Exhibit 2.1
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AGREEMENT AND PLAN OF MERGER
dated as of February 28, 2002
by and among
INVESTMENT TECHNOLOGY GROUP, INC.,
▇▇▇▇▇▇ GROUP INC.
and
INDIGO ACQUISITION CORP.
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TABLE OF CONTENTS
Page
ARTICLE ONE
DEFINITIONS
SECTION 1.1. Definitions................................................1
ARTICLE TWO
THE MERGER
SECTION 2.1. Effective Time of Merger...................................8
SECTION 2.2. Closing....................................................8
SECTION 2.3. Effects of the Merger......................................9
SECTION 2.4. Certificate of Incorporation and By-Laws...................9
SECTION 2.5. Officers and Directors.....................................9
SECTION 2.6. Effect on Capital Stock....................................9
SECTION 2.7. Exchange of Certificates for Merger Consideration.........10
SECTION 2.8. Options...................................................12
SECTION 2.9. Certain Adjustments.......................................14
ARTICLE THREE
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of Company.................14
SECTION 3.2. Representations and Warranties of Parent and Merger
Subsidiary..............................................29
ARTICLE FOUR
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 4.1. Interim Conduct...........................................31
SECTION 4.2. Notice of Certain Events..................................34
ARTICLE FIVE
ADDITIONAL AGREEMENTS
SECTION 5.1. Preparation of Proxy Statement; Stockholders Meeting......35
SECTION 5.2. Access to Information.....................................36
SECTION 5.3. Reasonable Best Efforts...................................36
SECTION 5.4. Acquisition Proposals.....................................37
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SECTION 5.5. Fees and Expenses.........................................39
SECTION 5.6. Indemnification; Directors' and Officers' Insurance.......39
SECTION 5.7. Public Announcements......................................40
SECTION 5.8. Employee Benefits.........................................41
SECTION 5.9. Additional Agreements.....................................41
ARTICLE SIX
CONDITIONS PRECEDENT
SECTION 6.1. Conditions to Each Party's Obligation To Effect the
Merger..................................................41
SECTION 6.2. Conditions to Obligations of Parent and Merger
Subsidiary..............................................42
SECTION 6.3. Conditions to Obligations of Company......................43
ARTICLE SEVEN
TERMINATION AND AMENDMENT
SECTION 7.1. Termination...............................................43
SECTION 7.2. Effect of Termination.....................................45
SECTION 7.3. Amendment.................................................46
SECTION 7.4. Extension; Waiver.........................................46
ARTICLE EIGHT
GENERAL PROVISIONS
SECTION 8.1. Non-survival of Representations, Warranties and
Agreements..............................................47
SECTION 8.2. Notices...................................................47
SECTION 8.3. Interpretation............................................48
SECTION 8.4. Counterparts..............................................48
SECTION 8.5. Entire Agreement; No Third Party Beneficiaries............48
SECTION 8.6. Governing Law.............................................48
SECTION 8.7. Waiver of Jury Trial......................................48
SECTION 8.8. Severability..............................................48
SECTION 8.9. Assignment................................................49
SECTION 8.10. Enforcement...............................................49
Exhibit A Form of Voting Agreement
Exhibit B Form of Certificate of Incorporation of Surviving Corporation
Exhibit C Form of Letter from Holders of Company Options
Schedule I List of Employees Entering into Employment Agreements
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AGREEMENT AND PLAN OF MERGER dated as of February 28, 2002 (this
"Agreement") by and among Investment Technology Group, Inc., a Delaware
corporation ("Parent"), ▇▇▇▇▇▇ Group Inc., a Delaware corporation ("Company"),
and Indigo Acquisition Corp. ("Merger Subsidiary"), a Delaware corporation and a
direct wholly owned subsidiary of Parent.
WHEREAS, the boards of directors of Parent, Merger Subsidiary and Company
have approved, and deem it advisable and in the best interests of their
respective stockholders to consummate, the business combination transaction
provided for herein, on the terms and subject to the conditions hereof, in which
Merger Subsidiary would merge with and into Company, with Company surviving as a
wholly-owned subsidiary of Parent (the "Merger");
WHEREAS, as a condition and inducement to Parent's willingness to enter
into this Agreement, Parent, Company and certain stockholders of Company are
entering into an agreement dated as of the date hereof, in the form of Exhibit A
(the "Voting Agreement"), pursuant to which such stockholders have, among other
things, given their proxy to Parent to vote their shares of Company Common Stock
(as defined herein) in favor of the adoption of this Agreement;
WHEREAS, as a further condition and inducement to Parent's willingness to
enter into this Agreement, Merger Subsidiary, Company or a Subsidiary of Company
and the employees of Company listed on Schedule I are entering into employment
agreements and a consulting agreement contemporaneously herewith (collectively,
the "Management Agreements"); and
WHEREAS, Parent, Merger Subsidiary and Company desire to make certain
representations, warranties and agreements in connection with the Merger and
also to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.1. Definitions. For all purposes in this Agreement, the following
terms shall have the respective meanings set forth in this Section 1.1 (such
definitions to be equally applicable to both the singular and plural forms of
the terms herein defined):
"Acquisition Proposal" has the meaning given in Section 5.4(a).
"Action" has the meaning given in Section 3.1(g).
"Affected Employees" has the meaning given in Section 5.8(a).
"AHA" means Axe-Houghton Associates, Inc., a Delaware corporation and a
wholly owned Subsidiary of Company.
"Average Parent Price" means the average (rounded to the nearest
thousandth) of the closing trading prices of Parent Common Stock on the NYSE, as
reported in The Wall Street Journal, Eastern Edition (or such other source as
the parties shall agree in writing), for the 20 full trading days ending on the
fifth business day immediately preceding the Closing Date.
"AHA Stock Purchase Agreement" has the meaning given in Section 3.1(t).
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"Board of Directors" means the board of directors of Company.
"Cash-out Option" means each Company Option that is listed on the Cash-out
Option Schedule.
"Cash-out Option Schedule" means a schedule delivered by Company to Parent
within 30 days after the date hereof that sets forth (i) the name of each holder
who has elected to have such holder's Company Options treated as "Cash-out
Options" hereunder, (ii) the number of Company Options as to which such election
has been made and (iii) the exercise price for each such Company Option.
"Certificate of Merger" has the meaning given in Section 2.1.
"Change in Company Recommendation" has the meaning given in Section 5.1(b).
"Closing" has the meaning given in Section 2.2.
"Closing Date" has the meaning given in Section 2.2.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" has the meaning given in the first paragraph of this Agreement.
"Company Certificates" has the meaning given in Section 2.7(a).
"Company Common Stock" means the common stock, par value $0.01, of Company,
including the associated Company Rights.
"Company Contracts" has the meaning given in Section 3.1(i).
"Company Disclosure Schedule" means the disclosure schedule delivered by
Company to Parent concurrently with the execution and delivery of this
Agreement.
"Company Expenses" means all out-of-pocket costs and expenses, including
all fees and expenses of investment bankers, attorneys, accountants and other
advisors, incurred by or on behalf of Company or any of its Subsidiaries in
connection with or related to the Transaction Agreements and the transactions
contemplated thereby, but in no case shall the Company Expenses exceed $1.0
million.
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"Company Option" means an option to purchase shares of Company Common Stock
granted to an employee, consultant, independent contractor or director.
"Company Permits" means permits, licenses, variances, exemptions, orders
and approvals of all Governmental Entities held by Company or any of its
Subsidiaries (other than AHA or any of its Subsidiaries) which are material to
the operation of their respective businesses.
"Company Plans" has the meaning given in Section 3.1(j).
"Company Preferred Stock" means the preferred stock, par value $0.01 per
share, of Company.
"Company Recommendation" has the meaning given in Section 5.1(a).
"Company Regulatory Consents" has the meaning given in Section 3.1(c).
"Company Rights" means the rights issued pursuant to the Company Rights
Agreement.
"Company Rights Agreement" means the Rights Agreement dated as of December
17, 1996 between Company and Continental Stock Transfer & Trust Company, as
rights agent.
"Company RSU" means restricted shares of Company Common Stock.
"Company SEC Documents" has the meaning given in Section 3.1(d).
"Company Stockholders Meeting" has the meaning given in Section 5.1(b).
"Company Stock Option Plans" has the meaning given in Section 2.8(b).
"Company Stock Purchase Plans" means the 1996 Employee Stock Purchase Plan
and the 1997 Foreign Employee Stock Purchase Plan of Company.
"Company's Current Premium" has the meaning given in Section 5.6(b).
"Company's Financial Advisor" has the meaning given in Section 3.1(r).
"Confidentiality Agreements" means the confidentiality agreements dated
March 7, 2001 and November 5, 2001 between Parent and Company, as amended on the
date hereof.
"Constituent Corporations" means Merger Subsidiary and Company.
"Controlled Group" means, with respect to any person, any organization
which is a member of a controlled group of organizations within the meaning of
Code Section 414(b), (c), (m) or (o).
"Dissenting Shares" has the meaning given in Section 2.6(d).
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"DGCL" means the Delaware General Corporation Law.
"Effective Time" has the meaning given in Section 2.1.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" has the meaning given in Section 3.1(j).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Agent" has the meaning given in Section 2.7(a).
"Exchange Fund" has the meaning given in Section 2.7(a).
"Exchange Ratio" means the Merger Consideration divided by the Average
Parent Price, rounded to the nearest thousandth of a share.
"Final Proxy Statement" has the meaning given in Section 5.1(c).
"Foreign Plan" means any plan, program, policy, arrangement or agreement
maintained or contributed to by, or entered into with, Company or any of its
Subsidiaries with respect to employees (or former employees) employed outside
the United States.
"GAAP" means accounting principles generally accepted in the United States
in effect at the applicable time.
"Governmental Consents" has the meaning given in Section 3.1(c).
"Governmental Entity" means any court, administrative agency or commission
or other governmental authority or instrumentality, or SRO, domestic or foreign.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976,
as amended.
"Indemnified Liabilities" has the meaning given in Section 5.6(a).
"Indemnified Parties" has the meaning given in Section 5.6(a).
"Intellectual Property" means all of the following, in whatever form or
medium, anywhere in the world: patents, trademarks, service marks, trade names,
corporate names, domain names, copyrights, and copyrighted works; registrations
thereof and applications (including provisional applications) therefor;
derivatives, continuations, continuations-in-part, extensions, divisionals,
re-examinations, reissues and renewals thereof; trade secrets, software (in any
form, including source code and object code), firmware, mask works, programs,
flow charts, documentation, inventions (whether patentable or unpatentable),
utility models, discoveries, proprietary processes, and items of proprietary
know-how, information, data (whether or not protected by copyright or other
intellectual
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property), proprietary prospect lists, customer lists, projections, analyses,
proprietary market studies and any other intellectual property.
"IRS" means the Internal Revenue Service.
"Law" means any United States Federal, state, local or foreign statute,
law, ordinance, rule or code, or a rule or regulation of any Governmental
Entity.
"Lien" means any lien, claim, charge, option, encumbrance, mortgage, pledge
or security interest.
"Management Agreements" has the meaning given in the recitals of this
Agreement.
"material", with respect to any event, change or effect with respect to any
person, means an event, change or effect which is material in relation to the
condition (financial or otherwise), properties, assets (including, without
limitation, client base), liabilities, businesses or results of operations of
such person and its Subsidiaries taken as a whole.
"Material Adverse Effect" means (i) with respect to Company, a material
adverse effect on the condition (financial or otherwise), properties, assets
(including, without limitation, client base), liabilities, businesses or results
of operations of Company and its Subsidiaries taken as a whole or the Surviving
Corporation and its Subsidiaries taken as a whole, in each case, after giving
effect to the Specified Asset Sales, or an adverse effect on the ability of
Company to perform its obligations hereunder on a timely basis and (ii) with
respect to Parent, a material adverse effect on the condition (financial or
otherwise), properties, assets (including, without limitation, client base),
liabilities, businesses or results of operations of Parent and its Subsidiaries
taken as a whole or an adverse effect on the ability of Parent or Merger
Subsidiary to perform its respective obligations hereunder on a timely basis;
provided, however, that in determining whether there has been a Material Adverse
Effect with respect to any person, the following shall be disregarded: (a) any
adverse effect resulting from conditions in the securities industry generally,
or from general economic conditions, in each case, in the countries in which
such person or any of its Subsidiaries conducts business and (b) changes in the
value of the securities portfolio owned by such person or any of its
Subsidiaries.
"Merger" has the meaning given in the recitals of this Agreement.
"Merger Consideration" has the meaning given in Section 2.6(b).
"Merger Subsidiary" has the meaning given in the recitals of this
Agreement.
"NASD" means the National Association of Securities Dealers, Inc.
"Net Cash Proceeds" means, with respect to the Specified Asset Sale under
the AHA Stock Purchase Agreement, the proceeds in the form of cash or cash
equivalents received by Company or any of its Subsidiaries from such Specified
Asset Sale (including, for the avoidance of doubt, in payment of accounts
receivable) prior to the Effective Time, net of:
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(i) all out-of-pocket expenses and fees paid or payable by Company or
any of its Subsidiaries in connection with such Specified Asset Sale
(including legal, accounting and investment banking fees);
(ii) all taxes paid or payable by Company or any of its Subsidiaries
in connection with such Specified Asset Sale, after taking into account any
reduction in consolidated tax liability due to available tax credits or
deductions and any tax sharing arrangements; and
(iii) all duties, obligations and liabilities arising from employee
benefit or compensation plans, practices, policies and arrangements
relating to employees of AHA or any of its Subsidiaries or their businesses
or the employment or termination of employment of any such employees, other
than salary and bonus of such employees accrued in the ordinary course of
business prior to the date of consummation of such Specified Asset Sale.
The amount of the Net Cash Proceeds shall not be determined until all
adjustments to the purchase prices for such Specified Asset Sale are completed
in accordance with the terms of the applicable Specified Asset Sale Agreement
and are not subject to further adjustment. The Net Cash Proceeds shall be
calculated without regard to any indemnity obligations of Company under the
applicable Specified Asset Sale Agreement.
"Number of Shares and Options Outstanding" means the sum of the number of
shares of Company Common Stock issued and outstanding immediately prior to the
Effective Time (other than such shares to be canceled pursuant to Section
2.6(a)) including Company RSUs, plus the number of shares of Company Common
Stock issuable upon the exercise of all Company Stock Options outstanding
immediately prior to the Effective Time.
"NYSE" means the New York Stock Exchange, Inc.
"Option Consideration" has the meaning given in Section 2.8(a).
"Order" has the meaning given in Section 3.1(g).
"Parent" has the meaning given in the recitals of this Agreement.
"Parent Common Stock" means the common stock, par value $0.01 per share, of
Parent.
"Parent Expenses" means all out-of-pocket costs and expenses, including all
fees and expenses of investment bankers, attorneys, accountants and other
advisors, incurred by or on behalf of Parent or any of its Subsidiaries in
connection with or related to the Transaction Agreements and the transactions
contemplated thereby, but in no case shall the Parent Expenses exceed $1.0
million.
"person" means any individual, corporation, partnership, limited liability
company, joint venture, incorporated or unincorporated association, joint stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof.
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"Proxy Statement" has the meaning given in Section 5.1(a).
"Representative" means, with respect to any person, any officer, director,
employee, affiliate, agent, representative or advisor, including any investment
banker, attorney or accountant retained by such person or any of its
Subsidiaries.
"Required Company Vote" has the meaning given in Section 3.1(m).
"Rollover Option" means each Company Option, whether or not vested, other
than (x) a Cash-out Option or (ii) a Company Option not constituting a Cash-out
Option that is exercised prior to the Effective Time.
"SEC" means the Securities and Exchange Commission.
"Section 7.2 Acquisition Proposal" means any Acquisition Proposal with
respect to assets (including equity interests in Subsidiaries other than AHA)
representing in the aggregate one-third or more of the consolidated assets of
Company and its Subsidiaries (after giving effect to the Specified Asset Sales)
or equity interests representing one-third or more (in economic or voting power)
of the outstanding equity interests in Company.
"Securities Act" means the Securities Act of 1933, as amended.
"Solicit" has the meaning given in Section 5.4(a).
"Specified Asset Sale Agreements" has the meaning given in Section 3.1(t).
"Specified Asset Sales" means the sales of AHA and its Subsidiaries or
their assets pursuant to the Specified Asset Sale Agreements.
"SROs" means industry self-regulatory organizations.
"Subsidiary," as to any party, means any corporation or other organization,
whether incorporated or unincorporated, (i) of which such party or any other
Subsidiary of such party is a general partner (excluding partnerships, the
general partnership interests of which held by such party or any Subsidiary of
such party do not have a majority of the voting interests in such partnership),
or (ii) at least a majority of the securities or other interests of which having
by their terms ordinary voting power to elect a majority of the board of
directors or others performing similar functions with respect to such
corporation or other organization is directly or indirectly owned or controlled
by such party or by any one or more of its Subsidiaries.
"Superior Proposal" means a bona fide written Acquisition Proposal not
Solicited in violation of this Agreement and which the Board of Directors
concludes in good faith, after consultation with its financial and legal
advisors, taking into account all legal, financial, regulatory and other
relevant aspects of the proposal and the person making the proposal (including
any break-up fees, expense reimbursement provisions and conditions to
consummation), (i) is more favorable to the stockholders
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of Company, from a financial point of view, than the transactions contemplated
by this Agreement and (ii) is not subject to any financing contingencies and is
from a person that the Board of Directors concludes in good faith, taking into
consideration advice from a nationally recognized investment bank, is
financially capable of consummating such proposal; provided that, for purposes
of this definition, "Acquisition Proposal" shall be deemed to refer only to a
transaction involving a majority of the outstanding voting securities of
Company.
"Surviving Corporation" means Company, at and after the Effective Time, as
the surviving corporation in the Merger.
"tax" (including, with correlative meaning, the terms "taxes" and
"taxable") includes, except where the context otherwise requires, all Federal,
state, local and foreign income, profits, franchise, gross receipts, payroll,
sales, employment, use, property, withholding, excise, occupancy, custom, duty,
capital stock, ad valorem, value added, estimated, stamp, alternative and other
taxes, governmental duties or governmental assessments of any nature whatsoever,
together with all interest, penalties and additions imposed with respect to such
amounts.
"Termination Fee" means $4.5 million.
"Transaction Agreements" means this Agreement, the Voting Agreement and the
Management Agreements.
"Violation" has the meaning given in Section 3.1(c).
"Voting Debt" has the meaning given in Section 3.1(b).
"Voting Agreement" has the meaning given in the recitals of this Agreement.
ARTICLE TWO
THE MERGER
SECTION 2.1. Effective Time of Merger Subject to the provisions of this
Agreement, a certificate of merger (the "Certificate of Merger") shall be duly
prepared, executed in accordance with the DGCL and thereafter delivered to the
Secretary of State of the State of Delaware for filing, as provided in the DGCL,
on the Closing Date. The Merger shall become effective upon the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware or at
such time thereafter as is provided in the Certificate of Merger (the "Effective
Time").
SECTION 2.2. Closing. The closing of the Merger (the "Closing") will take
place at 10:00 a.m. on the date (the "Closing Date") that is two business days
after satisfaction or waiver (subject to applicable law) of the conditions
(excluding conditions that, by their terms, are to be satisfied on the Closing
Date) set forth in Article Six, unless another time or date is agreed to in
writing by the parties hereto. The Closing shall be held at the offices of
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, unless
another place is agreed to in writing by the parties hereto.
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SECTION 2.3. Effects of the Merger. At the Effective Time, Merger
Subsidiary shall be merged with and into Company, the separate existence of
Merger Subsidiary shall cease, and Company shall survive the Merger as the
Surviving Corporation. The Merger will have the effects set forth in the DGCL.
SECTION 2.4. Certificate of Incorporation and By-Laws. At the Effective
Time, the certificate of incorporation of Company shall be amended and restated
in its entirety as set forth in Exhibit B hereto and shall be the certificate of
incorporation of the Surviving Corporation until thereafter changed or amended
as provided therein or by applicable law. The by-laws of Merger Subsidiary as in
effect immediately prior to the Effective Time shall be adopted by, and will be
the by-laws of, the Surviving Corporation until thereafter changed or amended as
provided therein or by applicable law.
SECTION 2.5. Officers and Directors. The officers of Company immediately
prior to the Effective Time shall be the officers of the Surviving Corporation,
until the earlier of their resignation or removal or otherwise ceasing to be an
officer or until their respective successors are duly appointed. The directors
of Merger Subsidiary immediately prior to the Effective Time shall be the
directors of the Surviving Corporation, until the earlier of their resignation
or removal or otherwise ceasing to be a director or until their respective
successors are duly elected and qualified.
SECTION 2.6. Effect on Capital Stock; Merger Consideration. As of the
Effective Time, by virtue of the Merger and without any action on the part of
the holder of any shares of Company Common Stock:
(a) Cancellation of Treasury Stock and Parent-Owned Stock, Etc. All
shares of Company Common Stock that are owned by Company as treasury stock
or otherwise and all shares of Company Common Stock that are owned by
Parent or Merger Subsidiary shall be canceled and retired and shall cease
to exist and no cash or other consideration shall be delivered in exchange
therefor.
(b) Conversion of Company Common Stock. Subject to Section 2.6(d),
each share of Company Common Stock issued and outstanding immediately prior
to the Effective Time (including (i) all vested and unvested Company RSUs
and (ii) any shares of Company Common Stock held by participants in the
Company Stock Purchase Plans and issued prior to the date hereof, but
excluding (x) shares to be canceled in accordance with Section 2.6(a) and
(y) Dissenting Shares) shall be converted at the Effective Time into the
right to receive, without interest, an amount in cash equal to the sum of
(i) $12.32 plus (ii) the amount determined by dividing (x) the Net Cash
Proceeds by (y) the Number of Shares and Options Outstanding (the "Merger
Consideration"). Upon such conversion, all such shares of Company Common
Stock shall no longer be deemed to be outstanding and shall automatically
be canceled and retired and shall cease to exist, and each certificate
previously representing any such shares shall thereafter represent only the
right to receive the Merger Consideration upon the surrender of the
certificate representing such shares of Company Common Stock in accordance
with Section 2.7.
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(c) Merger Subsidiary Capital Stock. Each share of common stock, par
value $0.01 per share, of Merger Subsidiary outstanding immediately prior
to the Effective Time shall be converted into one validly issued, fully
paid and nonassessable share of common stock, par value $0.01 per share, of
the Surviving Corporation.
(d) Appraisal Rights. (i) Notwithstanding anything in this Agreement
to the contrary, shares of Company Common Stock that are issued and
outstanding immediately prior to the Effective Time and that are owned by
stockholders that have properly perfected their rights of appraisal within
the meaning of Section 262 of the DGCL (the "Dissenting Shares") shall not
be converted into the right to receive the Merger Consideration, unless and
until such stockholders shall have failed to perfect any available right of
appraisal under applicable law, but, instead, the holders thereof shall be
entitled to payment of the appraised value of such Dissenting Shares in
accordance with Section 262 of the DGCL. If any such holder shall have
failed to perfect or shall have effectively withdrawn or lost such right of
appraisal, the shares of Company Common Stock held by such stockholder
shall not be deemed Dissenting Shares for purposes of this Agreement and
shall thereupon be deemed to have been converted into the Merger
Consideration at the Effective Time in accordance with Section 2.6(b).
(ii) Company shall give Parent (A) prompt notice of any demands for
appraisal filed pursuant to Section 262 of the DGCL received by Company,
withdrawals of such demands and any other instruments served or delivered
in connection with such demands pursuant to the DGCL and received by
Company and (B) the opportunity to participate in all negotiations and
proceedings with respect to demands made pursuant to Section 262 of the
DGCL. Company shall not, except with the prior written consent of Parent,
(x) make any payment with respect to any such demand, (y) offer to settle
or settle any such demand or (z) waive any failure to timely deliver a
written demand for appraisal or timely take any other action to perfect
appraisal rights in accordance with the DGCL.
(e) Company Stock Purchase Plans. Prior to the Closing Date, the
offering period under each of the Company Stock Purchase Plans shall be
terminated without any shares of Company Common Stock being issued
thereunder after the date hereof. The Company Stock Purchase Plans shall be
terminated as of the Effective Time. Prior to the Effective Time, Company
shall adopt such resolutions or take such other actions (including, if
appropriate, amending the terms of the Company Stock Purchase Plans) that
are necessary to give effect to the requirements of this paragraph (e).
SECTION 2.7. Exchange of Certificates for Merger Consideration.
(a) Exchange Agent. Prior to the Effective Time, Parent shall appoint
either Equiserve Trust Company N.A. or a bank or trust company designated by
Parent and reasonably acceptable to Company to act as exchange agent hereunder
(the "Exchange Agent") for the purpose of exchanging (i) certificates which
immediately prior to the Effective Time evidenced shares of Company Common Stock
(the "Company Certificates") and (ii) shares of Company Common Stock held
through book-
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entry facilities, as the case may be, for the Merger Consideration. As of the
Effective Time, Parent shall deposit, or shall cause to be deposited, with the
Exchange Agent, for the benefit of the holders of shares of Company Common
Stock, for exchange in accordance with this Article Two, cash in an amount
sufficient to pay the aggregate Merger Consideration (the cash deposited being
hereinafter referred to as the "Exchange Fund").
(b) Investment of the Exchange Fund. Any cash deposited with the Exchange
Agent shall be invested by the Exchange Agent as Parent reasonably directs;
provided that (i) no such investment or any losses thereon shall affect the
Merger Consideration payable to stockholders of Company and (ii) such
investments shall be in obligations of or guaranteed by the United States of
America and backed by the full faith and credit of the United States of America
or in commercial paper obligations rated P-1 and A-1 or better by ▇▇▇▇▇'▇
Investors Service, Inc. and Standard & Poor's Ratings Group, respectively. Any
net profit resulting from, or interest or income produced by, such investments
will be payable to the Surviving Corporation upon termination of the Exchange
Fund pursuant to paragraph (e) below. Parent shall pay all charges and expenses
of the Exchange Agent in connection with the exchange of shares of Company
Common Stock for the Merger Consideration.
(c) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, the Exchange Agent shall mail to each holder of record of shares
of Company Common Stock immediately prior to the Effective Time (whose shares
were converted into the right to receive the Merger Consideration pursuant to
Section 2.6) (i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Company Certificates, if
any, shall pass, only upon delivery of the Company Certificates to the Exchange
Agent, and which shall be in such form and have such other provisions as Parent
and Company may reasonably specify) and (ii) instructions for use in effecting
the surrender of shares of Company Common Stock in exchange for the Merger
Consideration. Upon (i) surrender of a Company Certificate for cancellation to
the Exchange Agent together with such letter of transmittal, duly executed, or
(ii) the book-entry transfer by the holder of shares of Company Common Stock to
the account established by the Exchange Agent for such purpose, together with a
properly completed letter of transmittal or an agent's message in lieu thereof
(as described in the letter of transmittal) and such other documents as the
Exchange Agent may reasonably require, the holder of such shares of Company
Common Stock shall receive in exchange therefor the Merger Consideration which
such holder has the right to receive in respect of the shares of Company Common
Stock surrendered pursuant to the provisions of this Article Two. Each Company
Certificate so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of Company Common Stock which is not registered in the
transfer records of Company, the applicable Merger Consideration may be issued
and paid to a transferee only if the Company Certificate representing such
Company Common Stock is presented to the Exchange Agent accompanied by all
documents required to evidence and effect such transfer and by evidence that any
applicable stock transfer taxes have been paid. Until surrendered as
contemplated by this Section 2.7, each Company Certificate shall be deemed at
any time after the Effective Time to represent only the right to receive the
amount of cash into which the shares of Company Common Stock represented by such
Company Certificate have been converted as provided in this Article Two.
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(d) No Further Ownership Rights in Company Common Stock. All cash paid upon
conversion of shares of Company Common Stock in accordance with the terms hereof
shall be deemed to have been paid in full satisfaction of all rights pertaining
to such shares of Company Common Stock. After the Effective Time there shall be
no further registration of transfers on the stock transfer books of the
Surviving Corporation of the shares of Company Common Stock which were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Company Certificates are presented to the Surviving Corporation for any
reason, they shall be canceled and exchanged as provided in this Article Two.
(e) Termination of Exchange Fund. Any portion of the Exchange Fund which
remains undistributed to the stockholders of Company for six months after the
Effective Time shall be delivered to the Surviving Corporation, upon demand, and
any stockholders of Company who have not theretofore complied with this Article
Two shall thereafter look only to the Surviving Corporation for payment of the
Merger Consideration payable to such stockholder.
(f) No Liability. None of Parent, Merger Subsidiary, Company or the
Surviving Corporation shall be liable to any holder of shares of Company Common
Stock for any portion of the Exchange Fund (or dividends or distributions with
respect thereto) delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
(g) Lost Certificates. If any Company Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such Company Certificate to be lost, stolen or destroyed and, if
required by Parent, the posting by such person of a bond in such reasonable
amount as Parent may direct as indemnity against any claim that may be made
against it with respect to such Company Certificate, the Exchange Agent will
deliver in exchange for such lost, stolen or destroyed Company Certificate the
applicable Merger Consideration with respect to the shares of Company Common
Stock formerly represented thereby pursuant to this Agreement.
(h) Withholding. Parent shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any holder of
shares of Company Common Stock such amounts as it is required to deduct and
withhold with respect to the making of such payment under the Code and the rules
and regulations promulgated thereunder, or any provision of any tax Law. To the
extent that amounts are so withheld by Parent and paid to governmental tax
authorities, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the shares of Company Common
Stock in respect of which such deduction and withholding was made by Parent.
SECTION 2.8. Options. (a) At the Effective Time, all Cash-out Options shall
be canceled, and holders of Cash-out Options with an exercise price below the
Merger Consideration shall receive from Surviving Corporation (subject to any
applicable withholding taxes), with respect to each Cash-out Option, an amount
equal to the product of (x) the excess of the Merger Consideration over the
exercise price per share of such Cash-out Option times (y) the number of shares
of Company Common Stock subject to such Cash-out Option (the "Option
Consideration"). The Option Consideration shall be due and paid at (or as soon
as practicable following) the Effective Time.
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(b) At the Effective Time, each Rollover Option shall be converted into and
become an option to purchase shares of Parent Common Stock on terms
substantially identical to those in effect immediately prior to the Effective
Time under the terms of the stock option plan or other agreement or award
pursuant to which such Company Option was granted (collectively, such plans,
agreements and awards being hereinafter referred to as the "Company Stock Option
Plans"); provided, however, that from and after the Effective Time, (i) each
Rollover Option assumed by Parent may be exercised solely to purchase shares of
Parent Common Stock, (ii) the number of shares of Parent Common Stock
purchasable upon exercise of each Rollover Option shall be equal to the number
of shares of Company Common Stock that were purchasable under such Rollover
Option immediately prior to the Effective Time multiplied by the Exchange Ratio
and rounded down to the nearest whole share and (iii) the per share exercise
price under each Rollover Option shall be adjusted by dividing the per share
exercise price of such Rollover Option immediately prior to the Effective Time
by the Exchange Ratio, and rounded up to the nearest whole cent; provided,
however, that in the case of any Rollover Option to which Section 421 of the
Code applies by reason of its qualification as an incentive stock option under
Section 422 of the Code, the conversion formula set forth in the foregoing
clauses (ii) and (iii) shall be adjusted, if necessary, to comply with Section
424(a) of the Code. Company shall deliver a schedule to Parent within 30 days
after the date hereof that sets forth (i) the name of each holder of a Company
Option that is not a Cash-out Option, (ii) the number of shares of Company
Common Stock subject to such Company Option, (iii) the exercise price for each
such Company Option and (iv) the date of grant of each such Company Option. On
the Closing Date, Company shall give notice to Parent indicating which such
Company Options have been exercised after the delivery of such schedule and
prior to the Closing Date.
(c) Parent shall take all corporate action necessary to reserve for
issuance a sufficient number of shares of Parent Common Stock for delivery upon
exercise of Rollover Options. As soon as practicable but in any event within 20
days after the Effective Time, the shares of Parent Common Stock subject to
Rollover Options will be covered by an effective registration statement on Form
S-8 (or any successor form) or another appropriate form, and Parent shall use
its commercially reasonable efforts to maintain the effectiveness of such
registration statement for so long as any Rollover Options remain outstanding.
In addition, Parent shall use its commercially reasonable efforts to cause the
shares of Parent Common Stock subject to Rollover Options to be listed on the
NYSE.
(d) Company shall obtain from each holder of a Company Option a letter in
the form of Exhibit C hereto and deliver all such letters to Parent prior to the
Effective Time.
(e) Each of Company and, if applicable, Parent shall take all such steps as
may be required by it to cause the transactions contemplated by this Section 2.8
and any other dispositions of Company equity securities (including derivative
securities) or acquisitions of Parent equity securities (including derivative
securities) in connection with this Agreement by each individual who is a
director or officer of Company to be exempt under Rule 16b-3 promulgated under
the Securities Exchange Act of 1934, as amended, such steps to be taken in
accordance with the No-Action Letter dated January 12, 1999, issued by the SEC
to Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP.
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SECTION 2.9. Certain Adjustments. If, between the date of this Agreement
and the Effective Time, the outstanding shares of Company Common Stock shall
have been increased, decreased, changed into or exchanged for a different number
of shares or different class of stock, in each case, by reason of any
reclassification, recapitalization, stock split, split-up, combination or
exchange of shares, a cash dividend, or a stock dividend or dividend payable in
any other securities shall be declared with a record date within such period, or
any similar event shall have occurred (other than exercises of Company Options),
the applicable Merger Consideration shall be appropriately adjusted to provide
to the holders of Company Common Stock the same economic effect as contemplated
by this Agreement prior to such event.
ARTICLE THREE
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of Company. Company represents
and warrants to Parent as follows:
(a) Organization, Standing and Power; Subsidiaries. (i) Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. Company has all requisite power and
authority to own, lease and operate its properties and to carry on its
businesses as now being conducted and is duly licensed or qualified to do
business and in good standing in each jurisdiction in which the nature of
its businesses or the ownership or leasing of its properties makes such
licensing or qualification necessary, other than in such jurisdictions
where the failure to be so licensed or qualified would not, either
individually or in the aggregate, have a Material Adverse Effect on
Company. Company has furnished to Parent true and complete copies of the
certificate of incorporation and by-laws or other organizational documents
of Company and each of its Subsidiaries as in effect on the date of this
Agreement.
(ii) Part I of Section 3.1(a) of the Company Disclosure Schedule sets
forth a true and complete list of all of Company's Subsidiaries and
indicates, as to each such Subsidiary, the principal businesses in which it
is engaged, the number and type of outstanding shares of capital stock or
other equity securities of each such Subsidiary and the holder(s) thereof,
any issued and outstanding options, warrants, stock appreciation rights,
rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, shares of any
capital stock or other equity securities of such Subsidiary, and any
contracts, commitments, understandings or arrangements by which such
Subsidiary may be or become bound to issue additional shares of its capital
stock or other equity securities, or options, warrants or rights to
purchase, acquire, subscribe to, calls on or commitments for any shares of
its capital stock or other equity securities and the identity of the
parties to any such agreements or arrangements. All of the outstanding
shares of capital stock or other securities evidencing ownership of
Company's Subsidiaries have been duly authorized and validly issued and are
fully paid and non-assessable with no personal liability attaching to the
ownership thereof and such shares or other securities are owned by Company
or its direct or indirect
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wholly-owned Subsidiaries free and clear of any Lien with respect thereto.
Each of Company's Subsidiaries (x) is a duly organized and validly existing
corporation, partnership, limited liability company or other legal entity
under the laws of its jurisdiction of organization, (y) has all requisite
corporate or other power and authority to own or lease all of its
properties and assets and to carry on its businesses as now conducted, and
(z) is duly licensed or qualified to do business and in good standing in
all jurisdictions where its ownership or leasing of property or the conduct
of its businesses requires it to be so licensed or qualified, other than,
in the case of this clause (z) in those jurisdictions where the failure to
be so licensed or qualified would not, either individually or in the
aggregate, have a Material Adverse Effect on Company.
(iii) Part II of Section 3.1(a) of the Company Disclosure Schedule
provides a true and complete list of all direct or indirect investments of
Company or any of its Subsidiaries in any other person as of the date
hereof, whether in the form of equity or debt or options, warrants or other
rights to acquire or purchase equity or debt. Company has provided or made
available to Parent a true and complete copy of all partnership, joint
venture or similar agreements to which Company or any of its Subsidiaries
is a party. Except as set forth in Part III of Section 3.1(a) of the
Company Disclosure Schedule, neither Company nor any of its Subsidiaries is
subject to any obligation or requirement to provide funds to or make any
investment in (whether in the form of equity or debt or otherwise) any
person.
(iv) The minute books of Company accurately reflect in all material
respects all corporate meetings and actions held or taken by its
stockholders or Board of Directors (including committees of the Board of
Directors) since January 1, 1998.
(b) Capital Structure. (i) The authorized capital stock of Company
consists of 40,000,000 shares of Company Common Stock and 1,000,000 shares
of Company Preferred Stock. At the close of business on February 27, 2002,
(A) 7,909,817 shares of Company Common Stock were outstanding (including
130,024 Company RSUs), 2,401,501 shares of Company Common Stock were
reserved for issuance upon the exercise of outstanding Company Options
pursuant to the Company Stock Option Plans, 281,100 shares of Company
Common Stock were reserved for issuance pursuant to the Company Stock
Purchase Plans and 3,020,633 shares of Company Common Stock were held by
Company in its treasury; and (B) no shares of Company Preferred Stock were
outstanding and 150,000 shares of Company Series A Junior Participating
Preferred Stock were reserved for issuance in connection with the Company
Rights. All outstanding shares of Company Common Stock have been duly
authorized and validly issued and are fully paid and non-assessable and not
subject to preemptive rights. The shares of Company Common Stock which may
be issued upon exercise of Company Stock Options have been duly authorized
and, if and when issued pursuant to the terms thereof, will be validly
issued, fully paid and non-assessable and not subject to preemptive rights.
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(ii) No bonds, debentures, notes or other indebtedness having the
right to vote on any matters on which stockholders may vote ("Voting
Debt") of Company are issued or outstanding.
(iii) As of the close of business on February 27, 2002, except
for (A) this Agreement, (B) Company Options which represented the
right to acquire up to an aggregate of 2,401,501 shares of Company
Common Stock, (C) the Company Rights and (D) as set forth in Section
3.1(b)(iii) of the Company Disclosure Schedule, there are no options,
warrants, calls, rights, commitments or agreements of any character to
which Company or any of its Subsidiaries is a party or by which it or
any such Subsidiary is bound obligating Company or any of its
Subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or any Voting
Debt of Company or any of its Subsidiaries or obligating Company or
any of its Subsidiaries to grant, extend or enter into any such
option, warrant, call, right, commitment or agreement. Except as set
forth in Section 3.1(b)(iii) of the Company Disclosure Schedule, after
the Effective Time, there will be no option, warrant, call, right or
agreement obligating Company or any of its Subsidiaries to issue,
deliver or sell, or cause to be issued, delivered or sold, any shares
of capital stock or any Voting Debt of Company or any of its
Subsidiaries, or obligating Company or any of its Subsidiaries to
grant, extend or enter into any such option, warrant, call, right or
agreement.
(iv) There are no outstanding contractual obligations of Company
or any of its Subsidiaries (A) to repurchase, redeem or otherwise
acquire any shares of capital stock of Company or any of its
Subsidiaries, other than the agreements between Company and persons
who were its stockholders prior to the initial public offering of
Company Common Stock (which agreements will become void and of no
further effect at the Effective Time), or (B) pursuant to which
Company or any of its Subsidiaries is or could be required to register
shares of Company Common Stock or other securities under the
Securities Act.
(c) Authority. (i) Company has all requisite corporate power and
authority to enter into the Transaction Agreements and, subject to adoption
of this Agreement by the Required Company Vote, to consummate the
transactions contemplated thereby. The execution and delivery of the
Transaction Agreements and the consummation of the transactions
contemplated thereby have been duly authorized by all necessary corporate
action on the part of Company, subject in the case of the consummation of
the Merger to the adoption of this Agreement by the Required Company Vote.
Each of the Transaction Agreements has been duly executed and delivered by
Company and its Subsidiary party thereto and constitutes a valid and
binding obligation of each of Company and such Subsidiary, enforceable
against it in accordance with its terms, except as may be limited by
bankruptcy, insolvency or other similar laws affecting the rights and
remedies of creditors generally, and subject to general principles of
equity, whether applied by a court of law or equity.
(ii) The execution and delivery of the Transaction Agreements do
not, and the consummation of the transactions contemplated thereby and
compliance with the terms thereof will not, (A) conflict with, or
result in any violation of, or constitute a default (with or
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without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation, acceleration or increase of any
obligation, liability or fee or the loss of a material benefit under,
or the creation of a Lien on any assets (any such conflict, violation,
default, right of termination, cancellation or acceleration, loss or
creation, including under any "change of control" provision, a
"Violation") pursuant to, any provision of the certificate of
incorporation or by-laws of Company or any of its Subsidiaries, (B)
except as set forth in Section 3.1(c)(ii) of the Company Disclosure
Schedule, result in any Violation of any loan or credit agreement,
note, bond, mortgage, deed of trust, indenture, lease, Company Plan or
other contract, agreement, obligation or instrument to which Company
or any of its Subsidiaries (other than AHA or any of its Subsidiaries)
is a party or by which any of their properties, assets or businesses
are bound or (C) except as set forth in Section 3.1(c)(ii) of the
Company Disclosure Schedule and subject to obtaining or making the
Governmental Consents referred to in paragraph (iii) below, result in
any Violation of any permit, concession, franchise, license, judgment,
order, decree, injunction, arbitration award or Law applicable to
Company or any of its Subsidiaries or their respective properties,
assets or businesses, other than, in the case of clauses (B) and (C),
Violations, which, individually or in the aggregate, would not have a
Material Adverse Effect on Company and would not prevent, or
materially alter or delay, the consummation of the Merger or the other
transactions contemplated by the Transaction Agreements.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity
("Governmental Consents") is required in connection with the execution
and delivery of the Transaction Agreements by Company or any of its
Subsidiaries party thereto, their consummation of the transactions
contemplated thereby or their compliance with the terms thereof,
except for (A) notices or filings under the HSR Act and the expiration
or termination of the applicable waiting period thereunder and
compliance with any applicable foreign antitrust or competition law,
(B) the filing with, and the clearance by, the SEC of the Proxy
Statement and the filing with the SEC of such reports under the
Exchange Act as may be required in connection with the Transaction
Agreements and the transactions contemplated thereby, (C) the filing
of the Certificate of Merger with the Secretary of State of the State
of Delaware, (D) the approvals, filings and notices listed on Section
3.1(c)(iii) of the Company Disclosure Schedule (the "Company
Regulatory Consents") and (E) such other filings, authorizations,
orders and approvals which, if not obtained or made, would not have a
Material Adverse Effect on Company and would not prevent, or
materially alter or delay, the consummation of the Merger or the other
transactions contemplated by the Transaction Agreements. As of the
date of this Agreement, Company does not have knowledge of any reason
why the Governmental Consents referred to in this Section 3.1(c)(iii)
will not be received or made on a timely basis.
(d) SEC Documents; Undisclosed Liabilities. (i) Company has filed and
will file, on a timely basis, all reports, schedules, registration
statements and other documents required to be filed with the SEC since
January 1, 1999 (collectively, the "Company SEC Documents"). As of their
respective dates of filing with the SEC (or, if amended or superseded by a
filing prior to the date hereof, as of the date of such filing), the
Company SEC Documents complied
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and will comply in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such Company SEC Documents,
and none of the Company SEC Documents when filed contained or will contain
any untrue statement of a material fact or omitted or will omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. Notwithstanding the foregoing, the Company makes no
representation or warranty with respect to any information supplied in
writing by Parent or Merger Subsidiary for inclusion or incorporation by
reference in any Company SEC Document filed after the date hereof. Company
and its Subsidiaries are not engaged in any material business or activity
which is not described in the Company SEC Documents filed prior to the date
of this Agreement. The financial statements of Company included in the
Company SEC Documents complied and will comply as to form, as of their
respective dates of filing with the SEC, in all material respects with all
applicable accounting requirements and with the published rules and
regulations of the SEC with respect thereto, have been and will be prepared
in accordance with GAAP (except, in the case of unaudited statements, as
permitted by Form 10-Q and Form 8-K of the SEC) applied on a consistent
basis during the periods involved (except as may be disclosed therein) and
fairly present and will fairly present in all material respects the
consolidated financial position of Company and its consolidated
Subsidiaries and their consolidated results of operations, changes in
stockholders' equity and cash flows as of the dates and for the periods
shown.
(ii) Except for (A) those liabilities that are fully reflected or
reserved for in the consolidated balance sheet of Company included in
its Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 2001, and (B) liabilities incurred since September 30,
2001 in the ordinary course of business consistent with past practice,
at September 30, 2001 Company did not have, and since such date
Company has not incurred, any material liabilities or obligations of
any nature whatsoever (whether accrued, absolute, contingent or
otherwise and whether or not required to be reflected in Company's
financial statements in accordance with GAAP).
(e) Proxy Statement. The Proxy Statement, as supplemented or amended,
as applicable, will, when the Proxy Statement or any such amendment or
supplement is first mailed to stockholders of Company, at the time of the
Company Stockholders Meeting and at the Effective Time, not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The Proxy Statement and any amendment or supplement thereto
will comply as to form in all material respects with the requirements of
the Exchange Act and the rules and regulations of the SEC thereunder.
Notwithstanding the foregoing, Company makes no representation or warranty
with respect to any information supplied in writing by Parent or Merger
Subsidiary for inclusion or incorporation by reference in the Proxy
Statement.
(f) Compliance with Applicable Laws. (i) Section 3.1(f)(i) of the
Company Disclosure Schedule sets forth a true and complete list of all
Company Permits. Company and its
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Subsidiaries have been and are in compliance in all material respects with
the terms of the Company Permits, except as set forth on Section 3.1(f)(i)
of the Company Disclosure Schedule.
(ii) Except as disclosed in the Company SEC Documents filed prior
to the date of this Agreement or Section 3.1(f)(ii) of the Company
Disclosure Schedule, the businesses of Company and its Subsidiaries
(other than AHA or any of its Subsidiaries) have not been and are not
being conducted in violation of any Law or any judgment, order,
decree, injunction or arbitration award of any Governmental Entity in
any material respect. Except as disclosed in Section 3.1(f)(ii) of the
Company Disclosure Schedule and for normal examinations conducted by a
Governmental Entity in the regular course of the business of Company
and its Subsidiaries, no Governmental Entity has initiated any
material proceeding or, to the knowledge of Company, investigation
into the business or operations of Company or any of its Subsidiaries
(other than AHA or any of its Subsidiaries) since January 1, 1999.
Except as set forth in Section 3.1(f)(ii) of the Company Disclosure
Schedule, there is no unresolved or uncured material violation or
exception noted by any Governmental Entity in any report, comment
letter or other statement relating to or based on any examinations of
Company or any of its Subsidiaries (other than AHA or any of its
Subsidiaries) or otherwise, and neither Company nor any of its
Subsidiaries (other than AHA or any of its Subsidiaries) is a party to
any material written agreement, commitment letter or other similar
undertaking with or to any Governmental Entity with respect to the
conduct of its businesses or its capital adequacy.
(iii) Company and each of its Subsidiaries have filed all
material regulatory reports, schedules, forms, registrations and other
documents, together with any amendments required to be made with
respect thereto, that they were required to file since January 1, 1999
with (i) the SEC, (ii) any SRO and (iii) any other Governmental
Entity, and have paid all fees and assessments due and payable in
connection therewith. As of the date of this Agreement, except as
disclosed on an SEC Form BD which has been filed by Company or its
Subsidiaries with the SEC and copies of which have been made available
to Parent prior to the date of this Agreement, neither Company nor any
of its Subsidiaries, nor any of their respective officers, directors
or employees, has been the subject of any disciplinary proceedings or
orders of any Governmental Entity arising under applicable securities
laws which would be required to be disclosed on SEC Form BD, and, to
the knowledge of Company, no such disciplinary proceeding or order is
pending or threatened; and neither Company nor any of its
Subsidiaries, nor any respective persons affiliated with Company or
its Subsidiaries, nor, to Company's knowledge, any of the respective
officers, directors or employees of any of the foregoing or any
"associated person" (as defined in the Exchange Act) thereof, is or
has been subject to any "statutory disqualification" as defined in
Section 3(a)(39) of the Exchange Act or ineligible to serve as a
broker-dealer or as an associated person of a registered broker-dealer
under the Exchange Act.
(iv) Section 3.1(f)(iv) of the Company Disclosure Schedule sets
forth a true and complete list of the Subsidiaries of Company which
are duly registered or licensed as a broker-dealer under the Exchange
Act or under any state, federal or foreign broker-dealer or
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similar laws pursuant to which each such Subsidiary is required to be
so registered, together with a listing of such registrations and an
indication as to whether such Subsidiary is a member in good standing
of the NASD, NYSE or other foreign or domestic broker-dealer
associations. No other Subsidiary of Company is required by the nature
of its activities to be so registered under the Exchange Act or under
the laws of any state or other domestic or foreign jurisdiction or to
be a member in good standing of the NASD, NYSE or other broker-dealer
associations under any other applicable law. Company has filed and
made available to Parent, in the form as filed, a true and complete
copy of each such Subsidiary's currently effective Form BD, all state,
federal and foreign registration forms and all material reports filed
by it or any such Subsidiary with the SEC, NASD, NYSE or other
Governmental Entity under the Exchange Act and the rules and
regulations thereunder or otherwise and under similar state, federal
and foreign statutes within the last two years and will file and make
available to Parent in the form as filed such material forms and
reports as are filed from and after the date hereof and prior to the
Closing Date. The information contained in such forms and reports was
(or will be, in the case of filings made after the date hereof) true
and complete in all material respects as of the time of filing.
(v) Neither Company nor any of its Subsidiaries is required by
the nature of its activities or assets to be registered as a national
securities exchange, a registered investment advisor under the
Investment Advisers Act of 1940, as amended, other than AHA and its
Subsidiaries, or an investment company under the Investment Company
Act of 1940, as amended.
(vi) Section 3.1(f)(vi) of the Company Disclosure Schedule sets
forth a true and complete list of each of the memberships of Company
and each of its Subsidiaries (other than AHA or any of its
Subsidiaries) in commodities exchanges, boards of trade, clearing
organizations, trade associations and similar organizations, and a
description of the type of membership and the name of the registered
holder thereof. All such memberships and similar privileges of Company
and each of its Subsidiaries are in good standing, except where the
failure to keep such memberships and privileges in good standing has
not had and would not be reasonably expected to have a Material
Adverse Effect on Company.
(g) Legal Proceedings. Except as disclosed in the Company SEC
Documents filed prior to the date of this Agreement, there is no claim,
litigation, inquiry, suit, action, investigation or proceeding (whether
judicial, arbitral, administrative or other) ("Action") pending or, to the
knowledge of Company, threatened, against or affecting Company or any of
its Subsidiaries, or any of its properties, assets or businesses, which
would, individually or in the aggregate, have a Material Adverse Effect on
Company, or challenging the validity or propriety of, or which could in any
material respect affect, the Transaction Agreements or any of the
transactions contemplated thereby, nor is there any judgment, decree,
injunction, rule or order of any Governmental Entity or arbitrator, or any
settlement or stipulation with any person (collectively, "Order"),
outstanding or imminent against Company or any of its Subsidiaries having,
or which, insofar as reasonably can be foreseen, in the future would have,
individually or in the aggregate, a Material Adverse Effect on Company.
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(h) Taxes. Except as set forth in Section 3.1(h) of the Company
Disclosure Schedule:
(i) Company and each of its Subsidiaries have filed all material
tax returns required to be filed by any of them and have paid (or had
paid on their behalf), or have set up an adequate reserve for the
payment of, all taxes required to be paid (whether or not shown to be
due on such tax returns), and the most recent financial statements
contained in the Company SEC Documents reflect an adequate reserve for
all taxes payable by Company and its Subsidiaries accrued, but not yet
due and owing, through the date of such financial statements. All such
tax returns are true and complete in all material respects.
(ii) No material deficiencies for any taxes have been proposed,
asserted or assessed against Company or any of its Subsidiaries that
are not adequately reserved for, and no audit or other proceeding with
respect to taxes due from Company or any of its Subsidiaries is
pending or threatened.
(iii) Proper and accurate amounts have been withheld, collected
or deposited by Company and its Subsidiaries from their employees in
compliance with the tax withholding provisions of applicable Law and
have been paid over to the appropriate taxing authorities.
(iv) There are no material tax Liens upon any property or assets
of Company or any of its Subsidiaries except Liens for taxes not yet
due and payable.
(v) Neither Company nor any of its Subsidiaries has filed a
consent under Section 341(f) of the Code concerning collapsible
corporations. Neither Company nor any of its Subsidiaries has been
required to include in income any adjustment pursuant to Section 481
of the Code (or any similar provision of tax Law) by reason of a
voluntary change in accounting method initiated by Company or any of
its Subsidiaries, and the IRS has not initiated or proposed any such
adjustment or change in accounting method.
(vi) None of Company or any of its Subsidiaries has liability for
any taxes of any predecessor for any tax periods prior to its
formation.
(vii) None of Company or any of its Subsidiaries (A) has been a
member of an affiliated group filing a consolidated federal income tax
return (other than a group the common parent of which was Company) or
(B) has any liability for the taxes of any person (other than any of
Company or its Subsidiaries) including, but not limited to, under
Treasury Regulation Section 1.1502-6 (or any similar provision of
state, local or foreign Law).
(viii) None of Company or any of its Subsidiaries is a party to,
is bound by or has any obligation under, any tax sharing agreement or
similar contract or ar-
-22-
rangement or any agreement that obligates it to make any payment
computed by reference to the taxes, taxable income or taxable losses
of any other person.
(ix) Company and each of its Subsidiaries have collected all
material sales and use taxes required to be collected and have
remitted, or will remit on a timely basis, such amounts to the
appropriate governmental authorities, or have furnished properly
completed exemption certificates and have maintained all material
records and supporting documents in the manner required by all
applicable sales and use tax statutes and regulations for all periods
for which the statute of limitations has not expired.
(x) Neither Company nor any of its Subsidiaries has made any
payment or is obligated to make any payment (by contract or otherwise)
which by reason of Section 162(m) of the Code will not be deductible.
(xi) No closing agreement pursuant to Section 7121 of the Code
(or any similar provision of state, local or foreign Law) has been
entered into by or with respect to Company or any of its Subsidiaries.
(i) Certain Agreements. Except as disclosed in Section 3.1(i) of the
Company Disclosure Schedule (identified by the applicable subclause of this
Section 3.1(i)), except for the Transaction Agreements and except those
listed as exhibits to the Annual Report on Form 10-K for the year ended
December 31, 2000 or to any Company SEC Reports filed subsequent to the
filing of such Annual Report and prior to the date of this Agreement
(provided that Section 3.1(i) of the Company Disclosure Schedule shall set
forth each Company Contract described in subclauses (vii) through (x) below
whether or not so listed as exhibits), neither Company nor any of its
Subsidiaries is a party to or bound by any contract, arrangement,
commitment or understanding
(i) that is a "material contract" (as such term is defined in
Item 601(b)(10) of Regulation S-K of the SEC);
(ii) that provides for any payment by or to Company or any of its
Subsidiaries in excess of $250,000 in any year or which is not
terminable within 90 days, except contracts for the provision of
products or services to clients by third parties in the ordinary
course of business;
(iii) with any current director, officer or employee of Company
or any of its Subsidiaries or any affiliate of any such person;
(iv) with or to a labor union or guild (including any collective
bargaining agreement);
(v) evidencing indebtedness for borrowed money or pursuant to
which indebtedness for borrowed money may be incurred in excess of
$100,000;
-23-
(vi) with clients that generated 5.0% or more of total 2001
commission revenues of Company and its Subsidiaries, except for
contracts related to "soft dollar" and directed brokerage arrangements
made in the ordinary course of business;
(vii) other than confidentiality provisions applicable to Company
or any of its Subsidiaries set forth in any agreement or contract,
that limits or purports to limit in any way the ability of Company or
any of its affiliates to compete in any line of business, in any
geographic area or with any person, to solicit any person for
employment, to obtain products or services from or engage in business
transactions with any person, or which requires referrals of any
business or requires Company or any of its affiliates to make
available investment or business opportunities to any person on a
priority, equal or exclusive basis;
(viii) relating to the voting of any securities of Company or any
of its Subsidiaries;
(ix) entitling the other party thereto any material right or
benefit (including any material right to consent), or increasing or
accelerating any material right or benefit, or triggering any material
requirement, restriction or limitation, by reason of the transactions
contemplated by any of the Transaction Agreements; or
(x) which would prevent, or materially alter or delay, the
consummation of any of the transactions contemplated by the
Transaction Agreements.
Company has previously made available to Parent true and complete
copies of each contract, arrangement, commitment or understanding of
the type described in clauses (i) through (x) of this Section 3.1(i)
(collectively referred to herein as the "Company Contracts"). All of
the Company Contracts are valid and in full force and effect, except
where the failure to be in full force and effect, individually or in
the aggregate, would not have a Material Adverse Effect on Company. No
other person has challenged the validity or enforceability of any
Company Contract. Neither Company nor any of its Subsidiaries, and to
the knowledge of Company, none of the other parties thereto, has
violated any provision of, or committed or failed to perform any act
which with or without notice, lapse of time or both would constitute a
default under the provisions of, any Company Contract, except for those
violations and defaults which, individually or in the aggregate, would
not result in a Material Adverse Effect on Company.
(j) Benefits. (i) Section 3.1(j) of the Company Disclosure Schedule
sets forth a true and complete list of each "employee benefit plan" (within
the meaning of ERISA Section 3(3)) and each other employee benefit plan,
agreement, program, policy or arrangement, including, without limitation,
multiemployer plans within the meaning of ERISA Section 3(37)), stock
purchase, stock option, severance, employment, consulting,
change-in-control, fringe benefit, bonus, incentive and deferred
compensation plan, in each case, that is sponsored, maintained or
contributed to or required to be contributed to by Company or any
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trade or business whether or not incorporated, (an "ERISA Affiliate"), that
together with Company would be deemed a "single employer" within the
meaning of Section 4001(b) of ERISA, or to which Company or an ERISA
Affiliate is party for the benefit of any employee or former employee of
Company or any of its Subsidiaries. All such plans, agreements, programs,
policies and arrangements, other than any Foreign Plans, are collectively
referred to as the "Company Plans." With respect to each Company Plan,
Company has delivered or made available to Parent a true and complete copy
thereof and, to the extent applicable: (i) any related trust agreement or
other funding instrument; (ii) the most recent determination letter, if
applicable; (iii) any summary plan description; and (iv) for the two most
recent years (A) the Form 5500 and attached schedules, (B) audited
financial statements, (C) actuarial valuation reports and (D) any
attorney's response to an auditor's request for information. No Company
Plan or plan contributed to by a member of Company's Controlled Group is a
"multiemployer pension plan," as defined in Section 3(37) of ERISA nor is
any Company Plan or plan contributed by to a member of Company's Controlled
Group a plan described in Section 4063(a) of ERISA.
(ii) Each Company Plan has been established and administered in
all material respects in accordance with its terms, and in compliance
in all material respects with the applicable provisions of ERISA, the
Code and other applicable laws, rules and regulations. Each Company
Plan which is intended to be qualified within the meaning of Code
Section 401(a) has received a favorable determination letter as to its
qualification, and nothing has occurred, whether by action or failure
to act, that could reasonably be expected to cause the loss of such
qualification. All contributions to, and payments from, the Company
Plans that are required to have been made in accordance with such
plans have been timely made.
(iii) None of Company, any of its Subsidiaries, any member of
their Controlled Group, any Company Plan, any trust created
thereunder, nor, to the knowledge of Company, any trustee or
administrator thereof has engaged in a transaction in connection with
which Company or any of its Subsidiaries, any Company Plan, any such
trust, or any trustee or administrator thereof, or any party dealing
with any Company Plan or any such trust would be subject to either a
material civil penalty assessed pursuant to Section 409 or 502(i) of
ERISA or a material tax imposed pursuant to Section 4975 or 4976 of
the Code.
(iv) No Company Plan provides retiree welfare benefits, and
neither Company nor any of its Subsidiaries has any obligation to
provide any retiree welfare benefits other than as required by Code
Section 4980B.
(v) None of Company, any of its Subsidiaries or any member of
their Controlled Group maintains or contributes to, nor has it
maintained or contributed to within the previous five years, any
pension plan subject to Title IV of ERISA or Code Section 412. None of
Company, any of its Subsidiaries or any member of their Controlled
Group has liability (including any contingent liability under ERISA
Section 4204) with respect to any multiemployer plan, within the
meaning of ERISA Section 3(37). None of Company, any of its
Subsidiaries or any member of their Controlled Group has incurred or
is reasonably likely to in-
-25-
cur, any liability under Title IV of ERISA (other than premiums due to
the Pension Benefit Guaranty Corporation, which premiums have been
paid when due). None of Company, any of its Subsidiaries or any member
of their Controlled Group has engaged in, or, to the knowledge of
Company, is a successor or parent corporation to an entity that has
engaged in, a transaction described in ERISA Sections 4069 or 4212(c).
(vi) With respect to any Company Plan, (i) no actions, suits or
claims (other than routine claims for benefits in the ordinary course)
are pending or, to the knowledge of Company, threatened, and (ii) to
the knowledge of Company, no facts or circumstances exist that could
reasonably be expected to give rise to any such actions, suits or
claims. Except as disclosed on Section 3.1(j) of the Company
Disclosure Schedule, no Company Plan is under audit by the IRS, the
Department of Labor or any other governmental or quasi governmental
authority, and there is no outstanding or, to the knowledge of
Company, potential liability resulting from any past audits of such
plans.
(vii) Except with respect to the Company Stock Option Plans and
except as set forth on Section 3.1(j) of the Company Disclosure
Schedule, no Company Plan exists that could reasonably be expected to
result in the payment to any present or former employee of Company or
any of its Subsidiaries of any money or other property or accelerate
or provide any other rights or benefits to any present or former
employee of Company or any of its Subsidiaries as a result of the
transactions contemplated by the Transaction Agreements. There is no
contract, plan or arrangement covering any employee or former employee
of Company or any of its Subsidiaries that, individually or
collectively, could reasonably be expected to give rise to the payment
of any amount that would not be deductible pursuant to the terms of
Code Section 280G.
(viii) Section 3.1(j) of the Company Disclosure Schedule sets
forth a true and complete list of each Foreign Plan, to the extent the
benefits provided thereunder are not mandated by the laws of the
applicable foreign jurisdiction. Each Foreign Plan has been
established and administered in all material respects in accordance
with its terms and in compliance in all material respects with
applicable Law. All contributions required to be made by Company or
any of its Subsidiaries with respect to a Foreign Plan has been timely
made, except where the failure to make such timely contributions would
not have a Material Adverse Effect on Company. Neither Company nor any
of its Subsidiaries has incurred any liability in connection with the
termination or withdrawal from any Foreign Plan. No Foreign Plan is a
defined benefit plan. With respect to any Foreign Plan adequate
reserves have been established to the extent required by ordinary
accounting practices in the jurisdiction in which such Plan is
maintained. There are no actions, suits or claims (other than routine
claims for benefits) pending or threatened with respect to any Foreign
Plan and no Foreign Plan is under audit by any governmental authority.
(k) Absence of Certain Changes or Events. Except as disclosed in the
Company SEC Documents filed prior to the date of this Agreement, since
September 30, 2001, except as otherwise expressly permitted by Section 4.1,
(i) Company and its Subsidiaries have con-
-26-
ducted their respective businesses in the ordinary course consistent with
their past practices, (ii) there has not been any change, circumstance or
event which has had, or would reasonably be expected to have, a Material
Adverse Effect on Company and (iii) neither Company nor any of its
Subsidiaries has taken any action that would have been prohibited pursuant
to Section 4.1 if it had been taken after the date hereof other than as set
forth on Section 3.1(k) of the Company Disclosure Schedule.
(l) Board Approval; State Takeover Statutes; Company Rights Agreement.
The Board of Directors, by resolutions duly adopted by unanimous vote of
those voting at a meeting duly called and held, has (i) determined that
this Agreement and the Merger are fair to and in the best interests of
Company and its stockholders and declared the Merger to be advisable, (ii)
approved the Transaction Agreements and the Merger, and (iii) recommended
that the stockholders of Company adopt this Agreement and directed that
such matter be submitted for consideration by Company stockholders at the
Company Stockholders Meeting. To the knowledge of Company, no state
takeover statute (including, without limitation, Section 203 of the DGCL)
is applicable to the Transaction Agreements, the Merger or the other
transactions contemplated thereby. Company has taken all action necessary
to render all outstanding Company Rights inapplicable to the Transaction
Agreements, the Merger and the other transactions contemplated thereby.
(m) Vote Required. The affirmative vote of the holders of a majority
of the outstanding shares of Company Common Stock to adopt this Agreement
(the "Required Company Vote") is the only vote of the holders of any class
or series of capital stock necessary to approve and adopt this Agreement
and to consummate the Merger and the other transactions contemplated hereby
and by the other Transaction Agreements.
(n) Properties. Except as disclosed in the Company SEC Documents filed
prior to the date of this Agreement, Company or one of its Subsidiaries (i)
has good and marketable title to all the properties and assets reflected in
the latest balance sheet included in such Company SEC Documents as being
owned by Company or one of its Subsidiaries or acquired after the date
thereof which are material to Company (except properties or assets sold or
otherwise disposed of since the date thereof in the ordinary course of
business or to be sold pursuant to the Specified Asset Sale Agreements),
free and clear of all Liens of any nature whatsoever except (A) statutory
Liens securing payments not yet due, and (B) such Liens as do not
materially affect the use of the properties or assets subject thereto or
affected thereby or otherwise materially impair business operations at such
properties, and (ii) is the lessee of all leasehold estates reflected in
the latest financial statements included in such Company SEC Documents or
acquired after the date thereof which are material to Company (except for
leases that have expired by their terms since the date thereof) and is in
possession of the properties purported to be leased thereunder, and each
such lease is valid without default thereunder by the lessee or, to
Company's knowledge, the lessor.
(o) Intellectual Property. (i) Part I of Section 3.1(o) of the Company
Disclosure Schedule contains a true and complete list of all issued and
pending U.S. and foreign patents,
-27-
and all applications (including provisional applications), continuations,
continuations-in-part, extensions, divisionals, re-examinations, reissues
and renewals therefor; all registered and other material trademarks and
service marks and applications for registrations therefor; all trade names,
corporate names and domain names, and all registrations or applications
therefor; and all registered copyrights and applications therefor owned by
or registered to Company or any of its Subsidiaries (other than AHA or any
of its Subsidiaries). Part II of Section 3.1(o) of the Company Disclosure
Schedule contains a true and complete list of all material agreements,
including licenses, sublicenses, assignments and other rights granted by
Company or any of its Subsidiaries to any third party or granted by any
third party to Company or any of its Subsidiaries, with respect to any
material item of Intellectual Property (other than Intellectual Property
granted by or to AHA or any of its Subsidiaries). True and complete copies
of such material licenses, sublicenses, assignments and agreements have
been delivered or made available to Parent.
(ii) Company or one of its Subsidiaries owns, or is licensed or
otherwise has the right to use, all material Intellectual Property
that is necessary for the operation and businesses of Company and its
Subsidiaries as presently conducted. There exists no restriction on
the use, transfer or licensing of such Intellectual Property and
licenses in the operation and businesses of Company and its
Subsidiaries as presently conducted, except as described in Part II of
Section 3.1(o) of the Company Disclosure Schedule.
(iii) Except (A) as disclosed in Company SEC Documents filed
prior to the date of this Agreement and (B) for such Intellectual
Property that is not material to Company, there is no notice or claim
made or threatened by or against Company, any of its Subsidiaries or
any of their licensees asserting the invalidity, misuse, infringement,
non-infringement or enforceability of any item of Intellectual
Property or challenging their right to the use or ownership of any
item of Intellectual Property; provided that to the extent the
foregoing relates to a notice or claim threatened against Company, any
of its Subsidiaries or any of their licensees, it shall be limited to
Company's knowledge.
(p) Insurance. Company and its Subsidiaries maintain the insurance
policies and performance bonds set forth on Section 3.1(p) of the Company
Disclosure Schedule. Company has made available to Parent true and complete
copies of all such insurance policies and performance bonds. Company and
its Subsidiaries have paid all premiums payable thereunder, and, except as
disclosed in Section 3.1(p) of the Company Disclosure Schedule, no claims
for coverage thereunder have been denied. To Company's knowledge, neither
Company nor any of its Subsidiaries is in default under any such policies
or bonds.
(q) Accounting Controls. Each Subsidiary of Company that is registered
as a broker-dealer has adopted the record keeping systems that comply in
all material respects with the requirements of applicable Law (including,
in the case of U.S. broker-dealer Subsidiaries, Section 17 of the Exchange
Act and the rules and regulations thereunder) and the rules of all SROs
having jurisdiction, and maintains its records in substantial compliance
therewith. Each of Company and its Subsidiaries has devised and maintained
systems of internal ac-
-28-
counting controls which Company believes are sufficient to provide
reasonable assurances that (i) all transactions are executed in accordance
with management's general or specific authorization; (ii) all transactions
are recorded as necessary to permit the preparation of financial statements
in conformity with generally accepted accounting principles consistently
applied with respect to broker-dealers, if applicable, or any other
criteria applicable to such statements; and (iii) the recorded amounts for
items is compared with the actual levels at reasonable intervals and
appropriate action is taken with respect to any differences.
(r) Brokers or Finders. No agent, broker, investment banker, financial
advisor or other firm or person is or will be entitled to any broker's or
finder's fee or any other similar commission or fee in connection with any
of the transactions contemplated by the Transaction Agreements based upon
arrangements made by or on behalf of Company or any of its affiliates,
except Lazard Freres & Co. LLC ("Company's Financial Advisor"), whose fees
and expenses will be paid by Company in accordance with Company's agreement
with such firm (a copy of which has been furnished to Parent) except as
otherwise provided in Section 7.2(b), and, if the Merger is not
consummated, Company agrees to indemnify Parent and to hold Parent harmless
from and against any and all claims, liabilities or obligations with
respect to any other fees, commissions or expenses asserted by any person
on the basis of any act or statement alleged to have been made by Company
or any of its affiliates.
(s) Opinion of Company Financial Advisor. Company has received the
opinion of Company's Financial Advisor, dated the date of this Agreement,
to the effect that the Merger Consideration is fair, from a financial point
of view, to the holders of Company Common Stock.
(t) Asset Management Businesses. Company has provided Parent a true
and complete copy of (i) the Transfer and Assumption Agreement dated as of
November 28, 2001 by and among The Bank of New York, Company and AHA, (ii)
the Letter Agreement dated February 11, 2002 among Company, AHA, ▇▇▇▇▇
Capital Management LLC and ▇▇. ▇▇▇▇ ▇. ▇▇▇▇, ▇▇. and (iii) the Stock
Purchase Agreement dated as of February 11, 2002 between Company and Axe
Acquisition Corp. (the "AHA Stock Purchase Agreement"), including, in each
case, all exhibits and schedules thereto, and all agreements and
instruments in connection therewith, including any employment or consulting
agreements referred to therein (the "Specified Asset Sale Agreements").
Following consummation of the Specified Asset Sales, neither Company nor
any of its Subsidiaries will have any liability with respect to the
business, operations, assets or liabilities of AHA or any of its
Subsidiaries, other than those specified liabilities that are expressly
disclosed in the Specified Asset Sale Agreements.
(u) No Other Representations or Warranties. Except for the
representations and warranties contained in this Section 3.1, neither
Company nor any of its Subsidiaries makes any other representation or
warranty, express or implied, with respect to Company or any of its
Subsidiaries.
-29-
SECTION 3.2. Representations and Warranties of Parent and Merger
Subsidiary. Parent and Merger Subsidiary hereby jointly and severally represent
and warrant to Company as follows:
(a) Organization, Standing and Power; Subsidiaries. Each of Parent and
Merger Subsidiary is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, has all requisite
power and authority to own, lease and operate its properties and to carry
on its businesses as now being conducted, and is duly licensed or qualified
to do business and in good standing in each jurisdiction in which the
nature of its businesses or the ownership or leasing of its properties
makes such licensing or qualification necessary, other than in such
jurisdictions where the failure to be so licensed or qualified would not,
either individually or in the aggregate, have a Material Adverse Effect on
Parent. The certificate of incorporation and by-laws of Parent, which are
on file with the SEC, and of Merger Subsidiary, copies of which were
previously furnished to Company, are true and complete copies of such
documents as in effect on the date of this Agreement.
(b) Authority. (i) Each of Parent and Merger Subsidiary has all
requisite corporate power and authority to enter into the Transaction
Agreements to which it is a party and to consummate the transactions
contemplated thereby. The execution and delivery of the Transaction
Agreements and the consummation of the transactions contemplated thereby
have been duly authorized by all necessary corporate action on the part of
Parent and Merger Subsidiary (to the extent a party thereto). Each of the
Transaction Agreements to which it is a party has been duly executed and
delivered by each of Parent and Merger Subsidiary (to the extent a party
thereto) and constitutes a valid and binding obligation of each of Parent
and Merger Subsidiary, enforceable against each of Parent and Merger
Subsidiary in accordance with its terms, except as may be limited by
bankruptcy, insolvency, insolvency or other similar laws affecting the
rights and remedies of creditors generally, and subject to general
principles of equity, whether applied by a court of law or equity.
(ii) The execution and delivery of the Transaction Agreements do
not, and the consummation of the transactions contemplated thereby and
compliance with the terms thereof will not, (A) result in any
Violation pursuant to any provision of the certificate of
incorporation or by-laws of Parent or Merger Subsidiary, (B) result in
any Violation of any loan or credit agreement, note, bond, mortgage,
deed of trust, indenture, lease, employee benefit plan or other
contract, agreement, obligation or instrument to which Parent or
Merger Subsidiary is a party or by which any of their properties,
assets or businesses are bound or (C) subject to obtaining or making
the Governmental Consents referred to in paragraph (iii) below, result
in any Violation of any judgment, order, decree, injunction,
arbitration award or Law applicable to Parent or any Subsidiary of
Parent or their respective properties, assets or businesses, except in
the case of clauses (B) and (C), Violations which, individually or in
the aggregate, would not have a Material Adverse Effect on Parent and
would not prevent, or materially alter or delay, the consummation of
the Merger or the other transactions contemplated by the Transaction
Agreements.
-30-
(iii) No Governmental Consent is required in connection with the
execution and delivery by each of Parent and Merger Subsidiary of the
Transaction Agreements to which it is a party or the consummation by
each of Parent and Merger Subsidiary of the transactions contemplated
thereby, except for (A) notices or filings under the HSR Act and the
expiration or termination of the applicable waiting period thereunder
and compliance with any applicable foreign antitrust or competition
law, (B) the filing with the SEC of a Schedule 13D under the Exchange
Act as may be required in connection with the Voting Agreement, (C)
the filing of the Certificate of Merger with the Secretary of State of
the State of Delaware, (D) the Company Regulatory Consents and (E)
such other filings, authorizations, orders and approvals which, if not
obtained or made, would not have a Material Adverse Effect on Parent
and would not prevent, or materially alter or delay, the consummation
of the Merger or the other transactions contemplated by the
Transaction Agreements.
(c) Brokers or Finders. No agent, broker, investment banker, financial
advisor or other firm or person is or will be entitled to any broker's or
finder's fee or any other similar commission or fee in connection with any
of the transactions contemplated by the Transaction Agreements based upon
arrangements made by or on behalf of Parent or any of its affiliates,
except ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated and ▇▇▇▇▇▇▇ & Co.
LLC, whose fees and expenses will be paid by Parent except as otherwise
provided in Section 7.2(b), and Parent agrees to indemnify Company and to
hold Company harmless from and against any and all claims, liabilities or
obligations with respect to any other fees, commissions or expenses
asserted by any person on the basis of any act or statement alleged to have
been made by Parent or any of its affiliates.
(d) Disclosure Documents. The information with respect to Parent and
Merger Subsidiary that Parent or Merger Subsidiary supplies in writing to
Company for inclusion or incorporation by reference in any Company SEC
Document filed after the date of this Agreement, including the Proxy
Statement, as supplemented or amended, if applicable, will not contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading (i) in the case of
the Proxy Statement, as supplemented or amended, if applicable, at the time
such Proxy Statement or amendment or supplement thereto is first mailed to
stockholders of Company, at the time of the Company Stockholders Meeting
and at the Effective Time and (ii) in the case of any Company SEC Document
other than the Proxy Statement, or any amendment or supplement thereto, if
applicable, at the time of filing of such Company SEC Document or
supplement or amendment thereto.
(e) Board Recommendation. The respective boards of directors of Parent
and Merger Subsidiary have approved the execution, delivery and performance
of the Transaction Agreements by each of Parent and Merger Subsidiary (to
the extent a party thereto) and the consummation of the Merger, which
approval by Parent was also in its capacity as sole stockholder of Merger
Subsidiary. The board of directors of Merger Subsidiary has declared the
Merger to be advisable. No vote of the holders of any class or series of
capital stock or other securities of Parent is necessary to approve the
Transaction Agreements or the Merger.
-31-
(f) Financing. Parent has and will have at the Effective Time
sufficient funds to pay the Merger Consideration and the Option
Consideration.
(g) Merger Subsidiary's Operations. Merger Subsidiary was formed
solely for the purpose of engaging in the transactions contemplated hereby,
is a direct wholly-owned Subsidiary of Parent and has not owned any assets,
engaged in any business activities or conducted any operations other than
in connection with the transactions contemplated hereby.
(h) No Other Representations or Warranties. Except for the
representations and warranties contained in this Section 3.2, neither
Parent nor Merger Subsidiary makes any other representation or warranty,
express or implied, with respect to Parent or Merger Subsidiary.
ARTICLE FOUR
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 4.1. Interim Conduct. During the period from the date of this
Agreement and continuing until the Effective Time, except as expressly required
by this Agreement or to the extent that Parent (in its sole discretion) shall
otherwise consent in writing (provided that with respect to matters described in
clauses (a), (j) (with respect to newly hired employees of Company or any of its
Subsidiaries in the ordinary course of business), (m) and (p), such consent of
Parent shall not be unreasonably withheld or delayed):
(a) General. Company and its Subsidiaries shall carry on their
respective businesses in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted and shall use all
reasonable efforts to preserve intact their present business organizations,
maintain their rights, franchises, licenses and other authorizations issued
by Governmental Entities, keep available the services of their officers and
employees, maintain their assets and properties in good working order and
condition and preserve their relationships with customers, suppliers and
others having business dealings with them to the end that their goodwill
and ongoing businesses shall not be impaired in any material respect.
Company shall not, nor shall it permit any of its Subsidiaries to, (i)
enter into any new material line of business, (ii) change its or its
Subsidiaries' investment, risk and asset-liability management and other
operating policies in any respect which is material to Company, except as
required by law or by policies imposed by a Governmental Entity, (iii)
incur or commit to any capital expenditures or any obligations or
liabilities in connection therewith, other than capital expenditures and
obligations or liabilities incurred or committed to in the ordinary course
of business consistent with past practice, which in any event will not
exceed $100,000 in the aggregate, or (iv) amend, supplement, waive, cancel,
rescind or terminate any Company Contract or enter into any contract,
arrangement, commitment or understanding that would constitute a Company
Contract, other than, in the case of clause (iii) or (iv), such
incurrences, commitments, contracts, arrangements, understandings or
Company Contracts with Company clients or third parties providing products
or services to Company clients in connection with
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Company's soft-dollar, commission recapture or directed brokerage business
in the ordinary course of business.
(b) Dividends; Changes in Stock. Company shall not, and shall not
permit any of its Subsidiaries to, or propose to, (i) declare or pay any
dividends on or make other distributions in respect of any of its capital
stock, except dividends by a wholly-owned Subsidiary of Company to Company
or another wholly-owned Subsidiary of Company, (ii) split, combine or
reclassify any of its capital stock or issue or authorize the issuance of
any other securities in respect of, in lieu of or in substitution for,
shares of its capital stock or (iii) repurchase, redeem or otherwise
acquire any shares of capital stock of Company or any of its Subsidiaries
or any securities convertible into or exercisable for any shares of capital
stock of Company or any of its Subsidiaries.
(c) Issuance of Securities. Company shall not, nor shall it permit any
of its Subsidiaries to, issue, deliver or sell, or authorize or propose the
issuance, delivery or sale of, any shares of capital stock of Company or
any of its Subsidiaries, any Voting Debt or any securities convertible into
or exercisable for, or any rights, warrants or options to acquire, any such
shares or Voting Debt, or enter into any agreement with respect to any of
the foregoing, other than (i) the issuance of Company Common Stock upon the
exercise of stock options issued under the Company Stock Option Plans and
outstanding on the date of this Agreement and (ii) issuances by a
wholly-owned Subsidiary of Company of its capital stock to Company or to
another wholly-owned Subsidiary of Company.
(d) Governing Documents, Etc. Company shall not, and shall not permit
any of its Subsidiaries to, amend or propose to amend its certificate of
incorporation, by-laws or other organizational documents or enter into a
plan of consolidation, merger or reorganization with any person; provided
that the foregoing shall not prohibit AHA or any of its Subsidiaries from
consummating a Specified Asset Sale in compliance with Section 4.1(p).
(e) No Acquisitions; No Investments. Company shall not, and shall not
permit any of its Subsidiaries to, (i) acquire or agree to acquire by
merging or consolidating with, by purchasing an equity interest in or any
material assets of, by forming a partnership or joint venture with, or by
any other manner, any business or any corporation, partnership, association
or other person or business organization or division thereof or otherwise
acquire or agree to acquire any material assets or (ii) make any
investment, either by purchase of stock or securities, contribution to
capital, property transfer or otherwise other than, in the case of clause
(ii), (x) investments consisting of debt securities, of the type included
in Company's investment portfolio on the date hereof, in the ordinary
course of business of Company or Company's broker-dealer Subsidiaries, and
(y) any investments set forth on Section 4.1(e) of the Company Disclosure
Schedule.
(f) No Dispositions. Company shall not, and shall not permit any of
its Subsidiaries to, sell, lease, assign, transfer, license, sublicense,
encumber or otherwise dispose of, in whole or in part, or agree to sell,
lease, assign, transfer, license, sublicense, encumber or dispose of,
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in whole or in part, any properties, assets or rights (including capital
stock of its Subsidiaries) which are material, individually or in the
aggregate, to Company or any of its Subsidiaries; provided that (i) Company
and AHA shall be permitted to (x) consummate the Specified Asset Sales in
accordance with Section 4.1(p) and (y) dissolve Axe-Houghton Partners for
Growth, L.P. and Axe-Houghton Partners for Value, L.P.; and (ii) Company
and Company's broker-dealer subsidiaries may (x) dispose of investments in
the ordinary course of business and (y) dispose of any investments set
forth on Section 4.1(f) of the Company Disclosure Schedule.
(g) Indebtedness. Company shall not, and shall not permit any of its
Subsidiaries to, incur, create or assume any indebtedness for borrowed
money (or modify any of the material terms of any such outstanding
indebtedness) or guarantee any such indebtedness or issue or sell any
warrants or rights to acquire any indebtedness of Company or any of its
Subsidiaries, other than (i) short-term indebtedness incurred pursuant to
working capital lines of credit existing on the date of this Agreement in
the ordinary course of business consistent with past practice, (ii)
indebtedness of any wholly-owned Subsidiary of Company to Company or to
another wholly-owned Subsidiary of Company and (iii) guarantees of
indebtedness in the ordinary course of business, which in any event will
not exceed $43.5 million in the aggregate (including any guarantees
outstanding on the date hereof).
(h) Other Actions. Except to the extent provided in Section 5.4(b) or
(d), Company shall not, and shall not permit any of its Subsidiaries to,
intentionally take any action that adversely affects the ability of the
parties to obtain any Governmental Consent or that would, or reasonably
would be expected to, result in any of the conditions to the Merger set
forth in Article Six not being satisfied.
(i) Accounting Methods. Except as disclosed in Company SEC Documents
filed prior to the date of this Agreement, Company shall not, and shall not
permit any of its Subsidiaries to, change its methods of accounting in
effect at September 30, 2001, except as required by changes in GAAP as
concurred in by Company's independent auditors.
(j) Compensation and Benefit Plans. Except as required by Law, any
Company Plan existing on the date of this Agreement (as in effect on the
date hereof), the Management Agreements or any employment agreement listed
on Section 3.1(j) of the Company Disclosure Schedule, Company shall not,
and shall not permit any of its Subsidiaries to, (i) enter into, adopt,
amend, renew or terminate any Company Plan, or any other employee benefit
plan or any agreement, arrangement, plan or policy between Company or any
of its Subsidiaries and one or more of its directors, officers or employees
or (ii) except for normal increases in compensation and fringe benefits in
the ordinary course of business consistent with past practice and payment
of bonuses in cash in lieu of equity, increase in any manner the
compensation or fringe benefits of any director, officer or employee
(including, without limitation, by granting stock options, stock
appreciation rights, restricted stock, restricted stock units or
performance units or shares) or enter into any contract, agreement,
commitment or arrangement to do any of the foregoing.
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(k) Tax Elections. Company shall not (i) change any tax election,
annual tax accounting period or method of tax accounting in any material
respect, (ii) file any material amended tax return, (iii) enter into any
closing agreement relating to any material tax, (iv) settle any material
tax claim or assessment, (v) surrender any right to claim a material tax
refund or (vi) consent to any extension or waiver of the limitations period
applicable to any material tax claim or assessment.
(l) No Liquidation. Except as permitted by Section 4.1(p), Company
shall not, and shall not permit any of its Subsidiaries to, adopt a plan of
complete or partial liquidation, dissolution, restructuring,
recapitalization or reorganization or resolutions providing for or
authorizing such a liquidation, dissolution, restructuring,
recapitalization or reorganization.
(m) No Settlements. Company shall not, and shall not permit any of its
Subsidiaries to, settle any litigation (whether or not commenced prior to
the date of this Agreement), other than settlements or compromises of
litigation where the amount paid does not exceed $50,000 for any litigation
matter or group of related matters (and provided that any such settlement
or compromise does not involve any non-monetary obligations on the part of
Company or any of its Subsidiaries).
(n) Other Agreements. Company shall not, and shall not permit any of
its Subsidiaries to, agree to, or make any commitment to, take, or
authorize, any of the actions prohibited by this Section 4.1.
(o) No Company Rights Agreement Amendment. Prior to the earlier of the
termination of this Agreement or the Effective Time, Company and the Board
of Directors will not amend or modify the Company Rights Agreement in any
manner or take any other action that would (i) render the Company Rights
Agreement inapplicable to any transaction(s) other than the Merger and
related transactions hereunder, (ii) permit any person or group (other than
Parent and its affiliates) who would otherwise be an Acquiring Person (as
such term is defined in the Company Rights Agreement) not to be an
Acquiring Person or (iii) except as specifically contemplated by this
Agreement, otherwise affect the Company Rights.
(p) Specified Assets Sales. Company shall not amend or supplement any
of the Specified Asset Sale Agreements, or waive any of the provisions
thereof. Company shall use all reasonable efforts to consummate the
Specified Asset Sales that have not been consummated prior to the date
hereof in accordance with the Specified Asset Sale Agreements as soon as
practicable.
SECTION 4.2. Notice of Certain Events. Each party shall promptly notify the
other of:
(a) any notice or other communication from any person alleging that
the consent of such person is or may be required in connection with the
transactions contemplated by the Transaction Agreements;
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(b) any notice or other communication from any Governmental Entity in
connection with the transactions contemplated by the Transaction
Agreements; and
(c) any actions, suits, claims, investigations or proceedings
commenced or, to its knowledge, threatened against, relating to or
involving or otherwise affecting such party or any of its Subsidiaries
that, if pending on the date of this Agreement, would have been required to
have been disclosed pursuant to Section 3.1 or 3.2, as the case may be, or
that relate to the transactions contemplated by the Transaction Agreements.
ARTICLE FIVE
ADDITIONAL AGREEMENTS
SECTION 5.1. Preparation of Proxy Statement; Company Stockholders Meeting.
(a) As promptly as reasonably practicable following the date hereof, Company
shall, in cooperation with Parent, prepare and file with the SEC a proxy
statement of Company relating to the matters to be submitted to Company's
stockholders at the Company Stockholders Meeting and other proxy materials (such
proxy materials, and any amendments or supplements thereto including the Final
Proxy Statement, the "Proxy Statement"). The Proxy Statement shall state that
the Board of Directors finds the Merger to be advisable, fair to and in the best
interests of Company's stockholders and recommends that Company's stockholders
vote in favor of the adoption of this Agreement (the "Company Recommendation").
Company shall use all reasonable efforts to have the Proxy Statement cleared by
the SEC as promptly as practicable after filing. Company shall, as promptly as
practicable after receipt thereof, provide Parent with copies of any written
comments and advise Parent of any oral comments with respect to the Proxy
Statement received from the SEC. Company shall cause the Proxy Statement to be
mailed to its stockholders at the earliest practicable date following clearance
by the SEC. Company shall cooperate and provide Parent with a reasonable
opportunity to review and comment on the draft of the Proxy Statement (including
each amendment or supplement thereto including the Final Proxy Statement) and
all responses to requests for additional information by and replies to comments
of the SEC, prior to filing such with or sending such to the SEC, and Company
will provide Parent with a copy of all such filings made and correspondence with
the SEC. Except to effect a Change in Company Recommendation in compliance with
Section 5.4 or to satisfy the condition of the first proviso of either Section
7.2(b)(ii) or Section 7.2(b)(iii), no amendment or supplement (including by
incorporation by reference) to the Proxy Statement shall be made without the
approval of Parent, which approval shall not be unreasonably withheld. If at any
time prior to the Effective Time any information should be discovered by any
party which should be set forth in an amendment or supplement to the Proxy
Statement so that the Proxy Statement would not include any misstatement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, the party which discovers such
information shall promptly notify the other party hereto and, to the extent
required by law, rules or regulations, an appropriate amendment or supplement
describing such information shall be promptly filed with the SEC and
disseminated to the stockholders of Company.
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(b) Company shall duly take all lawful action to call, give notice of,
convene and hold a meeting of its stockholders as promptly as practicable (the
"Company Stockholders Meeting"), and in any event, not later than 30 days after
mailing of the definitive Proxy Statement to Company's stockholders, for the
purpose of obtaining the Required Company Vote and shall take all lawful action
to solicit proxies for the Required Company Vote, unless, in any case, a Change
in Company Recommendation shall have been effected in accordance with Section
5.4(b). The Board of Directors shall not (x) withdraw, modify or qualify (or
propose to withdraw, modify or qualify) the Company Recommendation in any manner
adverse to Parent or (y) take any other action or make any other statement in
connection with the Company Stockholders Meeting inconsistent with the Company
Recommendation (collectively, a "Change in Company Recommendation"), except as
and to the extent expressly permitted by Section 5.4(b).
(c) As promptly as practicable following the determination of the Net Cash
Proceeds, Company shall prepare a supplement to the Proxy Statement (the "Final
Proxy Statement") and file it with the SEC and mail it to Company's
stockholders. The Company Stockholders Meeting shall be held within ten (10)
business days after the mailing of the Final Proxy Statement to Company's
stockholders.
SECTION 5.2. Access to Information. Upon reasonable notice, Company shall
(and shall cause each of its Subsidiaries to) afford to the Representatives of
Parent and its Subsidiaries reasonable access during normal business hours to
all its facilities, operations, Representatives, properties, books, contracts
and records. Company shall (and shall cause each of its Subsidiaries to) make
available to Parent (i) a copy of each report, form, schedule, statement and
other document filed or deemed to be filed, published or received by it prior to
the Effective Time (x) pursuant to the requirements of Federal or state
securities laws or (y) otherwise with or from any Governmental Entity and (ii)
all other information concerning its business, properties and personnel as
Parent may reasonably request; provided that, in the case of this clause (ii),
Company shall not be required to disclose any document or communication
protected by the attorney-client privilege under applicable law. No such
investigation by Parent shall affect the representations and warranties of
Company.
SECTION 5.3. Reasonable Best Efforts. (a) Each of Parent, Merger Subsidiary
and Company shall, and shall cause its Subsidiaries to, use their respective
reasonable best efforts to take, or cause to be taken, all actions necessary,
proper or advisable to comply promptly with all legal requirements which may be
imposed on such party or its Subsidiaries with respect to the Merger and to
consummate the transactions contemplated by this Agreement as promptly as
practicable, and to obtain or make (and to cooperate with the other party to
obtain or make) any Governmental Consent or any consent or approval of any other
public or private third party which is required to be obtained or made by such
party or any of its Subsidiaries in connection with the Merger and the
transactions contemplated by the Transaction Agreements. Each of Company and
Parent will promptly cooperate with and furnish information to the other in
connection with any such requirement imposed upon any of them or any of their
Subsidiaries in connection with the foregoing.
(b) Company and the Board of Directors shall, if any state takeover statute
or similar statute becomes applicable to the Transaction Agreements, the Merger
or any other transactions contem-
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plated thereby, take all action reasonably necessary to ensure that the Merger
and the other transactions contemplated by the Transaction Agreements may be
consummated as promptly as practicable on the terms contemplated thereby and
otherwise to minimize the effect of such statute or regulation on the
Transaction Agreements, the Merger and the other transactions contemplated
thereby.
SECTION 5.4. Acquisition Proposals. (a) Company shall not, and shall cause
each of its Subsidiaries, and the Representatives of Company and its
Subsidiaries, not to, directly or indirectly, on or after the date of this
Agreement:
(i) initiate, solicit, encourage or knowingly facilitate (including by
way of furnishing information or assistance) any inquiries or expressions
of interest or the making of any proposal or offer that constitutes, or
could reasonably be expected to lead to (individually or collectively, to
"Solicit"), (x) a proposal or offer with respect to a merger,
reorganization, share exchange, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction
involving, or any purchase directly or indirectly (including by way of
lease, exchange, sale, mortgage, pledge, tender offer, exchange offer or
otherwise, as may be applicable) of any assets (other than sales of
investment securities in the ordinary course of business) of or any equity
interests in Company or any of its Subsidiaries, in each case, other than a
proposal or offer (A) made by Parent or an affiliate thereof or (B) with
respect to a Specified Asset Sale, (y) a breach of any of the Transaction
Agreements or any interference with the completion of the Merger or (z) any
public announcement of a proposal, plan or intention to do any of the
foregoing or any agreement to engage in any of the foregoing (any of the
foregoing inquiries, expressions of interest, proposals or offers being
hereinafter referred to as an "Acquisition Proposal");
(ii) have any discussions with or provide any nonpublic information or
data to any person relating to an Acquisition Proposal, or engage in any
negotiations concerning an Acquisition Proposal, or knowingly facilitate
any effort or attempt to make or implement an Acquisition Proposal;
(iii) approve or recommend, or propose publicly to approve or
recommend, any Acquisition Proposal; or
(iv) approve or recommend, or propose to approve or recommend, or
execute or enter into, any letter of intent, agreement in principle, merger
agreement, asset purchase or share exchange agreement, option agreement or
other similar agreement (other than a confidentiality agreement to the
extent permitted by Section 5.4(b)); or
(v) agree to do any of the foregoing related to any Acquisition
Proposal.
Notwithstanding the foregoing, Company and the Board of Directors shall be
permitted to engage in discussions not disclosing any non-public information
regarding the Merger, Company or Parent with any passive investor holding not
more than 10% of the outstanding shares of Company Common Stock; provided, that
if any such investor acquires or proposes to acquire more than 10% of the
outstanding shares of Company Common Stock, all such discussions shall be
immediately termi-
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nated by Company and the foregoing provisions of this Section 5.4(a) shall apply
with respect to such investor subject to Section 5.4(b).
(b) Notwithstanding the foregoing, Company and the Board of Directors shall
be permitted to (A) to the extent applicable, comply with Rule 14d-9 and Rule
14e-2 promulgated under the Exchange Act with regard to an Acquisition Proposal
or make any disclosures as to factual matters that are required by applicable
law or which the Board of Directors, after consultation with outside counsel,
determines in good faith is required in the exercise of its fiduciary duties
under applicable law, (B) effect a Change in Company Recommendation or (C)
engage in any discussions or negotiations with, or provide nonpublic information
or data to, any person in response to a bona fide written Acquisition Proposal
not Solicited in violation of this Agreement by any such person first made after
the date of this Agreement, if and only to the extent that, in any such case
referred to in clause (B) or (C):
(i) the Company Stockholders Meeting shall not have already occurred;
(ii) Company has complied in all material respects with this Section
5.4;
(iii) the Board of Directors, after consultation with outside counsel,
determines in good faith that such action is required in the exercise of
its fiduciary duties under applicable law;
(iv) in the case of clause (B) above, (I) if Company has received a
bona fide written Acquisition Proposal not Solicited in violation of this
Agreement from a third party, the Board of Directors concludes in good
faith that such Acquisition Proposal constitutes a Superior Proposal after
giving effect to all of the adjustments which may be offered by Parent
pursuant to clause (III) below, (II) it has notified Parent, at least five
business days in advance, of its intention to effect a Change in Company
Recommendation, specifying the material terms and conditions of any such
Superior Proposal and furnishing to Parent a copy of the relevant proposed
transaction agreements with the party making such Superior Proposal and
other material documents and (III) prior to effecting such a Change in
Company Recommendation, it has, and has caused its financial and legal
advisors to, negotiate with Parent in good faith to make such adjustments
in the terms and conditions of this Agreement as would enable it to proceed
with the Merger and the other transactions contemplated hereby without
violating its fiduciary duties under applicable law;
(v) in the case of clause (C) above, the Board of Directors concludes
in good faith that there is a reasonable likelihood that such Acquisition
Proposal constitutes a Superior Proposal, and prior to providing any
nonpublic information or data to any person in connection with the
Acquisition Proposal, the Board of Directors receives from such person an
executed confidentiality agreement having provisions that are no less
favorable to Company than those contained in the Confidentiality
Agreements; and
(vi) Company immediately (and in any event prior to providing any
nonpublic information or data to any person or entering into discussions or
negotiations with any person) notifies Parent of such inquiries, proposals
or offers received by, any such information re-
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quested from, or any such discussions or negotiations sought to be
initiated or continued with, it or any of its Representatives indicating,
in connection with such notice, the identity of such person and the
material terms and conditions of any inquiries, proposals or offers
(including a copy thereof if in writing and any related documentation or
correspondence). Company agrees that it will advise Parent of any material
developments (including any changes in such terms and conditions) with
respect to such inquiries, proposals or offers as promptly as practicable
after the occurrence thereof.
(c) Company agrees that it will immediately cease and cause its
Subsidiaries, and its and their Representatives, to cease any and all existing
activities, discussions or negotiations with any third parties conducted
heretofore with respect to any Acquisition Proposal, and request in writing to
any such third parties in possession of nonpublic information about it or any of
its Subsidiaries that was furnished by or on its behalf in connection with any
of the foregoing to return or destroy all such information in the possession of
any such third party or in the possession of any Representative of any such
third party, and use commercially reasonable efforts to receive certification of
such return or destruction, and it will not release any third party from, or
waive any provisions of, any confidentiality or standstill agreement to which it
or any of its Subsidiaries is a party with respect to any Acquisition Proposal.
(d) Any disclosure (other than a "stop, look and listen" or similar
communication of the type contemplated by Rule 14d-9(f) under the Exchange Act)
made pursuant to clause (A) of Section 5.4(b) shall be deemed to be a Change in
Company Recommendation unless the Board of Directors expressly reaffirms the
Company Recommendation in such disclosure.
SECTION 5.5. Fees and Expenses. Whether or not the Merger is consummated,
all costs and expenses incurred in connection with the Transaction Agreements
and the transactions contemplated thereby shall be paid by the person incurring
such expense, except as otherwise provided in Section 7.2 hereof.
SECTION 5.6. Indemnification; Directors' and Officers' Insurance. (a) From
and after the Effective Time, Parent and the Surviving Corporation, jointly and
severally, (i) shall indemnify, defend and hold harmless each person who is now,
or has been at any time prior to the date hereof or who becomes prior to the
Effective Time, an officer, director or employee of Company or any of its past
or present Subsidiaries, including, without limitation, AHA, InstiPro Group,
Inc. and InstiPro, Inc. (the "Indemnified Parties") against all losses, claims,
damages, costs, expenses, liabilities or judgments or amounts that are paid in
settlement of or in connection with any claim, action, suit, proceeding or
investigation based in whole or in part on or arising in whole or in part out of
the fact that such person is or was a director, officer or employee of Company
or any of its Subsidiaries, whether pertaining to any matter existing or
occurring at or prior to the Effective Time and whether asserted or claimed
prior to, or at or after the Effective Time ("Indemnified Liabilities"), to the
same extent such persons are indemnified by Company as of the date of this
Agreement pursuant to Company's certificate of incorporation and by-laws and
(ii) to the extent permitted by applicable Law, shall cause to be maintained in
effect in the Surviving Corporation's certificate of incorporation and bylaws
after the Effective Time provisions regarding elimination of liability of
directors, indemnification of officers,
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directors and employees and advancement of expenses which are, in the aggregate,
not materially less favorable to the intended beneficiaries than the
corresponding provisions contained in the certificate of incorporation and
bylaws of Company on the date hereof. If requested by an Indemnified Party, the
determination of whether or not the Indemnified Party has met any applicable
standard of conduct required by Law for indemnification (unless made by a court)
shall be made by independent counsel selected by Parent and reasonably
acceptable to the Indemnified Party.
(b) For a period of six years after the Effective Time, the Surviving
Corporation shall cause to be maintained in effect the current policies of
directors' and officers' liability insurance maintained by Company (provided
that the Surviving Corporation may substitute therefor policies of at least the
same coverage and amounts containing terms and conditions which are in the
aggregate not materially less advantageous to the insured) with respect to
claims arising from facts or events which occurred before the Effective Time;
provided, however, that the Surviving Corporation shall not be obligated to make
annual premium payments for such insurance to the extent such premiums exceed
300% of the premiums paid as of the date hereof by Company for such insurance
("Company's Current Premium"), and if such premiums for such insurance would at
any time exceed 300% of Company's Current Premium, then the Surviving
Corporation shall cause to be maintained policies of insurance which, in the
Surviving Corporation's good faith determination, provide the maximum coverage
available at an annual premium equal to 300% of Company's Current Premium. The
provisions of this Section 5.6(b) shall be deemed to have been satisfied if
prepaid policies have been obtained prior to the Closing for purposes of this
Section 5.6, which policies provide such directors and officers with coverage
for an aggregate period of six years after the Effective Time with respect to
claims arising from facts or events that occurred before the Effective Time, and
for a premium not in excess of the aggregate of the premiums set forth in the
preceding sentence. If such prepaid policies have been obtained prior to the
Closing, Parent shall maintain such policies in full force and effect, and
continue to honor the obligations thereunder.
(c) The provisions of this Section 5.6 are (i) intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party, his or her
heirs and representatives and (ii) in addition to, and not in substitution for,
any other rights to indemnification or contribution that any such person may
have by Law, contract or otherwise.
SECTION 5.7. Public Announcements. Parent and Company shall use reasonable
best efforts (i) to develop a joint communications plan, (ii) to ensure that all
press releases and other public statements with respect to the transactions
contemplated hereby shall be consistent with such joint communications plan, and
(iii) unless otherwise required by applicable law or by obligations pursuant to
any listing agreement with or rules of any securities exchange, to consult with
each other before issuing any press release or otherwise making any public
statement with respect to the Transaction Agreements or the transactions
contemplated thereby.
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SECTION 5.8. Employee Benefits. (a) For purposes hereof, "Affected
Employees" shall mean those individuals who are employees of Company and its
Subsidiaries (including those employees who are on vacation, leave of absence,
disability or maternity leave) as of the Effective Time.
(b) Parent shall (i) waive all limitations as to preexisting conditions and
waiting periods with respect to participation and coverage requirements
applicable to the Affected Employees under any Parent welfare plan (other than
any long-term disability plan) that such Affected Employees may be eligible to
participate in after the Effective Time and (ii) provide each Affected Employee
with credit for any co-payments and deductibles paid prior to the Effective Time
in satisfying any applicable deductible or out-of-pocket requirements under any
Parent welfare plans that such employees are eligible to participate in after
the Effective Time. As soon as practicable following the Closing Date (but in
any event within 30 days thereof), Company shall provide Parent with information
regarding such deductible, co-payment and out-of-pocket maximums, and such
information as is required to comply with the Health Insurance Portability and
Accountability Act of 1996, with respect to each Affected Employee as of the
Effective Time.
(c) Parent shall recognize service with Company or any of its Subsidiaries
as service with Parent for all purposes under any benefit plan, policy or
program, including any severance pay plan, policy or program, maintained by
Parent or any of its Subsidiaries in which the Affected Employees are otherwise
eligible to participate, but only to the extent such service would have been
recognized under each such plan, policy or program of Parent or any of its
Subsidiaries if such service has been rendered as an employee of Parent or any
of its Subsidiaries; provided, however, that such service will not be recognized
for purposes of (i) determining benefit accruals or pay credit service under any
defined benefit pension plan of Parent or any of its Subsidiaries or (ii)
determining eligibility for post-retirement medical and life insurance plans of
Parent or any of its Subsidiaries.
(d) For a period of at least one year following the Effective Time, Parent
shall provide the Affected Employees employee benefit plans and arrangements
that are at least as favorable as those provided by Company and its Subsidiaries
on the date hereof; provided, however, that the foregoing shall not be construed
as prohibiting Parent from terminating the employment of any Employee.
SECTION 5.9. Additional Agreements. In case at any time after the Effective
Time any further action is necessary or desirable to carry out the purposes of
this Agreement or to vest the Surviving Corporation with full title to all
properties, assets, rights, approvals, immunities and franchises of either of
the Constituent Corporations, the proper officers and directors of each party to
this Agreement shall take all such necessary action.
ARTICLE SIX
CONDITIONS PRECEDENT
SECTION 6.1. Conditions to Each Party's Obligation To Effect the Merger.
The respective obligation of each party to effect the Merger shall be subject to
the satisfaction prior to the Closing Date of the following conditions:
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(a) Company Stockholder Approval. Company shall have obtained the
Required Company Vote.
(b) HSR Waiting Period. The waiting period under the HSR Act shall
have expired or been terminated early.
(c) No Injunctions or Restraints; Illegality. No temporary restraining
order, preliminary or permanent injunction or other order issued by any
court of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the Merger shall be in effect. There shall
not be any action taken, or any statute, rule, regulation or order enacted,
entered, enforced or deemed applicable to the Merger, by any Governmental
Entity which makes the consummation of the Merger illegal.
SECTION 6.2. Conditions to Obligations of Parent and Merger Subsidiary. The
obligation of Parent and Merger Subsidiary to effect the Merger is subject to
the satisfaction of the following conditions unless waived by Parent:
(a) Representations and Warranties. The representations and warranties
of Company set forth in this Agreement (x) that are qualified by
materiality or Material Adverse Effect shall be true and correct as of the
Closing Date (except to the extent such representations and warranties
speak as of an earlier date) as though made on and as of the Closing Date,
and (y) that are not qualified by materiality or Material Adverse Effect
shall be true and correct in all material respects as of the Closing Date
(except to the extent such representations speak as of an earlier date) as
though made on and as of the Closing Date, and Parent shall have received a
certificate signed on behalf of Company by the Chief Executive Officer and
Chief Financial Officer of Company to such effect.
(b) Performance of Obligations of Company. Company shall have
performed in all material respects all obligations required to be performed
by it under this Agreement at or prior to the Closing Date, and Parent
shall have received a certificate signed on behalf of Company by the Chief
Executive Officer and Chief Financial Officer of Company to such effect.
(c) Specified Asset Sales. The Specified Asset Sales shall have been
consummated in accordance with Section 4.1(p) and the final amount of the
Net Cash Proceeds shall have been determined. Prior to the consummation of
the Specified Asset Sale under the AHA Stock Purchase Agreement, Company
shall have caused AHA to make such dividends or distributions to Company so
that AHA's Tangible Net Worth (as defined in the AHA Stock Purchase
Agreement) is equal to zero at the closing of such Specified Asset Sale.
(d) Regulatory Consents. All Company Regulatory Consents shall have
been obtained or made, as the case may be. In obtaining any consent or
approval required to consummate any of the transactions contemplated
hereby, no Governmental Entity shall have imposed or shall be seeking to
impose any condition, penalty or requirement which, in the
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reasonable opinion of Parent, individually or in the aggregate, would have
a Material Adverse Effect on Company or on Parent.
(e) Consents. Company shall have obtained each consent or approval set
forth on Section 6.2(e) of the Company Disclosure Schedule, which includes
all consents and approvals required in connection with the transactions
contemplated hereby under any loan or credit agreement, note, mortgage,
indenture, lease or other agreement or instrument, other than such consents
and approvals the failure of which to obtain would not, in the reasonable
opinion of Parent, individually or in the aggregate, have a Material
Adverse Effect on Company or on Parent or upon the consummation of the
transactions contemplated in this Agreement.
SECTION 6.3. Conditions to Obligations of Company. The obligation of
Company to effect the Merger is subject to the satisfaction of the following
conditions unless waived by Company:
(a) Representations and Warranties. Each of the representations and
warranties of Parent and Merger Subsidiary set forth in this Agreement (x)
that are qualified by materiality or Material Adverse Effect shall be true
and correct as of the Closing Date (except to the extent such
representations and warranties speak as of an earlier date) as though made
on and as of the Closing Date, and (y) that are not qualified by
materiality or Material Adverse Effect shall be true and correct in all
material respects as of the Closing Date (except to the extent such
representations speak as of an earlier date) as though made on and as of
the Closing Date, and Company shall have received a certificate signed on
behalf of Parent by the Chief Executive Officer and the Chief Financial
Officer of Parent to such effect.
(b) Performance of Obligations of Parent. Parent shall have performed
all obligations required to be performed by it under this Agreement at or
prior to the Closing Date, and Company shall have received a certificate
signed on behalf of Parent by the Chief Executive Officer and the Chief
Financial Officer of Parent to such effect.
(c) Specified Asset Sales. The Specified Asset Sales shall have been
consummated in accordance with Section 4.1(p) and the final amount of the
Net Cash Proceeds shall have been determined; provided that Company shall
not be entitled to rely on this condition if Company has not complied with
Section 4.1(p).
(d) Regulatory Consents. All Company Regulatory Consents shall have
been obtained or made, as the case may be; provided the Company shall not
be entitled to rely on this condition if Company has not complied with
Section 5.3(a).
ARTICLE SEVEN
TERMINATION AND AMENDMENT
SECTION 7.1. Termination. This Agreement may be terminated at any time
prior to the Effective Time, by action taken or authorized by the board of
directors of the terminating party or parties, whether before or after approval
of the Merger by the stockholders of Company:
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(a) by mutual consent of Parent, Merger Subsidiary and Company in a
written instrument;
(b) (x) by either Parent or Company, upon written notice to the other
party, if a Governmental Entity of competent jurisdiction shall have issued
an order, decree or ruling or taken any other action permanently
restraining, enjoining or otherwise prohibiting the Merger, and such order,
decree, ruling or other action has become final and nonappealable, (y) by
Parent, upon written notice to Company, if a Company Regulatory Consent has
been denied and such denial has become final and nonappealable and (z) by
Company, upon written notice to Parent, if a Company Regulatory Consent has
been denied and such denial has become final and nonappealable; provided,
however, that the right to terminate this Agreement under this Section
7.1(b) shall not be available to any party whose failure to comply with
Section 5.3 or any other provision of this Agreement has been the cause of,
or resulted in, such order, decree, ruling, denial or other action;
(c) by either Parent or Company, upon written notice to the other
party, if the Merger shall not have been consummated on or before August
15, 2002; provided, however, that the right to terminate this Agreement
under this Section 7.1(c) shall not be available to any party whose failure
to comply with Section 5.3 or any other provision of this Agreement has
been the cause of, or resulted in, the failure of the Effective Time to
occur on or before such date;
(d) by Parent, upon written notice to Company, if Company shall have
(i) failed to make the Company Recommendation or effected a Change in
Company Recommendation (or resolved to take any such action), whether or
not permitted by the terms hereof, or (ii) failed to call or hold the
Company Stockholders Meeting in accordance with Section 5.1(b) or to
prepare and mail to its stockholders the Proxy Statement in accordance with
Section 5.1(a), or (iii) otherwise failed to comply with or perform its
obligations under Section 5.4;
(e) by either Parent or Company if the Required Company Vote shall not
have been obtained at the Company Stockholders Meeting (or any adjournment
or postponement thereof);
(f) by Company, upon written notice given to Parent in the event of a
breach or default in the performance by Parent or Merger Subsidiary of any
representation, warranty, covenant or agreement set forth in this Agreement
which breach or default (i) would result in one or more of the conditions
set forth in Sections 6.3(a) and (b) not being satisfied at the Closing
Date, and (ii) has not been, or cannot be, cured within 30 days after
written notice of such breach or default, describing such breach or default
in reasonable detail, is given by Company to Parent;
(g) by Parent, upon written notice given to Company in the event of a
breach or default in the performance by Company of any representation,
warranty, covenant or agreement set forth in this Agreement which breach or
default (i) would result in one or more of the conditions set forth in
Sections 6.2(a) and (b) not being satisfied at the Closing Date, and (ii)
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has not been, or cannot be, cured within 30 days after written notice of
such breach or default, describing such breach or default in reasonable
detail, is given by Parent to Company; or
(h) by Company, upon written notice to Parent, if Company shall have
effected a Change in Company Recommendation in compliance with the
provisions of Section 5.4.
SECTION 7.2. Effect of Termination.
(a) Liabilities. In the event of termination of this Agreement by either
Company or Parent as provided in Section 7.1, this Agreement shall forthwith
become void and there shall be no liability or obligation on the part of Parent
or Company or their respective officers or directors, except (i) with respect to
Section 3.1(r), Section 3.2(c), this Section 7.2 and Article Eight, which shall
survive such termination and (ii) that no party shall be relieved or released
from any liabilities or damages arising out of its willful and material breach
of this Agreement.
(b) Payments.
(i) If this Agreement is terminated pursuant to Section 7.1(d) or (h),
Company shall pay to Parent (I) the Termination Fee on the business day
following such termination and (II) the Parent Expenses within two business
days after demand is made by Parent.
(ii) If this Agreement is terminated pursuant to Section 7.1(g),
Company shall pay to Parent the Parent Expenses within two business days
after demand is made by Parent. If at any time after the date of this
Agreement and before termination pursuant to Section 7.1(g), a Section 7.2
Acquisition Proposal has been publicly disclosed or otherwise communicated
to the senior management or Board of Directors, Company shall pay to Parent
the Termination Fee on the business day following such termination;
provided, however, that no such payment shall be required if, within 5
business days after such announcement or other communication, the Board of
Directors (A) determines that such Section 7.2 Acquisition Proposal does
not constitute a Superior Proposal, (B) so notifies, in writing, Parent and
the person or persons that made the Section 7.2 Acquisition Proposal and
(C) in the case of any Section 7.2 Acquisition Proposal that has been
publicly disclosed, files with the SEC, and mails to Company's
stockholders, a supplement to the Proxy Statement describing such
determination and reaffirming the Company Recommendation.
(iii) If (x) this Agreement is terminated pursuant to Section 7.1(c)
or (e) and (y) at any time after the date of this Agreement and before such
termination, a Section 7.2 Acquisition Proposal has been publicly disclosed
or otherwise communicated to the senior management or the Board of
Directors, Company shall pay to Parent (I) the Termination Fee on the
business day following such termination and (II) the Parent Expenses within
two business days after demand is made by Parent; provided, however, that
no such payment shall be required if, within 5 business days after such
announcement or other communication, the Board of Directors (A) determines
that such Section 7.2 Acquisition Proposal does not constitute a Superior
Proposal, (B) so notifies, in writing, Parent and the person or persons
that made the Section 7.2 Acquisition Proposal and (C) in the case of any
Section 7.2 Acquisition Proposal
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that has been publicly disclosed, files with the SEC, and mails to
Company's stockholders, a supplement to the Proxy Statement describing such
determination and reaffirming the Company Recommendation; provided,
further, however, if, at any time prior to the first anniversary of such
termination, Company or any of its Subsidiaries enters into a definitive
agreement in respect of, or approves or recommends, a Section 7.2
Acquisition Proposal, or agrees or resolves to do any of the foregoing,
Company shall pay to Parent the Termination Fee and the Parent Expenses not
later than the date of consummation of the transaction relating to a
Section 7.2 Acquisition Proposal.
(iv) If this Agreement is terminated pursuant to Section 7.1(f),
Parent shall pay the Company Expenses to Company within two business days
after demand is made by Company.
(v) All payments under this Section 7.2(b) shall be made by wire
transfer of immediately available funds to the account specified by Parent
or Company, as the case may be. In no event shall the Termination Fee be
paid more than once.
(vi) Each of Company and Parent acknowledges that the agreements
contained in this Section 7.2(b) are critical provisions of the
transactions contemplated hereby and that without these agreements the
other party would not enter into this Agreement. Accordingly, if any party
fails to pay all amounts due to the other party on the dates specified, the
failing party shall pay all costs and expenses (including legal fees and
expenses) incurred by the other party in connection with any action or
proceeding (including the filing of any lawsuit) taken by it to collect
such unpaid amounts, together with interest on such unpaid amounts at the
prime lending rate prevailing at such time, as published in The Wall Street
Journal, from the date such amounts were required to be paid until the date
actually received by the other party.
SECTION 7.3. Amendment. This Agreement may be amended by the parties
hereto, by action taken or authorized by their respective boards of directors,
at any time before or after approval of the matters presented in connection with
the Merger by the stockholders of Company, but, after any such approval, no
amendment shall be made which by law requires further approval by such
stockholders without such further approval. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto.
SECTION 7.4. Extension; Waiver. At any time prior to the Effective Time,
the parties hereto, by action taken or authorized by their respective board of
directors, may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other party hereto,
(ii) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto and (iii) waive compliance
with any of the agreements or conditions contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in a written instrument signed on behalf of such party. The failure of
a party to assert any of its rights under this Agreement or otherwise shall not
constitute a waiver of those rights.
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ARTICLE EIGHT
GENERAL PROVISIONS
SECTION 8.1. Non-Survival of Representations, Warranties and Agreements.
None of the representations, warranties, covenants and agreements in this
Agreement or in any instrument delivered pursuant to this Agreement, including
any rights arising out of any breach of such representations, warranties,
covenants, and agreements, shall survive the Effective Time, except for those
covenants and agreements contained herein and therein that by their terms apply
or are to be performed in whole or in part after the Effective Time.
SECTION 8.2. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed duly given (a) on the date of delivery if
delivered personally, or by telecopy upon confirmation of receipt, (b) on the
first business day following the date of dispatch if delivered by a nationally
recognized next-day courier service, or (c) on the third business day following
the date of mailing if delivered by registered or certified mail, return receipt
requested, postage prepaid. All notices hereunder shall be delivered as set
forth below, or pursuant to such other instructions as may be designated in
writing by the party to receive such notice.
(a) if to Parent or Merger Subsidiary, to
Invesment Technology Group, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to Company, to
▇▇▇▇▇▇ Group Inc.
▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 8.3. Interpretation. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section of or
Exhibit or Schedule to this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation." The phrase "made available" or "furnished" in this Agreement shall
mean that the information referred to has been made available if requested by
the party to whom such information is to be made available. The phrases "the
date of this Agreement," "the date hereof" and terms of similar import, unless
the context otherwise requires, shall be deemed to refer to February 28, 2002.
The phrases "known" or "knowledge" mean, with respect to either party to this
Agreement, the actual knowledge of any of such party's directors or executive
officers after reasonable inquiry.
SECTION 8.4. Counterparts. This Agreement may be executed in counterparts,
each of which shall be considered one and the same agreement and shall become
effective when both counterparts have been signed by each of the parties and
delivered to the other party, it being understood that both parties need not
sign the same counterpart.
SECTION 8.5. Entire Agreement; No Third Party Beneficiaries. This Agreement
(including the documents and the instruments referred to herein, including the
Voting Agreement and the Confidentiality Agreements) (a) constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, between the parties with respect to the subject matter hereof, other
than the Confidentiality Agreements, which shall survive the execution and
delivery of this Agreement, and (b) except as provided in Section 5.6, is not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder.
SECTION 8.6. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
SECTION 8.7. Waiver of Jury Trial. Each of the parties hereto hereby
irrevocably waives any and all right to trial by jury in any legal proceeding
arising out of or related to this Agreement or the transactions contemplated
hereby.
SECTION 8.8. Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability and shall not
render invalid or unenforceable the remaining terms and
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provisions of this Agreement or affect the validity or enforceability of any of
the terms or provisions of this Agreement in any other jurisdiction. If any
provision of this Agreement is so broad as to be unenforceable, the provision
shall be interpreted to be only so broad as is enforceable.
SECTION 8.9. Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties, and any attempt to make any such assignment
without such consent shall be null and void. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and assigns.
SECTION 8.10. Enforcement. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States or
of the State of New York sitting in the Borough of Manhattan, City of New York,
this being in addition to any other remedy to which they are entitled at law or
in equity.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officers thereunto duly authorized, all as of the
first written above.
INVESTMENT TECHNOLOGY GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Chairman, President & CEO
INDIGO ACQUISITION CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
▇▇▇▇▇▇ GROUP INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: CEO
Exhibit C
To:
Investment Technology Group, Inc.
▇▇▇▇▇▇ Group Inc.
Reference is made to the Merger Agreement dated as of February 28, 2002,
among Investment Technology Group, Inc., ▇▇▇▇▇▇ Group Inc. and Indigo
Acquisition Corp. (the "Merger Agreement"). Capitalized terms have the meanings
given to them in the Merger Agreement.
The undersigned hereby confirms that, upon the Effective Time, any right
that the undersigned or the undersigned's estate may have to require Company to
repurchase any shares of Company Common Stock will be extinguished.
The undersigned acknowledges that execution and delivery of this letter to
Parent is a requirement under the Merger Agreement.
This letter shall be governed by the laws of the State of New York.
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Name: