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Exhibit 11(c)(1)
AGREEMENT AND PLAN OF MERGER
by and among
THE CHASE MANHATTAN CORPORATION,
BRIDGE ACQUISITION CORPORATION
and
XXXXXXXXX & XXXXX GROUP
Dated as of September 27, 1999
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TABLE OF CONTENTS
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ARTICLE I
The Offer and the Merger
1.1 The Offer......................................................... 2
1.2 Company Action.................................................... 3
1.3 Directors......................................................... 5
1.4 The Merger........................................................ 6
1.5 Closing........................................................... 6
1.6 Effective Time.................................................... 6
1.7 Effects of the Merger............................................. 7
1.8 Conversion of Company Common Stock................................ 7
1.9 Options; Restricted Shares........................................ 8
1.10 Certificate of Incorporation..................................... 10
1.11 Bylaws........................................................... 10
1.12 Directors and Officers of Surviving Corporation.................. 10
1.13 Alternate Transaction Structures, Etc............................ 10
ARTICLE II
Exchange of Shares
2.1 Establishment of Exchange Fund.................................... 11
2.2 Exchange of Shares................................................ 11
ARTICLE III
Representations and Warranties of Company
3.1 Corporate Organization............................................ 13
3.2 Capitalization.................................................... 15
3.3 Authority; No Violation........................................... 16
3.4 Consents and Approvals............................................ 18
3.5 Regulatory Reports................................................ 18
3.6 Broker's Fees..................................................... 19
3.7 Absence of Certain Changes or Events.............................. 19
3.8 Legal Proceedings................................................. 19
3.9 Taxes and Tax Returns............................................. 19
3.10 Employees........................................................ 21
3.11 SEC Reports...................................................... 22
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3.12 Financial Statements............................................... 23
3.13 Licenses; Compliance with Applicable Law........................... 23
3.14 Certain Contracts.................................................. 25
3.15 Agreements with Regulatory Agencies................................ 26
3.16 Investment Securities.............................................. 26
3.17 Interest Rate Risk Management Instruments.......................... 26
3.18 Undisclosed Liabilities............................................ 27
3.19 Environmental Liability............................................ 27
3.20 Information Supplied............................................... 27
3.21 State Takeover Laws................................................ 28
3.22 Insurance.......................................................... 28
3.23 Year 2000 Compliance............................................... 28
3.24 Intellectual Property.............................................. 29
ARTICLE IV
Representations and Warranties
of Parent and Sub
4.1 Corporate Organization.............................................. 29
4.2 Authority; No Violation............................................. 29
4.3 Consents and Approvals.............................................. 30
4.4 Broker's Fees....................................................... 31
4.5 Funds............................................................... 31
4.6 Information Supplied................................................ 31
ARTICLE V
Covenants Relating to Conduct of Business
5.1 Conduct of Company Businesses Prior to the Effective Time........... 32
5.2 Forbearances of Company............................................. 32
5.3 Transition.......................................................... 36
ARTICLE VI
Additional Agreements
6.1 Company Stockholders Meeting; Preparation of Proxy Statement........ 36
6.2 Reasonable Best Efforts............................................. 37
6.3 Access to Information............................................... 38
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6.4 Employee Benefits................................................... 39
6.5 Indemnification; Directors' and Officers' Insurance................. 40
6.6 Additional Agreements............................................... 41
6.7 Advice of Changes................................................... 41
6.8 [Reserved].......................................................... 41
6.9 No Solicitation..................................................... 41
6.10 Publicity.......................................................... 43
6.11 Stockholder Litigation............................................. 43
6.12 State Takeover Statutes............................................ 44
6.13 Section 15 of the Investment Company Act........................... 44
ARTICLE VII
Conditions Precedent
7.1 Conditions to Each Party's Obligation To Effect the Merger.......... 45
ARTICLE VIII
Termination and Amendment
8.1 Termination......................................................... 45
8.2 Effect of Termination............................................... 47
8.3 Amendment........................................................... 48
8.4 Extension; Waiver................................................... 48
ARTICLE IX
General Provisions
9.1 Nonsurvival of Representations, Warranties and Agreements........... 49
9.2 Expenses............................................................ 49
9.3 Notices............................................................. 49
9.4 Interpretation...................................................... 50
9.5 Counterparts........................................................ 50
9.6 Entire Agreement.................................................... 50
9.7 Governing Law....................................................... 51
9.8 Severability........................................................ 51
9.9 Assignment; Third Party Beneficiaries............................... 51
Annex I - Conditions of the Offer
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of September 27, 1999
(this "Agreement") by and among THE CHASE MANHATTAN CORPORATION, a Delaware
corporation ("Parent"), BRIDGE ACQUISITION CORPORATION, a Delaware corporation
and a wholly-owned subsidiary of Parent ("Sub"), and XXXXXXXXX & XXXXX GROUP, a
Delaware corporation ("Company").
WHEREAS, the respective Boards of Directors of Parent, Sub and
Company have determined that the Offer (as defined in Section 1.1) and (ii) the
merger of Sub with and into Company (the "Merger") following the consummation of
the Offer, with Company as the surviving corporation of the Merger (the
"Surviving Corporation"), each upon the terms and subject to the conditions set
forth in this Agreement, are advisable and fair to and in the best interests of
their respective stockholders;
WHEREAS, as an inducement and condition to Parent and Sub
entering into this Agreement, the Board of Directors of Company has approved,
and concurrently with the execution of this Agreement Company is executing and
delivering to Parent, a stock option agreement (the "Company Option Agreement")
dated as of the date hereof;
WHEREAS, as an inducement and condition to Parent and Sub
entering into this Agreement, and concurrently with the execution of this
Agreement, certain directors and executive officers of Company are executing and
delivering to Parent a Tender and Voting Agreement (the "Support Agreement")
dated as of the date hereof;
WHEREAS, as an inducement and condition to Parent and Sub
entering into this Agreement, and concurrently with the execution of this
Agreement, Xxxxxx X. Case III is executing and delivering to Parent an
employment agreement dated as of the date hereof and to be effective from and
after the consummation of the Offer; and
WHEREAS, the parties desire to make certain representations,
warranties and agreements in connection with the Offer and the Merger and also
to prescribe certain conditions therefor.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements contained herein, and intending to be
legally bound hereby, the parties agree as follows:
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ARTICLE I
THE OFFER AND THE MERGER
1.1 The Offer. (a) Provided that this Agreement shall not have
been terminated in accordance with Section 8.1, Parent shall cause Sub to, and
Sub shall, as soon as practicable after the date hereof, but in any event within
five business days after the public announcement of the execution hereof,
commence (within the meaning of Rule 14d-2(a) under the Securities Exchange Act
of 1934, as amended (the "Exchange Act")), a tender offer (the "Offer") for all
of the issued and outstanding shares of common stock, par value $0.01 per share,
of Company (the "Company Common Stock") at a price of $50.00 per share (the "Per
Share Price"), net to the sellers thereof in cash, subject to the conditions set
forth in Annex I hereto (the "Offer Conditions") including the Minimum Condition
(as defined therein).
(b) The Offer shall be made by means of an offer to purchase
which shall contain as conditions only the Minimum Condition and the other
conditions set forth in Annex I hereto, and, subject to the next succeeding
sentence, shall otherwise contain, and be consistent with, the terms and
conditions of the Offer as described in this Agreement. Each of Sub and Parent
expressly reserves the right, in its sole discretion, to waive any such
condition and make any other changes to the terms of the Offer; provided, that,
without the consent of Company, neither Parent nor Sub shall amend or waive the
Minimum Condition, change the form of consideration to be paid in the Offer
(other than by adding cash consideration), decrease the Per Share Price or the
number of shares of Company Common Stock sought, or amend any other condition of
the Offer in any manner adverse to the holders of the shares of Company Common
Stock. The Per Share Price shall be net to the sellers in cash, without
interest, subject to reduction only for any applicable withholding taxes.
Notwithstanding the foregoing, Sub may, without the consent of Company, (i)
extend the Offer on one or more occasions for up to ten business days for each
such extension beyond the then-scheduled expiration date (the initial scheduled
expiration date being 20 business days following commencement of the Offer), if
at the then-scheduled expiration date of the Offer any of the conditions to
Sub's obligation to accept for payment and pay for the shares of Company Common
Stock shall not be satisfied or waived, until such time as such conditions are
satisfied or waived, and, at the request of Company, Sub shall, subject to
Parent's right to terminate this Agreement pursuant to Article VIII, extend the
Offer for additional periods up to but not later than March 31, 2000, if the
only condition not satisfied or earlier waived on the then-scheduled expiration
date is the Requisite Regulatory Approvals Condition (as defined in Annex I
hereto), (ii) extend the Offer for any period required by any rule, regulation,
interpretation or position of the Securities and Exchange Commission (the "SEC")
or the staff thereof applicable to the Offer and (iii) extend the Offer for an
aggregate period of not more than ten business days beyond the latest expiration
date that would otherwise
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be permitted under clause (i) or (ii) of this sentence if the Minimum Condition
shall have been satisfied but there shall not have been tendered sufficient
shares of Company Common Stock so that the Merger could be effected without a
vote of Company's stockholders in accordance with Section 253 of the DGCL (as
defined in Section 1.4); provided, that, as a condition to the extension
provided for in clause (iii), Sub irrevocably waives the satisfaction of the
conditions to the Offer set forth in subclause (x) of clause (a) of Annex I
hereto that subsequently may not be satisfied during any such extension of the
Offer. Subject to the terms of the Offer, including the Offer Conditions, Sub
shall accept for payment and pay for all shares of Company Common Stock duly
tendered at the earliest time at which it is permitted to do so under applicable
law; provided, that, as set forth above, Sub shall have the right, in its sole
discretion, to extend the Offer for up to ten business days notwithstanding the
prior satisfaction or waiver of the Offer Conditions, in order to attempt to
satisfy the requirements of Section 253 of the DGCL. It is agreed that the Offer
Conditions other than the Minimum Condition are solely for the benefit of Sub
and that all Offer Conditions may be asserted by Sub regardless of the
circumstances resulting in a condition not being satisfied (except for any
action or inaction by Sub or Parent constituting a breach of this Agreement)
and, except with respect to the Minimum Condition, may be waived by Sub, in
whole or in part at any time and from time to time, in its sole discretion.
(c) On the date of commencement of the Offer, Parent and Sub,
with the cooperation of, and subject to the prior review thereof by, Company,
shall file with the SEC a Schedule 14D-1 (the "Schedule 14D-1") with respect to
the Offer that will contain or will incorporate by reference the Offer (or
portions thereof) and forms of the related letter of transmittal and summary
advertisement (which documents, together with any supplements or amendments
thereto, are referred to herein collectively as the "Offer Documents"). Each of
Parent, Sub and Company, with respect to information supplied by it for use in
the Schedule 14D-1 or the Offer Documents, agrees promptly to correct the
Schedule 14D-1 or the Offer Documents if and to the extent that any of them
shall have become false or misleading in any material respect or any event
occurs which should be set forth in an amendment or supplement to the Schedule
14D-1, and Sub shall take all steps necessary to cause the Schedule 14D-1 as so
corrected or supplemented to be filed with the SEC and such Offer Documents as
so corrected to be disseminated to holders of shares of Company Common Stock, in
each case as and to the extent required by applicable federal securities laws.
1.2 Company Action. (a) Subject to Section 1.2(b) below,
Company hereby consents to the inclusion in the Offer Documents of the Company
Board Recommendation (as defined in Section 3.21).
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(b) Company agrees to file with the SEC and mail to its
stockholders contemporaneously with the commencement of the Offer a
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9")
which shall reflect the actions of the Board of Directors of Company referred to
above and shall comply in all material respects with the provisions of
applicable federal securities laws. Each of Company, Parent and Sub, with
respect to information supplied by it for use in the Schedule 14D-9, agrees
promptly to correct the Schedule 14D-9 if and to the extent that it shall have
become false or misleading in any material respect, and Company shall take all
steps necessary to cause the Schedule 14D-9 as so corrected to be filed with the
SEC and mailed to holders of shares of Company Common Stock to the extent
required by applicable federal securities laws. The Schedule 14D-9 shall contain
the Company Board Recommendation recommending that the holders of shares of
Company Common Stock accept the Offer, which recommendation shall not be
withdrawn, amended, modified or materially qualified in a manner adverse to
Parent (nor shall the Board of Directors of Company publicly announce its
intention to do so) unless, (i) in the opinion of Company's outside counsel,
failure to take such action in response to an unsolicited bona fide written
Superior Proposal (as defined below) would constitute a breach by the Board of
Directors of Company of its fiduciary duties under applicable law, (ii) Company
has given Parent five business days' prior written notice of its intent to take
such action, which notice describes all material terms of such Superior Proposal
and attaches a copy of any written communications relating thereto, and
Company's Board of Directors has duly considered in good faith any proposed
changes to this Agreement (if any) proposed by Parent and (iii) Company has
fully and completely complied with Section 6.9. For the purposes of this
Agreement, "Superior Proposal" shall mean any bona fide Transaction Proposal (as
defined in Section 6.9) for at least a majority of the outstanding fully-diluted
shares of Company Common Stock on terms the Board of Directors of Company
determines in its good faith judgment (taking into account the advice of a
financial advisor of nationally recognized reputation, and taking into account
all the terms and conditions of the Transaction Proposal, including any break-up
fees, expense reimbursement provisions and conditions to consummation) are more
favorable and provide greater value to the Company's stockholders than this
Agreement, the Offer and the Merger taken as a whole, and which (i) is not
subject to any financing contingency or other material contingency (except such
other material contingency as the Board of Directors determines in its
reasonable good faith judgment is likely to be satisfied), and (ii) is, in the
Board of Directors' reasonable good faith judgment (taking into account all
relevant legal, financial, regulatory and other considerations), reasonably
capable of being consummated on the terms proposed. Without limiting the
generality of the foregoing, Company agrees that, except as otherwise expressly
provided herein, its and its Board of Directors' obligations under this Section
1.2, and under all other provisions of this Agreement, shall not be altered by
the commencement, public proposal, public disclosure or communication to Company
of any Transaction Proposal, including without limitation a Superior Proposal.
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(c) Company shall promptly furnish Parent or Sub with a list
of the record holders of shares of Company Common Stock and their addresses, as
well as mailing labels containing the names and addresses of the record holders
of such shares, lists of any non-objecting beneficial owners of such shares and
lists of securities positions of such shares held in stock depositories, each as
of the most recent practicable date, and shall furnish Parent or Sub with such
additional information, including updated lists of holders of such shares,
mailing labels and lists of securities positions, and other assistance as
Parent, Sub or their agents may reasonably request for the purpose of
disseminating the Offer Documents and communicating with the record and
beneficial holders of shares of Company Common Stock with respect thereto.
1.3 Directors. (a) Promptly upon the purchase of and payment
for shares of Company Common Stock by Sub which represent at least a majority of
the outstanding shares of Company Common Stock, Parent shall be entitled to
designate a number of directors on the Board of Directors of Company equal to
the product (rounded up to the nearest whole number) of the total number of the
directors on such Board (after giving effect to the directors elected pursuant
to this sentence) multiplied by the percentage that such number of shares owned
by Sub and its affiliates bears to the number of shares of Company Common Stock
outstanding. Company's obligations under this Section 1.3(a) shall be subject to
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder. Parent
or Sub will supply Company with any information with respect to either of them
and their nominees, officers, directors and affiliates required by Section 14(f)
and Rule 14f-1. Upon receipt of such information from Parent or Sub, Company
shall include in the Schedule 14D-9 (as an annex or otherwise) or a separate
Rule 14f-1 information statement mailed to stockholders of Company promptly
after the commencement of the Offer the information required by Section 14(f)
and Rule 14f-1 as is necessary to enable Parent's designees to be elected to the
Board of Directors of Company.
(b) At the time specified in the first sentence of Section
1.3(a), Company shall, upon request of Parent, use its best efforts promptly
either to increase the size of the Board of Directors of Company or, at
Company's election, secure the resignations of such number of its incumbent
directors as is necessary to enable Parent's designees pursuant to Section
1.3(a) to be so elected or appointed to Company's Board of Directors, and shall
cause Parent's designees to be so elected or appointed. Company will use its
reasonable best efforts to cause directors designated by Parent to constitute
the same percentage as is on the board (but in any event at least one Parent
designee) (i) of each committee of its Board of Directors, (ii) of each board of
directors of its Subsidiaries (as defined in Section 3.1) and (iii) of each
committee of each such board, in each case only to the extent permitted by law
and the rules of the New York Stock Exchange (the "NYSE") to the extent
applicable. Notwithstanding the foregoing, until the
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Effective Time (as defined in Section 1.6), Company and Parent shall use all
reasonable best efforts to retain as members of Company's Board of Directors at
least two directors who are directors of Company on the date hereof and who are
not designated by Parent or employees of Company or its Subsidiaries (the
"Independent Directors").
(c) Notwithstanding anything in this Agreement to the
contrary, following the election or appointment of Parent's designees to
Company's Board of Directors and prior to the Effective Time, the affirmative
vote of a majority of the Independent Directors shall be required for Company to
take action to (i) amend or terminate this Agreement, (ii) exercise or waive any
of Company's rights or remedies hereunder, (iii) extend the time for performance
of Parent's and Sub's respective obligations hereunder, or (iv) approve any
other action by Company that could adversely affect the interests of the
stockholders of Company (other than Parent, Sub and their affiliates) with
respect to the transactions contemplated hereby.
1.4 The Merger. Subject to the terms and conditions of this
Agreement, in accordance with the Delaware General Corporation Law (the "DGCL"),
at the Effective Time, Sub shall merge with and into Company. Company shall be
the Surviving Corporation in the Merger, and shall continue its corporate
existence under the laws of the State of Delaware. Upon consummation of the
Merger, the separate corporate existence of Sub shall terminate.
1.5 Closing. Unless this Agreement shall have been terminated
and the transactions herein contemplated shall have been abandoned pursuant to
Section 8.1, the closing of the Merger (the "Closing") will take place at 10:00
a.m., New York City time, on the second business day after satisfaction or
waiver of the conditions (excluding conditions that, by their terms, cannot be
satisfied until the Closing Date (as defined below), but subject to satisfaction
or waiver of such conditions on the Closing Date) set forth in Article VII (the
"Closing Date"), at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx, 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, unless another date, time or place is agreed
to in writing by the parties hereto. Each of the parties undertakes to use its
reasonable best efforts to ensure that the Merger occurs as soon as practicable
following the date on which Sub consummates the Offer.
1.6 Effective Time. Upon the Closing, the parties shall file a
certificate of merger (the "Certificate of Merger") with the Secretary of State
of the State of Delaware and shall make all other filings or recordings required
under the DGCL. The Merger shall become effective at such time as the
Certificate of Merger shall have been duly filed with the Secretary of State of
the State of Delaware, or at such later time as is agreed by Parent and Company
and specified in the Certificate of Merger (the time the Merger becomes
effective being the "Effective Time").
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1.7 Effects of the Merger. At and after the Effective Time,
the Merger shall have the effects set forth in Sections 259, 260 and 261 of the
DGCL.
1.8 Conversion of Company Common Stock. At the Effective Time
by virtue of the Merger and without any action on the part of Parent, Sub,
Company or the holder of any of the following securities:
(a) Each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time (other than (x) shares of
Company Common Stock canceled pursuant to Section 1.8(c), (y)
Restricted Shares ( as defined in Section 1.9(a)), other than
Restricted Shares that vest effective as of the Effective Time pursuant
to the Company Stock Plans (as defined in Section 1.9), and (z)
Dissenting Shares, as defined in Section 1.8(d)), shall be converted
into the right to receive cash in an amount equal to the Per Share
Price or any higher per share price as may be paid in the Offer,
payable to the holder thereof, without interest thereon (the "Merger
Consideration").
(b) All of the shares of Company Common Stock issued and
outstanding immediately prior to the Effective Time shall no longer be
outstanding and shall automatically be canceled and shall cease to
exist as of the Effective Time, and each certificate (each a "Common
Certificate") previously representing any such shares of Company Common
Stock (other than shares canceled pursuant to Section 1.8(c),
Restricted Shares which are converted into shares of restricted Parent
Common Stock pursuant to Section 1.9(a), and Dissenting Shares) shall
thereafter represent solely the right to receive the Merger
Consideration into which the shares of Company Common Stock represented
by such Common Certificate have been converted pursuant to this Section
1.8. All Restricted Shares which are issued and outstanding immediately
prior to the Effective Time and which are not converted into the Merger
Consideration pursuant to this Section 1.8 shall be converted into
shares of restricted Parent Common Stock as provided in Section 1.9(a).
(c) All shares of Company Common Stock that are held by
Company as treasury stock or by Parent or any of Company's or Parent's
respective wholly-owned Subsidiaries (other than shares of Company
Common Stock held, directly or indirectly, in trust accounts, managed
accounts and the like or otherwise held in a fiduciary, nominee or
custodial capacity that are beneficially owned by third parties,
including shares held by mutual funds for which a Subsidiary (as
defined in Section 3.1) of Parent or Company acts as investment adviser
(any such shares being referred to herein as "Trust Account Shares")
and other than any shares of Company Common Stock held by Parent or
Company or any of their respective Subsidiaries in respect of a debt
previously
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contracted in good faith (any such shares of Company Common Stock being
referred to herein as "DPC Shares")) shall automatically be canceled
and shall cease to exist and no cash, stock of Parent or other
consideration shall be delivered in exchange therefor.
(d) Notwithstanding anything in this Agreement to the
contrary, shares of Company Common Stock issued and outstanding
immediately prior to the Effective Time held by holders (if any) who
have not voted in favor of the Merger or consented thereto in writing
and who have demanded appraisal rights with respect thereto in
accordance with Section 262 of the DGCL and, as of the Effective Time,
have not failed to perfect or have not effectively withdrawn or lost
their rights to appraisal and payment under Section 262 of the DGCL
("Dissenting Shares") shall not be converted into the right to receive
the Merger Consideration as described in Section 1.8(a), but holders of
such shares shall be entitled to receive payment of the appraised value
of such Dissenting Shares in accordance with the provisions of such
Section 262, except that any Dissenting Shares held by a holder who
shall have failed to perfect or shall have effectively withdrawn or
lost its right to appraisal and payment under Section 262 of the DGCL
shall thereupon be deemed to have been converted into the right to
receive the Merger Consideration and shall no longer be considered
Dissenting Shares. Company shall give Parent (i) prompt notice of any
written demands for appraisal of any shares, attempted withdrawals of
such demands, and any other instruments served pursuant to the DGCL
received by Company relating to stockholders' rights of appraisal and
(ii) the opportunity to direct all negotiations and proceedings with
respect to demands for appraisal under the DGCL. Company shall not,
except with the prior written consent of Parent, voluntarily make any
payment with respect to any demands for appraisals of capital stock of
Company, offer to settle or settle any such demands or approve any
withdrawal of any such demands.
(e) Each share of capital stock of Sub issued and outstanding
immediately prior to the Effective Time shall be converted into one
identical share of the capital stock of the Surviving Corporation and
shall constitute the only issued and outstanding capital stock of the
Surviving Corporation following the Effective Time.
1.9 Options; Restricted Shares. (a) Prior to the Effective
Time, Company and its Subsidiaries shall take all action necessary (including
obtaining any necessary consents and/or waivers) to ensure that from and after
the Effective Time, all employee, consultant, independent contractor and
director stock options to purchase shares of Company Common Stock (each, a
"Company Option"), which are then outstanding and unexercised, and all shares of
restricted and unvested Company Common Stock (each, a "Restricted Share"), other
than Restricted Shares converted into the Merger Consideration pursuant to
Section 1.8, which are then outstanding,
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shall, without any further action on the part of the holders thereof, be
converted into and become, respectively, options to purchase shares of common
stock, par value $1.00 per share, of Parent (the "Parent Common Stock") and
shares of restricted 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, restricted stock plan or other agreement or award pursuant to
which such Company Option or Restricted Share was granted (collectively, such
plans, agreements and awards being hereinafter referred to as the "Company Stock
Plans"); provided, however, that from and after the Effective Time (i) each such
Company 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 such Company Option shall be equal to the number of
shares of Company Common Stock that were purchasable under such Company Option
immediately prior to the Effective Time multiplied by the Conversion Ratio (as
defined below) and rounded to the nearest whole share, (iii) the per share
exercise price under each such Company Option shall be adjusted by dividing the
per share exercise price of each such Company Option immediately prior to the
Effective Time by the Conversion Ratio, and rounded to the nearest whole cent,
and (iv) the number of shares of restricted Parent Common Stock held by an
individual following such conversion shall be equal to the number of Restricted
Shares held by such individual immediately prior to the Effective Time
multiplied by the Conversion Ratio and rounded to the nearest whole share.
(b) For purposes of this Section, the "Conversion Ratio" means
the quotient determined by dividing the Merger Consideration by the Parent
Common Share Price, rounded to the nearest 1/100,000th, and the "Parent Common
Share Price" shall be equal to the average closing sale price of Parent Common
Stock on the NYSE (rounded to the nearest one-thousandth) over the 20
consecutive full trading days in which such shares are traded on the NYSE ending
at the close of business on the second business day prior to the Closing Date.
(c) The vesting of each Company Option and Restricted Share
shall not accelerate as a result of, or in connection with, the transactions
contemplated hereby, except for Company Options and Restricted Shares that would
otherwise become exercisable or free of restrictions within 12 months from the
Closing Date and otherwise to the extent required by the existing terms of the
Company Stock Plan pursuant to which such Company Option or Restricted Share was
granted, as in effect on the date hereof. In addition, except as may be
necessary to cause the vesting of Company Options that would otherwise become
exercisable within 12 months from the Closing Date, Company shall ensure that no
discretion is exercised by any body or person so as to cause the vesting of any
Company Option or Restricted Share to accelerate. Notwithstanding the foregoing,
the number of shares and the per share exercise price of each Company Option
which is intended to be an "incentive stock option" (as defined in
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Section 422 of the Internal Revenue Code of 1986, as amended (the "Code")) shall
be adjusted in accordance with the requirements of Section 424 of the Code.
1.10 Certificate of Incorporation. Subject to the terms and
conditions of this Agreement, at the Effective Time, the Certificate of
Incorporation of Company, as in effect immediately prior to the Effective Time,
shall be the certificate of incorporation of the Surviving Corporation until
thereafter amended as provided therein and by the DGCL.
1.11 Bylaws. Subject to the terms and conditions of this
Agreement, at the Effective Time, the Bylaws of Sub, as in effect immediately
prior to the Effective Time, shall, subject to the provisions of Section 6.5, be
the Bylaws of the Surviving Corporation until thereafter amended as provided
therein and by the DGCL.
1.12 Directors and Officers of Surviving Corporation. At the
Effective Time, the directors and officers of Sub immediately prior to the
Effective Time shall be the directors and officers, respectively, of the
Surviving Corporation following the Merger, to hold office in accordance with
the Surviving Corporation's Bylaws and applicable law.
1.13 Alternate Transaction Structures, Etc. The parties agree
that Parent may at any time change the method of effecting the Offer, including
by providing that Parent or any other Subsidiary of Parent shall make the Offer,
or the Merger, including by merging Company with and into Parent, by merging a
direct or indirect wholly-owned Subsidiary of Parent with and into Company or by
merging Company with and into any such direct or indirect wholly-owned
Subsidiary, and Company shall cooperate in such efforts, including by entering
into an appropriate amendment to this Agreement; provided, however, that such
other Subsidiary, if any, shall become a party to, and shall agree to be bound
by, the terms of this Agreement, and that any such actions shall not (a) alter
or change the amount or kind of consideration to be issued to holders of Company
Common Stock as provided for in this Agreement, or (b) materially delay the
receipt of any Requisite Regulatory Approval (as defined in Annex I hereto) or
the consummation of the transactions contemplated by this Agreement. The parties
also agree to take such actions as Parent may reasonably request to provide for
the merger or consolidation of Subsidiaries of Company with other Subsidiaries
of Company or of Parent, to be effective at or following the Effective Time.
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ARTICLE II
EXCHANGE OF SHARES
2.1 Establishment of Exchange Fund. Prior to the Effective
Time, Parent shall designate a bank or trust company, which may be a Subsidiary
or affiliate of Parent, to act as exchange agent (the "Exchange Agent") for the
payment of the Merger Consideration. At or prior to the Effective Time, Parent
shall deposit, or shall cause to be deposited, with the Exchange Agent, for the
benefit of the holders of Common Certificates, for exchange in accordance with
this Article II, cash (such cash being hereinafter referred to as the "Exchange
Fund") to be paid pursuant to Section 2.2(a) in exchange for outstanding shares
of Company Common Stock.
2.2 Exchange of Shares. (a) As soon as practicable after the
Effective Time, the Exchange Agent shall mail to each holder of record as of the
Effective Time of one or more Common Certificates (other than with respect to
shares of Company Common Stock canceled pursuant to Section 1.8(c)) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Common Certificates shall pass, only upon delivery of the
Common Certificates to the Exchange Agent) and instructions for use in effecting
the surrender of the Common Certificates in exchange for the Merger
Consideration. Upon proper surrender of a Common Certificate for exchange and
cancellation to the Exchange Agent, together with such properly completed letter
of transmittal, duly executed, covering such Common Certificate, the holder of
such Common Certificate shall be entitled to receive in exchange therefor a
check representing the amount of the Merger Consideration, and the Common
Certificate so surrendered shall forthwith be canceled. No interest will be paid
or accrued on the Merger Consideration payable to holders of Common
Certificates.
(b) If the payment of the Merger Consideration is to be made
to a person other than the registered holder of the Common Certificate
surrendered in exchange therefor, it shall be a condition to the payment thereof
that the Common Certificate so surrendered shall be properly endorsed (or
accompanied by an appropriate instrument of transfer) and otherwise in proper
form for transfer, and that the person requesting such exchange shall pay to the
Exchange Agent in advance any transfer or other taxes required by reason of the
issuance, delivery or payment of such Merger Consideration to any person other
than the registered holder of the Common Certificate surrendered, or required
for any other reason, or shall establish to the satisfaction of the Exchange
Agent that such tax has been paid or is not payable.
(c) After the Effective Time, there shall be no transfers on
the stock transfer books of Company of the shares of Company Common Stock which
were issued and outstanding
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immediately prior to the Effective Time. If, after the Effective Time, Common
Certificates representing such shares are presented for transfer to the Exchange
Agent, they shall be canceled and exchanged for the applicable Merger
Consideration as provided in this Article II.
(d) Any portion of the Exchange Fund that remains unclaimed by
the stockholders of Company for 6 months after the Effective Time shall be paid
to Parent. Any stockholders of Company who have not theretofore complied with
this Article II shall thereafter look only to Parent for payment of the Merger
Consideration, without any interest thereon. Notwithstanding the foregoing, none
of the Surviving Corporation, Parent, the Exchange Agent or any other person
shall be liable to any former holder of shares of Company Common Stock for any
Merger Consideration delivered to a public official pursuant to applicable
abandoned property, escheat or similar laws.
(e) In the event any Common Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such Common Certificate to be lost, stolen or destroyed and, if
reasonably required by Parent, the posting by such person of a bond in such
amount as Parent may determine is reasonably necessary as indemnity against any
claim that may be made against it with respect to such Common Certificate, the
Exchange Agent will issue in exchange for such lost, stolen or destroyed Common
Certificate the Merger Consideration.
(f) All cash paid upon the surrender of the Common
Certificates in accordance with the terms of Articles I and II shall be deemed
to have been paid in full satisfaction of all rights pertaining to the shares of
the Company Common Stock theretofore represented by such Common Certificates;
subject, however, to the Surviving Corporation's obligation, with respect to
shares of Company Common Stock outstanding immediately prior to the Effective
Time, to pay any dividends or make any other distributions with a record date
prior to the Effective Time which may have been declared or made by Company on
such shares of Company Common Stock in accordance with the terms of this
Agreement or prior to the date of this Agreement and which remain unpaid at the
Effective Time.
(g) The Exchange Agent shall invest the Exchange Fund as
directed by Parent. Any interest and other income resulting from such
investments shall be paid to Parent.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF COMPANY
Company hereby represents and warrants to Parent and Sub that,
except as set forth in the Company Disclosure Schedule (as defined in Section
3.1(a) below) (provided, that the listing of an item in one section of the
Company Disclosure Schedule shall be deemed to be a listing in another section
of the Company Disclosure Schedule and apply to any other representation and
warranty of Company in this Agreement only to the extent that it is reasonably
apparent from a reading of such disclosure item that it would also qualify or
apply to such other section or representation and warranty) and for any
exceptions to the following as do not have and would not reasonably be expected
to have, either individually or in the aggregate, a Material Adverse Effect on
Company or Parent (as defined in Section 3.1(a) below):
3.1 Corporate Organization. (a) Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Company has all requisite corporate power and authority to own or
lease all of its properties and assets and to carry on its business as it is now
being conducted, and is duly licensed or qualified to do business and in good
standing in each jurisdiction in which the nature of the business conducted by
it or the character or location of the properties and assets owned or leased by
it makes such licensing or qualification necessary. As used in this Agreement,
(i) the term "Subsidiary" when used with respect to any party means any
corporation or other organization, whether incorporated or unincorporated, (x)
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 (y) 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 other body 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, or
by such party and one or more of its Subsidiaries, and (ii) the term "Material
Adverse Effect" means, with respect to Parent or Company, as the case may be, a
material adverse effect on the business, assets, liabilities, financial
condition or results of operations of such party and its Subsidiaries taken as a
whole (other than any change, event, occurrence or effect relating to (x) the
United States or global economy or securities markets in general, (y) this
Agreement or the transactions contemplated hereby or the announcement thereof,
or (z) the financial services industry in general, and not specifically relating
to Parent or Company, as the case may be, or its Subsidiaries) or on the ability
of such party to perform its obligations under and to consummate the
transactions contemplated by this Agreement on a timely basis. Section 3.1(a) of
the Company disclosure schedule delivered to Parent concurrently herewith (the
"Company
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Disclosure Schedule") contains true and complete copies of the Certificate of
Incorporation and Bylaws of Company, as in effect as of the date of this
Agreement. Such organizational documents are in full force and effect and no
other organizational documents are applicable to or binding upon Company.
Company is not in violation of any of the provisions of its Certificate of
Incorporation or Bylaws.
(b) Part I of Section 3.1(b) of the Company Disclosure
Schedule sets forth a complete and correct list of all of Company's Subsidiaries
(each a "Company Subsidiary" and collectively the "Company Subsidiaries") and
indicates, as to each such Subsidiary (other than Subsidiaries which were formed
and exist for the principal purpose of holding portfolio investments and other
investment securities for Company and its other Subsidiaries or for the benefit
of third parties for whom Company or its other Subsidiaries manage such
investments ("Investment Subsidiaries")), the number and type of outstanding
shares of capital stock or other equity securities of each such Subsidiary, any
issued and outstanding options, warrants, stock appreciation rights, scrip,
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 become
bound to issue additional shares of its capital stock or other equity
securities, or options, warrants, scrip on 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 the Company 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 wholly-owned Subsidiaries free and clear
of any lien, claim, charge, option, encumbrance, mortgage, pledge or security
interest (a "Lien") with respect thereto. Each Company Subsidiary (i) is a duly
organized and validly existing corporation, partnership or limited liability
company or other legal entity under the laws of its jurisdiction of
organization, (ii) is duly licensed or qualified to do business and in good
standing in all jurisdictions (whether federal, state, local or foreign) where
its ownership or leasing of property or the conduct of its business requires it
to be so qualified, and (iii) has all requisite corporate power and authority to
own or lease all of its properties and assets and to carry on its business as
now conducted. Except for (i) the ownership interests set forth in Part II of
Section 3.1(b) of the Company Disclosure Schedule, (ii) the ownership interests
in its Subsidiaries disclosed in Part I of Section 3.1(b) of the Company
Disclosure Schedule, (iii) publicly traded securities acquired in the ordinary
course of Company's underwriting and market-making activities, and (iv)
securities held by Investment Subsidiaries and by investment entities managed by
entities that are not Subsidiaries, Company does not own, directly or
indirectly, any capital stock or other ownership interest, and does not have any
option or similar right to acquire any equity or other ownership
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interest, which represents 5% or more of the outstanding shares of any class of
voting securities or ownership interests in any entity. Part III of Section
3.1(b) of the Company Disclosure Schedule provides a complete and accurate
description of all partnership, joint venture and similar investments held by
Company or any Company Subsidiary, including, without limitation, all such
investments in which any Company employee or affiliate serves as a director.
Company has provided or made available to Parent a complete and accurate copy of
all such partnership, joint venture or similar agreements to which Company or
any Company Subsidiary is a party. Except as set forth in Part IV of Section
3.1(b) of the Company Disclosure Schedule, neither Company nor any Company
Subsidiary is subject to any obligation or requirement to provide funds to or
make any investment (in the form of a loan, capital contribution or otherwise)
in any corporate entity.
(c) Except as set forth in Section 3.1(c) of the Company
Disclosure Schedule, the minute books of Company accurately reflect in all
respects all corporate meetings and actions held or taken since January 1, 1997
by its stockholders and Board of Directors (including committees of the Board of
Directors of Company).
3.2 Capitalization. The authorized capital stock of Company
consists of 100,000,000 shares of Company Common Stock, of which, as of
September 27, 1999, 24,595,169 shares were issued and outstanding and 748 shares
were held in treasury. All of the issued and outstanding shares of Company
Common Stock have been duly authorized and validly issued and are fully paid,
non-assessable and free of preemptive rights, with no personal liability
attaching to the ownership thereof. The shares of Company Common Stock which are
issuable upon exercise of Company Options and the Option (as defined in the
Company Option Agreement) have been duly authorized and reserved for issuance
and, if and when issued pursuant to the terms thereof, will be validly issued,
fully paid and non-assessable and free of preemptive rights, with no personal
liability attaching to the ownership thereof. Part I of Section 3.2 of the
Company Disclosure Schedule sets forth, in each case as of September 27, 1999,
(i) the number of shares of Company Common Stock that were reserved for issuance
upon the exercise of authorized but unissued stock options pursuant to the
Company Stock Plans, (ii) the number of shares of Company Common Stock issuable
upon the exercise of outstanding Company Options pursuant to the Company Stock
Plans and (iii) the number of Restricted Shares. Except as set forth in Part I
of Section 3.2 of the Company Disclosure Schedule, no other shares of Company
Common Stock or other equity or voting securities of Company were outstanding or
reserved for issuance as of September 27, 1999. Part II of Section 3.2 of the
Company Disclosure Schedule sets forth a list, as of September 27, 1999, of the
holders of Company Options, the date of grant of each Company Option granted and
outstanding, the number of shares subject to each such option, the expiration
date of each such option, the vesting schedule of each such option and the price
at which each such option may be exercised under the
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applicable Company Stock Plan. Part III of Section 3.2 of the Company Disclosure
Schedule sets forth a list as of September 27, 1999, of the holders of
Restricted Shares, the date of grant of each Restricted Share outstanding and
the vesting schedule of each such share. Holders of Restricted Shares are
prohibited from tendering such shares in the Offer. Except as set forth in Part
IV of Section 3.2 of the Company Disclosure Schedule, since September 27, 1999,
Company has not (i) issued any shares of its capital stock or other equity or
voting securities or any securities convertible into or exercisable or
exchangeable for any shares of its capital stock or other equity or voting
securities, other than shares of Company Common Stock issued upon the exercise
or conversion of Company Options outstanding as of September 27, 1999 as
described in the immediately preceding sentence or (ii) taken any actions which
would cause an antidilution adjustment under any outstanding options of Company.
There are no outstanding bonds, debentures, notes or other indebtedness or other
securities of Company having the right to vote (or convertible into, or
exchangeable or exercisable for, securities having the right to vote) on any
matters on which stockholders of Company may vote. Except as set forth above and
except for the Company Option Agreement, there are no outstanding securities,
options, warrants, calls, rights, commitments, agreements, arrangements or
undertakings of any kind to which Company or any of its Subsidiaries is a party
or by which any of them is bound obligating Company or any of its Subsidiaries
to issue, deliver or sell, or cause to be issued, delivered or sold, additional
shares or shares of capital stock or other equity or voting securities of
Company or of any of its Subsidiaries or obligating Company or any of its
Subsidiaries to issue, grant, extend or enter into any such security, option,
warrant, call, right, commitment, agreement, arrangement or undertaking. There
are no outstanding contractual obligations, commitments, understandings or
arrangements of Company or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any shares of capital stock of Company or any of its
Subsidiaries, other than in connection with the surrender of Company Common
Stock as full or partial payment of the exercise price or withholding tax in
connection with the exercise of Company Options under the Company Stock Plans.
There are no agreements or arrangements pursuant to which Company is or could be
required to register shares of Company Common Stock or other securities under
the Securities Act of 1933, as amended (the "Securities Act"), or other
agreements or arrangements with or among any securityholders of Company with
respect to securities of Company. There are no voting, sale, transfer or other
similar agreements to which Company or any of its Subsidiaries is a party with
respect to the capital stock of Company or its Subsidiaries or any other
securities of Company or its Subsidiaries which are convertible or exchangeable
into or exercisable for shares of the capital stock of Company or its
Subsidiaries. None of the shares of Company Common Stock are held, directly or
indirectly, by any of the Company Subsidiaries (except for Trust Account Shares
and DPC Shares).
3.3 Authority; No Violation. (a) Company has full corporate
power and authority to execute and deliver this Agreement and the Company Option
Agreement and to
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consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the Company Option Agreement by Company and the
consummation of the transactions contemplated hereby and thereby have been duly
and validly authorized by the Board of Directors of Company. The Board of
Directors of Company has directed that this Agreement be submitted to Company's
stockholders for approval at a meeting of such stockholders and, except for the
adoption of this Agreement by the affirmative vote of the holders of a majority
of the outstanding shares of Company Common Stock entitled to vote thereon in
connection with the Merger (the "Company Stockholder Approval"), no other
corporate proceedings on the part of Company and no other votes or consents of
any holders of Company securities are necessary to approve this Agreement and
the Company Option Agreement and to consummate the transactions contemplated
hereby and thereby. This Agreement and the Company Option Agreement have been
duly and validly executed and delivered by Company and (assuming due
authorization, execution and delivery by Parent and Sub) constitute valid and
binding obligations of Company, enforceable against Company in accordance with
their respective terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, and general equitable
principles (whether considered in a proceeding in equity or at law).
(b) Except as set forth in Section 3.3(b) of the Company
Disclosure Schedule, neither the execution and delivery of this Agreement or the
Company Option Agreement by Company nor the consummation by Company of the
transactions contemplated hereby or thereby, nor compliance by Company with any
of the terms or provisions hereof or thereof, will (i) violate any provision of
the Certificate of Incorporation or Bylaws of Company or any Company Subsidiary
or (ii) assuming that the consents and approvals referred to in Section 3.4 are
duly obtained, violate any statute, code, ordinance, rule, regulation, judgment,
order, writ, decree or injunction applicable to Company or any of its
Subsidiaries or any of their respective properties or assets, or violate,
conflict with, result in a breach of any provision of or the loss of any benefit
under, constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, result in the termination of or a right
of termination or cancellation under, accelerate the performance required by or
rights or obligations under, or result in the creation of any Lien upon any of
the respective properties or assets of Company or any of its Subsidiaries under,
any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, permit, concession, franchise, license, lease,
agreement, contract, or other instrument or obligation to which Company or any
of its Subsidiaries is a party, or by which they or any of their respective
properties, assets or business activities may be bound or affected.
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3.4 Consents and Approvals. Except for (i) the requisite
filings with, notices to and approval of the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board") under the Bank Holding Company Act
of 1956, as amended (the "BHCA"), (ii) the filing of any required applications
or notices with other applicable federal, state or foreign governmental agencies
or authorities as set forth in Schedule 3.4 of the Company Disclosure Schedule
and approval of such applications and notices (the "Additional Regulatory
Approvals"), (iii) the filing with the SEC of a proxy statement in definitive
form relating to the meeting of Company's stockholders to be held in connection
with the Merger (the "Proxy Statement"), (iv) the filing with the SEC of the
Offer Documents and the Schedule 14D-9, (v) the filing of the Certificate of
Merger with the Secretary of State of the State of Delaware pursuant to the
DGCL, (vi) any consents, authorizations, approvals, filings or exemptions in
connection with compliance with the applicable provisions of federal, state and
foreign laws relating to the regulation of broker-dealers and futures commission
merchants and any applicable domestic or foreign industry self-regulatory
organization ("SRO"), and the rules of the NYSE and the Pacific Exchange, (vii)
the expiration of any applicable waiting period under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), (viii) the
consents, approvals and notices required under the Investment Company Act of
1940, as amended (the "1940 Act") and the Investment Advisers Act of 1940, as
amended (the "Advisers Act"), (ix) the Company Stockholder Approval, and (x) the
filing with the SEC of such reports under the Exchange Act, as may be required
in connection with the execution and delivery of this Agreement and the Company
Option Agreement and the transactions contemplated by this Agreement and the
Company Option Agreement, no consents or approvals of or filings or
registrations with any court, administrative agency or commission or other
governmental or regulatory authority or instrumentality (each a "Governmental
Entity"), or of or with any third party, are necessary in connection with the
execution and delivery by Company of this Agreement and the Company Option
Agreement and the consummation by Company of the transactions contemplated by
this Agreement and the Company Option Agreement. Company has no reason to
believe that any Requisite Regulatory Approvals (as defined in Annex I hereto)
will not be obtained on a timely basis.
3.5 Regulatory Reports. Company and each of its Subsidiaries
have filed all 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, 1997 with (i) the SEC,
(ii) any SRO and (iii) any other federal, state or foreign governmental or
regulatory agency or authority (collectively with the SEC and the SROs,
"Regulatory Agencies"), and have paid all fees and assessments due and payable
in connection therewith. Except as disclosed in Section 3.5 of the Company
Disclosure Schedule and for normal examinations conducted by a Regulatory Agency
in the regular course of the business of Company and its Subsidiaries, no
Regulatory Agency has initiated any proceeding or, to the
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knowledge of Company, investigation into the business or operations of Company
or any of its Subsidiaries since January 1, 1997. Except as set forth in Section
3.5 of the Company Disclosure Schedule, there is no unresolved violation,
criticism, or exception by any Regulatory Agency with respect to any report or
statement relating to any examinations of Company or any of its Subsidiaries.
3.6 Broker's Fees. Neither Company nor any Company Subsidiary
nor any of their respective officers or directors has employed any broker or
finder or incurred any liability for any broker's fees, commissions or finder's
fees in connection with the transactions contemplated by this Agreement or the
Company Option Agreement.
3.7 Absence of Certain Changes or Events. (a) Except as set
forth in Section 3.7(a) of the Company Disclosure Schedule, since September 30,
1998, no event, change or circumstance has occurred which has had, or would
reasonably be expected to result in, individually or in the aggregate, a
Material Adverse Effect on Company.
(b) Since September 30, 1998, Company and its Subsidiaries
have in all respects carried on their respective businesses only in the ordinary
and usual course consistent with their past practices.
(c) Except as disclosed in Section 3.7(c) of the Company
Disclosure Schedule, since June 30, 1999, there has not occurred any event
which, if it had taken place following the execution of this Agreement, would
not have been permitted by Section 5.2 (other than subsection (b) thereof)
without the prior consent of Parent.
3.8 Legal Proceedings. Except as set forth in Section 3.8 of
the Company Disclosure Schedule, there are no suits, actions, counterclaims,
proceedings (whether judicial, arbitral, administrative or other) or
governmental, or regulatory investigations pending or, to the best knowledge of
Company, threatened against or affecting Company or any of its Subsidiaries.
There is not any judgment, decree, injunction, rule or order of any Governmental
Entity or arbitrator outstanding against Company or any of its Subsidiaries.
3.9 Taxes and Tax Returns. Except as set forth in Section 3.9
of the Company Disclosure Schedule, (a) Company and each of its Subsidiaries,
and any consolidated, combined, unitary or aggregate group for tax purposes of
which Company or any of its Subsidiaries is or has been a member, has timely
filed all Tax Returns (as defined below) required to be filed by it in the
manner provided by law and all such Tax Returns are true, correct and complete
in all respects. Company and each of its Subsidiaries has paid all Taxes (as
defined below) whether or not shown thereon to be due other than Taxes which are
being contested in good faith and for
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which an adequate reserve has been provided in accordance with GAAP. No claim
has been made by any Taxing authority in a jurisdiction where any of Company or
its Subsidiaries does not file Tax Returns that it is or may be subject to
taxation by that jurisdiction.
(b) There are no audits or disputes pending, or claims
asserted, for Taxes upon Company (or any of its predecessors) or any of its
Subsidiaries (or any of their respective predecessors). No closing agreements,
private letter rulings, technical advice memoranda or similar agreements or
rulings have been entered into or issued by any Taxing authority with respect to
Company or any of its Subsidiaries that have a continuing impact on any Taxes.
(c) Proper and accurate amounts have been withheld by Company
and its Subsidiaries from their employees in compliance with the tax withholding
provisions of applicable federal, state and local laws and have been paid over
to the appropriate taxing authorities.
(d) There are no Tax liens upon any property or assets of
Company or any of its Subsidiaries except liens for Taxes not yet due and
payable.
(e) None of Company and its Subsidiaries has filed a consent
under section 341(f) of the Code concerning collapsible corporations. None of
Company and its Subsidiaries has been required to include in income any
adjustment pursuant to section 481 of the Code (or any similar provision of
state, local or foreign 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.
(f) None of Company or any of its Subsidiaries has liability
for any Taxes of any predecessor for any Tax periods prior to its formation.
(g) Neither Company nor any of its Subsidiaries (i) has been a
member of an affiliated group filing consolidated federal income tax return
(other than a group the common parent of which was Company), (ii) is a party to
a Tax allocation or Tax sharing agreement (other than an agreement solely among
members of a group the common parent of which is Company), or (iii) has any
liability for the Taxes of any person (other than any of Company or its
Subsidiaries) including, but not limited to, (x) under Treasury Regulation
section 1.1502-6 (or any similar provision of state, local or foreign law), (y)
as a transferee or successor or (z) by contract.
For purposes of this Agreement, "Taxes" shall mean any taxes
of any kind, including but not limited to those on or measured by or referred to
as income, gross receipts,
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capital, sales, use, ad valorem, franchise, profits, license, withholding,
payroll, employment, excise, severance, stamp, occupation, premium, value added,
property or windfall profits taxes, customs, duties or similar fees, assessments
or charges of any kind whatsoever, together with any interest and any penalties,
additions to tax or additional amounts imposed by any governmental authority,
domestic or foreign. For purposes of this Agreement, "Tax Return" shall mean any
return, report or statement required to be filed with any governmental authority
with respect to Taxes, including any schedule or attachment thereto or amendment
thereof.
3.10 Employees. (a) Section 3.10(a) of the Company Disclosure
Schedule identifies each "employee benefit plan" (as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended, and the rules
and regulations promulgated thereunder ("ERISA")) and each employment, severance
or similar contract or arrangement (whether or not written) and each plan,
policy, fund, program, contract or arrangement (whether or not written)
providing for compensation, bonus, profit-sharing, stock options, other stock
related rights, other forms of incentive or deferred compensation, vacation
benefits, insurance coverage (including any self-insured arrangements), health
or medical benefits, disability benefits, workers' compensation, supplemental
unemployment benefits, severance benefits, or post-employment or retirement
benefits that (i) is maintained, administered or contributed to by Company, any
of its Subsidiaries, or any entity which, together with Company or any of its
Subsidiaries, would be treated as a single employer under Section 414 of the
Code (each such entity, an "ERISA Affiliate") and (ii) covers any current or
former employee, consultant, independent contractor or director of or with
respect to Company or any of its Subsidiaries (each, an "Employee Plan").
Company has made available to Parent accurate and complete copies of the
Employee Plans (and, if applicable, related trust agreements), all amendments
thereto, and all written interpretations thereof, together with the most recent
annual report (Form 5500) prepared in connection with each Employee Plan.
(b) None of Company, any of its Subsidiaries or any ERISA
Affiliate has at any time during the last six years (i) maintained or
contributed to any plan subject to Title IV of ERISA or Section 412 of the Code,
(ii) been required to contribute to any multiemployer plan (as defined in
Section 3(37) of ERISA), or (iii) incurred any current or projected liability in
respect of post-employment or post-retirement health, medical or life insurance
benefits for current, former or retired employees of Company or any of its
Subsidiaries, except as required to avoid an excise tax under Section 4980B of
the Code.
(c) Each Employee Plan that is intended to be qualified under
Section 401(a) of the Code is so qualified and has been so qualified during the
period since its adoption; each trust created under any such Plan is exempt from
tax under Section 501(a) of the Code and has been so exempt since its creation.
Company has made available to Parent the most recent
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determination letter of the Internal Revenue Service relating to each such
Employee Plan. Each Employee Plan has been maintained in compliance with its
terms and with the requirements prescribed by any and all applicable statutes,
orders, rules and regulations, including but not limited to ERISA and the Code
and has been maintained in good standing with applicable regulatory authorities,
and is not "top-heavy".
(d) There has been no amendment to, written interpretation of
or announcement (whether or not written) by Company or any of its Subsidiaries
or ERISA Affiliates relating to, or any change in employee participation or
coverage under, any Employee Plan that would increase the expense of maintaining
such Employee Plan above the level of the expense incurred in respect thereof
for the most recent fiscal year ended prior to the date hereof.
(e) Except as set forth in Section 3.10(e) of the Company
Disclosure Schedule, there is no contract, plan or arrangement (written or
otherwise) covering any employee or former employee of Company or any of its
Subsidiaries that, individually or collectively, could give rise to the payment
of any amount that would not be deductible pursuant to the terms of Section 162
or 280G of the Code.
(f) Except as set forth in Section 3.10(f) of the Company
Disclosure Schedule, no employee or former employee of Company or any of its
Subsidiaries will become entitled to any bonus, retirement, severance, job
security or similar benefit or enhanced such benefit (including acceleration of
vesting or exercise of an incentive award) as a result of the transactions
contemplated by this Agreement.
(g) Except as set forth in Section 3.10(g) of the Company
Disclosure Schedule, no Employee Plan is maintained outside the jurisdiction of
the United States, or covers any employee residing or working outside the United
States.
3.11 SEC Reports. Company has made available to Parent an
accurate and complete copy of each (a) final registration statement, prospectus,
report, schedule, form and definitive proxy statement filed since January 1,
1996 by Company with the SEC pursuant to the Securities Act or the Exchange Act
(collectively, and in each case including all exhibits and schedules thereto and
documents incorporated by reference therein, the "Company Reports"), and (b)
communication mailed by Company to its stockholders since January 1, 1996. As of
their respective dates of filing or mailing, as the case may be, each Company
Report and each such communication complied in all 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 promulgated thereunder applicable to such
Company Report or communication, and as of such dates no such Company Report or
communication (including any and all financial statements included
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therein) contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances in which they were made,
not misleading. Since January 1, 1996, Company and each of its Subsidiaries has
filed all reports and other documents required to be filed by them under the
Securities Act and the Exchange Act on a timely basis.
3.12 Financial Statements. Each of the consolidated financial
statements (including the notes thereto) included in the Company Reports
complied as to form, as of their respective dates of filing with the SEC, in all
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, have been prepared in accordance
with generally accepted accounting principles ("GAAP") (except, in the case of
unaudited consolidated quarterly statements, as permitted by Form 10-Q of the
SEC) applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present the consolidated financial
position of Company and its Subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended. The books and records of Company and its Subsidiaries have been, and are
being, maintained in all respects in accordance with GAAP and any other
applicable legal and accounting requirements.
3.13 Licenses; Compliance with Applicable Law. (a) Except as
set forth in Section 3.13(a) of the Company Disclosure Schedule, Company and its
Subsidiaries hold, and have been and are in compliance with, all permits,
licenses, exemptions, orders and approvals ("Permits") of all Governmental
Entities and SROs necessary for the operation of their respective businesses,
and there are no proceedings pending or, to the best knowledge of Company,
threatened or contemplated by any Governmental Entity or SRO seeking to
terminate, revoke or limit any such permit, license, exemption, order or
approval, nor, to the best knowledge of Company, do adequate grounds exist for
any such action by any Governmental Entity or SRO, and all officers, directors
and employees of Company and its Subsidiaries required to be registered or
licensed with a Governmental Entity or SRO are currently registered or licensed
in the appropriate capacity with such Governmental Entity or SRO and all such
registrations and licenses are in full force and effect and no suspension or
cancellation of any of them is, to the best knowledge of Company, pending or
threatened. Company has delivered to Parent a true and complete copy of
Company's and each Company Subsidiary's currently effective Forms BD and ADV as
filed with the SEC, all state and other federal registration forms, all reports
and all material correspondence filed by Company or any of its Subsidiaries with
the SEC or any SRO under the Exchange Act, the 1940 Act and the Advisers Act and
the rules promulgated thereunder and under similar state and federal statutes
within the last three years, and Company will deliver to Parent such 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
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was (or will be, in the case of any forms and reports filed after the date of
this Agreement) complete and accurate in all respects as of the time of filing
thereof.
(b) Neither Company nor any of its Subsidiaries nor the
conduct of any of their respective businesses is in conflict with, or in default
or violation of, any statutes, laws, regulations, ordinances, permits, rules,
judgments, orders, decrees or arbitration awards of any Governmental Entity or
SRO applicable to Company or any of its Subsidiaries or by which its or any of
their respective properties are bound or affected.
(c) Except as disclosed in Section 3.13(c) of the Company
Disclosure Schedule, 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 or SRO arising
under applicable laws which would be required to be disclosed on SEC Forms ADV
or BD, and no such disciplinary proceeding or order is pending or, to the best
knowledge of Company, threatened, nor, to the best knowledge of Company, do
adequate grounds exist for any such action by any Governmental Entity or SRO;
and except as disclosed on such SEC Forms ADV or BD, neither Company nor any of
its Subsidiaries, nor any of the respective officers, directors or employees of
any of the foregoing, has been permanently enjoined by the order, judgment or
decree of any Governmental Entity from engaging in or continuing any conduct or
practice in connection with any activity or in connection with the purchase or
sale of any security. Except as disclosed on such SEC Forms ADV or BD, neither
Company nor any of its Subsidiaries, nor any of their respective officers,
directors or employees, is or has been ineligible to serve as, or subject to any
disqualification which would be the basis for any denial, suspension or
revocation of the registration of or for any limitation on the activities of
Company or any of its Subsidiaries as, an investment adviser under the
provisions of the Advisers Act or as a broker-dealer under the Exchange Act or
ineligible to serve in, or subject to any disqualification which would be the
basis for any limitation on serving in, any of the capacities specified in
Section 9(a) or 9(b) of the 1940 Act.
(d) Neither Company nor any of its Subsidiaries, nor any
"associated person" (as defined in the Exchange Act) thereof, is subject to a
"statutory disqualification" as defined in Section 3(a)(39) of the Exchange Act
or otherwise ineligible to serve as a broker-dealer or as an associated person
to a registered broker-dealer.
(e) Section 3.13(e) of the Company Disclosure Schedule sets
forth a complete list of each Subsidiary of Company which is registered or
licensed as (i) a broker-dealer under the Exchange Act or under any similar
state or foreign laws, together with a listing of all such registrations and
licenses with all applicable Regulatory Agencies, or (ii) as a futures
commission merchant, commodities trading adviser, commodity pool operator or
introducing
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broker under the Commodities and Futures Trading Act or under any similar state
or foreign laws, together with a listing of all such registrations and licenses
with all applicable Regulatory Agencies, or (iii) as an investment adviser under
the Advisers Act or under any similar state or foreign laws, together with a
listing of all such registrations and licenses with all applicable Regulatory
Agencies.
(f) Section 3.13(f) of the Company Disclosure Schedule sets
forth a complete list of all registered investment companies and unregistered
collective investment vehicles to which, or on whose behalf, Company or any of
its Subsidiaries acts as investment adviser or sub-adviser or otherwise provides
investment management or advisory services. Neither Company nor any of its
Subsidiaries acts as sponsor, advisor, sub-adviser or principal underwriter for
any open-end company (as such term is defined in Section 5 of the 1940 Act).
(g) Section 3.13(g) of the Company Disclosure Schedule sets
forth a complete list of all securities exchanges, commodities exchanges, boards
of trade and similar organizations in which Company and its Subsidiaries hold
memberships or have been granted trading privileges.
3.14 Certain Contracts. Except as set forth in Section 3.14 of
the Company Disclosure Schedule or as expressly permitted by Section 5.2,
neither Company nor any of its Subsidiaries is a party to or bound by any
contract, arrangement, commitment or understanding (i) with respect to the
employment of any directors, executive officers or key employees, or with any
consultants involving the payment of $1,000,000 or more per annum, (ii) which is
a "material contract" (as such term is defined in Item 601(b)(10) of Regulation
S-K of the SEC) that has not been filed as an exhibit to or incorporated by
reference in the Company Reports, (iii) which limits in any way the ability of
Company or any of its Subsidiaries to compete in any line of business, in any
geographic area or with any person, or which requires referrals of any business
or requires Company or any of its affiliates to make available investment
opportunities to any person on a priority, equal or exclusive basis, (iv) with
or to a labor union or guild (including any collective bargaining agreement),
(v) any of the benefits of which will be increased, or the vesting of the
benefits of which will be accelerated, by the occurrence of any of the
transactions contemplated by this Agreement or the Company Option Agreement, or
the value of any of the benefits of which will be calculated on the basis of any
of the transactions contemplated by this Agreement or the Company Option
Agreement (other than those agreements and arrangements disclosed in Section
3.11 of the Company Disclosure Schedule), or (vi) which would prohibit or delay
the consummation of any of the transactions contemplated by this Agreement or
the Company Option Agreement. Company has previously made available to Parent
complete and accurate copies of all Company Contracts (as defined below). Each
contract, arrangement, commitment or understanding of the type described in this
Section 3.14,
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whether or not set forth in Section 3.14 of the Company Disclosure Schedule, is
referred to herein as a "Company Contract", and neither Company nor any of its
Subsidiaries knows of, or has received notice of, any violation of the above by
any of the other parties thereto. All contracts, agreements, arrangements or
understandings of any kind between any affiliate of Company (other than any
wholly-owned Subsidiary of Company), on the one hand, and Company or any
Subsidiary of Company, on the other hand, are on terms no less favorable to
Company or to such Subsidiary of Company than would be obtained with an
unaffiliated third party on an arm's-length basis.
3.15 Agreements with Regulatory Agencies. Except as set forth
in Section 3.15 of the Company Disclosure Schedule, neither Company nor any of
its Subsidiaries is subject to any cease-and-desist or other order issued by, or
is a party to any written agreement, consent agreement or memorandum of
understanding with, or is a party to any commitment letter or similar
undertaking to, or is subject to any order or directive issued by, or is a
recipient of any supervisory letter from or has adopted any board resolutions at
the request of, any Regulatory Agency or other Governmental Entity that
restricts the conduct of its business or that in any manner relates to its
capital adequacy, its credit policies, its management or its business (each,
whether or not set forth in the Company Disclosure Schedule, a "Company
Regulatory Agreement"), nor has Company or any of its Subsidiaries been advised
since January 1, 1997 by any Regulatory Agency or other Governmental Entity that
it is considering issuing or requesting any such Company Regulatory Agreement.
3.16 Investment Securities. Each of Company and its
Subsidiaries has good and marketable title to all securities held by it (except
securities sold under repurchase agreements or held in any fiduciary or agency
capacity), free and clear of any Lien, except to the extent such securities are
pledged in the ordinary course of business consistent with prudent business
practices to secure obligations of Company or any of its Subsidiaries. Such
securities are valued on the books of Company in accordance with GAAP.
3.17 Interest Rate Risk Management Instruments. Any interest
rate swaps, caps, floors and option agreements and other interest rate risk
management arrangements, whether entered into for the account of Company or one
of its Subsidiaries or entered into by Company or one of its Subsidiaries for
the account of a customer of Company or one of its Subsidiaries, were entered
into in the ordinary course of business and, to Company's knowledge, in
accordance with prudent business practice and applicable rules, regulations and
policies of any Regulatory Authority and with counterparties reasonably believed
by Company to be financially responsible at the time and are legal, valid and
binding obligations of Company or one of its Subsidiaries and of the other
parties thereto enforceable in accordance with their terms (except as may be
limited by bankruptcy, insolvency, moratorium, reorganization or similar laws
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affecting the rights of creditors generally and the availability of equitable
remedies), and are in full force and effect. Company and each of its
Subsidiaries have duly performed all of their obligations thereunder to the
extent that such obligations to perform have accrued, and, to Company's
knowledge, there are no breaches, violations or defaults or allegations or
assertions of such by any party thereunder.
3.18 Undisclosed Liabilities. Except for (i) 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 three-month period
ended June 30, 1999, as filed with the SEC, (ii) liabilities disclosed in
Section 3.18 of the Company Disclosure Schedule, and (iii) liabilities incurred
since June 30, 1999 in the ordinary course of business consistent with past
practice, at June 30, 1999, neither Company nor any of its Subsidiaries had, and
since such date none of them has incurred, any 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).
3.19 Environmental Liability. There are no legal,
administrative, arbitral or other proceedings, claims, actions, causes of
action, private environmental investigations or remediation activities or
governmental investigations of any nature seeking to impose, or that could
reasonably result in the imposition, on Company or any of its Subsidiaries of
any liability or obligation arising under common law or under any local, state
or federal environmental statute, regulation or ordinance including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended ("CERCLA"), pending or threatened against Company or any
of its Subsidiaries. To the knowledge of Company, there is no reasonable basis
for any such proceeding, claim, action or governmental investigation that would
impose any liability or obligation.
3.20 Information Supplied. None of the information supplied or
to be supplied by Company for inclusion or incorporation by reference in the
Offer Documents or the Schedule 14D-9 will, at the time such documents are filed
with the SEC or distributed to Company's stockholders, or at the consummation of
the Offer, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The Proxy Statement to be sent to the stockholders of Company in
connection with the Company Stockholders Meeting, will not, at the date it is
first mailed to Company's stockholders or at the time of the Company
Stockholders Meeting, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading. The Schedule 14D-9 and the Proxy Statement will comply as
to form in all
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respects with the requirements of the Exchange Act and the rules and regulations
of the SEC thereunder, except that no representation is made by Company with
respect to statements made or incorporated by reference therein based on
information supplied by Parent or Sub for inclusion or incorporation by
reference in such documents. Company shall promptly inform Parent of the
discovery of any information which should be set forth in a corrected Schedule
14D-9 or a supplement to the Offer Documents or the Proxy Statement.
3.21 State Takeover Laws. The Board of Directors of Company,
at a meeting duly called and held, has unanimously (the "Company Board
Recommendation") (i) determined that this Agreement and the transactions
contemplated hereby, including the Offer and the Merger, are advisable and fair
to and in the best interests of the holders of shares of Company Common Stock,
(ii) duly approved and adopted this Agreement and the Company Option Agreement
and approved the transactions contemplated hereby and thereby, including the
Merger and the Offer, and approved the execution and performance of the Support
Agreement, in each case prior to the execution of such agreement (such approvals
being sufficient to render the restrictions of Section 203 of the DGCL
inapplicable to this Agreement, the Offer, the Merger, the Company Option
Agreement and the Support Agreement and the other transactions contemplated
hereby and thereby) and (iii) resolved to recommend that the holders of shares
of Company Common Stock accept the Offer, tender their shares of Company Common
Stock pursuant thereto and vote to approve and adopt this Agreement.
3.22 Insurance. Company and its Subsidiaries maintain
insurance policies and performance bonds on their respective properties and
assets, and with respect to their employees and operations, with reputable
insurance carriers, and such insurance policies provide full and adequate
coverage for all normal risks incident to the business of Company and its
Subsidiaries and their respective properties and assets and are in character and
amount at least equivalent to that carried by persons engaged in similar
businesses and subject to the same or similar perils or hazards. Company and its
Subsidiaries are not in default under any of their insurance policies and have
paid all premiums owed thereunder, and no claims for coverage thereunder have
been denied.
3.23 Year 2000 Compliance. Except as disclosed in Section 3.23
of the Company Disclosure Schedule, all computer hardware, software, databases,
systems and other computer equipment (collectively, "Software") owned, held,
and/or used by Company or any Company Subsidiary can be used prior to, during
and after the calendar year 2000 A.D., and will operate during each such time
period, either on a stand-alone basis, or by interacting or interoperating with
third-party Software without error relating to the processing, calculating,
comparing, sequencing or other use of date data (the foregoing ability, "Year
2000 Compliant").
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3.24 Intellectual Property. Company and its Subsidiaries own
or have a valid license to use all trademarks, trade names, service marks,
copyrights and other intellectual property (collectively, "Intellectual
Property") used in the conduct of their business. Except as set forth in Section
3.24 of the Company Disclosure Schedule, neither Company nor any of its
Subsidiaries is bound by or subject to any license or other agreement with
respect to any such Intellectual Property (including, without limitation, the
rights to the name "Xxxxxxxxx & Xxxxx" and any variations thereof). Neither
Company nor any of its Subsidiaries has received any notice or other
communication alleging that its usage of such Intellectual Property violates the
intellectual property rights of any other person.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PARENT AND SUB
Parent and, with respect to Sections 4.1 and 4.2, Sub hereby
represent and warrant to Company that, except for any exceptions to the
following as would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect on Parent:
4.1 Corporate Organization. Each of Parent and Sub is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. Parent is duly registered as a bank holding company
under the BHCA. Each of Parent and Sub has all requisite corporate power and
authority to own or lease all of its properties and assets and to carry on its
business as it is now being conducted, and is duly licensed or qualified to do
business and in good standing in each jurisdiction in which the nature of the
business conducted by it or the character or location of the properties and
assets owned or leased by it makes such licensing or qualification necessary.
4.2 Authority; No Violation. (a) Each of Parent and Sub has
full corporate power and authority to execute and deliver this Agreement and the
Company Option Agreement and to consummate the transactions contemplated hereby
and thereby. The execution and delivery of this Agreement and the Company Option
Agreement by Parent and Sub and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized by the
Board of Directors of each of Parent and Sub and by Parent in its capacity as
sole stockholder of Sub. No other corporate proceedings on the part of Parent or
Sub and no other votes or consents of any holders of Parent securities are
necessary on the part of Parent or Sub to approve this Agreement and the Company
Option Agreement and to consummate the transactions contemplated hereby and
thereby. This Agreement and the Company Option
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Agreement have been duly and validly executed and delivered by each of Parent
and Sub and (assuming due authorization, execution and delivery by Company)
constitute valid and binding obligations of Parent and Sub, enforceable against
each of them in accordance with their respective terms, subject to the effects
of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, and
general equitable principles (whether considered in a proceeding in equity or at
law).
(b) Neither the execution and delivery of this Agreement or
the Company Option Agreement by Parent or Sub nor the consummation by Parent or
Sub of the transactions contemplated hereby or thereby, nor compliance by Parent
or Sub with any of the terms or provisions hereof or thereof, will (i) violate
any provision of the Certificate of Incorporation or Bylaws of Parent or Sub, as
applicable, or (ii) assuming that the consents and approvals referred to in
Section 4.3 are duly obtained, violate any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or injunction applicable to Parent or
any of its material Subsidiaries or any of their respective properties or
assets, or violate, conflict with, result in a breach of any provision of or the
loss of any benefit under, constitute a default (or an event which, with notice
or lapse of time, or both, would constitute a default) under, result in the
termination of or a right of termination or cancellation under, accelerate the
performance required by or rights or obligations under, or result in the
creation of any Lien upon any of the respective properties or assets of Parent
or any of its material Subsidiaries under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, deed of trust, permit,
concession, franchise, license, lease, agreement, contract, or other instrument
or obligation to which Parent or any of its material Subsidiaries is a party, or
by which they or any of their respective properties, assets or business
activities may be bound or affected.
4.3 Consents and Approvals. Except for (i) the requisite
filings with, notices to and approval of the Federal Reserve Board under the
BHCA, (ii) the Additional Regulatory Approvals, (iii) the filing with the SEC of
the Proxy Statement, (iv) the filing with the SEC of the Offer Documents and the
Schedule 14D-9, (v) the filing of the Certificate of Merger with the Secretary
of State of the State of Delaware pursuant to the DGCL, (vi) any consents,
authorizations, approvals, filings or exemptions in connection with compliance
with the applicable provisions of federal, state and foreign laws relating to
the regulation of broker-dealers and futures commission merchants and any
applicable SRO, and the rules of the NYSE and the Pacific Exchange, (vii) the
expiration of any applicable waiting period under the HSR Act, (viii) the
consents, approvals and notices required under the 1940 Act and the Advisers
Act, (ix) the Company Stockholder Approval, and (x) the filing with the SEC of
such reports under the Exchange Act as may be required in connection with the
execution and delivery of this Agreement and the Company Option Agreement and
the transactions
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contemplated by this Agreement and the Company Option Agreement, no consents or
approvals of or filings or registrations with any Governmental Entity, or of or
with any third party, are necessary in connection with the execution and
delivery by Parent of this Agreement and the Company Option Agreement and the
consummation by Parent of the transactions contemplated by this Agreement and
the Company Option Agreement. Parent has no reason to believe that any Requisite
Regulatory Approvals will not be obtained on a timely basis.
4.4 Broker's Fees. Neither Parent nor any Parent Subsidiary
nor any of their respective officers or directors has employed any broker or
finder or incurred any liability for any broker's fees, commissions or finder's
fees in connection with the transactions contemplated by this Agreement or the
Company Option Agreement.
4.5 Funds. Either Parent or Sub has, or will have prior to the
consummation of the Offer, sufficient funds available to satisfy the obligation
to pay for shares of Company Common Stock in the Offer and to pay the Merger
Consideration in the Merger.
4.6 Information Supplied. None of the information supplied or
to be supplied by Parent for inclusion or incorporation by reference in the
Offer Documents or the Schedule 14D-9 will, at the time such documents are filed
with the SEC or distributed to Company's stockholders, or at the consummation of
the Offer, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The Proxy Statement to be sent to the stockholders of Company in
connection with the Company Stockholders Meeting, will not, at the date it is
first mailed to Company's stockholders or at the time of the Company
Stockholders Meeting, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading. The Offer Documents will comply as to form in all respects
with the requirements of the Exchange Act and the rules and regulations of the
SEC thereunder, except that no representation is made by Parent with respect to
statements made or incorporated by reference therein based on information
supplied by Company for inclusion or incorporation by reference in such
documents. Parent shall promptly inform Company of the discovery by it or Sub of
any information which should be set forth in a corrected Schedule 14D-9 or a
supplement to the Offer Documents or the Proxy Statement.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
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5.1 Conduct of Company Businesses Prior to the Effective Time.
During the period from the date of this Agreement to the Effective Time, except
as expressly required or permitted by this Agreement or the Company Option
Agreement, Company shall, and shall cause each of its Subsidiaries to, (a)
conduct its business in the usual, regular and ordinary course consistent with
past practice and in compliance in all material respects with applicable laws,
(b) use reasonable best efforts to maintain and preserve intact its business
organization, employees and business relationships and retain the services of
its key officers and key employees and (c) take no action which would adversely
affect or delay in any material respect the ability of either Parent or Company
to obtain any necessary approvals of any Regulatory Agency or other Governmental
Entity required for the transactions contemplated hereby or to perform its
covenants and agreements under this Agreement or the Company Option Agreement.
5.2 Forbearances of Company. During the period from the date
of this Agreement to the Effective Time, except as set forth in Section 5.2 of
the Company Disclosure Schedule and except as expressly required or permitted by
this Agreement or the Company Option Agreement, Company shall not, and shall not
permit any of its Subsidiaries to, without the prior written consent of Parent:
(a) (i) incur any indebtedness for borrowed money (other than
(A) short-term indebtedness incurred (x) to refinance existing
short-term indebtedness, (y) pursuant to lines of credit and credit
facilities existing on the date of this Agreement, or (z) otherwise in
the ordinary course of business consistent with past practice, and (B)
indebtedness of Company or any of its Subsidiaries owed to Company or
any of its other wholly-owned Subsidiaries), assume, guarantee, endorse
or otherwise as an accommodation become responsible for the obligations
of any other individual, corporation or other entity, or make any loan,
advance or capital contribution (other than to Company or any of its
wholly-owned Subsidiaries and other than in the ordinary course of
Company's investment banking business consistent with past practice) or
(ii) make or commit to make any capital expenditures in excess of
$2,500,000 for any single or related group of capital expenditures;
(b) (i) adjust, split, combine or reclassify any of its
capital stock; (ii) make, declare, set aside or pay any dividend
(except for dividends paid in the ordinary course of business by any
wholly-owned Subsidiaries of Company to Company or to any other of its
wholly-owned Subsidiaries) or make any other distribution on, or
directly or indirectly (other than in connection with the surrender of
Company Common Stock as full or partial payment of the exercise price
or withholding tax in connection with the exercise of Company Options
under the Company Stock Plans) redeem, purchase or otherwise acquire,
any shares of its capital stock or any securities or obligations
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convertible into or exchangeable for any shares of its capital stock;
(iii) grant any individual, corporation or other entity any right to
acquire any shares of its capital stock or any stock appreciation or
similar rights except as permitted by Section 5.2(i); (iv) issue or
authorize the issuance of, deliver, sell, transfer, pledge or otherwise
encumber any additional shares of capital stock or any securities or
obligations convertible into or exchangeable for any shares of its
capital stock, other than the issuance of Company Common Stock pursuant
to the exercise of stock options disclosed in Section 3.2 of the
Company Disclosure Schedule as being outstanding on the date of this
Agreement and granted pursuant to the Company Stock Plans; or (v) enter
into any agreement, understanding or arrangement with respect to the
sale or voting of its capital stock;
(c) sell, transfer, mortgage, encumber or otherwise dispose of
any material portion of its properties or assets, including, without
limitation, capital stock in any Subsidiaries of Company, to any
individual, corporation or other entity other than a direct or indirect
wholly-owned Subsidiary, or cancel, release or assign any indebtedness
to any such person or any claims held by any such person, except in the
ordinary course of business consistent with past practice;
(d) except for transactions in connection with underwriting
activities in the ordinary course of business consistent with past
practice and portfolio investments by Investment Subsidiaries in
accordance with their applicable investment guidelines, make any
material investment either by purchase of stock or securities,
contributions to capital, property transfers, or purchase of any
property or assets of any other individual, corporation, limited
partnership or other entity, other than an investment in a wholly-owned
Subsidiary of Company;
(e) acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial portion of the stock or assets of,
or by any other manner, any business or any corporation, partnership,
joint venture, association or other business organization or division
thereof;
(f) acquire or agree to acquire voting or non-voting equity
securities or similar ownership interests in any person (other than a
Subsidiary) in an amount (when combined with any voting or non-voting
equity securities or similar interests already owned by Company or its
Subsidiaries) exceeding 4.9% of any class of voting securities or
interests or 24.9% of the total equity of any such person, other than
securities or other similar ownership interests acquired in the
ordinary course of Company's or its Subsidiaries' underwriting, dealing
or market-making business consistent with past practice;
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(g) commence, undertake or engage in any new line of business;
(h) enter into or terminate any material lease, contract or
agreement, or make any change in any of its existing material leases,
contracts or agreements;
(i) (i) enter into, amend, modify or renew any employment,
consulting, severance or similar agreements or arrangements with any
director, officer, consultant, independent contractor, or employee of
or with respect to Company or any of its Subsidiaries, or grant any
salary, wage or bonus increase, except, (1) for normal individual
increases in compensation to employees in the ordinary course of
business consistent with past practice (subject, in the case of
executive officers of Company and others whose combined annual salary
and bonus exceed $500,000, to prior consultation with Parent), (2) for
other changes that are required by applicable law, (3) to satisfy
contractual obligations existing as of the date of this Agreement, (4)
for employment arrangements for, or grants of awards to, newly hired
employees in the ordinary course of business consistent with past or
previously announced practice (subject, in the case of executive
officers of Company and others whose combined annual salary and target
bonus would exceed $500,000, to prior consultation with Parent), or (5)
for payment of bonuses by Company to its employees in respect of its
1999 fiscal year, or (ii) enter into, establish, adopt or amend (except
(1) as may be required by applicable law, (2) to satisfy contractual
obligations existing as of the date of this Agreement or (3) as
otherwise provided by this Agreement) any pension, retirement, stock
option, stock purchase, savings, profit sharing, deferred compensation,
consulting, bonus, group insurance or other employee benefit, incentive
or welfare contract, plan or arrangement, or any trust agreement (or
similar arrangement) related thereto in respect of any director,
officer, consultant, independent contractor, or employee of or with
respect to Company or any of its Subsidiaries, or, except as otherwise
provided by this Agreement, take any action to accelerate the vesting,
exercisability, payment or funding of Company Options, restricted stock
or other compensation or benefits;
(j) pay, discharge or satisfy any material claims, liabilities
or obligations (absolute, accrued, asserted or unasserted, contingent
or otherwise), except for the payment, discharge or satisfaction of
current liabilities or obligations, in accordance with their terms, in
the ordinary course of business consistent with past practice, or
waive, release, grant, or transfer any rights of material value or
modify or change any existing license, lease, contract or other
document in any manner that would be material to Company and its
Subsidiaries;
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(k) settle or compromise 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
$250,000 for any single litigation matter or related group of
litigation matters (provided such settlement or compromise agreements
do not involve any non-monetary obligations on the part of Company or
any of its Subsidiaries other than, in the case of litigation not
involving any Governmental Entity or other Regulatory Agency,
immaterial non-monetary obligations);
(l) change any accounting principle used by it, except for
such changes as may be required to be implemented following the date of
this Agreement pursuant to generally accepted accounting principles or
rules and regulations of the SEC promulgated following the date hereof,
as concurred in by Company's independent auditors;
(m) change any Tax election, change any annual Tax accounting
period, change any method of Tax accounting in any material respect,
file any material amended Tax return, enter into any closing agreement
relating to any material Tax, settle any material Tax claim or
assessment, surrender any right to claim a material Tax refund or
consent to any extension or waiver of the limitations period applicable
to any material Tax claim or assessment;
(n) adopt or implement any amendment to its charter or bylaws
or other comparable organizational documents, or enter into any plan of
consolidation, merger or reorganization with any person other than a
wholly-owned Subsidiary of Company;
(o) materially restructure or materially change its investment
securities portfolio, its hedging strategy or its gap position, through
purchases, sales or otherwise, or the manner in which the portfolio is
classified or reported or materially alter the credit or risk
concentrations associated with its underwriting, market-making and
other investment banking businesses;
(p) adopt a plan of complete or partial liquidation or
resolutions providing for or authorizing such a liquidation or a
dissolution, restructuring, recapitalization or reorganization;
(q) take any action that is intended or would reasonably be
expected to result in any of its representations and warranties set
forth in this Agreement being or becoming untrue in any material
respect, or in any of the conditions to the Merger set forth in Article
VII or to the Offer set forth in Annex I not being satisfied or in a
violation of any
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provision of this Agreement, except, in each case, as may be required
by applicable law; or
(r) agree to, or make any commitment to, take, or authorize,
any of the actions prohibited by this Section 5.2.
5.3 Transition. In order to facilitate an orderly transition
of the management of the business of Company and its Subsidiaries to Parent and
in order to facilitate the integration of the operations of Company and Parent
and their Subsidiaries and to permit the coordination of their related
operations on a timely basis, and in an effort to accelerate to the earliest
time possible following the Effective Time the realization of synergies,
operating efficiencies and other benefits expected to be realized by Parent and
Company as a result of the Merger, Company shall and shall cause its
Subsidiaries to consult with Parent on all strategic and operational matters to
the extent such consultation is not in violation of applicable laws, including
laws regarding the exchange of information and other laws regarding competition.
Company shall and shall cause its Subsidiaries to make available to Parent at
the facilities of Company and its Subsidiaries, where determined by Parent to be
appropriate and necessary, office space in order to assist it in observing all
operations and reviewing all matters concerning Company's affairs. Without in
any way limiting the provisions of Section 6.2, Parent, its Subsidiaries,
officers, employees, counsel, financial advisors and other representatives
shall, upon reasonable notice to Company, be entitled to review the operations
and visit the facilities of Company and its Subsidiaries at all times as may be
deemed reasonably necessary by Parent in order to accomplish the foregoing
arrangements. Notwithstanding the foregoing, nothing contained in this Agreement
shall give Parent, directly or indirectly, the right to control or direct
Company's operations prior to the date on which the directors of Company
designated by Parent shall have been elected or appointed to, and shall
constitute a majority of, the Board of Directors of Company (the "Appointment
Date"). Prior to the Appointment Date, each of Company and Parent shall
exercise, consistent with the terms and conditions of this Agreement, complete
control and supervision over its and its Subsidiaries' respective operations.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 Company Stockholders Meeting; Preparation of Proxy
Statement.
(a) If the Company Stockholder Approval is required under the
DGCL to consummate the Merger, (i) Company shall cause a meeting of its
stockholders (the "Company
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Stockholders Meeting") to be duly called and held as soon as practicable after
the date on which shares of Company Common Stock are purchased by Sub pursuant
to the Offer for the purpose of voting on the adoption of this Agreement, and
(ii) Parent and Company shall prepare and file with the SEC the Proxy Statement.
Each of Parent and Company shall use all reasonable efforts to resolve any
comments of the SEC as promptly as practicable after such filing, and Company
shall thereafter mail or deliver the Proxy Statement to its stockholders as
promptly as practicable. The Board of Directors of Company shall (i) include in
the Proxy Statement the Company Board Recommendation and (ii) use its reasonable
best efforts to obtain the necessary vote in favor of the adoption of this
Agreement by its stockholders. The Board of Directors of Company shall not
withdraw, amend, modify or materially qualify in a manner adverse to Parent the
Company Board Recommendation (or announce publicly its intention to do so).
Without limiting the generality of the foregoing, Company agrees that its and
its Board of Directors' obligations under this Section 6.1, and (except as
expressly otherwise provided elsewhere herein) under all other provisions of
this Agreement, shall not be altered by the commencement, public proposal,
public disclosure or communication to Company of any Transaction Proposal (as
defined in Section 6.9), including without limitation a Superior Proposal.
(b) Parent agrees that it will vote, or cause to be voted, at
the Company Stockholders Meeting, all shares of Company Common Stock then owned
by it or Sub in favor of the adoption of this Agreement.
(c) Notwithstanding this Section 6.1, in the event that
Parent, Sub or any other Subsidiary of Parent shall acquire at least 90% of the
outstanding shares of each class of capital stock of Company, the parties hereto
agree to take all necessary and appropriate action to cause the Merger to become
effective as soon as practicable after such acquisition, without a meeting of
stockholders of Company, in accordance with Section 253 of the DGCL.
6.2 Reasonable Best Efforts. (a) Each of Parent and Company
shall, and shall cause their respective Subsidiaries to, use their 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 any of its Subsidiaries with respect to the Offer and the Merger
and, subject to the conditions set forth in Article VII hereof, to consummate
the transactions contemplated by this Agreement.
(b) The parties hereto shall cooperate with each other and use
their reasonable best efforts to as promptly as practicable prepare and file all
necessary documentation, to effect all applications, notices, petitions and
filings, to obtain as promptly as practicable all permits, consents, approvals
and authorizations of all Governmental Entities and any other third parties
which are necessary or advisable to consummate the transactions contemplated by
this
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Agreement (including, without limitation, the Offer and the Merger) or to
prevent the termination of Company's and its Subsidiaries contracts as a result
thereof, to comply fully with the terms and conditions of all such permits,
consents, approvals and authorizations of all such Governmental Entities, to
lift or rescind any injunction or restraining order or other order adversely
affecting the ability of the parties to consummate the transactions contemplated
hereby, and to defend any litigation seeking to enjoin, prevent or delay the
consummation of the transactions contemplated hereby or seek material damages.
Parent and Company shall have the right to review in advance, and, to the extent
practicable, each will consult with the other on, in each case subject to
applicable laws relating to the exchange of information, all the information
relating to Company or Parent, as the case may be, and any of their respective
Subsidiaries, which appear in any filing made with, or written materials
submitted to, any Governmental Entity or any other third party in connection
with the transactions contemplated by this Agreement. In exercising the
foregoing right, each of the parties hereto shall act reasonably and as promptly
as practicable. The parties hereto agree that they will consult with each other
with respect to the obtaining of all permits, consents, approvals and
authorizations of all Governmental Entities and other third parties necessary or
advisable to consummate the transactions contemplated by this Agreement and each
party will keep the other apprised of the status of matters relating to
completion of the transactions contemplated hereby.
(c) Parent and Company shall, upon request, furnish each other
with all information concerning themselves, their Subsidiaries, directors,
officers and stockholders and such other matters as may be reasonably necessary
or advisable in connection with the Offer Documents, the Schedule 14D-9 or the
Proxy Statement or any other statement, filing, notice or application made by or
on behalf of Parent, Company or any of their respective Subsidiaries to any
Governmental Entity in connection with the Offer, the Merger and the other
transactions contemplated by this Agreement.
(d) Parent and Company agree to take the further actions set
forth in Section 6.2(d) of the disclosure schedule of Parent delivered to
Company concurrently herewith (the "Parent Disclosure Schedule").
6.3 Access to Information. (a) Upon reasonable notice and
subject to applicable laws relating to the exchange of information, Company
shall, and shall cause its Subsidiaries to, afford to the officers, employees,
accountants, counsel and other representatives of Parent, complete access,
during normal business hours during the period prior to the Effective Time, to
all its properties, books, contracts, commitments and records and, during such
period, Company shall, and shall cause its Subsidiaries to, make available to
Parent and such other parties (i) a copy of each report, schedule, registration
statement and other document filed or received by it during such period pursuant
to the requirements of federal securities laws or other federal or
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state laws and the rules of SROs relating to broker-dealers (other than reports
or documents which Company is not permitted to disclose under applicable law)
and (ii) all other information concerning its business, properties and personnel
as Parent may reasonably request, in all cases so that Parent may have full
opportunity to make such investigations as it desires of the affairs and assets
of Company. Neither Company nor any of its Subsidiaries shall be required to
provide access to or to disclose information where such access or disclosure
would violate or prejudice the rights of its customers, jeopardize the
attorney-client privilege of the institution in possession or control of such
information or contravene any law, rule, regulation, order, judgment, decree, or
binding agreement entered into prior to the date of this Agreement. The parties
hereto will make appropriate substitute disclosure arrangements under
circumstances in which the restrictions of the preceding sentence apply.
(b) Parent shall hold all information furnished by or on
behalf of Company or any of Company's Subsidiaries or representatives pursuant
to Section 6.3(a) in confidence to the extent required by, and in accordance
with, the provisions of the confidentiality agreement, dated February 8, 1999
between Parent and Company (the "Confidentiality Agreement").
(c) No investigation by Parent or its representatives shall
affect the representations and warranties of Company set forth herein.
6.4 Employee Benefits. (a) From and after the Effective Time
but prior to January 1, 2000, employees of Company and its Subsidiaries who
continue their employment with the Surviving Corporation, Parent or any of their
respective Subsidiaries ("Continued Employees") will be provided employee
benefits which are substantially identical to those currently provided to such
employees under Company's employee welfare benefit plans, and which are
comparable to those provided under Company's defined contribution pension plan.
After December 31, 1999, such employees will be provided employee benefits which
are comparable to those provided by Parent and its Subsidiaries to their
similarly-situated employees; provided, however, that it is understood that
after the Effective Time nothing herein shall interfere with Parent's or the
Surviving Corporation's right to take any action or refrain from taking any
action which Company or any of its Subsidiaries could take or refrain from
taking prior to the Effective Time.
(b) For the purpose of determining eligibility to participate
in any plans Parent and its Subsidiaries make available to Continued Employees,
and determining the vesting of benefits thereunder (but not for the accrual of
benefits under such plans), Parent and its Subsidiaries shall give effect to
years of service with Company or its Subsidiaries, as the case may be, as if
such service had been with Parent or its Subsidiaries. From and after the
Effective Time, Parent and its Subsidiaries will, or will cause the Surviving
Corporation to, (i) cause any
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pre-existing conditions or limitations and eligibility waiting periods under any
group health plans of Parent or its Subsidiaries to be waived with respect to
Continued Employees and their eligible dependents and (ii) give each Continued
Employee credit for the plan year in which the Effective Time occurs towards
applicable deductibles and annual out-of-pocket limits for expenses incurred
prior to the Effective Time.
(c) The payment of certain bonuses to employees of Company and
its Subsidiaries subsequent to the date hereof and the establishment of a
retention pool consisting of restricted shares of Parent Common Stock shall be
in accordance with the provisions set forth in Section 6.4(c) of the Parent
Disclosure Schedule.
6.5 Indemnification; Directors' and Officers' Insurance. (a)
The Certificate of Incorporation and Bylaws of the Surviving Corporation shall
contain, to the extent permitted by law, the provisions with respect to
indemnification set forth in the Certificate of Incorporation and Bylaws of
Company on the date hereof, which provisions shall not be amended, repealed or
otherwise modified for a period of six years after the Effective Time in any
manner that would adversely affect the rights thereunder of the persons who at
any time prior to the Effective Time were entitled to such indemnification under
the Certificate of Incorporation or Bylaws of Company in respect of actions or
omissions occurring at or prior to the Effective Time (including, without
limitation, the transactions contemplated hereby), unless such modification is
required by law; provided, that the Certificate of Incorporation and Bylaws of
the Surviving Corporation shall not be required to contain such provisions if
Parent otherwise provides the same level of indemnification for such individuals
as contained in the Certificate of Incorporation and Bylaws of the Surviving
Corporation.
(b) Parent shall, and shall cause the Surviving Corporation
to, indemnify, defend and hold harmless the present and former officers and
directors of Company or any of Company's Subsidiaries in their capacities as
such (each an "Indemnified Party") after the Effective Time against all losses,
expenses, claims, damages or liabilities arising out of actions or omissions
occurring on or prior to the Effective Time to the fullest extent now provided
in their respective Certificates of Incorporation or Bylaws, and as permitted by
applicable law.
(c) Parent shall use its reasonable best efforts to cause the
persons serving as officers and directors of Company immediately prior to the
Effective Time to be covered for a period of six years from the Effective Time
by the directors' and officers' liability insurance policy maintained by Company
(provided that Parent may substitute therefor policies of at least the same
coverage and amounts containing terms and conditions which are not less
advantageous than such policy) with respect to acts or omissions occurring prior
to the Effective Time which were committed by such officers and directors in
their capacity as such; provided, however, that
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in no event shall Parent be required to expend more than 200% of the current
amount expended by Company (the "Insurance Amount") to maintain or procure
insurance coverage pursuant hereto and further provided, that if Parent is
unable to maintain or obtain the insurance called for by this Section 6.5(c),
Parent shall use its reasonable best efforts to obtain as much comparable
insurance as available for the Insurance Amount.
(d) In the event Parent, the Surviving Corporation or any of
their respective successors or assigns (i) consolidates with or merges into any
other person and shall not be the continuing or surviving corporation or entity
of such consolidation or merger, or (ii) transfers or conveys all or
substantially all of its properties and assets to any person, then, and in each
such case, to the extent necessary, proper provision shall be made so that the
successors and assigns of Parent or the Surviving Corporation, as the case may
be, assume the obligations set forth in this section.
(e) The provisions of this Section 6.5 are intended to be for
the benefit of, and shall be enforceable by, each Indemnified Party and his or
her heirs and representatives.
6.6 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 (including, without limitation, any other merger
between a Subsidiary of Company and a Subsidiary of Parent) or to vest the
Surviving Corporation with full title to all properties, assets, rights,
approvals, immunities and franchises of any of the parties to the Merger, the
proper officers and directors of each party to this Agreement and their
respective Subsidiaries shall take all such necessary action as may be
reasonably requested by Parent.
6.7 Advice of Changes. Parent and Company shall promptly
advise the other party of any change or event having a Material Adverse Effect
on it or which it believes would or would be reasonably likely to cause or
constitute a material breach of any of its representations or warranties or
covenants contained herein; provided, however, that the delivery of any notice
pursuant to this Section 6.7 shall not limit or otherwise affect the remedies
available hereunder to any party receiving such notice.
6.8 [Reserved]
6.9 No Solicitation. Neither Company nor any of its
Subsidiaries shall (whether directly or indirectly through advisors, agents or
other intermediaries), nor shall Company or any of its Subsidiaries authorize or
permit any of its or their officers, directors, agents, representatives or
advisors to, (a) solicit, initiate, encourage (including by way of furnishing
information) or take any action knowingly to facilitate the submission of any
inquiries, proposals
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or offers (whether or not in writing) from any person other than Parent relating
to, (i) any acquisition or purchase of 10% or more of the consolidated assets of
Company and its Subsidiaries (including through the formation of a joint
venture) or of 10% or more of any class of equity securities of Company or any
of its Subsidiaries, (ii) any tender offer or exchange offer (including a
self-tender offer) that if consummated would result in any person beneficially
owning 10% or more of any class of equity securities of Company or any of its
Subsidiaries, (iii) any merger, consolidation, business combination,
reorganization, recapitalization, liquidation, dissolution or similar
transaction involving Company or any of its Subsidiaries, or (iv) any other
transaction the consummation of which would or would reasonably be expected to
impede, interfere with, prevent or materially delay the Offer or the Merger (any
of the foregoing, a "Transaction Proposal"), or agree to, approve or endorse any
Transaction Proposal, or (b) enter into or participate in any discussions or
negotiations regarding any of the foregoing, or otherwise cooperate in any way
with, or knowingly assist or participate in, facilitate or encourage, any effort
or attempt by any other person to do or seek any of the foregoing; provided,
that Company may, in response and with respect to a bona fide unsolicited
written proposal from a third party submitted after the date of this Agreement
which constitutes a Superior Proposal, engage in the activities specified in
clause (b), including furnishing information to such third party, if (i) in the
opinion of Company's outside counsel, failure to take such action in response to
such a proposal would constitute a breach by the Board of Directors of Company
of its fiduciary duties under applicable law, (ii) Company has received from
such third party an executed confidentiality agreement with terms not materially
less favorable to Company than those contained in the Confidentiality Agreement,
and (iii) Company has fully and completely complied with this Section 6.9. If
Company receives a Transaction Proposal, or a request for nonpublic information
relating to Company or any of its Subsidiaries or for access to the properties,
books or records of Company or any of its Subsidiaries by any Person who is
considering making or has made a Transaction Proposal, it shall immediately
inform Parent orally and shall as promptly as practicable (and in any event
within one day) inform Parent in writing of the terms and conditions of such
proposal and the identity of the person making it, forwarding a copy of any
written communications relating thereto. Company will keep Parent fully informed
on as prompt a basis as is practicable of the status and details of any such
Transaction Proposal or request and any related discussions or negotiations,
including by forwarding copies of any material written communications relating
thereto. Company will immediately cease and cause its Subsidiaries, and its and
their officers, directors, agents, representatives and advisors, to cease any
and all existing activities, discussions or negotiations with any parties
conducted heretofore with respect to any of the foregoing, and shall use its
reasonable best efforts to cause any such parties in possession of confidential
information about Company or its Subsidiaries that was furnished by or on behalf
of Company or its Subsidiaries in connection with any of the foregoing to return
or destroy all such information in the possession of any such party or in the
possession of any agent or advisor of any such party. Company agrees not to
release any third party from,
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or waive any provisions of, any confidentiality or standstill agreement to which
it or its Subsidiaries is a party. Company shall ensure that the officers,
directors and employees of Company and its Subsidiaries and any investment
banker or other advisor or representative retained by such party are aware of
and instructed to comply with the restrictions described in this Section 6.9.
Nothing in this Section 6.9 shall prohibit Company or its Board of Directors
from taking and disclosing to Company's stockholders a position with respect to
a Transaction Proposal by a third party to the extent required under the
Exchange Act, including Rules 14e-2 and 14d-9 thereunder, or from making such
disclosure to Company's stockholders which, in the opinion of Company's outside
counsel, is required under applicable law; provided, that nothing in this
sentence shall affect the obligations of Company and its Board of Directors
under any other provision of this Agreement. For purposes of this Section 6.9
and the definition of "Transaction Proposal" as used elsewhere in this
Agreement, the term "Subsidiaries" shall not include any Investment Subsidiaries
which are not, either individually or in the aggregate, material to Company and
its Subsidiaries taken as a whole.
6.10 Publicity. Company, on the one hand, and Parent and Sub,
on the other hand, will consult with each other before holding any press
conferences, analyst calls or other meetings or discussions and before issuing
any press releases or other public announcements or statements regarding the
transactions contemplated hereby and by the Company Option Agreement and Support
Agreement. The parties will provide each other the opportunity to review and
comment upon any press release or other public announcement or statement with
respect to the transactions contemplated by this Agreement, the Company Option
Agreement and the Support Agreement, including the Offer and the Merger, and
shall not issue any such press release or other public announcement or statement
prior to such consultation, except as may be required by applicable law, court
process or by obligations pursuant to any listing agreement with any national
securities exchange. The parties agree that the initial press release or
releases to be issued with respect to the transactions contemplated by this
Agreement shall be mutually agreed upon prior to the issuance thereof. In
addition, Company shall, and shall cause its Subsidiaries to, (a) consult with
Parent regarding communications with customers, stockholders and employees
relating to the transactions contemplated hereby, (b) provide Parent with
stockholder lists of Company, and (c) allow and facilitate Parent contact with
stockholders of Company.
6.11 Stockholder Litigation. The parties to this Agreement
shall cooperate and consult with one another, to the fullest extent possible, in
connection with any stockholder litigation against any of them or any of their
respective directors or officers with respect to the transactions contemplated
by this Agreement. In furtherance of and without in any way limiting the
foregoing, each of the parties shall use its respective reasonable best efforts
to prevail in such litigation so as to permit the consummation of the
transactions contemplated by this Agreement
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in the manner contemplated by this Agreement. Notwithstanding the foregoing,
Company agrees that it will not compromise or settle any litigation commenced
against it or its directors or officers relating to this Agreement, the Company
Option Agreement or the Support Agreement or the transactions contemplated
hereby or thereby (including the Offer and the Merger) without Parent's prior
written consent, which shall not be unreasonably withheld.
6.12 State Takeover Statutes. Each party will take all steps
necessary to exempt (or continue the exemption of) the Offer, the Merger and the
other transactions contemplated hereby and by the Company Option Agreement and
the Support Agreement from, and challenge the validity of, any applicable state
takeover law (including Section 203 of the DGCL), as now or hereafter in effect.
6.13 Section 15 of the Investment Company Act. (a) Unless
Parent reasonably concludes that the existing investment advisory agreements
will not terminate as a result of the transactions contemplated hereby, Company
will use its reasonable best efforts to obtain, as promptly as practicable after
the date of this Agreement, the approval of the boards of directors and the
stockholders of each registered investment company for which a Subsidiary of
Company serves as adviser, sub-adviser or manager (collectively, the "Funds"),
pursuant to the provisions of Section 15 of the 1940 Act applicable thereto, of
a new investment advisory agreement for each such Fund identical in all respects
(except for the date thereof) to that in effect immediately prior to the date on
which the Offer is consummated.
(b) Company shall use its reasonable best efforts to assure,
prior to the date on which the Offer is consummated, the satisfaction of the
conditions set forth in Section 15(f) of the 1940 Act with respect to each Fund.
(c) Parent agrees to use its reasonable best efforts to assure
compliance with the conditions of Section 15(f) of the 1940 Act with respect to
the Funds from and after the Appointment Date. Without limiting the foregoing,
Parent agrees that (i) for a period of not less than three years after the
Appointment Date, Parent shall assure that no more than 25% of the members of
the Board of Directors of any Fund shall be "interested persons" (as defined in
the 0000 Xxx) of Parent (or such other entity which acts as adviser or
sub-adviser to the Funds) or of the predecessor investment adviser of the Funds
and (ii) neither Parent nor any affiliate (including any parent company of
Parent) of Parent (or any entity which will act as adviser to the Funds), for a
period of not less than two years after the Appointment Date, shall have any
express or implied understanding, arrangement or intention to impose an unfair
burden on any of the Funds as a result of the transactions contemplated hereby.
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ARTICLE VII
CONDITIONS PRECEDENT
7.1 Conditions to Each Party's Obligation To Effect the
Merger. The respective obligation of each party to effect the Merger shall be
subject to the satisfaction at or prior to the Effective Time of the following
conditions:
(a) Consummation of the Offer. Sub shall have purchased shares
of Company Common Stock pursuant to the Offer.
(b) Company Stockholder Approval. If required under the DGCL,
the Company Stockholder Approval shall have been obtained.
(c) No Injunctions or Restraints; Illegality. No order,
injunction or decree issued by any court or agency of competent
jurisdiction or other legal restraint or prohibition (an "Injunction")
preventing the consummation of the Merger shall be in effect. No
statute, rule, regulation, order, injunction or decree shall have been
enacted, entered, promulgated or enforced by any Governmental Entity
which prohibits, materially restricts or makes illegal consummation of
the Merger.
ARTICLE VIII
TERMINATION AND AMENDMENT
8.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after approval by the
stockholders of Company of the matters presented in connection with the Merger:
(a) by mutual consent of Parent and Company;
(b) by either Parent or the Board of Directors of Company if
any Governmental Entity of competent jurisdiction which must grant a
Requisite Regulatory Approval has denied approval of the Offer or the
Merger and such denial has become final and nonappealable or any
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 transactions
contemplated by this Agreement, and such order, decree, ruling or other
action shall have become final and nonappealable; provided,
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however, that the right to terminate this Agreement under this Section
8.1(b) shall not be available to any party whose failure to comply with
Section 6.2 or any other provision of this Agreement has been the cause
of such action;
(c) (i) by the Board of Directors of Company, if, prior to the
purchase of any shares of Company Common Stock by Sub pursuant to the
Offer, Parent breaches any of its representations, covenants or
agreements contained in this Agreement (A) such that any of the
conditions set forth in Annex I would not be satisfied, and (B) such
breach either cannot be cured or is not cured prior to the earlier of
(x) 10 days after Company has furnished Parent with written notice of
such breach and (y) two business days prior to the date on which the
Offer is then scheduled to expire; or (ii) by Parent, if, prior to the
purchase of any shares of Company Common Stock by Sub pursuant to the
Offer, Company breaches any of its representations, covenants or
agreements contained in this Agreement (A) such that any of the
conditions set forth in Annex I would not be satisfied, and (B) such
breach either cannot be cured or is not cured prior to the earlier of
(x) 10 days after Parent has furnished Company with written notice of
such breach and (y) two business days prior to the date on which the
Offer is then scheduled to expire;
(d) by Parent, if, prior to the purchase of any shares of
Company Common Stock by Sub pursuant to the Offer, Company or its Board
of Directors shall have (i) withdrawn, modified, amended or materially
qualified in any respect adverse to Parent the Company Board
Recommendation, (ii) failed to mail the Schedule 14D-9 as required by
Section 1.2(b) to its stockholders, or failed to include in the
Schedule 14D-9 the Company Board Recommendation, (iii) resolved to do
any of the foregoing or (iv) in response to the commencement of any
tender offer or exchange offer for 10% or more of the outstanding
shares of Company Common Stock, or the public announcement or
disclosure of any other Transaction Proposal, or the commencement of
negotiations or discussions with any third party regarding a
Transaction Proposal in accordance with the terms of Section 6.9,
failed to, fully and unconditionally, publicly recommend rejection of
such tender or exchange offer or reject such other Transaction Proposal
(and publicly announce such rejection, in the case of Transaction
Proposals which have been publicly disclosed or become publicly known)
within ten business days of such commencement, announcement or
disclosure; or
(e) by either Parent or the Board of Directors of Company if
(i) the Offer expires or terminates in accordance with the terms hereof
without the purchase of any shares of Company Common Stock thereunder
or (ii) Sub shall not have purchased Shares under the Offer prior to
March 31, 2000; provided, however, that the right to terminate this
Agreement under this Section 8.1(e) shall not be available to any party
to
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the extent that such party's failure to comply with Section 6.2 or any
other provision of this Agreement has resulted in the failure of any of
the conditions set forth on Annex I hereto.
8.2 Effect of Termination. (a) In the event of termination of
this Agreement by either Parent or Company as provided in Section 8.1, written
notice thereof shall forthwith be given to the other party or parties specifying
the provision hereof pursuant to which such termination is made, and this
Agreement shall forthwith become void and have no effect, and none of Parent,
Company, any of their respective Subsidiaries or any of the officers or
directors of any of them shall have any liability of any nature whatsoever
hereunder, or in connection with the transactions contemplated hereby, except
that (i) Section 6.3(b), this Section 8.2 and Article IX shall survive any
termination of this Agreement, (ii) notwithstanding anything to the contrary
contained in this Agreement, neither Parent nor Company shall be relieved or
released from any liabilities or damages arising out of its willful breach of
any provision of this Agreement, and (iii) Company shall pay to Parent the
Termination Fee (as defined below), if applicable, in accordance with this
Section 8.2.
(b) In the event that this Agreement is terminated by Parent
pursuant to clause (d) of Section 8.1, Company shall pay to Parent by wire
transfer of immediately available funds to an account designated by Parent on
the next business day following such termination an amount equal to $57.5
million (the "Termination Fee").
(c) If:
(i) a Transaction Proposal is commenced, publicly disclosed,
publicly proposed or otherwise communicated or made known in writing to
Company at any time on or after the date of this Agreement and prior to
the termination hereof, and this Agreement is terminated (x) pursuant
to clause (c)(ii) of Section 8.1, if the breach which gave rise to such
termination was intentional, or (y) pursuant to clause (e) of Section
8.1 if the Minimum Condition was not met at the time of such
termination, then, in the case of the foregoing clause (x) only,
Company shall upon such termination pay to Parent an amount equal to
33.3% of the Termination Fee; and
(ii) within 18 months of the date of such termination, Company
enters into a definitive agreement with respect to, or consummates, any
Transaction Proposal, then Company shall pay to Parent an amount equal
to (x) the remaining 66.7% of the Termination Fee, in the circumstances
described in clause (x) of the preceding paragraph (c)(i), or (y) the
entire Termination Fee, in the circumstances described in clause (y) of
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the preceding paragraph (c)(i), in each case concurrently with the
earlier of the execution of such definitive agreement or the
consummation of such Transaction Proposal.
(d) If Company fails to pay Parent any amounts due to Parent
under this Section 8.2 within the time periods specified herein, Company shall
pay all costs and expenses (including legal fees and expenses) incurred by
Parent 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 publicly announced prime or base lending rate of The
Chase Manhattan Bank from the date such amounts were required to be paid until
the date actually received by Parent.
8.3 Amendment. Subject to compliance with applicable law, 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; provided, however, that after any approval of the transactions
contemplated by this Agreement by the stockholders of Company, there may not be,
without further approval of such stockholders, any amendment of this Agreement
which changes the amount or the form of the consideration to be delivered to the
holders of Company Common Stock hereunder other than as contemplated by this
Agreement. This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto.
8.4 Extension; Waiver. At any time prior to the Effective
Time, the parties hereto, by action taken or authorized by their respective
Boards of Directors, may, to the extent legally allowed, (a) extend the time for
the performance of any of the obligations or other acts of the other parties
hereto, (b) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto and (c) waive
compliance with any of the agreements or conditions contained herein; provided,
however, that after any approval of the transactions contemplated by this
Agreement by the stockholders of Company, there may not be, without further
approval of such stockholders, any extension or waiver of this Agreement or any
portion thereof which reduces the amount or changes the form of the
consideration to be delivered to the holders of Company Common Stock hereunder
other than as contemplated by this Agreement. 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, but such extension or
waiver or failure to insist on strict compliance with an obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure.
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ARTICLE IX
GENERAL PROVISIONS
9.1 Nonsurvival 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 (other than
pursuant to the Company Option Agreement and the Support Agreement, which shall
terminate in accordance with their respective terms) shall survive the Effective
Time, except for those covenants and agreements contained herein and therein
which by their terms apply in whole or in part after the Effective Time.
9.2 Expenses. All costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such expense; provided, however, that the costs and expenses
of printing and mailing the Offer Documents, the Schedule 14D-9 and the Proxy
Statement, and all filing and other fees paid to the SEC in connection with the
Offer and the Merger, shall be borne equally by Parent and Company.
9.3 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (with confirmation), mailed by registered or certified mail (return
receipt requested) or delivered by an express courier (with confirmation) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) if to Parent, to:
The Chase Manhattan Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. XxXxxxx, Esq.
Fax: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxx Xxxxxxxx, Esq.
Fax: (000) 000-0000
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and
(b) if to Company, to:
Xxxxxxxxx & Xxxxx Group
0 Xxxx Xx.
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Case III
Fax: (000) 000-0000
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
9.4 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". No provision of this Agreement shall be construed to require
Company, Parent or any of their respective Subsidiaries or affiliates to take
any action which would violate any applicable law, rule or regulation.
9.5 Counterparts. This Agreement may be executed in
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each of the parties
and delivered to the other parties, it being understood that all parties need
not sign the same counterpart.
9.6 Entire Agreement. This Agreement (including the documents
and the instruments referred to herein) constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof other than the Company
Option Agreement, the Support Agreement, the Confidentiality Agreement and the
Confidentiality Agreement dated March 29, 1999, between Parent and Company.
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9.7 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of New York.
9.8 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 without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting 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.
9.9 Assignment; Third Party Beneficiaries. Subject to Section
1.13, neither this Agreement nor any of the rights, interests or obligations
shall be assigned by either of the parties hereto (whether by operation of law
or otherwise) without the prior written consent of the other party. 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. Except as otherwise specifically provided in Section 6.5, this
Agreement (including the documents and instruments referred to herein) is not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder.
9.10 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 Federal court or New York
State court 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.
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IN WITNESS WHEREOF, Parent, Sub and Company have caused this
Agreement to be executed by their respective officers thereunto duly authorized
as of the date first above written.
THE CHASE MANHATTAN CORPORATION
By: /s/ Xxxxxxx X. XxXxxxx
------------------------------------
Name: Xxxxxxx X. XxXxxxx
Title: General Counsel
BRIDGE ACQUISITION CORPORATION
By: /s/ Xxxxxxx X. XxXxxxx
------------------------------------
Name: Xxxxxxx X. XxXxxxx
Title:
XXXXXXXXX & XXXXX GROUP
By: /s/ Xxxxxx X. Case III
------------------------------------
Name: Xxxxxx X. Case III
Title:
57
ANNEX I
CONDITIONS OF THE OFFER
The capitalized terms used in this Annex I have the meanings
set forth in the attached Agreement, except that the term "Merger Agreement"
shall be deemed to refer to the attached Agreement.
Notwithstanding any other provisions of the Offer, and in
addition to the conditions that at the expiration of the Offer (i) there shall
have been validly tendered and not withdrawn prior to the expiration of the
Offer a number of shares of Company Common Stock which, together with any other
shares beneficially owned by Parent or its wholly-owned Subsidiaries (other than
Trust Account Shares), constitute more than 50% of the voting power (determined
on a fully-diluted basis) on the date of purchase of all the securities of
Company entitled to vote generally in the election of directors or in a merger
(the "Minimum Condition"), (ii) all regulatory approvals and consents required
to consummate the transactions contemplated by the Merger Agreement, including
the Offer and the Merger (the "Requisite Regulatory Approvals"), shall have been
obtained and shall remain in full force and effect and any statutory waiting
periods shall have expired (all such approvals and consents and the expiration
of all such waiting periods being referred to as the "Requisite Regulatory
Approvals Condition"), and (iii) any other approvals or consents of third
parties required to consummate the transactions contemplated by the Merger
Agreement (including the Offer and the Merger), other than such third party
approvals and consents the failure to obtain which would not reasonably be
expected to result in a Material Adverse Effect on Parent, Company or the
Surviving Corporation following the Offer or the Merger, shall have been
obtained and shall remain in full force and effect, Sub shall not be required to
accept for payment, or subject to applicable rules and regulations of the SEC,
including Rule 14e-1(c) under the Exchange Act (relating to Sub's obligation to
pay for or return tendered Shares promptly after termination or withdrawal of
the Offer), purchase or pay for any shares tendered pursuant to the Offer, may
postpone the acceptance for payment of shares tendered, and subject to the terms
and conditions of the Merger Agreement may terminate the Offer, if at any time
on or after the date of the Merger Agreement and at or before the time of
payment for any such shares any of the following conditions shall occur or exist
or has occurred or existed:
(a)(x) the representations and warranties of Company set forth
in the Merger Agreement shall not have been true and correct in all
respects as of the date of the Merger Agreement, or shall not be true
and correct in all respects as of the expiration of the Offer as though
made at and as of the expiration of the Offer (except to the extent
that such representations and warranties speak as of another date which
shall be required to be true and correct as of such date, and in each
case subject to and after giving effect to the qualification set forth
in the introductory paragraph of Article III of the Merger Agreement),
or (y) Company shall have breached in any material respect any of its
covenants or obligations contained in the Merger Agreement;
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I-2
(b) there shall have been any action or proceeding taken or
instituted and pending, or any statute, rule, regulation, judgment,
order, injunction or decree promulgated, entered, enforced, enacted,
issued or deemed applicable to the Offer or the Merger, or any other
action taken, proposed or threatened, by any domestic or foreign
federal or state governmental, regulatory or administrative agency or
authority or court or legislative body or commission which has or could
reasonably be expected to have the effect of (i) making the purchase
of, or payment for, some or all of the shares of Company Common Stock
by Parent or Sub or their affiliates pursuant to the Offer or the
Merger illegal, (ii) otherwise preventing consummation of the Offer or
Merger, (iii) prohibiting the ownership or operation by Parent or any
of its Subsidiaries of all or any material portion of the business or
assets of Company and its Subsidiaries, taken as a whole, or Parent and
its Subsidiaries, taken as a whole, (iv) imposing material limitations
on the ability of Parent, Sub or any of Parent's affiliates effectively
to acquire or hold or to exercise full rights of ownership of the
shares of Company Common Stock, including, without limitation, the
right to vote any such shares acquired or owned by Parent or Sub or any
of their affiliates on all matters properly presented to the
stockholders of Company, including, without limitation, the adoption of
the Merger Agreement or the right to vote any shares of capital stock
of any Company Subsidiary, or (v) requiring divestiture by Parent or
Sub or any of their affiliates of any shares of Company Common Stock;
or
(c) the Merger Agreement shall have been terminated by
Company, Parent or Sub in accordance with its terms.
The foregoing conditions (other than the Minimum Condition)
are for the sole benefit of Sub and may be asserted by Sub regardless of the
circumstances giving rise to such condition. The foregoing conditions (other
than the Minimum Condition) may be waived by Sub in whole or in part at any time
and from time to time in its sole discretion. The failure by Sub at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right, the waiver of any such right with respect to particular facts and other
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances, and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time.
