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AGREEMENT AND PLAN OF MERGER
dated as of February 28, 2002
by and among
INVESTMENT TECHNOLOGY GROUP, INC.,
XXXXXX GROUP INC.
and
INDIGO ACQUISITION CORP.
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TABLE OF CONTENTS
Page
ARTICLE ONE
DEFINITIONS
SECTION 1.1. Definitions.........................................................1
ARTICLE TWO
THE MERGER
SECTION 2.1. Effective Time of Merger............................................8
SECTION 2.2. Closing.............................................................8
SECTION 2.3. Effects of the Merger...............................................8
SECTION 2.4. Certificate of Incorporation and By-Laws............................9
SECTION 2.5. Officers and Directors..............................................9
SECTION 2.6. Effect on Capital Stock.............................................9
SECTION 2.7. Exchange of Certificates for Merger Consideration..................10
SECTION 2.8. Options............................................................12
SECTION 2.9. Certain Adjustments................................................13
ARTICLE THREE
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of Company..........................14
SECTION 3.2. Representations and Warranties of Parent and Merger Subsidiary.....28
ARTICLE FOUR
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 4.1. Interim Conduct....................................................30
SECTION 4.2. Notice of Certain Events...........................................34
ARTICLE FIVE
ADDITIONAL AGREEMENTS
SECTION 5.1. Preparation of Proxy Statement; Stockholders Meeting...............34
SECTION 5.2. Access to Information..............................................35
SECTION 5.3. Reasonable Best Efforts............................................36
SECTION 5.4. Acquisition Proposals..............................................36
SECTION 5.5. Fees and Expenses..................................................38
SECTION 5.6. Indemnification; Directors' and Officers' Insurance................39
SECTION 5.7. Public Announcements...............................................40
SECTION 5.8. Employee Benefits..................................................40
SECTION 5.9. Additional Agreements..............................................41
ARTICLE SIX
CONDITIONS PRECEDENT
SECTION 6.1. Conditions to Each Party's Obligation To Effect the Merger.........41
SECTION 6.2. Conditions to Obligations of Parent and Merger Subsidiary..........41
SECTION 6.3. Conditions to Obligations of Company...............................42
ARTICLE SEVEN
TERMINATION AND AMENDMENT
SECTION 7.1. Termination........................................................43
SECTION 7.2. Effect of Termination..............................................44
SECTION 7.3. Amendment..........................................................46
SECTION 7.4. Extension; Waiver..................................................46
ARTICLE EIGHT
GENERAL PROVISIONS
SECTION 8.1. Non-survival of Representations, Warranties and Agreements.........46
SECTION 8.2. Notices............................................................46
SECTION 8.3. Interpretation.....................................................47
SECTION 8.4. Counterparts.......................................................47
SECTION 8.5. Entire Agreement; No Third Party Beneficiaries.....................48
SECTION 8.6. Governing Law......................................................48
SECTION 8.7. Waiver of Jury Trial...............................................48
SECTION 8.8. Severability.......................................................48
SECTION 8.9. Assignment.........................................................48
SECTION 8.10. Enforcement........................................................48
Exhibit A Form of Voting Agreement
Exhibit B Form of Certificate of Incorporation of Surviving Corporation
Exhibit C Form of Letter from Holders of Company Options
Schedule I List of Employees Entering into Employment Agreements
AGREEMENT AND PLAN OF MERGER dated as of February 28, 2002 (this
"Agreement") by and among Investment Technology Group, Inc., a Delaware
corporation ("Parent"), Xxxxxx Group Inc., a Delaware corporation
("Company"), and Indigo Acquisition Corp. ("Merger Subsidiary"), a Delaware
corporation and a direct wholly owned subsidiary of Parent.
WHEREAS, the boards of directors of Parent, Merger Subsidiary and
Company have approved, and deem it advisable and in the best interests of
their respective stockholders to consummate, the business combination
transaction provided for herein, on the terms and subject to the conditions
hereof, in which Merger Subsidiary would merge with and into Company, with
Company surviving as a wholly-owned subsidiary of Parent (the "Merger");
WHEREAS, as a condition and inducement to Parent's willingness to
enter into this Agreement, Parent, Company and certain stockholders of
Company are entering into an agreement dated as of the date hereof, in the
form of Exhibit A (the "Voting Agreement"), pursuant to which such
stockholders have, among other things, given their proxy to Parent to vote
their shares of Company Common Stock (as defined herein) in favor of the
adoption of this Agreement;
WHEREAS, as a further condition and inducement to Parent's
willingness to enter into this Agreement, Merger Subsidiary, Company or a
Subsidiary of Company and the employees of Company listed on Schedule I are
entering into employment agreements and a consulting agreement
contemporaneously herewith (collectively, the "Management Agreements"); and
WHEREAS, Parent, Merger Subsidiary and Company desire to make
certain representations, warranties and agreements in connection with the
Merger and also to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein, the parties hereto agree as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.1. Definitions. For all purposes in this Agreement, the
following terms shall have the respective meanings set forth in this
Section 1.1 (such definitions to be equally applicable to both the singular
and plural forms of the terms herein defined):
"Acquisition Proposal" has the meaning given in Section 5.4(a).
"Action" has the meaning given in Section 3.1(g).
"Affected Employees" has the meaning given in Section 5.8(a).
"AHA" means Axe-Houghton Associates, Inc., a Delaware corporation
and a wholly owned Subsidiary of Company.
"Average Parent Price" means the average (rounded to the nearest
thousandth) of the closing trading prices of Parent Common Stock on the
NYSE, as reported in The Wall Street Journal, Eastern Edition (or such
other source as the parties shall agree in writing), for the 20 full
trading days ending on the fifth business day immediately preceding the
Closing Date.
"AHA Stock Purchase Agreement" has the meaning given in Section 3.1(t).
"Board of Directors" means the board of directors of Company.
"Cash-out Option" means each Company Option that is listed on the
Cash-out Option Schedule.
"Cash-out Option Schedule" means a schedule delivered by Company
to Parent within 30 days after the date hereof that sets forth (i) the name
of each holder who has elected to have such holder's Company Options
treated as "Cash-out Options" hereunder, (ii) the number of Company Options
as to which such election has been made and (iii) the exercise price for
each such Company Option.
"Certificate of Merger" has the meaning given in Section 2.1.
"Change in Company Recommendation" has the meaning given in
Section 5.1(b).
"Closing" has the meaning given in Section 2.2.
"Closing Date" has the meaning given in Section 2.2.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" has the meaning given in the first paragraph of this
Agreement.
"Company Certificates" has the meaning given in Section 2.7(a).
"Company Common Stock" means the common stock, par value $0.01, of
Company, including the associated Company Rights.
"Company Contracts" has the meaning given in Section 3.1(i).
"Company Disclosure Schedule" means the disclosure schedule
delivered by Company to Parent concurrently with the execution and delivery
of this Agreement.
"Company Expenses" means all out-of-pocket costs and expenses,
including all fees and expenses of investment bankers, attorneys,
accountants and other advisors, incurred by or on behalf of Company or any
of its Subsidiaries in connection with or related to the Transaction
Agreements and the transactions contemplated thereby, but in no case shall
the Company Expenses exceed $1.0 million.
"Company Option" means an option to purchase shares of Company
Common Stock granted to an employee, consultant, independent contractor or
director.
"Company Permits" means permits, licenses, variances, exemptions,
orders and approvals of all Governmental Entities held by Company or any of
its Subsidiaries (other than AHA or any of its Subsidiaries) which are
material to the operation of their respective businesses.
"Company Plans" has the meaning given in Section 3.1(j).
"Company Preferred Stock" means the preferred stock, par value
$0.01 per share, of Company.
"Company Recommendation" has the meaning given in Section 5.1(a).
"Company Regulatory Consents" has the meaning given in Section 3.1(c).
"Company Rights" means the rights issued pursuant to the Company
Rights Agreement.
"Company Rights Agreement" means the Rights Agreement dated as of
December 17, 1996 between Company and Continental Stock Transfer & Trust
Company, as rights agent.
"Company RSU" means restricted shares of Company Common Stock.
"Company SEC Documents" has the meaning given in Section 3.1(d).
"Company Stockholders Meeting" has the meaning given in Section 5.1(b).
"Company Stock Option Plans" has the meaning given in Section 2.8(b).
"Company Stock Purchase Plans" means the 1996 Employee Stock
Purchase Plan and the 1997 Foreign Employee Stock Purchase Plan of Company.
"Company's Current Premium" has the meaning given in Section 5.6(b).
"Company's Financial Advisor" has the meaning given in Section 3.1(r).
"Confidentiality Agreements" means the confidentiality agreements
dated March 7, 2001 and November 5, 2001 between Parent and Company, as
amended on the date hereof.
"Constituent Corporations" means Merger Subsidiary and Company.
"Controlled Group" means, with respect to any person, any
organization which is a member of a controlled group of organizations
within the meaning of Code Section 414(b), (c), (m) or (o).
"Dissenting Shares" has the meaning given in Section 2.6(d).
"DGCL" means the Delaware General Corporation Law.
"Effective Time" has the meaning given in Section 2.1.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA Affiliate" has the meaning given in Section 3.1(j).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Agent" has the meaning given in Section 2.7(a).
"Exchange Fund" has the meaning given in Section 2.7(a).
"Exchange Ratio" means the Merger Consideration divided by the
Average Parent Price, rounded to the nearest thousandth of a share.
"Final Proxy Statement" has the meaning given in Section 5.1(c).
"Foreign Plan" means any plan, program, policy, arrangement or
agreement maintained or contributed to by, or entered into with, Company or
any of its Subsidiaries with respect to employees (or former employees)
employed outside the United States.
"GAAP" means accounting principles generally accepted in the
United States in effect at the applicable time.
"Governmental Consents" has the meaning given in Section 3.1(c).
"Governmental Entity" means any court, administrative agency or
commission or other governmental authority or instrumentality, or SRO,
domestic or foreign.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended.
"Indemnified Liabilities" has the meaning given in Section 5.6(a).
"Indemnified Parties" has the meaning given in Section 5.6(a).
"Intellectual Property" means all of the following, in whatever
form or medium, anywhere in the world: patents, trademarks, service marks,
trade names, corporate names, domain names, copyrights, and copyrighted
works; registrations thereof and applications (including provisional
applications) therefor; derivatives, continuations, continuations-in-part,
extensions, divisionals, re-examinations, reissues and renewals thereof;
trade secrets, software (in any form, including source code and object
code), firmware, mask works, programs, flow charts, documentation,
inventions (whether patentable or unpatentable), utility models,
discoveries, proprietary processes, and items of proprietary know-how,
information, data (whether or not protected by copyright or other
intellectual property), proprietary prospect lists, customer lists,
projections, analyses, proprietary market studies and any other
intellectual property.
"IRS" means the Internal Revenue Service.
"Law" means any United States Federal, state, local or foreign
statute, law, ordinance, rule or code, or a rule or regulation of any
Governmental Entity.
"Lien" means any lien, claim, charge, option, encumbrance,
mortgage, pledge or security interest.
"Management Agreements" has the meaning given in the recitals of
this Agreement.
"material", with respect to any event, change or effect with
respect to any person, means an event, change or effect which is material
in relation to the condition (financial or otherwise), properties, assets
(including, without limitation, client base), liabilities, businesses or
results of operations of such person and its Subsidiaries taken as a whole.
"Material Adverse Effect" means (i) with respect to Company, a
material adverse effect on the condition (financial or otherwise),
properties, assets (including, without limitation, client base),
liabilities, businesses or results of operations of Company and its
Subsidiaries taken as a whole or the Surviving Corporation and its
Subsidiaries taken as a whole, in each case, after giving effect to the
Specified Asset Sales, or an adverse effect on the ability of Company to
perform its obligations hereunder on a timely basis and (ii) with respect
to Parent, a material adverse effect on the condition (financial or
otherwise), properties, assets (including, without limitation, client
base), liabilities, businesses or results of operations of Parent and its
Subsidiaries taken as a whole or an adverse effect on the ability of Parent
or Merger Subsidiary to perform its respective obligations hereunder on a
timely basis; provided, however, that in determining whether there has been
a Material Adverse Effect with respect to any person, the following shall
be disregarded: (a) any adverse effect resulting from conditions in the
securities industry generally, or from general economic conditions, in each
case, in the countries in which such person or any of its Subsidiaries
conducts business and (b) changes in the value of the securities portfolio
owned by such person or any of its Subsidiaries.
"Merger" has the meaning given in the recitals of this Agreement.
"Merger Consideration" has the meaning given in Section 2.6(b).
"Merger Subsidiary" has the meaning given in the recitals of this
Agreement.
"NASD" means the National Association of Securities Dealers, Inc.
"Net Cash Proceeds" means, with respect to the Specified Asset
Sale under the AHA Stock Purchase Agreement, the proceeds in the form of
cash or cash equivalents received by Company or any of its Subsidiaries
from such Specified Asset Sale (including, for the avoidance of doubt, in
payment of accounts receivable) prior to the Effective Time, net of:
(i) all out-of-pocket expenses and fees paid or payable
by Company or any of its Subsidiaries in connection with such
Specified Asset Sale (including legal, accounting and investment
banking fees);
(ii) all taxes paid or payable by Company or any of its
Subsidiaries in connection with such Specified Asset Sale, after
taking into account any reduction in consolidated tax liability
due to available tax credits or deductions and any tax sharing
arrangements; and
(iii) all duties, obligations and liabilities arising
from employee benefit or compensation plans, practices, policies
and arrangements relating to employees of AHA or any of its
Subsidiaries or their businesses or the employment or termination
of employment of any such employees, other than salary and bonus
of such employees accrued in the ordinary course of business prior
to the date of consummation of such Specified Asset Sale.
The amount of the Net Cash Proceeds shall not be determined until all
adjustments to the purchase prices for such Specified Asset Sale are
completed in accordance with the terms of the applicable Specified Asset
Sale Agreement and are not subject to further adjustment. The Net Cash
Proceeds shall be calculated without regard to any indemnity obligations of
Company under the applicable Specified Asset Sale Agreement.
"Number of Shares and Options Outstanding" means the sum of the
number of shares of Company Common Stock issued and outstanding immediately
prior to the Effective Time (other than such shares to be canceled pursuant
to Section 2.6(a)) including Company RSUs, plus the number of shares of
Company Common Stock issuable upon the exercise of all Company Stock
Options outstanding immediately prior to the Effective Time.
"NYSE" means the New York Stock Exchange, Inc.
"Option Consideration" has the meaning given in Section 2.8(a).
"Order" has the meaning given in Section 3.1(g).
"Parent" has the meaning given in the recitals of this Agreement.
"Parent Common Stock" means the common stock, par value $0.01 per
share, of Parent.
"Parent Expenses" means all out-of-pocket costs and expenses,
including all fees and expenses of investment bankers, attorneys,
accountants and other advisors, incurred by or on behalf of Parent or any
of its Subsidiaries in connection with or related to the Transaction
Agreements and the transactions contemplated thereby, but in no case shall
the Parent Expenses exceed $1.0 million.
"person" means any individual, corporation, partnership, limited
liability company, joint venture, incorporated or unincorporated
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Proxy Statement" has the meaning given in Section 5.1(a).
"Representative" means, with respect to any person, any officer,
director, employee, affiliate, agent, representative or advisor, including
any investment banker, attorney or accountant retained by such person or
any of its Subsidiaries.
"Required Company Vote" has the meaning given in Section 3.1(m).
"Rollover Option" means each Company Option, whether or not
vested, other than (x) a Cash-out Option or (ii) a Company Option not
constituting a Cash-out Option that is exercised prior to the Effective Time.
"SEC" means the Securities and Exchange Commission.
"Section 7.2 Acquisition Proposal" means any Acquisition Proposal
with respect to assets (including equity interests in Subsidiaries other
than AHA) representing in the aggregate one-third or more of the
consolidated assets of Company and its Subsidiaries (after giving effect to
the Specified Asset Sales) or equity interests representing one-third or
more (in economic or voting power) of the outstanding equity interests in
Company.
"Securities Act" means the Securities Act of 1933, as amended.
"Solicit" has the meaning given in Section 5.4(a).
"Specified Asset Sale Agreements" has the meaning given in Section
3.1(t).
"Specified Asset Sales" means the sales of AHA and its Subsidiaries
or their assets pursuant to the Specified Asset Sale Agreements.
"SROs" means industry self-regulatory organizations.
"Subsidiary," as to any party, means any corporation or other
organization, whether incorporated or unincorporated, (i) of which such
party or any other Subsidiary of such party is a general partner (excluding
partnerships, the general partnership interests of which held by such party
or any Subsidiary of such party do not have a majority of the voting
interests in such partnership), or (ii) at least a majority of the
securities or other interests of which having by their terms ordinary
voting power to elect a majority of the board of directors or others
performing similar functions with respect to such corporation or other
organization is directly or indirectly owned or controlled by such party or
by any one or more of its Subsidiaries.
"Superior Proposal" means a bona fide written Acquisition Proposal
not Solicited in violation of this Agreement and which the Board of
Directors concludes in good faith, after consultation with its financial
and legal advisors, taking into account all legal, financial, regulatory
and other relevant aspects of the proposal and the person making the
proposal (including any break-up fees, expense reimbursement provisions and
conditions to consummation), (i) is more favorable to the stockholders of
Company, from a financial point of view, than the transactions contemplated
by this Agreement and (ii) is not subject to any financing contingencies
and is from a person that the Board of Directors concludes in good faith,
taking into consideration advice from a nationally recognized investment
bank, is financially capable of consummating such proposal; provided that,
for purposes of this definition, "Acquisition Proposal" shall be deemed to
refer only to a transaction involving a majority of the outstanding voting
securities of Company.
"Surviving Corporation" means Company, at and after the Effective
Time, as the surviving corporation in the Merger.
"tax" (including, with correlative meaning, the terms "taxes" and
"taxable") includes, except where the context otherwise requires, all
Federal, state, local and foreign income, profits, franchise, gross
receipts, payroll, sales, employment, use, property, withholding, excise,
occupancy, custom, duty, capital stock, ad valorem, value added, estimated,
stamp, alternative and other taxes, governmental duties or governmental
assessments of any nature whatsoever, together with all interest, penalties
and additions imposed with respect to such amounts.
"Termination Fee" means $4.5 million.
"Transaction Agreements" means this Agreement, the Voting Agreement
and the Management Agreements.
"Violation" has the meaning given in Section 3.1(c).
"Voting Debt" has the meaning given in Section 3.1(b).
"Voting Agreement" has the meaning given in the recitals of this
Agreement.
ARTICLE TWO
THE MERGER
SECTION 2.1. Effective Time of Merger Subject to the provisions of
this Agreement, a certificate of merger (the "Certificate of Merger") shall
be duly prepared, executed in accordance with the DGCL and thereafter
delivered to the Secretary of State of the State of Delaware for filing, as
provided in the DGCL, on the Closing Date. The Merger shall become
effective upon the filing of the Certificate of Merger with the Secretary
of State of the State of Delaware or at such time thereafter as is provided
in the Certificate of Merger (the "Effective Time").
SECTION 2.2. Closing. The closing of the Merger (the "Closing")
will take place at 10:00 a.m. on the date (the "Closing Date") that is two
business days after satisfaction or waiver (subject to applicable law) of
the conditions (excluding conditions that, by their terms, are to be
satisfied on the Closing Date) set forth in Article Six, unless another
time or date is agreed to in writing by the parties hereto. The Closing
shall be held at the offices of Xxxxxx Xxxxxx & Xxxxxxx, 00 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, unless another place is agreed to in writing by
the parties hereto.
SECTION 2.3. Effects of the Merger. At the Effective Time, Merger
Subsidiary shall be merged with and into Company, the separate existence of
Merger Subsidiary shall cease, and Company shall survive the Merger as the
Surviving Corporation. The Merger will have the effects set forth in the DGCL.
SECTION 2.4. Certificate of Incorporation and By-Laws. At the
Effective Time, the certificate of incorporation of Company shall be
amended and restated in its entirety as set forth in Exhibit B hereto and
shall be the certificate of incorporation of the Surviving Corporation
until thereafter changed or amended as provided therein or by applicable
law. The by-laws of Merger Subsidiary as in effect immediately prior to the
Effective Time shall be adopted by, and will be the by-laws of, the
Surviving Corporation until thereafter changed or amended as provided
therein or by applicable law.
SECTION 2.5. Officers and Directors. The officers of Company
immediately prior to the Effective Time shall be the officers of the
Surviving Corporation, until the earlier of their resignation or removal or
otherwise ceasing to be an officer or until their respective successors are
duly appointed. The directors of Merger Subsidiary immediately prior to the
Effective Time shall be the directors of the Surviving Corporation, until
the earlier of their resignation or removal or otherwise ceasing to be a
director or until their respective successors are duly elected and
qualified.
SECTION 2.6. Effect on Capital Stock; Merger Consideration. As of
the Effective Time, by virtue of the Merger and without any action on the
part of the holder of any shares of Company Common Stock:
(a) Cancellation of Treasury Stock and Parent-Owned
Stock, Etc. All shares of Company Common Stock that are owned by
Company as treasury stock or otherwise and all shares of Company
Common Stock that are owned by Parent or Merger Subsidiary shall
be canceled and retired and shall cease to exist and no cash or
other consideration shall be delivered in exchange therefor.
(b) Conversion of Company Common Stock. Subject to
Section 2.6(d), each share of Company Common Stock issued and
outstanding immediately prior to the Effective Time (including (i)
all vested and unvested Company RSUs and (ii) any shares of
Company Common Stock held by participants in the Company Stock
Purchase Plans and issued prior to the date hereof, but excluding
(x) shares to be canceled in accordance with Section 2.6(a) and
(y) Dissenting Shares) shall be converted at the Effective Time
into the right to receive, without interest, an amount in cash
equal to the sum of (i) $12.32 plus (ii) the amount determined by
dividing (x) the Net Cash Proceeds by (y) the Number of Shares and
Options Outstanding (the "Merger Consideration"). Upon such
conversion, all such shares of Company Common Stock shall no
longer be deemed to be outstanding and shall automatically be
canceled and retired and shall cease to exist, and each
certificate previously representing any such shares shall
thereafter represent only the right to receive the Merger
Consideration upon the surrender of the certificate representing
such shares of Company Common Stock in accordance with Section 2.7.
(c) Merger Subsidiary Capital Stock. Each share of common
stock, par value $0.01 per share, of Merger Subsidiary outstanding
immediately prior to the Effective Time shall be converted into
one validly issued, fully paid and nonassessable share of common
stock, par value $0.01 per share, of the Surviving Corporation.
(d) Appraisal Rights. (i) Notwithstanding anything in
this Agreement to the contrary, shares of Company Common Stock
that are issued and outstanding immediately prior to the Effective
Time and that are owned by stockholders that have properly
perfected their rights of appraisal within the meaning of Section
262 of the DGCL (the "Dissenting Shares") shall not be converted
into the right to receive the Merger Consideration, unless and
until such stockholders shall have failed to perfect any available
right of appraisal under applicable law, but, instead, the holders
thereof shall be entitled to payment of the appraised value of
such Dissenting Shares in accordance with Section 262 of the DGCL.
If any such holder shall have failed to perfect or shall have
effectively withdrawn or lost such right of appraisal, the shares
of Company Common Stock held by such stockholder shall not be
deemed Dissenting Shares for purposes of this Agreement and shall
thereupon be deemed to have been converted into the Merger
Consideration at the Effective Time in accordance with Section 2.6(b).
(ii) Company shall give Parent (A) prompt notice of any
demands for appraisal filed pursuant to Section 262 of the DGCL
received by Company, withdrawals of such demands and any other
instruments served or delivered in connection with such demands
pursuant to the DGCL and received by Company and (B) the
opportunity to participate in all negotiations and proceedings
with respect to demands made pursuant to Section 262 of the DGCL.
Company shall not, except with the prior written consent of
Parent, (x) make any payment with respect to any such demand, (y)
offer to settle or settle any such demand or (z) waive any failure
to timely deliver a written demand for appraisal or timely take
any other action to perfect appraisal rights in accordance with
the DGCL.
(e) Company Stock Purchase Plans. Prior to the Closing
Date, the offering period under each of the Company Stock Purchase
Plans shall be terminated without any shares of Company Common
Stock being issued thereunder after the date hereof. The Company
Stock Purchase Plans shall be terminated as of the Effective Time.
Prior to the Effective Time, Company shall adopt such resolutions
or take such other actions (including, if appropriate, amending
the terms of the Company Stock Purchase Plans) that are necessary
to give effect to the requirements of this paragraph (e).
SECTION 2.7. Exchange of Certificates for Merger Consideration.
(a) Exchange Agent. Prior to the Effective Time, Parent shall
appoint either Equiserve Trust Company N.A. or a bank or trust company
designated by Parent and reasonably acceptable to Company to act as
exchange agent hereunder (the "Exchange Agent") for the purpose of
exchanging (i) certificates which immediately prior to the Effective Time
evidenced shares of Company Common Stock (the "Company Certificates") and
(ii) shares of Company Common Stock held through book-entry facilities, as
the case may be, for the Merger Consideration. As of the Effective Time,
Parent shall deposit, or shall cause to be deposited, with the Exchange
Agent, for the benefit of the holders of shares of Company Common Stock,
for exchange in accordance with this Article Two, cash in an amount
sufficient to pay the aggregate Merger Consideration (the cash deposited
being hereinafter referred to as the "Exchange Fund").
(b) Investment of the Exchange Fund. Any cash deposited with the
Exchange Agent shall be invested by the Exchange Agent as Parent reasonably
directs; provided that (i) no such investment or any losses thereon shall
affect the Merger Consideration payable to stockholders of Company and (ii)
such investments shall be in obligations of or guaranteed by the United
States of America and backed by the full faith and credit of the United
States of America or in commercial paper obligations rated P-1 and A-1 or
better by Xxxxx'x Investors Service, Inc. and Standard & Poor's Ratings
Group, respectively. Any net profit resulting from, or interest or income
produced by, such investments will be payable to the Surviving Corporation
upon termination of the Exchange Fund pursuant to paragraph (e) below.
Parent shall pay all charges and expenses of the Exchange Agent in
connection with the exchange of shares of Company Common Stock for the
Merger Consideration.
(c) Exchange Procedures. As soon as reasonably practicable after
the Effective Time, the Exchange Agent shall mail to each holder of record
of shares of Company Common Stock immediately prior to the Effective Time
(whose shares were converted into the right to receive the Merger
Consideration pursuant to Section 2.6) (i) a letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and title
to the Company Certificates, if any, shall pass, only upon delivery of the
Company Certificates to the Exchange Agent, and which shall be in such form
and have such other provisions as Parent and Company may reasonably
specify) and (ii) instructions for use in effecting the surrender of shares
of Company Common Stock in exchange for the Merger Consideration. Upon (i)
surrender of a Company Certificate for cancellation to the Exchange Agent
together with such letter of transmittal, duly executed, or (ii) the
book-entry transfer by the holder of shares of Company Common Stock to the
account established by the Exchange Agent for such purpose, together with a
properly completed letter of transmittal or an agent's message in lieu
thereof (as described in the letter of transmittal) and such other
documents as the Exchange Agent may reasonably require, the holder of such
shares of Company Common Stock shall receive in exchange therefor the
Merger Consideration which such holder has the right to receive in respect
of the shares of Company Common Stock surrendered pursuant to the
provisions of this Article Two. Each Company Certificate so surrendered
shall forthwith be canceled. In the event of a transfer of ownership of
Company Common Stock which is not registered in the transfer records of
Company, the applicable Merger Consideration may be issued and paid to a
transferee only if the Company Certificate representing such Company Common
Stock is presented to the Exchange Agent accompanied by all documents
required to evidence and effect such transfer and by evidence that any
applicable stock transfer taxes have been paid. Until surrendered as
contemplated by this Section 2.7, each Company Certificate shall be deemed
at any time after the Effective Time to represent only the right to receive
the amount of cash into which the shares of Company Common Stock
represented by such Company Certificate have been converted as provided in
this Article Two.
(d) No Further Ownership Rights in Company Common Stock. All cash
paid upon conversion of shares of Company Common Stock in accordance with
the terms hereof shall be deemed to have been paid in full satisfaction of
all rights pertaining to such shares of Company Common Stock. After the
Effective Time there shall be no further registration of transfers on the
stock transfer books of the Surviving Corporation of the shares of Company
Common Stock which were outstanding immediately prior to the Effective
Time. If, after the Effective Time, Company Certificates are presented to
the Surviving Corporation for any reason, they shall be canceled and
exchanged as provided in this Article Two.
(e) Termination of Exchange Fund. Any portion of the Exchange Fund
which remains undistributed to the stockholders of Company for six months
after the Effective Time shall be delivered to the Surviving Corporation,
upon demand, and any stockholders of Company who have not theretofore
complied with this Article Two shall thereafter look only to the Surviving
Corporation for payment of the Merger Consideration payable to such
stockholder.
(f) No Liability. None of Parent, Merger Subsidiary, Company or
the Surviving Corporation shall be liable to any holder of shares of
Company Common Stock for any portion of the Exchange Fund (or dividends or
distributions with respect thereto) delivered to a public official pursuant
to any applicable abandoned property, escheat or similar law.
(g) Lost Certificates. If any Company Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by
the person claiming such Company Certificate to be lost, stolen or
destroyed and, if required by Parent, the posting by such person of a bond
in such reasonable amount as Parent may direct as indemnity against any
claim that may be made against it with respect to such Company Certificate,
the Exchange Agent will deliver in exchange for such lost, stolen or
destroyed Company Certificate the applicable Merger Consideration with
respect to the shares of Company Common Stock formerly represented thereby
pursuant to this Agreement.
(h) Withholding. Parent shall be entitled to deduct and withhold
from the consideration otherwise payable pursuant to this Agreement to any
holder of shares of Company Common Stock such amounts as it is required to
deduct and withhold with respect to the making of such payment under the
Code and the rules and regulations promulgated thereunder, or any provision
of any tax Law. To the extent that amounts are so withheld by Parent and
paid to governmental tax authorities, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the
holder of the shares of Company Common Stock in respect of which such
deduction and withholding was made by Parent.
SECTION 2.8. Options. (a) At the Effective Time, all Cash-out
Options shall be canceled, and holders of Cash-out Options with an exercise
price below the Merger Consideration shall receive from Surviving
Corporation (subject to any applicable withholding taxes), with respect to
each Cash-out Option, an amount equal to the product of (x) the excess of
the Merger Consideration over the exercise price per share of such Cash-out
Option times (y) the number of shares of Company Common Stock subject to
such Cash-out Option (the "Option Consideration"). The Option Consideration
shall be due and paid at (or as soon as practicable following) the
Effective Time.
(b) At the Effective Time, each Rollover Option shall be converted
into and become an option to purchase shares of Parent Common Stock on
terms substantially identical to those in effect immediately prior to the
Effective Time under the terms of the stock option plan or other agreement
or award pursuant to which such Company Option was granted (collectively,
such plans, agreements and awards being hereinafter referred to as the
"Company Stock Option Plans"); provided, however, that from and after the
Effective Time, (i) each Rollover Option assumed by Parent may be exercised
solely to purchase shares of Parent Common Stock, (ii) the number of shares
of Parent Common Stock purchasable upon exercise of each Rollover Option
shall be equal to the number of shares of Company Common Stock that were
purchasable under such Rollover Option immediately prior to the Effective
Time multiplied by the Exchange Ratio and rounded down to the nearest whole
share and (iii) the per share exercise price under each Rollover Option
shall be adjusted by dividing the per share exercise price of such Rollover
Option immediately prior to the Effective Time by the Exchange Ratio, and
rounded up to the nearest whole cent; provided, however, that in the case
of any Rollover Option to which Section 421 of the Code applies by reason
of its qualification as an incentive stock option under Section 422 of the
Code, the conversion formula set forth in the foregoing clauses (ii) and
(iii) shall be adjusted, if necessary, to comply with Section 424(a) of the
Code. Company shall deliver a schedule to Parent within 30 days after the
date hereof that sets forth (i) the name of each holder of a Company Option
that is not a Cash-out Option, (ii) the number of shares of Company Common
Stock subject to such Company Option, (iii) the exercise price for each
such Company Option and (iv) the date of grant of each such Company Option.
On the Closing Date, Company shall give notice to Parent indicating which
such Company Options have been exercised after the delivery of such
schedule and prior to the Closing Date.
(c) Parent shall take all corporate action necessary to reserve
for issuance a sufficient number of shares of Parent Common Stock for
delivery upon exercise of Rollover Options. As soon as practicable but in
any event within 20 days after the Effective Time, the shares of Parent
Common Stock subject to Rollover Options will be covered by an effective
registration statement on Form S-8 (or any successor form) or another
appropriate form, and Parent shall use its commercially reasonable efforts
to maintain the effectiveness of such registration statement for so long as
any Rollover Options remain outstanding. In addition, Parent shall use its
commercially reasonable efforts to cause the shares of Parent Common Stock
subject to Rollover Options to be listed on the NYSE.
(d) Company shall obtain from each holder of a Company Option a
letter in the form of Exhibit C hereto and deliver all such letters to
Parent prior to the Effective Time.
(e) Each of Company and, if applicable, Parent shall take all such
steps as may be required by it to cause the transactions contemplated by
this Section 2.8 and any other dispositions of Company equity securities
(including derivative securities) or acquisitions of Parent equity
securities (including derivative securities) in connection with this
Agreement by each individual who is a director or officer of Company to be
exempt under Rule 16b-3 promulgated under the Securities Exchange Act of
1934, as amended, such steps to be taken in accordance with the No-Action
Letter dated January 12, 1999, issued by the SEC to Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP.
SECTION 2.9. Certain Adjustments. If, between the date of this
Agreement and the Effective Time, the outstanding shares of Company Common
Stock shall have been increased, decreased, changed into or exchanged for a
different number of shares or different class of stock, in each case, by
reason of any reclassification, recapitalization, stock split, split-up,
combination or exchange of shares, a cash dividend, or a stock dividend or
dividend payable in any other securities shall be declared with a record
date within such period, or any similar event shall have occurred (other
than exercises of Company Options), the applicable Merger Consideration
shall be appropriately adjusted to provide to the holders of Company Common
Stock the same economic effect as contemplated by this Agreement prior to
such event.
ARTICLE THREE
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of Company. Company
represents and warrants to Parent as follows:
(a) Organization, Standing and Power; Subsidiaries. (i)
Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. Company has
all requisite power and authority to own, lease and operate its
properties and to carry on its businesses as now being conducted
and is duly licensed or qualified to do business and in good
standing in each jurisdiction in which the nature of its
businesses or the ownership or leasing of its properties makes
such licensing or qualification necessary, other than in such
jurisdictions where the failure to be so licensed or qualified
would not, either individually or in the aggregate, have a
Material Adverse Effect on Company. Company has furnished to
Parent true and complete copies of the certificate of
incorporation and by-laws or other organizational documents of
Company and each of its Subsidiaries as in effect on the date of
this Agreement.
(ii) Part I of Section 3.1(a) of the Company Disclosure
Schedule sets forth a true and complete list of all of Company's
Subsidiaries and indicates, as to each such Subsidiary, the
principal businesses in which it is engaged, the number and type
of outstanding shares of capital stock or other equity securities
of each such Subsidiary and the holder(s) thereof, any issued and
outstanding options, warrants, stock appreciation rights, rights
to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, shares of
any capital stock or other equity securities of such Subsidiary,
and any contracts, commitments, understandings or arrangements by
which such Subsidiary may be or become bound to issue additional
shares of its capital stock or other equity securities, or
options, warrants or rights to purchase, acquire, subscribe to,
calls on or commitments for any shares of its capital stock or
other equity securities and the identity of the parties to any
such agreements or arrangements. All of the outstanding shares of
capital stock or other securities evidencing ownership of
Company's Subsidiaries have been duly authorized and validly
issued and are fully paid and non-assessable with no personal
liability attaching to the ownership thereof and such shares or
other securities are owned by Company or its direct or indirect
wholly-owned Subsidiaries free and clear of any Lien with respect
thereto. Each of Company's Subsidiaries (x) is a duly organized
and validly existing corporation, partnership, limited liability
company or other legal entity under the laws of its jurisdiction
of organization, (y) has all requisite corporate or other power
and authority to own or lease all of its properties and assets and
to carry on its businesses as now conducted, and (z) is duly
licensed or qualified to do business and in good standing in all
jurisdictions where its ownership or leasing of property or the
conduct of its businesses requires it to be so licensed or
qualified, other than, in the case of this clause (z) in those
jurisdictions where the failure to be so licensed or qualified
would not, either individually or in the aggregate, have a
Material Adverse Effect on Company.
(iii) Part II of Section 3.1(a) of the Company Disclosure
Schedule provides a true and complete list of all direct or
indirect investments of Company or any of its Subsidiaries in any
other person as of the date hereof, whether in the form of equity
or debt or options, warrants or other rights to acquire or
purchase equity or debt. Company has provided or made available to
Parent a true and complete copy of all partnership, joint venture
or similar agreements to which Company or any of its Subsidiaries
is a party. Except as set forth in Part III of Section 3.1(a) of
the Company Disclosure Schedule, neither Company nor any of its
Subsidiaries is subject to any obligation or requirement to
provide funds to or make any investment in (whether in the form of
equity or debt or otherwise) any person.
(iv) The minute books of Company accurately reflect in all
material respects all corporate meetings and actions held or taken
by its stockholders or Board of Directors (including committees of
the Board of Directors) since January 1, 1998.
(b) Capital Structure. (i) The authorized capital stock
of Company consists of 40,000,000 shares of Company Common Stock
and 1,000,000 shares of Company Preferred Stock. At the close of
business on February 27, 2002, (A) 7,909,817 shares of Company
Common Stock were outstanding (including 130,024 Company RSUs),
2,401,501 shares of Company Common Stock were reserved for
issuance upon the exercise of outstanding Company Options pursuant
to the Company Stock Option Plans, 281,100 shares of Company
Common Stock were reserved for issuance pursuant to the Company
Stock Purchase Plans and 3,020,633 shares of Company Common Stock
were held by Company in its treasury; and (B) no shares of Company
Preferred Stock were outstanding and 150,000 shares of Company
Series A Junior Participating Preferred Stock were reserved for
issuance in connection with the Company Rights. All outstanding
shares of Company Common Stock have been duly authorized and
validly issued and are fully paid and non-assessable and not
subject to preemptive rights. The shares of Company Common Stock
which may be issued upon exercise of Company Stock Options have
been duly authorized and, if and when issued pursuant to the terms
thereof, will be validly issued, fully paid and non-assessable and
not subject to preemptive rights.
(ii) No bonds, debentures, notes or other indebtedness
having the right to vote on any matters on which stockholders may
vote ("Voting Debt") of Company are issued or outstanding.
(iii) As of the close of business on February 27, 2002,
except for (A) this Agreement, (B) Company Options which
represented the right to acquire up to an aggregate of 2,401,501
shares of Company Common Stock, (C) the Company Rights and (D) as
set forth in Section 3.1(b)(iii) of the Company Disclosure
Schedule, there are no options, warrants, calls, rights,
commitments or agreements of any character to which Company or any
of its Subsidiaries is a party or by which it or any such
Subsidiary is bound obligating Company or any of its Subsidiaries
to issue, deliver or sell, or cause to be issued, delivered or
sold, additional shares of capital stock or any Voting Debt of
Company or any of its Subsidiaries or obligating Company or any of
its Subsidiaries to grant, extend or enter into any such option,
warrant, call, right, commitment or agreement. Except as set forth
in Section 3.1(b)(iii) of the Company Disclosure Schedule, after
the Effective Time, there will be no option, warrant, call, right
or agreement obligating Company or any of its Subsidiaries to
issue, deliver or sell, or cause to be issued, delivered or sold,
any shares of capital stock or any Voting Debt of Company or any
of its Subsidiaries, or obligating Company or any of its
Subsidiaries to grant, extend or enter into any such option,
warrant, call, right or agreement.
(iv) There are no outstanding contractual obligations of
Company or any of its Subsidiaries (A) to repurchase, redeem or
otherwise acquire any shares of capital stock of Company or any of
its Subsidiaries, other than the agreements between Company and
persons who were its stockholders prior to the initial public
offering of Company Common Stock (which agreements will become
void and of no further effect at the Effective Time), or (B)
pursuant to which Company or any of its Subsidiaries is or could
be required to register shares of Company Common Stock or other
securities under the Securities Act.
(c) Authority. (i) Company has all requisite corporate
power and authority to enter into the Transaction Agreements and,
subject to adoption of this Agreement by the Required Company
Vote, to consummate the transactions contemplated thereby. The
execution and delivery of the Transaction Agreements and the
consummation of the transactions contemplated thereby have been
duly authorized by all necessary corporate action on the part of
Company, subject in the case of the consummation of the Merger to
the adoption of this Agreement by the Required Company Vote. Each
of the Transaction Agreements has been duly executed and delivered
by Company and its Subsidiary party thereto and constitutes a
valid and binding obligation of each of Company and such
Subsidiary, enforceable against it in accordance with its terms,
except as may be limited by bankruptcy, insolvency or other
similar laws affecting the rights and remedies of creditors
generally, and subject to general principles of equity, whether
applied by a court of law or equity.
(ii) The execution and delivery of the Transaction
Agreements do not, and the consummation of the transactions
contemplated thereby and compliance with the terms thereof will
not, (A) conflict with, or result in any violation of, or
constitute a default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancellation,
acceleration or increase of any obligation, liability or fee or
the loss of a material benefit under, or the creation of a Lien on
any assets (any such conflict, violation, default, right of
termination, cancellation or acceleration, loss or creation,
including under any "change of control" provision, a "Violation")
pursuant to, any provision of the certificate of incorporation or
by-laws of Company or any of its Subsidiaries, (B) except as set
forth in Section 3.1(c)(ii) of the Company Disclosure Schedule,
result in any Violation of any loan or credit agreement, note,
bond, mortgage, deed of trust, indenture, lease, Company Plan or
other contract, agreement, obligation or instrument to which
Company or any of its Subsidiaries (other than AHA or any of its
Subsidiaries) is a party or by which any of their properties,
assets or businesses are bound or (C) except as set forth in
Section 3.1(c)(ii) of the Company Disclosure Schedule and subject
to obtaining or making the Governmental Consents referred to in
paragraph (iii) below, result in any Violation of any permit,
concession, franchise, license, judgment, order, decree,
injunction, arbitration award or Law applicable to Company or any
of its Subsidiaries or their respective properties, assets or
businesses, other than, in the case of clauses (B) and (C),
Violations, which, individually or in the aggregate, would not
have a Material Adverse Effect on Company and would not prevent,
or materially alter or delay, the consummation of the Merger or
the other transactions contemplated by the Transaction Agreements.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity
("Governmental Consents") is required in connection with the
execution and delivery of the Transaction Agreements by Company or
any of its Subsidiaries party thereto, their consummation of the
transactions contemplated thereby or their compliance with the
terms thereof, except for (A) notices or filings under the HSR Act
and the expiration or termination of the applicable waiting period
thereunder and compliance with any applicable foreign antitrust or
competition law, (B) the filing with, and the clearance by, the
SEC of the Proxy Statement and the filing with the SEC of such
reports under the Exchange Act as may be required in connection
with the Transaction Agreements and the transactions contemplated
thereby, (C) the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware, (D) the approvals,
filings and notices listed on Section 3.1(c)(iii) of the Company
Disclosure Schedule (the "Company Regulatory Consents") and (E)
such other filings, authorizations, orders and approvals which, if
not obtained or made, would not have a Material Adverse Effect on
Company and would not prevent, or materially alter or delay, the
consummation of the Merger or the other transactions contemplated
by the Transaction Agreements. As of the date of this Agreement,
Company does not have knowledge of any reason why the Governmental
Consents referred to in this Section 3.1(c)(iii) will not be
received or made on a timely basis.
(d) SEC Documents; Undisclosed Liabilities. (i) Company
has filed and will file, on a timely basis, all reports,
schedules, registration statements and other documents required to
be filed with the SEC since January 1, 1999 (collectively, the
"Company SEC Documents"). As of their respective dates of filing
with the SEC (or, if amended or superseded by a filing prior to
the date hereof, as of the date of such filing), the Company SEC
Documents complied and will comply in all material respects with
the requirements of the Securities Act or the Exchange Act, as the
case may be, and the rules and regulations of the SEC thereunder
applicable to such Company SEC Documents, and none of the Company
SEC Documents when filed contained or will contain any untrue
statement of a material fact or omitted or will omit to state a
material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading. Notwithstanding the
foregoing, the Company makes no representation or warranty with
respect to any information supplied in writing by Parent or Merger
Subsidiary for inclusion or incorporation by reference in any
Company SEC Document filed after the date hereof. Company and its
Subsidiaries are not engaged in any material business or activity
which is not described in the Company SEC Documents filed prior to
the date of this Agreement. The financial statements of Company
included in the Company SEC Documents complied and will comply as
to form, as of their respective dates of filing with the SEC, in
all material respects with all applicable accounting requirements
and with the published rules and regulations of the SEC with
respect thereto, have been and will be prepared in accordance with
GAAP (except, in the case of unaudited statements, as permitted by
Form 10-Q and Form 8-K of the SEC) applied on a consistent basis
during the periods involved (except as may be disclosed therein)
and fairly present and will fairly present in all material
respects the consolidated financial position of Company and its
consolidated Subsidiaries and their consolidated results of
operations, changes in stockholders' equity and cash flows as of
the dates and for the periods shown.
(ii) Except for (A) those liabilities that are fully
reflected or reserved for in the consolidated balance sheet of
Company included in its Quarterly Report on Form 10-Q for the
fiscal quarter ended September 30, 2001, and (B) liabilities
incurred since September 30, 2001 in the ordinary course of
business consistent with past practice, at September 30, 2001
Company did not have, and since such date Company has not
incurred, any material liabilities or obligations of any nature
whatsoever (whether accrued, absolute, contingent or otherwise and
whether or not required to be reflected in Company's financial
statements in accordance with GAAP).
(e) Proxy Statement. The Proxy Statement, as supplemented
or amended, as applicable, will, when the Proxy Statement or any
such amendment or supplement is first mailed to stockholders of
Company, at the time of the Company Stockholders Meeting and at
the Effective Time, 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
the light of the circumstances under which they were made, not
misleading. The Proxy Statement and any amendment or supplement
thereto will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations of
the SEC thereunder. Notwithstanding the foregoing, Company makes
no representation or warranty with respect to any information
supplied in writing by Parent or Merger Subsidiary for inclusion
or incorporation by reference in the Proxy Statement.
(f) Compliance with Applicable Laws. (i) Section
3.1(f)(i) of the Company Disclosure Schedule sets forth a true and
complete list of all Company Permits. Company and its Subsidiaries
have been and are in compliance in all material respects with the
terms of the Company Permits, except as set forth on Section
3.1(f)(i) of the Company Disclosure Schedule.
(ii) Except as disclosed in the Company SEC Documents
filed prior to the date of this Agreement or Section 3.1(f)(ii) of
the Company Disclosure Schedule, the businesses of Company and its
Subsidiaries (other than AHA or any of its Subsidiaries) have not
been and are not being conducted in violation of any Law or any
judgment, order, decree, injunction or arbitration award of any
Governmental Entity in any material respect. Except as disclosed
in Section 3.1(f)(ii) of the Company Disclosure Schedule and for
normal examinations conducted by a Governmental Entity in the
regular course of the business of Company and its Subsidiaries, no
Governmental Entity has initiated any material proceeding or, to
the knowledge of Company, investigation into the business or
operations of Company or any of its Subsidiaries (other than AHA
or any of its Subsidiaries) since January 1, 1999. Except as set
forth in Section 3.1(f)(ii) of the Company Disclosure Schedule,
there is no unresolved or uncured material violation or exception
noted by any Governmental Entity in any report, comment letter or
other statement relating to or based on any examinations of
Company or any of its Subsidiaries (other than AHA or any of its
Subsidiaries) or otherwise, and neither Company nor any of its
Subsidiaries (other than AHA or any of its Subsidiaries) is a
party to any material written agreement, commitment letter or
other similar undertaking with or to any Governmental Entity with
respect to the conduct of its businesses or its capital adequacy.
(iii) Company and each of its Subsidiaries have filed all
material regulatory reports, schedules, forms, registrations and
other documents, together with any amendments required to be made
with respect thereto, that they were required to file since
January 1, 1999 with (i) the SEC, (ii) any SRO and (iii) any other
Governmental Entity, and have paid all fees and assessments due
and payable in connection therewith. As of the date of this
Agreement, except as disclosed on an SEC Form BD which has been
filed by Company or its Subsidiaries with the SEC and copies of
which have been made available to Parent prior to the date of this
Agreement, neither Company nor any of its Subsidiaries, nor any of
their respective officers, directors or employees, has been the
subject of any disciplinary proceedings or orders of any
Governmental Entity arising under applicable securities laws which
would be required to be disclosed on SEC Form BD, and, to the
knowledge of Company, no such disciplinary proceeding or order is
pending or threatened; and neither Company nor any of its
Subsidiaries, nor any respective persons affiliated with Company
or its Subsidiaries, nor, to Company's knowledge, any of the
respective officers, directors or employees of any of the
foregoing or any "associated person" (as defined in the Exchange
Act) thereof, is or has been subject to any "statutory
disqualification" as defined in Section 3(a)(39) of the Exchange
Act or ineligible to serve as a broker-dealer or as an associated
person of a registered broker-dealer under the Exchange Act.
(iv) Section 3.1(f)(iv) of the Company Disclosure Schedule
sets forth a true and complete list of the Subsidiaries of Company
which are duly registered or licensed as a broker-dealer under the
Exchange Act or under any state, federal or foreign broker-dealer
or similar laws pursuant to which each such Subsidiary is required
to be so registered, together with a listing of such registrations
and an indication as to whether such Subsidiary is a member in
good standing of the NASD, NYSE or other foreign or domestic
broker-dealer associations. No other Subsidiary of Company is
required by the nature of its activities to be so registered under
the Exchange Act or under the laws of any state or other domestic
or foreign jurisdiction or to be a member in good standing of the
NASD, NYSE or other broker-dealer associations under any other
applicable law. Company has filed and made available to Parent, in
the form as filed, a true and complete copy of each such
Subsidiary's currently effective Form BD, all state, federal and
foreign registration forms and all material reports filed by it or
any such Subsidiary with the SEC, NASD, NYSE or other Governmental
Entity under the Exchange Act and the rules and regulations
thereunder or otherwise and under similar state, federal and
foreign statutes within the last two years and will file and make
available to Parent in the form as filed such material forms and
reports as are filed from and after the date hereof and prior to
the Closing Date. The information contained in such forms and
reports was (or will be, in the case of filings made after the
date hereof) true and complete in all material respects as of the
time of filing.
(v) Neither Company nor any of its Subsidiaries is
required by the nature of its activities or assets to be
registered as a national securities exchange, a registered
investment advisor under the Investment Advisers Act of 1940, as
amended, other than AHA and its Subsidiaries, or an investment
company under the Investment Company Act of 1940, as amended.
(vi) Section 3.1(f)(vi) of the Company Disclosure Schedule
sets forth a true and complete list of each of the memberships of
Company and each of its Subsidiaries (other than AHA or any of its
Subsidiaries) in commodities exchanges, boards of trade, clearing
organizations, trade associations and similar organizations, and a
description of the type of membership and the name of the
registered holder thereof. All such memberships and similar
privileges of Company and each of its Subsidiaries are in good
standing, except where the failure to keep such memberships and
privileges in good standing has not had and would not be
reasonably expected to have a Material Adverse Effect on Company.
(g) Legal Proceedings. Except as disclosed in the Company
SEC Documents filed prior to the date of this Agreement, there is
no claim, litigation, inquiry, suit, action, investigation or
proceeding (whether judicial, arbitral, administrative or other)
("Action") pending or, to the knowledge of Company, threatened,
against or affecting Company or any of its Subsidiaries, or any of
its properties, assets or businesses, which would, individually or
in the aggregate, have a Material Adverse Effect on Company, or
challenging the validity or propriety of, or which could in any
material respect affect, the Transaction Agreements or any of the
transactions contemplated thereby, nor is there any judgment,
decree, injunction, rule or order of any Governmental Entity or
arbitrator, or any settlement or stipulation with any person
(collectively, "Order"), outstanding or imminent against Company
or any of its Subsidiaries having, or which, insofar as reasonably
can be foreseen, in the future would have, individually or in the
aggregate, a Material Adverse Effect on Company.
(h) Taxes. Except as set forth in Section 3.1(h) of the
Company Disclosure Schedule:
(i) Company and each of its Subsidiaries have
filed all material tax returns required to be filed by
any of them and have paid (or had paid on their behalf),
or have set up an adequate reserve for the payment of,
all taxes required to be paid (whether or not shown to be
due on such tax returns), and the most recent financial
statements contained in the Company SEC Documents reflect
an adequate reserve for all taxes payable by Company and
its Subsidiaries accrued, but not yet due and owing,
through the date of such financial statements. All such
tax returns are true and complete in all material
respects.
(ii) No material deficiencies for any taxes have
been proposed, asserted or assessed against Company or
any of its Subsidiaries that are not adequately reserved
for, and no audit or other proceeding with respect to
taxes due from Company or any of its Subsidiaries is
pending or threatened.
(iii) Proper and accurate amounts have been
withheld, collected or deposited by Company and its
Subsidiaries from their employees in compliance with the
tax withholding provisions of applicable Law and have
been paid over to the appropriate taxing authorities.
(iv) There are no material tax Liens upon any
property or assets of Company or any of its Subsidiaries
except Liens for taxes not yet due and payable.
(v) Neither Company nor any of its Subsidiaries
has filed a consent under Section 341(f) of the Code
concerning collapsible corporations. Neither Company nor
any of its Subsidiaries has been required to include in
income any adjustment pursuant to Section 481 of the Code
(or any similar provision of tax Law) by reason of a
voluntary change in accounting method initiated by
Company or any of its Subsidiaries, and the IRS has not
initiated or proposed any such adjustment or change in
accounting method.
(vi) None of Company or any of its Subsidiaries
has liability for any taxes of any predecessor for any
tax periods prior to its formation.
(vii) None of Company or any of its Subsidiaries
(A) has been a member of an affiliated group filing a
consolidated federal income tax return (other than a
group the common parent of which was Company) or (B) has
any liability for the taxes of any person (other than any
of Company or its Subsidiaries) including, but not
limited to, under Treasury Regulation Section 1.1502-6
(or any similar provision of state, local or foreign
Law).
(viii) None of Company or any of its Subsidiaries
is a party to, is bound by or has any obligation under,
any tax sharing agreement or similar contract or
arrangement or any agreement that obligates it to make
any payment computed by reference to the taxes, taxable
income or taxable losses of any other person.
(ix) Company and each of its Subsidiaries have
collected all material sales and use taxes required to be
collected and have remitted, or will remit on a timely
basis, such amounts to the appropriate governmental
authorities, or have furnished properly completed
exemption certificates and have maintained all material
records and supporting documents in the manner required
by all applicable sales and use tax statutes and
regulations for all periods for which the statute of
limitations has not expired.
(x) Neither Company nor any of its Subsidiaries
has made any payment or is obligated to make any payment
(by contract or otherwise) which by reason of Section
162(m) of the Code will not be deductible.
(xi) No closing agreement pursuant to Section
7121 of the Code (or any similar provision of state,
local or foreign Law) has been entered into by or with
respect to Company or any of its Subsidiaries.
(i) Certain Agreements. Except as disclosed in Section
3.1(i) of the Company Disclosure Schedule (identified by the
applicable subclause of this Section 3.1(i)), except for the
Transaction Agreements and except those listed as exhibits to the
Annual Report on Form 10-K for the year ended December 31, 2000 or
to any Company SEC Reports filed subsequent to the filing of such
Annual Report and prior to the date of this Agreement (provided
that Section 3.1(i) of the Company Disclosure Schedule shall set
forth each Company Contract described in subclauses (vii) through
(x) below whether or not so listed as exhibits), neither Company
nor any of its Subsidiaries is a party to or bound by any
contract, arrangement, commitment or understanding
(i) that is a "material contract" (as such term
is defined in Item 601(b)(10) of Regulation S-K of the SEC);
(ii) that provides for any payment by or to
Company or any of its Subsidiaries in excess of $250,000
in any year or which is not terminable within 90 days,
except contracts for the provision of products or
services to clients by third parties in the ordinary
course of business;
(iii) with any current director, officer or
employee of Company or any of its Subsidiaries or any
affiliate of any such person;
(iv) with or to a labor union or guild (including
any collective bargaining agreement);
(v) evidencing indebtedness for borrowed money or
pursuant to which indebtedness for borrowed money may be
incurred in excess of $100,000;
(vi) with clients that generated 5.0% or more of
total 2001 commission revenues of Company and its
Subsidiaries, except for contracts related to "soft
dollar" and directed brokerage arrangements made in the
ordinary course of business;
(vii) other than confidentiality provisions
applicable to Company or any of its Subsidiaries set
forth in any agreement or contract, that limits or
purports to limit in any way the ability of Company or
any of its affiliates to compete in any line of business,
in any geographic area or with any person, to solicit any
person for employment, to obtain products or services
from or engage in business transactions with any person,
or which requires referrals of any business or requires
Company or any of its affiliates to make available
investment or business opportunities to any person on a
priority, equal or exclusive basis;
(viii) relating to the voting of any securities
of Company or any of its Subsidiaries;
(ix) entitling the other party thereto any
material right or benefit (including any material right
to consent), or increasing or accelerating any material
right or benefit, or triggering any material requirement,
restriction or limitation, by reason of the transactions
contemplated by any of the Transaction Agreements; or
(x) which would prevent, or materially alter or
delay, the consummation of any of the transactions
contemplated by the Transaction Agreements.
Company has previously made available to Parent true and complete
copies of each contract, arrangement, commitment or understanding
of the type described in clauses (i) through (x) of this Section
3.1(i) (collectively referred to herein as the "Company
Contracts"). All of the Company Contracts are valid and in full
force and effect, except where the failure to be in full force and
effect, individually or in the aggregate, would not have a
Material Adverse Effect on Company. No other person has challenged
the validity or enforceability of any Company Contract. Neither
Company nor any of its Subsidiaries, and to the knowledge of
Company, none of the other parties thereto, has violated any
provision of, or committed or failed to perform any act which with
or without notice, lapse of time or both would constitute a
default under the provisions of, any Company Contract, except for
those violations and defaults which, individually or in the
aggregate, would not result in a Material Adverse Effect on
Company.
(j) Benefits. (i) Section 3.1(j) of the Company
Disclosure Schedule sets forth a true and complete list of each
"employee benefit plan" (within the meaning of ERISA Section 3(3))
and each other employee benefit plan, agreement, program, policy
or arrangement, including, without limitation, multiemployer plans
within the meaning of ERISA Section 3(37)), stock purchase, stock
option, severance, employment, consulting, change-in-control,
fringe benefit, bonus, incentive and deferred compensation plan,
in each case, that is sponsored, maintained or contributed to or
required to be contributed to by Company or any trade or business
whether or not incorporated, (an "ERISA Affiliate"), that together
with Company would be deemed a "single employer" within the
meaning of Section 4001(b) of ERISA, or to which Company or an
ERISA Affiliate is party for the benefit of any employee or former
employee of Company or any of its Subsidiaries. All such plans,
agreements, programs, policies and arrangements, other than any
Foreign Plans, are collectively referred to as the "Company
Plans." With respect to each Company Plan, Company has delivered
or made available to Parent a true and complete copy thereof and,
to the extent applicable: (i) any related trust agreement or other
funding instrument; (ii) the most recent determination letter, if
applicable; (iii) any summary plan description; and (iv) for the
two most recent years (A) the Form 5500 and attached schedules,
(B) audited financial statements, (C) actuarial valuation reports
and (D) any attorney's response to an auditor's request for
information. No Company Plan or plan contributed to by a member of
Company's Controlled Group is a "multiemployer pension plan," as
defined in Section 3(37) of ERISA nor is any Company Plan or plan
contributed by to a member of Company's Controlled Group a plan
described in Section 4063(a) of ERISA.
(ii) Each Company Plan has been established and
administered in all material respects in accordance with its
terms, and in compliance in all material respects with the
applicable provisions of ERISA, the Code and other applicable
laws, rules and regulations. Each Company Plan which is intended
to be qualified within the meaning of Code Section 401(a) has
received a favorable determination letter as to its qualification,
and nothing has occurred, whether by action or failure to act,
that could reasonably be expected to cause the loss of such
qualification. All contributions to, and payments from, the
Company Plans that are required to have been made in accordance
with such plans have been timely made.
(iii) None of Company, any of its Subsidiaries, any member
of their Controlled Group, any Company Plan, any trust created
thereunder, nor, to the knowledge of Company, any trustee or
administrator thereof has engaged in a transaction in connection
with which Company or any of its Subsidiaries, any Company Plan,
any such trust, or any trustee or administrator thereof, or any
party dealing with any Company Plan or any such trust would be
subject to either a material civil penalty assessed pursuant to
Section 409 or 502(i) of ERISA or a material tax imposed pursuant
to Section 4975 or 4976 of the Code.
(iv) No Company Plan provides retiree welfare benefits,
and neither Company nor any of its Subsidiaries has any obligation
to provide any retiree welfare benefits other than as required by
Code Section 4980B.
(v) None of Company, any of its Subsidiaries or any
member of their Controlled Group maintains or contributes to, nor
has it maintained or contributed to within the previous five
years, any pension plan subject to Title IV of ERISA or Code
Section 412. None of Company, any of its Subsidiaries or any
member of their Controlled Group has liability (including any
contingent liability under ERISA Section 4204) with respect to any
multiemployer plan, within the meaning of ERISA Section 3(37).
None of Company, any of its Subsidiaries or any member of their
Controlled Group has incurred or is reasonably likely to incur,
any liability under Title IV of ERISA (other than premiums due to
the Pension Benefit Guaranty Corporation, which premiums have been
paid when due). None of Company, any of its Subsidiaries or any
member of their Controlled Group has engaged in, or, to the
knowledge of Company, is a successor or parent corporation to an
entity that has engaged in, a transaction described in ERISA
Sections 4069 or 4212(c).
(vi) With respect to any Company Plan, (i) no actions,
suits or claims (other than routine claims for benefits in the
ordinary course) are pending or, to the knowledge of Company,
threatened, and (ii) to the knowledge of Company, no facts or
circumstances exist that could reasonably be expected to give rise
to any such actions, suits or claims. Except as disclosed on
Section 3.1(j) of the Company Disclosure Schedule, no Company Plan
is under audit by the IRS, the Department of Labor or any other
governmental or quasi governmental authority, and there is no
outstanding or, to the knowledge of Company, potential liability
resulting from any past audits of such plans.
(vii) Except with respect to the Company Stock Option Plans
and except as set forth on Section 3.1(j) of the Company
Disclosure Schedule, no Company Plan exists that could reasonably
be expected to result in the payment to any present or former
employee of Company or any of its Subsidiaries of any money or
other property or accelerate or provide any other rights or
benefits to any present or former employee of Company or any of
its Subsidiaries as a result of the transactions contemplated by
the Transaction Agreements. There is no contract, plan or
arrangement covering any employee or former employee of Company or
any of its Subsidiaries that, individually or collectively, could
reasonably be expected to give rise to the payment of any amount
that would not be deductible pursuant to the terms of Code Section
280G.
(viii) Section 3.1(j) of the Company Disclosure Schedule
sets forth a true and complete list of each Foreign Plan, to the
extent the benefits provided thereunder are not mandated by the
laws of the applicable foreign jurisdiction. Each Foreign Plan has
been established and administered in all material respects in
accordance with its terms and in compliance in all material
respects with applicable Law. All contributions required to be
made by Company or any of its Subsidiaries with respect to a
Foreign Plan has been timely made, except where the failure to
make such timely contributions would not have a Material Adverse
Effect on Company. Neither Company nor any of its Subsidiaries has
incurred any liability in connection with the termination or
withdrawal from any Foreign Plan. No Foreign Plan is a defined
benefit plan. With respect to any Foreign Plan adequate reserves
have been established to the extent required by ordinary
accounting practices in the jurisdiction in which such Plan is
maintained. There are no actions, suits or claims (other than
routine claims for benefits) pending or threatened with respect to
any Foreign Plan and no Foreign Plan is under audit by any
governmental authority.
(k) Absence of Certain Changes or Events. Except as
disclosed in the Company SEC Documents filed prior to the date of
this Agreement, since September 30, 2001, except as otherwise
expressly permitted by Section 4.1, (i) Company and its
Subsidiaries have conducted their respective businesses in the
ordinary course consistent with their past practices, (ii) there
has not been any change, circumstance or event which has had, or
would reasonably be expected to have, a Material Adverse Effect on
Company and (iii) neither Company nor any of its Subsidiaries has
taken any action that would have been prohibited pursuant to
Section 4.1 if it had been taken after the date hereof other than
as set forth on Section 3.1(k) of the Company Disclosure Schedule.
(l) Board Approval; State Takeover Statutes; Company
Rights Agreement. The Board of Directors, by resolutions duly
adopted by unanimous vote of those voting at a meeting duly called
and held, has (i) determined that this Agreement and the Merger
are fair to and in the best interests of Company and its
stockholders and declared the Merger to be advisable, (ii)
approved the Transaction Agreements and the Merger, and (iii)
recommended that the stockholders of Company adopt this Agreement
and directed that such matter be submitted for consideration by
Company stockholders at the Company Stockholders Meeting. To the
knowledge of Company, no state takeover statute (including,
without limitation, Section 203 of the DGCL) is applicable to the
Transaction Agreements, the Merger or the other transactions
contemplated thereby. Company has taken all action necessary to
render all outstanding Company Rights inapplicable to the
Transaction Agreements, the Merger and the other transactions
contemplated thereby.
(m) Vote Required. The affirmative vote of the holders of
a majority of the outstanding shares of Company Common Stock to
adopt this Agreement (the "Required Company Vote") is the only
vote of the holders of any class or series of capital stock
necessary to approve and adopt this Agreement and to consummate
the Merger and the other transactions contemplated hereby and by
the other Transaction Agreements.
(n) Properties. Except as disclosed in the Company SEC
Documents filed prior to the date of this Agreement, Company or
one of its Subsidiaries (i) has good and marketable title to all
the properties and assets reflected in the latest balance sheet
included in such Company SEC Documents as being owned by Company
or one of its Subsidiaries or acquired after the date thereof
which are material to Company (except properties or assets sold or
otherwise disposed of since the date thereof in the ordinary
course of business or to be sold pursuant to the Specified Asset
Sale Agreements), free and clear of all Liens of any nature
whatsoever except (A) statutory Liens securing payments not yet
due, and (B) such Liens as do not materially affect the use of the
properties or assets subject thereto or affected thereby or
otherwise materially impair business operations at such
properties, and (ii) is the lessee of all leasehold estates
reflected in the latest financial statements included in such
Company SEC Documents or acquired after the date thereof which are
material to Company (except for leases that have expired by their
terms since the date thereof) and is in possession of the
properties purported to be leased thereunder, and each such lease
is valid without default thereunder by the lessee or, to Company's
knowledge, the lessor.
(o) Intellectual Property. (i) Part I of Section 3.1(o)
of the Company Disclosure Schedule contains a true and complete
list of all issued and pending U.S. and foreign patents, and all
applications (including provisional applications), continuations,
continuations-in-part, extensions, divisionals, re-examinations,
reissues and renewals therefor; all registered and other material
trademarks and service marks and applications for registrations
therefor; all trade names, corporate names and domain names, and
all registrations or applications therefor; and all registered
copyrights and applications therefor owned by or registered to
Company or any of its Subsidiaries (other than AHA or any of its
Subsidiaries). Part II of Section 3.1(o) of the Company Disclosure
Schedule contains a true and complete list of all material
agreements, including licenses, sublicenses, assignments and other
rights granted by Company or any of its Subsidiaries to any third
party or granted by any third party to Company or any of its
Subsidiaries, with respect to any material item of Intellectual
Property (other than Intellectual Property granted by or to AHA or
any of its Subsidiaries). True and complete copies of such
material licenses, sublicenses, assignments and agreements have
been delivered or made available to Parent.
(ii) Company or one of its Subsidiaries owns, or is
licensed or otherwise has the right to use, all material
Intellectual Property that is necessary for the operation and
businesses of Company and its Subsidiaries as presently conducted.
There exists no restriction on the use, transfer or licensing of
such Intellectual Property and licenses in the operation and
businesses of Company and its Subsidiaries as presently conducted,
except as described in Part II of Section 3.1(o) of the Company
Disclosure Schedule.
(iii) Except (A) as disclosed in Company SEC Documents
filed prior to the date of this Agreement and (B) for such
Intellectual Property that is not material to Company, there is no
notice or claim made or threatened by or against Company, any of
its Subsidiaries or any of their licensees asserting the
invalidity, misuse, infringement, non-infringement or
enforceability of any item of Intellectual Property or challenging
their right to the use or ownership of any item of Intellectual
Property; provided that to the extent the foregoing relates to a
notice or claim threatened against Company, any of its
Subsidiaries or any of their licensees, it shall be limited to
Company's knowledge.
(p) Insurance. Company and its Subsidiaries maintain the
insurance policies and performance bonds set forth on Section
3.1(p) of the Company Disclosure Schedule. Company has made
available to Parent true and complete copies of all such insurance
policies and performance bonds. Company and its Subsidiaries have
paid all premiums payable thereunder, and, except as disclosed in
Section 3.1(p) of the Company Disclosure Schedule, no claims for
coverage thereunder have been denied. To Company's knowledge,
neither Company nor any of its Subsidiaries is in default under
any such policies or bonds.
(q) Accounting Controls. Each Subsidiary of Company that
is registered as a broker-dealer has adopted the record keeping
systems that comply in all material respects with the requirements
of applicable Law (including, in the case of U.S. broker-dealer
Subsidiaries, Section 17 of the Exchange Act and the rules and
regulations thereunder) and the rules of all SROs having
jurisdiction, and maintains its records in substantial compliance
therewith. Each of Company and its Subsidiaries has devised and
maintained systems of internal accounting controls which Company
believes are sufficient to provide reasonable assurances that (i)
all transactions are executed in accordance with management's
general or specific authorization; (ii) all transactions are
recorded as necessary to permit the preparation of financial
statements in conformity with generally accepted accounting
principles consistently applied with respect to broker-dealers, if
applicable, or any other criteria applicable to such statements;
and (iii) the recorded amounts for items is compared with the
actual levels at reasonable intervals and appropriate action is
taken with respect to any differences.
(r) Brokers or Finders. No agent, broker, investment
banker, financial advisor or other firm or person is or will be
entitled to any broker's or finder's fee or any other similar
commission or fee in connection with any of the transactions
contemplated by the Transaction Agreements based upon arrangements
made by or on behalf of Company or any of its affiliates, except
Lazard Freres & Co. LLC ("Company's Financial Advisor"), whose
fees and expenses will be paid by Company in accordance with
Company's agreement with such firm (a copy of which has been
furnished to Parent) except as otherwise provided in Section
7.2(b), and, if the Merger is not consummated, Company agrees to
indemnify Parent and to hold Parent harmless from and against any
and all claims, liabilities or obligations with respect to any
other fees, commissions or expenses asserted by any person on the
basis of any act or statement alleged to have been made by Company
or any of its affiliates.
(s) Opinion of Company Financial Advisor. Company has
received the opinion of Company's Financial Advisor, dated the
date of this Agreement, to the effect that the Merger
Consideration is fair, from a financial point of view, to the
holders of Company Common Stock.
(t) Asset Management Businesses. Company has provided
Parent a true and complete copy of (i) the Transfer and Assumption
Agreement dated as of November 28, 2001 by and among The Bank of
New York, Company and AHA, (ii) the Letter Agreement dated
February 11, 2002 among Company, AHA, Xxxxx Capital Management LLC
and Xx. Xxxx X. Xxxx, Xx. and (iii) the Stock Purchase Agreement
dated as of February 11, 2002 between Company and Axe Acquisition
Corp. (the "AHA Stock Purchase Agreement"), including, in each
case, all exhibits and schedules thereto, and all agreements and
instruments in connection therewith, including any employment or
consulting agreements referred to therein (the "Specified Asset
Sale Agreements"). Following consummation of the Specified Asset
Sales, neither Company nor any of its Subsidiaries will have any
liability with respect to the business, operations, assets or
liabilities of AHA or any of its Subsidiaries, other than those
specified liabilities that are expressly disclosed in the
Specified Asset Sale Agreements.
(u) No Other Representations or Warranties. Except for
the representations and warranties contained in this Section 3.1,
neither Company nor any of its Subsidiaries makes any other
representation or warranty, express or implied, with respect to
Company or any of its Subsidiaries.
SECTION 3.2. Representations and Warranties of Parent and Merger
Subsidiary. Parent and Merger Subsidiary hereby jointly and severally
represent and warrant to Company as follows:
(a) Organization, Standing and Power; Subsidiaries. Each
of Parent and Merger Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Delaware, has all requisite power and authority to own, lease
and operate its properties and to carry on its businesses as now
being conducted, and is duly licensed or qualified to do business
and in good standing in each jurisdiction in which the nature of
its businesses or the ownership or leasing of its properties makes
such licensing or qualification necessary, other than in such
jurisdictions where the failure to be so licensed or qualified
would not, either individually or in the aggregate, have a
Material Adverse Effect on Parent. The certificate of
incorporation and by-laws of Parent, which are on file with the
SEC, and of Merger Subsidiary, copies of which were previously
furnished to Company, are true and complete copies of such
documents as in effect on the date of this Agreement.
(b) Authority. (i) Each of Parent and Merger Subsidiary
has all requisite corporate power and authority to enter into the
Transaction Agreements to which it is a party and to consummate
the transactions contemplated thereby. The execution and delivery
of the Transaction Agreements and the consummation of the
transactions contemplated thereby have been duly authorized by all
necessary corporate action on the part of Parent and Merger
Subsidiary (to the extent a party thereto). Each of the
Transaction Agreements to which it is a party has been duly
executed and delivered by each of Parent and Merger Subsidiary (to
the extent a party thereto) and constitutes a valid and binding
obligation of each of Parent and Merger Subsidiary, enforceable
against each of Parent and Merger Subsidiary in accordance with
its terms, except as may be limited by bankruptcy, insolvency,
insolvency or other similar laws affecting the rights and remedies
of creditors generally, and subject to general principles of
equity, whether applied by a court of law or equity.
(ii) The execution and delivery of the Transaction
Agreements do not, and the consummation of the transactions
contemplated thereby and compliance with the terms thereof will
not, (A) result in any Violation pursuant to any provision of the
certificate of incorporation or by-laws of Parent or Merger
Subsidiary, (B) result in any Violation of any loan or credit
agreement, note, bond, mortgage, deed of trust, indenture, lease,
employee benefit plan or other contract, agreement, obligation or
instrument to which Parent or Merger Subsidiary is a party or by
which any of their properties, assets or businesses are bound or
(C) subject to obtaining or making the Governmental Consents
referred to in paragraph (iii) below, result in any Violation of
any judgment, order, decree, injunction, arbitration award or Law
applicable to Parent or any Subsidiary of Parent or their
respective properties, assets or businesses, except in the case of
clauses (B) and (C), Violations which, individually or in the
aggregate, would not have a Material Adverse Effect on Parent and
would not prevent, or materially alter or delay, the consummation
of the Merger or the other transactions contemplated by the
Transaction Agreements.
(iii) No Governmental Consent is required in connection
with the execution and delivery by each of Parent and Merger
Subsidiary of the Transaction Agreements to which it is a party or
the consummation by each of Parent and Merger Subsidiary of the
transactions contemplated thereby, except for (A) notices or
filings under the HSR Act and the expiration or termination of the
applicable waiting period thereunder and compliance with any
applicable foreign antitrust or competition law, (B) the filing
with the SEC of a Schedule 13D under the Exchange Act as may be
required in connection with the Voting Agreement, (C) the filing
of the Certificate of Merger with the Secretary of State of the
State of Delaware, (D) the Company Regulatory Consents and (E)
such other filings, authorizations, orders and approvals which, if
not obtained or made, would not have a Material Adverse Effect on
Parent and would not prevent, or materially alter or delay, the
consummation of the Merger or the other transactions contemplated
by the Transaction Agreements.
(c) Brokers or Finders. No agent, broker, investment
banker, financial advisor or other firm or person is or will be
entitled to any broker's or finder's fee or any other similar
commission or fee in connection with any of the transactions
contemplated by the Transaction Agreements based upon arrangements
made by or on behalf of Parent or any of its affiliates, except
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and Xxxxxxx &
Co. LLC, whose fees and expenses will be paid by Parent except as
otherwise provided in Section 7.2(b), and Parent agrees to
indemnify Company and to hold Company harmless from and against
any and all claims, liabilities or obligations with respect to any
other fees, commissions or expenses asserted by any person on the
basis of any act or statement alleged to have been made by Parent
or any of its affiliates.
(d) Disclosure Documents. The information with respect to
Parent and Merger Subsidiary that Parent or Merger Subsidiary
supplies in writing to Company for inclusion or incorporation by
reference in any Company SEC Document filed after the date of this
Agreement, including the Proxy Statement, as supplemented or
amended, if applicable, will not contain any untrue statement of a
material fact or omit to state any material fact necessary in
order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading (i) in
the case of the Proxy Statement, as supplemented or amended, if
applicable, at the time such Proxy Statement or amendment or
supplement thereto is first mailed to stockholders of Company, at
the time of the Company Stockholders Meeting and at the Effective
Time and (ii) in the case of any Company SEC Document other than
the Proxy Statement, or any amendment or supplement thereto, if
applicable, at the time of filing of such Company SEC Document or
supplement or amendment thereto.
(e) Board Recommendation. The respective boards of
directors of Parent and Merger Subsidiary have approved the
execution, delivery and performance of the Transaction Agreements
by each of Parent and Merger Subsidiary (to the extent a party
thereto) and the consummation of the Merger, which approval by
Parent was also in its capacity as sole stockholder of Merger
Subsidiary. The board of directors of Merger Subsidiary has
declared the Merger to be advisable. No vote of the holders of any
class or series of capital stock or other securities of Parent is
necessary to approve the Transaction Agreements or the Merger.
(f) Financing. Parent has and will have at the Effective
Time sufficient funds to pay the Merger Consideration and the
Option Consideration.
(g) Merger Subsidiary's Operations. Merger Subsidiary was
formed solely for the purpose of engaging in the transactions
contemplated hereby, is a direct wholly-owned Subsidiary of Parent
and has not owned any assets, engaged in any business activities
or conducted any operations other than in connection with the
transactions contemplated hereby.
(h) No Other Representations or Warranties. Except for
the representations and warranties contained in this Section 3.2,
neither Parent nor Merger Subsidiary makes any other
representation or warranty, express or implied, with respect to
Parent or Merger Subsidiary.
ARTICLE FOUR
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 4.1. Interim Conduct. During the period from the date of
this Agreement and continuing until the Effective Time, except as expressly
required by this Agreement or to the extent that Parent (in its sole
discretion) shall otherwise consent in writing (provided that with respect
to matters described in clauses (a), (j) (with respect to newly hired
employees of Company or any of its Subsidiaries in the ordinary course of
business), (m) and (p), such consent of Parent shall not be unreasonably
withheld or delayed):
(a) General. Company and its Subsidiaries shall carry on
their respective businesses in the usual, regular and ordinary
course in substantially the same manner as heretofore conducted
and shall use all reasonable efforts to preserve intact their
present business organizations, maintain their rights, franchises,
licenses and other authorizations issued by Governmental Entities,
keep available the services of their officers and employees,
maintain their assets and properties in good working order and
condition and preserve their relationships with customers,
suppliers and others having business dealings with them to the end
that their goodwill and ongoing businesses shall not be impaired
in any material respect. Company shall not, nor shall it permit
any of its Subsidiaries to, (i) enter into any new material line
of business, (ii) change its or its Subsidiaries' investment, risk
and asset-liability management and other operating policies in any
respect which is material to Company, except as required by law or
by policies imposed by a Governmental Entity, (iii) incur or
commit to any capital expenditures or any obligations or
liabilities in connection therewith, other than capital
expenditures and obligations or liabilities incurred or committed
to in the ordinary course of business consistent with past
practice, which in any event will not exceed $100,000 in the
aggregate, or (iv) amend, supplement, waive, cancel, rescind or
terminate any Company Contract or enter into any contract,
arrangement, commitment or understanding that would constitute a
Company Contract, other than, in the case of clause (iii) or (iv),
such incurrences, commitments, contracts, arrangements,
understandings or Company Contracts with Company clients or third
parties providing products or services to Company clients in
connection with Company's soft-dollar, commission recapture or
directed brokerage business in the ordinary course of business.
(b) Dividends; Changes in Stock. Company shall not, and
shall not permit any of its Subsidiaries to, or propose to, (i)
declare or pay any dividends on or make other distributions in
respect of any of its capital stock, except dividends by a
wholly-owned Subsidiary of Company to Company or another
wholly-owned Subsidiary of Company, (ii) split, combine or
reclassify any of its capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in
substitution for, shares of its capital stock or (iii) repurchase,
redeem or otherwise acquire any shares of capital stock of Company
or any of its Subsidiaries or any securities convertible into or
exercisable for any shares of capital stock of Company or any of
its Subsidiaries.
(c) Issuance of Securities. Company shall not, nor shall
it permit any of its Subsidiaries to, issue, deliver or sell, or
authorize or propose the issuance, delivery or sale of, any shares
of capital stock of Company or any of its Subsidiaries, any Voting
Debt or any securities convertible into or exercisable for, or any
rights, warrants or options to acquire, any such shares or Voting
Debt, or enter into any agreement with respect to any of the
foregoing, other than (i) the issuance of Company Common Stock
upon the exercise of stock options issued under the Company Stock
Option Plans and outstanding on the date of this Agreement and
(ii) issuances by a wholly-owned Subsidiary of Company of its
capital stock to Company or to another wholly-owned Subsidiary of
Company.
(d) Governing Documents, Etc. Company shall not, and
shall not permit any of its Subsidiaries to, amend or propose to
amend its certificate of incorporation, by-laws or other
organizational documents or enter into a plan of consolidation,
merger or reorganization with any person; provided that the
foregoing shall not prohibit AHA or any of its Subsidiaries from
consummating a Specified Asset Sale in compliance with Section
4.1(p).
(e) No Acquisitions; No Investments. Company shall not,
and shall not permit any of its Subsidiaries to, (i) acquire or
agree to acquire by merging or consolidating with, by purchasing
an equity interest in or any material assets of, by forming a
partnership or joint venture with, or by any other manner, any
business or any corporation, partnership, association or other
person or business organization or division thereof or otherwise
acquire or agree to acquire any material assets or (ii) make any
investment, either by purchase of stock or securities,
contribution to capital, property transfer or otherwise other
than, in the case of clause (ii), (x) investments consisting of
debt securities, of the type included in Company's investment
portfolio on the date hereof, in the ordinary course of business
of Company or Company's broker-dealer Subsidiaries, and (y) any
investments set forth on Section 4.1(e) of the Company Disclosure
Schedule.
(f) No Dispositions. Company shall not, and shall not
permit any of its Subsidiaries to, sell, lease, assign, transfer,
license, sublicense, encumber or otherwise dispose of, in whole or
in part, or agree to sell, lease, assign, transfer, license,
sublicense, encumber or dispose of, in whole or in part, any
properties, assets or rights (including capital stock of its
Subsidiaries) which are material, individually or in the
aggregate, to Company or any of its Subsidiaries; provided that
(i) Company and AHA shall be permitted to (x) consummate the
Specified Asset Sales in accordance with Section 4.1(p) and (y)
dissolve Axe-Houghton Partners for Growth, L.P. and Axe-Houghton
Partners for Value, L.P.; and (ii) Company and Company's
broker-dealer subsidiaries may (x) dispose of investments in the
ordinary course of business and (y) dispose of any investments set
forth on Section 4.1(f) of the Company Disclosure Schedule.
(g) Indebtedness. Company shall not, and shall not permit
any of its Subsidiaries to, incur, create or assume any
indebtedness for borrowed money (or modify any of the material
terms of any such outstanding indebtedness) or guarantee any such
indebtedness or issue or sell any warrants or rights to acquire
any indebtedness of Company or any of its Subsidiaries, other than
(i) short-term indebtedness incurred pursuant to working capital
lines of credit existing on the date of this Agreement in the
ordinary course of business consistent with past practice, (ii)
indebtedness of any wholly-owned Subsidiary of Company to Company
or to another wholly-owned Subsidiary of Company and (iii)
guarantees of indebtedness in the ordinary course of business,
which in any event will not exceed $43.5 million in the aggregate
(including any guarantees outstanding on the date hereof).
(h) Other Actions. Except to the extent provided in
Section 5.4(b) or (d), Company shall not, and shall not permit any
of its Subsidiaries to, intentionally take any action that
adversely affects the ability of the parties to obtain any
Governmental Consent or that would, or reasonably would be
expected to, result in any of the conditions to the Merger set
forth in Article Six not being satisfied.
(i) Accounting Methods. Except as disclosed in Company
SEC Documents filed prior to the date of this Agreement, Company
shall not, and shall not permit any of its Subsidiaries to, change
its methods of accounting in effect at September 30, 2001, except
as required by changes in GAAP as concurred in by Company's
independent auditors.
(j) Compensation and Benefit Plans. Except as required by
Law, any Company Plan existing on the date of this Agreement (as
in effect on the date hereof), the Management Agreements or any
employment agreement listed on Section 3.1(j) of the Company
Disclosure Schedule, Company shall not, and shall not permit any
of its Subsidiaries to, (i) enter into, adopt, amend, renew or
terminate any Company Plan, or any other employee benefit plan or
any agreement, arrangement, plan or policy between Company or any
of its Subsidiaries and one or more of its directors, officers or
employees or (ii) except for normal increases in compensation and
fringe benefits in the ordinary course of business consistent with
past practice and payment of bonuses in cash in lieu of equity,
increase in any manner the compensation or fringe benefits of any
director, officer or employee (including, without limitation, by
granting stock options, stock appreciation rights, restricted
stock, restricted stock units or performance units or shares) or
enter into any contract, agreement, commitment or arrangement to
do any of the foregoing.
(k) Tax Elections. Company shall not (i) change any tax
election, annual tax accounting period or method of tax accounting
in any material respect, (ii) file any material amended tax
return, (iii) enter into any closing agreement relating to any
material tax, (iv) settle any material tax claim or assessment,
(v) surrender any right to claim a material tax refund or (vi)
consent to any extension or waiver of the limitations period
applicable to any material tax claim or assessment.
(l) No Liquidation. Except as permitted by Section
4.1(p), Company shall not, and shall not permit any of its
Subsidiaries to, adopt a plan of complete or partial liquidation,
dissolution, restructuring, recapitalization or reorganization or
resolutions providing for or authorizing such a liquidation,
dissolution, restructuring, recapitalization or reorganization.
(m) No Settlements. Company shall not, and shall not
permit any of its Subsidiaries to, settle any litigation (whether
or not commenced prior to the date of this Agreement), other than
settlements or compromises of litigation where the amount paid
does not exceed $50,000 for any litigation matter or group of
related matters (and provided that any such settlement or
compromise does not involve any non-monetary obligations on the
part of Company or any of its Subsidiaries).
(n) Other Agreements. Company shall not, and shall not
permit any of its Subsidiaries to, agree to, or make any
commitment to, take, or authorize, any of the actions prohibited
by this Section 4.1.
(o) No Company Rights Agreement Amendment. Prior to the
earlier of the termination of this Agreement or the Effective
Time, Company and the Board of Directors will not amend or modify
the Company Rights Agreement in any manner or take any other
action that would (i) render the Company Rights Agreement
inapplicable to any transaction(s) other than the Merger and
related transactions hereunder, (ii) permit any person or group
(other than Parent and its affiliates) who would otherwise be an
Acquiring Person (as such term is defined in the Company Rights
Agreement) not to be an Acquiring Person or (iii) except as
specifically contemplated by this Agreement, otherwise affect the
Company Rights.
(p) Specified Assets Sales. Company shall not amend or
supplement any of the Specified Asset Sale Agreements, or waive
any of the provisions thereof. Company shall use all reasonable
efforts to consummate the Specified Asset Sales that have not been
consummated prior to the date hereof in accordance with the
Specified Asset Sale Agreements as soon as practicable.
SECTION 4.2. Notice of Certain Events. Each party shall promptly
notify the other of:
(a) any notice or other communication from any person
alleging that the consent of such person is or may be required in
connection with the transactions contemplated by the Transaction
Agreements;
(b) any notice or other communication from any
Governmental Entity in connection with the transactions
contemplated by the Transaction Agreements; and
(c) any actions, suits, claims, investigations or
proceedings commenced or, to its knowledge, threatened against,
relating to or involving or otherwise affecting such party or any
of its Subsidiaries that, if pending on the date of this
Agreement, would have been required to have been disclosed
pursuant to Section 3.1 or 3.2, as the case may be, or that relate
to the transactions contemplated by the Transaction Agreements.
ARTICLE FIVE
ADDITIONAL AGREEMENTS
SECTION 5.1. Preparation of Proxy Statement; Company Stockholders
Meeting. (a) As promptly as reasonably practicable following the date
hereof, Company shall, in cooperation with Parent, prepare and file with
the SEC a proxy statement of Company relating to the matters to be
submitted to Company's stockholders at the Company Stockholders Meeting and
other proxy materials (such proxy materials, and any amendments or
supplements thereto including the Final Proxy Statement, the "Proxy
Statement"). The Proxy Statement shall state that the Board of Directors
finds the Merger to be advisable, fair to and in the best interests of
Company's stockholders and recommends that Company's stockholders vote in
favor of the adoption of this Agreement (the "Company Recommendation").
Company shall use all reasonable efforts to have the Proxy Statement
cleared by the SEC as promptly as practicable after filing. Company shall,
as promptly as practicable after receipt thereof, provide Parent with
copies of any written comments and advise Parent of any oral comments with
respect to the Proxy Statement received from the SEC. Company shall cause
the Proxy Statement to be mailed to its stockholders at the earliest
practicable date following clearance by the SEC. Company shall cooperate
and provide Parent with a reasonable opportunity to review and comment on
the draft of the Proxy Statement (including each amendment or supplement
thereto including the Final Proxy Statement) and all responses to requests
for additional information by and replies to comments of the SEC, prior to
filing such with or sending such to the SEC, and Company will provide
Parent with a copy of all such filings made and correspondence with the
SEC. Except to effect a Change in Company Recommendation in compliance with
Section 5.4 or to satisfy the condition of the first proviso of either
Section 7.2(b)(ii) or Section 7.2(b)(iii), no amendment or supplement
(including by incorporation by reference) to the Proxy Statement shall be
made without the approval of Parent, which approval shall not be
unreasonably withheld. If at any time prior to the Effective Time any
information should be discovered by any party which should be set forth in
an amendment or supplement to the Proxy Statement so that the Proxy
Statement would not include any misstatement of a material fact or omit to
state any material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading, the party which discovers such information shall
promptly notify the other party hereto and, to the extent required by law,
rules or regulations, an appropriate amendment or supplement describing
such information shall be promptly filed with the SEC and disseminated to
the stockholders of Company.
(b) Company shall duly take all lawful action to call, give notice
of, convene and hold a meeting of its stockholders as promptly as
practicable (the "Company Stockholders Meeting"), and in any event, not
later than 30 days after mailing of the definitive Proxy Statement to
Company's stockholders, for the purpose of obtaining the Required Company
Vote and shall take all lawful action to solicit proxies for the Required
Company Vote, unless, in any case, a Change in Company Recommendation shall
have been effected in accordance with Section 5.4(b). The Board of
Directors shall not (x) withdraw, modify or qualify (or propose to
withdraw, modify or qualify) the Company Recommendation in any manner
adverse to Parent or (y) take any other action or make any other statement
in connection with the Company Stockholders Meeting inconsistent with the
Company Recommendation (collectively, a "Change in Company
Recommendation"), except as and to the extent expressly permitted by
Section 5.4(b).
(c) As promptly as practicable following the determination of the
Net Cash Proceeds, Company shall prepare a supplement to the Proxy
Statement (the "Final Proxy Statement") and file it with the SEC and mail
it to Company's stockholders. The Company Stockholders Meeting shall be
held within ten (10) business days after the mailing of the Final Proxy
Statement to Company's stockholders.
SECTION 5.2. Access to Information. Upon reasonable notice,
Company shall (and shall cause each of its Subsidiaries to) afford to the
Representatives of Parent and its Subsidiaries reasonable access during
normal business hours to all its facilities, operations, Representatives,
properties, books, contracts and records. Company shall (and shall cause
each of its Subsidiaries to) make available to Parent (i) a copy of each
report, form, schedule, statement and other document filed or deemed to be
filed, published or received by it prior to the Effective Time (x) pursuant
to the requirements of Federal or state securities laws or (y) otherwise
with or from any Governmental Entity and (ii) all other information
concerning its business, properties and personnel as Parent may reasonably
request; provided that, in the case of this clause (ii), Company shall not
be required to disclose any document or communication protected by the
attorney-client privilege under applicable law. No such investigation by
Parent shall affect the representations and warranties of Company.
SECTION 5.3. Reasonable Best Efforts. (a) Each of Parent, Merger
Subsidiary and Company shall, and shall cause its Subsidiaries to, use
their respective reasonable best efforts to take, or cause to be taken, all
actions necessary, proper or advisable to comply promptly with all legal
requirements which may be imposed on such party or its Subsidiaries with
respect to the Merger and to consummate the transactions contemplated by
this Agreement as promptly as practicable, and to obtain or make (and to
cooperate with the other party to obtain or make) any Governmental Consent
or any consent or approval of any other public or private third party which
is required to be obtained or made by such party or any of its Subsidiaries
in connection with the Merger and the transactions contemplated by the
Transaction Agreements. Each of Company and Parent will promptly cooperate
with and furnish information to the other in connection with any such
requirement imposed upon any of them or any of their Subsidiaries in
connection with the foregoing.
(b) Company and the Board of Directors shall, if any state
takeover statute or similar statute becomes applicable to the Transaction
Agreements, the Merger or any other transactions contemplated thereby, take
all action reasonably necessary to ensure that the Merger and the other
transactions contemplated by the Transaction Agreements may be consummated
as promptly as practicable on the terms contemplated thereby and otherwise
to minimize the effect of such statute or regulation on the Transaction
Agreements, the Merger and the other transactions contemplated thereby.
SECTION 5.4. Acquisition Proposals. (a) Company shall not, and
shall cause each of its Subsidiaries, and the Representatives of Company
and its Subsidiaries, not to, directly or indirectly, on or after the date
of this Agreement:
(i) initiate, solicit, encourage or knowingly facilitate
(including by way of furnishing information or assistance) any
inquiries or expressions of interest or the making of any proposal
or offer that constitutes, or could reasonably be expected to lead
to (individually or collectively, to "Solicit"), (x) a proposal or
offer with respect to a merger, reorganization, share exchange,
consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving, or any
purchase directly or indirectly (including by way of lease,
exchange, sale, mortgage, pledge, tender offer, exchange offer or
otherwise, as may be applicable) of any assets (other than sales
of investment securities in the ordinary course of business) of or
any equity interests in Company or any of its Subsidiaries, in
each case, other than a proposal or offer (A) made by Parent or an
affiliate thereof or (B) with respect to a Specified Asset Sale,
(y) a breach of any of the Transaction Agreements or any
interference with the completion of the Merger or (z) any public
announcement of a proposal, plan or intention to do any of the
foregoing or any agreement to engage in any of the foregoing (any
of the foregoing inquiries, expressions of interest, proposals or
offers being hereinafter referred to as an "Acquisition
Proposal");
(ii) have any discussions with or provide any nonpublic
information or data to any person relating to an Acquisition
Proposal, or engage in any negotiations concerning an Acquisition
Proposal, or knowingly facilitate any effort or attempt to make or
implement an Acquisition Proposal;
(iii) approve or recommend, or propose publicly to
approve or recommend, any Acquisition Proposal; or
(iv) approve or recommend, or propose to approve or
recommend, or execute or enter into, any letter of intent,
agreement in principle, merger agreement, asset purchase or share
exchange agreement, option agreement or other similar agreement
(other than a confidentiality agreement to the extent permitted by
Section 5.4(b)); or
(v) agree to do any of the foregoing related to any
Acquisition Proposal.
Notwithstanding the foregoing, Company and the Board of Directors
shall be permitted to engage in discussions not disclosing any non-public
information regarding the Merger, Company or Parent with any passive
investor holding not more than 10% of the outstanding shares of Company
Common Stock; provided, that if any such investor acquires or proposes to
acquire more than 10% of the outstanding shares of Company Common Stock,
all such discussions shall be immediately terminated by Company and the
foregoing provisions of this Section 5.4(a) shall apply with respect to
such investor subject to Section 5.4(b).
(b) Notwithstanding the foregoing, Company and the Board of
Directors shall be permitted to (A) to the extent applicable, comply with
Rule 14d-9 and Rule 14e-2 promulgated under the Exchange Act with regard to
an Acquisition Proposal or make any disclosures as to factual matters that
are required by applicable law or which the Board of Directors, after
consultation with outside counsel, determines in good faith is required in
the exercise of its fiduciary duties under applicable law, (B) effect a
Change in Company Recommendation or (C) engage in any discussions or
negotiations with, or provide nonpublic information or data to, any person
in response to a bona fide written Acquisition Proposal not Solicited in
violation of this Agreement by any such person first made after the date of
this Agreement, if and only to the extent that, in any such case referred
to in clause (B) or (C):
(i) the Company Stockholders Meeting shall not have
already occurred;
(ii) Company has complied in all material respects with
this Section 5.4;
(iii) the Board of Directors, after consultation with
outside counsel, determines in good faith that such action is
required in the exercise of its fiduciary duties under applicable law;
(iv) in the case of clause (B) above, (I) if Company has
received a bona fide written Acquisition Proposal not Solicited in
violation of this Agreement from a third party, the Board of
Directors concludes in good faith that such Acquisition Proposal
constitutes a Superior Proposal after giving effect to all of the
adjustments which may be offered by Parent pursuant to clause
(III) below, (II) it has notified Parent, at least five business
days in advance, of its intention to effect a Change in Company
Recommendation, specifying the material terms and conditions of
any such Superior Proposal and furnishing to Parent a copy of the
relevant proposed transaction agreements with the party making
such Superior Proposal and other material documents and (III)
prior to effecting such a Change in Company Recommendation, it
has, and has caused its financial and legal advisors to, negotiate
with Parent in good faith to make such adjustments in the terms
and conditions of this Agreement as would enable it to proceed
with the Merger and the other transactions contemplated hereby
without violating its fiduciary duties under applicable law;
(v) in the case of clause (C) above, the Board of
Directors concludes in good faith that there is a reasonable
likelihood that such Acquisition Proposal constitutes a Superior
Proposal, and prior to providing any nonpublic information or data
to any person in connection with the Acquisition Proposal, the
Board of Directors receives from such person an executed
confidentiality agreement having provisions that are no less
favorable to Company than those contained in the Confidentiality
Agreements; and
(vi) Company immediately (and in any event prior to
providing any nonpublic information or data to any person or
entering into discussions or negotiations with any person)
notifies Parent of such inquiries, proposals or offers received
by, any such information requested from, or any such discussions
or negotiations sought to be initiated or continued with, it or
any of its Representatives indicating, in connection with such
notice, the identity of such person and the material terms and
conditions of any inquiries, proposals or offers (including a copy
thereof if in writing and any related documentation or
correspondence). Company agrees that it will advise Parent of any
material developments (including any changes in such terms and
conditions) with respect to such inquiries, proposals or offers as
promptly as practicable after the occurrence thereof.
(c) Company agrees that it will immediately cease and cause its
Subsidiaries, and its and their Representatives, to cease any and all
existing activities, discussions or negotiations with any third parties
conducted heretofore with respect to any Acquisition Proposal, and request
in writing to any such third parties in possession of nonpublic information
about it or any of its Subsidiaries that was furnished by or on its behalf
in connection with any of the foregoing to return or destroy all such
information in the possession of any such third party or in the possession
of any Representative of any such third party, and use commercially
reasonable efforts to receive certification of such return or destruction,
and it will not release any third party from, or waive any provisions of,
any confidentiality or standstill agreement to which it or any of its
Subsidiaries is a party with respect to any Acquisition Proposal.
(d) Any disclosure (other than a "stop, look and listen" or
similar communication of the type contemplated by Rule 14d-9(f) under the
Exchange Act) made pursuant to clause (A) of Section 5.4(b) shall be deemed
to be a Change in Company Recommendation unless the Board of Directors
expressly reaffirms the Company Recommendation in such disclosure.
SECTION 5.5. Fees and Expenses. Whether or not the Merger is
consummated, all costs and expenses incurred in connection with the
Transaction Agreements and the transactions contemplated thereby shall be
paid by the person incurring such expense, except as otherwise provided in
Section 7.2 hereof.
SECTION 5.6. Indemnification; Directors' and Officers' Insurance.
(a) From and after the Effective Time, Parent and the Surviving
Corporation, jointly and severally, (i) shall indemnify, defend and hold
harmless each person who is now, or has been at any time prior to the date
hereof or who becomes prior to the Effective Time, an officer, director or
employee of Company or any of its past or present Subsidiaries, including,
without limitation, AHA, InstiPro Group, Inc. and InstiPro, Inc. (the
"Indemnified Parties") against all losses, claims, damages, costs,
expenses, liabilities or judgments or amounts that are paid in settlement
of or in connection with any claim, action, suit, proceeding or
investigation based in whole or in part on or arising in whole or in part
out of the fact that such person is or was a director, officer or employee
of Company or any of its Subsidiaries, whether pertaining to any matter
existing or occurring at or prior to the Effective Time and whether
asserted or claimed prior to, or at or after the Effective Time
("Indemnified Liabilities"), to the same extent such persons are
indemnified by Company as of the date of this Agreement pursuant to
Company's certificate of incorporation and by-laws and (ii) to the extent
permitted by applicable Law, shall cause to be maintained in effect in the
Surviving Corporation's certificate of incorporation and bylaws after the
Effective Time provisions regarding elimination of liability of directors,
indemnification of officers, directors and employees and advancement of
expenses which are, in the aggregate, not materially less favorable to the
intended beneficiaries than the corresponding provisions contained in the
certificate of incorporation and bylaws of Company on the date hereof. If
requested by an Indemnified Party, the determination of whether or not the
Indemnified Party has met any applicable standard of conduct required by
Law for indemnification (unless made by a court) shall be made by
independent counsel selected by Parent and reasonably acceptable to the
Indemnified Party.
(b) For a period of six years after the Effective Time, the
Surviving Corporation shall cause to be maintained in effect the current
policies of directors' and officers' liability insurance maintained by
Company (provided that the Surviving Corporation may substitute therefor
policies of at least the same coverage and amounts containing terms and
conditions which are in the aggregate not materially less advantageous to
the insured) with respect to claims arising from facts or events which
occurred before the Effective Time; provided, however, that the Surviving
Corporation shall not be obligated to make annual premium payments for such
insurance to the extent such premiums exceed 300% of the premiums paid as
of the date hereof by Company for such insurance ("Company's Current
Premium"), and if such premiums for such insurance would at any time exceed
300% of Company's Current Premium, then the Surviving Corporation shall
cause to be maintained policies of insurance which, in the Surviving
Corporation's good faith determination, provide the maximum coverage
available at an annual premium equal to 300% of Company's Current Premium.
The provisions of this Section 5.6(b) shall be deemed to have been
satisfied if prepaid policies have been obtained prior to the Closing for
purposes of this Section 5.6, which policies provide such directors and
officers with coverage for an aggregate period of six years after the
Effective Time with respect to claims arising from facts or events that
occurred before the Effective Time, and for a premium not in excess of the
aggregate of the premiums set forth in the preceding sentence. If such
prepaid policies have been obtained prior to the Closing, Parent shall
maintain such policies in full force and effect, and continue to honor the
obligations thereunder.
(c) The provisions of this Section 5.6 are (i) intended to be for
the benefit of, and shall be enforceable by, each Indemnified Party, his or
her heirs and representatives and (ii) in addition to, and not in
substitution for, any other rights to indemnification or contribution that
any such person may have by Law, contract or otherwise.
SECTION 5.7. Public Announcements. Parent and Company shall use
reasonable best efforts (i) to develop a joint communications plan, (ii) to
ensure that all press releases and other public statements with respect to
the transactions contemplated hereby shall be consistent with such joint
communications plan, and (iii) unless otherwise required by applicable law
or by obligations pursuant to any listing agreement with or rules of any
securities exchange, to consult with each other before issuing any press
release or otherwise making any public statement with respect to the
Transaction Agreements or the transactions contemplated thereby.
SECTION 5.8. Employee Benefits. (a) For purposes hereof, "Affected
Employees" shall mean those individuals who are employees of Company and
its Subsidiaries (including those employees who are on vacation, leave of
absence, disability or maternity leave) as of the Effective Time.
(b) Parent shall (i) waive all limitations as to preexisting
conditions and waiting periods with respect to participation and coverage
requirements applicable to the Affected Employees under any Parent welfare
plan (other than any long-term disability plan) that such Affected
Employees may be eligible to participate in after the Effective Time and
(ii) provide each Affected Employee with credit for any co-payments and
deductibles paid prior to the Effective Time in satisfying any applicable
deductible or out-of-pocket requirements under any Parent welfare plans
that such employees are eligible to participate in after the Effective
Time. As soon as practicable following the Closing Date (but in any event
within 30 days thereof), Company shall provide Parent with information
regarding such deductible, co-payment and out-of-pocket maximums, and such
information as is required to comply with the Health Insurance Portability
and Accountability Act of 1996, with respect to each Affected Employee as
of the Effective Time.
(c) Parent shall recognize service with Company or any of its
Subsidiaries as service with Parent for all purposes under any benefit
plan, policy or program, including any severance pay plan, policy or
program, maintained by Parent or any of its Subsidiaries in which the
Affected Employees are otherwise eligible to participate, but only to the
extent such service would have been recognized under each such plan, policy
or program of Parent or any of its Subsidiaries if such service has been
rendered as an employee of Parent or any of its Subsidiaries; provided,
however, that such service will not be recognized for purposes of (i)
determining benefit accruals or pay credit service under any defined
benefit pension plan of Parent or any of its Subsidiaries or (ii)
determining eligibility for post-retirement medical and life insurance
plans of Parent or any of its Subsidiaries.
(d) For a period of at least one year following the Effective
Time, Parent shall provide the Affected Employees employee benefit plans
and arrangements that are at least as favorable as those provided by
Company and its Subsidiaries on the date hereof; provided, however, that
the foregoing shall not be construed as prohibiting Parent from terminating
the employment of any Employee.
SECTION 5.9. Additional Agreements. In case at any time after the
Effective Time any further action is necessary or desirable to carry out
the purposes of this Agreement or to vest the Surviving Corporation with
full title to all properties, assets, rights, approvals, immunities and
franchises of either of the Constituent Corporations, the proper officers
and directors of each party to this Agreement shall take all such necessary
action.
ARTICLE SIX
CONDITIONS PRECEDENT
SECTION 6.1. Conditions to Each Party's Obligation To Effect the
Merger. The respective obligation of each party to effect the Merger shall
be subject to the satisfaction prior to the Closing Date of the following
conditions:
(a) Company Stockholder Approval. Company shall have
obtained the Required Company Vote.
(b) HSR Waiting Period. The waiting period under the HSR
Act shall have expired or been terminated early.
(c) No Injunctions or Restraints; Illegality. No
temporary restraining order, preliminary or permanent injunction
or other order issued by any court of competent jurisdiction or
other legal restraint or prohibition preventing the consummation
of the Merger shall be in effect. There shall not be any action
taken, or any statute, rule, regulation or order enacted, entered,
enforced or deemed applicable to the Merger, by any Governmental
Entity which makes the consummation of the Merger illegal.
SECTION 6.2. Conditions to Obligations of Parent and Merger
Subsidiary. The obligation of Parent and Merger Subsidiary to effect the
Merger is subject to the satisfaction of the following conditions unless
waived by Parent:
(a) Representations and Warranties. The representations
and warranties of Company set forth in this Agreement (x) that are
qualified by materiality or Material Adverse Effect shall be true
and correct as of the Closing Date (except to the extent such
representations and warranties speak as of an earlier date) as
though made on and as of the Closing Date, and (y) that are not
qualified by materiality or Material Adverse Effect shall be true
and correct in all material respects as of the Closing Date
(except to the extent such representations speak as of an earlier
date) as though made on and as of the Closing Date, and Parent
shall have received a certificate signed on behalf of Company by
the Chief Executive Officer and Chief Financial Officer of Company
to such effect.
(b) Performance of Obligations of Company. Company shall
have performed in all material respects all obligations required
to be performed by it under this Agreement at or prior to the
Closing Date, and Parent shall have received a certificate signed
on behalf of Company by the Chief Executive Officer and Chief
Financial Officer of Company to such effect.
(c) Specified Asset Sales. The Specified Asset Sales
shall have been consummated in accordance with Section 4.1(p) and
the final amount of the Net Cash Proceeds shall have been
determined. Prior to the consummation of the Specified Asset Sale
under the AHA Stock Purchase Agreement, Company shall have caused
AHA to make such dividends or distributions to Company so that
AHA's Tangible Net Worth (as defined in the AHA Stock Purchase
Agreement) is equal to zero at the closing of such Specified Asset
Sale.
(d) Regulatory Consents. All Company Regulatory Consents
shall have been obtained or made, as the case may be. In obtaining
any consent or approval required to consummate any of the
transactions contemplated hereby, no Governmental Entity shall
have imposed or shall be seeking to impose any condition, penalty
or requirement which, in the reasonable opinion of Parent,
individually or in the aggregate, would have a Material Adverse
Effect on Company or on Parent.
(e) Consents. Company shall have obtained each consent or
approval set forth on Section 6.2(e) of the Company Disclosure
Schedule, which includes all consents and approvals required in
connection with the transactions contemplated hereby under any
loan or credit agreement, note, mortgage, indenture, lease or
other agreement or instrument, other than such consents and
approvals the failure of which to obtain would not, in the
reasonable opinion of Parent, individually or in the aggregate,
have a Material Adverse Effect on Company or on Parent or upon the
consummation of the transactions contemplated in this Agreement.
SECTION 6.3. Conditions to Obligations of Company. The obligation
of Company to effect the Merger is subject to the satisfaction of the
following conditions unless waived by Company:
(a) Representations and Warranties. Each of the
representations and warranties of Parent and Merger Subsidiary set
forth in this Agreement (x) that are qualified by materiality or
Material Adverse Effect shall be true and correct as of the
Closing Date (except to the extent such representations and
warranties speak as of an earlier date) as though made on and as
of the Closing Date, and (y) that are not qualified by materiality
or Material Adverse Effect shall be true and correct in all
material respects as of the Closing Date (except to the extent
such representations speak as of an earlier date) as though made
on and as of the Closing Date, and Company shall have received a
certificate signed on behalf of Parent by the Chief Executive
Officer and the Chief Financial Officer of Parent to such effect.
(b) Performance of Obligations of Parent. Parent shall
have performed all obligations required to be performed by it
under this Agreement at or prior to the Closing Date, and Company
shall have received a certificate signed on behalf of Parent by
the Chief Executive Officer and the Chief Financial Officer of
Parent to such effect.
(c) Specified Asset Sales. The Specified Asset Sales
shall have been consummated in accordance with Section 4.1(p) and
the final amount of the Net Cash Proceeds shall have been
determined; provided that Company shall not be entitled to rely on
this condition if Company has not complied with Section 4.1(p).
(d) Regulatory Consents. All Company Regulatory Consents
shall have been obtained or made, as the case may be; provided the
Company shall not be entitled to rely on this condition if Company
has not complied with Section 5.3(a).
ARTICLE SEVEN
TERMINATION AND AMENDMENT
SECTION 7.1. Termination. This Agreement may be terminated at any
time prior to the Effective Time, by action taken or authorized by the
board of directors of the terminating party or parties, whether before or
after approval of the Merger by the stockholders of Company:
(a) by mutual consent of Parent, Merger Subsidiary and
Company in a written instrument;
(b) (x) by either Parent or Company, upon written notice
to the other party, if a Governmental Entity of competent
jurisdiction shall have issued an order, decree or ruling or taken
any other action permanently restraining, enjoining or otherwise
prohibiting the Merger, and such order, decree, ruling or other
action has become final and nonappealable, (y) by Parent, upon
written notice to Company, if a Company Regulatory Consent has
been denied and such denial has become final and nonappealable and
(z) by Company, upon written notice to Parent, if a Company
Regulatory Consent has been denied and such denial has become
final and nonappealable; provided, however, that the right to
terminate this Agreement under this Section 7.1(b) shall not be
available to any party whose failure to comply with Section 5.3 or
any other provision of this Agreement has been the cause of, or
resulted in, such order, decree, ruling, denial or other action;
(c) by either Parent or Company, upon written notice to
the other party, if the Merger shall not have been consummated on
or before August 15, 2002; provided, however, that the right to
terminate this Agreement under this Section 7.1(c) shall not be
available to any party whose failure to comply with Section 5.3 or
any other provision of this Agreement has been the cause of, or
resulted in, the failure of the Effective Time to occur on or
before such date;
(d) by Parent, upon written notice to Company, if Company
shall have (i) failed to make the Company Recommendation or
effected a Change in Company Recommendation (or resolved to take
any such action), whether or not permitted by the terms hereof, or
(ii) failed to call or hold the Company Stockholders Meeting in
accordance with Section 5.1(b) or to prepare and mail to its
stockholders the Proxy Statement in accordance with Section
5.1(a), or (iii) otherwise failed to comply with or perform its
obligations under Section 5.4;
(e) by either Parent or Company if the Required Company
Vote shall not have been obtained at the Company Stockholders
Meeting (or any adjournment or postponement thereof);
(f) by Company, upon written notice given to Parent in
the event of a breach or default in the performance by Parent or
Merger Subsidiary of any representation, warranty, covenant or
agreement set forth in this Agreement which breach or default (i)
would result in one or more of the conditions set forth in
Sections 6.3(a) and (b) not being satisfied at the Closing Date,
and (ii) has not been, or cannot be, cured within 30 days after
written notice of such breach or default, describing such breach
or default in reasonable detail, is given by Company to Parent;
(g) by Parent, upon written notice given to Company in
the event of a breach or default in the performance by Company of
any representation, warranty, covenant or agreement set forth in
this Agreement which breach or default (i) would result in one or
more of the conditions set forth in Sections 6.2(a) and (b) not
being satisfied at the Closing Date, and (ii) has not been, or
cannot be, cured within 30 days after written notice of such
breach or default, describing such breach or default in reasonable
detail, is given by Parent to Company; or
(h) by Company, upon written notice to Parent, if Company
shall have effected a Change in Company Recommendation in
compliance with the provisions of Section 5.4.
SECTION 7.2. Effect of Termination.
(a) Liabilities. In the event of termination of this Agreement by
either Company or Parent as provided in Section 7.1, this Agreement shall
forthwith become void and there shall be no liability or obligation on the
part of Parent or Company or their respective officers or directors, except
(i) with respect to Section 3.1(r), Section 3.2(c), this Section 7.2 and
Article Eight, which shall survive such termination and (ii) that no party
shall be relieved or released from any liabilities or damages arising out
of its willful and material breach of this Agreement.
(b) Payments.
(i) If this Agreement is terminated pursuant to Section
7.1(d) or (h), Company shall pay to Parent (I) the Termination Fee
on the business day following such termination and (II) the Parent
Expenses within two business days after demand is made by Parent.
(ii) If this Agreement is terminated pursuant to Section
7.1(g), Company shall pay to Parent the Parent Expenses within two
business days after demand is made by Parent. If at any time after
the date of this Agreement and before termination pursuant to
Section 7.1(g), a Section 7.2 Acquisition Proposal has been
publicly disclosed or otherwise communicated to the senior
management or Board of Directors, Company shall pay to Parent the
Termination Fee on the business day following such termination;
provided, however, that no such payment shall be required if,
within 5 business days after such announcement or other
communication, the Board of Directors (A) determines that such
Section 7.2 Acquisition Proposal does not constitute a Superior
Proposal, (B) so notifies, in writing, Parent and the person or
persons that made the Section 7.2 Acquisition Proposal and (C) in
the case of any Section 7.2 Acquisition Proposal that has been
publicly disclosed, files with the SEC, and mails to Company's
stockholders, a supplement to the Proxy Statement describing such
determination and reaffirming the Company Recommendation.
(iii) If (x) this Agreement is terminated pursuant to
Section 7.1(c) or (e) and (y) at any time after the date of this
Agreement and before such termination, a Section 7.2 Acquisition
Proposal has been publicly disclosed or otherwise communicated to
the senior management or the Board of Directors, Company shall pay
to Parent (I) the Termination Fee on the business day following
such termination and (II) the Parent Expenses within two business
days after demand is made by Parent; provided, however, that no
such payment shall be required if, within 5 business days after
such announcement or other communication, the Board of Directors
(A) determines that such Section 7.2 Acquisition Proposal does not
constitute a Superior Proposal, (B) so notifies, in writing,
Parent and the person or persons that made the Section 7.2
Acquisition Proposal and (C) in the case of any Section 7.2
Acquisition Proposal that has been publicly disclosed, files with
the SEC, and mails to Company's stockholders, a supplement to the
Proxy Statement describing such determination and reaffirming the
Company Recommendation; provided, further, however, if, at any
time prior to the first anniversary of such termination, Company
or any of its Subsidiaries enters into a definitive agreement in
respect of, or approves or recommends, a Section 7.2 Acquisition
Proposal, or agrees or resolves to do any of the foregoing,
Company shall pay to Parent the Termination Fee and the Parent
Expenses not later than the date of consummation of the
transaction relating to a Section 7.2 Acquisition Proposal.
(iv) If this Agreement is terminated pursuant to Section
7.1(f), Parent shall pay the Company Expenses to Company within
two business days after demand is made by Company.
(v) All payments under this Section 7.2(b) shall be made
by wire transfer of immediately available funds to the account
specified by Parent or Company, as the case may be. In no event
shall the Termination Fee be paid more than once.
(vi) Each of Company and Parent acknowledges that the
agreements contained in this Section 7.2(b) are critical
provisions of the transactions contemplated hereby and that
without these agreements the other party would not enter into this
Agreement. Accordingly, if any party fails to pay all amounts due
to the other party on the dates specified, the failing party shall
pay all costs and expenses (including legal fees and expenses)
incurred by the other party in connection with any action or
proceeding (including the filing of any lawsuit) taken by it to
collect such unpaid amounts, together with interest on such unpaid
amounts at the prime lending rate prevailing at such time, as
published in The Wall Street Journal, from the date such amounts
were required to be paid until the date actually received by the
other party.
SECTION 7.3. Amendment. This Agreement may be amended by the
parties hereto, by action taken or authorized by their respective boards of
directors, at any time before or after approval of the matters presented in
connection with the Merger by the stockholders of Company, but, after any
such approval, no amendment shall be made which by law requires further
approval by such stockholders without such further approval. This Agreement
may not be amended except by an instrument in writing signed on behalf of
each of the parties hereto.
SECTION 7.4. Extension; Waiver. At any time prior to the Effective
Time, the parties hereto, by action taken or authorized by their respective
board of directors, may, to the extent legally allowed, (i) extend the time
for the performance of any of the obligations or other acts of the other
party hereto, (ii) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto
and (iii) waive compliance with any of the agreements or conditions
contained herein. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party. The failure of a party to assert
any of its rights under this Agreement or otherwise shall not constitute a
waiver of those rights.
ARTICLE EIGHT
GENERAL PROVISIONS
SECTION 8.1. Non-Survival of Representations, Warranties and
Agreements. None of the representations, warranties, covenants and
agreements in this Agreement or in any instrument delivered pursuant to
this Agreement, including any rights arising out of any breach of such
representations, warranties, covenants, and agreements, shall survive the
Effective Time, except for those covenants and agreements contained herein
and therein that by their terms apply or are to be performed in whole or in
part after the Effective Time.
SECTION 8.2. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed duly given (a) on the
date of delivery if delivered personally, or by telecopy upon confirmation
of receipt, (b) on the first business day following the date of dispatch if
delivered by a nationally recognized next-day courier service, or (c) on
the third business day following the date of mailing if delivered by
registered or certified mail, return receipt requested, postage prepaid.
All notices hereunder shall be delivered as set forth below, or pursuant to
such other instructions as may be designated in writing by the party to
receive such notice.
(a) if to Parent or Merger Subsidiary, to
Invesment Technology Group, Inc.
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
with a copy to
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
(b) if to Company, to
Xxxxxx Group Inc.
0 Xxxxxxxxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attention: General Counsel
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
with a copy to
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxx, Esq.
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
SECTION 8.3. Interpretation. When a reference is made in this
Agreement to Sections, Exhibits or Schedules, such reference shall be to a
Section of or Exhibit or Schedule to this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning
or interpretation of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed
to be followed by the words "without limitation." The phrase "made
available" or "furnished" in this Agreement shall mean that the information
referred to has been made available if requested by the party to whom such
information is to be made available. The phrases "the date of this
Agreement," "the date hereof" and terms of similar import, unless the
context otherwise requires, shall be deemed to refer to February 28, 2002.
The phrases "known" or "knowledge" mean, with respect to either party to
this Agreement, the actual knowledge of any of such party's directors or
executive officers after reasonable inquiry.
SECTION 8.4. Counterparts. This Agreement may be executed in
counterparts, each of which shall be considered one and the same agreement
and shall become effective when both counterparts have been signed by each
of the parties and delivered to the other party, it being understood that
both parties need not sign the same counterpart.
SECTION 8.5. Entire Agreement; No Third Party Beneficiaries. This
Agreement (including the documents and the instruments referred to herein,
including the Voting Agreement and the Confidentiality Agreements) (a)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect to
the subject matter hereof, other than the Confidentiality Agreements, which
shall survive the execution and delivery of this Agreement, and (b) except
as provided in Section 5.6, is not intended to confer upon any person other
than the parties hereto any rights or remedies hereunder.
SECTION 8.6. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York.
SECTION 8.7. Waiver of Jury Trial. Each of the parties hereto
hereby irrevocably waives any and all right to trial by jury in any legal
proceeding arising out of or related to this Agreement or the transactions
contemplated hereby.
SECTION 8.8. Severability. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability and shall not render invalid or unenforceable the
remaining terms and provisions of this Agreement or affect the validity or
enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
SECTION 8.9. Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties, and any attempt to make any such
assignment without such consent shall be null and void. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective
successors and assigns.
SECTION 8.10. Enforcement. The parties agree that irreparable
damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions of this
Agreement in any court of the United States or of the State of New York
sitting in the Borough of Manhattan, City of New York, this being in
addition to any other remedy to which they are entitled at law or in equity.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be signed by their respective officers thereunto duly authorized, all as
of the first written above.
INVESTMENT TECHNOLOGY GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
-------------------------------
Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: Chairman, President & CEO
INDIGO ACQUISITION CORP.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
XXXXXX GROUP INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Executive Officer
Exhibit C
To:
Investment Technology Group, Inc.
Xxxxxx Group Inc.
Reference is made to the Merger Agreement dated as of February 28,
2002, among Investment Technology Group, Inc., Xxxxxx Group Inc. and Indigo
Acquisition Corp. (the "Merger Agreement"). Capitalized terms have the
meanings given to them in the Merger Agreement.
The undersigned hereby confirms that, upon the Effective Time, any
right that the undersigned or the undersigned's estate may have to require
Company to repurchase any shares of Company Common Stock will be extinguished.
The undersigned acknowledges that execution and delivery of this
letter to Parent is a requirement under the Merger Agreement.
This letter shall be governed by the laws of the State of New York.
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Name:
