Exhibit 2.1
CONFORMED COPY
AGREEMENT AND PLAN OF MERGER
by and among
THE MONY GROUP INC.
THE ADVEST GROUP, INC.
LAM ACQUISITION CORP.
and
LEBENTHAL & CO., INC.
and certain of its Shareholders named therein
Dated as of October 8, 2001
[The markings "[REDACTED]" in this document indicate portions of this document
that have been ommitted and were filed separately with the Securities and
Exchange Commission pursuant to The Mony Group Inc.'s application requesting
confidential treatment in accordance with Rule 406 as promulgated under the
Securities Act of 1933, as amended.]
TABLE OF CONTENTS
Page No.
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ARTICLE 1 The Merger ................................................................................................... 1
1.1 The Merger .............................................................................................. 1
1.2 The Closing ............................................................................................. 2
1.3 Effective Time .......................................................................................... 2
1.4 The Charter and Bylaws .................................................................................. 2
1.5 Directors of the Surviving Corporation .................................................................. 2
1.6 Officers of the Surviving Corporation ................................................................... 3
ARTICLE 2 Conversion and Exchange of Securities ........................................................................ 3
2.1 Conversion of Capital Stock ............................................................................. 3
2.2 Dissenting Shares ....................................................................................... 4
2.3 Payment of the Merger Consideration ..................................................................... 4
ARTICLE 3 Representations and Warranties of Lebenthal and the Principal Shareholders ................................... 5
3.1 Existence; Good Standing; Corporate Authority ........................................................... 5
3.2 Authorization, Validity and Effect of Agreements ........................................................ 5
3.3 Capitalization; Affiliates .............................................................................. 6
3.4 Subsidiaries ............................................................................................ 6
3.5 Other Interests ......................................................................................... 7
3.6 No Violation ............................................................................................ 7
3.7 Financial Statements .................................................................................... 8
3.8 Regulatory Reports ...................................................................................... 8
3.9 Patents, Trademarks, Copyrights and Trade Secrets ....................................................... 9
3.10 Investigations; Litigation .............................................................................. 9
3.11 Compliance with Law; Governmental Approvals ............................................................ 10
3.12 Absence of Certain Changes ............................................................................. 11
3.13 Taxes and Tax Returns .................................................................................. 13
3.14 Material Contracts ..................................................................................... 15
3.15 Employee Benefit Plans ................................................................................. 15
3.16 Labor Matters .......................................................................................... 17
3.17 MONY Common Stock Ownership ............................................................................ 18
3.18 Tax Reorganization ..................................................................................... 18
3.19 Environmental Matters .................................................................................. 18
3.20 Derivative Instruments ................................................................................. 18
3.21 Investment Advisory Activities ......................................................................... 18
3.22 State Takeover Statutes ................................................................................ 19
3.23 No Brokers ............................................................................................. 19
3.24 Securities ............................................................................................. 20
3.25 Additional Representations and Warranties of Principal Shareholders .................................... 20
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ARTICLE 4 Representations and Warranties of The Acquirers ............................................................. 21
4.1 Existence; Good Standing; Corporate Authority; Compliance with Law ..................................... 21
4.2 Authorization, Validity and Effect of Agreements ....................................................... 21
4.3 Capitalization ......................................................................................... 22
4.4 LAM Acquisition ........................................................................................ 22
4.5 No Violation ........................................................................................... 22
4.6 Investigations; Litigation ............................................................................. 23
4.7 SEC Documents .......................................................................................... 23
4.8 Absence of Certain Changes ............................................................................. 23
4.9 No Brokers ............................................................................................. 23
4.10 Compliance with Law; Governmental Approvals; Orders..................................................... 24
ARTICLE 5 Covenants ................................................................................................... 25
5.1 Alternative Proposals .................................................................................. 25
5.2 Interim Operations of Lebenthal ........................................................................ 25
5.3 Future Changes ......................................................................................... 27
5.4 Filings; Other Actions ................................................................................. 27
5.5 Inspection of Records .................................................................................. 27
5.6 Publicity .............................................................................................. 28
5.7 Employee Benefits ...................................................................................... 28
5.8 Expenses ............................................................................................... 29
5.9 Registration Rights; Investment Letters and Support Agreements ......................................... 29
5.10 Listing Application .................................................................................... 30
5.11 Directors' and Officers' Indemnification ............................................................... 30
5.12 Additional Agreements .................................................................................. 32
5.13 Takeover Statutes ...................................................................................... 32
5.14 Conveyance Taxes ........................................................................................32
5.15 Certain Tax Matters .................................................................................... 33
5.16 Advisory Contract Consents ............................................................................. 33
5.17 Lebenthal Satisfaction of the Conditions of Section 15 of the 1940 Act ................................. 33
5.18 Retention and Incentive Plans .......................................................................... 34
5.19 Activities of Principal Shareholders ................................................................... 34
5.20 Shareholder Approval ................................................................................... 35
5.21 Interim Operations of the Acquirers .................................................................... 35
5.22 Severance Pool ......................................................................................... 35
ARTICLE 6 Conditions .................................................................................................. 36
6.1 Conditions to Each Party's Obligation to Effect the Merger ............................................. 36
6.2 Conditions to Obligation of Lebenthal to Effect the Merger ............................................. 36
6.3 Conditions to Obligation of the Acquirers to Effect the Merger ......................................... 37
6.4 Conditions to Obligations of Principal Shareholders to Effect the Merger ............................... 38
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ARTICLE 7 Termination ................................................................................................. 38
7.1 Termination by Mutual Consent .......................................................................... 38
7.2 Termination by AGI, MONY or Lebenthal .................................................................. 38
7.3 Termination by Lebenthal ............................................................................... 39
7.4 Termination by AGI and MONY ............................................................................ 39
7.5 Effect of Termination and Abandonment .................................................................. 40
7.6 Extension; Waiver ...................................................................................... 40
ARTICLE 8 Indemnification; Remedies ................................................................................... 40
8.1 Survival ............................................................................................... 40
8.2 Indemnification and Payment of Damages by the Principal Shareholders ................................... 40
8.3 Indemnification and Payment of Damages by the Acquirers ................................................ 41
8.4 Time Limitations ....................................................................................... 41
8.5 Limitations on Amount - Principal Shareholders ......................................................... 41
8.6 Limitations on Amount - the Aquirers ................................................................... 43
8.7 Procedure for Indemnification - Third Party Claims ..................................................... 43
8.8 Procedure for Indemnification - Other Claims ........................................................... 44
8.9 Further Limitations on Amount - the Trusts ............................................................. 44
ARTICLE 9 General Provisions .......................................................................................... 44
9.1 Nonsurvival of Representations, Warranties and Agreements .............................................. 44
9.2 Notices ................................................................................................ 44
9.3 Assignment; Binding Effect ............................................................................. 45
9.4 Entire Agreement ...................................................................................... 46
9.5 Amendment .............................................................................................. 46
9.6 Governing Law; Jurisdiction ............................................................................ 46
9.7 Counterparts ........................................................................................... 46
9.8 Headings ............................................................................................... 47
9.9 Interpretation ......................................................................................... 47
9.10 Waivers ................................................................................................ 47
9.11 Incorporation of Schedules, Annexes and Exhibits ....................................................... 47
9.12 Severability ........................................................................................... 47
9.13 Enforcement of Agreement ............................................................................... 47
9.14 Subsidiaries ........................................................................................... 48
9.15 Lebenthal Material Adverse Effect ...................................................................... 48
9.16 MONY Material Adverse Effect ........................................................................... 48
9.17 Control of Lebenthal and its Subsidiaries .............................................................. 48
9.18 Capacity of Trusts ..................................................................................... 48
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TABLE OF SCHEDULES AND ANNEXES
SCHEDULE A Shareholder Payments
SCHEDULE B Lebenthal Disclosure Schedule
SCHEDULE C AGI Disclosure Schedule
ANNEX A Lebenthal 2001 Retention Plan
ANNEX B Lebenthal 2001 Key Employee Incentive Plan
ANNEX C Registration Rights Agreement
ANNEX D Employment Agreement with Alexandra Lebenthal
ANNEX E Employment Agreement with Gerald H. Tankersley
ANNEX F Employment Agreement with James A. Lebenthal
ANNEX G Employment Agreement with James E. McGrath
ANNEX H-1 Opinion of Counsel to MONY and LAM
ANNEX H-2 Opinion of Counsel to AGI
ANNEX I-1 Opinion of Paul Weiss, Rifkind, Wharton & Garrison
ANNEX I-2 Opinion of Counsel to Trusts
ANNEX I-3 Opinion of Counsel to Lebenthal to Principal Shareholders
ANNEX J Investment Letter
ANNEX K Support Agreement
ANNEX L Merger Agreement Joinder Agreement
ANNEX M Registration Rights Agreement Joinder Agreement
ANNEX N-1 Tax Certificate of Acquirers
ANNEX N-2 Tax Certificate of Lebenthal
[The MONY Group Inc. agrees to furnish supplementally a copy of any omitted
schedule or annex to the Commission upon request.]
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AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of October 8,
2001, by and among The MONY Group Inc., a Delaware corporation ("MONY"), The
Advest Group, Inc., a Delaware corporation ("AGI"), LAM Acquisition Corp., a New
York corporation and a wholly-owned subsidiary of MONY ("LAM Acquisition" and,
together with MONY and AGI, the "Acquirers"), Lebenthal & Co., Inc., a New York
corporation ("Lebenthal"), and the following shareholders of Lebenthal: the
Trust by Sayra F. Lebenthal for Grandchildren ("Sayra Lebenthal Trust"); James
A. Lebenthal; Eleanor Lebenthal Bissinger; The James A. Lebenthal Family
Irrevocable Trust ("James A. Lebenthal Trust"); Duncan K. Smith; James E.
McGrath; Gerald H. Tankersley; and Alexandra Lebenthal (the "Principal
Shareholders").
RECITALS
A. The Acquirers and Lebenthal and the Principal Shareholders each have
determined that a business combination is in the best interests of their
respective companies and stockholders and presents an opportunity for their
respective companies to achieve long-term strategic and financial benefits, and
accordingly have agreed to effect the merger provided for herein upon the terms
and subject to the conditions set forth herein.
B. It is intended that for federal income tax purposes the merger
provided for herein shall qualify as a reorganization within the meaning of
Section 368(a) of the Code (as defined in Section 3.13).
C. LAM Acquisition is a wholly-owned subsidiary of MONY, has been
formed solely to facilitate the Merger (as defined herein) and has conducted and
will conduct no business or activity other than in connection with the Merger.
D. In order to induce the shareholders of Lebenthal to approve the
Merger, MONY has agreed to grant registration rights with respect to MONY Common
Stock received by such shareholders in the Merger as set forth in the
Registration Rights Agreement, dated the date hereof, by and among MONY and the
shareholders of Lebenthal signatory thereto (the "Registration Rights
Agreement").
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
ARTICLE 1
THE MERGER
1.1 The Merger.
Subject to the terms and conditions of this Agreement, at the Effective
Time (as defined in Section 1.3), LAM Acquisition shall be merged with and into
Lebenthal in accordance with this Agreement, and the separate corporate
existence of LAM Acquisition shall thereupon
cease (the "Merger"). Lebenthal shall be the surviving corporation in the Merger
(sometimes hereinafter referred to as the "Surviving Corporation") and will be a
wholly owned subsidiary of MONY. The Merger shall have the effects specified in
the Business Corporation Law of the State of New York (the "NYBCL").
1.2 The Closing.
Subject to the terms and conditions of this Agreement, the closing of
the Merger (the "Closing") shall take place at the offices of MONY, 1740
Broadway, New York, NY 10019, at 10:00 a.m., local time, on the first business
day immediately following the day on which the last to be fulfilled or waived of
the conditions set forth in Article 6 shall be fulfilled or waived in accordance
herewith (other than conditions which by their nature are to satisfied at
Closing) or at such other time, date or place as MONY and Lebenthal may agree in
writing. The date on which the Closing occurs is hereinafter referred to as the
"Closing Date."
1.3 Effective Time.
If all the conditions set forth in Article 6 shall have been fulfilled
or waived in accordance herewith and this Agreement shall not have been
terminated as provided in Article 7, the parties hereto shall cause a
Certificate of Merger meeting the requirements of Section 904 of the NYBCL to be
properly executed and filed in accordance with such Section on the Closing Date.
The Merger shall become effective at the time of filing of the Certificate of
Merger with the Secretary of State of the State of New York in accordance with
the NYBCL or at such later time which the parties hereto shall have agreed upon
and designated in such filings as the effective time of the Merger (the
"Effective Time"). The parties presently anticipate that the Merger will become
effective immediately following the close of regular trading on the New York
Stock Exchange (the "NYSE").
1.4 The Charter and Bylaws.
(a) The Certificate of Incorporation of LAM Acquisition as in effect
immediately prior to the Effective Time (with Article First thereof amended to
read in its entirety as follows: "The name of the corporation is: Lebenthal &
Co., Inc.") shall be the Certificate of Incorporation of the Surviving
Corporation as of the Effective Time until duly amended as provided therein or
by applicable law.
(b) The Bylaws of LAM Acquisition in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation as of the
Effective Time, until thereafter amended as provided therein or by applicable
law.
1.5 Directors of the Surviving Corporation.
The directors of the Surviving Corporation immediately after the
Effective Time shall be as set forth in Section 1.5 of the AGI Disclosure
Schedule, each to hold office from the Effective Time in accordance with the
Certificate of Incorporation and By-Laws of the Surviving Corporation and until
his or her successor is duly elected and qualified.
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1.6 Officers of the Surviving Corporation.
The officers of the Surviving Corporation immediately after
the Effective Time shall be as set forth in Section 1.6 of the AGI Disclosure
Schedule, each to hold office from the Effective Time in accordance with the
Certificate of Incorporation and By-Laws of the Surviving Corporation and until
his or her successor is duly appointed and qualified.
ARTICLE 2
CONVERSION AND EXCHANGE OF SECURITIES
2.1 Conversion of Capital Stock.
As of the Effective Time, by virtue of the Merger and without
any action on the part of the holder of any shares of common stock of Lebenthal
(the "Lebenthal Common Stock"), or of the holder of any shares of capital stock
of LAM Acquisition, the following shall occur:
(a) Each issued and outstanding share of common stock of LAM
Acquisition shall be converted into and become one fully paid and nonassessable
share of common stock of the Surviving Corporation.
(b) All shares of Lebenthal Common Stock that are owned by
Lebenthal as treasury stock ("Treasury Shares") shall automatically be canceled
and retired and shall cease to exist and no consideration shall be delivered in
exchange therefor.
(c) The issued and outstanding shares of Lebenthal Common
Stock (other than Dissenting Shares) held by each shareholder of Lebenthal shall
be canceled and converted automatically into and represent the right to receive:
(i) an amount in cash as set forth next to such shareholder's
name on Schedule A hereto in the column headed "Cash Payment" (the
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aggregate amount of cash being received by all shareholders of
Lebenthal in respect of their Lebenthal Common Stock shall equal
$4,186,000 and is referred to herein as the "Cash Consideration"); and
(ii) that number of fully paid and nonassessable shares of
common stock, par value $.01 per share, of MONY (the "MONY Common
Stock") equal to the dollar amount set forth next to such shareholder's
name on Schedule A hereto in the column headed "Stock Payment" divided
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by the Exchange Price of MONY Common Stock (as defined below), and
rounded up to the next higher integral number of shares. The aggregate
dollar amount of stock consideration being received by all shareholders
of Lebenthal in respect of their Lebenthal Common Stock valued at the
Exchange Price shall equal $16,744,000 and is referred to herein as the
"Stock Consideration." The Cash Consideration and the Stock
Consideration are sometimes collectively referred to herein as the
"Merger Consideration." For purposes of this calculation, "Exchange
Price" of MONY Common Stock shall mean the average closing price per
share of MONY Common Stock on the NYSE for the ten consecutive trading
days ending on the trading
3
day prior to the Effective Time, as set forth in the Eastern edition of
the Wall Street Journal or, if not reported therein, any other
authoritative source.
Notwithstanding the foregoing, in the event that the aggregate
market value of the Stock Consideration after allowing for any dissenting
shareholders as provided under Section 2.2 below will be less than 80% of the
Merger Consideration, the Merger Consideration will be proportionately adjusted
by decreasing the amount of the Cash Consideration and increasing the amount of
Stock Consideration payable to each shareholder of Lebenthal to the extent
necessary so as to increase the aggregate market value of the Stock
Consideration to 80% of the Merger Consideration. For purposes of this
paragraph, the "aggregate market value of the Stock Consideration" will be
determined based, as closely as reasonably possible, on the actual MONY Common
Stock price for the last trade prior to the Effective Time, or if the Effective
Time is after the close of regular trading on the NYSE, the closing price on the
NYSE as set forth in the Eastern edition of the Wall Street Journal or, if not
reported therein, any other authoritative source.
(d) All shares of Lebenthal Common Stock, when converted as
provided in this Section 2.1, shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and each
certificate previously evidencing such shares shall thereafter represent only
the right to receive the Merger Consideration.
2.2 Dissenting Shares.
If and to the extent that any holder of Lebenthal Common Stock
is entitled to appraisal rights that have not been effectively waived, then
notwithstanding anything in this Agreement to the contrary, each share of
Lebenthal Common Stock that is issued and outstanding immediately prior to the
Effective Time and that is held by a shareholder who has properly exercised and
perfected appraisal rights under Section 623 of the NYBCL (each, a "Dissenting
Share") shall not be converted into or exchangeable for the right to receive the
Merger Consideration, but shall be entitled to receive such consideration as
shall be determined pursuant to Section 623 of the NYBCL; provided, however,
that if such holder shall have failed to perfect or shall have effectively
withdrawn or lost its right to appraisal and payment under the NYBCL, each share
of Lebenthal Common Stock of such holder shall thereupon be deemed to have been
converted into and to have become exchangeable for, as of the Effective Time,
the right to receive the Merger Consideration, without any interest thereon, in
accordance with Section 2.1, and such shares shall no longer be Dissenting
Shares.
2.3 Payment of the Merger Consideration.
Upon surrender of a certificate representing Lebenthal Common
Stock (a "Lebenthal Certificate") for cancellation to MONY, together with such
other documents as MONY shall reasonably request, the holder of such Lebenthal
Certificate shall be entitled to promptly receive in exchange therefor (a) a
check or a wire transfer to an account designated by such holder in the amount
equal to the cash, if any, which such holder has the right to receive pursuant
to the provisions of this Article 2, and (b) a certificate representing that
number of shares of MONY Common Stock, if any, which such holder has the right
to receive pursuant to this Article 2 and the Lebenthal Certificate so
surrendered shall forthwith be canceled. If any
4
certificate representing Lebenthal Common Stock shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such certificate to be lost, stolen or destroyed, MONY will pay, in exchange for
such lost, stolen or destroyed certificate, the Merger Consideration to be paid
in respect of the shares represented by such certificate.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF LEBENTHAL AND THE PRINCIPAL SHAREHOLDERS
Except as set forth in the disclosure schedule delivered to
AGI at or prior to the execution hereof and attached hereto as Schedule B (the
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"Lebenthal Disclosure Schedule"), Lebenthal and each of the Principal
Shareholders, jointly and severally (but subject to the limitations set forth in
Article 8 and the qualification as to the capacity of the Trusts set out in
Section 9.18) represent and warrant to the Acquirers as of the date of this
Agreement as follows:
3.1 Existence; Good Standing; Corporate Authority.
Lebenthal is a corporation duly incorporated, validly existing
and in good standing under the laws of New York. Lebenthal is duly licensed or
qualified to do business as a foreign corporation and is in good standing under
the laws of any other state of the United States in which the character of the
properties owned or leased by it or in which the transaction of its business
makes such qualification necessary, except where the failure to be so licensed,
qualified or to be in good standing is not reasonably likely to have a Lebenthal
Material Adverse Effect (as defined below). Lebenthal has all requisite
corporate power and authority to own, operate and lease its properties and carry
on its business as now conducted or as reasonably contemplated in the future.
Each of Lebenthal's Subsidiaries is a corporation or partnership duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation or organization, has the corporate or partnership power and
authority to own its properties and to carry on its business as it is now being
conducted, and is duly qualified to do business and is in good standing in each
jurisdiction in which the ownership of its property or the conduct of its
business requires such qualification, except for jurisdictions in which such
failure to be so qualified or to be in good standing is not reasonably likely to
have a Lebenthal Material Adverse Effect. Lebenthal and its Subsidiaries have no
governmental or non-governmental permits, licenses or authorizations that are
not freely assignable, except for the permit, license and authorizations of the
NASD and those permits, licenses or authorizations which the failure to assign
would not have a Lebenthal Material Adverse Effect. Lebenthal has heretofore
made available to AGI a complete and correct copy of the certificate of
incorporation and the bylaws or equivalent organizational documents, each as
amended to the date hereof, of Lebenthal and each of its Subsidiaries. Such
certificates of incorporation, bylaws and equivalent organizational documents
are in full force and effect.
3.2 Authorization, Validity and Effect of Agreements.
Lebenthal has all requisite corporate power and authority to
execute and deliver this Agreement, and all other agreements and documents
contemplated hereby and to perform its obligations hereunder. The execution and
delivery of this Agreement by Lebenthal and the consummation by Lebenthal of the
transactions contemplated hereby have been duly and validly
5
authorized by all requisite action of the Board of Directors of Lebenthal (the
"Lebenthal Board") and other than the approval of the shareholders of two thirds
of the outstanding shares of common stock of Lebenthal, no other corporate
proceedings on the part of Lebenthal or its shareholders are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby.
This Agreement and all other agreements and documents contemplated hereby to
which Lebenthal is a party (when executed and delivered pursuant hereto) will
constitute, the valid and legally binding obligations of Lebenthal, enforceable
in accordance with their respective terms, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws of general applicability relating
to creditors' rights and general principles of equity.
3.3 Capitalization; Affiliates.
(a) The authorized capital stock of Lebenthal consists of
250,000 shares of Lebenthal Common Stock. As of the date of this Agreement,
there were 155,954 shares of Lebenthal Common Stock issued and outstanding, and
43,546 shares of Lebenthal Common Stock held in Lebenthal's treasury. Lebenthal
has no outstanding bonds, debentures, notes or other obligations the holders of
which have the right to vote (or which are convertible into or exercisable for
securities having the right to vote) on any matter with respect to such
securities. All issued and outstanding shares of Lebenthal Common Stock are duly
authorized, validly issued, fully paid, nonassessable and free of preemptive
rights, and were issued in compliance with all applicable federal and state
securities laws, rules and regulations. Except to the extent set forth in the
Stockholders' Agreement made and entered into November 15, 1995 by and among
Lebenthal and the persons specified therein (the "Lebenthal Stockholders'
Agreement"), there are not at the date of this Agreement any existing options,
warrants, calls, subscriptions, convertible securities, or other rights,
agreements or commitments, that obligate Lebenthal or any of its Subsidiaries to
issue, transfer or sell any shares of capital stock of Lebenthal or any of its
Subsidiaries. After the Effective Time, the Surviving Corporation will have no
obligation to issue, transfer or sell any shares of capital stock or other
securities of Lebenthal or the Surviving Corporation or any Subsidiary of
Lebenthal pursuant to any Lebenthal Plan (as defined in Section 3.15), the
Stockholders' Agreement or otherwise.
(b) Schedule A sets forth a true and correct listing of the
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name, address, and share ownership of all shareholders of Lebenthal. In
addition, Schedule A sets forth a true and correct listing of the name, address
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and beneficial share ownership of each beneficiary, whether direct or indirect,
primary or contingent (the "Trust Beneficiaries") of the Sayra Lebenthal Trust
and the James A. Lebenthal Trust (the "Trusts"). Lebenthal shall provide the
Acquirers such information and documents as the Acquirers shall reasonably
request for purposes of reviewing such list.
3.4 Subsidiaries.
Lebenthal owns directly or indirectly each of the outstanding
shares of capital stock (or other ownership interests having by their terms
ordinary voting power to elect a majority of directors or others performing
similar functions with respect to such Subsidiary) of each of Lebenthal's
Subsidiaries. Each of the outstanding shares of capital stock of each of
Lebenthal's Subsidiaries is duly authorized, validly issued, fully paid and
nonassessable, and is owned, directly or indirectly, by Lebenthal free and clear
of all liens, pledges, security interests, claims or other encumbrances. Set
forth in Section 3.4 of the Lebenthal Disclosure Schedule is
6
the name, jurisdiction of incorporation and ownership by Lebenthal of each
Lebenthal Subsidiary.
3.5 Other Interests.
Except as set forth in Section 3.5 of the Lebenthal Disclosure
Schedule and except for interests in its Subsidiaries and except pursuant to its
investment activities in the ordinary course of business, neither Lebenthal nor
any of its Subsidiaries owns directly or indirectly any interest or investment
(whether equity or debt) in any corporation, partnership, joint venture,
business, trust or entity.
3.6 No Violation.
Neither the execution and delivery by Lebenthal of this
Agreement nor the consummation by Lebenthal of the transactions contemplated
hereby in accordance with the terms hereof, will:
(a) conflict with or result in a breach of any provisions of
the Certificate of Incorporation or Bylaws of Lebenthal or the Stockholders'
Agreement;
(b) result in a breach or violation of, a default under, or
the triggering of any payment or other material obligations pursuant to, or
accelerate vesting under, any existing Lebenthal Plan, or any grant or award
made under any of the foregoing;
(c) other than as set forth in Section 3.6(c) of the Lebenthal
Disclosure Schedule, violate, conflict with, result in a breach of any provision
of, constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, result in the termination or in a right
of termination or cancellation of, accelerate the performance required by,
result in the triggering of any payment or other material obligations pursuant
to, result in the creation of any material lien, material security interest,
material charge or material encumbrance upon any of the properties of Lebenthal
or its Subsidiaries under, or result in being declared void, voidable, or
without further binding effect, any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, deed of trust or any license, franchise,
permit, lease, contract, agreement or other instrument, commitment or obligation
to which Lebenthal or any of its Subsidiaries is a party, or by which Lebenthal
or any of its Subsidiaries or any of their respective properties is bound or
affected, except for any of the foregoing matters that are not reasonably likely
to have a Lebenthal Material Adverse Effect; or
(d) other than (i) the filings provided for in Article 1, (ii)
the consents, approvals and notices required or contemplated under the
Investment Company Act of 1940, as amended (the "1940 Act") and the Investment
Advisers Act of 1940, as amended (the "Advisers Act") reflected in Sections 5.16
and 5.17 and (iii) the filing of any required applications or notices with the
NASD (the "Regulatory Filings"), require any consent, approval or authorization
of, action by or in respect of, or declaration, filing or registration with, any
domestic governmental or regulatory authority or self-regulatory organization,
other than consents, approvals, authorizations, actions, declarations or filings
or registration that, if not obtained or made, are not reasonably likely to have
a Lebenthal Material Adverse Effect.
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3.7 Financial Statements.
(a) Lebenthal has delivered to AGI the audited consolidated
statement of financial condition (including the related notes and independent
auditors' report thereon) of Lebenthal and its consolidated Subsidiaries as at
March 31, 2001, March 31, 2000 and March 31, 1999 (the "Audited Financial
Statements"). The Audited Financial Statements present fairly, in all material
respects, the financial position of Lebenthal and its consolidated Subsidiaries
as of their respective dates. The Audited Financial Statements have been
prepared, in all material respects, in accordance with generally accepted
accounting principles in the United States ("GAAP"), except as noted therein.
(b) Lebenthal has delivered to AGI the unaudited consolidated
statement of financial condition of Lebenthal and its consolidated Subsidiaries
as at July 31, 2001 (the "Unaudited Financial Statements"). Except for normally
recurring year-end adjustments and the absence of any notes to the Unaudited
Financial Statements (i) the Unaudited Financial Statements present fairly, in
all material respects, the financial position of Lebenthal and its consolidated
Subsidiaries as of July 31, 2001, and (ii) the Unaudited Financial Statements
have been prepared, in all material respects, in accordance with GAAP, except as
noted therein.
(c) Lebenthal has delivered to AGI the unaudited,
unconsolidated financial statements of Lebenthal and each of its Subsidiaries
that are registered as broker-dealers under Section 15 of the Exchange Act
contained in the Financial and Operational Combined Uniform Single Reports
(each, a "Focus Report") for each of the fiscal quarters during the period from
April 1, 1998 through June 30, 2001. Except for normally recurring year-end
adjustments and the absence of any notes to the Focus Reports, (i) the balance
sheet included in each of the Focus Reports presents fairly, in all material
respects, the financial position of Lebenthal or such Subsidiary (as the case
may be) as of its date, (ii) the other related statements included in each of
the Focus Reports present fairly, in all material respects, the results of
operations and cash flows of Lebenthal or such Subsidiary (as the case may be)
for the period or as of the date set forth therein as of its date and (iii) each
of the balance sheet, the statement of operations, changes in shareholders'
equity and cash flows included in each of the Focus Reports has been prepared,
in all material respects, in accordance with GAAP, except as noted therein.
3.8 Regulatory Reports.
Lebenthal and its Subsidiaries have timely filed all reports,
registrations, statements and other filings (other than those relating to Taxes
or Tax Returns), together with any amendments required to be made with respect
thereto, that were required to be filed by Lebenthal or any of its Subsidiaries
since January 1, 1995 with any applicable Governmental Authority (other than
taxing authorities) or any Self-Regulatory Organization (all such reports and
statements, exhibits and schedules thereto, being collectively referred to
herein as the "Lebenthal Regulatory Reports"), except where the failure to file
such Lebenthal Regulatory Reports would not, individually or in the aggregate,
have a Lebenthal Material Adverse Effect. Each of the Lebenthal Regulatory
Reports, when filed, complied in all material respects with all applicable
statutes, rules, regulations and orders.
8
3.9 Patents, Trademarks, Copyrights and Trade Secrets.
(a) Section 3.9 of the Lebenthal Disclosure Schedule sets
forth a listing of each patent, trademark, service mark, copyright or similar
intellectual property registration held by Lebenthal or any of its Subsidiaries.
(b) (i) there is no existing or, to the knowledge of
Lebenthal, threatened infringement, misuse or misappropriation by others, of any
United States or foreign patents, patent applications, trademarks, whether
registered or as to which registration has been applied for, tradenames, service
marks, copyrights, processes, designs, formulae, inventions, know-how, trade
secrets or concepts (the "Intellectual Property") of Lebenthal or any of its
Subsidiaries that is reasonably likely to be material to Lebenthal's operation,
(ii) there are no pending or threatened claims by Lebenthal or any of its
Subsidiaries against others for infringement, misuse or misappropriating, of any
Intellectual Property of Lebenthal or its Subsidiaries, and (iii) neither
Lebenthal nor any of its Subsidiaries is infringing, misusing or
misappropriating any Intellectual Property of any third party and no claim of
such infringement, misuse or misappropriation is pending or, to Lebenthal's
knowledge, threatened.
(c) Except as set forth in Section 3.9 of the Lebenthal
Disclosure Schedule , Lebenthal and its Subsidiaries own or possess adequate
licenses or other valid rights to use all of the Intellectual Property of
Lebenthal and its Subsidiaries used in the business of Lebenthal and its
Subsidiaries as currently conducted, including without limitation, rights to use
the name "Lebenthal" in the manner currently used. Lebenthal has no knowledge of
any facts or claims which may bring the validity of its issued patents into
question.
3.10 Investigations; Litigation.
Except as set forth in Section 3.10 of the Lebenthal
Disclosure Schedule, (a) no investigation or review by any governmental entity
with respect to Lebenthal or any of its Subsidiaries is pending (or, to
Lebenthal's knowledge, threatened), nor has any governmental entity stated in
writing or verbally indicated to any senior officer of Lebenthal or Principal
Shareholder an intention to conduct the same; and (b) there are no actions,
suits or proceedings pending against Lebenthal or its Subsidiaries or, to the
knowledge of Lebenthal, threatened against Lebenthal or its Subsidiaries, at law
or in equity, or before or by any federal, state, local or foreign commission,
board, bureau, agency or instrumentality or arbitration panel. No such matter
set forth in Section 3.10 of the Lebenthal Disclosure Schedule is reasonably
likely to result in a Lebenthal Material Adverse Effect. Neither Lebenthal nor
any of its Subsidiaries is a party to or is subject to any order, decree,
agreement, memorandum of understanding or similar arrangement with, or a
commitment letter or similar submission to, any regulatory agency or other
governmental entity (including any United States or foreign government; any
state or other political subdivision thereof; any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government; any Self-Regulatory Organization (as defined below) and any
court, tribunal or arbitrator(s) of competent jurisdiction) charged with the
supervision or regulation of broker-dealers, securities underwriting or trading,
stock exchanges, commodities exchanges, investment companies, investment
advisors or insurance agents and brokers or the supervision or regulation of
Lebenthal or any of its Subsidiaries or any of the other businesses they
conduct; and neither Lebenthal nor any of its Subsidiaries has been notified in
9
writing by or received any written communication in the 24 months preceding the
date hereof from any such regulatory agency or other governmental entity to the
effect that such regulatory agency or other governmental entity is contemplating
issuing or requesting (or is considering the appropriateness of issuing or
requesting) any such order, decree, agreement, memorandum of understanding,
commitment letter or similar submission. Neither Lebenthal nor any of its
affiliated persons, as defined in Section 2(a)(3) of the 1940 Act, has been
convicted within the past 10 years of any felony or misdemeanor described in
Section 9(a)(1) of the 1940 Act, or is, by reason of any misconduct, permanently
or temporarily enjoined from acting in the capacities, or engaging in the
activities, described in Section 9(a)(2) of the 1940 Act. As used herein,
"Self-Regulatory Organization" means any United States or foreign governmental
or non-governmental self-regulatory organization, agency or authority, including
any of the NASD, the National Futures Association, or any securities or other
exchange or board of trade of which Lebenthal or any of its Subsidiaries is a
member or to the supervision or regulation of which Lebenthal or any of its
Subsidiaries is subject.
3.11 Compliance with Law; Governmental Approvals.
(a) Neither Lebenthal nor any of its Subsidiaries is in
violation of any order of any court, governmental authority, arbitration board
or tribunal, or Self-Regulatory Organization to which Lebenthal or any of its
Subsidiaries or any of their respective properties or assets is subject.
Lebenthal, each of its Subsidiaries, and each employee of each of them, holds,
and has at all pertinent times held, all licenses, franchises, permits,
qualifications, authorizations, orders and approval of, and has made or obtained
all filings, notices, applications, consents, registrations, approvals, permits
or authorizations with, to or of, all regulatory agencies, other governmental
entities and Self-Regulatory Organizations (collectively, "Permits") necessary
for the lawful ownership and use of the respective properties and assets of
Lebenthal, each of its Subsidiaries, and the conduct of their respective
businesses under and pursuant to every, and is in compliance with each, and are
not in default under any, and have taken all actions required by each,
applicable law, ordinance, governmental rule or regulation, or rule of each
Self-Regulatory Organization to which it is subject in connection with their
business as now conducted (including their sales and marketing practices),
except where the failure to obtain any such item or to take any such action is
not reasonably likely to have a Lebenthal Material Adverse Effect. Except as set
forth in Section 3.11 of the Lebenthal Disclosure Schedule, Lebenthal has
received no written notice, nor has any senior officer or Principal Shareholder
of Lebenthal received verbal notice, asserting any such violation. All such
Permits are valid and in good standing in all material respects and are not
subject to any proceeding for the suspension, modification or revocation thereof
or proceedings related thereto.
(b) Lebenthal and each of its Subsidiaries that are required
to be registered as a broker-dealer, an investment advisor, a commodity pool
operator, futures commission merchant, introducing broker, commodity trading
advisor or insurance agent with the SEC, the United States Commodities Futures
Trading Commission (the "CFTC"), the securities commission or similar authority
or insurance authority of any state or foreign jurisdiction or any
Self-Regulatory Organization are duly registered as such and such registrations
are in full force and effect. All United States federal, state and foreign
registration requirements have been complied with in all material respects and
such registrations as currently filed, and all periodic reports required to be
filed with respect thereto, are accurate and complete in all material
10
respects. Lebenthal has previously made available to AGI each registration of
Lebenthal or any of its Subsidiaries as a broker-dealer with the SEC or any
Self-Regulatory Organization.
(c) Since January 1, 1999, except as set forth in Section 3.11
of the Lebenthal Disclosure Schedule, there have been no contributions or
payments, and there is no other information, that would be required to be
disclosed by Lebenthal or any of Lebenthal's Subsidiaries on any Form G-37/G-38
or recorded by Lebenthal or any such Subsidiary pursuant to Rule G-8(a)(xvi) of
the United States Municipal Securities Rulemaking Board.
(d) Lebenthal and each Subsidiary which renders investment
advisory services to investment advisory clients with whom such entity is or was
a party to an investment advisory agreement or similar arrangement has, at all
times since January 1, 1999 or its date of formation, whichever is later,
rendered such services in material compliance with all applicable requirements
as to portfolio composition and portfolio management including, but not limited
to, the terms of such investment advisory agreements, written instructions from
such investment advisory clients, prospectuses or other offering materials,
board of director or trustee directives and applicable law.
(e) Neither Lebenthal, nor any of its Affiliates (as defined
below), is subject to a "statutory disqualification" as defined in Section
3(a)(39) of the Exchange Act or is subject to a disqualification that would be a
basis for censure, limitations on the activities, functions or operations of, or
suspension or revocation of the registration of any broker-dealer Subsidiary of
Lebenthal as a broker-dealer, municipal securities dealer, government securities
broker or government securities dealer under Section 15, Section 15B or Section
15C of the Exchange Act, and to the knowledge of any officer of Lebenthal or
Principal Shareholder, there is no reasonable basis for, or proceeding or
investigation, whether formal or informal or whether preliminary or otherwise,
that is reasonably likely to result in, any such censure, limitations,
suspension or revocation.
(f) Neither Lebenthal, nor any of its Subsidiaries is, or at
least since March 30, 1998, has been, are or were at any time an "investment
company" within the meaning of the Investment Company Act of 1940, as amended
(the "1940 Act").
3.12 Absence of Certain Changes.
Except as contemplated by this Agreement or as disclosed in
the Audited Financial Statements or the Unaudited Financial Statements, since
March 31, 2001:
(a) there has not occurred or arisen any event that,
individually or in the aggregate, has had or would be reasonably likely to have
a Lebenthal Material Adverse Effect;
(b) Lebenthal and its Subsidiaries have conducted their
respective businesses only in the ordinary course, consistent with past
practice, and without limiting the generality of the foregoing, there has not
been:
(i) any declaration, setting aside or payment of any dividend
or other distribution with respect to any shares of capital stock of
Lebenthal, or any repurchase, redemption or other acquisition by
Lebenthal of any Lebenthal Common Stock;
11
(ii) any incurrence or assumption by Lebenthal or any of its
Subsidiaries of any indebtedness for borrowed money or other long-term
indebtedness or any guarantee, endorsement or other incurrence or
assumption of material liability (whether directly, contingently or
otherwise) by Lebenthal or any of its Subsidiaries for the obligations
of any other person, other than (x) with respect to any Subsidiary or
(y) in the ordinary course of business consistent with past practice
and not in excess of $100,000 in the aggregate;
(iii) any creation or assumption by Lebenthal or any of its
Subsidiaries of any Lien on any material asset of Lebenthal or any of
its Subsidiaries, other than in the ordinary course of business,
consistent with past practice and which would not reasonably be
expected to have a Lebenthal Material Adverse Effect;
(iv) any making of any loan, advance or capital contribution
to or investment in any person (other than a Subsidiary of Lebenthal)
by Lebenthal or any of its Subsidiaries other than those consistent
with past practice and not in excess of $50,000 individually or
$200,000 in the aggregate;
(v) Except as set forth in Section 3.12 (b)(v) of the
Lebenthal Disclosure Schedule, (A) any contract or agreement entered
into by Lebenthal or any of its Subsidiaries on or prior to the date
hereto relating to any acquisition or disposition of any capital assets
or business having a value of $50,000 individually or $200,000 in the
aggregate, (B) any modification, amendment, assignment or termination
of or relinquishment by Lebenthal or any of its Subsidiaries of any
rights under any material contract or (C) any modification, amendment,
assignment or termination of or relinquishment by Lebenthal or any of
its Subsidiaries of any rights under any other contract that does or
would reasonably be expected to have, individually or in the aggregate,
a Lebenthal Material Adverse Effect;
(vi) any change in any method of accounting or accounting
principles or practice by Lebenthal, except for any such change
required by reason of a change in GAAP; or
(vii) any (A) grant of any severance or termination pay to
(or amendment of any such existing arrangement with) any director,
officer or employee of Lebenthal or any of its Subsidiaries; (B)
entering into of any employment, deferred compensation or other
similar agreement (or any amendment to any such existing agreement)
with any director, officer or employee of Lebenthal or any of its
Subsidiaries; (C) increase in benefits payable under any existing
severance or termination pay policies or employment agreements; or (D)
increase in compensation, bonus or other benefits payable to
directors, officers or employees of Lebenthal or any of its
Subsidiaries, other than (x) in the case of clauses (A) through (D),
with respect to any directors, officers and employees that are not
parties to employment agreements with Lebenthal or any of its
Subsidiaries, in the ordinary course of business consistent with past
practices and as specified on Section 3.12(b)(vii) of the Lebenthal
Disclosure Schedule or (y) in the case of clauses (A) through (D), with
respect to any directors, officer or employees who are parties to
employment agreements, in accordance with their respective employment
agreements.
12
3.13 Taxes and Tax Returns.
(a) Definitions:
"Code" means the Internal Revenue Code of 1986, as amended.
All citations to provisions of the Code, or to the Treasury Regulations
promulgated thereunder, shall include any amendments thereto and any substitute
or successor provisions thereto.
"Taxes" means any and all federal, state, local, U.S.
possession and foreign taxes, assessments and other governmental charges,
duties, impositions, levies and liabilities, including, without limitation,
taxes based upon or measured by gross receipts, income, profits, sales, use and
occupation, and value added, ad valorem, transfer, gains, franchise,
withholding, payroll, recapture, employment, excise, unemployment, insurance,
social security, business license, occupation, business organization, stamp,
environmental and property taxes, together with all interest, penalties and
additions imposed with respect to such amounts. For purposes of this Agreement,
"Taxes" also includes any obligations under any agreements or arrangements with
any person with respect to the liability for, or sharing of, Taxes (including,
without limitation, pursuant to Treas. Reg. ss. 1.1502-6 or comparable
provisions of state, local or foreign Tax law) and including, without
limitation, any liability for Taxes as a transferee or successor, by contract or
otherwise.
"Taxable Period" means any taxable year or any other period
that is treated as a taxable year (or other period, or portion thereof, in the
case of a Tax imposed with respect to such other period or portion thereof,
e.g., a quarter) with respect to which any Tax may be imposed under any
applicable statute, rule, or regulation.
"Tax Return" means any report, return, election, notice,
estimate, declaration, information statement and other forms and documents
(including, without limitation, all schedules, exhibits and other attachments
thereto) relating to and filed or required to be filed with a taxing authority
in connection with any Taxes (including, without limitation, estimated Taxes).
(b) All material Tax Returns required to be filed by or with
respect to Lebenthal and each of its Subsidiaries for all Taxable Periods have
been timely filed. All such Tax Returns are true, correct, and complete in all
material respects. All Taxes shown to be payable on such Tax Returns, and all
assessments of Tax made against Lebenthal and each of its Subsidiaries with
respect to such Tax Returns, have been paid when due. No adjustment relating to
any such Tax Return has been proposed or threatened in writing or to Lebenthal's
knowledge, in any other communication, by any taxing authority.
(c) Lebenthal and each of its Subsidiaries have provided a
reserve (without regard to deferred Tax assets and liabilities) (the "Tax
Reserve") on the Audited Financial Statements and Unaudited Financial Statements
that is adequate in accordance with GAAP for all unpaid Taxes for Taxable
Periods ending on or prior to the date of such financial statements.
(d) Lebenthal and each of its Subsidiaries have complied in
all material respects with the provisions of the Code relating to the
withholding and payment of Taxes, including, without limitation, the withholding
and reporting requirements under Code sections
13
1441 through 1464, 3401 through 3406, and 6041 through 6050S, as well as similar
provisions under any other laws (including without limitation state, local, U.S.
possession and foreign laws).
(e) None of the Tax Returns of Lebenthal or any of its
Subsidiaries has been or is currently being examined by the Internal Revenue
Service ("IRS") or state, local or foreign taxing authorities. Lebenthal is not
aware of any state of facts which to Lebenthal's knowledge, would constitute
grounds for the proper assessment of any material liability for Taxes with
respect to periods (or portions thereof) which have not been audited by the IRS
or other taxing authority and with respect to which the relevant statute of
limitations has not expired. There are no examinations or other administrative
or court proceedings relating to Taxes in progress or pending, nor has Lebenthal
or any of its Subsidiaries received a revenue agent's or similar written report
asserting a Tax deficiency.
(f) No claim has ever been made in writing by any taxing
authority with respect to Lebenthal or any of its Subsidiaries in a jurisdiction
where Lebenthal and/or any of its Subsidiaries do not file Tax Returns that
Lebenthal or any such Subsidiary is or may be subject to taxation by that
jurisdiction. There are no security interests on any of the assets of Lebenthal
or any of its Subsidiaries that arose in connection with any failure (or alleged
failure) to pay any Taxes and, except for liens for Taxes that are not yet due
and payable or are being disputed in good faith by appropriate proceedings,
there are no liens for any Tax upon any asset of Lebenthal or any of its
Subsidiaries.
(g) Neither Lebenthal nor any of its Subsidiaries is, or has
been, a party to any agreement relating to allocating or sharing the payment of,
or liability for, Taxes with respect to any Taxable Period (other than an
agreement solely between or among Lebenthal and its Subsidiaries).
(h) Neither Lebenthal nor any of its Subsidiaries has
distributed the stock of any corporation in a transaction satisfying the
requirements of Section 355 of the Code since April 16, 1997. The stock of
neither Lebenthal nor any of its Subsidiaries has been distributed in a
transaction satisfying the requirements of Section 355 of the Code since April
16, 1997.
(i) No extension of time with respect to any date on which a
Tax Return was or is to be filed by Lebenthal or any of its Subsidiaries is in
force, and no waiver or agreement by Lebenthal or any of its Subsidiaries is in
force for the extension of time for the assessment or payment of any Taxes.
(j) Neither Lebenthal nor any of its Subsidiaries has been a
member of an (i) affiliated group (within the meaning of Section 1504 of the
Code) or (ii) affiliated, combined, consolidated, unitary, or similar group for
state, local or foreign Tax purposes, in each case other than the group of which
Lebenthal is the common parent.
(k) Neither Lebenthal nor any of its Subsidiaries has been, is
or is reasonably expected to be a party to a closing agreement or similar
arrangement with the IRS or any relevant state, local or foreign taxing
authority.
(l) Neither Lebenthal nor any of its Subsidiaries has agreed
to make, or is required to make, any adjustment under Section 481(a) of the Code
to taxable income as the
14
result of any change in method of accounting, and no taxing authority has
proposed in writing any such adjustment or change in method of accounting.
(m) The Taxes payable by Lebenthal and its Subsidiaries for
any "short" taxable period beginning before the Effective Date and ending on the
Effective Date shall not exceed $425,000 in the aggregate.
(n) Neither Lebenthal nor any of its Subsidiaries has
requested a ruling or a final determination or guidance from the IRS or any
other taxing authority that is currently pending before the IRS or any other
taxing authority.
3.14 Material Contracts.
All contracts material to the business and operations of
Lebenthal and its Subsidiaries taken as a whole (the "Material Contracts") are
in full force and effect and are enforceable against all parties thereto in
accordance with their terms. Neither Lebenthal nor any of its Subsidiaries is in
default under any such Material Contract and, to the knowledge of Lebenthal, no
other party to any Material Contract with Lebenthal or any Subsidiary is in
default thereunder and Lebenthal has no knowledge of any fact, circumstance or
event which might reasonably be expected in the future to cause any such party
to be in default under any such Material Contract except for such instances that
are not reasonably likely to result in a Lebenthal Material Adverse Effect.
Neither Lebenthal nor any of its Subsidiaries is a party to or bound by any
non-competition agreement or any other agreement or obligation which purports to
limit in any material respect the manner in which, or the localities in which,
the business of Lebenthal or its Affiliates (including AGI and its Subsidiaries
following the Effective Time) is or would be conducted. Section 3.14 of the
Lebenthal Disclosure Schedule contains a true and complete list of each Material
Contract.
3.15 Employee Benefit Plans.
(a) Section 3.15 of the Lebenthal Disclosure Schedule contains
a true and complete list of each material employment, bonus, deferred
compensation, incentive compensation, stock purchase, stock option, stock
appreciation right or other stock-based incentive, severance, change-in-control,
or termination pay, hospitalization or other medical, disability, life or other
insurance, supplemental unemployment benefits, profit-sharing, pension, or
retirement plan, program, agreement or arrangement, and each other employee
benefit plan, program, agreement or arrangement, sponsored, maintained or
contributed to or required to be contributed to by Lebenthal or any Subsidiary
or ERISA Affiliate (as defined below) for the benefit of any current or former
employee, consultant, or director of Lebenthal or any of its Subsidiaries or any
ERISA Affiliate during the three year period ending on the date of this
Agreement (the "Lebenthal Plans"). For purposes of this Section 3.15, the term
"ERISA Affiliate" shall mean all members of a controlled group of corporations
and all trades and businesses (whether or not incorporated) under common control
and all other entities which, together with Lebenthal, are treated as a single
employer under any or all of Sections 414(b), (c), (m) or (o) of the Code or
Section 4001(a)(14) of ERISA at any time during the three year period ending on
the date of this Agreement.
15
(b) With respect to each of Lebenthal Plans, Lebenthal has
delivered or made available to AGI true and complete copies of each of the
following documents, as applicable: (i) a copy of Lebenthal Plan documents
(including all amendments thereto) for each Lebenthal Plan; (ii) a copy of the
annual report or Internal Revenue Service Form 5500 Series for the last three
years ending prior to the date of this Agreement if such report was required to
be filed; (iii) a copy of the actuarial report, if required under the Employment
Retirement Income Security Act of 1974, as amended ("ERISA"), for the last three
years ending prior to the date of this Agreement; (iv) a copy of the most recent
Summary Plan Description ("SPD") if required under ERISA; (v) if Lebenthal Plan
is funded through a trust or any other funding vehicle (including a rabbi
trust), a copy of the trust or other funding agreement (including all amendments
thereto) and the financial statements thereof, if any, for the last three year
period ending on the date of this Agreement; and (vi) the most recent
determination letter received from the IRS with respect to each Lebenthal Plan
that is intended to be qualified under Section 401(a) or Section 501(c)(3) of
the Code. In addition, with respect to each Lebenthal Plan, Lebenthal has made
available, or will prior to the Closing Date make available, to AGI true and
correct copies of all insurance contracts and all other material contracts
relating to such Lebenthal Plans.
(c) Neither Lebenthal, any Subsidiary, nor any ERISA
Affiliate, that together with Lebenthal would be deemed a "single employer"
within the meaning of Section 4001(b)(1) of ERISA has or at any time in the past
has had (i) any obligation to contribute to, or any liability, contingent or
otherwise with respect to, a plan subject to Title IV of ERISA, Section 412 of
the Code, or Section 302 of ERISA, or (ii) an obligation to contribute to any
"multiemployer plan" (as defined in Section 3(37) of ERISA or Section 4001(a)(3)
of ERISA).
(d) To the knowledge of Lebenthal, neither Lebenthal, any
Subsidiary nor any of Lebenthal Plans, any trust created thereunder, nor any
administrator of any Lebenthal Plan has engaged in a transaction or has taken or
failed to take any action in connection with which Lebenthal, any Subsidiary or
any ERISA Affiliate could be subject to any material liability for either a
civil penalty assessed pursuant to Sections 404, 406, 409, 502(c) or 502(i) of
ERISA or a tax imposed pursuant to Sections 4975(a) or (b), 4976, 4980B, 4980D,
4980E or 5000 of the Code.
(e) Each of Lebenthal Plans has been operated and administered
in all material respects in accordance with applicable laws, including but not
limited to ERISA and the Code.
(f) Lebenthal has applied for and received a currently
effective favorable determination letter from the IRS with respect to each
Lebenthal Plan that is intended to be "qualified" within the meaning of Section
401(a) of the Code to the effect that such Lebenthal Plan is so qualified, that
the trusts maintained thereunder are exempt from tax under Section 501(a) of the
Code, and that no event has occurred which would affect such qualified or
tax-exempt status.
(g) Any fund established under a Lebenthal Plan that is
intended to satisfy the requirements of Section 501(c)(9) of the Code has
applied for and received a currently effective determination letter from the IRS
stating that it is tax exempt and no event has occurred since the date of such
determination letter which would affect its tax-exempt status
16
(h) Except as set forth in Section 3.15(h) of the Lebenthal
Disclosure Schedules, no Lebenthal Plan provides benefits, including health,
life, death or medical benefits (whether or not insured), with respect to
current or former employees of Lebenthal, any Subsidiary or any ERISA Affiliate
after retirement or other termination of service (other than (i) coverage
mandated by applicable laws, (ii) death benefits or retirement benefits under
any "employee pension benefit plan," as that term is defined in Section 3(2) of
ERISA, (iii) deferred compensation benefits accrued as liabilities on the books
of Lebenthal, a Subsidiary or an ERISA Affiliate, (iv) benefits, the full direct
cost of which is borne by the current or former employee (or beneficiary
thereof), or (v) under Section 4980B of the Code). Benefits under all Lebenthal
Plans are as represented and have not been increased subsequent to the date as
of which documents have been provided.
(i) The consummation of the transactions contemplated by this
Agreement will not (i) entitle any current or former employee, officer or
director of Lebenthal, any Subsidiary or any ERISA Affiliate to severance pay or
(ii) accelerate the time of payment or vesting, or increase the amount of or
otherwise enhance any benefit due any such employee, officer or director. There
are no pending, or, to the knowledge of Lebenthal or any Subsidiary or ERISA
Affiliate, threatened or anticipated, claims by or on behalf of any Lebenthal
Plan, by any employee or beneficiary under any such Lebenthal Plan, or otherwise
involving any such Lebenthal Plan (other than routine claims for benefits or
appeals of denied claims).
(j) To the knowledge of Lebenthal, no Lebenthal Plan or
related trust has any liability of any nature, accrued or contingent, including,
without limitation, liabilities for federal, state, local U.S. possession or
foreign taxes, other than routine payments to be made in due course to
participants and beneficiaries, and there is no litigation, arbitration, claim,
governmental or other proceeding (formal or informal) or investigation pending,
threatened (or any basis therefor known to Lebenthal, any Subsidiary or any
ERISA Affiliate or any of their officers or directors) with respect to any
Lebenthal Plan or related trust or with respect to any fiduciary, administrator
or sponsor (in its capacity as such) of any Lebenthal Plan. No Lebenthal Plan or
any fiduciary thereof has been the direct or indirect subject of an audit,
investigation or examination by any governmental or quasi-governmental agency.
3.16 Labor Matters.
Neither Lebenthal nor any of its Subsidiaries is a party to,
or bound by, any collective bargaining agreement, contract or other agreement or
understanding with a labor union or labor organization. Neither Lebenthal nor
any of its Subsidiaries, nor their respective representatives or employees, has
committed any unfair labor practices in connection with the operation of the
respective businesses of Lebenthal or any of its Subsidiaries. There is no
unfair labor practice or labor arbitration proceeding pending or, to the
knowledge of Lebenthal, threatened against Lebenthal or its Subsidiaries
relating to their business by the National Labor Relations Board or any similar
governmental or adjudicatory agency or court. To the knowledge of Lebenthal,
there are no organizational efforts with respect to the formation of a
collective bargaining unit currently being made or threatened involving
employees of Lebenthal or any of its Subsidiaries. Lebenthal and its
Subsidiaries are in material compliance with all applicable federal, state and
local laws, rules and regulations regarding employment.
17
3.17 MONY Common Stock Ownership.
Neither Lebenthal nor any of its Subsidiaries beneficially
owns any shares of MONY Common Stock or other securities convertible into or
exercisable for MONY Common Stock.
3.18 Tax Reorganization.
Lebenthal is not aware of any fact or circumstance that could
reasonably be expected to prevent the Merger from qualifying as a reorganization
within the meaning of Section 368(a) of the Code.
3.19 Environmental Matters.
Lebenthal and each of its Subsidiaries are in material
compliance with all applicable federal, state, local and foreign laws, rules and
regulations relating to pollution or protection of human health, worker safety
or the environment (including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata) (collectively, "Environmental
Laws"). Such compliance includes, but is not limited to, the possession by
Lebenthal and its Subsidiaries of all material permits and other material
governmental authorizations required under applicable Environmental Laws, and
compliance with the terms and conditions thereof. Neither Lebenthal nor any of
its Subsidiaries has received written notice of, or to the knowledge of
Lebenthal, is the subject of, any actions, causes of action, claims,
investigations, demands or notices by any person or entity alleging liability
under or noncompliance with any Environmental Law. To the knowledge of
Lebenthal, there are no circumstances that are reasonably likely to prevent or
interfere with such material compliance in the future.
3.20 Derivative Instruments.
No swaps, caps, floors, futures, forward contracts, option
agreements and other derivative financial instruments, contracts or arrangements
for the account of Lebenthal or one of its Subsidiaries or for the account of a
customer of Lebenthal or one of its Subsidiaries have been entered into by
Lebenthal or any of its Subsidiaries since January 1, 2001 or are currently in
effect.
3.21 Investment Advisory Activities.
(a) Each of the Investment Companies (as defined below) (or
the trust or corporation of which it is a series) is duly organized and existing
in good standing under the laws of the jurisdiction under which it is organized.
Each of the Investment Companies (or the trust or corporation of which it is a
series) that is registered or required to be registered under the 1940 Act
(each, a "Lebenthal Fund") as an open-end management investment company is
governed by a board of trustees or directors (each a "Fund Board" and,
collectively, the "Fund Boards") consisting of at least 50% of trustees or
directors who are not "interested persons" (as defined in the 1940 Act) of the
Lebenthal Funds or Lebenthal. The Fund Boards operate in all material respects
in conformity with the requirements and restrictions of the 1940 Act. As used
herein, "Investment Company" means any investment company within the meaning of
the 1940 Act,
18
disregarding Section 3(c) thereof, that is sponsored, organized, advised,
managed or distributed by Lebenthal or one of its Subsidiaries (including the
Lebenthal Funds). Each Lebenthal Fund is identified in Section 3.21 of the
Lebenthal Disclosure Schedule.
(b) No material investigation or review by any governmental
entity with respect to any of the Investment Companies is pending (or, to
Lebenthal's knowledge, threatened) nor has any governmental entity indicated to
Lebenthal an intention to conduct the same; and (b) there are no actions, suits
or proceedings pending against any of the Investment Companies (or, to
Lebenthal's knowledge, threatened), at law or in equity, or before or by any
federal, state, local or foreign commission, board, bureau, agency or
instrumentality. None of the Investment Companies is a party to or is subject to
any order, decree, agreement, memorandum of understanding or similar arrangement
with any regulatory agency or other governmental entity.
(c) Each of the Investment Companies is in compliance in all
material respects with all applicable United States federal, state and foreign
laws, rules and regulations of the SEC, the CFTC, the IRS, and any
Self-Regulatory Organization having jurisdiction over such Investment Company.
(d) Each Investment Company has been operated or managed in
compliance with its respective objectives, policies and restrictions, including
those set forth in the applicable prospectus and registration statement, if any,
for that Investment Company. Lebenthal and its Subsidiaries have operated their
investment accounts in accordance with the investment objectives and guidelines
in effect for such investment accounts.
(e) None of Lebenthal or any of its Subsidiaries or any
"associated person" (as defined in the Advisers Act or the Exchange Act) or any
"affiliated person" (as defined in the 1940 Act) of Lebenthal or any of its
Subsidiaries is ineligible pursuant to Section 203 of the Advisers Act, Section
9(a) or 9(b) of the 1940 Act or Section 15(b) of the Exchange Act to serve as a
registered investment adviser or broker-dealer or as an associated person of a
registered investment adviser or broker-dealer.
3.22 State Takeover Statutes.
No "fair price," "moratorium," "control share acquisition" or
other form of antitakeover statute or regulation is applicable to the Merger or
the other transactions contemplated hereby.
3.23 No Brokers.
Lebenthal has not entered into any contract, arrangement or
understanding with any person or firm which may result in the obligation of
Lebenthal or any of the Acquirers to pay any finder's fees, brokerage or agent's
commissions or other like payments in connection with the negotiations leading
to this Agreement or the consummation of the transactions contemplated hereby,
except that Lebenthal has retained Freeman & Co. as its financial advisor, the
arrangements of which have been disclosed by Lebenthal to AGI. Other than the
foregoing arrangements, Lebenthal is not aware of any claim for payment of any
finder's fees, brokerage or
19
agent's commissions or other like payments in connection with the negotiations
leading to this Agreement or the consummation of the transactions contemplated
hereby.
3.24 Securities.
Lebenthal and its Subsidiaries have a "security entitlement"
(as defined in the Uniform Commercial Code) in all securities or investments
held or purported to be held by it (except securities sold under repurchase
agreements or held in any fiduciary or agency capacity) free and clear of any
Liens, except to the extent such securities are pledged in the ordinary course
of business to secure obligations of Lebenthal or any of its Subsidiaries, and
except where the failure to have such "security entitlement" would not,
individually or in the aggregate, have a Lebenthal Material Adverse Effect.
3.25 Additional Representations and Warranties of Principal Shareholders.
Each Principal Shareholder represents and warrants to the
Acquirers, severally and solely with respect to itself and not with respect to
any other Principal Shareholder, as follows:
(a) The representations and warranties set forth in the
Investment Letter attached hereto as Annex J are incorporated herein by
reference and are deemed made by each Principal Shareholder as though set forth
herein.
(b) This Agreement has been duly and validly authorized,
executed and delivered on behalf of the Principal Shareholder and is a valid and
binding agreement of the Principal Shareholder enforceable in accordance with
its terms, subject to the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of creditors
generally and the application of general principles of equity. The Principal
Shareholder has all requisite power to enter into and perform its obligations
under the Agreement.
(c) The execution, delivery and performance of this Agreement
by the Principal Shareholder and the consummation by the Principal Shareholder
of the transactions contemplated hereby will not (i) conflict with or result in
a violation of any provision of the Principal Shareholder's Certificate of
Incorporation or other organizational document, or (ii) violate or conflict
with, or result in a breach of any provision of, or constitute a default (or an
event which with notice or lapse of time or both could become a default) under,
or give to others any rights of termination, amendment (including without
limitation the triggering of any anti-dilution provision), acceleration or
cancellation of, any agreement, indenture or other instrument to which the
Principal Shareholder is a party, or (iii) result in a violation of any law,
rule, regulation, order, judgment or decree applicable to the Principal
Shareholder.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE ACQUIRERS
Except as set forth in the disclosure schedule delivered at or
prior to the execution hereof to Lebenthal and attached hereto as Schedule C
----------
(the "AGI Disclosure Schedule") or in the MONY Reports (as defined below) filed
on or prior to the date hereof, the Acquirers represent and warrant to Lebenthal
as of the date of this Agreement as follows:
4.1 Existence; Good Standing; Corporate Authority; Compliance
with Law.
Each of the Acquirers is a corporation duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of
incorporation. Each of the Acquirers is duly licensed or qualified to do
business as a foreign corporation and is in good standing under the laws of any
other state of the United States in which the character of the properties owned
or leased by it or in which the transaction of its business makes such
qualification necessary, except where the failure to be so qualified or to be in
good standing is not reasonably likely to have a MONY Material Adverse Effect
(as defined below). Each of the Acquirers has all requisite corporate power and
authority to own, operate and lease its properties and carry on its business as
now conducted. Each of the Acquirers has obtained all licenses, permits and
other authorizations and has taken all actions required by applicable law or
governmental regulations in connection with its business as now conducted,
except where the failure to obtain any such item or to take any such action is
not reasonably likely to have a MONY Material Adverse Effect.
4.2 Authorization, Validity and Effect of Agreements.
Each of the Acquirers, respectively, has the requisite
corporate power and authority to execute and deliver this Agreement and all
other agreements and documents contemplated hereby to which it is a party and
perform its obligations hereunder and thereunder. The consummation by each of
the Acquirers of the transactions contemplated hereby have been duly authorized
by all requisite corporate action of such Acquirer and no other corporate or
stockholder proceedings on the part of any of the Acquirers is necessary to
authorize this Agreement and to consummate the transactions contemplated hereby.
Without limiting the generality of the foregoing, (i) the board of directors of
MONY, at a meeting duly called and held, by vote of directors, approved the
terms of this Agreement and the consummation of the Merger and the other
transactions contemplated hereby and (ii) MONY, in its capacity as the sole
stockholder of LAM Acquisition, approved the terms of this Agreement and the
consummation of the Merger and the other transactions contemplated hereby. This
Agreement constitutes, and all other agreements and documents contemplated
hereby to which any Acquirer is a party (when executed and delivered pursuant
hereto) shall constitute, the valid and legally binding obligations of such
Acquirer, enforceable in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, moratorium or other similar laws of general
applicability relating to creditors' rights and general principles of equity.
21
4.3 Capitalization.
As of the date of this Agreement, the authorized capital stock
of MONY consists of 400,000,000 shares of MONY Common Stock and 100,000,000
shares of Preferred Stock, par value $.01 per share ("MONY Preferred Stock"). As
of June 30, 2001, the number of issued, outstanding and treasury shares of MONY
Common Stock was as set forth in the applicable MONY Report. Since June 30,
2001, no material changes have occurred in said number of outstanding shares.
Except as described in the MONY Reports, MONY has no outstanding bonds,
debentures, notes or other obligations the holders of which have the right to
vote (or which are convertible into or exercisable for securities having the
right to vote) with the stockholders of MONY on any matter. All such issued and
outstanding shares of MONY Common Stock are, and all shares of MONY Common Stock
to be issued pursuant to Article 2 hereof, when issued in accordance with the
terms hereof will be, duly authorized, validly issued, fully paid, nonassessable
and free of preemptive rights. Except as described in the MONY Reports, there
are not at the date of this Agreement any existing options, warrants, calls,
subscriptions, convertible securities or other rights which obligate MONY or any
of its Subsidiaries to issue, transfer or sell any shares of capital stock of
MONY or any of its Subsidiaries, other than such as may have been granted
pursuant to the MONY 1998 Stock Incentive Plan, the MONY Restricted Stock
Ownership Plan or the Rights Agreement between MONY and EquiServe dated November
10, 1998, or otherwise granted to officers, directors or employees of MONY and
its Subsidiaries in the ordinary course of business and not material in amount.
4.4 LAM Acquisition.
The authorized capital stock of LAM Acquisition consists of
25,000 shares of common stock, par value $.01 per share, all of which shares are
issued and outstanding and owned by MONY. LAM Acquisition has not engaged in any
activities other than in connection with its formation and the transactions
contemplated by this Agreement.
4.5 No Violation.
Neither the execution and delivery by each of the Acquirers of
this Agreement, nor the consummation by each of the Acquirers of the
transactions contemplated hereby in accordance with the terms hereof, will: (i)
conflict with or result in a breach of any provisions of their respective
certificates of incorporation or bylaws; (ii) violate, conflict with, result in
a breach of any provision of, constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, result in
the termination or in a right of termination or cancellation of, accelerate the
performance required by, result in the triggering of any payment or other
material obligations pursuant to, result in the creation of any lien, security
interest, charge or encumbrance upon any of the material properties of any
Acquirer under, or result in being declared void, voidable, or without further
binding effect, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust or any material license, franchise, permit,
lease, contract, agreement or other instrument, commitment or obligation to
which any Acquirer is a party, or by which any Acquirer or any of their
respective properties is bound or affected, except for any of the foregoing
matters that are not reasonably likely to have a MONY Material Adverse Effect;
or (iii) other than the Regulatory Filings, require any consent,
22
approval or authorization of, or declaration, filing or registration with, any
domestic governmental or regulatory authority or self-regulatory organization,
other than consents, approvals, authorizations, declarations or filings or
registrations which, if not obtained or made, are not reasonably likely to have
a MONY Material Adverse Effect.
4.6 Investigations; Litigation.
Except as set forth in the MONY Reports and except for matters
which would not require disclosure in MONY Reports under Item 103 or Regulation
S-K, (a) no material investigation or review by any governmental entity with
respect to MONY or any of its Subsidiaries is pending (or, to MONY's knowledge,
threatened) nor has any governmental entity indicated to MONY an intention to
conduct the same; and (b) there are no material actions, suits or proceedings
pending against MONY or its Subsidiaries or, to the knowledge of MONY,
threatened against MONY or its Subsidiaries, at law or in equity, or before or
by any federal, state, local or foreign commission, board, bureau, agency or
instrumentality or arbitration panel.
4.7 SEC Documents.
As of their respective dates, each registration statement,
report, proxy statement or information statement (as defined in Regulation 14C
under the Exchange Act) of MONY prepared by MONY in the form (including exhibits
and any amendments thereto) filed with the SEC since January 1, 2000,
(collectively, the "MONY Reports") (i) complied as to form in all material
respects with the applicable requirements of the Securities Act, the Exchange
Act, and the rules and regulations thereunder and (ii) did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements made therein, in the light
of the circumstances under which they were made, not misleading. Each of the
consolidated balance sheets included in or incorporated by reference into the
MONY Reports (including the related notes and schedules) fairly presents in all
material respects the consolidated financial position of MONY as of its date,
and each of the consolidated statements of income and comprehensive income,
changes in shareholders' equity and cash flows included in or incorporated by
reference into the MONY Reports (including, any related notes and schedules)
fairly presents in all material respects the results of operations, retained
earnings or cash flows, as the case may be, of MONY for the periods set forth
therein (subject, in the case of unaudited statements, to normal year-end audit
adjustments which would not be material in amount or effect), in each case in
accordance with GAAP consistently applied during the periods involved, except as
may be noted therein.
4.8 Absence of Certain Changes.
Other than as set forth in the MONY Reports, no event has
occurred since December 31, 2000 which has had or would be reasonably likely to
result in a MONY Material Adverse Effect.
4.9 No Brokers.
None of the Acquirers has entered into any contract,
arrangement or understanding with any person or firm which may result in the
obligation of Lebenthal or any Acquirer to pay any finder's fee, brokerage or
agent's commissions or other like payments in
23
connection with the negotiations leading to this Agreement or the consummation
of the transactions contemplated hereby. Other than the arrangement described in
Section 3.23, none of the Acquirers is aware of any claim for payment of any
finder's fees, brokerage or agent's commissions or other like payments in
connection with the negotiations leading to this Agreement or the consummation
of the transactions contemplated hereby.
4.10 Compliance with Law; Governmental Approvals; Orders.
Except to where the failure to satisfy such condition is not
reasonably likely to have a MONY Material Adverse Effect:
(a) none of the Acquirers is in violation of any order of any
court, governmental authority, arbitration board or tribunal, or Self-Regulatory
Organization to which it or any of their respective properties or assets is
subject;
(b) the Acquirers and each employee of each of them holds, and
has at all pertinent times held, all Permits necessary for the lawful ownership
and use of their respective properties and assets and the conduct of their
respective businesses under and pursuant to every, and is in compliance with
each, and are not in default under any, and have taken all actions required by
each, applicable law, ordinance, governmental rule or regulation, or rule of
each Self-Regulatory Organization to which it is subject in connection with
their business as now conducted, and none of the Acquirers has received notice
asserting any such violation;
(c) all such Permits are valid and in good standing in all
material respects and are not subject to any proceeding for the suspension,
modification or revocation thereof or proceedings related thereto;
(d) none of the Acquirers is a party to or is subject to any
order, decree, agreement, memorandum of understanding or similar arrangement
with, or a commitment letter or similar submission to, any regulatory agency or
other governmental entity (including any United States or foreign government;
any state or other political subdivision thereof; any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government; any Self-Regulatory Organization and any court,
tribunal or arbitrator(s) of competent jurisdiction) charged with the
supervision or regulation of broker-dealers, securities underwriting or trading,
stock exchanges, commodities exchanges, investment companies, investment
advisors or insurance agents and brokers or the supervision or regulation of
such Acquirer;
(e) none of the Acquirers have been notified in writing by or
received any written communication from any such regulatory agency or other
governmental entity to the effect that such regulatory agency or other
governmental entity is contemplating issuing or requesting (or is considering
the appropriateness of issuing or requesting) any such order, decree, agreement,
memorandum of understanding, commitment letter or similar submission; and
(f) none of the Acquirers or any of their respective
affiliated persons, as defined in Section 2(a)(3) of the 1940 Act, has been
convicted within the past 10 years of any felony or misdemeanor described in
Section 9(a)(1) of the 1940 Act, or is, by reason of any misconduct,
24
permanently or temporarily enjoined from acting in the capacities, or engaging
in the activities, described in Section 9(a)(2) of the 1940 Act.
ARTICLE 5
COVENANTS
5.1 Alternative Proposals.
Lebenthal, its affiliates and their respective officers,
directors, employees, representatives and agents shall immediately cease any
existing discussions or negotiations, if any, with any parties conducted
heretofore with respect to any merger, consolidation, share exchange, tender
offer or other business combination involving Lebenthal or any of its
Subsidiaries, or the acquisition (including by way of lease or license) in any
manner of any of the stock or equity or material assets of Lebenthal or any of
its Subsidiaries, other than as contemplated by this Agreement (each, a
"Transaction"). Neither Lebenthal nor any of its affiliates, nor any of its or
their respective officers, directors, employees, representatives or agents,
shall, directly or indirectly, encourage, solicit, participate in or initiate
discussions or negotiations with, or provide any information to, any
corporation, partnership, person or other entity or group (other than the
Acquirers, any affiliate or associate of the Acquirers or any designees of the
Acquirers) concerning, or enter into any agreement with respect to, any
Transaction.
5.2 Interim Operations of Lebenthal.
Prior to the Effective Time, unless AGI has otherwise
consented in writing thereto, Lebenthal:
(a) shall, and shall cause each of its Subsidiaries to,
conduct its operations according to their usual, regular and ordinary course in
substantially the same manner as heretofore conducted;
(b) shall use commercially reasonable efforts, and shall cause
each of its Subsidiaries to use commercially reasonable efforts, to preserve
intact their business organizations and goodwill, keep available the services of
their respective officers and employees and maintain satisfactory relationships
with those persons having business relationships with them;
(c) shall not, and shall cause its Subsidiaries not to, amend
their respective Certificates of Incorporation or Bylaws or comparable governing
instruments;
(d) shall, and shall cause each of its Subsidiaries to,
promptly notify AGI and MONY of (i) any Lebenthal Material Adverse Effect, (ii)
any litigation matter, governmental complaint, investigation or hearing (or
communication stating that the same may be contemplated), or (iii) any breach of
any representation or warranty contained herein known to any senior officer or
Principal Shareholder;
25
(e) shall, upon receiving any written notice from any taxing
authority proposing any adjustment to any Tax relating to Lebenthal or any of
its Subsidiaries, give prompt written notice thereof to AGI, which notice shall
describe in detail each proposed adjustment;
(f) shall promptly deliver to AGI and MONY true and correct
copies of any report, statement or schedule filed by Lebenthal or any of its
Subsidiaries with any regulatory agency subsequent to the date of this
Agreement;
(g) shall not, and shall not permit any of its Subsidiaries
to, authorize, propose or announce an intention to authorize or propose, or
enter into an agreement with respect to, any merger, consolidation or business
combination (other than the Merger), any acquisition of assets or securities
other than in the ordinary course of business, any disposition of assets or
securities other than in the ordinary course of business or any release or
relinquishment of any material contract rights other than in the ordinary course
of business;
(h) shall not, and shall not permit any of its Subsidiaries
to, issue any shares of its capital stock or securities convertible into or
exchangeable or exercisable for shares of its capital stock, or effect any stock
split, reverse stock split, stock dividend, subdivision, reclassification,
combination, exchange, or other similar transaction with respect to any shares
of its capital stock or other ownership interests, or otherwise change its
capitalization;
(i) shall not, and shall not permit any of its Subsidiaries
to, grant, confer or award any options, warrants, conversion rights or other
rights, not existing on the date hereof, to acquire any shares of its capital
stock or other securities of Lebenthal or its Subsidiaries;
(j) shall not, and shall not permit any of its Subsidiaries
to, take or fail to take any actions which would, or would be reasonably likely
to, prevent the Merger from qualifying as a reorganization with the meaning of
Section 368(a) of the Code;
(k) except as required by applicable law, shall not, and shall
not permit any of its Subsidiaries to, amend the terms of any Lebenthal Plan,
including, without limitation, any employment, severance or similar agreements
or arrangements in existence on the date hereof, or adopt any new employee
compensation or benefit plans, programs or arrangements or any employment,
severance or similar agreements or arrangements, or change in any respect any
vesting schedule with respect to any Lebenthal Plan or grant or award
thereunder, or grant any salary increases to any employee of Lebenthal or any
Subsidiary;
(l) except in the ordinary course consistent with past
practice, shall not, and shall not permit any of its Subsidiaries to, (A) incur,
create, assume or otherwise become liable for borrowed money or assume,
guarantee, endorse or otherwise become responsible or liable for the obligations
of any other individual, corporation or other entity, (B) make any loans or
advances to any other person or (C) subject any of its property or assets, or
permit any of its property or assets to be subjected, to any lien, claim or
encumbrance of any kind;
(m) shall not, and shall not permit any of its Subsidiaries
to, (A) change any practice with respect to Taxes, (B) make, revoke or change
any election with respect to Taxes or (C) settle or compromise any Tax
liability;
26
(n) shall not (A) declare, set aside or pay any dividend or
make any other distribution or payment with respect to any shares of its capital
stock or other ownership interests or (B) redeem, purchase or otherwise acquire
any shares of its capital stock, or make any commitment for any such action;
(o) shall not with respect to any director, officer or
employee of Lebenthal or any of its Subsidiaries: (A) grant or commit to grant
any severance or termination pay; (B) enter into any employment, deferred
compensation or other similar agreement (or amend any such existing agreement);
(C) modify the rate of base compensation; or (D) grant or commit to grant any
incentive, bonus or other performance-based compensation, except as set forth in
Section 5.2(o) of the Lebenthal Disclosure Schedule; and
(p) shall not, and shall not permit any of its Subsidiaries
to, agree, in writing or otherwise, to take any of the foregoing actions or take
any action which would make any representation or warranty in Article 3 hereof
untrue or incorrect.
5.3 Future Changes.
For a period of three years following the Effective Time, the
Acquirers shall not take any action which, in their reasonable judgement, would
materially impair the "Lebenthal" brand identity. Nothing herein will preclude
the Acquirers from reorganizing Lebenthal and its business as a subsidiary,
division or other unit of Advest, Inc. or otherwise, or in other respects
conducting its business as it deems advisable in its reasonable business
judgement.
5.4 Filings; Other Actions.
Subject to the terms and conditions herein provided, Lebenthal
and the Acquirers shall: (a) promptly make their respective filings and
thereafter make any other required submissions referenced under Section 3.6 or
otherwise required; (b) use all reasonable best efforts to cooperate with one
another (i) in determining which filings are required to be made prior to the
Effective Time with, and which consents, approvals, permits or authorizations
are required to be obtained prior to the Effective Time from, governmental or
regulatory authorities of the United States, the several states and foreign
jurisdictions and self-regulatory organizations in connection with the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby and (ii) in timely making all such filings and timely
seeking all such consents, approvals, permits or authorizations; and (c) use all
reasonable best efforts to take, or cause to be taken, all other actions and do,
or cause to be done, all other things necessary, proper or appropriate to
consummate and make effective the transactions contemplated by this Agreement as
promptly as practicable.
5.5 Inspection of Records.
From the date hereof to the Effective Time, Lebenthal shall
(i) allow all designated officers, attorneys, accountants and other
representatives of the Acquirers reasonable access at all reasonable times to
the offices, records and files, correspondence, audits and properties, as well
as to all information relating to commitments, contracts, titles and financial
position, or otherwise pertaining to the business and affairs, of Lebenthal and
its Subsidiaries, (ii) furnish to the Acquirers and their counsel, financial
advisors, auditors and other authorized representatives such financial and
operating data and other information as such persons may
27
reasonably request and (iii) instruct employees, counsel and financial advisors
to cooperate with the Acquirers in their investigation of the business of
Lebenthal and its Subsidiaries. All information provided in accordance with this
Agreement will be subject to the Confidentiality Agreement, dated as of February
27, 2001, between Lebenthal and AGI, relating to Lebenthal (the "Confidentiality
Agreement").
5.6 Publicity.
The initial press release relating to this Agreement shall be
a joint press release and thereafter, until the Closing, (a) Lebenthal will not
issue any press release or other public statement concerning the transactions
contemplated by this Agreement without the prior approval of AGI and MONY (such
approval not to be unreasonably withheld or delayed), and (b) AGI and MONY shall
use reasonable best efforts to consult with Lebenthal, and use reasonable best
efforts to agree upon the text of any press release, before issuing any such
press release or otherwise making public statements with respect to the
transactions contemplated hereby and in making any filing with any federal or
state governmental or regulatory agency or with any national securities exchange
with respect thereto.
5.7 Employee Benefits.
For at least one year following the Effective Time, AGI shall,
or shall cause its Subsidiaries to, provide the employees of Lebenthal who are
employed by AGI or any of its Subsidiaries immediately after the Effective Time
("Lebenthal Employees") (i) substantially the same base salary and wages on
substantially the same terms and conditions as those in effect immediately prior
to the Effective Time, and (ii) employee benefits that are no less favorable in
the aggregate to Lebenthal Plans provided to Lebenthal Employees immediately
prior to the Effective Time. Following the Effective Time, AGI agrees that AGI
shall, or shall cause its Subsidiaries to, (i) recognize all Lebenthal
Employees' service with Lebenthal for the purposes of eligibility,
participation, level of benefits and vesting of benefits (but not for benefit
accrual under defined benefit pension plans) under any employee benefit plans of
AGI or its Subsidiaries providing benefits to Lebenthal Employees after the
Effective Date (the "New Plans") to the extent such service would have been
recognized under the applicable Lebenthal Plans; provided, however, that no such
credited service shall result in a duplication of benefits.
In addition, and without limiting the generality of the
foregoing: (i) each Lebenthal Employee shall be immediately eligible to
participate, without any waiting time, in any and all New Plans to the extent
coverage under such New Plan replaces coverage under comparable Lebenthal Plans
in which such Lebenthal Employee participated immediately before the Effective
Time (such plans, collectively, the "Old Plans") and to the extent such coverage
would have been recognized under the applicable Old Plan; and (ii) for purposes
of each New Plan providing medical, dental, pharmaceutical and/or vision
benefits to any Lebenthal Employee, AGI shall cause all pre-existing condition
exclusions and actively at work requirements of such New Plan to be waived for
such employee and his or her covered dependents to the extent such exclusion or
requirement would not have applied under the applicable Old Plan, and AGI shall
cause any eligible expenses incurred by such employee and his or her covered
dependents during the portion of the plan year of the Old Plan ending on the
date such employee's participation in the corresponding New Plan begins to be
taken into
28
account under such New Plan for purposes of satisfying all deductible,
coinsurance and maximum out of pocket requirements applicable to such employee
and his or her covered dependents for the applicable plan year as if such
amounts had been paid in accordance with such New Plan. Nothing in this Section
shall limit the right of MONY and its Subsidiaries to terminate an employee of
Lebenthal and its Subsidiaries after the Closing.
5.8 Expenses.
Whether or not the Merger is consummated, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses.
5.9 Registration Rights; Investment Letters and Support
Agreements.
(a) MONY shall take all actions required pursuant to the
Registration Rights Agreement attached hereto as Annex C and entered into
-------
concurrently herewith.
(b) Lebenthal shall deliver or cause to be delivered to MONY,
prior to the Closing Date, from each shareholder of Lebenthal listed on Schedule
--------
A, an Investment Letter in the form attached hereto as Annex J.
- - -------
(c) Immediately prior to the Closing, the Sayra Lebenthal
Trust will distribute all of its shares of Lebenthal Common Stock to its
beneficiaries. Currently, the trustee anticipates that the distribution will be
made to the following individuals (the "Sayra Trust Beneficiaries") in the
percentages indicated:
Sayra Trust
Beneficiary Percentage
Ann Louise Bissenger 25%
H. Gerard Bissenger III 25%
Alexandra Lebenthal 16 2/3%
James B. Lebenthal 16 2/3%
Claudia Lebenthal 16 2/3%
No distribution will be made prior to the Closing Date to any person not listed
above. No distribution of principal from the Sayra Lebenthal Trust will be made
to any Sayra Trust Beneficiary unless such Sayra Trust Beneficiary has executed
and delivered to MONY an Investment Letter in the form attached as Annex J. In
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addition, no Sayra Trust Beneficiary will be entitled to the benefits of the
Registration Rights Agreement unless such Sayra Trust Beneficiary has executed
and delivered to MONY a Registration Rights Joinder Agreement in the form
attached as Annex M in accordance with the requirements set forth in the
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Registration Rights Agreement. Prior to the Closing, the trustee of the Sayra
Lebenthal Trust shall deliver to the Acquirers a certificate confirming that the
distribution to Sayra Trust Beneficiaries has occurred, confirming the identity
of each distributee and the number of shares of Lebenthal Common Stock
distributed to such person, and setting forth such other information as the
Acquirers may reasonably request.
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(d) Prior to the Closing, the James A. Lebenthal Trust will
not make any distribution of principal but may make distributions of income as
permitted by Section 9.18. Following the Closing, and as long as there remains
unsatisfied any indemnification obligation of the James A. Lebenthal Trust under
this Agreement or the Pro Rata Share (as defined in Section 8.5) of such Trust
is more than 0.0%, the James A. Lebenthal Trust may not make any distribution of
principal to any beneficiary unless (i) a person authorized to act for the
beneficiary has first executed and delivered to the Acquirers a Merger Agreement
Joinder Agreement in the form attached as Annex L satisfactory to the Acquirers
specifying that the beneficiary assumes that portion of such Trust's Pro Rata
Share equal to the principal dollar amount of the distribution divided by 150%
of the Cap Amount (as defined in Section 8.5), or (ii) the Trust delivers to the
Acquirers a Permitted Substitute therefor; provided, however, that such
requirement shall not apply if after the contemplated distribution the James A.
Lebenthal Trust will have principal assets of not less than 150% of the dollar
amount of its Pro Rata Share multiplied by the Cap Amount. No distribution of
shares of MONY Common Stock may be made to a beneficiary of such Trust unless a
party authorized to act for such beneficiary has first executed and delivered to
MONY an Investment Letter in the form attached as Annex J. The Acquirers may
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require evidence reasonably satisfactory to them that such a person acting for a
beneficiary is an authorized person. Notwithstanding the foregoing, the
Acquirers may presume the following to each be a "party authorized to act for
the beneficiary": (i) the beneficiary, if the beneficiary is a competent adult,
or (ii) if the beneficiary is under age 18 or incompetent, a custodial parent or
the legal guardian of such beneficiary acting as virtual representative of the
beneficiary, or (iii) in any other case, all competent adult beneficiaries of
the Trust, acting collectively as the virtual representative of such
beneficiary. "Permitted Substitute" means an assumption or guarantee of such Pro
Rata Share liability approved by Acquirers, such approval not to be unreasonably
withheld or conditioned.
5.10 Listing Application.
Promptly after the Effective Time, MONY shall prepare and
submit to the NYSE a listing application covering the shares of MONY Common
Stock issued in the Merger, and shall use all reasonable best efforts to obtain,
promptly after the Effective Time, approval for the listing of such MONY Common
Stock.
5.11 Directors' and Officers' Indemnification.
(a) From and after the Effective Time, in the event of any
threatened or actual claim, action, suit, proceeding or investigation, whether
civil, criminal or administrative, including, without limitation, any such
claim, action, suit, proceeding or investigation in which any person who is now,
or has been at any time prior to the date of this Agreement, or who becomes
prior to the Effective Time, a director, an officer or employee of Lebenthal or
any of its Subsidiaries (the "Indemnified Parties") is, or is threatened to be,
made a party based in whole or in part on, or arising in whole or in part out
of, or pertaining to (i) the fact that he or she is or was a director, officer
or employee of Lebenthal or any of its Subsidiaries or was prior to the
Effective Time serving at the request of any such party as a director, officer,
fiduciary or agent of another corporation, partnership, trust or other
enterprise or (ii) this Agreement, or any of the transactions contemplated
hereby and all actions properly taken by an Indemnified Party in connection
herewith, whether in any case asserted or arising before or after the Effective
Time,
30
the parties hereto agree to cooperate in connection with defending against and
responding to such proceedings.
(b) It is understood and agreed that after the Effective Time,
AGI shall indemnify and hold harmless, as and to the fullest extent permitted by
the corporate governance documents of Lebenthal or its Subsidiaries as of the
date hereof and by law, each such Indemnified Party against any losses, claims,
damages, liabilities, costs, expenses (including reasonable attorneys' fees and
expenses in advance of the final disposition of any claim, suit, proceeding or
investigation to each Indemnified Party to the fullest extent permitted by law
upon receipt of an undertaking, to the extent required by the NYBCL, from such
Indemnified Party to repay such advanced expenses if it is finally and
unappealably determined that such Indemnified Party was not entitled to
indemnification hereunder), judgments, fines and amounts paid in settlement
("Losses") in connection with any such threatened or actual claim, action, suit,
proceeding or investigation, and in the event of any such threatened or actual
claim, action, suit, proceeding or investigation (whether asserted or arising
before or after the Effective Time) (collectively, "Claims"), the Indemnified
Parties may retain counsel reasonably satisfactory to them after consultation
with AGI; provided, however, that except as otherwise specified by the corporate
governance documents of Lebenthal or its Subsidiaries,
(i) AGI shall have the right to assume the defense thereof by
retaining counsel reasonably satisfactory to the Indemnified Parties
and committing in writing that AGI will indemnify the Indemnified
Parties for any such Losses, and upon such assumption AGI shall not be
liable to any Indemnified Party for any legal expenses of other counsel
or any other expenses subsequently incurred by any Indemnified Party in
connection with the defense thereof, except that if AGI elects not to
assume such defense or counsel for the Indemnified Parties advises the
Indemnified Parties that there are or may be (whether or not any have
yet actually arisen) issues which raise conflicts of interest between
AGI and the Indemnified Parties, the Indemnified Parties may retain
counsel reasonably satisfactory to them, and AGI shall pay the
reasonable fees and expenses of such counsel for the Indemnified
Parties,
(ii) AGI shall be obligated pursuant to this paragraph to pay
for only one firm of counsel for all Indemnified Parties with respect
to any Claim or series of related Claims,
(iii) AGI shall not be liable for any settlement effected
without its prior written consent (which consent shall not be
unreasonably withheld or delayed), and
(iv) AGI shall have no obligation hereunder to any Indemnified
Party when and if a court of competent jurisdiction shall ultimately
determine, and such determination shall have become final and
nonappealable, that indemnification of such Indemnified Party in the
manner contemplated hereby is prohibited by the corporate governance
documents of Lebenthal or its Subsidiaries or applicable law.
(c) Any Indemnified Party wishing to claim indemnification
under this Section, upon learning of any such claim, action, suit, proceeding or
investigation, shall notify AGI thereof in writing, provided that the failure to
so notify shall not affect the obligations of
31
AGI under this Section except (and only) to the extent such failure to notify
materially prejudices the Surviving Corporation.
(d) Without limiting any of the obligations under this
Section, AGI agrees that all rights to indemnification and all limitations of
liability existing in favor of the Indemnified Parties as provided in
Lebenthal's Certificate of Incorporation or Bylaws or in the similar governing
documents of any of Lebenthal's Subsidiaries as in effect as of the date of this
Agreement with respect to matters occurring on or prior to the Effective Time
shall survive the Merger and shall continue in full force and effect for six
years thereafter, without any amendment thereto; provided, however, that in the
event that any claim or claims for indemnification are asserted or made within
such six-year period, all rights to indemnification in respect of any such claim
or claims shall continue until the disposition of any and all such claims; and,
provided, further, that nothing contained in this subsection (d) shall be deemed
to preclude the liquidation, consolidation or merger of Lebenthal or any
Subsidiary thereof, in which case all of such rights to indemnification and
limitations on liability shall be deemed to so survive and continue
notwithstanding any such liquidation, consolidation or merger and shall
constitute rights which may be asserted against AGI or its successor.
(e) This Section 5.11 shall survive the consummation of the
Merger at the Effective Time, is intended to benefit the Indemnified Parties,
shall be binding on all successors and assigns of the Surviving Corporation and
shall be enforceable by the Indemnified Parties.
5.12 Additional Agreements.
In case at any time after the Effective Time any further
action is necessary or desirable to carry out the purposes of this Agreement
(including, without limitation, any merger between a Subsidiary of AGI and a
Subsidiary of Lebenthal) or to vest the Surviving Corporation with full title to
all properties, assets, rights, approvals, immunities and franchises of any of
the parties to the Merger, each party to this Agreement shall cause its officers
and directors and the officers and directors of its respective Subsidiaries to
take all such necessary action as may be reasonably requested by AGI.
5.13 Takeover Statutes.
If any "fair price," "moratorium," "control share acquisition"
or other form of antitakeover statute or regulation, is or shall become
applicable to the transactions contemplated hereby, Lebenthal and the members of
Lebenthal Board shall grant such approvals and use commercially reasonable
effort to take such actions as are necessary so that the transactions
contemplated hereby may be consummated as promptly as practicable on the terms
contemplated hereby and otherwise use commercially reasonable efforts to act to
eliminate or minimize the effects of such statute or regulation on the
transactions contemplated hereby.
5.14 Conveyance Taxes.
Lebenthal and the Acquirers shall cooperate in the
preparation, execution and filing of all returns, questionnaires, applications
or other documents regarding any real property transfer or gains, sales, use,
transfer, value added, stock transfer and stamp Taxes, any transfer, recording,
registration and other fees or any similar Taxes which become payable in
connection
32
with the transactions contemplated by this Agreement that are required or
permitted to be filed on or before the Effective Time.
5.15 Certain Tax Matters.
(a) From the date hereof until the Effective Time, (i)
Lebenthal and each of its Subsidiaries will prepare and file, or will cause to
be prepared and filed, in the manner required by applicable law, all Tax Returns
that are required (with extensions) to be filed, (ii) Lebenthal and each of its
Subsidiaries will timely pay all Taxes shown as due and payable, or required to
be shown as due and payable, on such Tax Returns that are so filed, (iii)
Lebenthal and each of its Subsidiaries will make provision for all Taxes payable
by Lebenthal and/or any such Subsidiary for which no Tax Return is due prior to
the Effective Time and (iv) Lebenthal will promptly notify AGI in writing of any
action, suit, proceeding, claim or audit pending against or with respect to
Lebenthal or any Subsidiary thereof in respect of any Tax.
(b) Lebenthal agrees that it will, and will cause its
Subsidiaries to, make available all such information, employees and records of
or relating to Lebenthal and each of its Subsidiaries as AGI may reasonably
request with respect to matters relating to Taxes (including, without
limitation, the right to make copies of such information and records) and will
cooperate with respect to all matters relating to Taxes (including, without
limitation, the filing of Tax Returns, the filing of amended Tax Returns,
audits, and proceedings).
(c) Unless there has previously been a determination (within
the meaning of Section 1313 of the Code) to the contrary, the parties covenant
and agree, for all tax purposes, to take the position that the Merger
constitutes a reorganization under the provisions of Section 368(a)(2)(E) of the
Code.
5.16 Advisory Contract Consents.
As promptly as practicable following the date of this
Agreement, Lebenthal and its Subsidiaries shall inform, in compliance with
applicable law, its investment advisory services clients, custodial services
clients and mutual fund distribution services clients of the transactions
contemplated by this Agreement and shall request such clients' written consents
to the deemed assignment of their investment advisory services, custodial
services or mutual fund distribution services agreements, as the case may be,
resulting from the consummation of the transactions contemplated by this
Agreement and use their commercially reasonable efforts to obtain such consents
or, in the case of agreements which are not in writing or which either prohibit
assignment or a change in control or state by their terms that they terminate
upon assignment or a change in control, new agreements (and any required
director and investor approvals) with Lebenthal or the appropriate Subsidiary.
5.17 Lebenthal Satisfaction of the Conditions of Section 15 of
the 1940 Act.
Lebenthal shall use, and shall cause its Subsidiaries to use,
commercially reasonable efforts to cause the boards of trustees of the Lebenthal
Funds to approve, and to solicit their respective shareholders as promptly as
practicable with regard to the approval of, new investment advisory agreements
with Lebenthal or such Subsidiary acting as investment adviser for such funds,
to be effective as promptly as practicable after the Effective Time,
33
pursuant to the provisions of Section 15 of the 1940 Act, and consistent with
all requirements of the 1940 Act applicable thereto, provided that such
agreements are identical in all material respects to the existing agreements
other than the term of the agreement. Lebenthal and its Subsidiaries also shall
take any similar action required under the 1940 Act to continue any underwriting
or distribution agreements of the Lebenthal Funds. AGI shall have a reasonable
opportunity to review and provide comments on any proxy or other materials that
are proposed to be used by Lebenthal and its Subsidiaries to solicit the
approvals contemplated by this Section prior to the use of such materials.
Lebenthal shall use, and shall cause its Subsidiaries to use, commercially
reasonable efforts to ensure the satisfaction of the conditions set forth in
Section 15(f) of the 1940 Act with respect to each of the Lebenthal Funds.
5.18 Retention and Incentive Plans.
Prior to the Effective Time, Lebenthal will adopt the
Lebenthal 2001 Retention Plan in the form attached as Annex A (the "Retention
-------
Plan") and the Lebenthal 2001 Key Employee Incentive Plan in the form attached
as Annex B (the "KIP"), each to become effective subject to consummation of the
-------
Merger. Prior to the Effective Time, AGI and Lebenthal shall mutually agree on
(i) the employees of Lebenthal who shall be eligible to participate in the
Retention Plan and the KIP, (ii) the amount of the award that each participant
in the Retention Plan and KIP will be eligible to receive, (iii) the terms and
conditions of each award made pursuant to the Retention Plan and the KIP, (iv)
the applicable breakpoints to be inserted in Section 4.3 of the KIP with respect
to the Branch Contribution Pool, and (v) Exhibit C to the KIP illustrating the
methodology by which the Branch Contribution Pool will be calculated. It is
understood that the objective in calculating the breakpoints for purposes of
Section 4.3 of the KIP is to give to the participants in the KIP an incentive
compensation opportunity comparable to that previously discussed by the parties
with respect to a profitability pool. Lebenthal will use commercially reasonable
efforts to obtain the agreement to participate of each prospective participant
in the Retention Plan and the KIP prior to the Effective Time. Lebenthal shall
keep AGI informed in writing on a timely basis as to the number of producers who
elect to participate in the Lebenthal 2001 Retention Plan. After the Effective
Time, AGI shall cause the Surviving Corporation or any other successor entity to
honor the terms of the Retention Plan and the KIP.
5.19 Activities of Principal Shareholders
Each of the Principal Shareholders covenants and agrees that,
for a period of three years from the Effective Time of the Merger, such
Principal Shareholder shall not directly or indirectly:
(a) request, induce or otherwise solicit or attempt to
influence any employee of Lebenthal, MONY or their Subsidiaries to leave such
employment, or request, induce or attempt to influence any of their clients to
curtail or cancel any business they may transact or propose to transact with
such entities; or
(b) (i) engage in any business or undertaking competitive with
the securities and investment businesses carried on by Lebenthal, MONY and their
Subsidiaries in the States of New York, New Jersey, Connecticut or Florida, (ii)
be employed by or provide consulting services to, any entity in the securities
and investment business in the States of New York, New
34
Jersey, Connecticut or Florida or (iii) own equity interests constituting more
than one percent of the outstanding equity in any such competitive business.
In addition, at no time will such Principal Shareholder,
directly or indirectly, divulge, furnish, use, publish or make accessible to any
person or entity any information of Lebenthal, MONY or their Subsidiaries or
customers which is confidential, secret, proprietary or otherwise not generally
known in the industry, including but not limited to methods, processes,
procedures, business plans, clients list and records, potential client lists and
client billing.
The restrictions set out in this Article 5 are in addition to
and do not supercede or otherwise alter any other existing agreement which the
Principal Shareholder may be or become a party to with Lebenthal or MONY and its
Subsidiaries. Notwithstanding the foregoing, the restrictions set forth in
clause (b) above shall not apply to Duncan K. Smith or James E. McGrath.
5.20 Shareholder Approval
On or before the 15th day after the date of this Agreement,
Lebenthal will submit the Merger to a vote of its shareholders and will use its
best efforts to obtain the affirmative vote of all shareholders to approve the
Merger and terminate the Stockholders Agreement. The Principal Shareholders
shall take all actions in support of the shareholder vote required pursuant to
the Support Agreements attached hereto as Annex K and entered into concurrently
-------
herewith.
5.21 Interim Operations of the Acquirers.
Prior to the Effective Time, unless Lebenthal has otherwise
consented in writing thereto, none of the Acquirers shall take any action in
violation of any federal or state securities laws intended to affect the per
share price of the MONY Common Stock during the relevant period for
determination of the Exchange Price.
5.22 Severance Pool.
AGI shall set aside the sum of $400,000 as a fund to pay
severance benefits (the "Severance Pool") to persons employed by Lebenthal prior
to the Merger whose employment is terminated during the two-year period after
the Merger as a consequence of the Merger or any restructuring incident to the
Merger. Alexandra Lebenthal, in her sole discretion, shall designate the
recipients thereof. (In the event of the death or disability of Alexandra
Lebenthal during said two-year period the President of AGI shall make such
designations.) Those severance payments will be in addition to any severance
payments to be paid under any of the agreements identified in Article 6, and
other severance payments due such persons under the applicable policies of AGI
and its subsidiary corporations. Any balance remaining in the Severance Pool at
the expiration of such period shall be paid to James A. Lebenthal upon
expiration of the term of his employment pursuant to the Employment Agreement
identified in Section 6.2(g) or earlier termination thereof for any reason other
than a termination by AGI for Cause or a voluntary termination by James A.
Lebenthal other than for Good Reason (as those terms are defined in such
employment agreement).
35
ARTICLE 6
CONDITIONS
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 fulfillment at or prior to the Closing Date of the
following conditions:
(a) None of the parties hereto shall be subject to any order
or injunction of a court of competent jurisdiction in the United States which
prohibits the consummation of the transactions contemplated by this Agreement.
In the event any such order or injunction shall have been issued, each party
agrees to use all reasonable best efforts to have any such injunction lifted.
(b) All consents, authorizations, orders and approvals of (or
filings or registrations with) the NASD shall have been made.
(c) Approval of the Merger by a requisite majority of the
shareholders of Lebenthal shall have been obtained.
6.2 Conditions to Obligation of Lebenthal to Effect the
Merger.
The obligation of Lebenthal to effect the Merger shall be
subject to the fulfillment at or prior to the Closing Date of the following
conditions:
(a) (i) the Acquirers shall have performed in all material
respects their agreements contained in this Agreement required to be performed
on or prior to the Closing Date, (ii) the representations and warranties of the
Acquirers contained in this Agreement and documents delivered at Closing shall
be true and correct as of the Closing Date, except that those representations
and warranties which address matters only as of a particular date shall have
been true and correct as of such date; provided, however, that for purposes of
this paragraph, such representations and warranties shall be deemed to be true
and correct unless the failure or failures of such representations and
warranties to be so true and correct, either individually or in the aggregate,
and without giving effect to any qualification as to materiality is reasonably
likely to have a MONY Material Adverse Effect, and (iii) Lebenthal shall have
received a certificate of the President or a Vice President of MONY or AGI,
dated the Closing Date, certifying to such effect.
(b) AGI shall have adopted the Lebenthal 2001 Retention Plan
and the Lebenthal 2001 Key Employee Incentive Plan.
(c) AGI shall have executed an Employment Agreement with
Alexandra Lebenthal substantially in the form of Annex D hereto.
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(d) AGI shall have executed an Employment Agreement with
Gerald H. Tankersley substantially in the form of Annex E hereto.
-------
36
(e) AGI shall have executed an Employment Agreement with James
A. Lebenthal substantially in the form of Annex F hereto.
-------
(f) AGI shall have executed an Employment Agreement with James
E. McGrath substantially in the form of Annex G hereto.
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(g) Lebenthal shall have received an opinion from counsel for
MONY and LAM, dated as of the Effective Time and addressed to Lebenthal, as to
the matters addressed in Annex H-1 attached hereto and from counsel for AGI,
---------
dated as of the Effective Time and addressed to Lebenthal, as to the matters
addressed in Annex H-2 attached hereto
---------
6.3 Conditions to Obligation of the Acquirers to Effect the
Merger.
The obligations of the Acquirers to effect the Merger shall be
subject to the fulfillment at or prior to the Closing Date of the following
conditions:
(a) (i) Lebenthal shall have performed in all material
respects its agreements contained in this Agreement required to be performed on
or prior to the Closing Date, (ii) the representations and warranties of
Lebenthal and the Principal Shareholders contained in this Agreement and
documents delivered at closing, shall be true and correct as of the Closing
Date, except that those representations and warranties which address matters
only as of a particular date shall have been true and correct as of such date;
provided, however, that for purposes of this paragraph, such representations and
warranties shall be deemed to be true and correct unless the failure or failures
of such representations and warranties to be so true and correct, either
individually or in the aggregate, and without giving effect to any qualification
as to materiality is reasonably likely to have a Lebenthal Material Adverse
Effect, (iii) approval of a requisite vote of the shareholders of Lebenthal
shall have been obtained and shall remain in effect, and (iv) AGI shall have
received a certificate of the President or CEO of Lebenthal, dated the Closing
Date, certifying to such effect with respect to Lebenthal.
(b) Other than due to the death or disability of the employee
party thereto, the employment agreements referenced in Section 6.2(c), (d), (e)
and (f) shall have been fully executed by each party thereto other than AGI.
(c) From the date of this Agreement through the Effective
Time, there shall not have occurred a Lebenthal Material Adverse Effect.
(d) The Merger shall have been approved by a required vote of
the shareholders of Lebenthal. No more than 5% of Lebenthal Common Stock
outstanding at the Effective Time (excluding shares owned by MONY or any of
MONY's subsidiaries) shall be Dissenting Shares.
(e) (i) Registered representative of Lebenthal representing
not less than 85% of the retail commission income generated during the 12 month
production period ending prior to the Effective Time shall have agreed to
participate in the 2001 Lebenthal Retention Plan, and (ii) AGI shall have
received a certificate of the President or CEO of Lebenthal, dated the Closing
Date, certifying to such effect, together with copies of each such participation
agreement.
37
(f) The Acquirers shall have received an opinion from Paul
Weiss, Rifkind, Wharton & Garrison, counsel for Lebenthal, dated as of the
Effective Time and addressed to the Acquirers, as to the matters addressed in
Annex I-1 attached hereto, and an opinion from counsel for the Trusts, dated as
- ---------
of the Effective Time and addressed to the Acquirers, as to the matters
addressed in Annex I-2 attached hereto.
---------
(g) The Acquirers shall have received from each of the
shareholders of Lebenthal identified in Schedule A, an Investment Letter in the
----------
form attached hereto as Annex J.
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(h) The Acquirers shall have received evidence reasonably
satisfactory to them evidencing approval of the Merger by the shareholders of
Lebenthal.
6.4 Conditions to Obligations of Principal Shareholders to
Effect the Merger.
The obligation of the Principal Shareholders to effect the
Merger shall be subject to the fulfillment at or prior to the Closing Date of
the following condition:
(a) The Acquirers and Lebenthal shall have each delivered to
counsel for Lebenthal a tax certificate in the forms attached hereto,
respectively as Annex N-1 and Annex N-2 (the "Tax Certificates").
--------- ---------
(b) The Principal Shareholders shall have received an opinion
from counsel for Lebenthal, dated as of the Effective Time and addressed to
them, as to the matters addressed in Annex I-3 attached hereto (which opinion
---------
may be premised on and rely on the Tax Certificates).
ARTICLE 7
TERMINATION
7.1 Termination by Mutual Consent.
This Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time, before or after the approval
of this Agreement by the stockholders of Lebenthal, by the mutual consent of AGI
and Lebenthal.
7.2 Termination by AGI, MONY or Lebenthal.
This Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time by action of the Board of
Directors of AGI, MONY or Lebenthal if (a) the Merger shall not have been
consummated by March 31, 2002, or (b) a United States federal, state, local or
foreign court of competent jurisdiction or United States federal or state, local
or foreign governmental, regulatory or administrative agency or commission shall
have issued an order, decree or ruling or taken any other action permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement and such order, decree,
38
ruling or other action shall have become final and nonappealable; provided,
however, that the party seeking to terminate this Agreement pursuant to this
clause (b) shall have used all reasonable best efforts to remove such
injunction, order or decree; and provided, in the case of a termination pursuant
to clause (a) above, that the terminating party shall not have breached in any
material respect its obligations under this Agreement in any manner that shall
have proximately contributed to the failure to consummate the Merger by March
31, 2002.
7.3 Termination by Lebenthal.
This Agreement may be terminated and the Merger may be
abandoned at any time, by action of Lebenthal Board, if (a) there has been a
breach (without regard to materiality, MONY Material Adverse Effect or similar
qualifiers) by the Acquirers of any representation or warranty contained in this
Agreement, which breach is not curable or, if curable, is not cured within 30
days after written notice of such breach is given by Lebenthal to AGI and MONY;
provided, that such breach, if occurring or continuing on the Closing Date,
would constitute, individually or in the aggregate with other such breaches, the
failure of the conditions set forth in Section 6.2(a), or (b) there has been a
material breach of any of the covenants or agreements set forth in this
Agreement on the part of AGI, which breach is not curable or, if curable, is not
cured within 30 days after written notice of such breach is given by Lebenthal
to AGI and MONY; provided, however, that the right to terminate this Agreement
pursuant to this Section 7.3 shall not be available to Lebenthal if Lebenthal,
at such time, is in material breach of any representation, warranty, covenant or
agreement set forth in this Agreement.
7.4 Termination by AGI and MONY.
This Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time, by AGI or MONY if
(a) there has been a breach (without regard to materiality,
Lebenthal Material Adverse Effect or similar qualifiers) by Lebenthal of any
representation or warranty contained in this Agreement, which breach is not
curable or, if curable, is not cured within 30 days after written notice of such
breach is given by AGI or MONY to Lebenthal; provided, that such breach, if
occurring or continuing on the Closing Date, would constitute, individually or
in the aggregate with other such breaches, the failure of the conditions set
forth in Section 6.3(a),
(b) there has been a material breach of any of the covenants
or agreements set forth in this Agreement on the part of Lebenthal, which breach
is not curable or, if curable, is not cured within 30 days after written notice
of such breach is given by AGI or MONY to Lebenthal, or
(c) if (i) an outbreak of hostilities or material escalation
of hostilities involving the United States or other material national or
international crisis shall have occurred and trading generally in securities on
the New York Stock Exchange shall have been suspended or limited for four or
more days after the date of this Agreement or (ii) the Dow Jones Industrial
Average, as published in the Wall Street Journal (N.Y. edition), shall have
decreased by more that 20% from its level on the date of this Agreement.
39
Notwithstanding the foregoing, the right to terminate this Agreement pursuant to
this Section 7.4 shall not be available to AGI or MONY if the Acquirers, at such
time, are in material breach of any representation, warranty, covenant or
agreement set forth in this Agreement.
7.5 Effect of Termination and Abandonment.
In the event of termination of this Agreement and the
abandonment of the Merger pursuant to this Article 7, all obligations of the
parties hereto shall terminate, except for the obligations of the parties under
Sections 5.6, 5.8, 9.1 and 9.6 and except for the Confidentiality Agreement.
Moreover, in the event of termination of this Agreement pursuant to Section 7.3
or 7.4, nothing herein shall prejudice the ability of the nonbreaching party
from seeking damages from any other party for any breach of this Agreement,
including, without limitation, attorneys' fees and the right to pursue any
remedy at law or in equity.
7.6 Extension; Waiver.
At any time prior to the Effective Time, any party hereto,
may, to the extent legally allowed, (a) extend the time for the performance of
any of the obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties made to such party contained
herein or in any document delivered pursuant hereto and (c) waive compliance
with any of the agreements or conditions for the benefit of such party 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 an instrument in writing signed by
such party.
ARTICLE 8
INDEMNIFICATION; REMEDIES
8.1 Survival.
Except as set forth in Section 8.4, all representations, warranties,
covenants, and obligations in this Agreement, the Schedules and Annexes, and any
certificate or document delivered pursuant to this Agreement will survive the
Effective Time.
8.2 Indemnification and Payment of Damages by the Principal
Shareholders.
Each of the Principal Shareholders will (x) indemnify and hold
harmless the Acquirers, and their respective representatives, stockholders,
controlling persons, employees, and affiliates (collectively, the "Indemnified
Persons") for, and (y) pay to the Indemnified Persons the amount of, any loss,
liability, claim, damage, expense (including costs of investigation and defense
and reasonable attorneys' fees), whether or not involving a third-party claim
(collectively, "Damages"), arising, directly or indirectly, from or in
connection with: (i) any breach of any representation or warranty of Lebenthal
or any Principal Shareholder in Article 3 of this Agreement; or (ii) any breach
by Lebenthal or any Principal Shareholder of any covenant
40
or obligation in this Agreement; provided, however, that no Principal
Shareholder will be liable for an indemnity obligation hereunder premised solely
upon the breach by another Principal Shareholder of such other Principal
Shareholder's covenant under Section 5.19. The remedies provided in this Section
8.2 will be the exclusive remedies available to the Acquirers or the other
Indemnified Persons from the Principal Shareholders under this Agreement, other
than damages resulting from fraud as determined in a final nonappealable
judgement of a court of competent jurisdiction or specific performance as
provided in Section 9.13.
8.3 Indemnification and Payment of Damages by the Acquirers.
Subject to Section 8.4 hereof, each of the Acquirers, jointly
and severally will indemnify and hold harmless the Principal Shareholders and
their respective representatives (and, if applicable, trustees and
beneficiaries), and will pay to such persons, the amount of any Damages arising,
directly or indirectly, from or in connection with (a) any breach of any
representation or warranty made by the Acquirers in Article 4 of this Agreement
of which such party had actual or constructive knowledge prior to the Effective
Time; or (b) any breach by any Acquirer of any of its covenants or obligations
in this Agreement.
8.4 Time Limitations
The Principal Shareholders will have no liability (for indemnification
or otherwise) with respect to any representation or warranty, or covenant or
obligation to be performed and complied with prior to the Effective Time, other
than those in Sections 3.2, 3.3 or 3.13 unless on or before 16 months from the
Effective Date an Acquirer notifies the Principal Shareholders of a claim
specifying the factual basis of that claim in reasonable detail to the extent
then known by such Acquirer; a claim with respect to Sections 3.2, 3.3 or 3.13,
or a claim for indemnification or reimbursement based upon a breach of covenant
to be performed after the Effective Time or fraud, may be made at any time
subject to applicable statutes of limitations; provided, however, that no such
claim may be made unless on or before the earlier of (i) 48 months from the date
of the breach or the date of discovery of the fraudulent act or (ii) the date of
the expiration of the applicable statute of limitations, an Acquirer provides
notice thereof in manner and content as provided in this Article with respect to
the particular claim. None of the Acquirers will have any liability (for
indemnification or otherwise) with respect to any representation or warranty, or
covenant or obligation to be performed and complied with prior to the Effective
Time other than those in Sections 4.2 or 4.3, unless on or before 16 months from
the Effective Date the Principal Shareholders notify AGI or MONY of a claim
specifying the factual basis of that claim in reasonable detail to the extent
then known by the Principal Shareholders.
8.5 Limitations on Amount - Principal Shareholders
The Principal Shareholders will have no liability for
indemnification with respect to the matters described in Section 8.2 until the
total of all Damages with respect to such matters exceeds $210,000. After that
amount is reached, the Principal Shareholders will be liable for all Damages
incurred thereafter. In no event (x) shall the aggregate liability of the
Principal Shareholders with respect to all claims for indemnification by the
Acquirers or any Indemnified Persons under Section 8.2 exceed [REDACTED] (the
"Cap Amount"), (y) shall the liability of any Principal Stockholder exceed
[REDACTED] and (z) shall the liability of any Principal Shareholder exceed
[REDACTED].
41
This Section shall not apply with respect to any Principal Shareholder or
Lebenthal for any breach of representations and warranties in respect of which
such party acted fraudulently or any intentional breach of any covenant or
obligation. [REDACTED]
Notwithstanding the foregoing:
(a) Upon the distribution to the Sayra Trust Beneficiaries of
the principal of the Sayra Lebenthal Trust, as contemplated under Section 5.9(c)
above:
(i) 83 1/3% of the shares previously held by the Sayra
Lebenthal Trust shall be deemed held by James A.
Lebenthal for purposes of this calculation. Accordingly,
James A. Lebenthal will be considered to have beneficial
ownership of 25.84% of the outstanding shares (i.e.
those held in his own name) plus 30.84% of the
outstanding shares (83 1/3% multiplied by the 37.01% of
the shares held by the Sayra Lebenthal Trust prior to
such distribution);
(ii) 16 2/3% of the shares previously held by the Sayra
Lebenthal Trust shall be deemed held by Alexandra
Lebenthal for purposes of this calculation. Accordingly,
Alexandra Lebenthal will be considered to have
beneficial ownership of 0.32% of the outstanding shares
(i.e. those held in her own name) plus 6.17% of the
outstanding shares (16 2/3% multiplied by the 37.01% of
the shares held by the Sayra Lebenthal Trust); and
(iii) The Sayra Trust Beneficiaries will not be deemed to
beneficially own any of those 37.01% of the outstanding
shares for purposes of the calculation (though they may
be beneficial owners in other capacities).
This allocation is made for the purposes of allocating liability for
indemnification under this Article 8, and for no other purpose.
(b) If a beneficiary receiving a distribution out of the principal
assets of the James A. Lebenthal Trust has executed and delivered a Merger
Agreement Joinder Agreement required in connection therewith pursuant to Section
5.9(d), [REDACTED].
42
8.6 Limitations on Amount - the Aquirers.
The Acquirers will have no liability for indemnification with respect
to the matters discussed in Section 8.3 until the total of all Damages with
respect to such matters exceeds $210,000. After that amount is reached, the
Acquirers will be liable for the all Damages incurred thereafter. In no event
shall the aggregate liability of the Acquirers with respect to all claims for
indemnification by the Principal Shareholders exceed the Cap Amount. This
Section shall not apply to any breach of any of the Acquirers' representations
and warranties in respect of which it acted fraudulently or any intentional
breach by the Acquirers of any covenant or obligation.
8.7 Procedure for Indemnification - Third Party Claims.
(a) Promptly after receipt by an indemnified party under
Section 8.2 or 8.3 of notice of the commencement of any proceeding against it (a
"Proceeding"), such indemnified party will, if a claim is to be made against an
indemnifying party under such Section, give notice to the indemnifying party of
the commencement of such claim, but the failure to notify the indemnifying party
will not relieve the indemnifying party of any liability that it may have to any
indemnified party, except to the extent that the indemnifying party demonstrates
that the defense of such action is prejudiced by the indemnifying party's
failure to give such notice.
(b) If any Proceeding referred to in Section 8.7(a) is brought
against an indemnified party and it gives notice to the indemnifying party of
the commencement of such Proceeding, the indemnifying party will, be entitled to
participate in such Proceeding and, to the extent that it wishes (unless (i) the
indemnifying party is also a party to such Proceeding and the indemnified party
determines in good faith that joint representation would be inappropriate, or
(ii) the indemnifying party fails to provide reasonable assurance to the
indemnified party of its financial capacity to defend such Proceeding and
provide indemnification with respect to such Proceeding), to assume the defense
of such Proceeding with counsel reasonably satisfactory to the indemnified party
and, after notice from the indemnifying party to the indemnified party of its
election to assume the defense of such Proceeding, the indemnifying party will
not, as long as it conducts such defense in good faith, be liable to the
indemnified party under this Article 8 for any fees of other counsel or any
other expenses with respect to the defense of such Proceeding, in each case
subsequently incurred by the indemnified party in connection with the defense of
such Proceeding, other than reasonable costs of investigation. If the
indemnifying party assumes the defense of a Proceeding, (i) it will be
conclusively established for purposes of this Agreement that the claims made in
that Proceeding are within the scope of and subject to indemnification; (ii) no
compromise or settlement of such claims may be effected by the indemnifying
party without the indemnified party's consent unless such compromise or
settlement includes an unconditional release of each indemnified party from all
liability arising or that may arise out of such claim. If notice is given to an
indemnifying party of the commencement of any Proceeding and the indemnifying
party does not, within ten days after the indemnified party's notice is given,
43
give notice to the indemnified party of its election to assume the defense of
such Proceeding, indemnified party may assume the defense thereof.
(c) Notwithstanding the foregoing, if an indemnified party
determines in good faith that there is a reasonable probability that a
Proceeding may adversely affect it or its affiliates other than as a result of
monetary damages for which it would be entitled to indemnification under this
Agreement, the indemnified party may, by notice to the indemnifying party,
assume the exclusive right to defend, compromise, or settle such Proceeding, but
the indemnifying party will not be bound by any determination of a Proceeding so
defended or any compromise or settlement effected without its consent (which may
not be unreasonably withheld).
(d) Sellers hereby consent to the jurisdiction of any courts
in the State of New York for purposes of any claim that an Indemnified Person
may have under this Agreement with respect to such Proceeding or the matters
alleged therein, and agree that process may be served on the Principal
Shareholders with respect to such a claim in accordance with the laws of the
State of New York.
8.8 Procedure for Indemnification - Other Claims.
A claim for indemnification for any matter not involving a
third-party claim may be asserted by notice to the party from whom
indemnification is sought.
8.9 Further Limitations on Amount - the Trusts.
Without affecting the limitations on liability for
indemnification by them as Principal Shareholders provided in Section 8.5, and
by way of further limitation thereon, absent a failure by the trustee or
trustees of the Trust to comply with the covenants set forth in Section 5.9(c)
and (d), the liability of each Trust for indemnification shall be limited solely
to the assets of the Trust in its possession at the time such indemnification is
sought and shall in no way extend to the personal assets of such trustee or
trustees.
ARTICLE 9
GENERAL PROVISIONS
9.1 Nonsurvival of Representations, Warranties and Agreements.
All representations, warranties and agreements in this
Agreement or in any instrument delivered pursuant to this Agreement shall not
survive the Merger; provided, however, that the agreements contained in Article
1, Article 2, Article 5, Article 8 and this Article 9 shall survive the Merger
to the extent contemplated by such sections.
9.2 Notices.
Any notice required to be given hereunder shall be sufficient
if in writing, and sent by facsimile transmission, by courier or other national
overnight express mail service (with
44
proof of service), hand delivery or certified or registered mail (return receipt
requested and first-class postage prepaid), addressed as follows:
If to MONY:
The MONY Group Inc.
1740 Broadway
New York, NY 10017
Attention: General Counsel
Telecopy: (212) 708-2080
If to AGI or LAM Acquisition:
The Advest Group, Inc.
90 State House Square
Hartford, CT 06103
Attention: General Counsel
Telecopy: (860) 509-2143
If to Lebenthal:
Lebenthal & Co., Inc.
120 Broadway
New York, NY 10271
Attention: President
Telecopy: (212) 748-5912
with copies to:
Paul Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: John O'Neil, Esq.
Telecopy: (212) 757-3990
or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date so
telecommunicated, personally delivered or mailed.
9.3 Assignment; Binding Effect.
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, except that the Acquirers may assign their respective rights hereunder
to any Subsidiary of MONY. Subject to the preceding sentence, this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and assigns. Notwithstanding anything contained in
this Agreement to the
45
contrary, except as provided in Section 5.11 and Article 8, nothing in this
Agreement, expressed or implied, is intended to confer on any person other than
the parties hereto or their respective heirs, successors, executors,
administrators and assigns any rights, remedies, obligations or liabilities
under or by reason of this Agreement.
9.4 Entire Agreement.
This Agreement, the Schedules and Annexes hereto, the
Lebenthal Disclosure Schedule, the AGI Disclosure Schedule, and any documents
delivered by the parties in connection herewith or therewith constitute the
entire agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings among the parties with respect
thereto. No addition to or modification of any provision of this Agreement shall
be binding upon any party hereto unless made in writing and signed by all
parties hereto.
9.5 Amendment.
This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto, except that there shall
be no amendment or supplement which by law requires further approval by the
shareholders of Lebenthal without further approval by such shareholders.
9.6 Governing Law; Jurisdiction.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to its rules of
conflict of laws. Each party hereby irrevocably submits to the exclusive
jurisdiction of the courts of the State of New York and the federal courts of
the United States of America located in such State solely in respect of any
claim relating to the interpretation and enforcement of the provisions of this
Agreement and of the documents referred to in this Agreement, or otherwise in
respect of the transactions contemplated hereby and thereby. Each party hereby
waives, and agrees not to assert, as a defense in any action, suit or proceeding
in which any such claim is made that it is not subject to the jurisdiction of
such courts or that such action, suit or proceeding may not be brought or is not
maintainable in such courts or that the venue thereof may not be appropriate or
that this Agreement or any such document may not be enforced in or by such
courts. The parties hereby consent to and grant any such court jurisdiction over
such parties and over the subject matter of any such claim and agree that
mailing of process or other papers in connection with any such action, suit or
proceeding in the manner provided in Section 9.2, or in such other manner as may
be permitted by law, shall be valid and sufficient service thereof.
9.7 Counterparts.
This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument. Each counterpart may consist of a number of copies hereof each
signed by less than all, but together signed by all of the parties hereto.
46
9.8 Headings.
Headings of the Articles and Sections of this Agreement are
for the convenience of the parties only, and shall be given no substantive or
interpretive effect whatsoever.
9.9 Interpretation.
In this Agreement, unless the context otherwise requires,
words describing the singular number shall include the plural and vice versa,
and words denoting each gender shall include the other gender and words denoting
natural persons shall include corporations and partnerships and vice versa. The
drafting and negotiation of this Agreement have been participated in by each of
the parties, and for all purposes this Agreement shall be deemed to have been
drafted jointly by the parties.
9.10 Waivers.
Except as provided in this Agreement, no action taken pursuant
to this Agreement, including, without limitation, any investigation by or on
behalf of any party, shall be deemed to constitute a waiver by the party taking
such action of compliance with any representations, warranties, covenants or
agreements contained in this Agreement. The waiver by any party hereto of a
breach of any provision hereunder shall not operate or be construed as a waiver
of any prior or subsequent breach of the same or any other provision hereunder.
9.11 Incorporation of Schedules, Annexes and Exhibits.
The Lebenthal Disclosure Schedule, the AGI Disclosure Schedule
and all Schedules and Annexes attached hereto and referred to herein are hereby
incorporated herein and made a part hereof for all purposes as if fully set
forth herein.
9.12 Severability.
Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction. If any provision of this Agreement is
so broad as to be unenforceable, the provision shall be interpreted to be only
so broad as is enforceable.
9.13 Enforcement of Agreement.
The parties hereto agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed in
accordance with its 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 hereof, this being in addition to any other remedy to which they are
entitled at law or in equity.
47
9.14 Subsidiaries.
As used in this Agreement, the word "Subsidiary" when used
with respect to any party means any corporation or other organization, whether
incorporated or unincorporated, of which such party directly or indirectly owns
or controls at least a majority of the securities or other interests 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, or any organization of which such party is a general partner.
9.15 Lebenthal Material Adverse Effect.
"Lebenthal Material Adverse Effect" means any effect that is
material and adverse to (a) the financial position, results of operations,
assets, properties or business of Lebenthal and its Subsidiaries, taken as a
whole, or (b) the ability of Lebenthal to timely perform its obligations under
the Agreement or otherwise to consummate the transactions contemplated by this
Agreement, other than any fact, circumstance, event or thing (i) generally
affecting the securities industry, or resulting from general economic or market
conditions (including changes in interest rates) or changes in accounting
principles or changes in law, regulations or regulatory policies of general
applicability (or interpretations thereof), (ii) resulting from actions or
omissions of a party hereto taken with the prior written consent of the other
party in contemplation of the transactions contemplated hereby, or (iii)
resulting from the announcement or execution of this Agreement or the
transactions contemplated herein.
9.16 MONY Material Adverse Effect.
"MONY Material Adverse Effect" means any effect that is
material and adverse to (a) the financial position, results of operations,
assets, properties or business of MONY and its Subsidiaries, taken as a whole,
or (b) the ability of MONY to timely perform its obligations under the Agreement
or otherwise to consummate the transactions contemplated by this Agreement,
other than any fact, circumstance, event or thing (i) generally affecting the
securities or insurance industries, or resulting from general economic or market
conditions (including changes in interest rates) or changes in accounting
principles or changes in law, regulations or regulatory policies of general
applicability (or interpretations thereof), (ii) resulting from actions or
omissions of a party hereto taken with the prior written consent of the other
party in contemplation of the transactions contemplated hereby, or (iii)
resulting from the announcement or execution of this Agreement or the
transactions contemplated herein.
9.17 Control of Lebenthal and its Subsidiaries.
Nothing in this Agreement shall be construed as granting to
the Acquirers any power, right or authority to control, directly or indirectly,
the management, policies, business, operations or affairs of Lebenthal or any of
its Subsidiaries until the conditions to the consummation of the transactions
contemplated hereby have been satisfied or waived and the Closing of the
transactions contemplated hereby have been consummated.
9.18 Capacity of Trusts.
The parties acknowledge that:
48
(a) the Trusts have joined in the representations and
warranties set forth in Article 3 solely for the purpose of allocating liability
in the event of any breach thereof, and that by so joining the Trusts are not
indicating that (acting in the capacity of Principal Shareholder) they have
conducted any independent investigation or have any actual knowledge of the
facts and circumstances underlying those representations and warranties;
(b) except as otherwise provided in Section 8.9, with respect
to the Trusts, the trustees of the Trusts have entered into this Agreement
solely in their respective fiduciary capacities and the obligations of the
Trusts hereunder are the obligations of the Trusts only and not the personal
obligations of the trustee or trustees thereof; and
(c) subject to the restrictions set forth in Sections 5.9(c)
and (d), nothing in this agreement shall impede the fulfillment of any fiduciary
duty or the exercise of any power of a trustee of a Trust to make distributions
of income or principal or to pay other obligations of the Trust.
[Balance of page intentionally left blank]
49
IN WITNESS WHEREOF, the parties have executed this Agreement
and caused the same to be duly delivered on their behalf on the day and year
first written above.
THE MONY GROUP INC.
By: /s/ Richard Daddario
---------------------------------------------
Name: Richard Daddario
Title: Executive Vice President and
Chief Financial Officer
THE ADVEST GROUP, INC.
By: /s/ Grant W. Kurtz
---------------------------------------------
Name: Grant W. Kurtz
Title: President and Chief Executive Officer
LAM ACQUISITION CORP.
By: /s/ Richard Daddario
---------------------------------------------
Name: Richard Daddario
Title: Vice President
LEBENTHAL & CO., INC.
By: /s/ Alexandra Lebenthal
---------------------------------------------
Name: Alexandra Lebenthal
Title: President
PRINCIPAL SHAREHOLDERS
THE TRUST BY SAYRA F. LEBENTHAL FOR GRANDCHILDREN
By: /s/ James A. Lebenthal
---------------------------------------------
Name: James A. Lebenthal
Title: Trustee
50
/s/ James A. Lebenthal
---------------------------------------------
James A. Lebenthal
/s/ Eleanor Lebenthal Bissinger
---------------------------------------------
Eleanor Lebenthal Bissigner
THE JAMES A. LEBENTHAL FAMILY IRREVOCABLE TRUST
By: /s/ Carol Berg Geist
---------------------------------------------
Name: Carol Berg Geist
Title: Trustee
/s/ Duncan K. Smith
---------------------------------------------
Duncan K. Smith
/s/ James E. McGrath
---------------------------------------------
James E. McGrath
/s/ Gerald H. Tankersley
---------------------------------------------
Gerald H. Tankersley
/s/ Alexandra Lebenthal
---------------------------------------------
Alexandra Lebenthal
51