the transactions contemplated by this Agreement shall not be deemed
a Company Material Adverse Effect for purposes of this Agreement. There is no
injunction, order, judgment or decree imposed upon the Company, any of its
Subsidiaries or the assets of the Company or any of its Subsidiaries which has a
Company Material Adverse Effect.
3.9 TAXES AND TAX RETURNS.
(a) (i) The Company and each of its Subsidiaries have filed or caused
to be filed all federal, state, foreign and, to the knowledge of the Company,
local Tax returns and reports required to be filed with any Tax authority; (ii)
all such Tax returns and reports are correct and complete in all material
respects; (iii) the Company and its Subsidiaries have paid or caused to be paid
all Taxes that are due and payable by any of such companies, other than Taxes
which are being contested in good faith and are adequately reserved against or
provided for (in accordance with GAAP) in the Company Financial Statements; and
(iv) the Company and each of its Subsidiaries do not have any material liability
for Taxes for any current or prior tax periods in excess of the amount reserved
or provided for in the Company Financial Statements (but excluding, for this
purpose only, any liability reflected thereon for deferred taxes to reflect
timing differences between tax and financial accounting methods).
(b) The consolidated federal income tax returns of the Company and its
Subsidiaries for each taxable year through 1997, have been examined by the IRS.
Section 3.9(b) of the Company Disclosure Schedule identifies all pending audits
or examinations with respect to any Tax returns of the Company and its
Subsidiaries.
(c) There are no disputes pending with respect to, or claims or
assessments asserted in writing for any material amount of Taxes upon the
Company or any of its Subsidiaries, nor has the Company or any of its
Subsidiaries given or been requested in writing to give any currently effective
waivers extending the statutory period of limitation applicable to any Tax
return for any period.
(d) Since January 1, 2000, neither the Company nor any of its
Subsidiaries has been required to include in income any material adjustment
pursuant to Section 481 of the Code by reason of a voluntary change in
accounting method initiated by the Company or any of its Subsidiaries, and the
IRS has not initiated or proposed any such material adjustment or change in
accounting method (including any method for determining reserves for bad debts
maintained by the Company or any Subsidiary).
(e) Neither the Company nor any of its Subsidiaries (i) is a party to
a Tax allocation or Tax sharing agreement (other than an agreement solely among
members of a group the common parent of which is the Company) or (ii) has any
liability for the Taxes of any person (other than any of the Company or any of
its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar
provision of state, local or foreign law), as a transferee or successor, by
contract, or otherwise.
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(f) The Company and each of its Subsidiaries have withheld from their
employees, customers and any other applicable payees (and timely paid to the
appropriate governmental entity) proper and accurate amounts for all periods
through the date hereof in compliance with all tax withholding provisions of
applicable federal, state, local and foreign laws (including, without
limitation, income, social security and employment tax withholding for all types
of compensation, back-up withholding and withholding on payments to non-United
States persons), except for such amounts, individually or in the aggregate, as
are not material.
(g) Except as would not have, individually or in the aggregate, a
Company Material Adverse Effect, the Company and each of its Subsidiaries are in
compliance with all applicable rules and regulations regarding the solicitation,
collection and maintenance of any forms, certifications and other information
required in connection with federal, state, local or foreign tax withholding or
reporting.
(h) The Company has furnished or made available to Parent complete and
accurate copies of all income and franchise tax returns, and any amendments
thereto, filed by the Company or any of its Subsidiaries for the preceding three
taxable years.
(i) None of the Company and its Subsidiaries has been a party to any
"reportable transaction" within the meaning of Treasury Regulations Section
1.6011-4(b), any "confidential corporate tax shelter" within the meaning of
Treasury Regulations Section 1.6111-2, or any "potentially abusive tax shelter"
within the meaning of Treasury Regulations Section 1.6112-1(b).
(j) Except as set forth in Section 3.9(j) of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries is a party to any
plan, program, agreement, arrangement, practice, policy or understanding that
would result, separately or in the aggregate, in the payment or provision
(whether in connection with any termination of employment or otherwise) of any
"excess parachute payment" within the meaning of Section 280G of the Code with
respect to a current or former employee or current or former consultant or
contractor of the Company or any of its Subsidiaries.
(k) Except as set forth in Section 3.9(k) of the Company Disclosure
Schedule, none of the Company or its Subsidiaries is a party to any contract,
agreement, plan or arrangement covering any person that could give rise to the
payment of any amount that would not be deductible by reason of Section 162(m)
of the Code.
3.10 EMPLOYEE BENEFIT PLANS.
(a) (i) Section 3.10(a) of the Company Disclosure Schedule sets forth
a list of all "employee benefit plans," as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and all
other employee benefit or executive compensation arrangements, perquisite
programs or payroll practices, including, without limitation, any such
arrangements or payroll practices providing severance pay, sick leave, vacation
pay, salary continuation for disability, retirement benefits, deferred
compensation, bonus pay, incentive pay, stock options (including those held by
directors, employees, and consultants), hospitalization insurance, medical
insurance, life insurance,
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scholarships or tuition reimbursements, that are maintained by the Company, any
Subsidiary or any entity within the same "controlled group" as the Company or
Subsidiary, within the meaning of Section 4001(a)(14) of ERISA (a "Company ERISA
Affiliate") or to which the Company, any Subsidiary or Company ERISA Affiliate
is obligated to contribute thereunder for current or former directors, officers,
employees or consultants of the Company, any Subsidiary or Company ERISA
Affiliate (the "Company Employee Benefit Plans").
(b) None of the Company Employee Benefit Plans is a "multiemployer
plan," as defined in Section 4001(a)(3) of ERISA (the "Company Multiemployer
Plan"). Neither the Company, any Subsidiary nor any Company ERISA Affiliate has
withdrawn in a complete or partial withdrawal from any Company Multiemployer
Plan, nor has any of them incurred any liability due to the termination or
reorganization of a Company Multiemployer Plan.
(c) None of the Company Employee Benefit Plans is a "single employer
plan," as defined in Section 4001(a)(15) of ERISA, that is subject to Title IV
of ERISA. Neither the Company, any Subsidiary nor any Company ERISA Affiliate
has incurred any outstanding liability under Section 4062 of ERISA to the
Pension Benefit Guaranty Corporation or to a trustee appointed under Section
4042 of ERISA. Neither the Company, any Subsidiary nor any Company ERISA
Affiliate has engaged in any transaction described in Section 4069 of ERISA.
Neither the Company nor any Subsidiary maintains, or is required, either
currently or in the future, to provide medical benefits to employees, former
employees or retirees after their termination of employment, other than pursuant
to applicable law or regulation.
(d) Each Company Employee Benefit Plan that is intended to qualify
under Section 401 of the Code, and each trust maintained pursuant thereto,
received a favorable determination letter from the IRS, and, to the Company's
knowledge, nothing has occurred with respect to the operation of any such
Company Employee Benefit Plan that would cause the loss of such qualification or
exemption or the imposition of any material liability, penalty or tax under
ERISA or the Code.
(e) All contributions (including all employer contributions and
employee salary reduction contributions) required to have been made under any of
the Company Employee Benefit Plans to any funds or trusts established thereunder
or in connection therewith have been made by the due date thereof, other than a
failure to make contributions that is not material.
(f) There has been no material violation of ERISA or the Code with
respect to the filing of applicable reports, documents and notices regarding the
Company Employee Benefit Plans with the Secretary of Labor or the Secretary of
the Treasury or the furnishing of required reports, documents or notices to the
participants or beneficiaries of the Company Employee Benefit Plans.
(g) None of the Company, the Subsidiaries, the officers of the Company
or any of the Subsidiaries or the Company Employee Benefits Plans which are
subject to ERISA, any trusts created thereunder or any trustee or administrator
thereof, has engaged in a "prohibited transaction" (as such term is defined in
Section 406 of ERISA or Section 4975 of the Code) or any other breach of
fiduciary responsibility that could subject the Company, any of the Subsidiaries
or any officer of the Company or any of the Subsidiaries to any material tax or
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penalty on prohibited transactions imposed by such Section 4975 or to any
material liability under Section 502(i) or (1) of ERISA.
(h) Except as set forth in Section 3.10(h) of the Company Disclosure
Schedule, neither the Company nor any of the Subsidiaries is a party to any
contract, agreement or other arrangement which would reasonably be expected to
result in the payment of money or any other property or rights or accelerate or
provide any other rights or benefits, to any current or former employee of the
Company or any of its Subsidiaries (or other current or former service providers
thereto) that would not have been required but for the transaction provided for
herein.
(i) True, correct and complete copies of the following documents, with
respect to each of the Company Employee Benefit Plans, have been delivered or
made available to Parent by the Company: (i) all Company Employee Benefit Plans
and related trust documents, and amendments thereto; (ii) the most recent Forms
5500 and (iii) summary plan descriptions.
(j) There are no pending actions, claims or lawsuits which have been
asserted, instituted or, to the Company's knowledge, threatened, against the
Company Employee Benefit Plans, the assets of any of the trusts under such plans
or the plan sponsor or the plan administrator, or against any fiduciary of the
Company Employee Benefit Plans with respect to the operation of such plans
(other than routine benefit claims).
(k) All Company Employee Benefit Plans subject to ERISA or the Code
have been maintained and administered, in all material respects, in accordance
with their terms and with all provisions of ERISA and the Code, respectively
(including rules and regulations thereunder) and other applicable federal and
state laws and regulations and all employees required to be included as
participants by the terms of such plans have been properly included, except to
the extent that any failure to so include the employees would not subject the
Company to any material liability.
3.11 EMPLOYEE MATTERS.
(a) The Company and each of its Subsidiaries are in compliance in all
material respects with all applicable laws and regulations respecting the
employment of employees and the engagement of leased employees, consultants and
independent contractors, including, without limitation, all laws and regulations
regarding discrimination and/or harassment, affirmative action, terms and
conditions of employment, wage and hour requirements (including, without
limitation, the proper classification, compensation and related withholding with
respect to employees, leased employees, consultants and independent
contractors), leaves of absence, reasonable accommodation of disabilities,
occupational safety and health, workers' compensation and employment practices.
Neither the Company nor any of its Subsidiaries is engaged in any unfair labor
practice. Neither the Company nor any of its Subsidiaries is a party to any
collective bargaining agreement or other labor union contract; nor does the
Company know of any activities or proceedings of any labor union to organize any
such employees.
(b) Except as set forth in Section 3.11(b) of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries has any employment
agreement,
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leased employee agreement, consultant agreement or independent contractor
agreement with any of its respective officers, directors, employees or any other
person providing service to the Company or any of its Subsidiaries. As of the
time of execution and delivery of this Agreement, no executive officers or Key
Employees of the Company or any of its Subsidiaries have given notice to the
Company or any of its Subsidiaries, nor are the Company or any of its
Subsidiaries otherwise aware, that any such employee intends to terminate his or
her employment with the Company or any of its Subsidiaries.
(c) As of the time of execution and delivery of this Agreement, to the
knowledge of the Company, no executive officer or Key Employee of the Company or
any of its Subsidiaries is in violation in any respect of any term of any
employment or services contract, patent disclosure agreement, noncompetition
agreement, or any restrictive covenant to a former employer which would
reasonably be expected to impede the right of any such executive officer or Key
Employee to be employed or engaged by the Company or any of its Subsidiaries
because of the nature of the business conducted or presently proposed to be
conducted by the Company or any of its Subsidiaries or to the use of trade
secrets or proprietary information of others.
(d) None of the Company, any Subsidiary of the Company, Parent or any
Subsidiary of Parent shall have any liability under the Workers Adjustment and
Retraining Notification Act, as amended, or the employee protection laws of any
foreign jurisdiction, with respect to any events occurring or conditions
existing on or prior to Closing.
3.12 COMPLIANCE WITH APPLICABLE LAW AND REGULATORY MATTERS.
(a) Except as set forth in Section 3.12(a) of the Company Disclosure
Schedule, the Company and each of its Subsidiaries have complied with all
applicable Laws and Regulations, and are not in violation of, and have not
received any notices of violation with respect to, any Laws and Regulations in
connection with the conduct of their respective businesses or the ownership or
operation of their respective businesses, assets and properties, except for such
noncompliance and violations as would not have, individually or in the
aggregate, a Company Material Adverse Effect.
(b) Set forth on Section 3.12(b) of the Company Disclosure Schedule
are all material licenses, permits, certificates, franchises and other
authorizations (collectively the "Authorizations") held by the Company and each
of its Subsidiaries, which constitute all Authorizations necessary for the
ownership or use of its assets and properties and the conduct of its business.
The Company and each of its Subsidiaries have complied with, and are not in
violation of, any Authorization, except where such noncompliance or violation
would not, individually or in the aggregate, have a Company Material Adverse
Effect. Except as would not be material to the Company, all such Authorizations
are in full force and effect and there are no proceedings pending or, to the
knowledge of the Company or any of its Subsidiaries, threatened that seek the
revocation, cancellation, suspension or adverse modification thereof.
(c) Section 3.12(c) of the Company Disclosure Schedule sets forth a
description of each Governmental Order applicable to the Company or any of its
Subsidiaries, and no such Governmental Order has had or could reasonably be
expected to have a Material Adverse Effect on the Company or any of its
Subsidiaries.
-24-
(d) Section 3.12(d) of the Company Disclosure Schedule sets forth all
Governmental Entities with which the Company or its Subsidiaries or their
Affiliates is required to be registered as a broker-dealer as of the date hereof
(a "Broker-Dealer"); and none of the Company, its Subsidiaries nor any Affiliate
thereof, by virtue of their respective Broker-Dealer activities, is required to
be registered as a Broker-Dealer in or to obtain a Broker-Dealer license or
similar authorization from any other Governmental Entity. None of the Company or
any Subsidiary thereof has exceeded in any material way with respect to their
respective businesses, the business activities enumerated in any membership
agreements or other limitations imposed in connection with its registrations,
forms (including Form BDs) and reports filed with the National Association of
Securities Dealers, Inc. or any other Governmental Entity. The information
contained in such registrations, forms and reports was true and complete in all
material respects as of the date of the filing thereof with such Governmental
Entity. Each such registration is in full force and effect on the date hereof.
(e) Except as set forth on Section 3.12(e) of the Company Disclosure
Schedule, no activities of the Company or its Subsidiaries result in any of them
being required to be registered as an exchange or transfer agent, a clearing
agency, a municipal securities dealer, a government securities dealer, a futures
commission merchant, a commodity trading adviser or a commodity pool operator.
(f) Neither the Company nor any of its Subsidiaries is subject to
registration as an investment company under the Investment Company Act, or
similar laws of any foreign Governmental Entity. The Company and its
Subsidiaries and each of its employees, agents, associated persons or
contractors who are required to be registered as a broker-dealer, investment
adviser, a registered representative or other applicable regulatory category
with the SEC, the securities commission of any state or foreign jurisdiction or
any SRO are duly registered as such and such registrations are in full force and
effect except as would not individually or in the aggregate, have a Company
Material Adverse Effect. All federal, state and foreign registration
requirements have been complied with and such registrations as currently filed,
and all periodic reports required to be filed with respect thereto, are accurate
and complete except for such noncompliance and failure to be accurate and
complete as would not, individually or in the aggregate, have a Company Material
Adverse Effect.
(g) The Company is not aware of any facts or circumstances that would
(i) cause the NASD or any other required federal or state regulatory agency or
other Governmental Entity not to approve the transfer of control and ownership
of the Company to Parent; or (ii) cause the NASD or any federal or state
regulatory agency or other Governmental Entity to revoke or restrict the
Company's Authorizations to operate as a broker-dealer after the change in
ownership and control of the Company contemplated by this Agreement.
(h) Neither the Company nor any of its Subsidiaries is subject to any
cease-and-desist or other order or enforcement action issued by, or party to any
written agreement, consent agreement or memorandum of understanding with, or a
party to any commitment letter or similar undertaking to, or is subject to any
order or directive by, 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 regulatory authority or other
Governmental Entity that restricts the conduct of its business or that in any
manner relates to its
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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 or any of its
Subsidiaries, in any other manner by any regulatory authority or Governmental
Entity that it is considering issuing or requesting such a Company Regulatory
Agreement nor is there any pending or, to the knowledge of the Company or any of
its Subsidiaries, threatened regulatory investigation. To the knowledge of the
Company, none of the Company, any of its Subsidiaries or any of their respective
associated persons (as defined in Section 3(a)(21) of the Securities Exchange
Act) has been convicted within the past ten years of any felony or misdemeanor
described in Section 15(b)(4) of the Securities Exchange Act, or is, by reason
of any misconduct, permanently or temporarily enjoined from acting in the
capacities, or engaging in the activities, described in Section 15(b)(4)(C) of
the Securities Exchange Act. No such Person has been subject to a "statutory
disqualification" with respect to membership or participation in, or association
with a member of, a self-regulatory organization, described in Section 3(a)(39)
of the Securities Exchange Act or has been subject to the imposition by a SRO of
special supervision or other special requirements as prerequisites for
maintaining any securities license or regulation.
(i) Neither the Company nor any of its Subsidiaries has received any
notice from a competent authority alleging that the Company or any Subsidiary
has not complied with any applicable data or consumer protection laws, nor has
the Company or any of its Subsidiary received any claim from any individual
seeking compensation for breaches of applicable data and consumer protection
laws.
(j) Neither the Company nor any of its Subsidiaries has become aware
of any facts of circumstances that would require any of them to give notice to
any customers, consumers or other similarly situated individuals, pursuant to
California Civil Code Sections 1798.29, et seq., or any similar law of any other
state, of any actual or perceived data security breaches.
(k) Neither the Company nor any of its subsidiaries, including without
limitation the Company's venture capital business, owns or controls, directly or
indirectly, more than 5% of any class of voting securities of any depository
institution or depository institution holding company, as defined in section
3(w) of the Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.). The Company
derived at least 85% or more of its consolidated total annual gross revenues
from and at least 85% of its consolidated total assets are attributable to the
conduct of activities that are financial in nature, incidental to a financial
activity, or otherwise permissible for a financial holding company under section
4(c) of the Bank Holding Company Act of 1956, as amended (12 U.S.C. 1843(c)).
3.13 MATERIAL CONTRACTS.
(a) Except for the contracts described in or filed as an exhibit to
the Company SEC Documents or set forth in Section 3.13 of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries is a party to or bound
by any of the following (the following, together with the contracts described in
or filed as an exhibit to the Company SEC Documents, collectively, the "Material
Contracts"):
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(i) any contract or agreement entered into other than in the
ordinary course of business consistent with past practice for the acquisition of
the securities of or any material portion of the assets of any other Person or
entity;
(ii) any contract or agreement for the purchase of services in
excess of $100,000 which cannot be cancelled by the Company or any of its
Subsidiaries without penalty or further payment or without more than 45 days'
notice;
(iii) any contract, agreement or instrument in excess of $100,000
that expires or may be renewed at the option of any Person other than the
Company or any of its Subsidiaries so as to expire more than one year after the
date of this Agreement;
(iv) any material contract with any independent contractor or
consultant (or similar arrangement) which is not cancelable without penalty and
without more than thirty (30) days' notice;
(v) any trust indenture, mortgage, promissory note, loan
agreement or other contract, agreement or instrument for the borrowing of money,
any currency exchange, commodities or other hedging arrangement or any leasing
transaction of the type required to be capitalized in accordance with GAAP, in
each case, where the Company or any of its Subsidiaries is a lender, borrower or
guarantor;
(vi) any contract or agreement limiting the freedom of the
Company or any of its Subsidiaries or any of their respective employees to
engage in any line of business or to compete with any other Person;
(vii) any contract or agreement with any Affiliate of the
Company;
(viii) any agreement of guarantee, support, indemnification,
assumption or endorsement of, or any similar commitment with respect to, the
obligations, liabilities (whether accrued, absolute, contingent or otherwise) or
indebtedness of any other Person other than those entered into in the ordinary
course of operating a broker-dealer business;
(ix) any material agreement which would be terminable other than
by the Company or its Subsidiaries or under which a payment obligation would
arise or be accelerated, in each case as a result of the consummation of the
transactions contemplated by this Agreement;
(x) any alliance, cooperation, joint venture, stockholders'
partnership or similar agreement;
(xi) any broker, distributor, dealer, agency, sales promotion,
market research, market consulting or advertising agreement involving in excess
of $100,000;
(xii) any material research, development, sales representative,
marketing or reseller agreement, or any service, support or maintenance
agreement related to the business or technology of the Company or any of its
respective Subsidiaries;
(xiii) any agreement, option or commitment or right with, or held by, any third
party to acquire, use or have access to any assets or properties, or any
interest therein, of the Company or any of its Subsidiaries;
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(xiv) any outbound license, sublicense or development agreement
or other agreement or any material inbound license, sublicense or development
agreement or other agreement that affects or relates to the Intellectual
Property, including, without limitation, any agreement pursuant to which any
person or entity is authorized to use or has an ownership or security interest
in any Intellectual Property;
(xv) any material contract or agreement which would require any
consent or approval of a counterparty as a result of the consummation of the
transactions contemplated by this Agreement; and
(xvi) any other contract the loss of which would have a Company
Material Adverse Effect.
(b) The Company and each of its Subsidiaries have performed all of the
obligations required to be performed by them and are entitled to all accrued
benefits under, and are not alleged to be in default in respect of, each
Material Contract to which the Company or any Subsidiary is a party or by which
the Company or any Subsidiary is bound, except as would not, individually or in
the aggregate, have a Company Material Adverse Effect. Each of the Material
Contracts is in full force and effect, without amendment (other than as
disclosed in Section 3.13 of the Company Disclosure Schedule), and there exists
no default or event of default or event, occurrence, condition or act, with
respect to the Company or any of its Subsidiaries or, to the Company's
knowledge, with respect to any other contracting party, which, with the giving
of notice, the lapse of the time or the happening of any other event or
condition, would become a default or event of default under any Material
Contract, except, as would not, individually or in the aggregate, be material to
the Company. True, correct and complete copies of all Material Contracts have
been furnished or made available to Parent or filed as exhibits to the Company
SEC Documents.
3.14 ASSETS AND INVESTMENT SECURITIES.
(a) The Company and its Subsidiaries own, lease or have the right to
use all the material properties and assets necessary for or used or held for use
in the conduct of their respective business or otherwise owned, leased or used
by the Company or any of its Subsidiaries (all such properties and assets being
referred to as the "Assets"). Each of the Company and its Subsidiaries has good
title to, or in the case of leased or subleased Assets, valid and subsisting
leasehold interests in, all of the Assets, free and clear of all Liens, except
for defects in title, easements, restrictive covenants and similar encumbrances,
and Liens, that individually or in the aggregate, would not have a Company
Material Adverse Effect. Section 3.14(a) of the Company Disclosure Schedule
contains a true, complete and correct list (designating the relevant owners,
lessors, sublessors, sublessees and lessees, as applicable) of all real property
and improvements leased or subleased by the Company and its Subsidiaries or
otherwise made available for their use (the "Leases"). Copies of all Leases have
been delivered or otherwise made available to Parent by the Company.
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(b) The Company and each of its Subsidiaries has good and marketable
title to all securities held by the Company and each of its Subsidiaries (except
securities sold under repurchase agreements or held in any fiduciary or agency
capacity) free and clear of any Lien, 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 for such defects in title or Liens that would not be a Company Material
Adverse Effect. Such securities are valued on the books of the Company in
accordance with GAAP. Since December 31, 2002, neither the Company nor any of
its Subsidiaries has incurred any material and unusual or extraordinary losses
in its investment portfolio, and, except for matters of general application to
the securities industry (including changes in laws or regulations or GAAP) or
for events relating to the business environment in general, including market
fluctuations and changes in interest rates, the Company is not aware of any
events which are reasonably likely to occur in the future and which would be
reasonably likely to result in any material adverse change in the quality or
performance of the Company's and its Subsidiaries' investment portfolio on a
consolidated basis.
3.15 ENVIRONMENTAL LIABILITY. There are no legal, administrative, arbitral
or other proceedings, claims or actions or any private environmental
investigations or remediation activities or governmental investigations of any
nature that would be reasonably likely to result in the imposition on the
Company or any of its Subsidiaries, of any liability or obligation arising under
common law or under any local, state or federal environmental statute,
regulation or ordinance, including CERCLA, pending or, to the knowledge of the
Company, threatened against the Company or any of its Subsidiaries, which
liability or obligation would be material to the Company. To the knowledge of
the Company, there is no reasonable basis for any such proceeding, claim, action
or investigation. Neither the Company nor any of its Subsidiaries is subject to
any agreement, order, judgment or decree by or with any court, governmental
authority, regulatory agency or third party imposing any liability or obligation
with respect to the foregoing.
3.16 STATE TAKEOVER LAWS; COMPANY RIGHTS PLAN.
(a) The Board of Directors of the Company has taken all actions so
that the restrictions contained in Section 203 of the Delaware Law applicable to
a "business combination" (as defined in such Section 203) will not apply to the
execution, delivery or performance of this Agreement or the consummation of the
Merger or the other transactions contemplated by this Agreement. No other state
takeover statute is applicable to the Merger, this Agreement, or the
transactions contemplated hereby.
(b) The Company has taken all action necessary or appropriate so that
the entering into of this Agreement and the consummation of the transactions
contemplated hereby do not and will not result in the ability of any person to
exercise any rights under the Company Rights Agreement or enable or require the
rights provided under the Company Rights Agreement to separate from the shares
of Company Common Stock to which they were attached or to be triggered or to
become exercisable. No "Distribution Date," as such term is defined in the
Company Rights Agreement, has occurred by reason of the entry into this
Agreement, nor will the consummation of the transactions contemplated hereby
cause a Distribution Date to occur. The Company shall take all necessary action
with respect to all the outstanding Rights so that, as
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of the Effective Time, (i) none of the Company, Parent or Merger Sub will have
any obligations under the Company Rights Agreement and (ii) the holders of the
Rights will have no rights under the Company Rights Agreement.
3.17 INSURANCE. The Company has in full force and effect the insurance
coverage with respect to its business and the businesses of its Subsidiaries set
forth in Section 3.17 of the Company Disclosure Schedule. There is no material
claim pending under any of such policies as to which coverage has been
questioned, denied or disputed by the underwriters of such policies or bonds.
All premiums due and payable under all such policies have been paid and the
Company and its Subsidiaries are otherwise in compliance in all material
respects with the terms of such policies. The Company has no knowledge of any
threatened termination of, or material premium increase with respect to, any of
such policies.
3.18 INTELLECTUAL PROPERTY.
(a) Section 3.18(a) of the Company Disclosure Schedule lists all
Intellectual Property registered or filed in the name of the Company or any of
its Subsidiaries, and lists any proceedings or actions before any court or
tribunal (including the United States Patent and Trademark Office or equivalent
authority anywhere in the world) related to any of such registered or filed
Intellectual Property rights, including, without limitation, each patent, patent
application, copyright registration or application thereof, mask work
registration or application therefor, and trademark, service xxxx and domain
name registration or application therefor.
(b) Section 3.18(b) of the Company Disclosure Schedule lists (i) all
unregistered marks (trademarks, trade names and service marks), (ii) all
unregistered copyrights, and (iii) a list of each item of software developed by
or for the Company or its Subsidiaries necessary or material to the conduct of
the business of the Company and its Subsidiaries.
(c) Except as set forth on Section 3.18(c) of the Company Disclosure
Schedule, the Company (i) owns all right, title and interest in and to each item
of Intellectual Property, free and clear of any Liens other than Permitted
Liens, or (ii) is a licensee of Intellectual Property pursuant to a contract
that is a valid and binding obligation of the Company and, to the knowledge of
the Company, the other parties thereto and is in full force and effect. Except
as set forth on Section 3.18(c) of the Company Disclosure Schedule, each
material item of Intellectual Property shall be owned by the Company or
immediately available for use by the Company on substantially identical terms
and conditions immediately following the Closing, without any requirement for
any consent from any third party or any affirmative act by Parent (e.g., notice
to any third party).
(d) Section 3.18(d) of the Company Disclosure Schedule lists each
license or other agreement or authorization pursuant to which the Company or any
of its Subsidiaries provided a license to any third party with respect to any
Intellectual Property. Except for such agreements or licenses specified in
Section 3.18(d), no other person or entity has any rights to any Intellectual
Property, and, to the knowledge of the Company, no person or entity is
infringing, violating or misappropriating any of the Intellectual Property.
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(e) Section 3.18(e) identifies each license or agreement pursuant to
which the Company and/or its Subsidiaries use Intellectual Property that is
owned by a party other than the Company or its Subsidiaries. Except as set forth
in Section 3.18(e), no royalties or other continuing payment obligations are due
from the Company in respect of intellectual property rights of any third party.
(f) The Company and its Subsidiaries are not, and shall not be as a
result of the execution and delivery of this Agreement or the performance of
their obligations under this Agreement (assuming receipt of any consent or
approval set forth in Section 3.4 of the Company Disclosure Schedule), in
material breach of any license, sublicense or other agreement or any term or
condition thereof, pursuant to which the Company and its Subsidiaries grants or
is granted any license to the Intellectual Property.
(g) To the extent that any Intellectual Property has been developed or
created by any Person other than the Company, the Company has a written
agreement with such Person with respect thereto transferring to the Company all
right, title and interest in and to Intellectual Property by operation of law or
by valid assignment. To the extent internally developed, the Company has
followed standard business practices in developing such Intellectual Property,
including requiring each employee or contractor to execute a written agreement
in which such employee or contractor assigns to the Company all right, title and
interest in and to such Intellectual Property, and to the knowledge of the
Company, no viruses, Trojan programs, WORMS, time bombs or other disabling
devices have been inserted into the same by the Company, its Subsidiaries or
their respective employees, nor has there been to the knowledge of the Company
inserted any means for any software included in the Intellectual Property to be
remotely accessed without the knowledge and consent of Parent.
(h) The Company and its Subsidiaries have taken reasonable steps in
accordance with normal industry practice and in light of the nature of the
particular item of Intellectual Property to protect the proprietary nature of
each item of Intellectual Property, and to maintain in confidence all trade
secrets and other material confidential information that the Company and/or its
Subsidiaries own or use in connection with the business of the Company and its
Subsidiaries ("Company Confidential Information"). To the Company's knowledge,
there has been no misappropriation of any Company Confidential Information by
any third party. To the knowledge of the Company, neither the Company nor its
Subsidiaries has placed in escrow or otherwise disclosed the source code or
documentation for any software developed by or for the Company and/or its
Subsidiaries.
(i) To the knowledge of the Company, none of the Intellectual Property
infringes or violates, or constitutes a misappropriation of, any intellectual
property rights of any person or entity. Section 3.18(i) of the Company
Disclosure Schedule lists any complaint, claim, notice or other communication
(x) received in oral form by any partner, officer or employee of the Company
and/or its Subsidiaries, or (y) received in written form by the Company and/or
its Subsidiaries, expressly or impliedly alleging any infringement, violation or
misappropriation of the Intellectual Property of any third party, or otherwise
challenging the right of the Company and/or its Subsidiaries or any licensee or
sublicensee of the Company and/or its Subsidiaries to own or use any
Intellectual Property, or challenging the validity or enforceability of any
Intellectual Property or the right of the Company and/or its Subsidiaries to
license others to use
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or sublicense any Intellectual Property. The Company has made available to
Parent complete and accurate copies of all written documentation in the
possession of the Company and its Subsidiaries relating to any such complaint,
claim, notice, threat or other communication.
(j) Section 3.18(j) of the Company Disclosure Schedule sets forth a
list of all Internet domain names and their expiration dates currently used by
the Company and its Subsidiaries (collectively, the "Domain Names"). The Company
has, and after the Closing will have, a current registration of each Domain Name
and the right to continue to conduct their respective businesses as currently
conducted under the Domain Names.
3.19 INFORMATION TECHNOLOGY.
(a) The electronic data processing, information, record keeping,
communications, telecommunications, hardware, third party software, networks,
peripherals, portfolio trading and computer systems, including any outsourced
systems, services, or processes, and Intellectual Property which are used by the
Company and its Subsidiaries (collectively, "Technology Systems") are adequate
for the operation of their businesses as currently conducted or as currently
proposed to be conducted, except as would not be material. There has not been
any material malfunction, default, or failure with respect to any of the
Technology Systems that has not been remedied or replaced in all material
respects. The Company does not have knowledge that any of the Technology Systems
will fail to receive input of, recognized, store, retrieve, process or generate
output of dates and date related data without any error, ambiguity, interruption
or malfunction that would materially and adversely affect the operations of the
Company or any of its Subsidiaries.
(b) Technology Systems are either owned by, licensed or leased to, or
otherwise properly utilized pursuant to written authorization to the Company and
its Subsidiaries. No action will be necessary as a result of the transaction
effected by this Agreement to authorize, permit, or otherwise enable use of the
Technology Systems to continue to the same extent and in the same manner that
such Technology Systems have been used prior to the Closing Date. All royalties
and other payments due under such licenses or leases have been paid when due
and, so far as the Company and its Subsidiaries are aware, they are not in
material breach of, nor have there been any claims that they are in material
breach of, any obligation owed under such licenses or leases or under any other
agreement relating to the Technology Systems.
(c) Section 3.19(c) of the Company Disclosure Schedule lists all the
material third party agreements, licenses, and leases related to the Technology
Systems, including without limitation, all material maintenance and support
contracts for the Technology Systems.
(d) Except as disclosed in Section 3.19(d) of the Company Disclosure
Schedule, (i) the Technology Systems (for a period of 18 months prior to the
Closing Date) have not suffered unplanned disruption causing a material adverse
effect on the business of the Company and/or its Subsidiaries; (ii) except for
ongoing payments due under relevant third party agreements, the Technology
Systems are free from any material charge, mortgage or
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security interest; and (iii) access to business critical parts of the Technology
Systems is not shared with any third party.
(e) Details of the Company's material disaster recovery and business
continuity arrangements are disclosed in Schedule 3.19(e) of the Company
Disclosure Schedule.
(f) Neither the Company nor any of its Subsidiaries has received
notice of nor are they aware any material circumstances including, without
limitation, the execution of this Agreement, which would enable any third party
to terminate any of the Company's and/or its Subsidiaries' material agreements
or arrangements relating to the Technology Systems.
(g) The Company and its Subsidiaries have, in accordance with accepted
industry practices for comparable-sized competitors, taken reasonable measures
to protect the internal and external security and integrity of the Technology
Systems and the data they contain including, without limitation, procedures
preventing unauthorized access, the introduction of viruses, and the taking and
storing on-site and off-site of back-up copies of critical data.
(h) There are no material agreements with third parties for Technology
Systems that would terminate on the consummation of the transactions
contemplated by this Agreement or are otherwise not assignable without consent
from any third party or without payment of any associated cost, fee, charge, or
penalty.
(i) Neither the Company nor any of its Subsidiaries has received
notice of nor are they aware of any claim or action alleging that the Technology
Systems, or Company's or its Subsidiaries' use of the Technology Systems, in any
way violate any non-disclosure and/or non-use agreement, nor constitute an
infringement or other violation of any copyright, trade secret, trademark,
service xxxx, patent, invention, proprietary information, or other rights of any
third party.
3.20 INTERESTS OF OFFICERS AND DIRECTORS. None of the officers or directors
of the Company or any of its Subsidiaries or any of their respective Affiliates
has any material interest in any property, real or personal, tangible or
intangible or used in the business of the Company and its Subsidiaries, or in
any supplier, distributor or customer of the Company and its Subsidiaries, or
any other relationship, contract, agreement, arrangement or understanding with
the Company and its Subsidiaries, except as disclosed in the Company SEC
Documents and except for the normal rights of a stockholder and rights under the
Company Options.
3.21 OPINION. Prior to the execution of this Agreement, the Company has
received an opinion from Xxxxx, Xxxxxxxx & Xxxxx, Inc. to the effect that as of
the date hereof and based upon and subject to the matters set forth therein, the
Merger Consideration is fair to the stockholders of the Company from a financial
point of view. Such opinion has not been amended or rescinded as of the date
hereof.
3.22 BROKER'S FEES. Except for Financial Technology Partners and Xxxxx,
Xxxxxxxx & Xxxxx, Inc., neither the Company nor any of its Subsidiaries has
employed any broker or finder or incurred any liability for any broker's fees,
commissions or finder's fees in connection with the Merger or related
transactions contemplated by this Agreement.
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3.23 COMPANY INFORMATION.
(a) The representations or warranties made by the Company herein or in
any schedule hereto, including the Company Disclosure Schedule, or certificate
furnished by the Company pursuant to this Agreement do not contain any untrue
statement of a material fact, or omit to state any material fact necessary in
order to make the statements contained herein or therein, in the light of the
circumstances under which made, not misleading.
(b) None of the information to be supplied by the Company for
inclusion or incorporation by reference in (i) the Offer Documents or the
Schedule 14D-9 will, at the date the Offer Documents or the Schedule 14D-9 are
first mailed to the Company's stockholders and at any time between the time the
Offer Documents and the Schedule 14D-9 are mailed to the stockholders of the
Company and the Acceptance Date, 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 were made, not misleading or (ii) any other document filed with any other
regulatory agency in connection herewith will, at the time such document is
filed, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that no representation or warranty is made by the Company
with respect to statements made or incorporated by reference therein based on
information supplied by Parent or Merger Sub for inclusion or incorporation by
reference in the Offer Documents or the Schedule 14D-9. The Schedule 14D-9 will
comply as to form in all material respects with the requirements of the Exchange
Act and the rules and regulations thereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PARENT
Except as disclosed in the Parent Disclosure Schedule or as set forth in
the Parent SEC Documents filed since January 1, 2001 (or incorporated by
reference therein), Parent represents and warrants to the Company as follows:
4.1 CORPORATE ORGANIZATION, STANDING AND POWER. Each of Parent and its
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization. Each of Parent and
its Subsidiaries has the corporate power to own its properties and to carry on
its business as now being conducted and is duly qualified to do business and is
in good standing in each jurisdiction in which the failure to be so qualified
and in good standing would constitute a Parent Material Adverse Effect. Parent
has furnished or made available to the Company a true and correct copy of the
certificate or articles of incorporation, as amended, and bylaws, as amended,
and any other charter or organizational documents, each as amended, of Parent
and each of its Subsidiaries. Neither Parent nor any of its Subsidiaries is in
violation of any of the provisions of its certificate or articles of
incorporation or bylaws or other charter or organizational documents, each as
amended.
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4.2 AUTHORITY; NO VIOLATION.
(a) Each of Parent and Merger Sub has full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the Merger and the transactions contemplated hereby have
been duly and validly approved and adopted by the Boards of Directors of Parent
and Merger Sub. No other corporate proceedings (including any approvals of
Parent stockholders) on the part of Parent or Merger Sub are necessary to
approve this Agreement and to consummate the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by Parent and
Merger Sub and (assuming due authorization, execution and delivery by the
Company) constitutes a valid and binding obligation of Parent and Merger Sub,
enforceable against Parent and Merger Sub in accordance with its terms, except
as such enforcement may be limited by (i) the effect of bankruptcy, insolvency,
reorganization, receivership, conservatorship, arrangement, moratorium or other
laws affecting or relating to the rights of creditors generally, or (ii) the
rules governing the availability of specific performance, injunctive relief or
other equitable remedies and general principles of equity, regardless of whether
considered in a proceeding in equity or at law.
(b) Neither the execution and delivery of this Agreement by Parent nor
Merger Sub, nor the consummation by Parent or Merger Sub of the transactions
contemplated hereby, nor compliance by Parent or Merger Sub with any of the
terms or provisions hereof, will (i) violate any provision of the Certificate of
Incorporation or Bylaws of Parent or Merger Sub or (ii) assuming that the
consents and approvals referred to in Section 4.3 are duly obtained, (x) violate
any statute, code, ordinance, rule, regulation, judgment, order, writ, decree or
injunction applicable to Parent or any of its Subsidiaries or any of their
respective properties or assets or (y) violate, conflict with, result in a
breach of any provision of or the loss of any benefit under, constitute a
default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, result in the termination of or a right of
termination or cancellation under, accelerate the performance required by or
rights or obligations under, or result in the creation of any Lien upon any of
the respective properties or assets of Parent or any of its Subsidiaries under,
any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement, contract, or other
instrument or obligation to which Parent or any of its Subsidiaries is a party,
or by which they or any of their respective properties, assets or business
activities may be bound or affected, except (in the case of clause (ii) above)
for such violations, conflicts, breaches, defaults or the loss of benefits
which, either individually or in the aggregate, would not be a Parent Material
Adverse Effect.
4.3 CONSENTS AND APPROVALS. Except for (i) any approvals or filings
required by the HSR Act and (ii) the consents, notices and approvals set forth
in Section 4.3 of the Parent Disclosure Schedules, no consents or approvals of
any Governmental Entity or any third party are necessary in connection with (A)
the execution and delivery by Parent and Merger Sub of this Agreement and (B)
the consummation by Parent and Merger Sub of the Merger and the other
transactions contemplated hereby.
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4.4 SEC DOCUMENTS.
(a) Parent has furnished or made available to the Company a true and
complete copy of the Parent SEC Documents filed with the SEC (including via
XXXXX) by Parent since January 1, 2001, and, prior to the Effective Time, Parent
shall have furnished or made available to the Company true and complete copies
of any Parent SEC Documents filed with the SEC (including via XXXXX) by Parent
after the date hereof and prior to the Effective Time. Except as does not or
would not reasonably be likely to, prevent Parent from consummating the Offer or
the Merger, as of their respective filing dates, the Parent SEC Documents
complied in all material respects with the requirements of the Securities
Exchange Act and the Securities Act, and none of the Parent SEC Documents
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they were made, not
misleading, except to the extent corrected by a subsequently filed Parent SEC
Document.
4.5 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since June 30, 2003, Parent has,
in all material respects, conducted its business in the ordinary course
consistent with past practice and there has not occurred: (i) any change, event
or condition that is a Parent Material Adverse Effect; (ii) any change in
accounting methods or practices (including any change in depreciation or
amortization policies or rates) materially affecting Parent's assets or any of
its Subsidiaries' assets, except as set forth in any Parent SEC Document (but
only to the extent set forth therein) or as have been required by a change in
GAAP; or (iii) any amendment or change to the Certificate of Incorporation or
Bylaws of Parent, except, with respect to clauses (i) through (iii), as does not
or would not reasonably be likely to, prevent Parent from consummating the Offer
or the Merger.
4.6 LEGAL PROCEEDINGS. Except as set forth in Section 4.6 of the Parent
Disclosure Schedule, neither Parent nor any of its Subsidiaries is a party to
any, and there are no pending or, to the knowledge of Parent, threatened, legal,
administrative, arbitral or other proceedings, claims, actions or governmental
or regulatory investigations of any nature against Parent or any of its
Subsidiaries which does or would reasonably be likely to, prevent Parent from
consummating the Offer or the Merger, nor, to the knowledge of Parent, is there
any basis for any proceeding, claim or any action against Parent or any of its
Subsidiaries that does or would reasonably be likely to, prevent Parent from
consummating the Offer or the Merger; provided that, any litigation brought by a
party other than a Governmental Entity challenging the validity or propriety of
the transactions contemplated by this Agreement shall not be deemed to prevent
Parent from consummating the Offer or the Merger for the purposes of this
Agreement. There is no injunction, order, judgment or decree imposed upon
Parent, any of its Subsidiaries or the assets of Parent or any of its
Subsidiaries which does or would reasonably be likely to, prevent Parent from
consummating the Offer or the Merger.
4.7 COMPLIANCE WITH APPLICABLE LAW AND REGULATORY MATTERS.
(a) Except as set forth in Section 4.7(a) of the Parent Disclosure
Schedule, Parent and each of its Subsidiaries have complied with all applicable
Laws and Regulations, and are not in violation of, and have not received any
notices of violation with respect to, any Laws
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and Regulations in connection with the conduct of their respective businesses or
the ownership or operation of their respective businesses, assets and
properties, except for such noncompliance and violations as do not, or would not
reasonably be likely to, prevent Parent from consummating the Offer or the
Merger;
(b) There are no Governmental Orders applicable to Parent or any of
its Subsidiaries which do, or would reasonably be likely to, prevent Parent from
consummating the Offer or the Merger.
(c) Parent is not aware of any facts or circumstances that would (i)
cause the NASD or any other required federal or state regulatory agency or other
Governmental Entity not to approve the transfer of control and ownership of the
Company to Parent; or (ii) cause the NASD or any federal or state regulatory
agency or other Governmental Entity to revoke or restrict Parent's
Authorizations to operate as a broker-dealer after the change in ownership and
control of the Company contemplated by this Agreement.
(d) Except as does not or would not reasonably be likely to, prevent
Parent from consummating the Offer or the Merger, neither Parent nor any of its
Subsidiaries is subject to any cease-and-desist or other order or enforcement
action issued by, or party to any written agreement, consent agreement or
memorandum of understanding with, or a party to any commitment letter or similar
undertaking to, or is subject to any order or directive by, 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 regulatory authority or other Governmental Entity that restricts the conduct
of its business or that in any 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 "Parent Regulatory
Agreement"), nor has Parent or any of its Subsidiaries been advised in writing
or, to the knowledge of Parent or any of its Subsidiaries, in any other manner
by any regulatory authority or Governmental Entity that it is considering
issuing or requesting such a Parent Regulatory Agreement nor is there any
pending or, to the knowledge of Parent or any of its Subsidiaries, threatened
regulatory investigation.
4.8 BROKER'S FEES. Except for Xxxxxxx & Co. Securities LLC, neither Parent
nor any of its Subsidiaries has employed any broker or finder or incurred any
liability for any broker's fees, commissions or finder's fees in connection with
the Merger or related transactions contemplated by this Agreement.
4.9 PARENT INFORMATION.
(a) The representations or warranties made by Parent herein or in any
schedule hereto, including the Parent Disclosure Schedule, or certificate
furnished by Parent pursuant to this Agreement do not contain any untrue
statement of a material fact, or omit to state any material fact necessary in
order to make the statements contained herein or therein, in the light of the
circumstances under which made, not misleading.
(b) None of the information to be supplied by Parent for inclusion or
incorporation by reference in (i) the Offer Documents or the Schedule 14D-9
will, at the date the
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Offer Documents or the Schedule 14D-9 are first mailed to the Company's
stockholders and at any time between the time the Offer Documents and the
Schedule 14D-9 are mailed to the stockholders of the Company and the Acceptance
Date, 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 were made,
not misleading or (ii) any other document filed with any other regulatory agency
in connection herewith will, at the time such document is filed, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; except that no
representation or warranty is made by Parent or Merger Sub with respect to
statements made or incorporated by reference therein based on information
supplied by Parent or Merger Sub for inclusion or incorporation by reference in
the Offer Documents or the Schedule 14D-9. The Offer Documents will comply as to
form in all material respects with the requirements of the Exchange Act and the
rules and regulations thereunder.
ARTICLE V
CONDUCT PRIOR TO THE EFFECTIVE TIME
5.1 CONDUCT OF BUSINESS PRIOR TO THE EFFECTIVE TIME. During the period from
the date of this Agreement to the Effective Time, except as expressly
contemplated or permitted by this Agreement, the Company shall, and shall cause
each of its Subsidiaries, to (a) conduct its business in the usual, regular and
ordinary course consistent with past practice, (b) use all reasonable best
efforts consistent with past practice and policies to preserve intact its
present business organizations, keep available the services of its present
executive officers and key employees and preserve its relationships with
customers, suppliers, distributors, licensors, licensees, and others having
significant business dealings with it and (c) take no action which would
adversely affect or delay in any material respect the ability of either Parent
or the Company to obtain any necessary approvals of any regulatory agency or
other Governmental Entity required for the transactions contemplated hereby;
provided, however that nothing contained in this Section 5.1 shall prohibit the
Company from taking any action in connection with the sale, divestiture,
dissolution or other transfer of (A) the Company's venture capital business
pursuant to the memorandum of understanding set forth on Section 5.1(A) of the
Company Disclosure Schedule, (B) the Company's foreign businesses as described
on Section 5.1(B) of the Company Disclosure Schedule, or (C) the Company's
investment banking business either (i) pursuant to the arrangements referenced
on Section 5.1(C)(i) of the Company Disclosure Schedule or (ii) as described on
Section 5.1(C)(ii) of the Company Disclosure Schedule.
5.2 CONDUCT OF BUSINESS OF THE COMPANY. During the period from the date of
this Agreement and continuing until the earlier of the termination of this
Agreement or the Effective Time, except as set forth in Section 5.2 of the
Company Disclosure Schedule or except as expressly contemplated by this
Agreement, the Company shall not do, cause or permit any of the following, or
allow, cause or permit any of its Subsidiaries to do, cause or permit any of the
following, without the prior written consent of Parent:
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(a) Cause or permit any amendment, modification, alteration or
rescission of its certificate or articles of incorporation, bylaws or other
charter or organizational documents;
(b) Declare or pay any dividends on or make any other distributions
(whether in cash, stock or property) in respect of any of its capital stock
(other than dividends or distributions by any wholly owned Subsidiary of the
Company to the Company or another wholly owned Subsidiary thereof) or 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, or repurchase or otherwise acquire, directly or
indirectly, any shares of its capital stock except from former employees,
directors and consultants in accordance with agreements providing for the
repurchase of shares in connection with any termination of service to it or any
of its Subsidiaries;
(c) Grant any options, stock appreciation rights or other rights
(except for the issuance of Rights in connection with the issuance of Company
Common Stock permitted by this Section 5.2) to acquire securities, or
accelerate, amend or change the period of exercisability or vesting of options
or other rights granted under its stock plans or otherwise or authorize cash
payments in exchange for any options or other rights granted under any of such
plans, in each case except as otherwise required by such plans or any existing
agreements;
(d) grant annual restricted stock bonuses or annual cash bonuses other
than as may be required pursuant to agreements existing as of the date hereof
without Parent's consent, and with respect to this Section 5.2(d) only, such
consent will not be unreasonably withheld;
(e) Issue, deliver or sell or authorize or propose the issuance,
delivery or sale of, or purchase or propose the purchase of, any shares of its
capital stock or securities convertible into, or subscriptions, rights, warrants
or options to acquire, or other agreements or commitments of any character
obligating it to issue any such shares or other convertible securities, other
than (i) the issuance of shares of Company Common Stock pursuant to the exercise
of Company Options outstanding under the Company Stock Plans as of the date of
this Agreement, (ii) the issuance of shares of Company Common Stock or Company
Class B Common Stock pursuant to the exercise of the Warrants outstanding as of
the date of this Agreement and (iii) pursuant to agreements existing as of the
date hereof;
(f) Transfer to any person or entity any rights in or to its
Intellectual Property other than the transfer of non-exclusive rights to its
Intellectual Property in the ordinary course of business consistent with past
practice;
(g) Enter into or amend any agreements pursuant to which any other
party is granted exclusive marketing or other exclusive rights of any type or
scope with respect to any of its products or technology;
(h) Sell, lease, license or otherwise dispose of or encumber any of
its properties or assets which are material, individually or in the aggregate,
to the business of the Company and its Subsidiaries (taken as a whole), except
in the ordinary course of business
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consistent with past practice and except for the sale of real estate owned in
accordance with current policies of the Company with respect thereto;
(i) Other than in the ordinary course of business consistent with past
practice, (A) incur any indebtedness for borrowed money, (B) assume, guarantee,
endorse or otherwise as an accommodation become responsible for the obligations
of any other Person (except as set forth on Schedule 5.2(i)) or (C) cancel,
release, assign or modify any material amount of indebtedness of any other
person or entity;
(j) Enter into any lease for real property or material operating
lease;
(k) Pay, discharge or satisfy in an amount individually or in the
aggregate in excess of $100,000 any claim, action, litigation, arbitration or
proceeding (absolute, accrued, asserted or unasserted, contingent or otherwise)
arising other than in the ordinary course of business consistent with past
practice, other than (A) the payment, discharge or satisfaction of liabilities
reflected or reserved against in the Company Financial Statements, (B) pursuant
to the agreements listed on Schedule 5.2(k), (C) pursuant to court orders
entered against the Company or (D) as otherwise permitted pursuant to this
Section 5.2;
(l) Make any capital expenditures, capital additions or capital
improvements except (i) in the ordinary course of business consistent with past
practice that do not exceed individually or in the aggregate $100,000 and (ii)
pursuant to contracts or commitments set forth on Schedule 5.2(l);
(m) Materially reduce the amount of any material insurance coverage
provided by existing insurance policies;
(n) (i) Adopt or amend in a manner that will increase the benefits to
be provided to any director or employee of the Company or its Subsidiaries under
any Company Employee Benefit Plan (except as required by law), (ii) hire or
enter into any employment agreement with any director or executive officer level
employee other than in connection with the replacement of existing director or
executive officer level positions, (iii) pay any special bonus or special
remuneration to any employee or director other than pursuant to existing
agreements, other than in an amount not in excess of $10,000 individually or
$100,000 in the aggregate, (iv) provide any salary or bonus guarantee to any of
its employees other than pursuant to existing agreements or (v) other than in
the ordinary course of business consistent with past practice, increase the
salaries or wage rates of any of its employees;
(o) Grant any severance or termination pay (i) to any director or
officer or (ii) to any other employee, in each case, except payments made
pursuant to written plans or agreements outstanding, or Company policies in
effect (as described on Schedule 5.2(o)), on the date hereof, or severance
payments contemplated by this Agreement;
(p) Commence any action, suit or proceeding other than (i) in the
ordinary course of business consistent with past practice, (ii) in such cases
where it in good faith determines that failure to commence suit would result in
the material impairment of a valuable aspect of its business, provided that it
consults with Parent prior to the filing of such a suit or (iii) in respect of a
breach of this Agreement;
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(q) Acquire or agree to acquire by merging or consolidating with, or
by purchasing a substantial portion of the assets of, or by any other manner,
any business or any corporation, partnership, association or other business
organization or division thereof, or otherwise acquire or agree to acquire any
assets which are material, individually or in the aggregate, to the Company and
its Subsidiaries (taken as a whole), or acquire or agree to acquire any equity
securities of any corporation, partnership, limited liability company,
association or business organization which securities acquired or agreed to be
acquired would constitute greater than five percent (5%) of the outstanding
securities of such entity;
(r) Other than in the ordinary course of business consistent with past
practice or as required by applicable law, rule or regulation, make or change
any material election in respect of Taxes, adopt or change in any material
respect any accounting method in respect of Taxes, enter into any material
closing agreement, settle any material claim or assessment in respect of Taxes,
or consent to any extension or waiver of the limitation period applicable to any
material claim or assessment in respect of Taxes;
(s) Revalue any of its assets other than in the ordinary course of
business consistent with past practice or as required by applicable law, rule or
regulation;
(t) Make any material change to its accounting methods or practices,
except as may be required by GAAP, Regulation S-X or other rule or regulation
promulgated by the SEC;
(u) Except as required by applicable law or regulation, or written
rule, instruction or directive by a Governmental Entity which is furnished to
Parent promptly following receipt thereof: (i) implement or adopt any material
change in its risk management or hedging policies, procedures or practices; (ii)
fail to follow its existing policies or practices with respect to managing its
exposure to risk; or (iii) fail to use commercially reasonable means to avoid
any material increase in its aggregate exposure to risk;
(v) Change Domain Names or fail to renew existing Domain Name
registrations on a timely basis; or
(w) Take or agree in writing to take, any of the actions described in
Sections 5.2(a) through (v) above
PROVIDED, HOWEVER that nothing contained in this Section 5.2 shall prohibit the
Company from taking any action in connection with the sale, divestiture,
dissolution or other transfer of (A) the Company's venture capital business
pursuant to the memorandum of understanding identified on Section 5.1(A) of the
Company Disclosure Schedule, (B) the Company's foreign businesses as described
on Section 5.1(B) of the Company Disclosure Schedule, or (C) the Company's
investment banking business either (i) pursuant to the arrangements referenced
on Section 5.1(C)(i) of the Company Disclosure Schedule or (ii) as described on
Section 5.1(C)(ii) of the Company Disclosure Schedule.
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5.3 NO SOLICITATION.
(a) The Company shall not, nor shall it permit or authorize any of its
Subsidiaries or any officer, director, employee, accountant, counsel, financial
advisor, agent or other representative of the Company or any of its Subsidiaries
(collectively, the "COMPANY REPRESENTATIVES") to, (i) solicit or initiate, or
encourage, directly or indirectly, any inquiries regarding or the submission of,
any Takeover Proposal (as defined below), (ii) participate in any discussions or
negotiations regarding, or furnish to any Person any information or data with
respect to, or take any other action to knowingly facilitate the making of any
proposal that constitutes, or may reasonably be expected to lead to, any
Takeover Proposal or (iii) enter into any agreement with respect to any Takeover
Proposal or approve or resolve to approve any Takeover Proposal; PROVIDED,
HOWEVER, that nothing contained in this Section 5.3 or any other provision
hereof shall prohibit the Company or its Board of Directors from (A) taking and
disclosing to the Company's stockholders a position with respect to a tender or
exchange offer by a third party pursuant to Rules 14d-9 and 14e-2 or Item
1012(a) of Regulation M-A promulgated under the Securities Exchange Act or (B)
making such disclosure to the Company's stockholders as, in the good faith
judgment of the Company's Board of Directors, after receiving advice from
outside counsel, is required under applicable law, provided that the Company may
not, except as permitted by Section 5.3(b), withdraw or modify, or propose to
withdraw or modify, its approval or recommendation of this Agreement or the
transactions contemplated hereby, including the Offer or the Merger, or approve
or recommend, or propose to approve or recommend any Takeover Proposal, or enter
into any agreement with respect to any Takeover Proposal. Upon execution of this
Agreement, the Company shall, and it shall cause the Company Representatives to,
immediately cease any existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any Takeover Proposal.
Notwithstanding the foregoing, prior to the Acceptance Date, the Company may
furnish information concerning its business, properties or assets to any Person
or group pursuant to confidentiality agreements with terms and conditions at
least as restrictive on such Person or group as the Confidentiality Agreement is
on Parent, and may negotiate and participate in discussions and negotiations
with such Person or group concerning a Takeover Proposal if: (x) such Person or
group has submitted a Superior Proposal, or a Takeover Proposal that the Board
of Directors of the Company determines in good faith (after consultation with
its independent financial advisors) is reasonably likely to be a Superior
Proposal, which is pending at the time the Company determines to take such
action; and (y) the Board of Directors of the Company determines in good faith,
based upon advice of outside counsel, that such action is required to discharge
the Company's Board of Director's fiduciary duties to the Company's stockholders
under Delaware Law. The Company shall not release or permit the release of any
Person from, or waive or permit the waiver of any provision of, any such
confidentiality agreement or any other confidentiality, standstill or similar
agreement to which the Company is a party or under which the Company has any
rights.
The Company will promptly (and in any event within one (1) business day)
notify Parent in writing, of the existence of any proposal, discussion,
negotiation or inquiry received by the Company with respect to any Takeover
Proposal, and the Company will promptly communicate to Parent the material terms
and conditions of any proposal, discussion, negotiation or inquiry which it may
receive and the identity of the Person or group making such proposal or inquire
or engaging in such discussions or negotiations. The Company will promptly
provide to
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Parent any non-public information concerning the Company provided to any other
Person or group which was not previously provided to Parent. The Company will
keep Parent reasonably informed of the status and details of any such Takeover
Proposal.
As used in this Agreement, the following terms have the meanings set forth
below:
"SUPERIOR PROPOSAL" means an unsolicited written proposal by a Third Party
(defined below) to acquire, directly or indirectly, more than 50% of the shares
of Company Common Stock then outstanding or all or substantially all of the
assets of the Company, and (i) otherwise on terms which the Board of Directors
of the Company determines in good faith (after consultation with its independent
financial advisors) to be more favorable to the Company's stockholders from a
financial point of view than the Merger and (ii) which, in the good faith
reasonable judgment of the Company's Board of Directors, is reasonably likely to
be consummated within a reasonable time, taking into consideration (with respect
to both subsections (i) and (ii) hereof) all financial, regulatory, legal and
other aspects of such proposal.
"TAKEOVER PROPOSAL" means any inquiry, proposal or offer, whether in
writing or otherwise, from a Third Party to acquire beneficial ownership (as
defined under Rule 13(d) of the Securities Exchange Act) of assets that
constitute 20% or more of the consolidated revenues, net income or assets of the
Company and its Subsidiaries or twenty percent (20%) or more of any class of
equity securities of the Company or any of its Subsidiaries pursuant to a
merger, consolidation or other business combination, sale of shares of capital
stock, sale of assets, tender offer, exchange offer or similar transaction with
respect to either the Company or any of its Subsidiaries, including any single
or multi-step transaction or series of related transactions, which is structured
to permit such Third Party or another Third Party to acquire beneficial
ownership of assets that constitute 20% or more of the consolidated revenues,
net income or assets of the Company and its Subsidiaries, or twenty percent
(20%) or more of the equity interest in either the Company or any of its
Subsidiaries.
"THIRD PARTY" means any Person or group other than Parent, Merger Sub or
any affiliate thereof.
(b) Except as set forth in this Section 5.3(b), neither the Company's
Board of Directors nor any committee thereof shall (i) withdraw or modify, or
propose to withdraw or modify, in a manner adverse to Parent or Merger Sub, the
approval or recommendation by the Company's Board of Directors or any such
committee of this Agreement or the transactions contemplated hereby, including
the Merger, (ii) approve or recommend, or propose to approve or recommend, any
Takeover Proposal or (iii) enter into any agreement with respect to any Takeover
Proposal. Notwithstanding the foregoing, prior to the Acceptance Date, the
Company's Board of Directors may withdraw or modify its approval or
recommendation of this Agreement or the transactions contemplated hereby,
including the Merger, approve or recommend a Superior Proposal, or enter into an
agreement with respect to a Superior Proposal, in each case if (A) the Company
shall have received a Superior Proposal which is pending at the time the Company
determines to take such action, (B) the Company's Board of Directors shall have
determined in good faith, based upon advice of outside counsel, that such action
is required to discharge the Company's Board of Director's fiduciary duties to
the Company's stockholders under Delaware Law, (C) at least three (3) business
days shall have passed following Parent's
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receipt of written notice from the Company advising Parent that the Company's
Board of Directors has received such a Superior Proposal which it intends to
accept, specifying the material terms and conditions of such Superior Proposal,
and Parent does not make an offer that the Board of Directors shall have
concluded in its good faith judgment, after consultation with its financial
advisors and outside counsel, is as favorable (taking into account the
Termination Fee) to the Company's stockholders as such Superior Proposal and (D)
concurrently with taking such action the Company shall pay any applicable fee
required by Section 8.3.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 REGULATORY MATTERS.
(a) As promptly as practicable following the Acceptance Date (and
following the expiration of any subsequent offering period), if the adoption of
this Agreement by the Company's stockholders is required by applicable legal
requirements in order to consummate the Merger, the Company shall prepare and
file with the SEC the Proxy Statement and shall use all reasonable best efforts
to respond to any comments of the SEC or its staff and to cause the Proxy
Statement to be mailed to the Company's stockholders as promptly as practicable
after responding to all such comments to the satisfaction of the SEC. The
Company shall notify Parent promptly of the receipt of any comments from the SEC
or its staff and of any request by the SEC or its staff for amendments or
supplements to the Proxy Statement or for additional information and will supply
Parent with copies of all correspondence between the Company or any of its
representatives, on the one hand, and the SEC, on the other hand, with respect
to the Proxy Statement or the Merger. If at any time prior to the Company
Stockholders' Meeting (defined below) there shall occur any event that is
required to be set forth in an amendment or supplement to the Proxy Statement,
the Company shall as promptly as practicable prepare and mail to its
stockholders such an amendment or supplement. The Company shall consult with
Parent prior to mailing any Proxy Statement, or any amendment or supplement
thereto, to which Parent timely and reasonably objects. Parent shall cooperate
with the Company in the preparation of the Proxy Statement or any amendment or
supplement thereto.
(b) Each of Parent and the Company shall, and shall cause its
Subsidiaries to, use all reasonable best efforts to, (i) take, or cause to be
taken, all actions necessary, proper or advisable to comply promptly with all
legal requirements which may be imposed on such party or its Subsidiaries with
respect to the Merger, including, without limitation, obtaining any third party
consent which may be required to be obtained in connection with the Merger and
the other transactions contemplated by this Agreement, to remove any restraint
or prohibition preventing the consummation of the Merger and the other
transactions contemplated by this Agreement, and, subject to the conditions set
forth in Article VII hereof, to consummate the Merger and the other transactions
contemplated by this Agreement and (ii) obtain (and cooperate with the other
party to obtain) any consent, authorization, order or approval of, or any
exemption by, any Governmental Entity which is required to be obtained by Parent
or the Company, respectively, or any of their respective Subsidiaries in
connection with the Merger and the other transactions contemplated by this
Agreement. The parties hereto shall cooperate with each other and
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promptly prepare and file all necessary documentation, and to effect all
applications, notices, petitions and filings (including, to the extent
necessary, any notification required by the HSR Act), to obtain as promptly as
practicable all permits, consents, approvals and authorizations of all third
parties and Governmental Entities which are necessary or advisable to consummate
the Merger and the other transactions contemplated by this Agreement. Parent and
the Company shall have the right to review in advance and, to the extent
practicable, each will consult the other on, in each case subject to applicable
laws relating to the exchange of information, all the information relating to
the Company or Parent, as the case may be, and any of their respective
Subsidiaries, which appear in any filing made with any third party or any
Governmental Entity in connection with the transactions contemplated by this
Agreement (other than Items 4 through 8, and any attachments thereto, of any
Notification filed under the HSR Act). In exercising the foregoing right, each
of the parties hereto shall act reasonably and as promptly as practicable. The
parties hereto agree that they will consult with each other with respect to the
obtaining of all permits, consents, approvals and authorizations of all third
parties and Governmental Entities necessary or advisable to consummate the
transactions contemplated by this Agreement and each party will keep the other
apprised of the status of matters relating to completion of the transactions
contemplated herein. Each of Parent and the Company shall use its reasonable
best efforts to resolve any objections that may be asserted by any Governmental
Entity with respect to this Agreement, the Merger or the other transactions
contemplated by this Agreement. Each of Parent and the Company shall not, and
shall cause its respective Subsidiaries not to, engage in any action or
transaction that would materially delay or materially impair the ability of the
Company, Parent or Merger Sub to consummate the Merger, or of Parent to
consummate any commitment to any Company Representative made in connection
therewith. Parent and the Company further covenant and agree, with respect to a
threatened or pending preliminary or permanent injunction or other order, decree
or ruling or statute, rule, regulation or executive order that would adversely
affect the ability of the parties hereto to consummate the transactions
contemplated hereby, to use reasonable best efforts to prevent the entry,
enactment or promulgation thereof, as the case may be.
(c) Parent and the Company shall, upon request, furnish each other
with all information concerning themselves, their respective Subsidiaries,
directors, officers, employees and stockholders and such other matters as may be
reasonably necessary or advisable in connection with the Proxy Statement or any
other statement, filing, notice, application or other document made by or on
behalf of Parent, the Company or any of their respective Subsidiaries to any
Governmental Entity in connection with the Merger and the other transactions
contemplated by this Agreement.
(d) Parent and the Company shall promptly advise each other upon
receiving any communication from any Governmental Entity whose consent or
approval is required for consummation of the transactions contemplated by this
Agreement which causes such party to believe that there is a reasonable
likelihood that any such consent or approval will not be obtained or that the
receipt of any such approval will be materially delayed.
6.2 ACCESS TO INFORMATION.
(a) Subject to the Confidentiality Agreement, the Company agrees to
provide Parent and Parent's officers, directors, employees, accountants,
counsel, financial
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advisors, agents and other representatives (collectively, the "Parent
Representatives"), from time to time prior to the Effective Time or the
termination of this Agreement, such information as Parent shall reasonably
request with respect to the Company and its Subsidiaries and their respective
businesses, financial conditions and operations. Except as required by law,
Parent shall hold, and shall cause Parent's Affiliates and the Parent
Representatives to hold, any non-public information received from the Company,
directly or indirectly, in accordance with the Confidentiality Agreement.
(b) Subject to the Confidentiality Agreement, Parent agrees to provide
to the Company and the Company Representatives, from time to time prior to the
Effective Time or termination of this Agreement, such information as the Company
shall reasonably request with respect to Parent and its business, financial
condition and operations. Except as required by law, the Company shall hold, and
shall cause the Company's Affiliates and the Company Representatives to hold,
any non-public information received from Parent, directly or indirectly, in
accordance with the Confidentiality Agreement.
6.3 STOCKHOLDER APPROVAL.
(a) As promptly as practicable following the Acceptance Date (and
following the expiration of any subsequent offering period), if the adoption of
this Agreement by the Company's stockholders is required by applicable legal
requirements in order to consummate the Merger, the Company, acting through the
Post-Acceptance Board, shall take all action necessary under all applicable
legal requirements to call, give notice of and hold a meeting of the holders of
the Company's capital stock to vote on a proposal to adopt this Agreement (the
"Company Stockholders' Meeting"). The Company Stockholders' Meeting shall be
held (on a date selected by the Company in consultation with Parent) as promptly
as practicable after the mailing of the Proxy Statement. The Company shall use
reasonable best efforts to ensure that all proxies solicited in connection with
the Company Stockholders' Meeting are solicited in compliance with all
applicable legal requirements. The Proxy Statement shall include the Company
Board Recommendation
(b) Notwithstanding anything to the contrary contained in this
Agreement, if Merger Sub shall own, by virtue of the Offer or otherwise, at
least ninety percent (90%) of the outstanding shares of Company Common Stock,
the parties shall take all necessary and appropriate action to cause the Merger
to become effective as soon as practicable without a stockholders' meeting in
accordance with Section 253 of the Delaware Law.
(c) Parent agrees to cause all shares of Company Common Stock owned by
Parent or any subsidiary of Parent to be voted in favor of the adoption of the
Agreement and consummation of the Merger at the Company Stockholders' Meeting.
6.4 PUBLIC DISCLOSURE. Unless otherwise permitted by this Agreement, Parent
and the Company shall consult with each other before issuing any press release
or otherwise making any public statement or making any other public (or
non-confidential) disclosure (whether or not in response to an inquiry)
regarding the terms of this Agreement or any of the transactions contemplated
hereby, and neither shall issue any such press release or make any such
statement or disclosure without the prior approval of the other (which approval
shall not be unreasonably
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withheld or delayed), except as may be required by law or by obligations
pursuant to any listing agreement with any national securities exchange or with
the NASD, in which case the party proposing to issue such press release or make
such public statement or disclosure shall use reasonable best efforts to consult
with the other party before issuing such press release or making such public
statement or disclosure.
6.5 REASONABLE BEST EFFORTS AND FURTHER ASSURANCES. Each of the parties to
this Agreement shall use its reasonable best efforts to effect the transactions
contemplated hereby and to fulfill and cause to be fulfilled the conditions to
Closing under this Agreement. Each party hereto, at the reasonable request of
another party hereto, shall execute and deliver such other instruments and do
and perform such other acts and things as may be necessary or desirable for
effecting the consummation of this Agreement and the transactions contemplated
hereby.
6.6 EMPLOYEES; EMPLOYEE BENEFIT MATTERS.
(a) Prior to the Closing Date, the Company will take such action as is
necessary to terminate its 401(k) Plan (the "Company 401(k) Plan") and also will
take all necessary action to ensure that each employee of the Company or any of
its Subsidiaries is fully vested in his or her account balance under the Company
401(k) Plan. As soon as practicable following IRS approval of the termination of
the Company 401(k) Plan, the assets thereof shall be distributed and Parent
shall permit the employees of the Company employed by the Surviving Corporation
to roll any eligible rollover distributions (and loans under the Company's
401(k) Plan) over into Parent's 401(k) Plan. Employees of the Company shall be
eligible as of the Effective Time to participate in Parent's 401(k) Plan.
(b) Parent and the Company agree to certain employee matters set forth
on Schedule 6.6(b).
(c) Except as provided on Schedule 6.6(c), for purposes of their
participation in the employee benefit plans of Parent, Parent shall credit each
Company employee with full credit for all service credited under each applicable
Company Benefit Plan (including service with the Company and, where applicable,
service with prior or predecessor employers to the extent credit is given for
such service under each applicable Company Benefit Plan) for purposes of
eligibility to participate and receive benefits for purposes of vesting and for
purposes of benefit accruals (except where it would result in a duplication of
benefits). With respect to the Company's health, dental and vision benefit
plans, Parent shall cause any such plan to waive any pre-existing condition
exclusions and actively-at-work requirements under such plans with respect to
the Company employees and their eligible dependents (to the extent waived under
the corresponding Company welfare benefit plan) and ensure that any covered
expenses incurred on or before the Effective Time shall be taken into account
for purposes of satisfying applicable deductible, coinsurance and maximum
out-of-pocket provisions after the Effective Time to the extent that such
expenses are taken into account for similarly situated employees of Parent.
(d) Parent shall, or shall cause the Company to, honor all written
contractual obligations of the Company and its affiliates to their respective
current and former employees, directors and independent contractors, including,
but not limited to, all obligations
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under employment, severance and consulting plans and arrangements and under all
other Company Benefit Plans.
(e) Except as provided on Schedule 6.6(e), Parent shall provide to
employees of the Surviving Corporation (i) employee benefits that are no less
favorable in the aggregate to the employee benefits provided to
similarly-situated employees of Schwab Capital Markets, provided, that with
respect to employee benefit plans only, Parent may satisfy its obligations under
this clause (i) for a transition period following the Effective Date, by
providing benefits pursuant to such employee benefit plans that are no less
favorable than the benefits provided to such employees pursuant to the Company
Employee Benefit Plans immediately prior to the Effective Time and (ii) base
salaries and incentive compensation opportunities that are no less favorable in
the aggregate to the base salaries and incentive compensation opportunities
provided to such employees immediately prior to the Effective Time.
(f) Except as otherwise provided in this Agreement, nothing in this
Section 6.6 shall be interpreted as preventing the Surviving Corporation from
amending, modifying or terminating any Parent benefit plans, Company Benefit
Plans, or other employee benefit plans, contracts, arrangements, commitments or
understandings, in accordance with their terms and applicable law.
6.7 EMPLOYEE RETENTION PLANS.
Immediately effective at to the Effective Time, an employee incentive
program in accordance with the general terms outlined in Schedule 6.7 hereto
shall be established to help assure access after the Effective Time to the
skills and continuing services of the categories of employees identified in
Schedule 6.7 hereto.
6.8 DIRECTOR AND OFFICER INDEMNIFICATION.
(a) The Certificate of Incorporation and Bylaws of the Surviving
Corporation shall, with respect to indemnification of officers, directors,
employees and agents, not be amended, repealed or otherwise modified after the
Effective Time in any manner that would adversely affect the rights thereunder
of the persons who at any time prior to the Effective Time were identified as
prospective indemnitees under the Certificate of Incorporation or Bylaws of the
Company in respect of actions or omissions occurring at or prior to the
Effective Time (including the transactions contemplated hereby), unless such
modification is required by law.
(b) Parent shall cause the Surviving Corporation to indemnify, defend
and hold harmless, the present and former officers, directors, employees and
agents of the Company or any of its Subsidiaries in their capacities as such
(each an "Indemnified Party") in accordance with the Certificate of
Incorporation and Bylaws, or other charter documents, of the Company and its
Subsidiaries and any agreements or plans maintained by the Company and its
Subsidiaries, to the fullest extent permitted by the terms thereof against all
losses, expenses, claims, damages and liabilities arising out of actions or
omissions occurring on or prior to the Effective Time.
(c) For six years after the Effective Time, Parent shall cause the
Surviving Corporation to use reasonable best efforts to provide officers' and
directors' liability insurance in
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respect of acts or omissions occurring at or prior to the Effective Time
covering each such person covered immediately prior to the Effective Time by the
Company's officers' and directors' liability insurance policy with substantively
the same coverage and amounts and on terms and conditions which are reasonably
comparable to those of such policy in effect on the date hereof, provided that
in satisfying its obligation under this paragraph, Parent shall not be obligated
to cause the Surviving Corporation to pay premiums in excess of 200% of the
current amount per annum paid by the Company, and if the Surviving Corporation
is unable to obtain the insurance required by this paragraph, it shall obtain as
much comparable insurance as possible for an annual premium equal to such
maximum amount.
(d) In the event Parent or any of its successors or assigns or the
Surviving Corporation or any of its successors or assigns (i) consolidates with
or merges into any other person and shall not be 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, to the extent necessary, proper provision shall be
made so that the successors and assigns of Parent or the Surviving Corporation,
as applicable, assume the obligations set forth in this section.
(e) The provisions of this Section 6.8 shall survive the Effective
Time and are intended to be for the benefit of, and shall be enforceable by,
each Indemnified Party and his or her heirs and representatives.
6.9 ADVICE OF CHANGES. The Company and Parent shall promptly advise each
other of any change or event having a Company Material Adverse Effect or Parent
Material Adverse Effect, as applicable.
6.10 SECTION 16B-3. Parent, Merger Sub and the Company shall take all
commercially reasonable actions as may be required to cause the transactions
contemplated by Section 1.8 and any other dispositions of equity securities of
the Company or acquisitions of equity securities of Parent by each individual
who is a director or officer of the Company to be exempt under Rule 16b-3
promulgated under the Securities Exchange Act.
ARTICLE VII
CONDITIONS PRECEDENT
7.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligation of each party to effect the Merger shall be subject to the
satisfaction at or prior to the Effective Time of the following conditions:
(a) STOCKHOLDER APPROVAL. If required by applicable legal
requirements, the Company Stockholder Approval shall have been obtained.
(b) NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect; nor shall there be any statute,
rule, regulation or order enacted, entered, or
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enforced which prevents or prohibits the consummation of the Merger. In the
event an injunction or other order shall have been issued, each party agrees to
use its reasonable best efforts to have such injunction or other order lifted.
(c) CONSUMMATION OF OFFER. Merger Sub shall have accepted for payment
and paid for shares of Company Common Stock pursuant to the Offer.
ARTICLE VIII
TERMINATION AND AMENDMENT
8.1 TERMINATION. Whether before or after approval of the matters presented
in connection with the Merger by the stockholders of the Company, this Agreement
may be terminated:
(a) by mutual consent of Parent and the Company at any time prior to
the Effective Time;
(b) by either Parent or the Company at any time prior to the
Acceptance Date if the Closing shall not have occurred on or before September
30, 2004 (provided that the right to terminate this Agreement under this Section
8.1(b) shall not be available to any party whose action or failure to act has
been the cause of or resulted in the failure to accept shares of Company Common
Stock for payment pursuant to the Offer by the close of business on September
30, 2004 and such action or failure to act constitutes a breach of this
Agreement);
(c) by Parent at any time prior to the Acceptance Date, if (i) the
Company shall breach any of its representations, warranties or obligations
hereunder to an extent that would cause the conditions set forth in either
clause "(a)" or "(b)" of Annex I not to be satisfied and such breach shall not
have been cured within fifteen (15) business days of receipt by the Company of
written notice of such breach (provided that the right to terminate this
Agreement by Parent shall not be available to Parent if Parent is at that time
in material breach of this Agreement), (ii) the Board of Directors of the
Company shall withdraw or modify the Company Board Recommendation in a manner
adverse to Parent or shall have resolved to do so, (iii) the Company shall
breach in any material respect its obligations set forth in Sections 5.3(a) (i)
or (iii) of this Agreement or (iv) the Board of Directors of the Company shall
have recommended, endorsed, accepted or agreed to a Takeover Proposal or shall
have resolved to do so;
(d) by the Company at any time prior to the Acceptance Date, if Parent
shall breach any of its representations, warranties or obligations hereunder to
an extent that the representations and warranties of Parent shall not be true
and correct in all material respects, in each case as of the date of this
Agreement and as of the Effective Time as though made on such date, except to
the extent such representations and warranties are expressly made only as of an
earlier date, in which case as of such earlier date;, provided, however, that
Company may not terminate this Agreement if the cumulative effect of all
inaccuracies of such representations and warranties (for this purpose
disregarding any qualification or limitation as to materiality or Parent
Material Adverse Effect) shall not be or have a Parent Material Adverse Effect,
or such breach shall have been cured within fifteen (15) business days following
receipt by Parent of
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written notice of such breach and that the right to terminate this Agreement by
the Company shall not be available to the Company if the Company is at that time
in material breach of this Agreement;
(e) by the Company at any time prior to the Acceptance Date if (i) the
Board of Directors of the Company has determined in accordance with Section 5.3
that a Superior Proposal has been made and has not been withdrawn, (ii) neither
the Company nor any of the Company Representatives has violated in any material
respect any of the restrictions set forth in Section 5.3, and (iii) the Company
has paid any applicable fee to Parent required by Section 8.3;
(f) by either Parent or the Company if at any time prior to the
Effective Time any permanent injunction or other order of a court or other
competent authority preventing the consummation of the Merger shall have become
final and nonappealable; and
(g) by either Parent or the Company at any time prior to the
Acceptance Date if the Offer shall have expired without the acceptance for
payment of shares of Company Common Stock; provided, however, that a party shall
not be permitted to terminate this Agreement pursuant to this Section 8.1(g) if
the failure to accept shares of Company Common Stock for payment pursuant tot he
Offer is attributable to a failure on the part of such party to perform any
covenant in this Agreement required to be performed by such party on or prior to
the Acceptance Date.
8.2 EFFECT OF TERMINATION. In the event of termination of this Agreement as
provided in Section 8.1, this Agreement shall forthwith become void and there
shall be no liability or obligation on the part of Parent, Merger Sub or the
Company or their respective officers, directors, stockholders or Affiliates;
provided that (a) the provisions of Section 6.4 (Public Disclosure), Section 8.3
(Expenses and Termination Fees), Section 10.8 (Governing Law) and this Section
8.2 shall remain in full force and effect and survive any termination of this
Agreement and (b) nothing herein shall relieve any party from liability for
fraud or willful material breach in connection with this Agreement or the
transactions contemplated hereby.
8.3 EXPENSES AND TERMINATION FEE.
(a) Subject to subsections (b), (c) and (d) of this Section 8.3,
whether or not the Merger is consummated, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby
(including, without limitation, the fees and expenses of its advisers, brokers,
finders, agents, accountants and legal counsel) shall be paid by the party
incurring such expense, it being understood and agreed that expenses incurred in
connection with printing the Offer Documents, Schedule 14D-9 and Proxy
Statement, and registration and filing fees incurred in connection with the
Offer Documents, Schedule 14D-9 and Proxy Statement and filing fees associated
with compliance with applicable regulatory requirements in connection with the
Merger shall be shared equally by the Company and Parent.
(b) In the event that either (A) the Company shall terminate this
Agreement pursuant to Section 8.1(e) or (B) Parent shall terminate this
Agreement pursuant to Section 8.1(c) (ii), (iii) or (iv), the Company shall pay
to Parent the Termination Fee.
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(c) In the event that (A) any of (i) Parent or the Company shall
terminate this Agreement pursuant to Section 8.1(b), (ii) Parent shall terminate
this Agreement pursuant to Section 8.1(c)(i), or (iii) Parent or Company shall
terminate this Agreement pursuant to Section 8.1(g), (B) prior to the time of
such termination there shall have been a Takeover Proposal with respect to the
Company, and (C) a definitive agreement or letter of intent is entered into by
the Company with respect to a Takeover Proposal or a Takeover Proposal is
consummated within twelve (12) months of such termination of this Agreement, the
Company shall pay the Termination Fee to Parent.
(d) In the event that a Termination Fee is payable to Parent, the
Company shall pay the Termination Fee to Parent (i) on the date of termination,
in the event that the Termination Fee is payable pursuant to Section 8.3(b) as a
result of termination of this Agreement by the Company, (ii) at the time of
consummation of the Takeover Proposal, in the event that the Termination Fee is
payable pursuant to Section 8.3(c) and (iv) in all other cases within fifteen
(15) days after the date of termination. In no event shall the Company be
obligated to pay to Parent an amount in excess of the Termination Fee and any
amounts owed to Parent pursuant to Section 8.3(a).
(e) In the event that the Company fails to pay when due any amount
payable under this Section 8.3 and Parent commences a suit which results in a
judgment against the Company for the Termination Fee, then (i) the Company shall
reimburse Parent for all costs and expenses (including disbursements and
reasonable fees of counsel) incurred in connection with such suit, together with
interest on the Termination Fee (for the period commencing as of the date the
Termination Fee was originally required to be paid and ending on the date the
Termination Fee is actually paid to Parent in full) at a rate per annum equal to
the "prime rate" (as announced by Bank of America, N.A.) in effect on the date
the Termination Fee was originally required to be paid.
8.4 AMENDMENT. The boards of directors of the parties hereto may cause this
Agreement to be amended at any time by execution of an instrument in writing
signed on behalf of each of the parties hereto; provided that an amendment made
subsequent to adoption of the Agreement by the stockholders of the Company shall
not (i) alter or change the amount or kind of consideration to be received on
conversion of Company Common Stock, or (ii) alter or change any of the terms and
conditions of the Agreement if such alteration or change would materially
adversely affect the holders of Company Common Stock.
8.5 EXTENSION; WAIVER. At any time prior to the Effective Time any party
hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto and (iii)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein. 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.
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ARTICLE IX
DEFINITIONS
9.1 CERTAIN DEFINED TERMS. Unless the context otherwise requires, the
following terms, when used in this Agreement, shall have the respective meanings
specified below (such meanings to be equally applicable to the singular and
plural forms of the terms defined):
"Acceptance Date" shall mean the first date on which Merger Sub purchases
any shares of Company Common Stock pursuant to the Offer.
"Adjusted Outstanding Share Number" shall mean the sum of: (i) the
aggregate number of shares of Company Common Stock and Company Class B Common
Stock outstanding immediately prior to the acceptance of shares of Company
Common Stock and Company Class B Common Stock pursuant to the Offer, plus (ii)
at the election of Parent, an additional number of shares up to but not
exceeding the aggregate number of shares of Company Common Stock and Company
Class B Common Stock issuable on the exercise of any outstanding option (or
portion thereof) that is vested or is expected to become vested (other than by
reason of the Merger) on or before September 30, 2004, or any warrant or other
right to acquire capital stock of the Company, or on the conversion of any
convertible security.
"Affiliate" of a Person shall mean any Person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, such Person.
"Agreement" shall have the meaning stated in the preamble to this document.
"AMEX" shall mean the American Stock Exchange LLC.
"Assets" shall have the meaning stated in Section 3.14(a) hereof.
"Authorizations" shall have the meaning stated in Section 3.12(b) hereof.
"awareness" with respect to the Company or any of its Subsidiaries shall
mean actual knowledge of any of those persons set forth in Section 9.1(a) of the
Company Disclosure Schedule.
"Broker-Dealer" shall have the meaning stated in Section 3.12(d) hereof.
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended.
"Certificate of Merger" shall mean the certificate of merger in the form
mutually agreed to by Parent and the Company.
"Closing" shall mean the consummation of the Merger.
"Closing Date" shall have the meaning stated in Section 2.2.
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"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Company" shall mean SoundView Technology Group, Inc., a Delaware
corporation.
"Company Board Recommendation" shall have the meaning stated in Section
1.2(a).
"Company Class B Common Stock" shall mean the Class B common stock, par
value $.01 per share, of the Company.
"Company Common Stock" shall mean common stock, par value of $.01 per
share, of the Company.
"Company Confidential Information" shall have the meaning stated in Section
3.18(h).
"Company Disclosure Schedule" shall mean the document dated the date of the
Agreement delivered by the Company to Parent prior to the execution and delivery
of the Agreement and referring to the representations and warranties of the
Company in the Agreement.
"Company Dissenting Shares" shall mean all shares, if any, of the
outstanding capital stock of the Company for which appraisal rights have been
perfected under Section 262 of the Delaware Law.
"Company Employee Benefit Plans" shall have the meaning stated in Section
3.10(a).
"Company ERISA Affiliate" shall have the meaning stated in Section 3.10(a).
"Company Financial Statements" shall have the meaning stated in Section
3.5(b).
"Company Material Adverse Effect" shall mean any effect that (i) is, or
would be reasonably likely to be, material and adverse to the business,
operations, financial condition or results of operations of the Company and its
Subsidiaries taken as a whole or (ii) does, or would be reasonably likely to,
prevent the Company from consummating the Merger and the other transactions
contemplated hereby, other than (A) any effect resulting from events, facts or
circumstances relating to the economy in general, including market fluctuations
and changes in interest rates, or to the Company's industry in general and not
specifically relating to the Company or any of its Subsidiaries, (B) any effect
resulting from changes in legal or regulatory conditions that affect in general
the businesses in which the Company and its Subsidiaries are engaged, (C) any
effect resulting from the announcement or consummation of this Agreement or the
transactions contemplated hereby, (D) any effect in respect of any change in the
Company's stock price or (E) any effect resulting from the sale, divestiture,
dissolution or other transfer of, or the failure to sell, divest, dissolve, or
otherwise transfer (i) the Company's investment banking business pursuant to the
arrangements referenced on Section 5.1(C)(i) of the Company Disclosure Schedule
or as described on Section 5.1(C)(ii) of the Company Disclosure Schedule, (ii)
the Company's venture capital business pursuant to the memorandum of
understanding identified on Section 5.1(A) of the Company Disclosure Schedule.
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"Company Multiemployer Plan" shall have the meaning stated in Section
3.10(b).
"Company Options" shall mean all rights, obligations, commitments or
agreements of any character, whether fixed or contingent, (other than the
Warrants) calling for the purchase or issuance of any shares of Company Common
Stock or any other equity securities of the Company or any securities
representing the right to purchase or otherwise receive any shares of Company
Common Stock.
"Company Preferred Stock" shall mean the preferred stock, par value of $.01
per share, of the Company.
"Company Regulatory Agreement" shall have the meaning stated in Section
3.12(h).
"Company Representative" shall have the meaning stated in Section 5.3(a).
"Company Rights Agreement" shall mean the Rights Agreement dated as of June
7, 1999 between the Company and the Rights Agent.
"Company SEC Documents" shall mean (i) the Company's Annual Reports on Form
10-K for each fiscal year of the Company beginning on or after January 1, 2001,
(ii) its Quarterly Reports on Form 10-Q for each of the first three fiscal
quarters in each of the fiscal years of the Company referred to in clause (i)
above, (iii) all proxy statements relating to the Company's meetings of
stockholders (whether annual or special) held, and all information statements
relating to stockholder consents, since the beginning of the first fiscal year
referred to in clause (i) above, (iv) its Current Reports on Form 8-K filed
since the beginning of the first fiscal year referred to in clause (i) above,
(v) all other forms, reports, registration statements, financial statements and
other documents (other than preliminary materials if the corresponding
definitive materials have been provided to Parent pursuant to this definition)
filed or submitted by the Company with the SEC since the beginning of the first
fiscal year referred to in clause (i) above.
"Company Stock Plans" shall mean the employee and director stock plans of
the Company, any agreements evidencing the grant of any equity-based
compensatory awards under the employee and director stock plans of the Company
and other documents governing any equity-based compensatory awards.
"Company Stockholder Approval" shall mean the affirmative vote of the
holders of a majority of the votes of the outstanding shares of Company Common
Stock entitled to vote thereon.
"Company Stockholders' Meeting" shall have the meaning stated in Section
6.3(a).
"Confidentiality Agreement" shall mean the Confidentiality Agreement dated
as of September 22, 2003, between Parent and the Company, as it may be amended
from time to time.
"Continuing Directors" shall have the meaning stated in Section 1.3(a).
"Delaware Law" shall mean the Delaware General Corporation Law.
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"Designated Officer" shall have the meaning stated in Section 1.1(f).
"Domain Names" shall have the meaning stated in Section 3.18(j).
"Effective Time" shall mean the date and time when the Merger becomes
effective, as set forth in the Certificate of Merger.
"ERISA" shall have the meaning stated in Section 3.10(a).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Exchange Agent" shall mean Parent's transfer agent, Xxxxx Fargo Bank
Minnesota, N.A., or another bank or trust company selected by Parent and
reasonably acceptable to the Company.
"Exchange Fund" shall mean the cash deposited by Parent with the Exchange
Agent pursuant to Section 2.13.
"GAAP" means United States generally accepted accounting principles.
"Governmental Entity" shall mean any court, administrative agency or
commission or other governmental, prosecutorial or regulatory authority or
instrumentality and any SRO.
"Governmental Order" means any order, writ, judgment, injunction, decree,
stipulation, determination or award entered by or with any Governmental Entity.
"HSR Act" shall have the meaning stated in Section 3.4.
"Intellectual Property" shall mean all patents, trademarks, trade names,
service marks, domain names, database rights, copyrights, and any applications
therefor, mask works, net lists, technology, know-how, trade secrets, inventory,
ideas, algorithms, processes, computer software programs or applications (in
both source code and object code form), and tangible or intangible proprietary
information or material of the Company and its Subsidiaries.
"Investment Company Act" shall mean the Investment Company Act of 1940, as
amended.
"IRS" shall mean the Internal Revenue Service.
"Key Employees" shall mean those persons set forth in Section 6.7 of the
Company Disclosure Schedule.
"knowledge" with respect to the Company or any of its Subsidiaries shall
mean actual knowledge of any of those persons set forth in Section 9.1(a) of the
Company Disclosure Schedule.
"Laws and Regulations" means all federal, state, local and foreign laws,
rules, regulations and ordinances and any rules and regulations of any SRO.
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"Leases" shall have the meaning stated in Section 3.14(a).
"Lien" shall mean any lien, claim, charge, option, encumbrance, mortgage,
pledge or security interest or other restrictions of any kind.
"Material Contracts" shall have the meaning stated in Section 3.13.
"Merger" shall have the meaning stated in Recital B.
"Merger Consideration" shall have the meaning stated in Section 2.4(a).
"Merger Sub" shall mean Shakespeare Merger Corporation, a Delaware
corporation and wholly-owned subsidiary of Parent.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"NYSE" shall mean the New York Stock Exchange, Inc.
"Offer" shall have the meaning stated in Recital B.
"Offer Conditions" shall have the meaning stated in 1.1(b).
"Offer Documents" shall have the meaning stated in Section 1.1(d).
"Offer Price" shall have the meaning stated in Recital B.
"Offer to Purchase" shall have the meaning stated in Section 1.1(d).
"Parent" shall mean The Xxxxxxx Xxxxxx Corporation, a Delaware corporation.
"Parent Common Stock" shall mean common stock, par value $.01 per share, of
Parent.
"Parent Disclosure Schedule" shall mean the disclosure schedule, dated the
date hereof, delivered by Parent to the Company with reference to the specific
section of the Agreement to which each disclosure relates.
"Parent Material Adverse Effect" shall mean any effect that (i) is, or
would be reasonably likely to be, material and adverse to the business,
operations, financial condition or results of operations of Parent and its
Subsidiaries taken as a whole or (ii) does, or would be reasonably likely to,
prevent Parent from consummating the Merger and the other transactions
contemplated hereby, other than (A) any effect resulting from events, facts or
circumstances relating to the economy in general, including market fluctuations
and changes in interest rates, or to Parent's industry in general and not
specifically relating to, as applicable, Parent or any Subsidiary of the Parent,
(B) any effect resulting from changes in legal or regulatory conditions that
affect in general the businesses in which Parent and its Subsidiaries are
engaged, (C) any effect resulting from the announcement or consummation of this
Agreement or the transactions contemplated hereby or (D) any effect in respect
of any change in the Parent's stock price.
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"Parent Representative" shall have the meaning stated in Section 6.2(a).
"Parent SEC Documents" shall mean (i) the Company's Annual Reports on Form
10-K for each fiscal year of Parent beginning on or after January 1, 2001, (ii)
its Quarterly Reports on Form 10-Q for each of the first three fiscal quarters
in each of the fiscal years of Parent referred to in clause (i) above, (iii) all
proxy statements relating to Parent's meetings of stockholders (whether annual
or special) held, and all information statements relating to stockholder
consents, since the beginning of the first fiscal year referred to in clause (i)
above, (iv) its Current Reports on Form 8-K filed since the beginning of the
first fiscal year referred to in clause (i) above, (v) all other forms, reports,
registration statements, financial statements and other documents (other than
preliminary materials if the corresponding definitive materials have been
provided to Parent pursuant to this definition) filed or submitted by Parent
with the SEC since the beginning of the first fiscal year referred to in clause
(i) above.
"Permitted Lien" shall mean any Lien consisting of (i) carriers',
warehousemen's, mechanics', landlords', materialmen's, repairmen's or similar
common law or statutory liens or encumbrances arising in the ordinary course of
business which are not delinquent or remain payable without penalty, (ii)
encumbrances for Taxes and other assessments or governmental charges or levies
not yet due and delinquent, and (iii) any other Liens that individually or in
the aggregate do not result in a Company Material Adverse Effect.
"Person" shall mean any individual, entity or Governmental Entity.
"Post-Acceptance Board" shall have the meaning stated in Section 1.3(a).
"Proxy Statement" shall mean a definitive form relating to the meeting of
the Company's stockholders to be held in connection with this Agreement and the
transactions contemplated hereby.
"Regulation S-X" shall mean 17 CFRss.210.1-01, et. seq.
"Restricted Shares" shall have the meaning stated in Section 1.1(f).
"Rights" shall mean rights to purchase shares of the Company's Class 1
Series A Junior Participating Preferred Stock and Class 2 Series A Junior
Participating Preferred Stock Shares under the Company Rights Agreement.
"Rights Agent" shall mean the American Stock Transfer and Trust Company.
"Schedule 14D-9" shall have the meaning stated in Section 1.2(b).
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securities Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
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"SRO" shall mean any domestic or foreign securities, broker-dealer,
investment adviser and insurance industry self-regulatory organization.
"Subsidiary" of any Person shall mean any corporation, partnership, limited
liability company, joint venture or other entity in which such Person (a) owns,
directly or indirectly, 50% or more of the outstanding voting securities or
equity interests or (b) is a general partner or managing member.
"Superior Proposal" shall have the meaning stated in Section 5.3(a).
"Surviving Corporation" shall mean the entity into which Merger Sub has
merged, following the Effective Time.
"Takeover Proposal" shall have the meaning stated in Section 5.3(a).
"Tax" or "Taxes" shall mean all federal, state, local, and foreign income,
excise, gross receipts, gross income, ad valorem, profits, gains, property,
capital, sales, transfer, use, value-added, stamp, documentation, payroll,
employment, severance, withholding, duties, intangibles, franchise, backup
withholding, and other taxes (including estimated taxes), charges, levies or
like assessments together with all penalties and additions to tax and interest
thereon.
"Technology Systems" shall have the meaning stated in Section 3.19(a).
"Tendered Restricted Shares" shall have the meaning stated in Section
1.1(f).
"Termination Fee" shall mean $12,075,000.
"Third Party" shall have the meaning stated in Section 5.3(a).
"Top-Up Option" shall have the meaning stated in Section 1.4(a).
"Top-Up Option Shares" shall have the meaning stated in Section 1.4(a).
"Warrants" shall mean the warrants to purchase shares of Company Common
Stock and Company Class B Common Stock.
ARTICLE X
GENERAL PROVISIONS
10.1 NONSURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. The
representations, warranties and agreements set forth in this Agreement shall
terminate at the Effective Time, except that the agreements set forth in Article
I, Section 6.4 (Public Disclosure), Section 6.5 (Reasonable Best Efforts and
Further Assurances), Section 6.6 (Employees; Employee Benefit Matters), Section
6.8 (Director and Officer Indemnification), Section 8.3 (Expenses and
Termination Fee) and this Article X shall survive the Effective Time.
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10.2 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied (with
confirmation), mailed by registered or certified mail (return receipt requested)
or delivered by an express courier (with confirmation) 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, to:
The Xxxxxxx Xxxxxx Corporation
000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxx,
Executive Vice President and Chief Financial Officer
with a copy to:
The Xxxxxxx Xxxxxx Corporation
000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx, Senior Vice President, Corporate
Development
and to:
Xxxxxx Xxxx Nemerovski Xxxxxx Xxxx & Rabkin, a Professional
Corporation
Three Xxxxxxxxxxx Xxxxxx
Xxxxxxx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
and
(b) if to the Company, to:
SoundView Technology Group, Inc.
0000 Xxxx Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Xxxx Xxxxx,
Chief Executive Officer
with a copy to:
SoundView Technology Group, Inc.
0000 Xxxx Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxxxxx,
General Counsel
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Xxxxxxxx, Xxxxxx, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
10.3 INTERPRETATION. When a reference is made in this Agreement to Exhibits
or Schedules, such reference shall be to an Exhibit or Schedule to this
Agreement unless otherwise indicated. The words "include," "includes" and
"including" when used herein shall be deemed in each case to be followed by the
words "without limitation." The phrase "made available" in this Agreement shall
mean that the information referred to has been made available if requested by
the party to whom such information is to be made available. The phrases "the
date of this Agreement", "the date hereof", and terms of similar import, unless
the context otherwise requires, shall be deemed to refer to the date set forth
in the first paragraph of this Agreement. 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.
10.4 COUNTERPARTS. This Agreement may be executed in two 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 the other parties, it being understood that all
parties need not sign the same counterpart.
10.5 ENTIRE AGREEMENT. This Agreement and the documents and instruments and
other agreements specifically referred to herein or delivered pursuant hereto,
including the Exhibits, the Schedules, including the Company Disclosure Schedule
and Parent Disclosure Schedule, constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof, except for the Confidentiality Agreement,
which shall continue in full force and effect, and shall survive any termination
of this Agreement or the Closing, in accordance with its terms.
10.6 ASSIGNMENT. Neither this Agreement nor any of the rights, interests or
obligations shall be assigned by any of the parties hereto (whether by operation
of law or otherwise) without the prior written consent of the other parties.
Subject to the preceding sentence, this Agreement will be binding upon, inure to
the benefit of and be enforceable by the parties and their respective successors
and assigns.
10.7 THIRD PARTY BENEFICIARIES. Except as set forth in Section 6.8
(Director and Officer Indemnification), this Agreement (including the documents
and instruments referred to herein) is not intended to confer upon any person
other than the parties hereto any rights or remedies hereunder.
10.8 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without reference to such
state's principles of conflicts of law. Each of the parties hereto irrevocably
consents to the exclusive jurisdiction of any court located within the State of
New York in connection with any matter based upon or arising out of this
Agreement or the matters contemplated herein, agrees that process may be
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served upon them in any manner authorized by the laws of the State of New York
for such persons and waives and covenants not to assert or plead any objection
which they might otherwise have to such jurisdiction and such process.
10.9 RULES OF CONSTRUCTION. The parties hereto agree that they have been
represented by counsel during the negotiation, preparation and execution of this
Agreement and, therefore, waive the application of any law, regulation, holding
or rule of construction providing that ambiguities in an agreement or other
document shall be construed against the party drafting such agreement or
document.
10.10 ATTORNEYS' FEES. In any action at law or suit in equity to enforce
this Agreement or the rights of any of the parties hereunder, the prevailing
party in such action or suit shall be entitled to receive its reasonable
attorneys' fees and costs and expenses incurred in such action or suit.
10.11 WAIVER OF JURY TRIAL. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT WHICH ANY PARTY MAY HAVE TO TRIAL BY JURY IN
RESPECT OF ANY PROCEEDING, LITIGATION OR COUNTERCLAIM BASED ON, OR ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. IF
THE SUBJECT MATTER OF ANY LAWSUIT IS ONE IN WHICH THE WAIVER OF JURY TRIAL IS
PROHIBITED, NO PARTY TO THIS AGREEMENT SHALL PRESENT AS A NON-COMPULSORY
COUNTERCLAIM IN ANY SUCH LAWSUIT ANY CLAIM BASED ON, OR ARISING OUT OF, UNDER OR
IN CONNECTION WITH THIS AGREEMENT. FURTHERMORE, NO PARTY TO THIS AGREEMENT SHALL
SEEK TO CONSOLIDATE ANY SUCH ACTION IN WHICH A JURY TRIAL CANNOT BE WAIVED.
10.12 SEVERABILITY. In the event that any provision of this Agreement, or
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void, invalid or unenforceable, the remainder of
this Agreement shall continue in full force and effect and the application of
such provision to other persons or circumstances shall be interpreted so as
reasonably to effect the intent of the parties hereto. The parties further agree
to replace such illegal, void, invalid or unenforceable provision of this
Agreement with a legal, valid and enforceable provision that shall achieve, to
the extent possible, the economic, business and other purposes of such illegal,
void, invalid or unenforceable provision.
IN WITNESS WHEREOF, Parent, Merger Sub and the Company have
caused this Agreement to be executed by their respective officers thereunto duly
authorized as of the date first above written.
THE XXXXXXX XXXXXX CORPORATION SOUNDVIEW TECHNOLOGY GROUP, INC.
By: /s/ Xxxxxxxxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxx
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Name: Xxxxxxxxxxx X. Xxxxx Name: Xxxx X. Xxxxx
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Title: EVP & CFO Title: Chief Executive Officer
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SHAKESPEARE MERGER
CORPORATION
By: /s/ Xxxxxxxxxxx X. Xxxxx
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Name: Xxxxxxxxxxx X. Xxxxx
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Title: CFO
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ANNEX I
CONDITIONS OF THE OFFER
Capitalized terms used but not defined in this Annex I shall have the meanings
set forth in the Agreement and Plan of Merger to which this Annex I is attached
(the "Agreement"). Notwithstanding any other provision of the Offer or the
Agreement, Merger Sub shall not be required to accept for payment, or (subject
to any applicable rule or regulation of the SEC) pay for, and may delay the
acceptance of payment of, or (subject to any applicable rule or regulation of
the SEC) the payment for, any tendered shares of Company Common Stock, and
(subject to Section 1.1(c)(ii) and (v) of the Agreement) may terminate the Offer
on any scheduled expiration date and not accept for payment any tendered shares
of Company Common Stock, if (i) the Minimum Condition shall not have been
satisfied by midnight, U.S. Eastern Time, on the expiration date of the Offer,
or (ii) any of the following additional conditions shall not have been
satisfied:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Company set forth in the Agreement shall be true and correct in all
material respects, in each case as of the date of the Agreement and as of the
Acceptance Date as though made on such date, except to the extent such
representations and warranties are expressly made only as of an earlier date, in
which case as of such earlier date; provided that, if any of such
representations and warranties shall not be true and correct (for this purpose
disregarding any qualification or limitation as to materiality or a Company
Material Adverse Effect), then the condition stated in this clause (a) shall be
deemed satisfied if and only if the cumulative effect of all inaccuracies of
such representations and warranties (for this purpose disregarding any
qualification or limitation as to materiality or Company Material Adverse
Effect) shall not be or have a Company Material Adverse Effect. Parent shall
have received a certificate signed on behalf of the Company by its Chief
Executive Officer and Chief Financial Officer to the foregoing effect.
(b) PERFORMANCE OF OBLIGATIONS OF THE COMPANY. The Company shall have
performed in all material respects its obligations required to be performed by
it under this Agreement at or prior to the Acceptance Date, and Parent shall
have received a certificate signed on behalf of the Company by its Chief
Executive Officer and Chief Financial Officer to such effect.
(c) GOVERNMENTAL APPROVAL. Parent, the Company and Merger Sub and
their respective Subsidiaries shall have timely obtained from each Governmental
Entity all approvals, waivers and consents, if any, necessary for consummation
of or in connection with the Merger and the other transactions contemplated
hereby, including, without limitation, such approvals, waivers and consents as
may be required under the Securities Act, the Securities Exchange Act, the HSR
Act, the NYSE, the NASD, the AMEX, and any state laws.
(d) NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Offer or the Merger shall be in effect; nor shall there be
any statute, rule, regulation or order enacted, entered, or enforced which
prevents or prohibits the consummation of the Offer or the Merger.
In the event an injunction or other order shall have been issued, each party
agrees to use its reasonable best efforts to have such injunction or other order
lifted.
The foregoing conditions are for the sole benefit of Parent and Merger Sub and
may be waived by Parent or Merger Sub, in whole or in part at any time and from
time to time, in the sole discretion of Parent and Merger Sub. The failure by
Parent or Merger Sub at any time to exercise any of the foregoing rights shall
not be deemed a waiver of any such right and each such right shall be deemed an
ongoing right which may be asserted at any time and from time to time.
TABLE OF CONTENTS
Page
ARTICLE I THE OFFER.................................................2
1.1 Conduct of the Offer......................................2
1.2 Company Actions...........................................5
1.3 Directors.................................................6
1.4 Top-Up Option.............................................8
ARTICLE II THE MERGER................................................9
2.1 The Merger................................................9
2.2 Closing; Effective Time...................................9
2.3 Effects of the Merger.....................................9
2.4 Conversion of Company Capital Stock.......................9
2.5 Merger Sub Common Stock..................................10
2.6 Parent Common Stock......................................10
2.7 Company Dissenting Shares................................10
2.8 Options and Warrants.....................................10
2.9 Certificate of Incorporation.............................13
2.10 Bylaws...................................................13
2.11 Directors of Surviving Corporation.......................13
2.12 Taking of Necessary Action; Further Action...............13
2.13 Parent to Make Cash Available............................13
2.14 Exchange of Shares.......................................13
2.15 Withholding..............................................14
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY............15
3.1 Corporate Organization, Standing and Power...............15
3.2 Capitalization...........................................15
3.3 Authority; No Violation..................................16
3.4 Consents and Approvals...................................17
3.5 SEC Documents; Financial Statements......................18
3.6 Absence of Certain Changes or Events.....................18
3.7 Undisclosed Liabilities..................................19
3.8 Legal Proceedings........................................19
3.9 Taxes and Tax Returns....................................20
3.10 Employee Benefit Plans...................................21
3.11 Employee Matters.........................................23
3.12 Compliance with Applicable Law and Regulatory Matters....24
3.13 Material Contracts.......................................26
3.14 Assets and Investment Securities.........................28
3.15 Environmental Liability..................................29
3.16 State Takeover Laws; Company Rights Plan.................29
3.17 Insurance................................................30
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3.18 Intellectual Property....................................30
3.19 Information Technology...................................32
3.20 Interests of Officers and Directors......................33
3.21 Opinion..................................................33
3.22 Broker's Fees............................................33
3.23 Company Information......................................34
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT.................34
4.1 Corporate Organization, Standing and Power...............34
4.2 Authority; No Violation..................................35
4.3 Consents and Approvals...................................35
4.4 SEC Documents............................................36
4.5 Absence of Certain Changes or Events.....................36
4.6 Legal Proceedings........................................36
4.7 Compliance with Applicable Law and Regulatory Matters....36
4.8 Broker's Fees............................................37
4.9 Parent Information.......................................37
ARTICLE V CONDUCT PRIOR TO THE EFFECTIVE TIME......................38
5.1 Conduct of Business Prior to the Effective Time..........38
5.2 Conduct of Business of the Company.......................38
5.3 No Solicitation..........................................42
ARTICLE VI ADDITIONAL AGREEMENTS....................................44
6.1 Regulatory Matters.......................................44
6.2 Access to Information....................................45
6.3 Stockholder Approval.....................................46
6.4 Public Disclosure........................................46
6.5 Reasonable Best Efforts and Further Assurances...........47
6.6 Employees; Employee Benefit Matters......................47
6.7 Employee Retention Plans.................................48
6.8 Director and Officer Indemnification.....................48
6.9 Advice of Changes........................................49
6.10 Section 16b-3............................................49
ARTICLE VII CONDITIONS PRECEDENT.....................................49
7.1 Conditions to Each Party's Obligation To Effect the Merge49
ARTICLE VIII TERMINATION AND AMENDMENT................................50
8.1 Termination..............................................50
8.2 Effect of Termination....................................51
8.3 Expenses and Termination Fee.............................51
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Page
8.4 Amendment................................................52
8.5 Extension; Waiver........................................52
ARTICLE IX DEFINITIONS..............................................53
9.1 Certain Defined Terms....................................53
ARTICLE X GENERAL PROVISIONS.......................................59
10.1 Nonsurvival of Representations, Warranties
and Agreements...........................................59
10.2 Notices..................................................60
10.3 Interpretation...........................................61
10.4 Counterparts.............................................61
10.5 Entire Agreement.........................................61
10.6 Assignment...............................................61
10.7 Third Party Beneficiaries................................61
10.8 Governing Law............................................61
10.9 Rules of Construction....................................62
10.10 Attorneys' Fees..........................................62
10.11 Waiver of Jury Trial.....................................62
10.12 Severability.............................................62
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