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Exhibit 2.1
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MERGER AGREEMENT
BETWEEN
ONMONEY FINANCIAL SERVICES CORPORATION,
OM ACQUISITION SUB I, INC.,
FINANCIAL PASSPORT, INC.
AND
AMERITRADE HOLDING CORPORATION
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JUNE 30, 2000
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TABLE OF CONTENTS
Section Page
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ARTICLE I. DEFINITIONS
1.1. Definitions ....................................................................... 1
ARTICLE II. THE MERGER
2.1. Surviving Corporation ............................................................. 5
2.2. Certificate of Incorporation ...................................................... 5
2.3. Bylaws ............................................................................ 5
2.4. Directors ......................................................................... 5
2.5. Officers .......................................................................... 5
2.6. Effective Time .................................................................... 5
2.7. Closing ........................................................................... 5
2.8. Tax-Free Reorganization ........................................................... 6
ARTICLE III. CONVERSION OF SHARES
3.1. Conversion of Capital Stock ....................................................... 6
3.2. Exchange of Certificates, Escrow .................................................. 8
3.3. No Further Ownership Rights in the Company; No Ownership Rights in Merger Sub. .... 8
3.4. Adjustment to Purchase Price Post-Closing ......................................... 8
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
4.1. Corporate Organization; etc. Except as set forth on Schedule 4.1, each of t ...... 8
4.2. Authorization; etc ................................................................ 9
4.3. Capitalization .................................................................... 9
4.4. No Violations or Defaults ......................................................... 10
4.5. Consents and Approvals of Governmental Authorities ................................ 10
4.6. Subsidiaries and Affiliates ....................................................... 10
4.7. Financial Statements .............................................................. 11
4.8. Absence of Certain Changes ........................................................ 11
4.9. Title to Properties; Encumbrances ................................................. 13
4.10. Intellectual Property ............................................................. 13
4.11. Contracts ......................................................................... 16
4.12. Litigation; Compliance with Laws .................................................. 16
4.13. Taxes ............................................................................. 17
4.14. Benefit Plans ..................................................................... 18
4.15. Labor Matters ..................................................................... 19
4.16. Environmental Matters ............................................................. 19
4.17. Brokers, Finders' Fees, etc ....................................................... 20
4.18. Affiliate Transactions ............................................................ 20
4.19. Employees and Independent Contractors ............................................. 20
4.20. Insurance ......................................................................... 20
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4.21. Customer List ..................................................................... 20
4.22. Bank Accounts ..................................................................... 21
4.23. Accounts Receivables .............................................................. 21
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF MERGER SUB, ONMONEY AND AMERITRADE
5.1. Corporate Organization; etc ....................................................... 21
5.2. Authorization; etc ................................................................ 21
5.3. Consents and Approvals of Governmental Authorities ................................ 22
5.4. No Violations or Defaults ......................................................... 22
5.5. Brokers, Finders' Fees, etc ....................................................... 23
5.6. Capitalization .................................................................... 23
5.7. SEC Reports and Financial Statements .............................................. 23
5.8. Financing ......................................................................... 24
5.9. Merger Sub. ....................................................................... 24
ARTICLE VI. CONDUCT OF BUSINESS PENDING CLOSING
6.1. Regular Course of Business ........................................................ 24
6.2. Amendments ........................................................................ 24
6.3. Capital Changes. Each of t ....................................................... 24
6.4. Organization ...................................................................... 24
6.5. Contracts ......................................................................... 24
6.6. Compensation ...................................................................... 25
6.7. Payments. Neither t .............................................................. 25
6.8. Insurance ......................................................................... 25
6.9. Taxes ............................................................................. 25
ARTICLE VII. ADDITIONAL AGREEMENTS
7.1. Reasonable Access; Confidentiality ................................................ 25
7.2. Stockholder Matters ............................................................... 26
7.3. Ameritrade's or the Company's Knowledge of Breach ................................. 26
7.4. No Shop ........................................................................... 26
7.5. Supplements to Schedules .......................................................... 26
7.6. All Reasonable Efforts ............................................................ 27
7.7. Consents and Approvals ............................................................ 27
7.8. Joint Marketing Agreement ......................................................... 27
7.9. Employment Arrangements ........................................................... 27
7.10 Severance and Employment Agreements ............................................... 27
7.11 Xxxxxx ............................................................................ 28
7.12 Tax Reporting ..................................................................... 28
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ARTICLE VIII. CONDITIONS PRECEDENT TO AMERITRADE'S OBLIGATIONS
8.1. Representations and Warranties .................................................... 28
8.2. Secretary's Certificate ........................................................... 28
8.3. Good Standing Certificate ......................................................... 29
8.4. Performance ....................................................................... 29
8.5. Approvals and Filings ............................................................. 29
8.6. Authorization of Merger ........................................................... 29
8.7. No Injunction ..................................................................... 29
8.8. Maintenance of Insurance .......................................................... 29
8.9. Material Adverse Change ........................................................... 29
8.10 Opinion of Counsel ................................................................ 29
8.11 Escrow Agreement .................................................................. 30
8.12 Shareholder Consents .............................................................. 30
8.13 Financing Agreement ............................................................... 30
8.14 Noverus ........................................................................... 30
8.15 Severance Payments ................................................................ 30
ARTICLE IX. CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATIONS
9.1. Representations and Warranties .................................................... 30
9.2. Secretary's Certificate ........................................................... 31
9.3. Good Standing Certificate ......................................................... 31
9.4. Performance ....................................................................... 31
9.5. Approvals and Filings ............................................................. 31
9.6. No Injunction ..................................................................... 31
9.7. Authorization of Merger ........................................................... 31
9.8. Material Adverse Change ........................................................... 31
9.9. Piggyback Registration Rights ..................................................... 31
ARTICLE X. TERMINATION AND ABANDONMENT
10.1. Methods of Termination ............................................................ 32
10.2. Procedure Upon Termination ........................................................ 32
ARTICLE XI. MISCELLANEOUS PROVISIONS
11.1. Amendment and Modification ........................................................ 33
11.2. Waiver of Compliance .............................................................. 33
11.3. Representations and Warranties, etc ............................................... 33
11.4. Notices ........................................................................... 33
11.5. Binding Nature; Assignment ........................................................ 35
11.6. Knowledge ......................................................................... 35
11.7. Entire Agreement .................................................................. 35
11.8. Expenses .......................................................................... 36
11.9. Press Releases and Announcements .................................................. 36
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11.10.Governing Law ..................................................................... 36
11.11.Jurisdiction ...................................................................... 36
11.12.Severability ...................................................................... 36
11.13.Counterparts ...................................................................... 36
11.14.Headings .......................................................................... 36
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MERGER AGREEMENT
THIS MERGER AGREEMENT (this "Agreement") is made and entered into as of the
30th day of June 2000, by and between Financial Passport, Inc., a Delaware
corporation (the "Company"), Ameritrade Holding Corporation, a Delaware
corporation ("Ameritrade"), OnMoney Financial Services Corporation, a Delaware
corporation and a wholly owned subsidiary of Ameritrade ("OnMoney"), and OM
Acquisition Sub I, Inc., a Delaware corporation and a wholly owned subsidiary of
Ameritrade ("Merger Sub"). OnMoney is party to this Agreement in order to
protect its contractual rights arising under the Financing Agreement, dated May
24, 2000, between OnMoney and the Company.
RECITALS
WHEREAS, the Board of Directors of the Company has approved this Agreement
and the merger of the Merger Sub with and into the Company, with the Company
being the surviving corporation (the "Merger"), pursuant to the terms and
conditions contained herein and in accordance with the Delaware General
Corporation Law (the "DGCL") and a certificate of merger to be filed with the
State of Delaware (the "Certificate of Merger");
WHEREAS, the Board of Directors of Merger Sub has approved this Agreement
and the Certificate of Merger pursuant to the terms and conditions contained
herein and in accordance with the DGCL;
WHEREAS, the Board of Directors of the Company, subject to such Board's
fiduciary duties to the Company and its stockholders, shall recommend to the
stockholders of the Company that the stockholders consent to the Merger pursuant
to this Agreement in an action by written consent pursuant to the provisions
hereof and in accordance with the requirements of the DGCL and the Certificate
of Incorporation and Bylaws of the Company; and
WHEREAS, the parties to this Agreement intend that the Merger will qualify
as a "reorganization" within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code").
NOW THEREFORE, in consideration of the premises and of the mutual
representations, warranties and covenants which are to be made and performed by
the respective parties, it is hereby agreed as follows:
ARTICLE I.
DEFINITIONS
1.1. Definitions. The following terms when used in this Agreement have the
meanings set forth below:
"Agreement" shall have the meaning set forth in the Preamble.
"Ameritrade" shall have the meaning set forth in the Preamble.
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"Ameritrade Stock" means the unregistered shares of Class A common
stock, par value $.01, of Ameritrade.
"Ameritrade Share Value" means the average closing price for the
twenty (20) trading days immediately preceding the Closing Date of the
shares of Ameritrade common stock registered on the Nasdaq National Stock
Market.
"Benefit Plans" shall have the meaning set forth in Section 4.14(a).
"Certificate of Merger" shall have the meaning set forth in the First
Recital.
"Closing" shall have the meaning set forth in Section 2.7.
"Closing Date" shall have the meaning set forth in Section 2.7.
"Code" shall have the meaning set forth in the Fourth Recital.
"Company" shall have the meaning set forth in the Preamble.
"Company Stockholders" means the owners of Shares as of the date
hereof and listed on Schedule 4.3 attached hereto.
"Contract" means any contract, plan, understanding, undertaking,
agreement, license, lease, note, mortgage or other binding commitment,
whether written or oral.
"Customers" shall have the meaning set forth in Section 4.21.
"DGCL" shall have the meaning set forth in the First Recital.
"Effective Time" shall have the meaning set forth in Section 2.6.
"Environmental Laws" means all currently applicable local, state,
federal and international laws, statutes, codes, ordinances, rules,
regulations or permits relating to the environment, natural resources,
pollution or contamination or toxic or hazardous substances.
"ERISA" shall have the meaning as set forth in Section 4.14(a).
"Escrow" means the escrow account governed by the Escrow Agreement.
"Escrow Agent" means the bank or trust company selected by Ameritrade,
OnMoney and the Company to hold the Escrow.
"Escrow Agreement" means the Escrow Agreement among the Escrow Agent,
the Escrow Shareholders (as defined in Section 3.1), Ameritrade and
OnMoney, dated the Closing Date, in the form attached hereto as Exhibit A
and made a part hereof.
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"Escrow Shares" shall mean the number of shares of Ameritrade Stock as
set forth in Schedule 3.1(b) for each Escrow Shareholder that will be
placed in Escrow by Ameritrade in accordance with Section 3.2.
"Escrow Shareholders" shall mean those individuals listed on Schedule
3.1(b).
"Financing Agreement" means the Financing Agreement, dated as of May
24, 2000, among OnMoney and Company.
"Financial Statements" shall have the meaning as set forth in Section
4.7.
"Financing Termination Event" shall have the meaning given to such
term in the Financing Agreement.
"GAAP" means generally accepted accounting principles of the United
States applied in a consistent manner.
"Hazardous Substances" means hazardous substances, materials and
wastes, as identified and defined under any Environmental Laws.
"Indebtedness" means the sum of (1) the principal amount of any funded
indebtedness (other than capital lease obligations) of the Company for
borrowed money outstanding (other than pursuant to the Financing
Agreement), together with all prepayment premiums or penalties and other
amounts becoming due as a result of this transaction and (2) any unpaid
interest, fees or expenses, owing on any such indebtedness of the Company.
"Intellectual Property" shall have the meaning as set forth in Section
4.10(a).
"IRS" shall have the meaning as set forth in Section 4.13(b).
"Joint Marketing Agreement" shall mean the Agreement, dated as of
January 13, 2000, between Pace Financial Network, L.L.C. and OnMoney.
"Liabilities" shall mean any and all Indebtedness, damages,
liabilities, judgments, penalties, fines, losses, and Taxes of any nature,
whether accrued, absolute, direct or indirect, contingent or otherwise,
whether due or to become due.
"License Agreements" shall have the meaning as set forth in Section
4.10(c).
"material" shall mean any claim, circumstance or state of facts which
results in, or would reasonably be expected to result in, Liabilities or
the expenditure or commitment of $10,000 or more, or which results in any
material limitation or restriction on the ability of the Company to conduct
its business as presently conducted or proposed to be conducted.
"Material Adverse Effect" shall mean, as to any party to this
Agreement, a material adverse effect on the business, properties, results
of operations, condition
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(financial or other) or prospects of such party and its subsidiaries,
taken as a whole, other than any effect that (a) results from
occurrences relating to the economy in general or such party's (or any
of its subsidiaries') industry in general or (b) directly arises out
of or results from any action contemplated by the parties in
connection with, or which is directly attributable to, the
announcement of this Agreement and the transactions contemplated
hereby (including the loss of personnel, customers or suppliers or the
delay or cancellation or cessation of orders for any of such party's
products or services provided that such losses, delays or
cancellations were not reasonably foreseeable to such party as of the
date of this Agreement).
"Merger" shall have the meaning set forth in the First Recital.
"Merger Consideration" shall have the meaning as set forth in Section
3.1(b).
"Noverus" shall mean Noverus, Inc., a California corporation.
"OnMoney" shall have the meaning set forth in the Preamble.
"Person" means an individual, a partnership, a company, an
association, a joint stock company, a trust, a joint venture, an
unincorporated organization and a governmental entity or any department,
agency or political subdivision thereof.
"Purchase Price" shall have the meaning set forth in Section 3.1(d).
"Shares" shall mean the shares of common stock of the Company, $.001
par value.
"Software" shall have the meaning as set forth in Section 4.10(a).
"Subsidiary" shall refer to any subsidiary of the Company listed on
Schedule 4.6.
"Surviving Corporation" shall have the meaning as set forth in Section
2.1.
"Taxes" shall mean all taxes, charges, fees, duties, levies or other
assessments, including, without limitation, income, gross receipts, net
proceeds, ad valorem, turnover, real and personal property (tangible and
intangible), sales, use, franchise, excise, value added, license, payroll,
unemployment, customs duties, capital stock, disability, stamp, leasing,
lease, user, transfer, fuel, excess profits, occupational and interest
equalization, windfall profits, severance and employees' income withholding
and Social Security taxes imposed by the United States or any foreign
country or by any state, municipality, subdivision or instrumentality of
the United States or of any foreign country or by any other tax authority,
including all applicable penalties and interest, and such term shall
include any interest, penalties or additions to tax attributable to such
taxes.
"Trademarks" shall have the meaning as set forth in Section 4.10(a).
"Trade Secrets" shall have the meaning as set forth in Section
4.10(a).
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"Transaction Documents" shall have the meaning as set forth in Section
4.2.
"Treasury Shares" shall have the meaning as set forth in Section
3.1(b).
ARTICLE II.
THE MERGER
2.1. Surviving Corporation. Subject to the terms and conditions of this
Agreement, at the Effective Time, in accordance with the terms and conditions of
this Agreement and in accordance with the DGCL, the Merger Sub shall be merged
with and into the Company, and the separate corporate existence of the Merger
Sub shall cease. The Company shall be the surviving corporation in the Merger
(hereinafter sometimes called the "Surviving Corporation") and shall continue
its corporate existence under the laws of the State of Delaware. The Merger
shall have the effects as provided in this Agreement, the Certificate of Merger
and the applicable provisions of the DGCL.
2.2. Certificate of Incorporation. The Certificate of Incorporation of the
Company shall be the Certificate of Incorporation of the Surviving Corporation,
until thereafter duly amended in accordance with its terms and the DGCL.
2.3. Bylaws. The Bylaws of the Company shall be the Bylaws of the Surviving
Corporation until thereafter duly amended in accordance with their terms and the
DGCL.
2.4. Directors. The directors of the Surviving Corporation shall consist of
the directors of Merger Sub immediately prior to the Effective Time, as listed
on Schedule 2.4 hereto, such directors to hold office from the Effective Time
until their respective successors are duly elected and qualified.
2.5. Officers. The officers of the Surviving Corporation shall consist of
the officers of the Company immediately prior to the Effective Time, as listed
on Schedule 2.5 hereto, such officers to hold office from the Effective Time
until their respective successors are duly elected and qualified.
2.6. Effective Time. When all the conditions set forth in Articles VIII and
IX shall have been fulfilled or waived in accordance with the terms hereof,
provided this Agreement shall not have been terminated in accordance with
Article X hereof, the parties hereto shall cause the Certificate of Merger to be
properly executed and filed with the Secretary of State of the State of Delaware
on the Closing Date, and the Merger shall become effective on the Closing Date,
and the date and time when the Merger becomes effective is herein referred to as
the effective time (the "Effective Time"). Unless the context provides
otherwise, all references to the "Effective Time" shall refer to the earliest
date and time on which the Merger has become effective.
2.7. Closing. Unless this Agreement shall have been terminated and the
transactions contemplated by this Agreement abandoned pursuant to the provisions
of Article X, and subject to the provisions of Articles VIII and IX, the closing
of the Merger (the "Closing") will take place at 10:00 a.m. (Eastern time) on a
date to be mutually agreed upon by the parties, which
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date shall be no later than the second business day after all the conditions set
forth in Articles VIII and IX shall have been satisfied (the "Closing Date").
The closing shall take place at the offices of Xxxxx, Xxxxx & Xxxxx, 0000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx or such other place as the parties hereto otherwise
agree.
2.8. Tax-Free Reorganization. The Merger is intended to be a reorganization
within the meaning of Section 368(a) of the Code, and this Agreement is intended
to be a "plan of reorganization" within the meaning of the regulations
promulgated under Section 368(a) of the Code.
ARTICLE III.
CONVERSION OF SHARES
3.1. Conversion of Capital Stock. As of the Effective Time, by virtue of
the Merger and without any action on the part of the holders thereof:
(a) Cancellation of Treasury Shares. All Shares that are owned
directly or indirectly by the Company (the "Treasury Shares") shall be
canceled and no consideration shall be delivered in exchange therefor.
(b) Conversion of Shares. Each issued and outstanding Share (other
than Treasury Shares) shall be automatically converted into the right to
receive that number of shares of Ameritrade Stock at the Closing equal to
the Exchange Ratio; provided, however, that any Company Stockholder who
owns beneficially less than two thousand (2,000) Shares shall not be
entitled to receive any shares of Ameritrade Stock as provided above, but
shall instead be entitled to receive a payment in cash for each Share held
by such Company Stockholder equal to the Exchange Ratio multiplied by the
Ameritrade Share Value. The shares of Ameritrade Stock or cash received by
the Company Stockholders is sometimes herein referred to as the "Merger
Consideration." The Merger Consideration shall be issuable to each of the
Company Stockholders upon surrender of all certificates for the Shares held
by each such Company Stockholder; provided, however, that the Escrow Shares
of the Escrow Shareholders shall be placed in Escrow pursuant to the terms
of Section 3.2 hereof.
(c) Exchange Ratio. For purposes of this Agreement, the "Exchange
Ratio" shall be the quotient of (x) the quotient of (i) the Purchase Price
divided by (ii) the Ameritrade Share Value, divided by (y) the sum of the
number of Shares issued and outstanding as of the Effective Date plus the
Total Adjusted Option Shares set forth on Schedule 3.1(f).
(d) Purchase Price. The purchase price shall be twenty-three million
five hundred thousand dollars ($23,500,000) less any Liabilities
outstanding as of June 1, 2000 and listed on Schedule 4.7(b) and
liabilities listed on Schedule 4.7(c) as Liabilities before June 1, 2000,
less any reduction in the purchase price pursuant to Sections 7.10, 7.11
and 7.13, less any payments made by the Company pursuant to Sections 8.14
and 8.15 (the "Purchase Price").
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(e) Fractional Shares. Notwithstanding any other provision of this
Agreement, no fractional shares of Ameritrade Stock shall be issued in
connection with the Merger. In lieu of any such fractional shares, each
holder of Shares who would otherwise have been entitled to receive a
fraction of a share of Ameritrade Stock pursuant to Section 3.1(b) shall be
entitled to receive from Ameritrade a cash payment equal to such fraction
multiplied by a number equal to the Ameritrade Share Value.
(f) Treatment of Company Options. The parties agree that all options
for Shares held by employees of the Company as of the Effective Date shall
be converted into Ameritrade Shares, with the number of Ameritrade Shares
to be received by each holder of such options to vary depending on the
vesting schedule of such options. Schedule 3.1(f) sets forth the names of
such option holders and the number of Shares which such option holders will
be treated as holding solely for purposes of the conversion into Ameritrade
Shares (as adjusted based on the vesting schedule of the options) (the
"Adjusted Option Shares"). Each option holder shall receive the number of
Ameritrade Shares equal to the product of (x) such option holder's Adjusted
Option Shares a set forth on Schedule 3.1(f) and (y) the Exchange Ratio
(the "Ameritrade Option Shares"). The parties agree and the Company will
cause each option holder to acknowledge prior to Closing that OnMoney shall
hold such Ameritrade Option Shares and such Ameritrade Option Shares will
be restricted and subject to forfeiture if the option holder leaves the
employment of the Surviving Corporation on or prior to the first
anniversary of the Closing Date; provided, however, that such Ameritrade
Shares will not be forfeited, in the case of any particular employee, if
such employee leaves his or her employment because the Surviving
Corporation terminates such employee for reasons other than Gross
Misconduct (as that term is defined in the Company's 2000 Equity Incentive
Plan), or the employee resigns from employment because of (i) a substantial
reduction in the employee's authority and responsibilities relating to the
business of the Company or the Surviving Corporation or any of its
affiliates, (ii) a reduction of such employee's base salary, or (iii) a
requirement that the employee move his or her principal residence more than
fifty (50) miles in order to continue employment. Any Ameritrade Shares
that are so forfeited (or cash in lieu of such Shares, as applicable) shall
be distributed by Ameritrade as additional Merger Consideration to the
Company Stockholders as soon as practicable after such forfeiture in
proportion to the number of Shares each Company Stockholder held
immediately prior to the Effective Date in accordance with the terms of
agreements to be executed by Ameritrade, OnMoney, all option holders of the
Company as of the date hereof (except any option holder who elects not to
execute an Agreement on or prior to the Closing Date), and J. Xxxxxxxx
Xxxxxx, III and Xxxxxx Xxxxx, as representatives for all Company
Stockholders (the "Option Holders Agreements"). Messrs. Xxxxxx and Hooks
shall be deemed to be appointed as representatives of the Company
Stockholders for this purpose by virtue of the stockholder consent executed
by a majority of the Company Stockholders in connection with the approval
of this Agreement (the "Stockholder Consent"). Any option holder who does
not execute an Option Holders Agreement by the Closing Date shall forfeit
such option holder's right to receive restricted Ameritrade stock pursuant
to this Section 3.1(f) and Ameritrade shall distribute such forfeited
shares (or cash in lieu of such shares, as applicable) as additional Merger
Consideration to the Company Stockholders as soon as practicable in
proportion to the
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number of Shares each Company Stockholder held immediately prior to the
Effective Date in accordance with the terms of the Option Holders
Agreements.
3.2. Exchange of Certificates, Escrow. At and after the Effective Time,
each Company Stockholder, upon surrender to Ameritrade of his certificate or
certificates representing the Shares held by such Company Stockholder, shall be
issued a certificate of Ameritrade Stock or cash, as the case may be,
representing the Merger Consideration with respect to the Shares held by such
Company Stockholder in accordance with the provisions of Section 3.1, provided
that all Escrow Shares shall instead be deposited by Ameritrade into the Escrow
to be held by the Escrow Agent for 180 days pursuant to the provisions of the
Escrow Agreement and Section 3.4 hereof.
3.3. No Further Ownership Rights in the Company; No Ownership Rights in
Merger Sub. At and after the Effective Time, each holder of issued and
outstanding Shares immediately prior to the Effective Time shall cease to have
any rights as a stockholder of the Company, except for the right to surrender
such stockholder's certificates in exchange for receipt of the Merger
Consideration and after the Effective Time no transfer of Shares which were
outstanding immediately prior to the Effective Time shall be made on the stock
transfer books of the Company. No holder of any issued and outstanding Shares
will have any rights at any time as a stockholder of Merger Sub.
3.4. Adjustment to Purchase Price Post-Closing. If, within 180 days
following the Closing Date, any Liabilities of the Company existing on or prior
to the Closing Date not otherwise disclosed on Schedule 4.7, approved by OnMoney
pursuant to the Financing Agreement or used in the calculation of the Purchase
Price on the Closing Date pursuant to Section 3.1(b) are discovered by
Ameritrade or OnMoney and notified as a claim to the Escrow Stockholders (with a
copy to the Escrow Agent) in accordance with the provisions of the Escrow
Agreement (an "Undisclosed Liability"), then the Purchase Price shall be
adjusted downward by the amount of any Undisclosed Liabilities; provided,
however, that any such adjustment to the Purchase Price shall be satisfied
solely out of the Ameritrade Stock held in Escrow pursuant to Section 3.2
hereof, provided further that no such adjustment shall be made until and unless
the related claim is resolved in Ameritrade's favor pursuant to the terms of the
Escrow Agreement. Within five days after the 180th day following the Closing
Date, Ameritrade shall cause all remaining shares of Ameritrade Stock then held
in the Escrow to be released to the Escrow Shareholders in proportion to such
Escrow Shareholder's Escrow Shares.
ARTICLE IV.
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY
The Company represents and warrants to Ameritrade as follows:
4.1. Corporate Organization; etc. Except as set forth on Schedule 4.1, each
of the Company and its Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority to carry on
its business as now conducted and to own, operate or lease its
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properties and assets except where the failure to be so organized, existing or
in good standing would not have a Material Adverse Effect as to the Company.
Each of the Company and its Subsidiaries is duly qualified or licensed to do
business as a foreign company in good standing in each state of the United
States and in each foreign jurisdiction in which the conduct of its business or
the ownership, operation or leasing of its properties and assets requires such
qualification except where the failure to be so qualified, licensed or in good
standing would not have a Material Adverse Effect as to the Company. Schedule
4.1 hereto sets forth a true and complete list of all jurisdictions in which the
Company is qualified or licensed to do business as a foreign company. The
Company has delivered to Ameritrade true, complete and correct copies of the
Certificate of Incorporation and Bylaws of the Company.
4.2. Authorization; etc. The Company has full corporate power and authority
to execute, deliver and perform this Agreement and each of the other agreements,
instruments, documents and certificates executed or to be executed pursuant to
the terms of this Agreement (collectively with this Agreement, the "Transaction
Documents") and to consummate the transactions contemplated hereby and thereby
except where the failure to have such power and authority would not have a
Material Adverse Effect as to the Company. Except for the consent of a majority
of the Shares, which consent must be obtained as a condition to Closing pursuant
to Section 8.13, the Board of Directors of the Company has taken all action
required to authorize the execution and delivery of this Agreement and the other
Transaction Documents, the performance of the Company's obligations hereunder
and thereunder and the transactions contemplated hereby and thereby. No other
corporate proceedings on the part of the Company are necessary to authorize the
execution, delivery and performance by the Company of this Agreement or the
other Transaction Documents. This Agreement is a valid and binding agreement of
the Company, enforceable against them in accordance with its terms except (a) as
the same may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws now or hereafter in effect relating to creditors' rights generally
and (b) that the remedy of specific performance and injunctive and other forms
of equitable relief may be subject to equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought.
4.3. Capitalization.
(a) Schedule 4.3(a) hereto sets forth the authorized, issued and
outstanding shares of capital stock of the Company as of the date hereof.
All issued and outstanding shares of capital stock of the Company (i) are
duly authorized, validly issued, fully paid and nonassessable, and (ii) are
and when issued were, free of preemptive rights. Except as set forth in
Schedule 4.3(a), there are no shares of capital stock, securities
convertible into or exchangeable or exercisable for capital stock, or other
securities (whether or not such securities have voting rights), of the
Company issued or outstanding or any subscriptions, options, warrants,
calls, rights, contracts, commitments, convertible securities or other
agreements, arrangements or understandings of any character obligating or
binding the Company to issue, repurchase, transfer or sell, or cause the
issuance, repurchase, transfer or sale of, or otherwise acquire or retire,
any shares of capital stock or other securities (whether or not such
securities have voting rights) of the Company.
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15
(b) Schedule 4.3(b) hereto sets forth a true and complete list of all the
stockholders of the Company and the number and type of Shares
beneficially owned and held of record by each stockholder. To the
Company's knowledge, which has not been obtained through specific
inquiry of each Company Stockholder, (i) each stockholder owns the
Shares set forth next to his, her or its name on Schedule 4.3(b) free
and clear of any liens, claims or encumbrances and (ii) no stockholder
of the Company is a party to any voting trust, proxy or other
agreements with respect to the voting of any Shares which will remain
in full force or effect after the Closing.
4.4. No Violations or Defaults. Except as set forth in Schedule 4.4 and
except where any such violation, conflict, default, termination, acceleration,
requirement or imposition would not be material to the Company and its
Subsidiaries taken as a whole, neither the execution and delivery of this
Agreement or the other Transaction Documents nor the consummation of the
transactions contemplated hereby or thereby will violate any provisions of the
Certificate of Incorporation or Bylaws of the Company or any of its Subsidiaries
or, (a) with or without the giving of notice or the passage of time, or both,
violate, or be in conflict with, or constitute a default under, or permit the
termination of, or cause the acceleration of the maturity of, any debt or
obligation of the Company or any of its Subsidiaries, (b) require the consent of
any party to any agreement or commitment to which the Company or any of its
Subsidiaries is a party, or by which the Company or any of its Subsidiaries is
bound, (c) result in the creation or imposition of any security interest, lien,
or other encumbrance upon any property or assets of the Company or any of its
Subsidiaries (determined singly or in the aggregate), under any agreement or
commitment to which the Company or any of its Subsidiaries is a party, or by
which the Company or any of its Subsidiaries is bound, or (d) violate any
statute or law or any judgment, decree, order, regulation or rule of any court
or governmental authority to which the Company or any of its Subsidiaries is
subject.
4.5. Consents and Approvals of Governmental Authorities. Except for the
filing of the Certificate of Merger with the State of Delaware and the
requirements of the federal and state securities laws, and except where the
failure to obtain such consent, approval, authorization, or to make any
declaration, filing or registration would not have a Material Adverse Effect as
to the Company, no consent, approval or authorization of, or declaration, filing
or registration with, any federal, state, local or foreign governmental or
regulatory authority is required to be made or obtained by the Company in
connection with the execution, delivery and performance of this Agreement or the
other Transaction Documents or the consummation of the transactions contemplated
hereby or thereby.
4.6. Subsidiaries and Affiliates.
(a) Except as set forth on Schedule 4.6(a), the Company does not own
any capital stock or other equity securities of any other corporation and
has no other type of interest (whether ownership or other) in any other
corporation, partnership, joint venture or other business organization or
entity. The interests of the Company in any Person as set forth on Schedule
4.6(a) are owned by the Company free and clear of all material liens,
options, claims or encumbrances (including without limitation, rights of
first refusal or similar rights) with respect to the ownership thereof. The
Company is not subject to any material obligation or requirement to provide
funds for, or to make any investment (in the
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form of a loan, capital contribution or otherwise) to or in, any Person,
except as set forth on Schedule 4.6(a).
(b) Except as set forth on Schedule 4.6(b) and for equity interests in
classes of publicly traded securities not exceeding 2% of the outstanding
securities of that class, to the knowledge of the Company (which has not be
obtained through specific inquiry of each Company Stockholder), none of the
Company Stockholders has any direct or indirect interest in any Person that
competes with or conducts any business similar to the Company. To the
knowledge of the Company (which has not been obtained through specific
inquiry of each Company Stockholder), none of the Company Stockholders has
any direct or indirect interest in any property used by, or relating to,
the business of the Company, except by virtue of ownership of the Company
Stock.
4.7. Financial Statements.
(a) The Company has previously delivered to Ameritrade accurate and
complete copies of the audited balance sheets of Pace Financial Network,
LLC (predecessor to the Company) for the years ending December 31, 1999 and
December 31, 1998, together with the related statements of operations,
stockholders' equity (deficit), and cash flows of the Company (on a
consolidated basis) for the fiscal year then ended and any related notes
thereto, and accurate and complete copies of the unaudited balance sheets
of the Company (on a consolidated basis) for the five months ended May 31,
2000, together with the related statements of operations, stockholders'
equity (deficit), and cash flows of the Company (on a consolidated basis)
for the five months then ended (such unaudited balance sheets referred to
as the "Interim Financial Statements" and, together with the audited
balance sheets, the "Financial Statements"). The Financial Statements,
including the notes thereto, (i) were prepared in accordance with generally
accepted accounting principles applied on a consistent basis ("GAAP")
throughout the period covered thereby (except as may be indicated in the
notes thereto and subject, in the case of Interim Financial Statements, to
normal year-end adjustments) and (ii) present fairly in all material
respects the financial position, results of operations and changes in cash
flow of the Company as of such dates and for the periods then ended. To the
knowledge of the Company, there are no contingent or other liabilities or
obligations of the Company arising from pending or threatened third-party
claims, which would reasonably be expected to have a Material Adverse
Effect, which are not either reflected in the Financial Statements or in
the Schedules hereto.
(b) Schedule 4.7(b) sets forth all Liabilities of the Company and its
Subsidiaries as of June 1, 2000.
(c) Except as set forth on Schedule 4.7(c), or in the Financial
Statements, the Company and its Subsidiaries have no Liabilities as of the
date of this Agreement.
4.8. Absence of Certain Changes. Except as set forth in Schedule 4.8, as
contemplated by this Agreement or in the ordinary course of business, since
December 31, 1999 and through the date hereof, the business of the Company and
its Subsidiaries has been conducted only in the ordinary course and there has
not been:
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(a) any adverse change in the Company's business, operations or
financial position in the Company or any of its Subsidiaries which has had
a Material Adverse Effect;
(b) any general increase in the compensation of officers or employees
of the Company or any of its Subsidiaries, any increase in the compensation
payable or to become payable to any officer or employee of the Company or
any bonus compensation arrangements agreed upon;
(c) any loss or damage (whether or not covered by insurance) to any of
the assets of the Company or any of its Subsidiaries, that materially
affects or impairs the ability of the Company and its Subsidiaries, taken
as a whole, to conduct its business, or any other event or condition of any
character that has materially and adversely affected or would materially
and adversely affect the business or operations of the Company and its
Subsidiaries, taken as a whole;
(d) any sale, transfer or other disposition of any material tangible
asset of the Company or any of its Subsidiaries, except in the ordinary
course of business, or any sale, assignment, transfer or other disposition
of any of the material patents, trademarks, trade names, copyrights,
licenses or other intangible assets of the Company or any of its
Subsidiaries;
(e) any material contract or other transaction entered into by the
Company or any of its Subsidiaries relating to or otherwise affecting in
any way the business or operation of the Company other than in the ordinary
course of business;
(f) any incurrence of any lien, security interest, pledge, mortgage,
encumbrance, restriction or change of any kind permitted or allowed with
respect to any of the properties, business or assets of the Company or any
of its Subsidiaries, except as otherwise permitted by Section 4.9(b);
(g) any declaration, setting aside, making or paying of any dividend
or other distribution in respect of its capital stock or any direct or
indirect redemption, purchase or other acquisition of any shares of the
capital stock of the Company;
(h) any setting aside, making or incurring of any capital expenditure
or commitment, or series of related capital expenditures or commitments, by
the Company or any of its Subsidiaries, in the aggregate amount above
$35,000;
(i) any material decrease in the amount of the Company's or any of its
Subsidiaries reserves and accruals except in the ordinary course of
business and consistent with past practice;
(j) any changes in the accounting systems, policies or practices of
the Company or any of its Subsidiaries;
(k) any transactions with any affiliates of the Company or the Company
Stockholders;
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(l) any conduct of business in any material respect not in the
ordinary and usual course; or
(m) incurred any material long-term indebtedness for borrowed money or
issued any material amount of debt securities or assumed, guaranteed or
endorsed the obligations of any other Person.
4.9. Title to Properties; Encumbrances.
(a) The Company and its Subsidiaries do not own any real property.
Schedule 4.9(a) hereto lists all real properties leased by the Company and
its Subsidiaries as of the date hereof and Schedule 4.9(b) hereto lists the
material mortgages, pledges, liens or security interests, if any, affecting
the leasehold interests of the Company and its Subsidiaries in such real
properties. Schedule 4.9(c) hereto lists all material personal property
owned or leased by the Company and its Subsidiaries as of the date hereof;
(b) Except as would not have a Material Adverse Effect as to the
Company, the Company and its Subsidiaries, as applicable, have good title
to all tangible personal properties and other assets shown as owned by the
Company and its Subsidiaries, as applicable, on its books and records
(except for properties and assets acquired under installment purchase
contracts or held pursuant to capitalized leases as described on Schedule
4.11, or not required to be disclosed on such Schedule);
(c) Except as would not have a Material Adverse Effect as to the
Company, none of the properties or assets owned by the Company and its
Subsidiaries, as applicable, is subject to any mortgage, pledge, lien,
security interest, encumbrance, claim or charge of any kind except (i)
statutory liens arising in the ordinary course of business and not yet
delinquent; (ii) liens or encumbrances (other than mortgages, pledges,
liens or security interests securing indebtedness) that do not materially
interfere with the present use of or materially impair the value of such
properties or assets; (iii) mortgages, pledges, liens or security interests
securing indebtedness as listed on Schedule 4.9(b) hereto; (iv) liens for
taxes not yet due and payable; (v) liens which shall be removed prior to
the Closing Date; or (vi) liens accounted for as capitalized leases; and
(d) With respect to real property leased or subleased by the Company
and its Subsidiaries as set forth in Schedule 4.9(a), (i) each lease or
sublease is in full force and effect as of the date hereof; and (ii) the
Company and its Subsidiaries, as applicable, are not and, to the best of
its knowledge, no other party to such leases or subleases is, in material
breach or default or has repudiated any provision thereof.
4.10. Intellectual Property.
(a) For purposes of this Section 4.10, "Intellectual Property" shall
mean: trademarks, service marks, trade names, Internet domain names,
designs, logos, slogans, and general intangibles of like nature, together
with all goodwill, registrations and applications related to the foregoing
(collectively, "Trademarks"); patents and industrial design registrations
or applications (including any continuations, divisionals,
continuations-in-part, renewals, reissues, and applications for any of the
foregoing);
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copyrights (including any registrations and applications for any of the
foregoing); Software, "mask works" (as defined under 17 X.X.X.xx. 901) and
any registrations and applications for "mask works"; technology, trade
secrets and other confidential information, know-how, proprietary
processes, formulae, algorithms, models, and methodologies (collectively,
"Trade Secrets"); in each case material to or necessary for the conduct of
the Company's or any of its Subsidiaries' business as currently conducted
or contemplated to be conducted. "Software" means any and all (a) computer
programs, including any and all software implementation of algorithms,
models and methodologies, whether in source code or object code form, (b)
databases and compilations, including any and all data and collections of
data and (c) all documentation, including user manuals and training
materials, relating to any of the foregoing, in each case material to or
necessary for the conduct of the Company's or any of its Subsidiaries'
business as currently conducted or contemplated to be conducted.
(b) Schedule 4.10(b) sets forth, for the Intellectual Property owned
by the Company and its Subsidiaries, a complete and accurate list of all
material U.S. and foreign (a) patents and patent applications; (b)
trademark registrations (including Internet domain registrations) and
Trademark applications; (c) copyright registrations and mask work and
copyright and mask work applications. Schedule 4.10(b) lists all Software
(other than readily available commercial software programs having an
acquisition price of less than $5,000) which are owned, licensed, or leased
by the Company and its Subsidiaries, and identifies which Software is
owned, licensed, or leased, as the case may be.
(c) Schedule 4.10(c) sets forth a complete and accurate list of all
agreements to which the Company and its Subsidiaries is a party or
otherwise bound (i) granting or obtaining any right to use or practice any
rights under any Intellectual Property or (ii) restricting the rights of
the Company or any of its Subsidiaries to use any Intellectual Property,
including license agreements, development agreements, distribution
agreements, settlement agreements, consent to use agreements, and covenants
not to xxx (collectively, the "License Agreements"). The License Agreements
are valid and binding obligations of all parties thereto, enforceable in
accordance with their terms, and there exists no event or condition which
will result in a violation or breach of, or constitute (with or without due
notice of lapse of time or both) a default by any party under any such
License Agreement. The Company and its Subsidiaries has not licensed or
sublicensed its rights in any Intellectual Property other than pursuant to
the License Agreements. No royalties, honoraria or other fees are payable
by the Company or any of its Subsidiaries to any third parties for the use
of or right to use any Intellectual Property except pursuant to the License
Agreements.
(d) Except as set forth on Schedule 4.10(d):
(i) to the Company's knowledge, the Company and each of its
Subsidiaries owns, or has a valid right to use, free and clear of all
liens, all of the Intellectual Property, and the Company, a Subsidiary
or Pace Financial Network L.L.C. is listed in the records of the
appropriate United States, state, or foreign
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registry as the sole current owner of record for each application and
registration listed on Schedule 4.10(b);
(ii) to the Company's knowledge, the Intellectual Property owned
by the Company and its Subsidiaries and, to the Company's knowledge,
any Intellectual Property used by the Company and its Subsidiaries, is
subsisting, in full force and effect, and has not been canceled,
expired, or abandoned, and is valid and enforceable;
(iii) there is no pending or, to the Company's knowledge,
threatened or potential claim, suit, arbitration or other adversarial
proceeding before any court, agency, arbitral tribunal, or
registration authority in any jurisdiction (x) involving the
Intellectual Property owned the Company or any of its Subsidiaries, or
to the Company's knowledge the Intellectual Property licensed to the
Company or any of its Subsidiaries or (y) alleging that the activities
or the conduct of the Company's or any of its Subsidiaries' businesses
as presently conducted or proposed to be conducted do, or will,
infringe upon, violate or constitute the unauthorized use of the
intellectual property rights of any third party or challenging the
ownership, use, validity, enforceability or registrability of any
Intellectual Property owned by the Company or any of its Subsidiaries,
including but not limited to, any claim or potential claim of a
previous employee of the Company or any of its Subsidiaries or Person
for whom any employee of the Company or any of its Subsidiaries worked
as an independent contractor that relates to the misappropriation,
unauthorized use, infringement or violation of any of such employer's
or Person's trade secrets or other intellectual property, including
any Trade Secrets or other Intellectual Property;
(iv) to the Company's knowledge, the conduct of the Company's or
any of its Subsidiaries' business as currently conducted or planned to
be conducted does not and will not infringe upon (either directly or
indirectly such as through contributory infringement or inducement to
infringe) any intellectual property rights owned or controlled by any
third party and to the Company's knowledge, no third party is
misappropriating, infringing, or violating any Intellectual Property
owned or used by the Company or any of its Subsidiaries and no such
claims, suits, arbitrations or other adversarial proceedings which
have been brought against any third party by the Company or any of its
Subsidiaries remain unresolved; and
(v) the Company takes reasonable measures to protect the
confidentiality of its Trade Secrets, including requiring their
employees to be bound by Company policy to keep confidential all
information regarding the Company's technology. To the Company's
knowledge, no Trade Secret has been disclosed or authorized to be
disclosed to any third party other than pursuant to a non-disclosure
agreement.
(e) The consummation of the transactions contemplated hereby will not
result in the loss or impairment of the Company's (or any of its
Subsidiaries') right to own or use
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any of the Intellectual Property, nor will it require the consent of any
governmental authority or third party in respect of any such Intellectual
Property.
4.11. Contracts. Schedule 4.11 sets forth a list of Contracts as provided
below that relate to the business of the Company and its Subsidiaries. The
Company has delivered to OnMoney true and correct copies of each listed document
and a written description of each oral Contract so listed. Schedule 4.11 lists
all the Contracts of the following types to which the Company or any Subsidiary
is a party or by which it is bound relating to the business or operation of the
Company and its Subsidiaries: (a) any labor union Contract and any agreements
relating to the leasing of employees; (b) any loan agreement, deferred
compensation, profit sharing, incentive compensation, bonus, stock purchase,
stock option plan, arrangement or Contract with any officer, employee,
consultant or agent or any person or entity affiliated with or controlled by (or
with power to control) any officer, director, employee of the Company or any
Subsidiary; (c) any Contract with a broker, sales agency, distributor, dealer
(to the extent such sales agent, distributor or dealer is required to be listed
on Schedule 4.21), advertising agency or other person engaged in sales,
distributing or promotional activities involving a commitment in excess of
$10,000; (d) any indenture, credit agreement, notes, mortgages, security
agreements or other commitment or arrangement pursuant to which the Company or
any Subsidiary has made or will make loans or advances, or has or will have
incurred debts or become a guarantor or surety or pledged its credit on or
otherwise become responsible with respect to any undertaking of another (except
for the negotiation or collection of negotiable instruments in transactions in
the ordinary course of business); (e) any leases of real property or material
leases of personal property and agreements for financing involving a commitment
in excess of $10,000; (f) any Contract involving a partnership, joint venture or
other cooperative undertaking, or involving any restrictions of the geographical
area of operations or scope or type of business of the Company and its
Subsidiaries; (g) any power of attorney or agency agreement or arrangement with
any party pursuant to which such party is granted the authority to act for or on
behalf of the Company or any Subsidiary involving a commitment in excess of
$10,000; (h) any agreement with any officer, director or employee of the Company
or any Subsidiary (A) the benefit of which is contingent, or the terms of which
are materially altered, upon the occurrence of a transaction involving the
Company of the nature of any of the transactions contemplated by this Agreement
or (B) the benefits of which will be materially increased, or the vesting of the
benefits of which will be materially accelerated, by the occurrence of any of
the transactions contemplated by this 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; and (i) any other Contract of the Company or any
Subsidiary material to the operations of the Company and its Subsidiaries, taken
as a whole.
Except as set forth on Schedule 4.11, neither the Company nor any
Subsidiary is in default, and no third party is in default, under any of the
agreements, Contracts or obligations described in Schedule 4.11. Each of such
agreements, Contracts and obligations are in full force and effect and have been
complied with by the Company and its Subsidiaries in all material respects.
4.12. Litigation; Compliance with Laws.
(a) Except as set forth on Schedule 4.12 (and on Schedule 4.10(d) with
respect to Intellectual Property) and except as would not be reasonably
likely to be material to the
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Company and its Subsidiaries, taken as a whole, there is no action,
proceeding or investigation pending or threatened against the Company or
any of its Subsidiaries. Neither the Company nor any Subsidiary is in
violation of any judgment, order or decree entered against it in any
lawsuit or proceeding.
(b) Except as would not be reasonably likely to be material to the
Company and its Subsidiaries, taken as a whole, neither the Company nor any
Subsidiary is in violation of any foreign, federal, state or local laws,
rules, regulations, ordinances, orders, judgments and decrees applicable to
its business, properties or operations as presently conducted, except as
set forth on Schedule 4.12.
(c) Except as would not be reasonably likely to be material to the
Company and its Subsidiaries, taken as a whole, each of the Company and its
Subsidiaries possesses, is presently in compliance with and has received no
notice of violations of any license, permit, consent, authorization or
approval of or from any governmental body having jurisdiction over it
necessary to conduct its business as presently conducted.
4.13. Taxes.
(a) All federal, state and local Tax returns required to be filed by
or with respect to the Company and its Subsidiaries on or before the
Closing Date have been or will be accurately prepared in all material
respects and have been or will be duly and timely filed, and all Taxes
(including Taxes withheld from employees' salaries and all other
withholding Taxes and obligations and all deposits required to be made by
or with respect to the Company and its Subsidiaries with respect to such
withholding Taxes or otherwise), due with respect to such Tax returns have
been timely paid, or to the extent not due and payable as of the Closing
Date, adequate provision for the payment thereof has been made on the
financial statements in accordance with GAAP or the books of account of the
Company.
(b) Except as set forth in Schedule 4.13 attached hereto: (i) no
federal, state, local or foreign audit or other administrative proceeding
or court proceeding currently exists with regard to any Taxes or Tax
returns of the Company or any Subsidiary; (ii) neither the Company nor any
Subsidiary has received any written notice from the Internal Revenue
Service (the "IRS") or any other governmental entity that an audit or other
administrative proceeding is pending or threatened with respect to any
Taxes due from or with respect to the Company and its Subsidiaries or with
respect to any Tax return of the Company and its Subsidiaries; (iii)
neither the Company nor any Subsidiary has granted any waiver of any
statutes of limitations applicable to any claim for Taxes; (iv) all Tax
deficiencies which have been claimed, proposed or asserted in writing
against the Company and its Subsidiaries have been fully paid or finally
settled; (v) neither the Company nor any Subsidiary has made any election
under Section 341(f) of the Code (or any corresponding provision of state
or local income Tax law); (vi) neither the Company nor any Subsidiary has
been a member of an affiliated group (as defined in Section 1504(a) of the
Code) or filed or been included in a combined, consolidated or unitary
income tax return; (vii) Ameritrade will not be required to deduct and
withhold any amount pursuant to Section 1445(a) of the Code upon the
transfer of the Shares in the
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Merger; (viii) neither the Company nor any Subsidiary is required to make
any material adjustment under Section 481(a) of the Code by reason of a
change or proposed change in accounting method or otherwise (excluding for
purposes of this representation any accounting changes that may be required
as a result of the entry of the Company into the consolidated group of
which Ameritrade is the common parent); and (ix) no material issue has been
raised by any taxing authority with respect to the Company or any
Subsidiary in any audit or examination which, by application of similar
principles, could reasonably be expected to result in a proposed material
adjustment to the liability for Taxes for any period not so examined.
(c) Except for Tax Liabilities of Pace Financial Network, L.L.C., the
Company is not liable for the Taxes of any taxpayer other than the Company
and its Subsidiaries for any taxable period beginning before the Closing
Date.
4.14. Benefit Plans.
(a) Schedule 4.14 contains an accurate and complete list of all
material Benefit Plans (as defined below) maintained or sponsored by the
Company or any of its Subsidiaries, contributed to by the Company, covering
any employees of the Company or any of its Subsidiaries, to which the
Company or any of its Subsidiaries is obligated to contribute or with
respect to which the Company or any of its Subsidiaries has any material
liability. For purposes of the Agreement, the term "Benefit Plans" shall
mean: (i) employee benefit plans as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), whether or
not terminated (ii) employment agreements, and (iii) fringe benefit plans,
policies, programs and arrangements, whether or not subject to ERISA, and
whether or not funded and whether or not terminated. The Company has no
obligation to contribute to or has no liability with respect to any (x)
"multiemployer pension plan," as such term is defined in Section 3(37) of
ERISA, (y) employee benefit plan subject to Title IV of ERISA or (z)
employee benefit plan described in Section 413(c) of the Code (and
regulations promulgated thereunder).
(b) The Company does not contribute to or have liability with respect
to any Benefit Plan which provides health or life insurance benefits to
current or future retirees or current or future former employees, their
spouses or dependents, other than in accordance with Section 4980B of the
Code or applicable state continuation coverage law.
(c) All required contributions to Benefit Plans which are "defined
benefit plans," as defined in Section 3(35) of ERISA have been timely made,
and no accumulated funding deficiency, as defined by Section 302(a)(2) of
ERISA, exists (whether or not waived) with respect to any Benefit Plans as
of the Closing Date.
(d) To the knowledge of the Company, each Benefit Plan and all related
trusts, insurance contracts and funds have been maintained, funded and
administered in compliance in all material respects with all reporting and
disclosure requirements and applicable laws and regulations, including but
not limited to ERISA and the Code. Adequate accruals for all obligations
under the Benefit Plans are reflected in the Interim
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Financial Statements when required by GAAP. To the knowledge of the
Company, there (i) have been no prohibited transactions (as described in
Section 406 of ERISA) with respect to any Benefit Plan; (ii) have been no
acts or omissions by the Company which have given or may give rise to any
material liability under Section 502 of ERISA or Chapters 43, 47 or 68 of
the Code for which the Company may be liable; (iii) has been no act or
omission that would impair the ability of the Company (or any of its
successors) to unilaterally amend or terminate any Benefit Plan; and (iv)
none of the payments contemplated by the Benefit Plans would in the
aggregate constitute excess parachute payments (as defined in Section 280G
of the Code (without regard to subsection (b)(4) thereof)). No actions,
suits, claims (other than routine claims for benefits), taxes, penalties or
liens with respect or relating to the Benefit Plans are pending or
threatened or have been assessed or incurred.
(e) Each Benefit Plan that is intended to be qualified under Section
401(a) of the Code, and each trust (if any) forming a part thereof, has
received a favorable determination letter from the IRS as to the
qualification under the Code of such Benefit Plan and the tax-exempt status
of such related trust, and, to the Knowledge of the Company, nothing has
occurred since the date of such determination that could adversely affect
the qualification of such Benefit Plan or the tax-exempt status of such
related trust.
(f) With respect to each Benefit Plan, the Company has made available
to OnMoney true, complete and correct copies, to the extent applicable of
(i) all documents pursuant to which the Benefit Plans are maintained,
funded and administered, including all amendments thereto, (ii) the most
recent annual report (Form 5500 series) filed with the IRS (with
attachments), (iii) the most recent actuarial report, (iv) the most recent
financial statements, and (v) all governmental rulings and determinations
and opinions (and pending requests for governmental rulings, determinations
and opinions).
4.15. Labor Matters. There are no material controversies pending or
threatened between the Company or any of its Subsidiaries and its employees.
There are no collective bargaining agreements currently binding on or being
negotiated with respect to the business of the Company or any of its
Subsidiaries. There are no pending petitions by labor unions to the National
Labor Relations Board for certification as representative of any employees of
the Company or any of its Subsidiaries. The Company and its Subsidiaries have
not experienced any strikes, material grievances, claims of unfair labor
practices or lockouts.
4.16. Environmental Matters.
(a) Each of the Company and its Subsidiaries is in compliance in all
material respects with all Environmental Laws, except for such
noncompliance, facts, events and circumstances which would not have a
Material Adverse Effect.
(b) Each of the Company and its Subsidiaries has obtained, possesses
and is in compliance in all material respects with all permits, licenses,
certificates, franchises and other authorizations relating to Environmental
Laws with respect to all real property owned, operated, or occupied by the
Company.
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(c) The Company and its Subsidiaries have not generated, manufactured,
stored, treated, transported, disposed or released any Hazardous Substances
out of or into or from the real properties, owned operated or occupied by
the Company as of the date hereof in violation of any Environmental Laws;
nor to the knowledge of the Company, have any Hazardous Substances migrated
from any real property owned, occupied, or operated by the Company upon or
beneath other properties; nor to the knowledge of the Company, have any
Hazardous Substances migrated from other properties upon or beneath any
real property owned, occupied, or operated by the Company.
(d) The Company and its Subsidiaries have not assumed the liability of
any other Person pursuant to any Environmental Law.
4.17. Brokers, Finders' Fees, etc. Except as set forth on Schedule 4.17,
the Company and its Subsidiaries have not employed any broker, finder,
investment banker or financial advisor as to whom the Company or OnMoney may
have any obligation to pay any brokerage or finders' fees, commission or similar
compensation in connection with the transactions contemplated hereby.
4.18. Affiliate Transactions. Except as disclosed on Schedule 4.18 attached
hereto, no officer or director of the Company or any of its Subsidiaries or any
person related by blood or marriage to any such person or any entity in which
any such person owns any beneficial interest, is a party to any agreement,
Contract, commitment or transaction with the Company or any of its Subsidiaries
or which pertains to its business or had any interest in any property, real or
personal or mixed, tangible or intangible (including Intellectual Property),
used in or pertaining to the business of the Company or any of its Subsidiaries.
4.19. Employees and Independent Contractors. Except as set forth in
Schedule 4.19(a), no key executive employee and no group of employees or
independent contractors of the Company has advised the Company of any plans as
of the date hereof to terminate his, her or its employment or relationship as an
independent contractor with the Company. Schedule 4.19(a) sets forth the names
and annual compensation (including salary, bonuses and commissions) as of June
15, 2000, of all salaried employees and all independent contractors of the
Company.
4.20. Insurance. Schedule 4.20 sets forth a list and brief description
(specifying the insurer, the policy number or covering note number with respect
to binders and the amount of any deductible, describing the pending or open
claims if such claims exceed the applicable policy limits or fall within
deductibles, co-payment or other provisions providing for payment by the
Company, setting forth the aggregate amount paid out under each such policy
through June 15, 2000 to be updated as practicable to a date prior to the
Closing Date and the aggregate limit, if any, of the insurer's liability
thereunder) of all policies or binders of fire, liability, product liability,
workmen's compensation, vehicular, unemployment and other insurance held by or
on behalf of the Company and its Subsidiaries. All such policies and binders are
in full force and effect, all premiums due and payable thereon have been paid
and as of the date hereof, the Company has received no notice of cancellation or
non-renewal of any such policy or binder.
4.21. Customer List. Schedule 4.21 contains a true and complete list of the
customers and accounts of the Company in respect of the business of the
Company's gross sales since the
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date of its incorporation (the "Customers"). None of the Company's Customers
have indicated their intention to terminate, modify or change their business
relationship with the Company as a result of the transactions contemplated by
this Agreement. There have been no adverse changes in the relationships between
the Company and the Customers listed on Schedule 4.21.
4.22. Bank Accounts. Schedule 4.22 sets forth a true, complete and correct
list of each bank, deposit, lock-box or cash collection, management or other
account, of the Company or in respect of the business of the Company, including
the title and number of the account and the financial or other institution at
which such account is located.
4.23. Accounts Receivables. Except as set forth on Schedule 4.23, the
accounts receivable of the Company as set forth on the Interim Financial
Statements or arising since the date thereof have arisen solely out of bona fide
sales and deliveries of goods, performance of services and other business
transactions in the ordinary course of business consistent with past practice;
are not subject to valid defenses, set-offs or counterclaims; and are
collectible at the full recorded amount thereof less, in the case of accounts
receivable appearing on the Interim Financial Statements, the recorded allowance
collection of doubtful accounts on the Interim Financial Statements. The
allowance for collection of doubtful accounts on the Interim Financial
Statements has been determined in accordance with GAAP consistent with past
practice.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF MERGER SUB, ONMONEY AND AMERITRADE
Each of Merger Sub, OnMoney and Ameritrade hereby represents and warrants
to the Company as follows:
5.1. Corporate Organization; etc. Each of Merger Sub and Ameritrade is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
carry on its business as now conducted and to own, operate or lease its
properties and assets, except where the failure to be so organized, existing or
in good standing would not have a Material Adverse Effect on either Merger Sub
or Ameritrade. Each of Merger Sub and Ameritrade is duly qualified or licensed
to do business as a foreign company in good standing in each state of the United
States and in each foreign jurisdiction in which the conduct of its business or
the ownership, operation or leasing of its properties and assets requires such
qualification, except where the failure to be so qualified, licensed or in good
standing would not have a Material Adverse Effect on either Merger Sub or
Ameritrade. Each of Merger Sub and Ameritrade has delivered to the Company true,
complete and correct copies of the Certificate of Incorporation and Bylaws of
Merger Sub and Ameritrade.
5.2. Authorization; etc. (a) Each of OnMoney and Merger Sub has full
corporate power and authority to execute, deliver and perform this Agreement and
each of the other Transaction Documents and to consummate the transactions
contemplated hereby and thereby except where the failure to have such power and
authority would not have a Material Adverse Effect on either of OnMoney or
Merger Sub. The Board of Directors of each of OnMoney and Merger Sub has taken
all action required to authorize the execution and delivery of this
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Agreement and the other Transaction Documents, the performance of OnMoney or
Merger Sub's obligations hereunder and thereunder and the transactions
contemplated hereby and thereby. No other corporate proceedings on the part of
Merger Sub or OnMoney are necessary to authorize the execution, delivery and
performance by Merger Sub or OnMoney of this Agreement or the other Transaction
Documents. This Agreement is a valid and binding agreement of each of OnMoney
and Merger Sub, enforceable against it in accordance with its terms except (a)
as the same may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws now or hereafter in effect relating to creditors' rights
generally and (b) that the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
(b) Upon approval by the Board of Directors of Ameritrade, (i) Ameritrade
will have full corporate power and authority to execute, deliver and perform
this Agreement and each of the other Transaction Documents and to consummate the
transactions contemplated hereby and thereby except where the failure to have
such power and authority would not have a Material Adverse Effect on Ameritrade,
(ii) Ameritrade will have taken all action required to authorize the execution
and delivery of this Agreement and the other Transaction Documents, the
performance of Ameritrade's obligations hereunder and thereunder and the
transactions contemplated hereby and thereby, and (iii) no other corporate
proceedings on the part of Ameritrade will be necessary to authorize the
execution, delivery and performance by Ameritrade of this Agreement or the other
Transaction Documents. Upon approval by the Board of Directors of Ameritrade,
this Agreement will be a valid and binding agreement of Ameritrade, enforceable
against it in accordance with its terms except (x) as the same may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors' rights generally and (y) that the
remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the court
before which any proceedings therefor may be brought.
5.3. Consents and Approvals of Governmental Authorities. Except for the
filing of the Certificate of Merger with the State of Delaware and the
requirements of federal and state securities laws and except where the failure
to obtain such consent, approval, authorization, or to make any declaration,
filing or registration would not have a Material Adverse Effect on any of
OnMoney, Merger Sub or Ameritrade, no consent, approval or authorization of, or
declaration, filing or registration with, any federal, state, local or foreign
governmental or regulatory authority is required to be made or obtained by
OnMoney, Merger Sub or Ameritrade in connection with the execution, delivery and
performance of this Agreement or the other Transaction Documents or the
consummation of the transactions contemplated hereby or thereby, except such
consents, approvals, authorizations, declarations, filings or registrations the
failure of which to obtain would not be likely to have a Material Adverse Effect
on the parties' ability to consummate the Merger and the other transactions
contemplated hereby.
5.4. No Violations or Defaults. Except where any such violation or conflict
would not be material to OnMoney, Merger Sub or Ameritrade, neither the
execution and delivery of this Agreement or the other Transaction Documents nor
the consummation of the transactions contemplated hereby or thereby will violate
any provisions of the Certificate of Incorporation or Bylaws of Merger Sub or
Ameritrade or violate any statute or law or any judgment, decree,
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order, regulation or rule of any court or governmental authority to which
OnMoney, Merger Sub or Ameritrade is subject.
5.5. Brokers, Finders' Fees, etc. Each of Merger Sub, OnMoney and
Ameritrade has not employed any broker, finder, investment banker or financial
advisor as to whom the Company, Merger Sub, OnMoney or Ameritrade may have any
obligation to pay any brokerage or finders' fees, commission or similar
compensation in connection with the transactions contemplated hereby.
5.6. Capitalization. Schedule 5.6 hereto sets forth the authorized, issued
and outstanding shares of capital stock of Ameritrade as of the date hereof. All
issued and outstanding shares of capital stock of Ameritrade, (i) are duly
authorized, validly issued, fully paid and nonassessable, and (ii) are and when
issued were, free of preemptive rights. At the time of issuance, the Ameritrade
Shares issued pursuant to the Merger will be duly authorized and validly issued,
and such Ameritrade Shares will be fully paid and nonassessable and not subject
to preemptive (or similar) rights.
5.7. SEC Reports and Financial Statements. Each form, report, schedule,
registration statement and definitive proxy statement filed by Ameritrade with
the SEC prior to the date hereof (as such documents have been amended prior to
the date hereof, the "Ameritrade SEC Reports"), as of their respective dates,
complied in all material respects with the applicable requirements of the
Securities Act and the Exchange Act and the rules and regulations thereunder.
None of the Ameritrade SEC Reports, as of the date on which such SEC Report was
declared effective pursuant to the Securities Act or the date on which such SEC
Report was filed pursuant to the Exchange Act, as applicable, contained or
contains any untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. The
consolidated financial statements of Ameritrade and its subsidiaries included in
such reports comply as to form in all material respects with applicable
accounting requirements and with the published rules and regulations of the SEC
with respect thereto, have been prepared in accordance with GAAP, consistently
applied (except, in the case of the unaudited interim financial statements, as
permitted by the SEC) and fairly present in all material respects (subject, in
the case of the unaudited interim financial statements, to normal, year-end
audit adjustments) the consolidated financial position of Ameritrade and its
subsidiaries as at the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended. Ameritrade has timely
filed with the SEC all forms, reports and other documents required to be filed
prior to the date hereof, and no subsidiary of Ameritrade has filed, or been
required to file, any form, report or other document with the SEC, in each case,
pursuant to the Securities Act, the Exchange Act or the rules and regulations
thereunder. Since March 31, 2000, except as described in the Ameritrade SEC
Reports, there has been no change in any of the significant accounting
(including tax accounting) policies, practices or procedures of Ameritrade or
any subsidiary of Ameritrade, except changes resulting from changes in
accounting pronouncements of the Financial Accounting Standards Board or changes
in applicable laws or rules or regulations thereunder.
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5.8. Financing. Ameritrade has and will make available to Merger Sub,
sufficient cash, available lines of credit or other sources of immediately
available funds necessary to purchase Shares for which cash will be paid
pursuant to this Agreement.
5.9. Merger Sub. Merger Sub is a newly formed subsidiary of Ameritrade that
was organized for the purpose of the transactions contemplated by this
Agreement. Except for obligations incurred in connection with Merger Sub's
incorporation or organization and the negotiation and consummation of this
Agreement and the transactions contemplated hereby, Merger Sub has neither
incurred any obligation or liability nor engaged in any business or activity of
any type or kind whatsoever or entered into any agreement or arrangement with
any person.
ARTICLE VI.
CONDUCT OF BUSINESS PENDING CLOSING
From the date hereof to the Closing, and except as otherwise specifically
contemplated in the Financing Agreement, this Agreement, contained in
disclosures relating hereto or consented to or approved by Ameritrade or OnMoney
in writing, such approval not to be unreasonably withheld or delayed, the
Company and its Subsidiaries shall conform to the following:
6.1. Regular Course of Business. The Company and its Subsidiaries shall
carry on their businesses substantially in the same manner as heretofore
conducted and shall not engage in any transaction or activity, enter into any
agreement or make any commitment except in the ordinary course of business.
6.2. Amendments. No material change or amendment shall be made in the
Certificate of Incorporation, Bylaws or other governing instruments of the
Company or any of its Subsidiaries.
6.3. Capital Changes. Each of the Company and its Subsidiaries shall not
issue or sell options, warrants to purchase or rights to subscribe to, or enter
into any arrangement or contract with respect to, any shares of its capital
stock or any of its other securities, or make any other changes in its capital
structure, including, but not limited to, the issuance, sale or pledge of
additional shares of capital stock of any class or securities convertible into
any such shares, or any rights, warrants or options to acquire any such share or
other convertible securities.
6.4. Organization. The Company and each Subsidiary shall use reasonable
efforts to preserve its corporate existence and business organization intact and
to preserve its properties, tangible and intangible assets, books and records,
and relationships with its employees, suppliers, customers and others with whom
it has business relations.
6.5. Contracts. Except for contracts or commitments made in the ordinary
course of business the Company and its Subsidiaries shall not, without the prior
consent of OnMoney, (a) enter into any contract or commitment, (b) incur any
long-term indebtedness for borrowed money or issue any debt securities or
assume, guarantee or endorse the obligations of any other Person, (c) sell,
transfer or otherwise dispose of any of its material property or assets, (d)
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mortgage or encumber any of its material property or assets, or (e) enter into
any agreement or commitment involving an aggregate capital expenditure or
commitment on the part of the Company exceeding $10,000.
6.6. Compensation. The Company and its Subsidiaries will not (a) grant any
increase in compensation other than normal merit and cost-of-living increases to
any officer, employee, independent contractor or agent, (b) grant any bonuses to
any employee (except for those which come due in the ordinary course of
business, consistent with past practices), or (c) enter into or amend any
material Benefit Plan, employment contract or consulting agreement.
6.7. Payments. Neither the Company nor any Subsidiary shall declare, set
aside, make or pay any dividend or other distribution in respect of its capital
stock (other than in the ordinary course of business, consistent with past
practices) or directly or indirectly redeem, purchase or otherwise acquire any
of its capital stock.
6.8. Insurance. The Company and its Subsidiaries will maintain in full
force and effect all policies of insurance now held by it or otherwise naming
the Company as beneficiary or loss payee, including all insurance policies
disclosed or required to be disclosed pursuant to Section 4.20, and shall inform
OnMoney as soon as practicable of any notice of cancellation or non-renewal of
any insurance policy or binder. The Company shall also apply the proceeds, if
any, received under any insurance policy as a result of any loss or destruction
of or damage to any assets of the Company or its Subsidiaries to the repair or
replacement of such assets.
6.9. Taxes. Except for Taxes contested in good faith and for which adequate
reserves have been established in accordance with GAAP, the Company and its
Subsidiaries will pay all Taxes upon its properties and businesses as they
become due and prepare and duly file all Tax and other returns and reports which
are required to be filed in respect of Taxes.
ARTICLE VII.
ADDITIONAL AGREEMENTS
The Company hereby covenants and agrees with Merger Sub and Ameritrade, and
Merger Sub and Ameritrade hereby covenant and agree with the Company, as
follows:
7.1. Reasonable Access; Confidentiality. Each of the Company, Ameritrade
and OnMoney shall provide to the other party and to their respective authorized
representatives, during reasonable business hours, full access to the personnel,
books and records of the party in order that each of the Company, Ameritrade and
OnMoney may have full opportunity to make such additional investigation as it
shall reasonably desire of the affairs of the other party that such party deems
relevant to this Agreement; provided, however, that neither the Company,
Ameritrade nor OnMoney shall be obligated to disclose privileged information to
the other party unless and until it is clear that this Agreement will close
pursuant to Section 2.7. Each of the Company, Ameritrade and OnMoney agrees that
it will not, nor will its authorized representatives, contact any employee,
officer, agent, governmental agency, customer or supplier of the other party
without the prior consent of the other party. Each of the Company, Ameritrade
and OnMoney further agree that they shall keep all information obtained pursuant
to this Section
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7.1 confidential and shall protect such other party's confidential information
in the same manner as which it protects its own confidential information,
provided, however, that each party shall use, at a minimum, commercially
reasonable efforts to protect such other party's confidential information.
7.2. Stockholder Matters. The Company shall solicit the consents of its
stockholders as soon as practicable after the date hereof for the purposes of
approving the matters relating to this Agreement and the Merger. The Company
will, through its Board of Directors, recommend to its stockholders approval of
the Merger and this Agreement.
7.3. Ameritrade's or the Company's Knowledge of Breach. If prior to the
Closing Date, any of Ameritrade, OnMoney or the Company has knowledge of a
breach by the other of any representation, warranty or agreement contained in
this Agreement, the party so aware shall promptly advise the other party in
writing of the specifics thereof and such notice shall be delivered to the other
party prior to the Closing.
7.4. No Shop. Until the later of (i) the termination of this Agreement or
(ii) July 15, 2000, the Company will not, and will cause its directors,
officers, stockholders, employees, representatives, agents, advisors,
accountants and attorneys not to enter into any letters of intent, arrangements,
understandings, agreements, or otherwise solicit or engage in any negotiations
concerning, or provide any confidential information or data to any Person or
entity with respect to, or have any discussions with any Persons or entity
relating to, any merger, consolidation, liquidation, dissolution, acquisition,
business combination or purchase of all or any significant asset of, or any
equity interest in, directly or indirectly, the Company, and will immediately
cease and cause to be terminated any existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any of the
foregoing.
7.5. Supplements to Schedules. From time to time prior to the Effective
Time, the Company will promptly supplement or amend the Schedules hereto,
including without limitation Schedule 4.7(c), which they have delivered pursuant
to this Agreement with respect to any matter hereafter arising which, if
existing or occurring at the date of this Agreement, would have been required to
be set forth or described in any such Schedule or which is necessary to correct
any information in the Schedules hereto which has been rendered inaccurate
thereby. No disclosure by the Company pursuant to this Section 7.5, however,
shall be deemed to amend or supplement any Schedule hereto or to prevent or cure
any misrepresentation, breach of warranty, or breach of covenant unless the
transactions contemplated hereby are consummated pursuant to this Agreement in
which event any claims with respect to any such misrepresentations or breaches
shall be deemed waived by Ameritrade.
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7.6. All Reasonable Efforts. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use all reasonable efforts to
take, or cause to be taken, all action, and to do, or cause to be done as
promptly as practicable, all things necessary, proper and advisable under
applicable laws and regulations to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement. If 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, the execution
of additional instruments, the proper officers and directors of each party to
this Agreement shall take all such necessary action.
7.7. Consents and Approvals. The parties hereto each will cooperate with
one another and use all reasonable efforts to prepare all necessary
documentation, to effect promptly all necessary filings and to obtain all
necessary permits, consents, approvals, orders and authorizations of or any
exemptions by, all third parties and governmental bodies necessary to consummate
the transactions contemplated by this Agreement. Each party will keep the other
parties apprised of the status of any inquiries made of such party by any
governmental authority or members of their respective staffs with respect to
this Agreement or the transactions contemplated hereby or thereby.
7.8. Joint Marketing Agreement. The parties agree that, notwithstanding the
termination for any reason of this Agreement, the terms and conditions of the
Joint Marketing Agreement between the Company and OnMoney shall continue in full
force and effect for a period of six (6) months from the date of termination of
this Agreement, but shall terminate thereafter and be of no further force and
effect (other than the payment of accrued fees and expenses owed by the parties
to each other under the Joint Marketing Agreement for services provided prior to
the date of such termination, and the survival of any provisions of such
agreement which, by their terms, survive the termination thereof).
7.9. Employment Arrangements. Subject to Section 7.11, the Company will
continue to employ all employees of the Company and its Subsidiaries, under
substantially the same terms and conditions as their terms of employment prior
to the date hereof, subject to the sole and absolute discretion of OnMoney
(except as to the terms of any Company Benefit Plans to which such employee is a
party) to modify the terms of such employment or terminate such employee at any
time after Closing Date.
7.10. Severance and Employment Agreements. Except as provided in this
Agreement, OnMoney will pay all severance and other amounts, if any, that may be
due to any Company employee who has terminated or terminates his or her
employment with the Company after June 1, 2000 and prior to the Closing Date.
Any severance and other amounts payable to a Company employee who terminates his
or her employment with the Company on or after June 1, 2000 and prior to the
Closing Date shall be deducted from the Purchase Price, as set forth in Section
3.1(d), unless OnMoney consents to the payment of such severance or other
amounts prior to the Closing Date. The Company shall also pay all liabilities
due and payable to the Company's retired employees and other employees who
terminate their employment with the Company in connection with the consummation
of the transactions contemplated by this Agreement (other than pension
liabilities). All such payments made pursuant to the prior sentence shall be
deducted from the Purchase Price, as set forth in Section 3.1(d).
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7.11. Xxxxxx. As of the Closing Date, the Company shall cause J. Xxxxxxxx
Xxxxxx, III to resign as an officer of the Company; provided that section 4 of
the employment Agreement between J. Xxxxxxxx Xxxxxx, III and Pace Financial
Network, L.L.C. dated as of January 18, 2000 will remain in effect to the extent
necessary to preserve Xxxxxxxx Xxxxxx'x equity participation in the Merger
Consideration; and provided further, that the amount of any and all severance
payments due to Xxxxxxxx Xxxxxx shall be deducted from the Purchase Price.
7.12. Tax Reporting. Ameritrade, Merger Sub and the Company agree that, to
the extent permissible by law, each will report the Merger as a reorganization
within the meaning of Section 368(a) of the Code in any and all federal, state
and local income Tax returns filed by it. In the event that Ameritrade, Merger
Sub, and/or the Company determine that they are required by law to report the
Merger as not being a reorganization, Ameritrade shall promptly notify the
Company Stockholders in writing of such determination. J. Xxxxxxxx Xxxxxx, III
and Xxxxxx Xxxxx shall, by virtue of the Stockholder Consent to this Agreement,
be deemed to be appointed as the representatives of the Company Stockholders for
the purpose of receiving any such notification from Ameritrade.
7.13 Payment of Notes. Immediately after the Closing, Ameritrade shall (a)
provide funds to the Company sufficient to pay in full all principal and
interest owed up to and including the date of payment under the Company's
Convertible Promissory Notes due 2002 (the "Notes") and (b) cause the Company to
use such funds to make (and the Company shall make) such payments to the holders
of the Notes immediately after such funding. Such amounts shall be deducted from
the Purchase Price at Closing. The aggregate principal amount of the Notes
outstanding as of the date hereof is $2,280,150.
ARTICLE VIII.
CONDITIONS PRECEDENT TO AMERITRADE'S OBLIGATIONS
The obligations of Ameritrade under this Agreement shall be subject to the
satisfaction, on or before the Closing, of each of the following conditions:
8.1. Representations and Warranties. The representations and warranties of
the Company contained herein shall be true and accurate in all material respects
as of the date made and as of the Closing Date as though such representations
and warranties were made at and as of the Closing Date, except for
representations and warranties that are qualified as to materiality (and except
for representations made as of a certain date), each of which shall be true and
accurate in all material respects (or as of such date) and except for (i)
changes permitted or contemplated by this Agreement and (ii) changes occurring
in the ordinary course of business since the date of execution of this
Agreement; and Ameritrade shall have received at the Closing a certificate,
dated the Closing Date, signed by the President or Vice President of the Company
to such effect.
8.2. Secretary's Certificate. Ameritrade shall have received a certificate
of the Secretary of the Company, dated the Closing Date, certifying the
resolutions duly and validly adopted by the Company's directors evidencing the
authorization of their execution and delivery of this Agreement and other
Transaction Documents and the consummation of the transactions
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contemplated hereby and thereby, including but not limited to, the Merger, and
the names and signatures of the officers of the Company authorized to sign this
Agreement and the other Transaction Documents.
8.3. Good Standing Certificate. Ameritrade shall have received a
certificate with respect to the Company from the jurisdiction of its
incorporation attesting as to its valid existence and good standing as of a date
within 5 days prior to the Closing Date.
8.4. Performance. The Company shall have performed and complied with, in
all material respects, all agreements, obligations and conditions required by
this Agreement to be performed or complied with by it on or prior to the Closing
Date; and Ameritrade shall have received at the Closing a certificate, dated the
Closing Date, signed by the President of the Company to such effect.
8.5. Approvals and Filings. All consents, authorizations and approvals
from, and all material declarations, filings and registrations with, any
federal, state, local or foreign government agencies or third parties required
to consummate the transactions contemplated hereby and permit the Company to
continue its business consistent with its prior practice without a Material
Adverse Effect shall have been obtained or made and delivered to Ameritrade, in
form and substance to the reasonable satisfaction of Ameritrade.
8.6. Authorization of Merger. All corporate action necessary by the Company
to authorize the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby shall have been duly and
validly taken. This Agreement shall have been approved by the Board of Directors
of Ameritrade and requisite consent of stockholders of the Company in accordance
with the applicable requirements of the DGCL and the Certificate of
Incorporation and Bylaws of Ameritrade and the Company, respectively.
8.7. No Injunction. There shall not be in effect any preliminary or
permanent injunction or other order issued by any state or federal court which
prevents the consummation of the transactions contemplated hereby, and no such
proceedings with respect to any such injunction or order shall be pending or
threatened in writing.
8.8. Maintenance of Insurance. The Company will continue to carry its
existing insurance through the Closing Date and shall not allow any breach,
default or cancellation (other than expiration and replacement of policies in
the ordinary course of business) of such insurance policies or agreements to
occur or exist.
8.9. Material Adverse Change. There shall not have occurred any material
adverse change (taken together with all other developments) since the date of
this Agreement in the business; operations, assets, results and condition
(financial and other) or prospects of the Company and its Subsidiaries, taken as
a whole, including without limitation, an amendment of or supplement to the
Schedules to include the disclosure of an event, liability, contingency or facts
which OnMoney or Ameritrade reasonably believes would result in a Material
Adverse Effect as to the Company.
8.10. Opinion of Counsel. Ameritrade shall have received an opinion
substantially in the form of Exhibit B attached hereto from Xxxxxx, Xxxxxx &
Xxxxxxxxx, counsel to the Company.
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8.11. Escrow Agreement. The Company shall have executed and delivered to
Ameritrade and OnMoney the Escrow Agreement and shall have delivered to the
Escrow Agent stock powers, duly endorsed in blank, for each of the certificates
representing the Ameritrade Stock to be delivered into Escrow pursuant to
Section 3.1.
8.12. Shareholder Consents. Each officer and director of the Company shall
have consented to approval of this Agreement. The Company shall have solicited
the consents of its stockholders and the requisite consents in accordance with
the requirements of the DGCL the Company's Bylaws and Certificate of
Incorporation shall have been obtained approving this Agreement and the
consummation of the transactions hereby. Ameritrade shall have received a
certificate of the Secretary of the Company, dated the Closing Date, certifying
that the conditions of this Section 8.12 have been satisfied.
8.13. Financing Agreement. The Financing Agreement shall be in effect as of
the date hereof and no Financing Termination Event shall have occurred.
8.14. Noverus. All actions, proceedings, lawsuits or disputes between the
Company and Noverus (or any successor-in-interest thereto) shall have been
released, terminated, settled and/or fully adjudicated with no right of appeal,
in full satisfaction of any claim that may have existed between Noverus and the
Company.
8.15. Severance Payments. All severance payments payable by the Company to
Xxxxxxx Xxxx pursuant to the letter agreement between Xxxxxxx Xxxx and Pace
Financial Network, L.L.C., dated February 16, 1999 shall be fully paid or
released in full satisfaction of any such amount payable and all severance
payments payable by the Company to J. Xxxxxxxx Xxxxxx, III pursuant to the
agreement between J. Xxxxxxxx Xxxxxx, III and Pace Financial Network, L.L.C.,
dated as of January 18, 2000 shall be fully paid or released in full
satisfaction of any such amount payable.
8.16 Option Holders Agreements. J. Xxxxxxxx Xxxxxx, III, Xxxxxx Xxxxx and
the Company shall have executed and delivered to Ameritrade the Option Holders
Agreements.
ARTICLE IX.
CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATIONS
The obligations of the Company under this Agreement shall be subject to the
satisfaction, on or before the Closing, of each of the following conditions:
9.1. Representations and Warranties. The representations and warranties of
Merger Sub, OnMoney and Ameritrade contained herein shall be true and accurate
as of the date made and as of the Closing Date as though such representations
and warranties were made at and as of the Closing Date, except for
representations and warranties that are qualified as to materiality (and except
for representations made as of a certain date), which shall be true and accurate
in all material respects (or as of such date) and except for (i) changes
permitted or contemplated by this Agreement and (ii) changes occurring in the
ordinary course of business since the date of execution of this Agreement; and
the Company shall have received at the Closing a certificate,
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dated the Closing Date, signed by the President or Vice President of Merger Sub
and Ameritrade to such effect.
9.2. Secretary's Certificate. The Company shall have received a certificate
of the Secretary of OnMoney, Merger Sub and Ameritrade, dated the Closing Date,
certifying the resolutions duly and validly adopted by OnMoney's, Merger Sub's
and Ameritrade's directors evidencing the authorization of their execution and
delivery of this Agreement and other Transaction Documents and the consummation
of the transactions contemplated hereby and thereby, including but not limited
to, the Merger, and the names and signatures of the officers of the Company
authorized to sign this Agreement and the other Transaction Documents.
9.3. Good Standing Certificate. The Company shall have received a
certificate with respect to each of Merger Sub and Ameritrade from the
jurisdiction of its incorporation attesting as to its valid existence and good
standing as of a date within 5 days prior to the Closing Date.
9.4. Performance. OnMoney, Merger Sub and Ameritrade shall have performed
and complied with, in all material respects, all agreements, obligations and
conditions required by this Agreement to be performed or complied with by it on
or prior to the Closing Date and the Company shall have received at the Closing
a certificate, dated the Closing Date, signed by the Chief Financial Officer of
OnMoney, Merger Sub and Ameritrade to such effect.
9.5. Approvals and Filings. All consents, authorizations and approvals
from, and all material declarations, filings and registrations with, any
federal, state, local or foreign government agencies or third parties required
to consummate the transactions contemplated hereby without a Material Adverse
Effect shall have been obtained or made and delivered to the Company, in form
and substance to the reasonable satisfaction of the Company.
9.6. No Injunction. There shall not be in effect any preliminary or
permanent injunction or other order issued by any state or federal court which
prevents the consummation of the transactions contemplated hereby, and no such
proceedings with respect to any such injunction or order shall be pending or
threatened in writing.
9.7. Authorization of Merger. All corporate action necessary by Merger Sub,
OnMoney and Ameritrade to authorize the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby
shall have been duly and validly taken.
9.8. Material Adverse Change. There shall not have occurred any material
adverse change (taken together with all other developments) since the date of
this Agreement in the business, operations, assets, results and condition
(financial and other) or prospects of Ameritrade, including, without limitation,
an amendment of or supplement to the Schedules to include any event, liability,
contingency or facts which the Company reasonably believes would result in a
Material Adverse Effect.
9.9. Piggyback Registration Rights. The Company and Ameritrade shall have
executed a standard piggyback registration rights agreement in form and
substance reasonably satisfactory to the Company and Ameritrade.
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9.10 Opinion of Counsel. The Company shall have received an opinion
substantially in the form attached hereto as Exhibit C from the General Counsel
of Ameritrade.
9.11 Option Holders Agreements. Ameritrade and OnMoney shall have executed
and delivered to the Company the Option Holders Agreements.
ARTICLE X.
TERMINATION AND ABANDONMENT
10.1. Methods of Termination. This Agreement may be terminated and the
transactions herein contemplated may be abandoned at any time but not later than
the Closing:
(a) by mutual agreement of the Company and Ameritrade;
(b) by the Company or Ameritrade upon the occurrence of the other
party's bankruptcy, voluntary or involuntary petition for reorganization,
assignment of assets for the benefit of creditors, receivership,
liquidation or another usual and customary event of insolvency;
(c) by either party at any time on or after July 25, 2000, if the
Closing shall not have occurred; provided, however, that if the Closing
shall not have occurred because of any delay caused by required review by
the Securities and Exchange Commission then the parties shall not have the
right to terminate this Agreement pursuant to this Section 10.1(c) until
any time on or after August 31, 2000;
(d) by either party if there has been (i) a material violation or
breach by the other of its agreements, representations or warranties
contained in this Agreement or the Financing Agreement, which breach cannot
be cured or has not been cured by the breaching party within 30 days after
the giving of notice pursuant to Section 11.4 to the breaching party and
the party seeking termination is not in material violation or breach of its
agreements, representations or warranties contained in this Agreement or
(ii) a Financing Termination Event has occurred (as defined in the
Financing Agreement); or
(e) by Ameritrade if there shall have occurred a Material Adverse
Effect with respect to the Company.
10.2. Procedure Upon Termination. In the event of termination and
abandonment by the Company, or Ameritrade, or both, pursuant to this Article X,
written notice thereof shall forthwith be given to the other parties and this
Agreement shall terminate and be abandoned without further action by Ameritrade
or the Company. If this Agreement is terminated as provided herein:
(a) each party will redeliver all documents, work papers and other
material of any other party relating to the transactions contemplated
hereby, whether obtained before or after the execution hereof, to the
parties furnishing the same; and
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(b) no party hereto shall have any liability or further obligation to
any other party to this Agreement, except for repayment by the Company of
any amounts paid by Ameritrade or OnMoney pursuant to this Agreement and
any liabilities under the Financing Agreement or other agreement executed
in connection herewith, and except for such other legal and equitable
rights and remedies which any party may have by reason of any breach or
violation of this Agreement by any other party.
ARTICLE XI.
MISCELLANEOUS PROVISIONS
11.1. Amendment and Modification. This Agreement may be amended, modified
and supplemented only by written agreement of each of the parties hereto.
11.2. Waiver of Compliance. Any failure of a party to comply with any
obligation, covenant, agreement or condition contained herein may be expressly
waived in writing by the party to whom such obligation is owed, but such waiver
or failure to insist upon strict compliance shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure.
11.3. Representations and Warranties, etc. All of the terms and conditions
of this Agreement, together with the warranties, representations, agreements and
covenants contained herein or in any instrument or other document to be
delivered pursuant to this Agreement, shall survive until 180 days after the
Closing Date, except for (a) the obligations of Ameritrade to issue the
Ameritrade Option Shares pursuant to Section 3.1(f) (subject to Section 8.16)
which shall survive until such Ameritrade Option Shares are delivered pursuant
to Section 3.1(f) (subject to Section 8.16), (b) the obligations of Ameritrade
to deliver to the Escrow Shareholders the remaining Escrow Shares within five
days after the 180th day following the Closing Date pursuant to Section 3.4
(which shall survive until such remaining Escrow Shares are so delivered), (c)
the obligations of Ameritrade pursuant to Section 7.12 (which shall survive
until September 15, 2007), and (d) the obligations of Ameritrade and OnMoney set
forth in Section 11.15 (which shall survive until the first anniversary after
the Closing Date).
11.4. Notices. All notices, requests, demands and other communications
required or permitted hereunder to or upon any party hereto shall be deemed to
have been duly given or made for all purposes if (a) in writing and sent by (i)
messenger or a recognized national overnight courier service for next day
delivery with receipt therefor or (ii) certified or registered mail, postage
paid, return receipt requested, or (b) sent by facsimile transmission with a
written copy thereof sent on the same day by postage paid first-class mail or
(c) by personal delivery to such party at the following address:
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If to the Company to:
Financial Passport, Inc.
0000 Xxxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxx, XX 00000
Fax: (000) 000-0000
Attention: J. Xxxxxxxx Xxxxxx, III
with a copy to:
Xxxxxx, Xxxxxx & Xxxxxxxxx
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X.
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx
or to such other person or address as the Company shall designate to Ameritrade
in writing.
If to OnMoney to:
OnMoney Financial Services Corporation
0000 Xxxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxx Xxxxxx, XX 00000-0000
Fax: (000) 000-0000
Attention: Chief Financial Officer
with a copy to:
Xxxxx, Xxxxx & Xxxxx
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
or to such other person or address as OnMoney shall designate to the Company in
writing.
If to Ameritrade to:
Ameritrade Holding Corporation
000 Xxxxxxxx Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx Xxxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attention: General Counsel
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with a copy to:
Xxxxx, Xxxxx & Xxxxx
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxx
or to such other person or address as Ameritrade shall designate to the Company
in writing.
The date of giving or making any such notice or demand shall be, in the
case of clauses (a)(i) and (c), the date of the receipt, in the case of clause
(a)(ii), five business days after such notice or demand is sent, and, in the
case of clause (b), the business day next following the date such notice or
demand is sent.
11.5. Binding Nature; Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns, but neither this Agreement nor any of the rights, interest or
obligations hereunder shall be assigned by any of the parties hereto without
prior written consent of the other parties; except, that (i) Ameritrade may
assign any of its rights hereunder to any affiliate or wholly-owned subsidiary,
(ii) Ameritrade may grant a security interest in its rights and interests
hereunder to its lenders and (iii) as otherwise provided in this Section.
Nothing contained herein, express or implied, is intended to confer on any
Person other than the parties hereto or their successors and assigns, any
rights, remedies, obligations or liabilities under or by reason of this
Agreement, with the exception of the holders of options to purchase Shares as
contemplated by Section 3.1(f), the Company Stockholders and the holders of the
Notes for purposes of Section 7.13. Nothing contained herein shall be deemed to
give rise to any personal obligation of any of the directors, officers,
stockholders or principals of any of the parties hereto, by reason of any breach
or violation of any of the provisions hereof or otherwise, and no party hereto
shall have any right against, or be entitled to xxx or seek any recovery from,
any such Persons.
11.6. Knowledge. As used herein, the phrase "to the knowledge of the
Company" or any similar phrase shall mean the actual knowledge of any officer or
director of the Company, in which case after reasonable inquiry.
11.7. Entire Agreement. This Agreement, including the other documents
referred to herein, embodies the entire agreement and understanding of the
parties hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties, covenants or undertakings, other than those
expressly set forth or referred to herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
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11.8. Expenses. OnMoney, Ameritrade and the Company will each pay their own
expenses in connection with the negotiation of this Agreement and the other
Transaction Documents, the performance of their obligations hereunder and
thereunder, and the consummation of the transactions contemplated hereby and
thereby.
11.9. Press Releases and Announcements. No press release related to this
Agreement or the other Transaction Documents and the transactions contemplated
herein or therein will be issued without the express written consent of
Ameritrade or OnMoney on the one hand, and the Company on the other hand, which
will not be unreasonably withheld or delayed, except as otherwise required by
law (including without limitation any federal or state securities, insurance,
financial regulatory or similar law); provided, however, that the Company and
OnMoney will give prior notice to the other party of the content and timing of
any such press release or other public statement required by applicable law.
Notwithstanding the foregoing, OnMoney or Ameritrade may disclose, in general
terms, the existence of this Agreement and its financial terms to (i)
prospective investors from whom OnMoney is soliciting financing, or (ii)
security analysts during the course of Ameritrade's periodic communications with
security analysts in the ordinary course of business; provided that such
investors and analysts execute standard confidentiality agreements related to
the disclosure.
11.10. Governing Law. Except to the extent the DGCL shall govern the
Merger, this Agreement and the legal relations between the parties hereto shall
be governed by and construed in accordance with the internal laws of the State
of New York without regard to choice of law principles.
11.11. Jurisdiction. The parties hereto consent to personal jurisdiction in
the State of New York and agree that the exclusive venue and place of trial for
their solution of any disputes arising in connection with the interpretation or
enforcement of this Agreement shall be the Federal District Court in the
Southern District of New York.
11.12. Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
11.13. Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
11.14. Headings. The headings contained in this Agreement are inserted for
convenience of reference only and shall not constitute a part hereof.
11.15 Provision of Information. Ameritrade shall on the Closing Date inform
the Company Stockholders in writing as to whether it has transferred or entered
into any binding agreement to transfer any of its OnMoney stock to any other
Person. OnMoney shall on the Closing Date inform the Company Stockholders in
writing as to whether OnMoney has issued or entered into any binding agreement
to issue equity securities of OnMoney to any Person(s) other than Ameritrade.
Such information shall include information regarding the amount of stock
transferred or to be transferred by Ameritrade, the terms (including the voting
rights) of any
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equity securities issued or to be issued by OnMoney and such other information
as the Company Stockholders may reasonably request concerning such transactions.
Ameritrade and OnMoney shall update this information by providing, as soon as
practicable after the closing of the relevant transaction, written notice of and
information regarding any transfer of OnMoney stock by Ameritrade or any
issuance of equity securities by OnMoney that occurs between the Closing Date
and the date that is one year after the Closing Date. J. Xxxxxxxx Xxxxxx, III
and Xxxxxx Xxxxx shall, by virtue of the Stockholder Consent, be deemed to be
appointed as the representatives of the Company Stockholders for the purpose of
receiving and requesting any information described in this Section 11.15 from
Ameritrade and OnMoney.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed the day and year first above written.
FINANCIAL PASSPORT, INC.
By: /s/ J. Xxxxxxxx Xxxx, III
---------------------------------
Name: J. Xxxxxxxx Xxxx, III
Title: Chief Executive Officer
ONMONEY FINANCIAL SERVICES CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chief Financial Officer
OM ACQUISITION SUB I, INC.
By: /s/ Xxxx Xxx Xxxxxxxx
---------------------------------
Name: J. Xxx Xxxxxxxx
Title: Chairman
AMERITRADE HOLDING CORPORATION
By: /s/ Xxxx Xxx Xxxxxxxx
---------------------------------
Name: J. Xxx Xxxxxxxx
Title: Chairman
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List of Exhibits and Schedules to Merger Agreement*
--------------------------------------------------
Exhibit A - Escrow Agreement
Exhibit B - Form of Opinion of Counsel to FPI
Exhibit C - Form of Opinion of Counsel to Ameritrade
Schedule 2.4 - Directors of the Surviving Corporation in the Merger
Schedule 2.5 - Officers of the Surviving Corporation in the Merger
Schedule 3.1(b) - Escrow Shareholders and Escrow Shares
Schedule 3.1(f) - FPI Employee Option Shares
Schedule 4.1 - FPI Organizational Documents
Schedule 4.3 - Capitalization of FPI
Schedule 4.4 - Violations or Defaults
Schedule 4.6 - FPI Ownership Interests
Schedule 4.7 - FPI Financial Information
Schedule 4.8 - Absence of Certain Changes with respect to FPI
Schedule 4.9 - Real Property Leased or Owned by FPI
Schedule 4.10 - FPI Intellectual Property
Schedule 4.11 - FPI Material Contracts
Schedule 4.12 - Material Proceedings relating to FPI
Schedule 4.13 - Exceptions to FPI Tax Representation
Schedule 4.14 - List of FPI Benefit Plans
Schedule 4.17 - Brokers/Finders Fees
Schedule 4.18 - FPI Affiliate Transactions
Schedule 4.19 - Employees and Independent Contractors of FPI
Schedule 4.20 - FPI Insurance Policies
Schedule 4.21 - FPI Customer List
Schedule 4.22 - FPI Bank Accounts
Schedule 4.23 - FPI Accounts Receivable
Schedule 5.6 - Ameritrade Holding Corporation Capitalization
*Ameritrade Holding Corporation agrees to furnish supplementally to the
Commission upon request a copy of any omitted exhibit or schedule to the Merger
Agreement.
