Exhibit 99.2
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT (the "Agreement"), dated as of January 12,
2000 between U.S. Trust Corporation, a New York corporation ("Issuer"), and
The Xxxxxxx Xxxxxx Corporation, a Delaware corporation ("Grantee").
W I T N E S S E T H:
WHEREAS, as a condition to, and simultaneously with, the execution
and delivery of this Agreement, Grantee, Patriot Merger Corporation, a New
York corporation ("Merger Sub"), and Issuer are entering into an Agreement and
Plan of Merger pursuant to which Merger Sub will merge with and into Issuer on
the terms and subject to the conditions set forth therein; and
WHEREAS, as a condition to Grantee's entering into the Merger
Agreement and in consideration therefor, Issuer has agreed to grant Grantee
the Option (as hereinafter defined);
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein and in the Merger Agreement, the
parties hereto agree as follows:
1. (a) Issuer hereby grants to Grantee an irrevocable option (the
"Option") to purchase, subject to the terms hereof, up to 3,713,558 fully paid
and nonassessable shares ("Option Shares") of Issuer's Common Stock, par value
$1.00 per share ("Common Stock"), at a price of $125.00 per share (the "Option
Price"); provided, however, that in the event Issuer issues or agrees to issue
any shares of Common Stock (other than as permitted under the Merger
Agreement) at a price less than the Option Price (as adjusted pursuant to
Section 5), the Option Price shall be equal to such lesser price; provided
further, that in no event shall the number of shares of Common Stock for which
this Option is exercisable exceed 19.9% of the Issuer's issued and outstanding
shares of Common Stock. The number of shares of Common Stock that may be
received upon the exercise of the Option and the Option Price are subject to
adjustment as herein set forth.
(b) In the event that any additional shares of Common Stock are
issued or otherwise become outstanding after the date of this Agreement (other
than pursuant to this Agreement), the number of shares of Common Stock subject
to the Option shall be increased so that, after such issuance, such number
equals 19.9% of the number of shares of Common Stock then issued and
outstanding without giving effect to any shares subject or issued pursuant to
the Option. Nothing contained in this Section 1(b) or elsewhere in this
Agreement shall be deemed to authorize Issuer or Grantee to breach any
provision of the Merger Agreement.
2. (a) Grantee may exercise the Option, with respect to any or all
of the Option Shares, at any time and from time to time, after a Triggering
Event (as hereinafter defined) shall have occurred; provided, however, that
the Option will terminate and be of no further force
or effect upon the earliest to occur of: (i) the Effective Time (as defined in
the Merger Agreement), (ii) twelve months after the first occurrence of a
Triggering Event and (iii) termination of the Merger Agreement in accordance
with the provisions thereof if such termination occurs prior to the occurrence
of a Triggering Event, unless, in the case of clause (iii), Grantee has the
right to receive a Termination Fee (as defined in the Merger Agreement)
following such termination upon the occurrence of certain events, in which
case the Option will not terminate until the later of (x) twelve months
following the time such Termination Fee first becomes payable and (y) the
expiration of the time period in which Grantee has such right or could obtain
the right to receive a Termination Fee. The date on which the Option
terminates is referred to hereinafter as the "Exercise Termination Event."
Notwithstanding the occurrence of an Exercise Termination Event, Grantee will
be entitled to purchase the Option Shares if it has exercised the Option in
accordance with the terms hereof prior to the Exercise Termination Event and
the termination of the Option will not affect any rights hereunder which by
their terms do not terminate or expire prior to or as of such termination.
(b) A "Triggering Event" shall mean any event as a result of
which Grantee is entitled to receive the Termination Fee pursuant to Section
8.2(b) of the Merger Agreement by reason of all the conditions stated in
Section 8.2(b) having been satisfied.
(c) Issuer shall notify Grantee promptly in writing of the
occurrence of any Triggering Event of which it has notice, it being understood
that the giving of such notice by Issuer shall not be a condition to the right
of Grantee to exercise the Option.
(d) In the event Grantee is entitled to and wishes to exercise
the Option, it shall send to Issuer a written notice (the date of which being
herein referred to as the "Notice Date") specifying (i) the total number of
shares it will purchase pursuant to such exercise and (ii) a place and date
not earlier than three business days nor later than 60 business days from the
Notice Date for the closing of such purchase (the "Closing Date"); provided
that, if prior notification to or approval of the Federal Reserve Board or any
other regulatory agency is required in connection with such purchase, Grantee
shall promptly file the required notice or application for approval and shall
expeditiously process the same and the period of time that otherwise would run
pursuant to this sentence shall run instead from the date on which any
required notification periods have expired or been terminated or such
approvals have been obtained and any requisite waiting period or periods shall
have passed; provided further, that the Closing Date shall not in any event be
later than twelve months after the Notice Date. Any exercise of the Option
shall be deemed to occur on the Notice Date relating thereto.
(e) At the closing referred to in subsection (d) of this
Section 2, Grantee shall pay to Issuer the aggregate purchase price for the
shares of Common Stock purchased pursuant to the exercise of the Option in
immediately available funds by wire transfer to a bank account designated by
Issuer; provided that, failure or refusal of Issuer to designate such a bank
account shall not preclude Grantee from exercising the Option.
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(f) At such closing, simultaneously with the delivery of
immediately available funds as provided in subsection (e) of this Section 2,
Issuer shall deliver to Grantee a certificate or certificates representing the
number of shares of Common Stock purchased by Grantee and, if the Option
should be exercised in part only, a new Option evidencing the rights of
Grantee thereof to purchase the balance of the shares purchasable hereunder,
and Grantee shall deliver to Issuer a letter agreeing that Grantee will not
offer to sell or otherwise dispose of such shares in violation of applicable
law or the provisions of this Agreement.
(g) Certificates for Common Stock delivered at a closing
hereunder may be endorsed with a restrictive legend that shall read
substantially as follows:
"The transfer of the shares represented by this certificate is
subject to certain provisions of an agreement between the registered
holder hereof and Issuer and to resale restrictions arising under
the Securities Act of 1933, as amended. A copy of such agreement is
on file at the principal office of Issuer and will be provided to
the holder hereof without charge upon receipt by Issuer of a written
request therefor."
It is understood and agreed that: (i) the reference to the resale restrictions
of the Securities Act of 1933, as amended (the "1933 Act"), in the above
legend shall be removed by delivery of substitute certificate(s) without such
reference if Grantee shall have delivered to Issuer a copy of a letter from
the staff of the SEC, or an opinion of counsel, in form and substance
reasonably satisfactory to Issuer, to the effect that such legend is not
required for purposes of the 1933 Act, (ii) the reference to the provisions of
this Agreement in the above legend shall be removed by delivery of substitute
certificate(s) without such reference if the shares have been sold or
transferred in compliance with the provisions of this Agreement and under
circumstances that do not require the retention of such reference and (iii)
the legend shall be removed in its entirety if the conditions in the preceding
clauses (i) and (ii) are both satisfied. In addition, such certificates shall
bear any other legend as may be required by law.
(h) Upon the giving by Grantee to Issuer of the written notice
of exercise of the Option provided for under subsection (e) of this Section 2
and the tender of the applicable purchase price in immediately available
funds, Grantee shall be deemed to be the holder of record of the shares of
Common Stock issuable upon such exercise notwithstanding that the stock
transfer books of Issuer shall then be closed or that certificates
representing such shares of Common Stock shall not then be actually delivered
to Grantee. Issuer shall pay all expenses, and any and all United States
federal, state and local taxes and other charges that may be payable in
connection with the preparation, issue and delivery of stock certificates
under this Section 2 in the name of Grantee.
3. Issuer agrees: (i) that it shall at all times maintain, free from
preemptive rights, sufficient authorized but unissued or treasury shares of
Common Stock so that the Option may be exercised without additional
authorization of Common Stock after giving effect to all other options,
warrants, convertible securities and other rights to purchase Common Stock,
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(ii) that it will not, by charter amendment or through reorganization,
consolidation, merger, dissolution or sale of assets, or by any other
voluntary act, avoid or seek to avoid the observance or performance of any of
the covenants, stipulations or conditions to be observed or performed
hereunder by Issuer (provided that compliance by Issuer with applicable law
and regulation shall be deemed to not be a voluntary act), (iii) promptly use
best efforts to take all action as may from time to time be required
(including (x) complying with all premerger notification, reporting and
waiting period requirements specified in 15 U.S.C. Section 18(a) and
regulations promulgated thereunder and (y) in the event, under the Bank
Holding Company Act of 1956, as amended (the "BHCA"), or the Change in Bank
Control Act of 1978, as amended, or any state banking law, prior approval of
or notice to the Federal Reserve Board, to the Office of Thrift Supervision or
to any state regulatory authority is necessary before the Option may be
exercised, cooperating fully with Grantee in preparing such applications or
notices and providing such information to the Federal Reserve Board or such
state regulatory authority as they may require) in order to permit Grantee to
exercise the Option and Issuer duly and effectively to issue shares of Common
Stock pursuant hereto and (iv) promptly to take all action provided herein to
protect the rights of Grantee against dilution.
4. Upon receipt by Issuer of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of this Agreement, and (in the
case of loss, theft or destruction) of reasonably satisfactory
indemnification, and upon surrender and cancellation of this Agreement, if
mutilated, Issuer will execute and deliver a new Agreement of like tenor and
date. Any such new Agreement executed and delivered shall constitute an
additional contractual obligation on the part of Issuer, whether or not the
Agreement so lost, stolen, destroyed or mutilated shall at any time be
enforceable by anyone.
5. In addition to the adjustment in the number of shares of Common
Stock that are purchasable upon exercise of the Option pursuant to Section 1
of this Agreement, the number of shares of Common Stock purchasable upon the
exercise of the Option and the Option Price shall be subject to adjustment
from time to time as provided in this Section 5. In the event of any change
in, or distributions in respect of, the Common Stock by reason of stock
dividends, split-ups, mergers, recapitalizations, combinations, subdivisions,
conversions, exchanges of shares, distributions on or in respect of the Common
Stock that would be prohibited under the terms of the Merger Agreement, or the
like, the type and number of shares of Common Stock purchasable upon exercise
hereof and the Option Price shall be appropriately adjusted in such manner as
shall fully preserve the economic benefits provided hereunder and proper
provision shall be made in any agreement governing any such transaction to
provide for such proper adjustment and the full satisfaction of the Issuer's
obligations hereunder.
6. Issuer shall, at the request of Grantee delivered within two
years after the exercise of the Option, promptly prepare, file and keep
current a shelf registration statement under the 1933 Act covering any Option
Shares and shall use its commercially reasonable efforts to cause such
registration statement to become effective and remain current in order to
permit the sale or other disposition of any Option Shares in accordance with
any plan of disposition requested by Grantee. Issuer will use its commercially
reasonable efforts to cause such
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registration statement first to become effective and then to remain effective
for such period not in excess of 180 days from the day such registration
statement first becomes effective or such shorter time as may be reasonably
necessary to effect such sales or other dispositions. Grantee shall have the
right to demand two such registrations. The foregoing notwithstanding, if, at
the time of any request by Grantee for registration of Option Shares as
provided above, Issuer is in registration with respect to an underwritten
public offering of shares of Common Stock, and if in the good faith judgment
of the managing underwriter or managing underwriters, or, if none, the sole
underwriter or underwriters, of such offering the inclusion of Grantee's
Option Shares would interfere with the successful marketing of the shares of
Common Stock offered by Issuer, the number of Option Shares otherwise to be
covered in the registration statement contemplated hereby may be reduced; and
provided, however, that after any such required reduction the number of Option
Shares to be included in such offering for the account of Grantee shall
constitute at least 25% of the total number of shares to be sold by Grantee
and Issuer in the aggregate; and provided further, however, that if such
reduction occurs, then Issuer shall file a registration statement for the
balance as promptly as practical and no reduction shall thereafter occur.
Grantee shall provide all information reasonably requested by Issuer for
inclusion in any registration statement to be filed hereunder. If requested by
Grantee in connection with such registration, Issuer shall become a party to
any underwriting agreement relating to the sale of such shares, but only to
the extent of obligating itself in respect of representations, warranties,
indemnities and other agreements customarily included in secondary offering
underwriting agreements for Issuer.
7. (a) At any time after the occurrence of a Repurchase Event (as
defined below), (i) at the request of Grantee, delivered prior to an Exercise
Termination Event, Issuer (or any successor thereto) shall repurchase the
Option from Grantee at a price (the "Option Repurchase Price") equal to the
amount by which (A) the Market Price (as defined below) exceeds (B) the Option
Price, multiplied by the number of shares for which this Option may then be
exercised and (ii) at the request of Grantee at any time it is the owner of
Option Shares (the "Owner"), delivered prior to an Exercise Termination Event,
Issuer shall repurchase such number of the Option Shares from the Owner as the
Owner shall designate at a price (the "Option Share Repurchase Price") equal
to the Market Price multiplied by the number of Option Shares so designated.
The term "Market Price" shall mean the average closing price for shares of
Common Stock for the five trading days ending on and including the trading day
immediately preceding the date Grantee gives notice of the required repurchase
of this Option or the Owner gives notice of the required repurchase of Option
Shares, as the case may be.
(b) Grantee and the Owner, as the case may be, may exercise its
right to require Issuer to repurchase the Option and any Option Shares
pursuant to this Section 7 by surrendering for such purpose to Issuer, at its
principal office, a copy of this Agreement or certificates for Option Shares,
as applicable, accompanied by a written notice or notices stating that Grantee
or the Owner, as the case may be, elects to require Issuer to repurchase this
Option and/or the Option Shares in accordance with the provisions of this
Section 7. Within the later to occur of (x) five business days after the
surrender of a copy of this Agreement and/or certificates representing Option
Shares and the receipt of such notice or notices relating thereto and (y) the
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time that is immediately prior to the occurrence of a Repurchase Event, Issuer
shall deliver or cause to be delivered to Grantee the Option Repurchase Price
and/or to the Owner the Option Share Repurchase Price therefor or the portion
thereof that Issuer is not then prohibited under applicable law and regulation
from so delivering.
(c) To the extent that Issuer is prohibited under applicable
law or regulation from repurchasing the Option and/or the Option Shares in
full, Issuer shall immediately so notify Grantee and/or the Owner and
thereafter deliver or cause to be delivered, from time to time, to Grantee
and/ or the Owner, as appropriate, the portion of the Option Repurchase Price
and the Option Share Repurchase Price, respectively, that it is no longer
prohibited from delivering, within five business days after the date on which
Issuer is no longer so prohibited; provided, however, that if Issuer at any
time after delivery of a notice of repurchase pursuant to paragraph (b) of
this Section 7 is prohibited under applicable law or regulation from
delivering to Grantee and/or the Owner, as appropriate, the Option Repurchase
Price and the Option Share Repurchase Price, respectively, in full (and Issuer
hereby undertakes to use its best efforts to obtain all required regulatory
and legal approvals and to file any required notices as promptly as
practicable in order to accomplish such repurchase), Grantee or the Owner may
revoke its notice of repurchase of the Option or the Option Shares either in
whole or to the extent of the prohibition, whereupon, in the latter case,
Issuer shall promptly (i) deliver to Grantee and/or the Owner, as appropriate,
that portion of the Option Repurchase Price or the Option Share Repurchase
Price that Issuer is not prohibited from delivering and (ii) deliver, as
appropriate, either (A) to Grantee, a new Stock Option Agreement evidencing
the right of Grantee to purchase that number of shares of Common Stock
obtained by multiplying the number of shares of Common Stock for which the
surrendered Stock Option Agreement was exercisable at the time of delivery of
the notice of repurchase by a fraction, the numerator of which is the Option
Repurchase Price less the portion thereof theretofore delivered to Grantee and
the denominator of which is the Option Repurchase Price, or (B) to the Owner,
a certificate for the Option Shares it is then so prohibited from
repurchasing.
(d) For purposes of this Section 7, a "Repurchase Event" shall
be deemed to have occurred (i) upon the consummation of any merger,
consolidation or similar transaction involving Issuer or any purchase, lease
or other acquisition of all or a substantial portion of the assets of Issuer,
other than any merger, consolidation, purchase or similar transaction
involving only Issuer and one or more of its Subsidiaries (as defined in the
Merger Agreement) or involving only two or more of such Subsidiaries or (ii)
upon the acquisition by any person of beneficial ownership of 50% or more of
the then outstanding shares of Common Stock, provided that no such event shall
constitute a Repurchase Event unless a Triggering Event shall have occurred
prior to an Exercise Termination Event. Grantee will be entitled to exercise
its rights under this Section 7 if it has exercised such rights in accordance
with the terms hereof prior to the termination of the Option.
8. (a) In the event that prior to an Exercise Termination Event,
Issuer shall enter into an agreement (i) to consolidate with or merge into any
person, other than Grantee or one of its Subsidiaries, and shall not be the
continuing or surviving corporation of such
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consolidation or merger, (ii) to permit any person, other than Grantee or one
of its Subsidiaries, to merge into Issuer and Issuer shall be the continuing
or surviving corporation, but, in connection with such merger, the then
outstanding shares of Common Stock shall be changed into or exchanged for
stock or other securities of any other person or cash or any other property or
the then outstanding shares of Common Stock shall after such merger represent
less than 50% of the outstanding voting shares and voting share equivalents of
the merged company or (iii) to sell or otherwise transfer all or substantially
all of its assets to any person, other than Grantee or one of its
Subsidiaries, then, and in each such case, the agreement governing such
transaction shall make proper provision so that the Option shall, upon the
consummation of any such transaction (the date of such consummation the
"Consummation Date") and upon the terms and conditions set forth herein, be
converted into, or exchanged for, an option (the "Substitute Option"), at the
election of Grantee, of either (x) the Acquiring Corporation (as hereinafter
defined) or (y) any person that controls the Acquiring Corporation.
(b) The following terms have the meanings indicated:
(i) "Acquiring Corporation" shall mean (i) the continuing
or surviving corporation of a consolidation or merger with Issuer (if other
than Issuer), (ii) Issuer in a merger in which Issuer is the continuing or
surviving person and (iii) the transferee of all or substantially all of
Issuer's assets.
(ii) "Substitute Common Stock" shall mean the common stock
issued by the issuer of the Substitute Option upon exercise of the Substitute
Option.
(iii) "Assigned Value" shall mean the Market Price, as
defined in Section 7, as of the Consummation Date.
(iv) "Average Price" shall mean the average closing price
of a share of the Substitute Common Stock for the 30 trading days immediately
preceding the Consummation Date; provided that, if Issuer is the issuer of the
Substitute Option, the Average Price shall equal the Assigned Value.
(c) The Substitute Option shall have the same terms as the
Option; provided that, if the terms of the Substitute Option cannot, for legal
reasons, be the same as the Option, such terms shall be as similar as possible
and in no event less advantageous to Grantee. The issuer of the Substitute
Option shall also enter into an agreement (the "Substitute Option Agreement")
with Grantee of the Substitute Option in substantially the same form as this
Agreement, which shall be applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for such number
of shares of Substitute Common Stock as is equal to the Assigned Value
multiplied by the number of shares of Common Stock for which the Option is
then exercisable, divided by the Average Price. The exercise price of the
Substitute Option per share of Substitute Common Stock shall then be equal to
the Option Price multiplied by a fraction, the numerator of which shall be the
number of
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shares of Common Stock for which the Option is then exercisable and the
denominator of which shall be the number of shares of Substitute Common Stock
for which the Substitute Option is exercisable.
(e) In no event, pursuant to any of the foregoing paragraphs,
shall the Substitute Option be exercisable for more than 19.9% of the shares
of Substitute Common Stock outstanding prior to exercise of the Substitute
Option.
(f) Issuer shall not enter into any transaction described in
subsection (a) of this Section 8 unless the Acquiring Corporation and any
person that controls the Acquiring Corporation assume in writing all the
obligations of Issuer hereunder.
9. (a) For the purposes hereof Total Gain as of any date shall be
the aggregate of all amounts (before taxes) received by Grantee hereunder as
(i) the Option Repurchase Price, (ii) the excess of (A) the Option Share
Repurchase Price over (B) the aggregate amount of the Option Price paid for
the shares for which Grantee receives the Option Share Repurchase Price and
(iii) the Sale Proceeds. For the purposes hereof Sale Proceeds shall be the
excess of (A) the net proceeds (before taxes, but after deducting brokerage
commissions and other similar customary sales expenses) from the sale (other
than a sale to Issuer (or any successor thereto) pursuant to Section 7) of
Option Shares or any portion thereof over (B) the aggregate amount of exercise
price paid for such Option Shares. In determining the amount of the Sale
Proceeds, the value of any non-cash consideration received for the sale of the
Option Shares shall be, (i) for securities listed on a national securities
exchange or traded on the Nasdaq National Market, the average closing price
per share of such security as reported on such exchange or the Nasdaq National
Market for the five trading days prior to the date of delivery of such
consideration to Grantee and (ii) for other securities or property, the value
as determined by a nationally recognized independent investment banking firm
mutually agreed upon by Grantee and Issuer. In the event that the Option is
converted into a Substitute Option pursuant to Section 8, the provision of the
applicable Substitute Option Agreement corresponding to this Section 9(a)
shall provide that the Total Gain with respect to such Substitute Option shall
include in its aggregate amount the Total Gain with respect to this Option as
determined pursuant to this Section 9(a).
(b) If at any time the aggregate amount of (x) the Total Gain
and (y) any Termination Fee paid to Grantee pursuant to Section 8.2(b) of the
Merger Agreement shall exceed $150 million, Grantee at its sole election shall
(i) deliver cash to Issuer, (ii) authorize Issuer to reduce the amount then
payable to Grantee under Section 7, (iii) agree to cancel a portion of the
Option, (iv) deliver Common Stock to Issuer (the shares so delivered being
deemed to have a per share value equal to the closing price of the Common
Stock on the day prior to the day of the event giving rise to the requirement
to make such payment) or (v) any combination thereof so that Grantee's
realized Total Gain when aggregated with such Termination Fee so paid to
Grantee no longer exceeds $150 million after taking into account the foregoing
actions.
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(c) Notwithstanding any other provision of this Agreement, the
Option may not be exercised for a number of shares as would, as of the date of
exercise, result in a Notional Total Gain (as defined below) which, together
with any Termination Fee theretofore paid to Grantee would exceed $150
million; provided that, nothing in this sentence shall restrict any exercise
of the Option permitted hereby on any subsequent date.
(d) As used herein, the term "Notional Total Gain" with respect
to any number of shares as to which Grantee may propose to exercise the Option
shall be the Total Gain determined as of the date of such proposal assuming
that the Option were exercised on such date for such number of shares and
assuming that such shares, together with all other Option Shares held by
Grantee and its affiliates as of such date, were sold for cash at the closing
market price for the Common Stock as of the close of business on the preceding
trading day (less customary brokerage commissions).
10. The period for exercise of certain rights under Sections 2, 6
and 7 shall be extended to the extent necessary to avoid liability under
Section 16(b) of the 1934 Act by reason of such exercise.
11. Issuer hereby represents and warrants to Grantee as follows:
(a) Issuer 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 transactions contemplated hereby have been duly and validly authorized by
the Board of Directors of Issuer and no other corporate proceedings on the
part of Issuer are necessary to authorize this Agreement or to consummate the
transactions so contemplated. This Agreement has been duly and validly
executed and delivered by Issuer.
(b) Issuer has taken all necessary corporate action to
authorize and reserve and to permit it to issue, and at all times from the
date hereof through the termination of this Agreement in accordance with its
terms will have reserved for issuance upon the exercise of the Option, that
number of shares of Common Stock equal to the maximum number of shares of
Common Stock at any time and from time to time issuable hereunder, and all
such shares, upon issuance pursuant hereto, will be duly authorized, validly
issued, fully paid, nonassessable, and will be delivered free and clear of all
claims, liens, encumbrances and security interests and not subject to any
preemptive rights.
(c) Issuer has taken all action (including, if required,
redeeming all of the rights outstanding under, or amending or terminating, the
UST Rights Agreement) so that the entering into of this Agreement, the
acquisition of shares of Common Stock hereunder and the other transactions
contemplated hereby do not and will not result in the grant of any rights to
any person under the UST Rights Agreement or enable or require the rights
outstanding thereunder to be exercised, distributed or triggered.
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12. Grantee hereby represents and warrants to Issuer that:
(a) Grantee has all requisite corporate power and authority to
enter into this Agreement and, subject to any approvals or consents referred
to herein, to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate
action on the part of Grantee. This Agreement has been duly executed and
delivered by Grantee.
(b) The Option is not being, and any shares of Common Stock or
other securities acquired by Grantee upon exercise of the Option will not be,
acquired with a view to the public distribution thereof and will not be
transferred or otherwise disposed of except in a transaction registered or
exempt from registration under the 1933 Act.
13. Neither of the parties hereto may assign any of its rights or
obligations under this Option Agreement or the Option created hereunder to any
other person, without the express written consent of the other party.
14. Each of Grantee and Issuer will use its best efforts to make all
filings with, and to obtain consents of, all third parties and governmental
authorities necessary to the consummation of the transactions contemplated by
this Agreement, including without limitation making application to list the
shares of Common Stock issuable hereunder on the New York Stock Exchange upon
official notice of issuance and applying to the Federal Reserve Board under
the BHCA for approval to acquire the shares issuable hereunder, but Grantee
shall not be obligated to apply to state banking authorities for approval to
acquire the shares of Common Stock issuable hereunder until such time, if
ever, as it deems appropriate to do so.
15. The parties hereto acknowledge that damages would be an
inadequate remedy for a breach of this Agreement by either party hereto and
that the obligations of the parties hereto shall be enforceable by either
party hereto through injunctive or other equitable relief.
16. If any term, provision, covenant or restriction contained in
this Agreement is held by a court or a federal or state regulatory agency of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions and covenants and restrictions contained in this
Agreement shall remain in full force and effect, and shall in no way be
affected, impaired or invalidated. If for any reason such court or regulatory
agency determines that Grantee is not permitted to acquire, or Issuer is not
permitted to repurchase pursuant to Section 7, the full number of shares of
Common Stock provided in Section 1(a) hereof (as adjusted pursuant to Sections
1(b) or 5 hereof), it is the express intention of Issuer to allow Grantee to
acquire or to require Issuer to repurchase such lesser number of shares as may
be permissible, without any amendment or modification hereof.
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17. All notices, requests, claims, demands and other communications
hereunder shall be deemed to have been duly given when delivered in person, by
cable, telegram, telecopy or telex, or by registered or certified mail
(postage prepaid, return receipt requested) at the respective addresses of the
parties set forth in the Merger Agreement.
18. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, regardless of the laws that might
otherwise govern under applicable principles of conflicts of laws thereof.
19. This Agreement may be executed in two or more counterparts, each
of which shall be deemed to be an original, but all of which shall constitute
one and the same agreement.
20. Except as otherwise expressly provided herein, each of the
parties hereto shall bear and pay all costs and expenses incurred by it or on
its behalf in connection with the transactions contemplated hereunder,
including fees and expenses of its own financial consultants, investment
bankers, accountants and counsel.
21. Except as otherwise expressly provided herein or in the Merger
Agreement, this Agreement contains the entire agreement between the parties
with respect to the transactions contemplated hereunder and supersedes all
prior arrangements or understandings with respect thereof, written or oral.
The terms and conditions of this Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors and
permitted assigns. Nothing in this Agreement, expressed or implied, is
intended to confer upon any party, other than the parties hereto, and their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
herein.
22. Capitalized terms used in this Agreement and not defined herein
shall have the meanings assigned thereto in the Merger Agreement.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed on its behalf by its officers thereunto duly authorized, all as of
the date first above written.
THE XXXXXXX XXXXXX CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President and Co-Chief
Executive Officer
U.S. TRUST CORPORATION
By: /s/ H. Xxxxxxxx Xxxxxxxx
-----------------------------
Name: H. Xxxxxxxx Xxxxxxxx
Title: Chairman and Chief
Executive Officer
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