EXHIBIT 99(d)(1)
AGREEMENT AND PLAN OF MERGER
Among
CREDIT SUISSE FIRST BOSTON, INC.,
CSFBDIRECT ACQUISITION CORP.
and
CREDIT SUISSE FIRST BOSTON (USA), INC.
Dated as of July 11, 2001
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS
SECTION 1.01. DEFINITIONS....................................................2
ARTICLE II THE OFFER
SECTION 2.01. THE OFFER......................................................4
SECTION 2.02. COMPANY ACTION.................................................6
ARTICLE III THE MERGER
SECTION 3.01. THE MERGER.....................................................7
SECTION 3.02. EFFECTIVE TIME.................................................7
SECTION 3.03. EFFECT OF THE MERGER...........................................7
SECTION 3.04. CERTIFICATE OF INCORPORATION; BY-LAWS..........................8
SECTION 3.05. DIRECTORS AND OFFICERS.........................................8
SECTION 3.06. CONVERSION OF SECURITIES.......................................8
SECTION 3.07. DISSENTING SHARES..............................................9
SECTION 3.08. SURRENDER OF SHARES; STOCK TRANSFER BOOKS......................9
SECTION 3.09. LOST, STOLEN OR DESTROYED CERTIFICATES........................10
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 4.01. ORGANIZATION AND QUALIFICATION; SUBSIDIARIES..................10
SECTION 4.02. CAPITALIZATION................................................11
SECTION 4.03. AUTHORITY RELATIVE TO THIS AGREEMENT..........................11
SECTION 4.04. NO CONFLICT; REQUIRED FILINGS AND CONSENTS....................11
SECTION 4.05. BROKERS.......................................................12
SECTION 4.06. OPINION OF FINANCIAL ADVISOR..................................12
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ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
SECTION 5.01. CORPORATE ORGANIZATION........................................12
SECTION 5.02. AUTHORITY RELATIVE TO THIS AGREEMENT..........................12
SECTION 5.03. NO CONFLICT; REQUIRED FILINGS AND CONSENTS....................13
SECTION 5.04. BROKERS.......................................................13
SECTION 5.05. FINANCING.....................................................13
ARTICLE VI CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 6.01. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER.........13
ARTICLE VII ADDITIONAL AGREEMENTS
SECTION 7.01. STOCKHOLDERS' MEETING.........................................14
SECTION 7.02. PROXY STATEMENT...............................................14
SECTION 7.03. ACCESS TO INFORMATION.........................................15
SECTION 7.04. NOTIFICATION OF CERTAIN MATTERS...............................15
SECTION 7.05. FURTHER ACTION; REASONABLE BEST EFFORTS.......................15
SECTION 7.06. PUBLIC ANNOUNCEMENTS..........................................16
SECTION 7.07. DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE........16
SECTION 7.08. OBLIGATIONS OF PURCHASER......................................17
ARTICLE VIII CONDITIONS TO THE MERGER
SECTION 8.01. CONDITIONS TO THE MERGER......................................18
ARTICLE IX TERMINATION, AMENDMENT AND WAIVER
SECTION 9.01. TERMINATION...................................................18
SECTION 9.02. EFFECT OF TERMINATION.........................................19
SECTION 9.03. FEES AND EXPENSES.............................................19
SECTION 9.04. AMENDMENT.....................................................19
SECTION 9.05. WAIVER........................................................19
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ARTICLE X GENERAL PROVISIONS
SECTION 10.01. NOTICES......................................................20
SECTION 10.02. SEVERABILITY.................................................20
SECTION 10.03. ENTIRE AGREEMENT; ASSIGNMENT.................................21
SECTION 10.04. PARTIES IN INTEREST..........................................21
SECTION 10.05. SPECIFIC PERFORMANCE.........................................21
SECTION 10.06. GOVERNING LAW................................................21
SECTION 10.07. WAIVER OF JURY TRIAL.........................................21
SECTION 10.08. HEADINGS.....................................................22
SECTION 10.09. COUNTERPARTS.................................................22
ANNEX A Conditions to the Offer
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AGREEMENT AND PLAN OF MERGER, dated as of July 11, 2001 (this
"AGREEMENT"), among Credit Suisse First Boston, Inc., a Delaware corporation
("PARENT"), CSFBdirect Acquisition Corp., a Delaware corporation and a wholly
owned subsidiary of Parent ("PURCHASER"), and Credit Suisse First Boston (USA),
Inc., a Delaware corporation (the "COMPANY").
WHEREAS, the authorized capital stock of the Company consists of (i)
1,500,000,000 shares of common stock, par value $.10 per share, of which (x)
500,000,000 shares have been designated Credit Suisse First Boston (USA), Inc.
Common Stock , par value $.10 per share (the "COMMON STOCK"), of which 1000
shares are outstanding as of the date hereof and all of which are beneficially
owned by Parent, and (y) 500,000,000 shares have been designated Credit Suisse
First Boston (USA), Inc. - CSFBDIRECT Common Stock, par value $0.10 per share
(the "SHARES"), of which 18,400,000 shares are outstanding as of the date hereof
(the "PUBLICLY HELD SHARES") and (ii) 50,000,000 shares of preferred stock, par
value $.01 per share, of which 4,000,000 shares of Series A Preferred Stock and
3,500,000 shares of Series B Preferred Stock are outstanding;
WHEREAS, Parent had proposed to the board of directors of the
Company (the "BOARD") that Parent or an affiliate of Parent acquire all the
Publicly Held Shares (the "PROPOSAL");
WHEREAS, it is proposed that Parent shall cause Purchaser to
commence a tender offer (the "OFFER") to acquire any and all of the Publicly
Held Shares, for an amount equal to $6.00 per Share (such amount, or any greater
amount per Share paid pursuant to the Offer, being the "PER SHARE AMOUNT") net
to the seller in cash, upon the terms and subject to the conditions of this
Agreement and the Offer;
WHEREAS, it is proposed that the Company issue to Purchaser or an
affiliate of Purchaser or Parent all the Shares issuable in respect of the
Company's retained interest in CSFBdirect (the "RETAINED INTEREST");
WHEREAS, the Board has established a special committee of the Board
(the "SPECIAL COMMITTEE") to determine (i) whether the Proposal is fair to and
in the best interests of the holders of the Publicly Held Shares (the "PUBLIC
HOLDERS") and (ii) conclusively whether or not the Board shall recommend the
Proposal to the Public Holders and whether or not the Company shall otherwise
consummate any transactions in respect of the Proposal;
WHEREAS, the Special Committee (i) has determined that it is fair to
and in the best interests of the Public Holders to consummate the Offer and the
merger of Purchaser with and into the Company, with the Company being the
Surviving Corporation (the "MERGER"), upon the terms and subject to the
conditions of this Agreement and in accordance with the General Corporation Law
of the State of Delaware ("DELAWARE LAW"), (ii) has determined that the Offer,
the Merger and this Agreement should be approved and declared advisable by the
Board and (iii) has resolved to recommend that the Public Holders accept the
Offer, tender their Shares pursuant thereto and approve and adopt this Agreement
if submitted for their approval;
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WHEREAS, the Board, acting upon the recommendation of the Special
Committee, (i) has determined that it is fair to and in the best interests of
the Public Holders to consummate the Offer and the Merger, upon the terms and
subject to the conditions of this Agreement and in accordance with Delaware Law,
(ii) has approved and declared advisable the Offer, the Merger and this
Agreement and (iii) has resolved to recommend that the Public Holders accept the
Offer, tender their Shares pursuant thereto and approve and adopt this Agreement
if submitted for their approval; and
WHEREAS, the board of directors of Purchaser (i) has determined that
the Offer and the Merger are fair to and in the best interests of Purchaser and
its stockholder and (ii) has approved and declared advisable the Offer, the
Merger and this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Parent, Purchaser and the Company hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. (a) For purposes of this Agreement:
"AFFILIATE" of a specified person means a person who, directly or
indirectly through one or more intermediaries, controls, is controlled by,
or is under common control with, such specified person.
"BENEFICIAL OWNER", with respect to any Shares, has the meaning
ascribed to such term under Rule 13d-3(a) of the Exchange Act.
"BUSINESS DAY" means any day on which the principal offices of the
SEC in Washington, D.C. are open to accept filings, or, in the case of
determining a date when any payment is due, any day on which banks are not
required or authorized to close in The City of New York.
"COMPANY STOCK OPTIONS" means the outstanding options to purchase
Shares and the stock incentive rights granted under the Company's 1996
Stock Option Plan, 1996 Incentive Compensation Plan, 1996 Non-Employee
Director Stock Plan and CSFBdirect 1999 Incentive Compensation Plan, each
as amended through the date of this Agreement.
"CONTROL" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly, or as trustee
or executor, of the power to direct or cause the direction of the
management and policies of a person, whether through the ownership of
voting securities, as trustee or executor, by contract or credit
arrangement or otherwise.
"KNOWLEDGE OF THE COMPANY" means the actual knowledge of any
executive officer of the Company.
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"MATERIAL ADVERSE EFFECT" means, when used in connection with the
Company or any Subsidiary, any event, circumstance, change or effect that,
when taken together with all other events, circumstances, changes and
effects is or is reasonably likely to be materially adverse to the
business, financial condition or results of operations of the Company and
the Subsidiaries taken as a whole, except to the extent such effect is
attributable to the execution or announcement of this Agreement or the
consummation of the Offer or the Merger, and other than events,
circumstances, changes or other effects that are generally applicable to
(i) the online brokerage industry, (ii) the United States economy or (iii)
the United States securities markets.
"PERSON" means an individual, corporation, partnership, limited
partnership, limited liability company, syndicate, person (including a
"person" as defined in Section 13(d)(3) of the Exchange Act), trust,
association or entity or government, political subdivision, agency or
instrumentality of a government.
"SUBSIDIARY" or "SUBSIDIARIES" of the Company, the Surviving
Corporation, Parent or any other person means any person (other than a
natural person) controlled by such person, directly or indirectly, through
one or more intermediaries.
"TAXES" shall mean any and all taxes, fees, levies, duties, tariffs,
imposts and other charges of any kind (together with any and all interest,
penalties, additions to tax and additional amounts imposed with respect
thereto) imposed by any Governmental Authority or taxing authority,
including: taxes or other charges on or with respect to income, franchise,
windfall or other profits, gross receipts, property, sales, use, capital
stock, payroll, employment, social security, workers' compensation,
unemployment compensation or net worth; taxes or other charges in the
nature of excise, withholding, ad valorem, stamp, transfer, value-added or
gains taxes; license, registration and documentation fees; and customers'
duties, tariffs and similar charges.
(b) The following terms have the meaning set forth in the Sections
set forth below:
Defined Term Location of Definition
------------ ----------------------
Action ss. 7.05(b)
Agreement Preamble
Blue Sky Laws ss. 4.04(b)
Board Recitals
Certificates ss. 3.08(b)
Common Stock Recitals
Company Preamble
Delaware Law Recitals
Dissenting Shares ss. 3.07(a)
Effective Time ss. 3.02
Exchange Act ss. 2.01(a)
Governmental Authority ss. 4.04(b)
Indemnified Parties ss. 7.07(b)
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Law ss. 4.04(a)
Lazard ss. 2.02(a)
Maximum Premium ss. 7.07(c)
Merger Recitals
Merger Consideration ss. 3.06(a)
Offer Recitals
Offer Documents ss. 2.01(b)
Offer to Purchase ss. 2.01(b)
Parent Preamble
Paying Agent ss. 3.08(a)
Per Share Amount Recitals
Proposal Recitals
Proxy Statement ss. 7.01(a)
Public Holders Recitals
Publicly Held Shares Recitals
Purchaser Preamble
Retained Interest Recitals
Schedule 13E-3 ss. 2.01(b)
Schedule 14D-9 ss. 2.02(b)
Schedule TO ss. 2.01(b)
SEC ss. 2.01(a)
Shares Recitals
Special Committee Recitals
Stockholders' Meeting ss. 7.01(a)
Subsidiary ss. 4.01(a)
Surviving Corporation ss. 3.03
Transactions ss. 2.02(a)
ARTICLE II
THE OFFER
SECTION 2.01. THE OFFER. (a) Provided that none of the events set
forth on Annex A hereto shall have occurred and be continuing, Purchaser shall
commence the Offer as promptly as reasonably practicable after the date hereof
and in no event more than ten business days after the date hereof. The
obligation of Purchaser to accept for payment Shares tendered pursuant to the
Offer are subject to the satisfaction of each of the conditions set forth on
Annex A hereto. Purchaser expressly reserves the right to waive any such
condition, to increase the price per Share payable in the Offer, and to make any
other changes in the terms and conditions of the Offer; PROVIDED, HOWEVER, that
no change may be made that (i) decreases the price per Share payable in the
Offer (ii) reduces the maximum number of Shares to be purchased in the Offer or
that imposes conditions to the Offer in addition to those set forth on Annex A
hereto or (iii) otherwise changes the terms and conditions of the Offer in a
manner adverse to the Public Holders. Notwithstanding the foregoing, Purchaser
may, without the consent of the Company, extend the Offer (i) for a period of
not more than ten business days beyond the scheduled expiration date, which
shall be 20 business days following the commencement of the Offer, if, at the
scheduled expiration of the Offer, any of the conditions to Purchaser's
obligation
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to accept Shares for payment, shall not be satisfied or waived, (ii) for any
period required by any rule, regulation or interpretation of the Securities and
Exchange Commission (the "SEC"), or the staff thereof, applicable to the Offer
or (iii) for an aggregate period of not more than 10 business days beyond the
latest applicable date that would otherwise be permitted under clause (i) or
(ii) of this sentence, if, as of such date, all of the conditions to Purchaser's
obligations to accept for payment Shares are satisfied or waived, but the number
of Shares validly tendered and not withdrawn pursuant to the Offer, together
with the Shares owned by Purchaser or its affiliates equals 80% or more, but
less than 90%, of outstanding Shares on a fully diluted basis. In addition to
the foregoing, Parent and Purchaser may provide for a "subsequent offering
period" to the extent provided in Rule 14d-11 under the Securities Exchange Act
of 0000 (xxx "XXXXXXXX Xxx"). The Per Share Amount shall, subject to applicable
withholding of taxes, be net to the seller in cash, upon the terms and subject
to the conditions of the Offer. Purchaser shall pay for all Shares validly
tendered and not withdrawn promptly following the acceptance of Shares for
payment pursuant to the Offer. If Parent or Purchaser are unable to consummate
the Offer on the scheduled expiration date due to the failure of any of the
conditions set forth in Annex A to be satisfied or waived, Purchaser shall
extend the Offer in increments of not less than five business days (at the
discretion of Purchaser) until such date as is 45 days from the date of the
initial commencement of the Offer; PROVIDED, HOWEVER, that Purchaser shall not
be required to extend the Offer if any such condition is, in the reasonable
judgment of the Purchaser, incapable of being satisfied prior to the expiration
of such 45-day period. If the payment equal to the Per Share Amount in cash is
to be made to a person other than the person in whose name the surrendered
certificate formerly evidencing Shares is registered on the stock transfer books
of the Company, it shall be a condition of payment that the certificate so
surrendered shall be endorsed properly or otherwise be in proper form for
transfer and that the person requesting such payment shall have paid all
transfer and other taxes required by reason of the payment of the Per Share
Amount to a person other than the registered holder of the certificate
surrendered, or shall have established to the satisfaction of Purchaser that
such taxes either have been paid or are not applicable.
(b) As promptly as reasonably practicable on the date of
commencement of the Offer, Purchaser and Parent shall file with the SEC (i) a
Tender Offer Statement on Schedule TO (together with all amendments and
supplements thereto, the "SCHEDULE TO") and (ii) together with the Company, a
Rule 13e-3 Transaction Statement on Schedule 13E-3 (together with all amendments
and supplements thereto, the "SCHEDULE 13E-3") with respect to the Offer which
shall be filed as a part of the Schedule TO. The Schedule TO and the Schedule
13E-3 shall contain or shall incorporate by reference an offer to purchase (the
"OFFER TO PURCHASE") and forms of the related letter of transmittal and any
related summary advertisement (the Schedule TO, the Schedule 13E-3, the Offer to
Purchase and such other documents, together with all supplements and amendments
thereto, being referred to herein collectively as the "OFFER DOCUMENTS"). The
Offer Documents shall comply in all material respects with the provisions of
applicable federal securities laws and Parent and Purchaser hereby represent and
warrant to the Company that, on the date filed with the SEC and on the date
first published, sent or given to the Public Holders, the Offer Documents shall
not 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. Each of Parent and Purchaser further agrees to take all steps
necessary to cause the Offer Documents to be filed with the SEC and to be
disseminated to holders of Shares, in each case as
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and to the extent required by applicable federal securities laws. Parent,
Purchaser and the Company agree to correct promptly any information provided by
any of them for use in the Offer Documents that shall have become false or
misleading, and Parent and Purchaser further agree to take all steps necessary
to cause the Schedule TO and the Schedule 13E-3, as so corrected, to be filed
with the SEC, and the other Offer Documents, as so corrected, to be disseminated
to holders of Shares, in each case as and to the extent required by applicable
federal securities laws. Parent and Purchaser shall give the Special Committee
and its counsel the opportunity to review the Offer Documents, including all
amendments and supplements thereto, prior to their being filed with the SEC and
shall give the Special Committee and its counsel the opportunity to review all
responses to requests for additional information and replies to comments prior
to their being filed with, or sent to, the SEC. In addition, Parent and
Purchaser shall provide the Special Committee and its counsel with any comments
or other communications that Parent, Purchaser or its counsel may receive from
time to time from the SEC or its staff with respect to the Offer Documents
promptly after the receipt of such comments or other communications and shall
consult with the Special Committee and its counsel as to all material
communications with the SEC and its staff, including any material meetings and
telephone conferences relating to the Offer Documents.
(c) Parent and Purchaser shall provide or cause to be provided to
the Paying Agent (as defined in Section 3.08(a)) on or prior to the expiration
of the Offer funds necessary to make payment for any Publicly Held shares that
Purchaser becomes obligated to purchase pursuant to the Offer.
SECTION 2.02. COMPANY ACTION. (a) The Company hereby approves of and
consents to the Offer and represents that (i) each of the Board and the Special
Committee, at meetings duly called, has unanimously (A) determined that this
Agreement and the transactions contemplated hereby, including each of the Offer
and the Merger (collectively, the "TRANSACTIONS"), are fair to, and in the best
interests of, the Public Holders (B) approved, adopted and declared advisable
this Agreement and the Transactions (such approval and adoption having been made
in accordance with Delaware Law, including Section 203 thereof) and (C) resolved
to recommend that the Public Holders accept the Offer and tender Shares pursuant
to the Offer, and, if applicable, adopt this Agreement, and (ii) Lazard Freres &
Co. LLC ("LAZARD"), the financial advisor to the Special Committee, has
delivered to the Special Committee a written opinion that the consideration to
be received by the Public Holders pursuant to the Offer and the Merger is fair
to the Public Holders from a financial point of view. The Company hereby
consents to the inclusion in the Offer Documents of the written opinion of
Lazard and the recommendations of the Board and the Special Committee described
in the immediately preceding sentence, and the Special Committee shall not
withdraw or modify such recommendations in any manner adverse to Purchaser or
Parent; PROVIDED, HOWEVER, that such recommendations may be withdrawn or
modified to the extent that the Special Committee determines in good faith,
after consultation with outside counsel, that such withdrawal or modification is
required to satisfy the Special Committee's fiduciary duties under applicable
law. The Company has been advised by its directors and executive officers that
they intend to tender all Shares beneficially owned by them to Purchaser
pursuant to the Offer.
(b) As promptly as reasonably practicable on the date of
commencement of the Offer, the Company shall file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with all
amendments and supplements thereto, the "SCHEDULE 14D-9")
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containing, except as provided in Section 7.05(b), the recommendations of the
Board and the Special Committee described in Section 2.02(a), and shall
disseminate the Schedule 14D-9 to the extent required by Rule 14d-9 promulgated
under the Exchange Act, and any other applicable federal securities laws. The
Schedule 14D-9 shall comply in all material respects with the provisions of
applicable federal securities laws and, the Company represents and warrants to
Parent and Purchaser that on the date filed with the SEC and on the date first
published, sent or given to the Public Holders, the Schedule 14D-9 shall not
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, except that no representation is made by the Company with respect to
information supplied by Parent or Purchaser in writing for inclusion in the
Schedule 14D-9. The Company further agrees to take all steps necessary to cause
the Schedule 14D-9 to be filed with the SEC and to be disseminated to holders of
Shares, in each case as and to the extent required by applicable federal
securities laws. Parent, Purchaser and the Company agree to correct promptly any
information provided by any of them for use in the Schedule 14D-9 that shall
have become false or misleading, and the Company further agrees to take all
steps necessary to cause the Schedule 14D-9, as so corrected, to be filed with
the SEC and to be disseminated to holders of Shares, in each case as and to the
extent required by applicable federal securities laws. The Company shall give
Parent and its counsel the opportunity to review the Schedule 14D-9, including
all amendments and supplements thereto, prior to its being filed with the SEC
and shall give Parent and its counsel the opportunity to review all responses to
requests for additional information and replies to comments prior to their being
filed with, or sent to, the SEC. In addition, the Company shall provide Parent
and its counsel with any comments or other communications that the Company or
its counsel may receive from time to time from the SEC or its staff with respect
to the Offer Documents promptly after the receipt of such comments or other
communications and shall consult with Parent and its counsel as to all material
communications with the SEC and its staff, including any material meetings and
telephone conversations relating to the Schedule 14D-9.
ARTICLE III
THE MERGER
SECTION 3.01. THE MERGER. Upon the terms and subject to the
conditions set forth in Article VIII, and in accordance with Delaware Law,
Purchaser shall be merged with and into the Company. SECTION 3.02. EFFECTIVE
TIME. As promptly as practicable after the satisfaction or, if permissible,
waiver of the conditions set forth in Article VIII, the parties hereto shall
cause the Merger to be consummated by filing this Agreement or a certificate of
merger or certificate of ownership and merger with the Secretary of State of the
State of Delaware, in such form as is required by, and executed in accordance
with, the relevant provisions of Delaware Law (the date and time of such filing
being the "EFFECTIVE TIME").
SECTION 3.03. EFFECT OF THE MERGER. As a result of the Merger, the
separate corporate existence of Purchaser shall cease and the Company shall
continue as the surviving corporation of the Merger (the "SURVIVING
CORPORATION"). At the Effective Time, the effect of the
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Merger shall be as provided in the applicable provisions of 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 Purchaser shall vest in the Surviving Corporation, and all
debts, liabilities, obligations, restrictions, disabilities and duties of the
Company and Purchaser shall become the debts, liabilities, obligations,
restrictions, disabilities and duties of the Surviving Corporation.
SECTION 3.04. CERTIFICATE OF INCORPORATION; BY-LAWS. (a) 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 until thereafter amended as provided
by law and such Certificate of Incorporation.
(b) Unless otherwise determined by Parent prior to the Effective
Time, the By-laws of the Company, as in effect immediately prior to the
Effective Time, shall be the By-laws of the Surviving Corporation until
thereafter amended as provided by law, the Certificate of Incorporation of the
Surviving Corporation and such By-laws.
SECTION 3.05. DIRECTORS AND OFFICERS. The directors of the Company
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the Certificate of
Incorporation and By-laws of the Surviving Corporation, and the officers of the
Company immediately prior to the Effective Time shall be the initial officers of
the Surviving Corporation, in each case until their respective successors are
duly elected or appointed and qualified or until their earlier death,
resignation or removal.
SECTION 3.06. CONVERSION OF SECURITIES. At the Effective Time, by
virtue of the Merger and without any action on the part of Purchaser, the
Company or the holders of any of the following securities:
(a) Each Share issued and outstanding immediately prior to the
Effective Time (other than any Shares to be cancelled pursuant to Section
3.06(b) and any Dissenting Shares (as hereinafter defined)) shall be
canceled and shall be converted automatically into the right to receive an
amount in cash equal to the Per Share Amount (the "MERGER CONSIDERATION")
payable, without interest, to the -------------------- holder of such
Share, upon surrender, in the manner provided in Section 3.08, of the
certificate that formerly evidenced such Share;
(b) Each Share held in the treasury of the Company and each Share
owned by Purchaser, Parent or any direct or indirect wholly owned
subsidiary of Parent or of the Company immediately prior to the Effective
Time shall be canceled without any conversion thereof and no payment or
distribution shall be made with respect thereto; and
(c) Each share of common stock, par value $.01 per share, of
Purchaser issued and outstanding immediately prior to the Effective Time
shall be converted into and exchanged for one validly issued, fully paid
and nonassessable share of common stock, par value $.01 per share, of the
Surviving Corporation.
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SECTION 3.07. DISSENTING SHARES. (a) Notwithstanding any provision
of this Agreement to the contrary, Shares that are outstanding immediately prior
to the Effective Time and that are held by stockholders who shall have neither
voted in favor of the Merger nor consented thereto in writing and who shall have
demanded properly in writing appraisal for such Shares in accordance with
Section 262 of Delaware Law (collectively, the "DISSENTING SHARES") shall not be
converted into, or represent the right to receive, the Merger Consideration.
Such stockholders shall be entitled to receive payment of the appraised value of
such Shares held by them in accordance with the provisions of such Section 262,
except that all Dissenting Shares held by stockholders who shall have failed to
perfect or who effectively shall have withdrawn or lost their rights to
appraisal of such Shares under such Section 262 shall thereupon be deemed to
have been converted into, and to have become exchangeable for, as of the
Effective Time, the right to receive the Merger Consideration, without any
interest thereon, upon surrender, in the manner provided in Section 3.09, of the
certificate or certificates that formerly evidenced such Shares.
(b) The Company shall give Parent (i) prompt notice of any demands
for appraisal received by the Company, withdrawals of such demands, and any
other instruments served pursuant to Delaware Law and received by the Company
and (ii) the opportunity to direct all negotiations and proceedings with respect
to demands for appraisal under Delaware Law. The Company shall not, except with
the prior written consent of Parent, make any payment with respect to any
demands for appraisal or offer to settle or settle any such demands.
SECTION 3.08. SURRENDER OF SHARES; STOCK TRANSFER BOOKS. (a) Prior
to the Effective Time, Purchaser shall designate a bank or trust company to act
as agent (the "PAYING AGENT") for the holders of Shares to receive the funds to
which holders of Shares shall become entitled pursuant to Section 3.06(a). Such
funds shall be invested by the Paying Agent as directed by the Surviving
Corporation.
(b) Promptly after the Effective Time, the Surviving Corporation
shall cause to be mailed to each person who was, at the Effective Time, a holder
of record of Shares entitled to receive the Merger Consideration pursuant to
Section 3.06(a) a letter of transmittal (which shall specify that delivery shall
be effected, and risk of loss and title to the certificates evidencing such
Shares (the "CERTIFICATES") shall pass, only upon proper delivery of the
Certificates to the Paying Agent) and instructions for use in effecting the
surrender of the Certificates pursuant to such letter of transmittal. Upon
surrender to the Paying Agent of a Certificate, together with such letter of
transmittal, duly completed and validly executed in accordance with the
instructions thereto, and such other documents as may be required pursuant to
such instructions, the holder of such Certificate shall be entitled to receive
in exchange therefor the Merger Consideration for each Share formerly evidenced
by such Certificate, and such Certificate shall then be canceled. No interest
shall accrue or be paid on the Merger Consideration payable upon the surrender
of any Certificate for the benefit of the holder of such Certificate. If the
payment of the Merger Consideration is to be made to a person other than the
person in whose name the surrendered Certificate formerly evidencing Shares is
registered on the stock transfer books of the Company, it shall be a condition
of payment that the certificate so surrendered shall be endorsed properly or
otherwise be in proper form for transfer and that the person requesting such
payment shall have paid all transfer and other taxes required by reason of the
payment of the Merger Consideration to a person other than the registered holder
of the Certificate surrendered,
9
or shall have established to the satisfaction of Purchaser that such taxes
either have been paid or are not applicable.
(c) At any time following the fourth month after the Effective Time,
the Surviving Corporation shall be entitled to require the Paying Agent to
deliver to it any funds which had been made available to the Paying Agent and
not disbursed to holders of Shares (including all interest and other income
received by the Paying Agent in respect of all funds made available to it), and,
thereafter, such holders shall be entitled to look to the Surviving Corporation
(subject to abandoned property, escheat and other similar laws) only as general
creditors thereof with respect to any Merger Consideration that may be payable
upon due surrender of the Certificates held by them. Notwithstanding the
foregoing, neither the Surviving Corporation nor the Paying Agent shall be
liable to any holder of a Share for any Merger Consideration delivered in
respect of such Share to a public official pursuant to any abandoned property,
escheat or other similar law.
(d) At the close of business on the day of the Effective Time, the
stock transfer books of the Company relating to the Shares shall be closed and
thereafter there shall be no further registration of transfers of Shares on the
records of the Company. From and after the Effective Time, the holders of Shares
outstanding immediately prior to the Effective Time shall cease to have any
rights with respect to such Shares except as otherwise provided herein or by
applicable law.
SECTION 3.09. LOST, STOLEN OR DESTROYED CERTIFICATES. In the event
any Certificate evidencing Shares shall have been lost, stolen or destroyed, the
holder of such lost, stolen or destroyed Certificate shall execute an affidavit
of that fact upon request. The holder of any such lost, stolen or destroyed
Certificate shall, upon request, also deliver a reasonable indemnity against any
claim that may be against Parent, Purchaser, the Surviving Corporation or the
Paying Agent with respect to the Certificate alleged to have been lost, stolen
or destroyed. The affidavit and any indemnity which may be required hereunder or
in the Offer Documents shall be delivered to the Paying Agent, who shall be
responsible for making payment for such lost, stolen or destroyed Certificate
pursuant to the terms hereof or the Offer Documents.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As an inducement to Parent and Purchaser to enter into this
Agreement, the Company hereby represents and warrants to Parent and Purchaser
that:
SECTION 4.01. ORGANIZATION AND QUALIFICATION; SUBSIDIARIES. Each of
the Company and each subsidiary of the Company ("SUBSIDIARY") is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the requisite corporate power and
authority and all necessary governmental approvals to own, lease and operate its
properties and to carry on its business as it is now being conducted, except
where the failure to be so organized, existing or in good standing or to have
such power, authority and governmental approvals would not prevent or materially
delay consummation of any of the Transactions or otherwise prevent or materially
delay the Company from performing
10
its obligations under this Agreement and would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
SECTION 4.02. CAPITALIZATION. The authorized capital stock of the
Company consists of (a) 1,500,000,000 shares of common stock, par value $.10 per
share, of which 500,000,000 shares have been designated Common Stock and
500,000,000 have been designated Shares and (b) 50,000,000 shares of preferred
stock, par value $.01 per share. As of the date hereof, (i) 18,400,000 Shares
are issued and outstanding, all of which are validly issued fully paid and
nonassessable, (ii) no Shares have been issued by the Company in respect of its
Retained Interest and (iii) no Shares are held in the treasury of the Company or
by the Subsidiaries. As of the date hereof, (x) 1,000 shares of Common Stock are
issued and outstanding, (y) 4,000,000 shares of Series A Preferred Stock and
3,500,000 shares of Series B Preferred Stock are issued and outstanding and (z)
Company Stock Options covering 9,265,155 Shares are issued and outstanding.
SECTION 4.03. AUTHORITY RELATIVE TO THIS AGREEMENT. The Company has
all necessary power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the Transactions. The
execution and delivery of this Agreement by the Company and the consummation by
the Company of the Transactions have been duly and validly authorized by all
necessary corporate action, and no other corporate proceedings on the part of
the Company are necessary to authorize this Agreement or to consummate the
Transactions (other than, with respect to the Merger, the approval and adoption
of this Agreement by the holders of a majority of the then-outstanding Shares
and the shares of Common Stock, if and to the extent required by applicable law,
and the filing and recordation of appropriate merger documents as required by
Delaware Law). This Agreement has been duly executed and delivered by the
Company and, assuming the due authorization, execution and delivery by Parent
and Purchaser, constitutes legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with its terms. Each of the Board
and the Special Committee has approved this Agreement and the Transactions and
such approvals are sufficient so that the restrictions on business combinations
set forth in Section 203(a) of Delaware Law shall not apply to the Merger.
SECTION 4.04. NO CONFLICT; REQUIRED FILINGS AND CONSENTS. (a) The
execution and delivery of this Agreement by the Company does not, and the
performance of this Agreement by the Company will not, (i) conflict with or
violate the Certificate of Incorporation or By-laws or equivalent organizational
documents of the Company or any Subsidiary or (ii) conflict with or violate any
United States or non-United States statute, law, ordinance, regulation, rule,
code, executive order, injunction, judgment, decree or other order ("LAW")
applicable to the Company or any Subsidiary or by which any property or asset of
the Company or any Subsidiary is bound or affected, except, with respect to
clause (ii), for any such conflicts or violations, that would not prevent or
materially delay consummation of the Offer or the Merger or otherwise prevent or
materially delay the Company from performing its obligations under this
Agreement and would not reasonably be expected to have a Material Adverse
Effect.
(b) The execution and delivery of this Agreement by the Company does
not, and the performance of this Agreement by the Company will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any United States federal, state,
11
county or local or non-United States government, governmental, regulatory or
administrative authority, agency, instrumentality or commission or any court,
tribunal, or judicial or arbitral body (a "GOVERNMENTAL AUTHORITY"), except (i)
for applicable requirements, if any, of the Exchange Act, state securities or
"blue sky" laws ("BLUE SKY LAWS") state takeover laws and The New York Stock
Exchange, and the filing and recordation of appropriate merger documents as
required by Delaware Law, and (ii) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications,
would not prevent or materially delay consummation of the Offer or the Merger,
or otherwise reasonably be expected to have a Material Adverse Effect.
SECTION 4.05. BROKERS. No broker, finder or investment banker (other
than Lazard) is entitled to any brokerage, finder's or other fee or commission
in connection with the Transactions based upon arrangements made by or on behalf
of the Company. The Company has heretofore furnished to Parent a complete and
correct copy of all agreements between the Company and Lazard pursuant to which
such firm would be entitled to any payment relating to the Transactions.
SECTION 4.06. OPINION OF FINANCIAL ADVISOR. The Special Committee
has received the written opinion of Lazard dated the date of this Agreement to
the effect that, as of the date of this Agreement, the consideration to be
received by the Public Holders pursuant to the Offer and the Merger is fair to
the Public Holders from a financial point of view and such opinion has not been
withdrawn. A copy of such opinion has been delivered to Parent.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
As an inducement to the Company to enter into this Agreement, Parent
and Purchaser hereby, jointly and severally, represent and warrant to the
Company that:
SECTION 5.01. CORPORATE ORGANIZATION. Each of Parent and Purchaser
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the requisite corporate power and
authority and all necessary governmental approvals to own, lease and operate its
properties and to carry on its business as it is now being conducted, except
where the failure to be so organized, existing or in good standing or to have
such power, authority and governmental approvals would not prevent or materially
delay consummation of the Transactions, or otherwise prevent Parent or Purchaser
from performing its material obligations under this Agreement.
SECTION 5.02. AUTHORITY RELATIVE TO THIS AGREEMENT. Each of Parent
and Purchaser has all necessary corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the Transactions. The execution and delivery of this Agreement by Parent and
Purchaser and the consummation by Parent and Purchaser of the Transactions have
been duly and validly authorized by all necessary corporate action, and no other
corporate proceedings on the part of Parent or Purchaser are necessary to
authorize this Agreement or to consummate the Transactions (other than, with
respect to the Merger, the filing and recordation of appropriate merger
documents as required by Delaware
12
Law). This Agreement has been duly and validly executed and delivered by Parent
and Purchaser and, assuming due authorization, execution and delivery by the
Company, constitutes legal, valid and binding obligation of each of Parent and
Purchaser enforceable against each of Parent and Purchaser in accordance with
its terms.
SECTION 5.03. NO CONFLICT; REQUIRED FILINGS AND CONSENTS. (a) The
execution and delivery of this Agreement by Parent and Purchaser do not, and the
performance of this Agreement by Parent and Purchaser will not, (i) conflict
with or violate the Certificate of Incorporation or By-laws of either Parent or
Purchaser, (ii) assuming that all consents, approvals, authorizations and other
actions described in Section 5.03(b) have been obtained and all filings and
obligations described in Section 5.03(b) have been made, conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to
Parent or Purchaser or by which any property or asset of either of them is bound
or affected except, with respect to clause (ii), for any such conflicts or
violations, which would not prevent or materially delay consummation of the
Transactions or otherwise prevent Parent and Purchaser from performing their
material obligations under this Agreement.
(b) The execution and delivery of this Agreement by Parent and
Purchaser do not, and the performance of this Agreement by Parent and Purchaser
will not, require any consent, approval, authorization or permit of, or filing
with or notification to, any Governmental Authority, except (i) for applicable
requirements, if any, of the Exchange Act, Blue Sky Laws and state takeover laws
and The New York Stock Exchange, and filing and recordation of appropriate
merger documents as required by Delaware Law, and (ii) where the failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not prevent or materially delay consummation of
the Transactions, or otherwise prevent Parent or Purchaser from performing their
material obligations under this Agreement.
SECTION 5.04. BROKERS. No broker, finder or investment banker (other
than affiliates of Parent) is entitled to any brokerage, finder's or other fee
or commission in connection with the Transactions based upon arrangements made
by or on behalf of Parent or Purchaser.
SECTION 5.05. FINANCING. Purchaser has or will have available, at or
prior to the expiration of the initial period of the Offer and through the
consummation of the Merger, sufficient funds to enable Purchaser to consummate
the Offer, the Merger and the other transactions contemplated hereby and to pay
all related expenses.
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 6.01. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER.
The Company agrees that, between the date of this Agreement and the Effective
Time, unless Parent shall otherwise agree in writing, the businesses of the
Company and the Subsidiaries shall be conducted only in, and the Company and the
Subsidiaries shall not take any action except in, the ordinary course of
business and in a manner consistent with past practice; and the Company shall
use its reasonable best efforts to preserve substantially intact the business
organization of the
13
Company and the Subsidiaries, to keep available the services of the current
officers, employees and consultants of the Company and the Subsidiaries and to
preserve the current relationships of the Company and the Subsidiaries with
customers, suppliers and other persons with which the Company or any Subsidiary
has significant business relations.
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.01. STOCKHOLDERS' MEETING. (a) If required by applicable
law in order to consummate the Merger, the Company, acting through the Board,
shall, in accordance with applicable law and the Company's Certificate of
Incorporation and By-laws, (i) duly call, give notice of, convene and hold an
annual or special meeting of its stockholders as promptly as practicable
following consummation of the Offer for the purpose of considering and taking
action on this Agreement and the Merger (the "STOCKHOLDERS' MEETING") and (ii)
(A) include in the proxy statement to be sent to the stockholders of the Company
in connection with the Stockholders' Meeting or the information statement to be
sent to such stockholders, as appropriate (such proxy statement or information
statement, as amended or supplemented, being referred to herein as the "PROXY
STATEMENT"), and not subsequently withdraw or modify in any manner adverse to
Purchaser or Parent, the unanimous recommendations of the Board and the Special
Committee that the stockholders of the Company adopt this Agreement and (B) use
its reasonable best efforts to cause such adoption. At the Stockholders'
Meeting, Parent and Purchaser shall cause all Shares and shares of Common Stock
then owned by them and their subsidiaries to be voted in favor of the adoption
of this Agreement and the Merger.
(b) Notwithstanding the foregoing, in the event that Purchaser shall
acquire through the Offer or otherwise at least 90% of the then outstanding
Shares, the parties shall take all necessary and appropriate action to cause the
Merger to become effective, in accordance with Section 253 of Delaware Law, as
promptly as reasonably practicable after such acquisition, without a meeting of
the stockholders of the Company.
SECTION 7.02. PROXY STATEMENT. If approval of the Company's
stockholders is required by applicable law to consummate the Merger, promptly
following consummation of the Offer, the Company shall file the Proxy Statement
with the SEC under the Exchange Act, and shall use its reasonable best efforts
to have the Proxy Statement cleared by the SEC promptly. Parent, Purchaser and
the Company shall cooperate with each other in the preparation of the Proxy
Statement, and the Company shall notify Parent of the receipt of any comments of
the SEC with respect to the Proxy Statement and of any requests by the SEC for
any amendment or supplement thereto or for additional information and shall
provide to Parent promptly copies of all correspondence between the Company or
any representative of the Company and the SEC. The Company shall give Parent and
its counsel the opportunity to review the Proxy Statement, including all
amendments and supplements thereto, prior to its being filed with the SEC and
shall give Parent and its counsel the opportunity to review all responses to
requests for additional information and replies to comments prior to their being
filed with, or sent to, the SEC. Each of the Company, Parent and Purchaser
agrees to use its reasonable best efforts, after consultation with the other
parties hereto, to respond promptly to all such comments of and requests by the
SEC and to cause the Proxy Statement and all required amendments and supplements
thereto to
14
be mailed to the holders of Shares entitled to vote at the Stockholders' Meeting
at the earliest practicable time.
SECTION 7.03. ACCESS TO INFORMATION. (a) From the date hereof until
the Effective Time, the Company shall, and shall cause the Subsidiaries and the
officers, directors, employees, auditors and agents of the Company and the
Subsidiaries to, afford the officers, employees and agents of Parent and
Purchaser access, at reasonable times, to the officers, employees, agents,
properties, offices and other facilities, books and records of the Company and
each Subsidiary, and shall furnish Parent and Purchaser with such financial,
operating and other data and information as Parent or Purchaser, through its
officers, employees or agents, may reasonably request.
(b) No investigation pursuant to this Section 7.03 shall affect any
representation or warranty in this Agreement of any party hereto or any
condition to the obligations of the parties hereto or any condition to the
Offer.
SECTION 7.04. NOTIFICATION OF CERTAIN MATTERS. The Company shall
give prompt notice to Parent, and Parent shall give prompt notice to the
Company, of (a) the occurrence, or non-occurrence, of any event the occurrence,
or non-occurrence, of which reasonably could be expected to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect and (b) any failure of the Company, Parent or
Purchaser, as the case may be, to comply with or satisfy any covenant or
agreement to be complied with or satisfied by it hereunder; PROVIDED, HOWEVER,
that the delivery of any notice pursuant to this Section 7.04 shall not limit or
otherwise affect the remedies available hereunder to the party receiving such
notice.
SECTION 7.05. FURTHER ACTION; REASONABLE BEST EFFORTS. (a) Upon the
terms and subject to the conditions hereof, each of the parties hereto shall use
its reasonable best efforts to take, or cause to be taken, all appropriate
action, and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
the Transactions, including using its reasonable best efforts to obtain all
franchises, grants, authorizations, licenses, permits, easements, variances,
exceptions, certificates, consents, approvals, authorizations, qualifications
and orders of Governmental Authorities and parties to contracts with the Company
and the Subsidiaries as are necessary for the consummation of the Transactions
and to fulfill the conditions to the Offer and the Merger. In case, at any time
after the Effective Time, any further action is necessary or desirable to carry
out the purposes of this Agreement, the proper officers and directors of each
party to this Agreement shall use their reasonable best efforts to take all such
action.
(b) Each of the parties hereto agrees to cooperate and use its
reasonable best efforts to defend any litigation, suit, claim, action,
proceeding or investigation (an "ACTION"), including administrative or judicial
Action, and to have vacated, lifted, reversed or overturned any decree,
judgment, injunction or other order (whether temporary, preliminary or
permanent) that is in effect and that restricts, prevents or prohibits
consummation of the Transactions, including by vigorously pursuing all available
avenues of administrative and judicial appeal.
15
SECTION 7.06. PUBLIC ANNOUNCEMENTS. Parent and the Company agree
that no public release or announcement concerning the Transactions, the Offer or
the Merger shall be issued by either party without the prior consent of the
other party (which consent shall not be unreasonably withheld), except as such
release or announcement may be required by Law or the rules or regulations of
any United States or non-United States securities exchange, in which case the
party required to make the release or announcement shall use its best efforts to
allow the other party reasonable time to comment on such release or announcement
in advance of such issuance.
SECTION 7.07. DIRECTORS' AND OFFICERS' INDEMNIFICATION AND
INSURANCE. (a) Parent shall, to the fullest extent permitted by Law, cause the
Surviving Corporation to honor all the Company's obligations to indemnify
(including any obligations to advance funds for expenses to) the current and
former directors and officers of the Company for acts and omissions by such
directors and officers occurring prior to the Effective Time to the extent that
such obligations of the Company or any of its subsidiaries exist on the date of
this Agreement, whether pursuant to the Amended and Restated Certificate of the
Company, the By-laws of the Company, resolutions of the Board, including,
without limitation, the resolutions of the Board dated March 26, 2001
establishing the Special Committee, or otherwise, and such obligations shall
survive the Merger and shall continue in full force and effect in accordance
with the terms of the Amended and Restated Certificate of the Company, the
By-laws of the Company, and such resolutions of the Board from the Effective
Time until the expiration of the applicable statute of limitations with respect
to any claims against such directors or officers arising out of such acts or
omissions.
(b) From and after the Effective Time, the Surviving Corporation
shall, to the fullest extent permitted under Delaware Law, and without limiting
the obligations of Parent and the Surviving Corporation pursuant to Sections
7.07(a) and 7.07(c), indemnify and hold harmless, each present and former
director and officer of the Company and each subsidiary of the Company and each
such individual who served at the request of the Company or any subsidiary of
the Company as a director, officer, trustee, partner, fiduciary, employee or
agent of another corporation, partnership, joint venture, trust, pension or
other employee benefit plan or enterprise (collectively, the "INDEMNIFIED
PARTIES") against all costs and expenses (including attorney's fees and
disbursements) judgments, fines, losses, claims, damages, liabilities and
settlement amounts paid in connection with any claim, action, suit, proceeding
or investigation (whether arising before or after the Effective Time) whether
civil, administrative or investigative, based on the fact that such person is or
was a director or officer of the Company and arising out of or pertaining to any
action or omission occurring at or before the Effective Time (including the
transactions contemplated by this Agreement ) and shall pay any expenses in
advance of the final disposition of such action or proceeding to each
Indemnified Party to the fullest extent permitted under Delaware Law, upon
receipt from the Indemnified Party to whom expenses are advanced of any
undertaking to repay such advances required under Delaware Law). In the event of
any such claim, action, suit, proceeding or investigation, (i) the Surviving
Corporation shall pay the reasonable fees and expenses of counsel selected by
the Indemnified Parties, which counsel shall be reasonably satisfactory to the
Surviving Corporation, promptly after statement therefore are received and (ii)
the Surviving Corporation shall cooperate in the defense of any such matter;
PROVIDED, HOWEVER, that the Surviving Corporation shall not be liable for any
settlement effected without its written consent (which consent shall not be
unreasonably
16
withheld); and PROVIDED FURTHER that the Surviving Corporation shall not be
obligated pursuant to this Section 7.07(b) to pay the fees and expenses of more
than one counsel other than local counsel for all Indemnified Parties in any
single action except to the extent, as determined by counsel to the Indemnified
Parties, that two or more of such Indemnified Parties shall have actual or
likely conflicting interests in the outcome of such action, in which case such
minimum number of additional counsel (including local counsel) as may be
required to avoid any such conflict or likely conflict may be retained by the
Indemnified Parties at the expense of the Surviving Corporation. Notwithstanding
the foregoing, an Indemnified Party shall consult with and keep informed the
Surviving Corporation with respect to the conduct of any such litigation.
(c) Parent shall provide or maintain in effect for six years from
the Effective Time the current policies of directors' and officers' liability
insurance maintained by the Company (provided that Parent may substitute
therefor policies with reputable and financially sound carriers of at least the
same coverage and amounts containing terms and conditions which are no less
advantageous to the directors and officers and so long as such substitution
results in continuous coverage) with respect to claims arising from or related
to facts or events which occurred at or before the Effective Time; PROVIDED,
HOWEVER, that Parent shall not be obligated to make annual premium payments for
such insurance to the extent such premiums exceed 200% of the annual premiums
paid as of the date hereof by the Company for such insurance (such 200% amount,
the "MAXIMUM PREMIUM"). If such insurance coverage cannot be obtained at all, or
can only be obtained at an annual premium in excess of the Maximum Premium,
Parent or the Surviving Corporation shall maintain the most advantageous
policies of directors' and officers' liability insurance commensurate with that
obtainable for an annual premium equal to the Maximum Premium.
(d) If 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 the Surviving
Corporation, as the case may be, shall assume the obligations of the Surviving
Corporation set forth in this Section 7.07 and in such event all references to
Parent or the Surviving Corporation in this Section 7.07 shall be deemed a
reference to such successors and assigns.
(e) The rights of each Indemnified Party under this Section 7.07
shall be in addition to any rights such person may have under the certificate of
incorporation or bylaws of the Company or any of its subsidiaries. These rights
shall survive consummation of the merger and are intended to benefit, and shall
be enforceable by, each Indemnified Party.
SECTION 7.08. OBLIGATIONS OF PURCHASER. Parent shall take all action
necessary to cause Purchaser to perform its obligations under this Agreement and
to consummate the Offer and the Merger on the terms and subject to the
conditions set forth in this Agreement.
17
ARTICLE VIII
CONDITIONS TO THE MERGER
SECTION 8.01. CONDITIONS TO THE MERGER. The obligations 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 and to the extent required by Delaware
Law, this Agreement shall have been adopted by the affirmative vote of the
stockholders of the Company;
(b) NO ORDER. No Governmental Authority in the United States shall
have enacted, issued, promulgated, enforced or entered any Law (whether
temporary, preliminary or permanent) that is then in effect and has the
effect of making the Merger illegal or otherwise restricting, preventing
or prohibiting consummation of the Merger; and
(c) OFFER. Purchaser or its permitted assignee shall have purchased
all Shares validly tendered and not withdrawn pursuant to the Offer;
PROVIDED, HOWEVER, that this condition shall not be applicable to the
obligations of Parent or Purchaser if, in breach of this Agreement or the
terms of the Offer, Purchaser fails to purchase any Shares validly
tendered and not withdrawn pursuant to the Offer.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.01. TERMINATION. This Agreement may be terminated and the
Merger and the other Transactions may be abandoned at any time prior to the
Effective Time, notwithstanding any requisite adoption of this Agreement by the
stockholders of the Company:
(a) by mutual written consent of each of Parent, Purchaser and the
Special Committee on behalf of the Company;
(b) by either Parent or the Special Committee on behalf of the
Company if any Governmental Authority shall have enacted, issued,
promulgated, enforced or entered any injunction, order, decree or ruling
restraining, enjoining or otherwise prohibiting the consummation of the
Offer or the Merger and such injunction, order, decree or ruling shall
have become final and nonappealable;
(c) by Parent or the Special Committee on behalf of the Company
after December 31, 2001, if Purchaser shall not have theretofore purchased
Shares pursuant to the Offer solely as a result of a failure of any of the
conditions set forth in Annex A hereto;
(d) by Parent if prior to the purchase of Shares pursuant to the
Offer, the Special Committee shall have withdrawn or modified in a manner
adverse to Purchaser or
18
Parent its approval or recommendation of this Agreement, the Offer, the
Merger or any other Transaction, or shall have resolved to do any of the
foregoing;
(e) by the Special Committee on behalf of the Company, if Purchaser
shall have (A) failed to commence the Offer within five days of the
expiration of the applicable period described in Section 2.01, (B)
terminated the Offer without having accepted any Shares for payment
thereunder or (C) failed to accept Shares for payment pursuant to the
Offer within 60 days following the commencement of the Offer; or
(f) by the Special Committee on behalf of the Company prior to the
purchase of Shares pursuant to the Offer if a third party makes an offer
to acquire or agrees to acquire (i) all or a substantial portion of the
assets allocated to the CSFBdirect business for a price that is superior
to the value attributed to such assets by the Special Committee, or (ii)
the Publicly Held Shares for a per Share price that is higher than the Per
Share Amount, and in either case such offer is subject only to customary
terms and conditions, and is not conditioned upon the availability of
financing or, in the case of an offer to acquire the Shares, on the sale
by Parent or its affiliates of the Retained Interest.
SECTION 9.02. EFFECT OF TERMINATION. In the event of the termination
of this Agreement pursuant to Section 9.01, this Agreement shall forthwith
become void, and there shall be no liability on the part of any party hereto,
except (a) as set forth in Section 9.03 and (b) nothing herein shall relieve any
party from liability for any breach hereof prior to the date of such
termination.
SECTION 9.03. FEES AND EXPENSES. All costs and expenses incurred in
connection with this Agreement and the Transactions shall be paid by the party
incurring such expenses, whether or not any Transaction is consummated.
SECTION 9.04. AMENDMENT. This Agreement may be amended by the
parties hereto at any time prior to the Effective Time with the prior written
approval of the Special Committee. This Agreement may not be amended except by
an instrument in writing signed by each of the parties hereto.
SECTION 9.05. WAIVER. At any time prior to the Effective Time, any
party hereto may (a) extend the time for the performance of any obligation or
other act of any other party hereto, (b) waive inaccuracy in the representations
and warranties of any other party contained herein or in any document delivered
pursuant hereto and (c) waive compliance with any agreement of any other party
or any condition to its own obligations contained herein; PROVIDED, HOWEVER,
that no extension by the Company shall be effective without the prior written
approval of the Special Committee; PROVIDED FURTHER that, if either Parent or
Purchaser breaches any provision of this Agreement, no party shall waive such
breach without the prior written approval of the Special Committee. Any such
extension shall be valid if set forth in an instrument in writing signed by the
party or parties to be bound thereby.
19
ARTICLE X
GENERAL PROVISIONS
SECTION 10.01. NOTICES. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly given upon receipt) by delivery in person, by
telecopy or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses (or at such
other address for a party as shall be specified in a notice given in accordance
with this Section 10.01):
if to Parent or Purchaser:
Credit Suisse First Boston, Inc.
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No: (000) 000-0000
Attention: Xxxxxx X. XxXxxxxxxx
with a copy to:
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No: (000) 000-0000
Attention: Xxxxx X'Xxxxx
if to the Company:
Credit Suisse First Boston (USA), Inc.
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No: (000) 000-0000
Attention: Xxxx Xxxxx
with a copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
Telecopier No: (000) 000-0000
Attention: Xxxxxxx Xxxxxxx, P.C.
Xxxxxx X. Xxxxxxxxxxx
SECTION 10.02. SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the Transactions is not affected in any manner
20
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in a mutually acceptable
manner in order that the Transactions be consummated as originally contemplated
to the fullest extent possible.
SECTION 10.03. ENTIRE AGREEMENT; ASSIGNMENT. This Agreement
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all prior agreements and undertakings, both written
and oral, among the parties, or any of them, with respect to the subject matter
hereof. This Agreement shall not be assigned (whether pursuant to a merger, by
operation of law or otherwise), except that Parent and Purchaser may assign all
or any of their rights and obligations hereunder to any affiliate of Parent
including the rights and obligations set forth in Sections 2.01 and 3.01 of this
Agreement, provided that no such assignment shall relieve the assigning party of
its obligations hereunder if such assignee does not perform such obligations.
SECTION 10.04. PARTIES IN INTEREST. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto, and, except as
provided in Section 7.07, nothing in this Agreement, express or implied, is
intended to or shall confer upon any other person any right, benefit or remedy
of any nature whatsoever under or by reason of this Agreement.
SECTION 10.05. SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement were
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
SECTION 10.06. GOVERNING LAW. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York applicable
to contracts executed in and to be performed in that State (other than those
provisions set forth herein that are required to be governed by Delaware Law).
All actions and proceedings arising out of or relating to this Agreement shall
be heard and determined exclusively in any New York state or federal court
sitting in The City of New York. The parties hereto hereby (a) submit to the
exclusive jurisdiction of any state or federal court sitting in The City of New
York for the purpose of any Action arising out of or relating to this Agreement
brought by any party hereto, and (b) irrevocably waive, and agree not to assert
by way of motion, defense, or otherwise, in any such Action, any claim that it
is not subject personally to the jurisdiction of the above-named courts, that
its property is exempt or immune from attachment or execution, that the Action
is brought in an inconvenient forum, that the venue of the Action is improper,
or that this Agreement or the Transactions may not be enforced in or by any of
the above-named courts.
SECTION 10.07. WAIVER OF JURY TRIAL. Each of the parties hereto
hereby waives to the fullest extent permitted by applicable law any right it may
have to a trial by jury with respect to any litigation directly or indirectly
arising out of, under or in connection with this Agreement or the Transactions.
Each of the parties hereto (a) certifies that no representative, agent or
attorney of any other party has represented, expressly or otherwise, that such
other party would not, in the event of litigation, seek to enforce that
foregoing waiver and (b) acknowledges
21
that it and the other hereto have been induced to enter into this Agreement and
the Transactions, as applicable, by, among other things, the mutual waivers and
certifications in this Section 10.07.
SECTION 10.08. HEADINGS. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
SECTION 10.09. COUNTERPARTS. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
22
IN WITNESS WHEREOF, Parent, Purchaser and the Company have caused
this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
CREDIT SUISSE FIRST BOSTON, INC.
By /s/ Xxxxxxx X. Xxxxxxxxxx
---------------------------------
Title: Chief Financial Officer
CSFBDIRECT ACQUISITION CORP.
By /s/ Xxxx Xxxxx
---------------------------------
Title: Treasurer
CREDIT SUISSE FIRST BOSTON
(USA), INC.
By /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Title: Chief Financial and
Administrative Officer
23
ANNEX A
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer, Purchaser shall
not be required to accept for payment any Shares tendered pursuant to the Offer,
and may extend, terminate or amend the Offer, if at any time on or after the
date of this Agreement and prior to the expiration of the Offer, any of the
following conditions shall exist:
(a) there shall have been instituted any Action before any
Governmental Authority (i) that has a reasonable likelihood of success and
would, if successful, make illegal, materially delay, or otherwise,
directly or indirectly, restrain or prohibit or make materially more
costly, the making of the Offer, the acceptance for payment of any Shares
by Parent, Purchaser or any other affiliate of Parent or the consummation
of any other Transaction, or seeking to obtain material damages in
connection with any Transaction; (ii) seeking to compel the Company,
Parent or any of their subsidiaries, as a result of the Transactions, to
dispose of or to hold separate all or any portion of the business or
assets of the Company, Parent or any of their subsidiaries that is
material to either Parent and its subsidiaries or the Company and the
Subsidiaries, in each case, taken as a whole; (iii) seeking to impose or
confirm any limitation on the ability of Parent, Purchaser or any other
affiliate of Parent to exercise effectively full rights of ownership of
any Shares, including the right to vote any Shares acquired by Purchaser
pursuant to the Offer or otherwise on all matters properly presented to
the Company's stockholders, including the approval and adoption of this
Agreement and the Transactions; or (iv) which otherwise would prevent or
materially delay consummation of the Offer or the Merger or otherwise
prevent or materially delay the Company from performing its obligations
under this Agreement or would have a Material Adverse Effect;
(b) there shall have been any statute, rule, regulation, legislation
or interpretation enacted, promulgated, amended, issued or deemed
applicable to (i) Parent, the Company or any subsidiary or affiliate of
Parent or the Company or (ii) any Transaction, by any United States or
non-United States legislative body or Governmental Authority with
appropriate jurisdiction that is reasonably likely to result, directly or
indirectly, in any of the consequences referred to in clauses (i) through
(iv) of paragraph (a) above;
(c) the Special Committee or the Board shall have (i) withdrawn or
modified, in a manner adverse to Parent or Purchaser, the approval or
recommendation of the Offer, the Merger and the Agreement or (ii) resolved
to do any of the foregoing;
(d) any representation or warranty of the Company in the Agreement
that is qualified as to materiality or Material Adverse Effect shall not
be true and correct or any such representation or warranty that is not so
qualified shall not be true and correct other than such failures to be
true and correct that, individually or in the aggregate, have not had and
would not reasonably be expected to have a Material Adverse Effect;
(e) the Company (with the approval of the Special Committee) shall
have failed to perform, in any material respect, any obligation or to
comply, in any material respect, with any agreement or covenant of the
Company to be performed or complied with by it under the Agreement;
(f) the Agreement shall have been terminated in accordance with its
terms; or
(g) Purchaser and the Company (as agreed to by the Special
Committee) shall have agreed that Purchaser shall terminate the Offer or
postpone the acceptance for payment of Shares thereunder;
which, in the sole judgment of Purchaser in any such case, and regardless of the
circumstances (including any action or inaction by Parent or any of its
affiliates) giving rise to any such condition, makes it inadvisable to proceed
with such acceptance for payment.
The foregoing conditions are for the sole benefit of Purchaser and
Parent and may be asserted by Purchaser or Parent regardless of the
circumstances giving rise to any such condition or may be waived by Purchaser or
Parent in whole or in part at any time and from time to time in their sole
discretion. The failure by Parent or Purchaser at any time to exercise any of
the foregoing rights shall not be deemed a waiver of any such right; the waiver
of any such right with respect to particular facts and other circumstances shall
not be deemed a waiver with respect to any other facts and circumstances; and
each such right shall be deemed an ongoing right that may be asserted at any
time and from time to time.
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