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EXHIBIT (d)(1)
AGREEMENT AND PLAN OF MERGER
by and among
METROPOLITAN LIFE INSURANCE COMPANY
CC MERGER SUB INC.
and
CONNING CORPORATION
dated as of
March 9, 2000
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TABLE OF CONTENTS
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ARTICLE I
THE OFFER
Section 1.1 The Offer.............................................................................. 2
Section 1.2 Company Actions........................................................................ 3
Section 1.3 Actions by Parent and Purchaser........................................................ 4
ARTICLE II
THE MERGER
Section 2.1 The Merger............................................................................. 5
Section 2.2 Effective Time......................................................................... 5
Section 2.3 Effects of the Merger.................................................................. 6
Section 2.4 Articles of Incorporation and By-Laws of the Surviving Corporation..................... 6
Section 2.5 Directors.............................................................................. 6
Section 2.6 Officers............................................................................... 6
Section 2.7 Conversion of Common Shares............................................................ 6
Section 2.8 Conversion of Purchaser Common Stock................................................... 7
Section 2.9 Options; Stock Plans................................................................... 7
Section 2.10 Stockholders' Meeting.................................................................. 7
Section 2.11 Merger without Meeting of Stockholders................................................. 8
ARTICLE III
DISSENTING SHARES; PAYMENT FOR COMMON SHARES
Section 3.1 Dissenting Shares...................................................................... 9
Section 3.2 Payment for Common Shares.............................................................. 9
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 4.1 Organization and Qualification; Subsidiaries........................................... 11
Section 4.2 Capitalization of the Company and its Subsidiaries..................................... 12
Section 4.3 Authority Relative to This Agreement; Consents and Approvals........................... 12
Section 4.4 SEC Reports; Financial Statements...................................................... 13
Section 4.5 Proxy Statement; Offer Documents....................................................... 14
Section 4.6 Consents and Approvals; No Violations.................................................. 14
Section 4.7 No Default............................................................................. 15
Section 4.8 No Undisclosed Liabilities............................................................. 15
Section 4.9 Litigation............................................................................. 15
Section 4.10 Permits................................................................................ 15
Section 4.11 Employee Benefit Matters............................................................... 16
Section 4.12 Brokers................................................................................ 17
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Section 4.13 Absence of Certain Changes............................................................. 17
Section 4.14 Taxes.................................................................................. 17
Section 4.15 Intellectual Property.................................................................. 18
Section 4.16 Opinion of Financial Advisor........................................................... 19
Section 4.17 Material Contracts..................................................................... 19
Section 4.18 Insurance.............................................................................. 19
Section 4.19 Affiliated Transactions................................................................ 19
Section 4.20 Investment Contracts, Funds and Clients................................................ 20
Section 4.21 Company Broker/Dealers................................................................. 20
Section 4.22 Takeover Statutes; Charter............................................................. 21
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PARENT AND PURCHASER
Section 5.1 Organization and Qualification Subsidiaries............................................ 21
Section 5.2 Authority Relative to This Agreement................................................... 21
Section 5.3 Consents and Approvals; No Violations.................................................. 22
Section 5.4 Proxy Statement; Schedule 14D-9........................................................ 22
Section 5.5 Financing.............................................................................. 23
Section 5.6 Ownership of Company Capital Stock..................................................... 23
Section 5.7 Conduct of Business of Purchaser....................................................... 23
ARTICLE VI
COVENANTS
Section 6.1 Conduct of Business of the Company..................................................... 23
Section 6.2 Acquisition Proposals.................................................................. 26
Section 6.3 Access to Information.................................................................. 26
Section 6.4 Additional Agreements; Reasonable Efforts.............................................. 26
Section 6.5 Consents............................................................................... 27
Section 6.6 Public Announcements................................................................... 27
Section 6.7 Indemnification........................................................................ 27
Section 6.8 Employee Benefit Arrangements.......................................................... 28
Section 6.9 Notification of Certain Matters........................................................ 30
Section 6.10 State Takeover Laws.................................................................... 30
Section 6.11 Stockholder Litigation................................................................. 30
Section 6.12 Further Action......................................................................... 30
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
Section 7.1 Conditions to Each Party's Obligation to Effect the Merger............................. 30
Section 7.2 Conditions to Obligations of Parent and Purchaser...................................... 31
Section 7.3 Conditions to Obligations of the Company............................................... 31
Section 7.4 Frustration of Closing Conditions...................................................... 32
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ARTICLE VIII
TERMINATION; AMENDMENTS; WAIVER
Section 8.1 Termination............................................................................ 32
Section 8.2 Effect of Termination.................................................................. 34
Section 8.3 Amendment.............................................................................. 34
Section 8.4 Waiver................................................................................. 34
ARTICLE IX
MISCELLANEOUS
Section 9.1 Nonsurvival of Representations and Warranties.......................................... 34
Section 9.2 Entire Agreement; Assignment........................................................... 34
Section 9.3 Validity............................................................................... 34
Section 9.4 Notices................................................................................ 35
Section 9.4 Governing Law.......................................................................... 36
Section 9.6 Descriptive Headings................................................................... 36
Section 9.7 Parties in Interest.................................................................... 36
Section 9.8 Counterparts........................................................................... 36
Section 9.9 Fees and Expenses...................................................................... 36
Section 9.10 Specific Performance................................................................... 36
Section 9.11 Interpretation; Absence of Presumption................................................. 36
ANNEX I Conditions to the Offer
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
March 9, 2000, by and among Metropolitan Life Insurance Company ("Parent"), a
New York life insurance company, CC Merger Sub Inc., a Missouri corporation and
an indirect wholly owned subsidiary of Parent ("Purchaser"), and Conning
Corporation, a Missouri corporation (the "Company").
WHEREAS, Parent beneficially owns 8,304,995 shares of the
common stock, par value $0.01 par share, of the Company (the "Common Shares");
WHEREAS, it is proposed that Purchaser acquire all of the
issued and outstanding Common Shares not beneficially owned by Parent or
Purchaser (references to the Parent shall, where the context so requires, be
deemed to refer to Purchaser as well);
WHEREAS, it is proposed that Purchaser will make a cash tender
offer (the "Offer") in compliance with Section 14(d)(1) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and the rules and
regulations promulgated thereunder to acquire all the issued and outstanding
shares of Common Stock for $12.50 per share (such amount, or any greater amount
per share paid pursuant to the Offer, being hereinafter referred to as the
"Offer Price"), net to the seller in cash, upon the terms and subject to the
conditions of this Agreement and Annex I hereto; and that the Offer will be
followed by the merger (the "Merger") of Purchaser with and into the Company,
with the Company being the surviving corporation, in accordance with the
Missouri General and Business Corporation Law ("MGBCL"), pursuant to which each
issued and outstanding Common Share not beneficially owned by Parent will be
converted into the right to receive the Offer Price upon the terms and subject
to the conditions provided herein and in Annex I hereto;
WHEREAS, a special committee (the "Special Committee") of the
Board of Directors of the Company (the "Company Board") has received the written
opinion of Salomon Smith Barney Inc. (the "Financial Advisor") to the effect
that, based on, and subject to, the various assumptions and qualifications set
forth in such opinion, as of the date of such opinion, the Offer Price to be
received by the holders of the Common Shares (other than Parent and its
affiliates) pursuant to the Offer and the Merger is fair to such holders from a
financial point of view;
WHEREAS, the Special Committee has determined that this
Agreement, and the Offer and the other transactions contemplated hereby, taken
as a whole, are in the best interests of the Company and its stockholders, and
has voted to recommend to the Company Board that the Company Board approve this
Agreement, and the Offer and the other transactions contemplated hereby;
WHEREAS, the Company Board has determined that this Agreement,
the Offer and the other transactions contemplated hereby, taken as a whole, are
in the best interests of the Company and its stockholders and has voted to
approve this Agreement, and the Offer and the other transactions contemplated
hereby; and
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WHEREAS, Parent, Purchaser and the Company desire to make
certain representations, warranties, covenants and agreements in connection with
the Offer and the Merger and also to prescribe various conditions to the Offer
and the Merger.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, and intending to be legally bound hereby, Parent, Purchaser
and the Company agree as follows:
ARTICLE I
THE OFFER
Section 1.1. The Offer.
(a) Provided that this Agreement shall not have been
terminated in accordance with Article VIII and none of the conditions set forth
in Annex I hereto (the "Tender Offer Conditions") shall exist after the date
hereof and prior to the commencement of the Offer, as promptly as practicable,
but not later than March 20, 2000, Purchaser shall, and Parent shall cause
Purchaser to, commence (within the meaning of Rule 14d-2 under the Exchange Act)
an offer to purchase all outstanding Common Shares at the Offer Price and shall
take the actions set forth in Section 1.3 below and shall take all other actions
as required by any order, writ, injunction, judgment, arbitration award, agency
requirement, decree, law, statute, ordinance, rule or regulation (each a "Law").
The obligation of Purchaser to accept for payment or pay for any Common Shares
tendered pursuant thereto will be subject only to the satisfaction of the Tender
Offer Conditions.
(b) Without the prior written consent of the Special Committee
and the Company Board, Purchaser shall not (i) impose conditions to the Offer in
addition to the Tender Offer Conditions, (ii) modify or amend the Tender Offer
Conditions or any other term of the Offer in a manner adverse to the holders of
Common Shares, (iii) reduce the number of Common Shares subject to the Offer,
(iv) reduce the Offer Price, (v) except as provided in the following sentence,
extend the Offer if all of the Tender Offer Conditions are satisfied or waived,
or (vi) change the form of consideration payable in the Offer. Notwithstanding
the foregoing, Purchaser may, in accordance with applicable Law, and without the
consent of the Special Committee, extend the Offer at any time, and from time to
time, (i) if at the then-scheduled expiration date of the Offer, any of the
conditions to Purchaser's obligation to accept for payment and pay for all
Common Shares shall not have been satisfied or waived; (ii) for any period
required by any rule, regulation, interpretation or position of the SEC or its
staff applicable to the Offer; or (iii) if all Tender Offer Conditions are
satisfied or waived but the number of Common Shares tendered, together with
Common Shares already beneficially owned by Parent, is at least equal to
66 2/3%, but less than 90%, of the then-outstanding number of Common Shares, for
an aggregate period of not more than 20 business days (for all such extensions)
beyond the latest expiration date that would be permitted under clause (i) or
(ii) of this sentence (such aggregate period, the "Subsequent Offering Period").
So long as this Agreement is in effect, the Offer has been commenced and the
Tender Offer Conditions have not been satisfied or waived, Purchaser shall, and
Parent shall cause Purchaser to, cause the Offer not to expire, subject,
however, to Purchaser's and Parent's
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rights of termination under this Agreement. Parent and Purchaser shall comply
with the obligations respecting prompt payment and announcement under the
Exchange Act. There shall be no withdrawal rights during the Subsequent Offering
Period.
(c) Parent and Purchaser represent that the Offer Documents
(as defined in Section 1.3(a)) will comply in all material respects with the
provisions of applicable federal securities Laws and, on the date filed with the
SEC and on the date first published, sent or given to the Company's
stockholders, shall not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements made therein, in light of the circumstances under which
they were made, not misleading, except that no representation is made by Parent
or Purchaser with respect to information supplied by the Company in writing for
inclusion in the Offer Documents. Each of Parent and Purchaser, on the one hand,
and the Company, on the other hand, agrees to correct promptly any information
provided by it for use in the Offer Documents if and to the extent that it shall
have become false or misleading in any material respect and Purchaser further
agrees to take all steps necessary to cause the Offer Documents as so corrected
to be filed with the SEC and to be disseminated to stockholders of the Company,
in each case, as and to the extent required by applicable federal securities
Laws.
Section 1.2. Company Actions.
(a) The Company shall file with the SEC and mail to the
holders of Common Shares, on or as promptly as practical after the date of the
filing by Parent and Purchaser of the Offer Documents, a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with any
amendments or supplements thereto, the "Schedule 14D-9") reflecting the
recommendations of the Company Board and the Special Committee that holders of
Common Shares tender their Common Shares pursuant to the Offer, and shall
disseminate the Schedule 14D-9 as required by Rule 14d-9 promulgated under the
Exchange Act. The Schedule 14D-9 will set forth, and the Company hereby
represents that the Company Board and the Special Committee, at meetings duly
called and held, have (i) determined by unanimous vote of its directors, other
than directors who abstained, that the Offer and the Merger are fair to,
advisable and in the best interests of the Company and its stockholders, (ii)
approved the Offer and this Agreement and the transactions contemplated hereby
in accordance with the MGBCL, (iii) resolved to recommend acceptance of the
Offer and approval of this Agreement by the Company's stockholders, and (iv)
taken all action in their control necessary to render Sections 351.407, 351.459
and 409.500 to 409.566 of the MGBCL inapplicable to the Offer and the Merger;
provided, however, that such recommendations and approvals may be withdrawn,
modified or amended to the extent that the Company Board or the Special
Committee determines in good faith and on a reasonable basis, after consultation
with outside counsel, that such action is required in the exercise of the
Company Board's fiduciary duties or the Special Committee's fiduciary duties,
respectively, under applicable Law. The Company further represents that, prior
to the execution hereof, the Financial Advisor has delivered to the Special
Committee the Fairness Opinion (as defined below), to the effect that, based on,
and subject to, the various assumptions and qualifications set forth in such
opinion, as of the date of such opinion, the Offer Price to be received by the
holders of Common Shares (other than Parent or any of its affiliates, including
Conning and its wholly owned Subsidiaries (as defined in Section 4.1)) pursuant
to the Offer and the Merger is fair to such holders from a financial point of
view. The Company further represents and warrants that it has been
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authorized by the Financial Advisor to reproduce the Fairness Opinion in full,
and may also include references to the Opinion and to the Financial Advisor and
its relationship with the Special Committee and the Company (in each case in
form and substance as the Financial Advisor shall reasonably approve), in any
statement on Schedule 14D-9 or proxy statement relating to the transactions
contemplated hereby that the Company is required to file or distribute to its
shareholders under the Securities Exchange Act of 1934 or other applicable Law.
The Company further represents that it will file such other documentation and
take such other actions as required by Law to effect the purposes of this
Agreement. The Company hereby consents to the inclusion in the Offer Documents
of the recommendations of the Company Board and the Special Committee described
in this Section 1.2(a).
(b) The Schedule 14D-9 will comply in all material respects
with the provisions of applicable federal securities Laws, and, on the date
filed with the SEC and on the date first published, sent or given to the
Company's stockholders, shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is made by the Company with respect to information supplied by
Parent or Purchaser in writing for inclusion in the Schedule 14D-9. Each of the
Company, on the one hand, and Parent and Purchaser, on the other hand, agrees
promptly to correct any information provided by either of them for use in the
Schedule 14D-9 if and to the extent that it shall have become false or
misleading, and the Company further agrees to take all steps necessary to cause
the Schedule 14D-9 as so corrected to be filed with the SEC and to be
disseminated to the holders of Common Shares, in each case, as and to the extent
required by applicable federal securities Law.
(c) In connection with the Offer, the Company will promptly,
or shall cause its transfer agent to promptly, furnish Purchaser with mailing
labels, security position listings, any non-objecting beneficial owner lists and
any available listing containing the names and addresses of the record holders
of Common Shares as of the most recent practicable date and shall furnish
Purchaser with such additional information (including, but not limited to,
updated lists of holders of Common Shares and their addresses, mailing labels
and lists of security positions and non-objecting beneficial owner lists) and
such other assistance as Purchaser or its agents may reasonably request in
communicating the Offer to the Company's record and beneficial stockholders.
Subject to the requirements of applicable Law, and except for such steps as are
appropriate to disseminate the Offer Documents and any other documents necessary
to consummate the Merger, Parent, Purchaser and their affiliates, associates,
agents and advisors shall use the information contained in any such labels,
listings and files only in connection with the Offer and the Merger, and, if
this Agreement shall be terminated, will deliver to the Company all copies of
such information then in their possession.
Section 1.3. Actions by Parent and Purchaser. Provided that
this Agreement shall not have been terminated in accordance with Article VIII
and none of the Tender Offer Conditions exists after the date hereof and prior
to the commencement of the Offer, as promptly as practicable, but no later than
March 20, 2000:
(a) Parent and Purchaser shall file with the SEC a Tender
Offer Statement and a Rule 13e-3 Transaction Statement on Schedule TO, including
all exhibits thereto (together with
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all amendments and supplements thereto, the "Schedule TO") with respect to the
Offer, the Merger and the other transactions contemplated hereby. The Schedule
TO shall contain or incorporate by reference an offer to purchase (the "Offer to
Purchase") and forms of the related letter of transmittal and any related
documents (the Schedule TO, the Offer to Purchase and such other documents,
together with all supplements or amendments thereto, collectively, the "Offer
Documents"). The Offer Documents shall comply in all material respects with the
requirements of the Exchange Act. On the date filed with the SEC and on the date
first published, sent or given to the Company's stockholders, the Offer
Documents shall not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, except that no representation is made by Parent or
Purchaser with respect to information supplied by the Company for inclusion in
the Offer Documents. Each of Parent and Purchaser agrees to correct promptly,
and the Company agrees to notify Parent promptly as to, any information provided
by it for use in the Offer Documents, if and to the extent such information
shall have become false or misleading in any material respect, and each of
Parent and Purchaser further agrees to take all steps necessary to cause the
Offer Documents as so corrected to be filed with the SEC and to be disseminated
to all of the holders of Shares, in each case as and to the extent required by
applicable federal securities laws. Parent and Purchaser agree to provide the
Company and the Special Committee and their respective counsel in writing any
comments Parent, Purchaser or their counsel may receive from the SEC or its
staff with respect to the Offer Documents promptly after receipt of such
comments. Parent and Purchaser shall use their respective reasonable best
efforts to respond to such comments promptly and shall provide the Company
copies of any written responses and telephonic notification of any verbal
responses by Parent, Purchaser or their counsel.
(b) Parent shall provide or cause to be provided to Purchaser
all of the funds necessary to purchase any Shares that Purchaser becomes
obligated to purchase pursuant to the Offer.
ARTICLE II
THE MERGER
Section 2.1. The Merger. Upon the terms and subject to the
satisfaction or waiver of the conditions hereof, and in accordance with the
applicable provisions of this Agreement and the MGBCL, at the Effective Time (as
defined below) Purchaser shall be merged with and into the Company. Following
the Merger, the separate corporate existence of Purchaser shall cease, and the
Company shall continue as the surviving corporation (the "Surviving
Corporation"). Parent may, upon notice to the Company, modify the structure of
the Merger if Parent determines it advisable to do so because of tax or other
considerations, and the Company shall promptly enter into any amendment to this
Agreement necessary or desirable to accomplish such structure modification;
provided that no such amendment shall reduce the Offer Price, change the form of
consideration payable in the Offer, or otherwise adversely affect the Company or
its shareholders or delay or hinder the transactions contemplated hereby.
Section 2.2. Effective Time. As soon as practicable after the
satisfaction or waiver of the conditions set forth in Article VII, the Company
and Purchaser shall cause articles
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of merger to be executed, verified and filed with, and deliver to, in the manner
required by the MGBCL, the Secretary of State of the State of Missouri, and the
parties shall take such other and further actions as may be required by Law to
make the Merger effective. The time at which the Merger becomes effective in
accordance with applicable Law is referred to as the "Effective Time." Prior to
the filing referred to in this Section 2.2, the closing will be held at the
offices of Wachtell, Lipton, Rosen & Katz, 51 West 52nd Street, New York, New
York 10019 (or such other place as the parties may agree) for the purpose of
confirming all of the foregoing.
Section 2.3. Effects of the Merger. From and after the
Effective Time, the Merger shall have the effects set forth in the MGBCL.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time, all the properties, rights, privileges, powers and franchises of
the Company and Purchaser shall vest in the Surviving Corporation, and all
debts, liabilities and duties of the Company and Purchaser shall become the
debts, liabilities and duties of the Surviving Corporation.
Section 2.4. Articles of Incorporation and By-Laws of the
Surviving Corporation.
(a) The articles of incorporation of Purchaser as in effect
immediately prior to the Effective Time shall be the articles of incorporation
of the Surviving Corporation until thereafter amended in accordance with the
provisions thereof and applicable Law, except that Article I of the articles of
incorporation of the Surviving Corporation shall read until thereafter amended:
"The name of the corporation (which is hereinafter referred to as the
"Corporation") is `Conning Corporation.'"
(b) Subject to the provisions of Section 6.7, the by-laws of
Purchaser in effect at the Effective Time shall be the by-laws of the Surviving
Corporation until amended in accordance with the provisions thereof, the
articles of incorporation and applicable Law.
Section 2.5. Directors. Subject to applicable Law, the
directors of the Company immediately prior to the Effective Time and three
directors to be determined by Parent in its sole discretion shall be the initial
directors of the Surviving Corporation and shall hold office until their
respective successors are duly elected or appointed and qualified, or their
earlier death, resignation or removal in accordance with the articles of
incorporation and the by-laws of the Surviving Corporation.
Section 2.6. Officers. The officers of the Company immediately
prior to the Effective Time shall be the initial officers of the Surviving
Corporation and shall hold office until their respective successors are duly
elected or appointed and qualified, or their earlier death, resignation or
removal in accordance with the articles of incorporation and the by-laws of the
Surviving Corporation.
Section 2.7. Conversion of Common Shares. At the Effective
Time, by virtue of the Merger and without any action on the part of the holders
thereof, each Common Share issued and outstanding immediately prior to the
Effective Time, including any shares of restricted stock issued pursuant to the
Stock Plans (as defined below) (other than (i) any Common Shares held by Parent,
Purchaser, any direct or indirect wholly owned Subsidiary of Parent or Purchaser
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(the "Parent Shares"), in the treasury of the Company or by any wholly owned
Subsidiary of the Company, which Common Shares shall remain outstanding or in
the treasury of the Company, as the case may be, and (ii) Dissenting Shares (as
defined herein)), shall by virtue of the Merger be cancelled and retired and
shall be converted into the right to receive pursuant to Section 3.2 the Offer
Price, payable to the holder thereof, without interest thereon, upon surrender
of the certificate formerly representing such Common Share or any replacement
certificates representing such Common Shares as may be obtained from the
transfer agent of the Company.
Section 2.8. Conversion of Purchaser Common Stock. Purchaser
has outstanding 100 shares of common stock, par value $0.01 per share, all of
which shares are entitled to vote with respect to approval and adoption of this
Agreement. At the Effective Time, each share of common stock, par value $0.01
per share, of Purchaser issued and outstanding immediately prior to the
Effective Time shall, by virtue of the Merger and without any action on the part
of the holder thereof, be converted into and become [54,483.64] validly issued,
fully paid and non-assessable shares of common stock, par value $0.01 per share,
of the Surviving Corporation.
Section 2.9. Options; Stock Plans.
(a) Prior to the consummation of the Offer, the Company Board
(or, if appropriate, any committee thereof) shall adopt appropriate resolutions
and take all other actions necessary to provide for the cancellation, effective
at the Effective Time, of all the outstanding stock options, all of which are
listed in Section 2.9 of the Company Disclosure Schedule (as defined below) (the
"Stock Options"), heretofore granted under any stock option or similar plan or
agreement of the Company (such stock option or similar plans or agreements being
collectively referred to herein as the "Stock Plans"). Such cancellation shall
occur without any payment therefor except as provided in Section 6.8 with
respect to the substitution therefor of Replacement Awards (as defined below).
(b) The Company shall take all actions necessary to provide
that, effective as of the Effective Time, (i) each of the Stock Plans shall be
terminated, and (ii) the provisions in any other plan, program or arrangement
providing for the issuance or grant of any other interest in respect of the
capital stock of the Company or any of its Subsidiaries shall be deleted.
Section 2.10. Stockholders' Meeting.
(a) If required by applicable Law in order to consummate the
Merger, the Company, acting through the Company Board, shall, in accordance with
applicable Law, and provided that this Agreement shall not have been terminated:
(i) duly call, give notice of, convene and hold a special
meeting of its stockholders (the "Special Meeting") to be held as soon as
practicable following the acceptance for purchase of and payment for Common
Shares by Purchaser pursuant to the Offer for the purpose of considering and
taking action upon this Agreement;
(ii) together with Parent, prepare and file with the SEC a
preliminary proxy statement relating to this Agreement, and use reasonable best
efforts (A) to obtain and furnish the information required to be included by the
SEC in the Proxy Statement (as defined herein) and, after consultation with each
other, to respond as soon as practicable to any comments made by
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the SEC with respect to the preliminary proxy statement and cause a definitive
proxy statement (the "Proxy Statement"), which the parties agree shall comply as
to form in all material respects with all applicable Law, to be mailed to its
stockholders at the earliest practicable date following expiration or
termination of the Offer, and (B) subject to the fiduciary duties of the Company
Board and the Special Committee under applicable Law, to obtain the necessary
approvals of the Merger and this Agreement by the Company stockholders; and
(iii) subject to the fiduciary duties of the Company Board and
the Special Committee under applicable Law, include in the Proxy Statement (x)
the recommendations of the Company Board and the Special Committee that
stockholders of the Company vote in favor of the approval of the Merger and of
this Agreement (except as set forth in the proviso to Section 1.2(a)) and (y)
the Fairness Opinion in accordance with the provisions of Section 1.2(a).
(b) Parent agrees that it will vote, or cause to be voted, all
Common Shares then owned by it, Purchaser or any of Parent's other Subsidiaries
in favor of the approval of this Agreement.
(c) Whenever any event occurs which is required to be set
forth in an amendment or supplement to the Proxy Statement, Parent or the
Company, as the case may be, shall promptly inform the other of each such
occurrence and cooperate in the filing with the SEC and/or mailing to the
Company stockholders of such amendment or supplement. Each of the parties agree
that the information provided by it for inclusion in the Proxy Statement and
each amendment or supplement thereto, at the time of mailing thereof and at the
time of the Special Meeting, will not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading. If, at any time prior to the Effective Time, any
information pertaining to one of the parties or, to such party's knowledge, any
of its affiliates or its officers or directors, contained in or omitted from the
Proxy Statement makes statements contained therein materially false or
misleading, such party shall promptly so advise the other parties and provide
such other parties with the information necessary to make the statements
contained therein not false or misleading. In the event of such advice being
given pursuant to the preceding sentence, the Company and Parent shall cooperate
to promptly file with the SEC (after reasonable opportunity to Parent and the
Company to review and comment thereon) any required amendments or supplements to
the Proxy Statement and, to the extent required by law, disseminate such
amendments or supplements to the Company stockholders.
Section 2.11. Merger without Meeting of Stockholders.
Notwithstanding Section 2.10, in the event that Purchaser shall acquire pursuant
to the Offer such number of Common Shares (the "Threshold Number of Common
Shares") which, when aggregated with the number of Common Shares currently
beneficially owned by Parent, represents 90% of the total number of outstanding
Common Shares on and after giving effect to the date of purchase, the parties
hereto agree to take all necessary and appropriate action to cause the Merger to
become effective as soon as practicable after the acceptance for payment of and
payment for Common Shares by Purchaser pursuant to the Offer without a meeting
of stockholders of the Company, in accordance with and to the extent permitted
by Section 351.447 of the MGBCL.
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ARTICLE III
DISSENTING SHARES; PAYMENT FOR COMMON SHARES
Section 3.1. Dissenting Shares. Notwithstanding Section 2.7 or
3.2, Common Shares outstanding immediately prior to the Effective Time and held
by a holder who has not voted in favor of the Merger or consented thereto in
writing and who has timely demanded and perfected the right, if any, for
appraisal for such Common Shares in accordance with Sections 351.447 and 351.455
of the MGBCL ("Dissenting Shares") shall not be converted into the right to
receive the Offer Price, unless such holder fails to perfect or withdraws or
otherwise loses such holder's right to appraisal. If, after the Effective Time,
such holder fails to perfect or withdraws or loses such holder's right to
appraisal, such Common Shares shall be treated as if they had been converted as
of the Effective Time into a right to receive the Offer Price. The Company shall
give Parent prompt notice of any demands received by the Company for appraisal
of Common Shares, and Parent shall have the right to participate in all
negotiations and proceedings with respect to such demands. The Company shall
not, except with the prior written consent of Parent, make any payment with
respect to, or settle or offer to settle, or otherwise negotiate, any such
demands.
Section 3.2. Payment for Common Shares.
(a) Prior to the Effective Time, Purchaser shall designate a
bank or trust company reasonably acceptable to the Company to act as paying
agent (the "Paying Agent") in effecting the payment of the Offer Price in
respect of certificates that, immediately prior to the Effective Time, represent
Common Shares (the "Certificates") entitled to payment of the Offer Price
pursuant to Section 2.7. At the Effective Time, Parent or Purchaser shall
deposit, or cause to be deposited, in trust with the Paying Agent the aggregate
Offer Price to which holders of Common Shares shall be entitled at the Effective
Time pursuant to Section 2.7.
(b) Promptly after the Effective Time, the Paying Agent shall
mail to each record holder of Certificates a form of letter of transmittal which
shall specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon proper delivery of the Certificates to the
Paying Agent and instructions for use in surrendering such Certificates and
receiving the Offer Price in respect thereof. Upon the surrender of each such
Certificate, together with a duly executed letter of transmittal and any other
required documents, the Paying Agent shall, as soon as practicable, pay the
holder of such Certificate an amount equal to the product of (x) the Offer Price
multiplied by (y) the number of Common Shares formerly represented by such
Certificate, in consideration therefor, and such Certificate shall forthwith be
cancelled. Until so surrendered, each such Certificate (other than Certificates
representing Common Shares held by Parent or Purchaser, any wholly owned
Subsidiary of Parent or Purchaser, in the treasury of the Company or by any
wholly owned Subsidiary of the Company or Dissenting Shares) shall represent
solely the right to receive the aggregate Offer Price relating thereto. No
interest or dividends shall be paid or accrued on the Offer Price. If the Offer
Price (or any portion thereof) is to be delivered to any individual,
corporation, trust, association, unincorporated association, estate,
partnership, joint venture, limited liability company, Governmental Entity (as
defined in Section 4.6) or other legal entity (each, a "Person"), other than the
Person in whose name the Certificate surrendered is registered, it shall be a
condition to such right to receive such
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Offer Price that the Certificate so surrendered shall be properly endorsed or
otherwise be in proper form for transfer, that the signatures on the Certificate
shall be properly guaranteed, and that the Person surrendering such Common
Shares shall pay to the Paying Agent any transfer or other taxes required by
reason of the payment of the Offer Price to a Person other than the registered
holder of the Certificate surrendered, or shall establish to the satisfaction of
the Paying Agent that such taxes have been paid or are not applicable. In the
event any Certificate shall have been lost, stolen or destroyed, the Paying
Agent shall be required to pay the full Offer Price in respect of any Common
Shares represented by such Certificate; however, Parent may require the owner of
such lost, stolen or destroyed Certificate to execute and deliver to the Paying
Agent a form of affidavit claiming such Certificate to be lost, stolen or
destroyed in form and substance reasonably satisfactory to Parent, and the
posting by such owner of a bond in such amount as Parent may determine is
reasonably necessary as indemnity against any claim that may be made against
Parent or the Paying Agent.
(c) Promptly following the date which is 135 days after the
Effective Time, the Paying Agent shall deliver to the Surviving Corporation all
cash, Certificates and other documents in its possession relating to the
transactions contemplated hereby, and the Paying Agent's duties shall terminate.
Thereafter, each holder of a Certificate may surrender such Certificate to the
Surviving Corporation and (subject to applicable abandoned property, escheat and
similar Laws) receive in consideration therefor the aggregate Offer Price
relating thereto, without any interest or dividends thereon, except as required
under applicable Law. Notwithstanding the foregoing, none of Parent, Purchaser,
the Company or the Paying Agent shall be liable to any Person in respect of any
cash delivered to a public official pursuant to any applicable abandoned
property, escheat or similar Law. If any Certificates shall not have been
surrendered immediately prior to such date on which any payment pursuant to this
Article III would otherwise escheat to or become the property of any
Governmental Entity (as defined herein), the cash payment in respect of such
Certificate shall, to the extent permitted by applicable Law, become the
property of the Surviving Corporation, free and clear of all claims or interests
of any Person previously entitled thereto.
(d) Immediately prior to the Effective Time, the stock
transfer books of the Company shall be closed, and, after the Effective Time,
there shall be no transfers on the stock transfer books of the Surviving
Corporation of any Common Shares which were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are presented to the
Surviving Corporation or the Paying Agent, they shall be surrendered and
cancelled in return for the payment of the aggregate Offer Price relating
thereto, as provided in this Article III.
(e) From and after the Effective Time, the holders of
Certificates evidencing ownership of Common Shares outstanding immediately prior
to the Effective Time shall cease to have any rights with respect to such Common
Shares except as otherwise provided herein or by applicable Law. Such holders
shall have no rights, after the Effective Time, with respect to such Common
Shares except to surrender such Certificates in exchange for the Offer Price
pursuant to this Agreement or to perfect any rights of appraisal as a holder of
Dissenting Shares that such holders may have pursuant to Sections 351.447 and
351.455 of the MGBCL.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the schedule delivered to the Parent
prior to the execution of this Agreement (the "Company Disclosure Schedule"),
the Company hereby represents and warrants to Purchaser and Parent as follows:
Section 4.1. Organization and Qualification; Subsidiaries.
(a) Each of the Company and its Subsidiaries (as defined
below) is a corporation or other legal entity duly organized, validly existing
and in good standing under the Laws of the jurisdiction of its incorporation and
has all requisite corporate power and authority to own, lease and operate its
properties and assets and to carry on its businesses as now being conducted and
is qualified to do business and is in good standing as a foreign corporation in
each jurisdiction where the ownership, leasing or operation of its properties or
assets or conduct of its business requires such qualification, except where the
failure to be so qualified or in good standing or to have such power or
authority, would not, individually or in the aggregate, reasonably be expected
to have a Company Material Adverse Effect (as defined below). The Company has
heretofore delivered or made available to Purchaser accurate and complete copies
of the articles of incorporation and by-laws and other organizational documents,
as currently in effect, of the Company and each of its Subsidiaries. As used in
this Agreement, "Subsidiary" shall mean, with respect to any party, any
corporation or other organization, whether incorporated or unincorporated or
domestic or foreign to the United States of which (i) such party or any other
Subsidiary of such party is a general partner or (ii) 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 is, directly or
indirectly, owned or controlled by such party or by any one or more of its
Subsidiaries, or by such party and one or more of its Subsidiaries, excluding
all investment funds (whether organized as partnerships, corporations, limited
liability companies or any other type of entity) for which the Company or any
entity, directly or indirectly, controlled by the Company acts as general
partner, investment advisor or investment manager (collectively, "Conning
Investment Funds"). The term "Company Material Adverse Effect" means any event,
change in or effect on the business of the Company or its Subsidiaries, taken as
a whole, that is or would reasonably be expected to be materially adverse to (i)
the business, results of operations, properties (including intangible
properties), financial condition, assets, agreements or employee base of the
Company and its Subsidiaries, taken as a whole, or (ii) the ability of the
Company to consummate the transactions contemplated hereby or to perform its
obligations under this Agreement, except in the case of either clause (i) or
clause (ii) any change or effect arising out of (x) a decline or deterioration
in the economy in general or the asset management or capital markets in which
the Company and its Subsidiaries operate, (y) this Agreement or the transactions
contemplated hereby or the announcement thereof, or (z) any event caused
primarily by any actions of Parent or its affiliates. Section 4.1(a) of the
Company Disclosure Schedule sets forth a complete list of the Company's
Subsidiaries.
(b) Except as set forth in Section 4.1(b) of the Company
Disclosure Schedule, the Company does not own (i) any equity interest in any
corporation or other entity, or (ii) market-
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able securities where the Company's equity interest in any entity exceeds 5% of
the outstanding equity of such entity on the date hereof.
Section 4.2. Capitalization of the Company and its
Subsidiaries.
(a) The authorized capital stock of the Company consists of:
50,000,000 Common Shares and 20,000,000 shares of preferred stock, par value
$0.01 per share ("Preferred Shares"). As of March 3, 2000, 13,753,359 Common
Shares were issued and outstanding and no Preferred Shares were outstanding. All
Common Shares have been duly authorized, validly issued, and are fully paid,
nonassessable and free of preemptive rights or other similar rights (except for
vesting and transfer restrictions on restricted shares issued under the Stock
Plans). The Company has no commitments to issue or deliver any Common Shares or
Preferred Shares except that, as of the date hereof, a total of 2,185,713 Common
Shares are reserved for issuance pursuant to outstanding Options under the Stock
Plans. Since March 3, 2000, no shares of the Company's capital stock have been
issued other than pursuant to Options already in existence on such date, and no
Options have been granted. Section 4.2 of the Company Disclosure Schedule
contains a correct and complete list of each outstanding Option, including the
holder, date of grant, exercise price and number of Shares subject thereto. Each
of the outstanding shares of capital stock or other securities of each of the
Company's Subsidiaries is duly authorized, validly issued, fully paid and
nonassessable and owned by the Company or by a direct or indirect wholly owned
Subsidiary of the Company, free and clear of any Lien (as defined below). Except
as set forth above or in Section 4.2 of the Company Disclosure Schedule, there
are no Common Shares or Preferred Shares authorized, reserved, issued or
outstanding and there are no preemptive or other outstanding rights,
subscriptions, options, warrants, stock appreciation rights, redemption rights,
repurchase rights, convertible, exercisable, or exchangeable securities or other
agreements, arrangements or commitments of any character relating to the issued
or unissued share capital or other ownership interest of the Company or any of
its Subsidiaries or any other securities or obligations convertible or
exchangeable into or exercisable for, or giving any Person a right to subscribe
for or acquire, any securities of the Company or its Subsidiaries, and no
securities evidencing such rights are authorized, issued or outstanding. The
Company does not have outstanding any bonds, debentures, notes or other
obligations the holders of which have the right to vote (or convertible or
exchangeable into or exercisable for securities having the right to vote) with
the stockholders of the Company on any matter. For purposes of this Agreement,
"Lien" means, with respect to any asset (including any security) any option,
claim, mortgage, lien, pledge, charge, security interest or encumbrance or
restrictions of any kind in respect of such asset.
(b) There are no voting trusts or other agreements or
understandings to which the Company or any of its Subsidiaries is a party with
respect to the voting of the capital stock of the Company or any of the
Subsidiaries.
Section 4.3. Authority Relative to This Agreement; Consents
and Approvals.
(a) The Company has all the necessary corporate power and
authority, and has taken all corporate action necessary, to execute, deliver and
perform this Agreement and to consummate the transactions contemplated hereby in
accordance with the terms hereof, subject only to the matters set forth in
Section 4.6 and to obtaining the necessary approval of this Agreement
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by the holders of at least two-thirds of the outstanding Common Shares entitled
to vote on the matter (provided, however, that no vote of the Company
stockholders shall be necessary if Parent shall acquire pursuant to the Offer,
the Threshold Number of Common Shares). This Agreement has been duly and validly
executed and delivered by the Company and, assuming the due authorization,
execution and delivery hereof by each of Parent and Purchaser, constitutes a
valid, legal and binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as may be subject to applicable
bankruptcy, insolvency or other similar Laws, now or hereafter in effect,
affecting creditors' rights generally.
(b) Each of the Special Committee and the Company Board have
duly and validly approved this Agreement and the Special Committee has received
the Fairness Opinion from the Financial Advisor.
Section 4.4. SEC Reports; Financial Statements.
(a) Since December 11, 1997, except as set forth in Section
4.4(a) of the Company Disclosure Schedule, the Company and its Subsidiaries have
filed with the SEC all forms, reports, schedules, statements and other documents
required to be filed by it with the SEC pursuant to the Securities Act of 1933,
as amended (including the rules and regulations promulgated thereunder the
"Securities Act") and the Exchange Act (any such documents filed prior to the
date hereof being collectively, the "Company SEC Documents"). The Company SEC
Documents, including any financial statements or schedules included therein, at
the time filed, or in the case of registration statements on their respective
effective dates, (i) complied in all material respects with the applicable
requirements of the Exchange Act and the Securities Act, as the case may be, and
(ii) did not at the time filed (or, in the case of registration statements, at
the time of effectiveness), contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading. The financial statements included in the
Company SEC Documents (the "Financial Statements"), (i) have been prepared from,
and are in accordance with, the books and records of the Company and its
Subsidiaries, (ii) complied in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto, (iii) have been prepared in accordance with United States
generally accepted accounting principles applied on a consistent basis ("GAAP")
during the periods involved (except as may be indicated in the notes thereto),
and (iv) fairly present the consolidated financial position and the consolidated
results of operations and cash flows (and changes in financial position, if any)
of the Company and its Subsidiaries as of the times and for the periods referred
to therein, except that any such Financial Statements that are unaudited,
interim financial statements are subject to normal and recurring year-end
adjustments.
(b) The Company has heretofore delivered or made available to
Purchaser, in the form filed with the SEC (including any amendments thereto),
(i) its Annual Reports on Form 10-K for each of the three fiscal years ended
December 31, 1997 and 1998, (ii) all definitive proxy statements relating to the
Company's meetings of stockholders (whether annual or special) held since
January 1, 1998, and (iii) all other reports (other than Quarterly Reports on
Form 10-Q) or registration statements filed by the Company with the SEC since
December 11, 1997.
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(c) The Company has heretofore delivered or made available to
Purchaser a complete and correct copy of any amendments or modifications, which
have not yet been filed by the Company with the SEC, to all agreements,
documents or other instruments which previously had been so filed by the Company
and are currently in effect.
Section 4.5. Proxy Statement; Offer Documents. The Proxy
Statement will comply in all material respects with the Securities Act and the
Exchange Act, except that no representation is made by the Company with respect
to information supplied by Parent for inclusion in the Proxy Statement. None of
the information supplied by the Company in writing for inclusion in the Offer
Documents or provided by the Company in the Schedule 14D-9 will, at the
respective times that the Offer Documents and the Schedule 14D-9 are filed with
the SEC and are first published or sent or given to holders of Common Shares,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
Section 4.6. Consents and Approvals; No Violations. No filing
with or notice to, and no permit, authorization, registration, consent or
approval of, any court or tribunal or administrative, governmental or regulatory
body, agency, authority or other entity (a "Governmental Entity") is required on
the part of the Company or any of its Subsidiaries for the execution, delivery
and performance by the Company of this Agreement or the consummation by the
Company of the transactions contemplated hereby, except (i) as set forth in
Section 4.6 of the Company Disclosure Schedule, (ii) pursuant to the applicable
requirements of the Securities Act, the Exchange Act and the Investment Advisors
Act of 1940, as amended (the "Advisors Act"), (iii) the delivery of the articles
of merger pursuant to the MGBCL, (iv) to comply with state securities or
"blue-sky" Laws, or (v) where the failure to obtain such permits,
authorizations, consents or approvals or to make such filings or give such
notice would not reasonably be expected to have a Company Material Adverse
Effect. Neither the execution, delivery and performance of this Agreement by the
Company nor the consummation by the Company of the transactions contemplated
hereby will (A) conflict with or result in any breach, violation or infringement
of any provision of the respective articles of incorporation or by-laws (or
similar governing documents) of the Company or of any its Subsidiaries, (B)
except as set forth in Section 4.6 of the Company Disclosure Schedule, result in
a breach, violation or infringement of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to the creation of any
Lien or any right of termination, amendment, cancellation or acceleration)
under, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, lease, license, contract, agreement or other instrument or
obligation, whether written or oral (each a "Contract"), to which the Company or
any of its Subsidiaries is a party or by which any of them or any of their
respective properties or assets may be bound, (C) change the rights or
obligations of any party under any Contract, or (D) violate or infringe any Law
applicable to the Company or any of its Subsidiaries or any of their respective
properties or assets, except in the case of (B), (C) or (D) for breaches,
violations, infringements, defaults or changes which would not, individually or
in the aggregate, reasonably be expected to have a Company Material Adverse
Effect. Section 4.6 of the Company Disclosure Schedule sets forth a list,
correct and complete in all material respects, of material Contracts of the
Company and its Subsidiaries pursuant to which consents or waivers are or may be
required prior to consummation of the transactions contemplated by this
Agreement (whether or not subject to the exception set forth with respect to
clauses (B), (C) and (D) above).
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Section 4.7. No Default. None of the Company or any of its
Subsidiaries is in default or violation (and no event has occurred which with
notice or the lapse of time or both would constitute a default or violation) of
any term, condition or provision of (i) its articles of incorporation or by-laws
(or similar governing documents), (ii) any Contract to which the Company or any
of its Subsidiaries is now a party or by which any of them or any of their
respective properties or assets may be bound, or (iii) any Law applicable to the
Company, any of its Subsidiaries or any of their respective properties or
assets, except in the case of clause (ii) or (iii) of this sentence for
violations, breaches or defaults that would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.
Section 4.8. No Undisclosed Liabilities. Except as set forth
in the Company SEC Documents, neither the Company nor any of its Subsidiaries
has incurred any, or has knowledge of any facts or circumstances that could give
rise to any, liabilities or obligations of any nature, whether or not accrued,
contingent, fixed, matured or otherwise, and whether or not required to be
disclosed, that have, or would reasonably be expected to have, a Company
Material Adverse Effect.
Section 4.9. Litigation. Except as set forth in Section 4.9 of
the Company Disclosure Schedule, there is no civil, criminal or administrative
suit, claim, hearing, inquiry, action, proceeding or investigation (each an
"Action") pending or, to the knowledge of the Company, threatened against the
Company or any of its Subsidiaries or any of their respective properties or
assets, or which would make the Company or any of its Subsidiaries a party in
such Action, except as would not, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect. Except as disclosed in
Section 4.9 of the Company Disclosure Schedule, neither the Company nor any of
its Subsidiaries is subject to any outstanding order, writ, injunction or
decree, except as would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect.
Section 4.10. Permits. Except as set forth in Section 4.10 of
the Company Disclosure Schedule, the Company and its Subsidiaries hold all
permits, licenses, variances, exemptions, orders and other authorizations,
consents and approvals of all Governmental Entities necessary for the conduct of
their respective businesses as presently conducted (the "Company Permits"),
except for failures to hold such Company Permits which would not, individually
or in the aggregate, reasonably be expected to have a Company Material Adverse
Effect. Except as set forth in Section 4.10 of the Company Disclosure Schedule,
the Company and its Subsidiaries are in compliance with the terms of the Company
Permits, except where the failure so to comply would not reasonably be expected
to have a Company Material Adverse Effect. Except as set forth in Section 4.10
of the Company Disclosure Schedule, the businesses of the Company and its
Subsidiaries are not being, and have not been, conducted in violation of any Law
except for violations which individually or in the aggregate would not
reasonably be expected to have a Company Material Adverse Effect. Except as set
forth in Section 4.10 of the Company Disclosure Schedule, no investigation or
review by any Governmental Entity with respect to the Company or any of its
Subsidiaries is pending or, to the knowledge of the Company, threatened nor, to
the knowledge of the Company, has any Governmental Entity indicated an intention
to conduct the same, except where such investigation or review would not
reasonably be expected to have a Material Adverse Effect.
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Section 4.11. Employee Benefit Matters.
(a) For purposes of this Agreement, "Company Employee Benefit
Plans" means all "employee benefit plans," as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and all
other material employee benefit or compensation arrangements, including, any
such arrangements providing severance pay, sick leave, vacation pay, salary
continuation for disability, retirement benefits, deferred compensation, bonus
pay, incentive pay, stock options (including those held by directors, employees,
and consultants), hospitalization insurance, medical insurance, life insurance,
scholarships or tuition reimbursements, in each case that are maintained by the
Company or any of its Subsidiaries or to which the Company or any of its
Subsidiaries is obligated to contribute thereunder for current or former
directors, employees, independent contractors, consultants and leased employees
of the Company or any of its Subsidiaries.
(b) Except as set forth in Section 4.11 of the Company
Disclosure Schedule or as otherwise contemplated by this Agreement, (i) the
execution of, and performance of the transactions contemplated in this Agreement
will not, either alone or upon the occurrence of subsequent events, result in
any material payment (whether of severance pay or otherwise), acceleration,
forgiveness of indebtedness, vesting, distribution, increase in benefits or
obligation to fund benefits with respect to any employee or Company Employee
Benefit Plan, and (ii) there are no material employment or severance agreements
or material severance policies applicable to the Company or any of its
Subsidiaries.
(c) The Company Employee Benefit Plans have been maintained in
all material respects in accordance with their terms and with all provisions of
ERISA and the Internal Revenue Code of 1986, as amended (including rules and
regulations thereunder) (the "Code") and all other applicable federal and state
laws and regulations, except for failures to so maintain which, individually or
in the aggregate, would not reasonably be expected to have a Company Material
Adverse Effect.
(d) Except for matters which, individually or in the
aggregate, could not reasonably be expected to have a Company Material Adverse
Effect, there is no (i) unfair labor practice, labor dispute (other than routine
individual grievances) or labor arbitration proceeding pending or, to the
knowledge of the Company, threatened against the Company or any of its
Subsidiaries relating to any of their businesses, (ii) activity or proceeding by
a labor union or representative thereof to organize any employees of the Company
or any of its Subsidiaries, or (iii) lockouts, strikes, slowdowns, work
stoppages or threats thereof by or with respect to such employees. The Company
is in compliance with all Laws regarding employment, employment practices, terms
and conditions of employment and wages, except for such noncompliance which,
either individually or in the aggregate, would not reasonably be expected to
have a Company Material Adverse Effect.
(e) Each material Company Employee Benefit Plan is listed in
Section 4.11 of the Company Disclosure Schedule and has been made available to
Parent.
(f) Except as set forth in Section 4.11 of the Company
Disclosure Schedule, each material Company Benefit Plan is set forth in a
written plan document.
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Section 4.12. Brokers. No broker, finder or investment banker
(other than the Financial Advisor, a true and correct copy of whose engagement
agreement has been provided to Purchaser) is entitled to any brokerage, finder's
or other fee or commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of the Company. Except as
set forth in Section 4.12 of the Company Disclosure Schedule no material
financial advisory, legal, accounting, consulting or other fees and expenses are
payable by or on behalf of the Company or any of its Subsidiaries in connection
with this Agreement.
Section 4.13. Absence of Certain Changes. Except as set forth
in Section 4.13 of the Company Disclosure Schedule, since September 30, 1999,
the Company and each of its Subsidiaries have conducted their respective
businesses only in, and have not engaged in any material transaction other than
according to, the ordinary course of business and consistent with past practice,
and (i) there has not been any change, development or combination of changes or
developments that, individually or in the aggregate, has had or could reasonably
be expected to have a Company Material Adverse Effect; (ii) there has not been
any damage, destruction, theft or other casualty loss with respect to any
material asset or property owned, leased or otherwise used by the Company or any
of its Subsidiaries, whether or not covered by insurance, except for such
damage, destruction, theft or other casualty loss which would not, individually
or in the aggregate, reasonably be expected to have a Company Material Adverse
Effect; and (iii) the Company has not taken any of the actions set forth in
paragraphs (a) through (p) of Section 6.1.
Section 4.14. Taxes.
(a) Except as set forth in Section 4.14 of the Company
Disclosure Schedule each of the Company and its Subsidiaries have timely filed
(or have had timely filed on their behalf) or will timely file or cause to be
timely filed all Tax Returns required by applicable Law to be filed by any of
them prior to or as of the Effective Time. All such Tax Returns and amendments
thereto are or will be true, complete and correct in all material respects.
(b) Each of the Company and its Subsidiaries have paid (or
have had paid on their behalf), or, where payment is not yet due, have
established an adequate accrual on the books and records of the Company and its
Subsidiaries for the payment of, all Taxes due with respect to any period (or
portion thereof) ending on or prior to the Effective Time.
(c) To the Company's knowledge, except as set forth in Section
4.14(c) of the Company Disclosure Schedule, no audit by a Tax authority is
pending or threatened with respect to any Tax Returns filed by, or Taxes due
from, the Company or its Subsidiaries. No issue has been raised by a Tax
authority in any audit of the Company or any of its Subsidiaries that if raised
with respect to any other period not so audited could be expected to result in a
proposed deficiency for any period not so audited. To the Company's knowledge,
no claim has ever been made by an authority in a jurisdiction in which the
Company or any of its Subsidiaries does not file Tax Returns that the Company or
such Subsidiary is or may be subject to taxation by that jurisdiction. No
deficiency or adjustment for any Taxes has been threatened, proposed, asserted
or assessed against the Company or its Subsidiaries. There are no Liens for
Taxes upon the assets of the Company or its Subsidiaries, except Liens for
current Taxes not yet due for which adequate reserves have been established in
accordance with GAAP. The federal income Tax Returns of the Company and each of
its Subsidiaries consolidated in such returns have been ex-
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amined by and settled with the IRS for all years through 1994. The Company has
made available to Parent true and complete copies of all federal, and all
material state, local and foreign, income Tax Returns filed by the Company or
any of its Subsidiaries for any of the taxable periods that remains open, as of
the date hereof, for examination or assessment of Tax.
(d) Neither the Company nor any of its Subsidiaries has given
or been requested to give any waiver of statutes of limitations relating to the
payment of any Taxes or have executed powers of attorney with respect to any Tax
matters, which will be outstanding as of the Effective Time.
(e) Neither the Company nor any of its Subsidiaries is a party
to, or is bound by, any Tax sharing, Tax indemnity, cost sharing, or similar
agreement or policy relating to Taxes.
(f) None of the Company or any of its Subsidiaries has made an
election under Section 341(f) of the Code.
(g) Neither the Company nor any Subsidiary has any liability
for Taxes of any Person (other than the Company and its Subsidiaries) under
Treasury Regulation Section 1.1502-6 (or any comparable provision of state,
local or foreign Law) as a transferee or successor, by contract or otherwise.
(h) For purposes of this Agreement, the term "Taxes" means all
taxes, charges, fees, levies or other assessments, including income, gross
receipts, excise, property, sales, use, transfer, license, payroll, withholding,
export, import, customs, capital stock and franchise taxes or duties, imposed by
the United States or any state, local or foreign government or subdivision or
agency thereof, including any interest, penalties or additions thereto. For
purposes of this Agreement, the term "Tax Return" means any report, return or
other information or document required to be supplied to a Tax authority in
connection with Taxes.
Section 4.15. Intellectual Property.
(a) Except as disclosed in Company Reports filed prior to the
date hereof or as would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect: To the Company's knowledge,
there do not exist any grounds for any bona fide claims (A) to the effect that
the use of any product as now used by the Company or any of its Subsidiaries,
infringes on any copyright, patent, trademark, trade name, service mark or trade
secret; (B) against the use by the Company or any of its Subsidiaries, of any
copyrights, patents, trademarks, trade names, service marks, trade secrets,
technology, know-how or computer software programs and applications used in the
business of the Company or any of its Subsidiaries as currently conducted; (C)
challenging the ownership, validity or effectiveness of any of the material
Company Intellectual Property Rights or other trade secret material to the
Company; or (D) challenging the license or legally enforceable right to use of
the material Third-Party Intellectual Rights by the Company or any of its
Subsidiaries.
(b) As used in this Agreement, the term (x) "Intellectual
Property" means all patents, trademarks, trade names, service marks, copyrights
and any applications therefor, technology, know-how, trade secret, computer
software programs or applications, and tangible or intangible proprietary
information or materials; (y) "Third-Party Intellectual Property Rights" means
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any third-party patents, trademarks, trade names, service marks and copyrights;
and (z) "Company Intellectual Property Rights" means the patents, registered and
material unregistered trademarks, trade names and service marks, registered
copyrights, and any applications therefor owned by or licensed to the Company or
any of its Subsidiaries.
Section 4.16. Opinion of Financial Advisor. The Financial
Advisor has delivered its written opinion (the "Fairness Opinion") to the
Special Committee to the effect that, based on, and subject to, the various
assumptions and qualifications set forth in such opinion, as of the date of such
opinion, the Offer Price to be received in the transactions contemplated hereby
by the holders of Common Shares (other than Parent and its affiliates, including
the Company and its wholly owned Subsidiaries) is fair from a financial point of
view to such holders, and such opinion has not been withdrawn or modified prior
to consummation of the Offer or prior to the Effective Time, a copy of which
opinion has been delivered to Purchaser.
Section 4.17. Material Contracts. Except as disclosed in
Section 4.17 of the Company Disclosure Schedule, all of the Contracts of the
Company and its Subsidiaries that are required to be described in the Company
SEC Documents or to be filed as exhibits thereto are described in the Company
SEC Documents or filed as exhibits thereto, respectively, and are in full force
and effect and, upon consummation of the Offer and the Merger, shall continue in
full force and effect without penalty, acceleration, termination, repurchase
right or other adverse consequence, except where such failure to continue in
full force and effect would not reasonably be expected to have a Material
Adverse Effect. Promptly following the date of this Agreement, true and complete
copies of all such Contracts will be delivered or made available by the Company
to Parent. Neither the Company nor any of its Subsidiaries nor, to the knowledge
of the Company, any other party is in breach of or in default under any such
Contract except for such breaches and defaults as would not, individually or in
the aggregate, reasonably be expected to have a Company Material Adverse Effect.
Section 4.18. Insurance. Section 4.18 of the Company
Disclosure Schedule lists the Company's and its Subsidiaries' material insurance
policies or bonds in effect prior to January 6, 2000 (the "Prior Insurance
Policies"). There is no material claim pending under any of the Company's or any
of its Subsidiary's Prior Insurance Policies as to which coverage has been
questioned, denied or disputed by the underwriters of such Prior Insurance
Policies. All premiums due and payable under all such Prior Insurance Policies
have been paid and the Company and its Subsidiaries are otherwise in compliance
in all material respects with the terms of such Prior Insurance Policies. The
Company has no knowledge of any threatened termination of, or material premium
increase with respect to, any such Prior Insurance Policies.
Section 4.19. Affiliated Transactions. Neither the Company nor
any of its Subsidiaries nor any of their respective officers, directors,
employees or affiliates (nor any individual related by blood, marriage or
adoption to any such individual) is a party to any agreement, contract,
commitment, transaction or understanding with or binding upon the Company or any
of its Subsidiaries or any of their respective assets or has engaged in any
transaction with any of the foregoing within the last 12 months, except (x) for
such agreements, contracts, commitments, transactions or understandings with or
binding upon Parent or any of its Subsidiaries, and (y) as set forth on Section
4.11 and Section 4.19 of the Company Disclosure Schedule and except for
customary payments to employees, officers or directors in the ordinary course of
business con-
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sistent with past practice for services rendered in their capacity as employees,
officers or directors.
Section 4.20. Investment Contracts, Funds and Clients.
(a) None of the Company's Subsidiaries provides investment
management, investment advisory, sub advisory, administration, distribution or
certain other services to any Person which is registered as an investment
company under the Investment Company Act of 1940 (the "1940 Act") and which has
been sponsored by the Company or one of its Subsidiaries.
(b) Each of the Company's domestic Subsidiaries (each an
"Advisory Entity" and, collectively "Advisory Entities"), a complete list of
which has previously been made available by the Company to the Parent, that
provides investment management, investment advisory or sub-advisory services to
any Person (each an "Advisory Client") is duly registered with the SEC or an
appropriate state regulatory authority as an investment adviser and is in
compliance with all applicable provisions of the Investment Advisers Act of
1940, as amended (the "Advisers Act"), except for such non-compliance or would
not, individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect. The Company is not an Advisory Entity.
(c) Each Advisory Entity has operated and is currently
operating in compliance with all Laws applicable to it or its business except
for such noncompliance as would not, individually or in the aggregate, be
reasonably expected to have a Company Material Adverse Effect. Each Advisory
Entity has been and is in compliance with each Investment Contract to which it
is a party, except as would not, individually or in the aggregate, be reasonably
expected to have a Company Material Adverse Effect.
(d) Except as would not individually or in the aggregate,
reasonably be expected to have a Company Material Adverser Effect, the accounts
of each Advisory Client subject to ERISA have been managed by the applicable
Company Subsidiary in compliance in all material respects with the applicable
requirements of ERISA.
Section 4.21. Company Broker/Dealers.
(a) Certain of the Company's Subsidiaries operate
broker/dealer operations (collectively, the "Company Broker/Dealers"). Each
Company Broker/Dealer that is required to be registered as a broker-dealer with
the SEC or under applicable state Laws, is so registered and is registered with
each other Governmental Entity with which it is required to register in order to
conduct its business as now conducted, and is and has been since January 1, 1997
in full compliance with all applicable Laws thereunder, except for any failures
to register or comply which would not, individually or in the aggregate, be
reasonably expected to have a Company Material Adverse Effect. Each Company
Broker/Dealer is a member organization in good standing of the NASD and such
other organizations in which its membership is required in order to conduct its
business as now conducted except such failures to be in good standing or such
memberships the failure to have or maintain which would not, individually or in
the aggregate, be reasonably expected to have a Company Material Adverse Effect.
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(i) Except as would not, individually or in the aggregate, be
reasonably expected to have a Company Material Adverse Effect, (x) no Company
Broker/Dealer is, nor is any "associated person" of it, subject to a "statutory
disqualification" (as such terms are defined in the Exchange Act) or 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 the Company as 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, (y) to the Company's
knowledge, there are no proceedings or investigations pending by any
Governmental Entity or self-regulatory organization that is reasonably likely to
result in any such censure, limitations, suspension or revocation.
(ii)Except as would not, individually or in the aggregate, be
reasonably expected to have a Company Material Adverse Effect, since its
inception, each Company Broker/Dealer has had net capital (as such term is
defined in Rule 15c3-1 under the Exchange Act) that satisfies the minimum net
capital requirements of the Exchange Act and of the Laws of any jurisdiction in
which such company conducts business.
Section 4.22. Takeover Statutes; Charter. The Company has
taken, all necessary action within its control to exempt the Merger, the Offer
and the other transactions contemplated by this Agreement from any restrictive
provision of any "fair price," "moratorium," "control share acquisition,"
"interested shareholder" or other anti-takeover statute or regulation (each a
"Takeover Statute") or any restrictive provision of any applicable anti-takeover
provision in the Company's charter and by-laws.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PARENT AND PURCHASER
Parent and Purchaser represent and warrant to the Company as
follows:
Section 5.1. Organization and Qualification; Subsidiaries.
Parent is a life insurance company duly organized, validly existing and in good
standing under the Laws of the State of New York, and Purchaser is a corporation
duly organized, validly existing and in good standing under the Laws of the
State of Missouri, and each of Parent and Purchaser has all requisite power and
authority to own, lease and operate its properties and assets, and to carry on
its business as now being conducted, except where the failure to be so
organized, existing and in good standing or to have such power and authority
would not reasonably be expected to have in the aggregate a Purchaser Material
Adverse Effect (as defined below) on Purchaser or Parent. When used in
connection with Purchaser or Parent, the term "Purchaser Material Adverse
Effect" means any change or effect that is materially adverse to the ability of
each of Purchaser or Parent to consummate the transactions contemplated hereby
or to perform its obligations under this Agreement.
Section 5.2. Authority Relative to This Agreement. Each of
Parent and Purchaser has all necessary power and authority, and has taken all
action necessary, to execute, deliver and perform this Agreement and to
consummate the transactions contemplated hereby in
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accordance with the terms hereof. This Agreement constitutes a valid, legal and
binding agreement of each of Parent and Purchaser, enforceable against each of
Parent and Purchaser in accordance with its terms, except as may be subject to
applicable bankruptcy, insolvency or other similar Laws, now or hereafter in
effect, affecting creditors' rights generally.
Section 5.3. Consents and Approvals; No Violations. (a) No
filing with or notice to, and no permit, authorization, registration, consent or
approval of, any Governmental Entity is required on the part of Parent or
Purchaser for the execution, delivery and performance by the Parent and
Purchaser of this Agreement or the consummation by the Parent and Purchaser of
the transactions contemplated hereby, except (i) pursuant to the applicable
requirements of the Securities Act and the Exchange Act, (ii) the delivery of
the articles of merger pursuant to the MGBCL, (iii) to comply with state
securities or "blue-sky" Laws, (iv) required to be made with the NASD and other
applicable self-regulatory organizations, or (v) where the failure to obtain
such permits, authorizations, consents or approvals or to make such filings or
give such notice would not reasonably be expected to have a Parent Material
Adverse Effect. Neither the execution, delivery and performance of this
Agreement by each of Parent and Purchaser nor the consummation by each of Parent
and Purchaser of the transactions contemplated hereby will (A) conflict with or
result in any breach, violation or infringement of any provision of the
respective articles of incorporation or by-laws (or similar governing documents)
of Parent, Purchaser or any of their respective Subsidiaries, (B) result in a
breach, violation or infringement of, or constitute (with or without due notice
or lapse of time or both) a default (or give rise to the creation of any Lien or
any right of termination, amendment, cancellation or acceleration) under, any of
the terms, conditions or provisions of any Contract to which Parent, Purchaser
or any of their respective Subsidiaries is a party or by which any of them or
any of their respective properties or assets may be bound or (C) violate any Law
applicable to Parent, Purchaser or any of their respective Subsidiaries or any
of their respective properties or assets, except in the case of clauses (B) or
(C) for breaches, violations, infringements or defaults which would not,
individually or in the aggregate, reasonably be expected to have a Purchaser
Material Adverse Effect.
(b) Upon consummation of the transactions contemplated hereby,
each of Parent and the Surviving Corporation (i) will not become insolvent, (ii)
will not be left with unreasonably small capital, (iii) will not have incurred
debts beyond its ability to pay all of its debts as they mature, and (iv) will
not have its capital impaired.
Section 5.4. Proxy Statement; Schedule 14D-9. None of the
information supplied or to be supplied by Parent or Purchaser in writing for
inclusion in the Proxy Statement, if any, the Schedule 14D-9 or other filings
with the SEC required to effectuate the transactions contemplated by this
Agreement will, at the respective times that the Proxy Statement, if any, the
Schedule 14D-9 or such other filings are filed with the SEC and are first
published or sent or given to holders of Common Shares, and in the case of the
Proxy Statement, if any, at the time that it or any amendment or supplement
thereto is mailed to the Company's stockholders, at the time of the Special
Meeting or at the Effective Time, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. All information to be supplied by
Parent and Purchaser to the Company will be supplied promptly and without delay.
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Section 5.5. Financing. Parent has available, and will provide
Purchaser with all funds necessary to consummate the Merger and the transactions
contemplated by this Agreement. In no event shall the receipt or availability of
any funds or financing by Parent or any affiliate or any other financing or
other transactions be a condition to any of Parent's obligations hereunder or to
the consummation of the Merger.
Section 5.6. Ownership of Company Capital Stock. Except for
the Parent's Common Shares and except as listed on Section 5.6 of the Parent
Disclosure Schedule, neither Parent nor, to its knowledge, any of its
subsidiaries or affiliates (other than the Company), (i) beneficially owns
directly or indirectly, or (ii) is party to any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of, in
each case, shares of capital stock of the Company or securities convertible into
or exchangeable for shares of capital stock of the Company.
Section 5.7. Conduct of Business of Purchaser. Purchaser was
formed solely for the purpose of engaging in the transactions contemplated
hereby, has engaged in no other business activities and has conducted its
operations only as contemplated hereby.
ARTICLE VI
COVENANTS
Section 6.1. Conduct of Business of the Company. Except (i) as
set forth in Section 6.1 of the Disclosure Schedule, (ii) as expressly
contemplated by this Agreement, (iii) as agreed in writing by Purchaser, during
the period from the date hereof to the Effective Time, the Company will, and
will cause each of its Subsidiaries to, conduct its and their respective
operations only in the ordinary course of business consistent with past practice
and will use its reasonable best efforts, and will cause each of its
Subsidiaries to use its reasonable best efforts, to preserve intact its current
business organization of the Company and each of its Subsidiaries, to keep
available the services of its and their present officers and key employees, and
to preserve its business relationships including customers.
Without limiting the generality of the foregoing, and except
as expressly provided otherwise in this Agreement or as set forth in Section 6.1
of the Company Disclosure Schedule, after the date hereof and prior to the
earlier of the (i) Effective time or (ii) termination of this Agreement, the
Company will not and will cause its subsidiaries not to, without the prior
written consent of Parent (and Parent shall, in the event any such consent is
requested by the Company, respond within seven days):
(a) amend or propose to amend its articles of incorporation or
by-laws or other organizational documents;
(b) (i) issue, reissue or sell, or authorize the issuance,
reissuance or sale of (A) additional shares of capital stock of any class, or
securities convertible into or exercisable or exchangeable for any capital stock
of any class, or any rights, warrants or options to acquire any convertible
securities or capital stock, other than the issuance of Common Shares, in
accordance with the terms of the instruments governing such issuance on the date
hereof, pursuant to the ex-
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ercise or conversion of Options outstanding on the date hereof, or (B) any other
securities in respect of, in lieu of, or in substitution for, Common Shares or
any other capital stock of any class outstanding on the date hereof; (ii) make
any other changes in its capital structure;
(c) split, combine or reclassify any shares of its capital
stock, declare, set aside or pay any dividend or other distribution (whether in
cash, stock or property or any combination thereof) in respect of its capital
stock (other than regular quarterly dividends consistent in timing with past
practice and not to exceed $0.05 per share per quarter), or redeem or otherwise
acquire any of its securities or any securities of its Subsidiaries;
(d) (i) incur or assume any long-term or short-term debt or
issue any debt securities, except for borrowings under existing lines of credit
in the ordinary course of business consistent with past practice ; (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other Person except in the
ordinary course of business consistent with past practice , and except for
obligations of wholly owned Subsidiaries of the Company to the Company or to
other wholly owned Subsidiaries of the Company; (iii) except for a capital
commitment of $20 million to Conning Capital Partners VI L.P. and capital
contributions to other Conning Investment Funds that have been committed as of
the date hereof or are made in the ordinary course of business as set forth in
Section 6.1 of the Company Disclosure Schedule (in amounts not to exceed the
amounts so scheduled), make any loans, advances or capital contributions to, or
investments in, any other Person (other than to wholly owned Subsidiaries of the
Company or customary loans or advances to employees in the ordinary course of
business consistent with past practice) or make any change in its existing
borrowing or lending arrangements for or on behalf of any such Person, whether
pursuant to an employee benefit plan or otherwise; (iv) pledge or otherwise
encumber shares of capital stock of the Company or any of its Subsidiaries; or
(v) mortgage or pledge any of its material assets, tangible or intangible, or
create or suffer to exist any material Lien thereupon;
(e) adopt a plan providing for the complete or partial
liquidation, dissolution, consolidation, merger, restructuring or
recapitalization of the Company or any of its Subsidiaries, or any resolutions
relating to any of the foregoing;
(f) increase in any manner the compensation or fringe benefits
payable or to become payable to any director, officer or, employee, except, in
the case of employees, only for normal increases in the ordinary course of
business consistent with past practice that, in the aggregate, do not result in
a material increase in benefits or compensation expense to the Company, or pay
or award any benefit not required by any existing plan or arrangement to any
officer, director or employee (including the granting of stock options, stock
appreciation rights, shares of restricted stock or performance units pursuant to
the Stock Plans or otherwise), or grant any severance or termination pay to any
officer, director or other employee of the Company or any of its Subsidiaries,
or enter into any employment or severance agreement with any director, officer
or other employee of the Company or any of its Subsidiaries or establish, adopt,
enter into, amend, or waive any performance or vesting criteria under any plan
for the benefit or welfare of any current or former directors, officers or
employees of the Company or its Subsidiaries or their beneficiaries or
dependents (any of the foregoing being an "Employee Benefit Arrangement"),
except, in each case, to the extent required by applicable Law;
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(g) acquire, sell, transfer, lease, encumber or dispose of (i)
any assets outside the ordinary course of business consistent with past practice
or (ii) any assets which in the aggregate are material to the Company and its
Subsidiaries taken as a whole, or enter into any commitment or transaction
outside the ordinary course of business consistent with past practice which
would be material to the Company and its Subsidiaries taken as a whole;
(h) except as may be required as a result of a change in Law
or in GAAP, change any of the accounting principles, practices or methods used
by the Company or any of its Subsidiaries;
(i) revalue in any material respect any of the Company's or
any of its Subsidiaries' assets, including writing off notes or accounts
receivable other than in the ordinary course of business consistent with past
practice;
(j) (i) acquire (by merger, consolidation, or acquisition of
stock or assets) any corporation, partnership or other business organization or
division thereof or any equity interest therein; (ii) enter into any contract or
agreement other than in the ordinary course of business consistent with past
practice which would be material to the Company and its Subsidiaries taken as a
whole; (iii) authorize any new capital expenditure(s) which, individually, is in
excess of $100,000 or, in the aggregate, are in excess of $300,000; or (iv)
enter into or amend any Contract providing for the taking of any action that
would be prohibited hereunder;
(k) make any Tax election (unless required by Law), settle or
compromise any Tax liability of the Company or any of its Subsidiaries or any
pending or threatened suit, action or claim relating to any potential or actual
Tax liability of the Company or any of its Subsidiaries, change any method of
accounting for Tax purposes or file (other than in a manner consistent with past
practice or as required by Law) any Tax Return;
(l) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the ordinary
course of business of liabilities reflected or reserved against in, or
contemplated by, the consolidated financial statements (or the notes thereto) of
the Company and its Subsidiaries or incurred in the ordinary course of business
consistent with past practice;
(m) enter into any obligation to indemnify any officer or
director of the Company or any Subsidiary not otherwise provided under a current
charter, by-law or other similar governing instrument or indemnity agreement in
existence on January 6, 2000;
(n) settle or compromise any pending or threatened suit,
action or claim (i) relating to the transactions contemplated hereby, or (ii)
any other pending or threatened material suit, action or claim other than in the
ordinary course of business;
(o) enter into any agreement of a nature that would be
required to be filed as an exhibit to Form 10-K or 10-Q under the Exchange Act;
and
(p) take, or agree in writing or otherwise to take, any of the
actions described in Sections 6.1(a) through 6.1(o).
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Section 6.2. Acquisition Proposals. From and after the
execution of this Agreement, the Company shall promptly advise Parent in
reasonable detail of the receipt, directly or indirectly, of any inquiries,
discussions, negotiations or proposals relating to a merger, liquidation,
recapitalization, consolidation or other business combination involving the
Company or its Subsidiaries or acquisition of any capital stock or any material
portion of the assets of the Company or its Subsidiaries, or any combination of
the foregoing (an "Acquisition Transaction"), including identifying the offeror
and the terms of any proposal relating to an Acquisition Transaction. The
Company shall promptly advise Parent of any material development relating to
such proposal, including the results of any discussions or negotiations with
respect thereto. Neither the Company nor any of its Subsidiaries shall provide
any non-public information to any third party (other than Parent, Purchaser or
any of their respective affiliates or advisors) without having entered into a
customary confidentiality agreement with respect to such information.
Section 6.3. Access to Information. Between the date hereof
and the consummation of the Offer and/or Effective Time, as the case may be, the
Company will give Parent and Purchaser and their authorized representatives
reasonable access to all employees, plants, offices, warehouses and other
facilities and properties and to all books and records of the Company and its
Subsidiaries, will permit Purchaser to make such inspections as Purchaser
reasonably request and will cause the Company's officers and those of its
Subsidiaries to furnish Purchaser with such financial and operating data and
other information with respect to the business and properties of the Company and
any of its Subsidiaries as Purchaser may from time to time reasonably request.
The Company shall furnish promptly to Parent and Purchaser a copy of each
report, schedule, registration statement and other document filed by it or its
Subsidiaries during such period pursuant to the requirements of federal or state
or foreign securities Laws.
Section 6.4. Additional Agreements; Reasonable Efforts.
(a) Upon the terms and subject to the conditions of this
Agreement, each of Parent, Purchaser and the Company agree to use its reasonable
best efforts to take, or cause to be taken, all actions, and to do, or cause to
be done, all things necessary, proper or advisable under any applicable Laws to
consummate and make effective the transactions contemplated hereby as promptly
as practicable including, but not limited to, (i) the preparation and filing of
all forms, registrations and notices required to be filed to consummate the
transactions contemplated hereby and the taking of such actions as are necessary
to obtain any requisite approvals, consents, orders, exemptions or waivers by
any third party or Governmental Entity, (ii) the satisfaction of the other
parties' conditions to the consummation of the Offer or the Merger, and (iii)
contesting any legal proceeding challenging the Merger, and (iv) the execution
of any additional instruments, including the Articles of Merger, necessary to
consummate the transactions contemplated hereby. Subject to the terms and
conditions of this Agreement, each party hereto agrees to use reasonable best
efforts to cause the Effective Time to occur as soon as practicable after the
stockholder vote, if any, with respect to the Merger. In case at any time after
the Effective Time any further action is necessary to carry out the purposes of
this Agreement, the proper officers and directors of each party hereto shall use
reasonable best efforts to take all such necessary action. In addition, no party
hereto shall take any action after the date hereof that would reasonably be
expected to delay materially the obtaining of, or result in not obtaining, any
permission, approval or consent from any Governmental Entity necessary to be
obtained prior to the consummation of the Offer or the Merger.
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(b) Each party shall promptly consult with the other parties
hereto with respect to, provide any necessary information with respect to and
provide the other (or its counsel) copies of, all filings made by such party
with any Governmental Entity or any other information supplied by such party to
a Governmental Entity in connection with this Agreement and the transactions
contemplated hereby. Each party hereto shall promptly inform the other of any
communication from any Governmental Entity regarding any of the transactions
contemplated hereby. If any party hereto or affiliate thereof receives a request
for additional information or documentary material from any such Governmental
Entity with respect to the transactions contemplated hereby, then such party
will endeavor in good faith to make, or cause to be made, as soon as reasonably
practicable and after consultation with the other party, an appropriate response
in compliance with such request. To the extent that transfers of Company Permits
are required as a result of execution of this Agreement or consummation of the
transactions contemplated hereby, the Company shall use its best efforts to
effect such transfers.
(c) Notwithstanding the foregoing, nothing in this Agreement
shall be deemed to require Purchaser to (i) enter into any agreement with any
Governmental Entity or to consent to any order, decree or judgment requiring
Purchaser to hold separate or divest, or to restrict the dominion or control of
Purchaser or any of its affiliates over, any of the assets, properties or
businesses of Purchaser, its affiliates or the Company, in each case, as in
existence on the date hereof, or (ii) defend against any litigation brought by
any Governmental Entity seeking to prevent the consummation of the transactions
contemplated hereby.
(d) Each of the Company, on the one hand, and Parent and
Purchaser, on the other hand, shall not, and shall use commercially reasonable
efforts to cause their respective Subsidiaries not to, take any action that
would result in (i) any representations and warranties of such party (without
giving effect to any "knowledge" qualification) set forth in this Agreement
becoming untrue, or (ii) any of the conditions to the Merger set forth in
Article VII or Annex I not being satisfied.
Section 6.5. Consents. Parent, Purchaser and the Company each
will use all reasonable efforts to obtain consents of all third parties and
Governmental Entities necessary, proper or advisable for the consummation of the
transactions contemplated hereby.
Section 6.6. Public Announcements. Parent, Purchaser and the
Company, as the case may be, will consult with one another before issuing any
press release or otherwise making any public statements with respect to the
transactions contemplated hereby, including the Offer and the Merger, and shall
not issue any such press release or make any such public statement prior to such
consultation, except as may be required by applicable Law or by obligations
pursuant to any listing agreement with any national securities exchange or The
Nasdaq Stock Market, as determined in good faith by Purchaser or the Company, as
the case may be.
Section 6.7. Indemnification.
(a) The Surviving Corporation agrees that all rights to
indemnification or exculpation now existing in favor of the directors, officers,
employees and agents of the Company and its Subsidiaries as provided in their
respective certificates or articles of incorporation or by-laws or otherwise in
effect as of the date hereof with respect to matters occurring prior to the
Effective
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Time shall survive the Effective Time and shall continue in full force and
effect. To the maximum extent permitted by Law, such indemnification shall be
mandatory rather than permissive, and the Company or the Surviving Corporation,
as the case may be, shall advance expenses in connection with such
indemnification.
(b) From and after the Effective Time, Parent and the
Surviving Corporation shall jointly and severally, to the fullest extent
permitted by applicable Law, indemnify, defend and hold harmless each Person who
is now or who becomes prior to the Effective Time a director of the Company
against all losses, expenses (including reasonable attorney's fees and
expenses), claims, damages, liabilities and, subject to the proviso of the next
succeeding sentence, amounts paid in settlement, to the extent they are based on
or arise out of or pertain to the transactions contemplated by this Agreement.
In the event of any such loss, expense, claim, damage, liability, or settlement
(whether or not arising before the Effective Time), (i) Parent and the Surviving
Corporation shall pay the reasonable fees and expenses of counsel selected by
the director seeking indemnification pursuant to this Section 6.7(b), which
counsel shall be reasonably satisfactory to Parent and the Surviving
Corporation, promptly after statements therefor are received and otherwise
advance to such directors upon request reimbursement of documented expenses
reasonably incurred, (ii) any determination required to be made with respect to
whether such directors' conduct complies with the standards set forth in the
MGBCL and the Company's articles of incorporation and by-laws shall be made by
independent counsel mutually acceptable to Parent, the Surviving Corporation and
such directors; provided, however, that neither Parent nor the Surviving
Corporation shall be liable for any settlement effected without its written
consent (which consent shall not be unreasonably withheld). The directors
seeking indemnification pursuant to this Section 6.7(b) as a group may retain
only one law firm with respect to each related matter except to the extent there
is, in the opinion of counsel to a director, under applicable standards of
professional conduct, a conflict on any significant issue between positions of
such director and any other director seeking indemnification pursuant to this
Section 6.7(b).
(c) The Surviving Corporation, shall maintain in effect for
not less than six (6) years from the Effective Time, the policies of the
directors' and officers' liability and fiduciary insurance most recently
maintained by the Company (provided that the Surviving Corporation may
substitute therefor policies of at least the same coverage containing terms and
conditions which are no less advantageous to the beneficiaries thereof so long
as such substitution does not result in gaps or lapses in coverage) with respect
to matters occurring prior to the Effective Time to the extent available.
(d) In the event the Surviving Corporation or any of its
successors or assigns (i) consolidates with or merges into any other Person and
shall not be the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers or conveys all or any substantial
portion of its properties and assets to any Person, then, and in each such case,
proper provision shall be made so that the successors and assigns of such party
assume the obligations of such party as contemplated by this Section 6.7.
Section 6.8. Employee Benefit Arrangements. (a) The Company
will not take any action which could prevent or impede the termination of the
Stock Plans and any other plans, programs or arrangements providing for the
issuance or grant of any other interest in respect of the capital stock of the
Company or any Subsidiary of the Company in each case effective prior
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to the Effective Time. The Company, as instructed by Parent, shall take all
steps necessary or appropriate so that as of the Effective Time, each person who
holds a Stock Option that is cancelled pursuant to Section 2.9(a) shall receive
in substitution therefor, in accordance with the provisions of the Stock Plans,
an incentive compensation award to replace such Stock Option (a "Replacement
Award"), on terms and conditions consistent with those set forth in Section 6.8
of the Company Disclosure Schedule, with such changes as the parties may
mutually agree.
(b) Subject to Section 6.8(c), Purchaser and the Company and
its Subsidiaries shall honor, without modification, all contracts, agreements,
collective bargaining agreements and other commitments of the parties prior to
the date hereof which apply to any current or former employee or current or
former director of the Company or its Subsidiaries; provided, however, that this
undertaking shall not prevent Parent, Purchaser or the Company or its
Subsidiaries from enforcing or complying with any such commitments in accordance
with its terms, including, exercising any right permitted thereunder or under
applicable law to amend, modify, suspend, revoke or terminate any such
commitment in whole or in part. Any workforce reductions carried out following
the Effective Time by Parent or the Company or any of its Subsidiaries with
respect to employees of the Company and its Subsidiaries shall be carried out in
accordance with all laws and regulations governing the employment relationship
and termination thereof, including the Worker Adjustment and Retraining
Notification Act and regulations promulgated thereunder and any analogous state
or local law.
(c) Each of the Company Employee Benefit Plans (other than the
Stock Plans) in effect as of the date hereof shall be maintained in effect with
respect to the employees or former employees of the Company and its Subsidiaries
who are covered by any such Company Employee Benefit Plan immediately prior to
the Effective Time (the "Affiliated Employees") until Parent, Purchaser or the
Company or its Subsidiaries otherwise determines after the Effective Time;
provided, however, that nothing herein contained shall limit any right contained
in any such Company Employee Benefit Plan or under applicable law to amend,
modify, suspend, revoke or terminate any such Company Employee Benefit Plan; and
provided, further, however, that Parent, Purchaser or the Company or their
Subsidiaries shall cause the Affiliated Employees to be provided with employee
benefits for a period of not less than one year following the Effective Time
which are no less favorable in the aggregate than those provided to similarly
situated employees of Parent and its Affiliates. Without limiting the foregoing,
with respect to any benefit plan established to replace any Company Employee
Benefit Plan (other than the Stock Plans) (each such plan, a "New Plan"), each
participant in any such Company Employee Benefit Plan shall receive credit for
purposes of eligibility to participate and vesting under such New Plan for
service credited for the corresponding purpose under such Company Employee
Benefit Plan; provided, however, that such crediting of service shall not
operate to duplicate any benefit to any such participant or the funding for any
such benefit or cause any such Company Employee Benefit Plan or New Plan to fail
to comply with the applicable provisions of the Code or ERISA.
(d) With respect to any New Plan which is a welfare benefit
plan, other than limitations, exclusions or waiting periods that are already in
effect with respect to Affiliated Employees and that have not been satisfied as
of the Effective Time, such New Plan shall waive all limitations to pre-existing
conditions, exclusions and waiting periods with respect to participation and
coverage requirements and provide each Affiliated Employee with full credit for
co-
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payments and deductibles paid prior to the Effective Time in satisfying any
applicable deductible or out-of-pocket requirements applicable to the same
calendar year under such New Plan.
Section 6.9. Notification of Certain Matters. Parent,
Purchaser and the Company shall promptly notify each other of (i) the occurrence
or non-occurrence of any fact or event which would be reasonably likely (A) to
cause any representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at any time from the date hereof to the
Effective Time or (B) to cause any covenant, condition or agreement under this
Agreement not to be complied with or satisfied in any material respect and (ii)
any failure of the Company, Parent or Purchaser, as the case may be, to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder in any material respect; provided, however, that no
such notification shall affect the representations or warranties of any party or
the conditions to the obligations of any party hereunder. Each of the Company,
Parent and Purchaser shall give prompt notice to the other parties hereof of any
notice or other communication from any third party alleging that the consent of
such third party is or may be required in connection with the transactions
contemplated by this Agreement.
Section 6.10. State Takeover Laws. Prior to the Effective
Time, the Company shall, upon the request of Purchaser, take all reasonable
steps to assist in any challenge by Purchaser to the validity or applicability
of any state takeover Law to the transactions contemplated by this Agreement,
including the Offer and the Merger.
Section 6.11. Stockholder Litigation. The Company shall give
Parent reasonable opportunity to participate in the defense of any stockholder
litigation against the Company and/or its officers and directors relating to the
transactions contemplated hereby.
Section 6.12. Further Action. Each party hereto shall, subject
to the fulfillment at or before the Effective Time of each of the conditions of
performance set forth herein or the waiver thereof, perform such further acts
and execute such documents as may be reasonably required to effect the
transactions contemplated hereby, including the Merger.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
Section 7.1. Conditions to Each Party's Obligation to Effect
the Merger. The respective obligations of Parent, Purchaser and the Company to
consummate the Merger and the transactions contemplated hereby are subject to
the satisfaction or waiver, at or before the Effective Time, of each of the
following conditions:
(a) Stockholder Approval. The Company shall have obtained the
necessary approval of this Agreement by the holders of at least two-thirds of
the outstanding Common Shares entitled to vote on the matter; provided, however,
that no vote of the Company stockholders shall be necessary if Parent shall
acquire, pursuant to the Offer, the Threshold Number of Common Shares.
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(b) Purchase of Common Shares. Purchaser shall have accepted
for payment Common Shares pursuant to the Offer in accordance with the terms
hereof.
(c) Injunctions; Illegality. The consummation of the Merger
shall not be restrained, enjoined or prohibited by any Law or ruling of a court
of competent jurisdiction or any Governmental Entity, and there shall not have
been any statute, rule or regulation enacted, promulgated or deemed applicable
to the Merger by any Governmental Entity which prevents the consummation of the
Merger or has the effect of making the purchase of Common Shares illegal. Each
party agrees that, in the event that any such Law shall have been enacted,
entered, promulgated or enforced, such party shall use its reasonable best
efforts to cause such Law to be complied with, lifted or vacated, subject to the
limitations set forth in Section 6.4(c).
Section 7.2. Conditions to Obligations of Parent and
Purchaser. The obligations of Parent and Purchaser to effect the Merger are also
subject to the satisfaction or waiver by Parent, at or prior to the Effective
Time, of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of the Company set forth in this Agreement shall be true and correct
(without giving effect to any qualifications as to "Company Material Adverse
Effect," "material" or similar qualifications) as of the date of this Agreement
and on and as of the Effective Time as though made on and as of the Effective
Time (except to the extent any such representation or warranty expressly speaks
as of an earlier or different date, and except for changes contemplated or
permitted by the terms hereof) except, in either case, where the failure of such
representations and warranties to be so true and correct (without giving effect
to any qualifications as to "Company Material Adverse Effect," "material" or
similar qualifications) would not, in the aggregate, be reasonably expected to
have a Company Material Adverse Effect, and the Company shall have delivered to
Parent a certificate signed on behalf of the Company by an executive officer of
the Company to such effect.
(b) Performance of Obligations of the Company. The Company
shall have performed all obligations required to be performed by it under this
Agreement at or prior to the Effective Time, except for such non-performance as
would not, in the aggregate, reasonably be expected to have either a Company
Material Adverse Effect or prevent or prohibit consummation of the Merger, and
Parent shall have received a certificate signed on behalf of the Company by an
executive officer of the Company to such effect.
(c) Termination of Stock Options. No holder of Stock Options
or other options, warrants, rights or agreements will have any right to receive
any shares of capital stock of the Company or, if applicable, the Surviving
Corporation, upon exercise of any such Stock Option or other option, warrant,
right or agreement.
Section 7.3. Conditions to Obligations of the Company. The
obligation of the Company to effect the Merger is also subject to the
satisfaction or waiver by the Company, at or prior to the Effective Time, of
each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Parent set forth in this Agreement shall be true and correct
(without giving effect to any qualifications as to "Parent Material Adverse
Effect," "material" or similar qualifications) as of the date of this
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Agreement and on and as of the Effective Time as though made on and as of the
Effective Time (except to the extent any such representation or warranty
expressly speaks as of an earlier or different date, and except for changes
contemplated or permitted by the terms hereof) except, in either case, where the
failure of such representations and warranties to be so true and correct
(without giving effect to any qualifications as to "Parent Material Adverse
Effect," "material" or similar qualifications) would not, in the aggregate, be
reasonably expected to have a Parent Material Adverse Effect, and Parent shall
have delivered to the Company a certificate signed on behalf of Parent by an
executive officer of Parent to such effect.
(b) Performance of Obligations of Parent. Parent shall have
performed all obligations required to be performed by it under this Agreement at
or prior to the Closing Date, except for such non-performance as would not, in
the aggregate, reasonably be expected to have either a Company Material Adverse
Effect or prevent or prohibit consummation of the Merger, and the Company shall
have received a certificate signed on behalf of Parent by an executive officer
of Parent to such effect.
Section 7.4. Frustration of Closing Conditions. Neither
Parent, Purchaser nor the Company may rely on the failure of any condition set
forth in Sections 7.1 through 7.3 to be satisfied if such failure was caused
solely by such party's own failure to use reasonable best efforts to consummate
the Merger and the transactions contemplated hereby, as required by and subject
to Section 6.4.
ARTICLE VIII
TERMINATION; AMENDMENTS; WAIVER
Section 8.1. Termination. This Agreement may be terminated and
the Offer and the Merger may be abandoned at any time prior to the Effective
Time notwithstanding any requisite approval of this Agreement by the
stockholders of the Company (with any termination by Parent also being an
effective termination by Purchaser):
(a) by mutual written consent of Parent and the Company;
(b) by Parent or the Company if (i) the consummation of the
Merger shall have been restrained, enjoined or prohibited by any Law or ruling
of a court of competent jurisdiction or any Governmental Entity, or there shall
have been any statute, rule or regulation enacted, promulgated or deemed
applicable to the Merger by any Governmental Entity which prevents the
consummation of the Merger or has the effect of making the purchase of Common
Shares illegal; or (ii) the Effective Time shall not have occurred on or before
the date which is six months from the date hereof; provided, however, that the
right to terminate this Agreement under this Section 8.1(b) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure of the Effective
Time to occur on or before such date;
(c) by Parent if, due to an occurrence or circumstance which
would result in a failure to satisfy any of the Tender Offer Conditions,
Purchaser shall have (i) failed to commence the Offer within the time period
prescribed in Section 1.1(a), (ii) terminated the Offer without
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having accepted any Common Shares for payment thereunder, or (iii) failed to pay
for Common Shares pursuant to the Offer by the date which is four months from
the date hereof, unless, in each case, such failure to satisfy any of the Tender
Offer Conditions shall have been caused by or resulted from a material breach of
any of Parent's or Purchaser's representations, warranties or covenants;
(d) by the Company if, due to an occurrence or circumstance
which would result in a failure to satisfy any of the Tender Offer Conditions,
Purchaser shall have (A) failed to commence the Offer within the time period
prescribed in Section 1.1(a), (B) terminated the Offer without having accepted
any Common Shares for payment or (C) failed to pay for Common Shares pursuant to
the Offer by the date which is four months from the date hereof, unless, in each
case, such failure to satisfy any of the Tender Offer Conditions shall have been
caused by or resulted from a material breach of any of the Company's
representations, warranties or covenants;
(e) by the Company if, prior to the purchase of Common Shares
pursuant to the Offer in accordance with the terms of this Agreement, the
Special Committee approves or recommends another offer or an agreement to effect
a proposal made by a third party (other than an affiliate of Parent) to effect
an Acquisition Transaction having terms which the Special Committee has
determined in good faith (i) based upon the advice of a nationally recognized
investment banker, to be more favorable to the Company and its Stockholders
(other than Parent and Purchaser) than the Offer and the Merger and (ii) based
upon the advice from its outside counsel, that failure to approve such third
party proposal and terminate this Agreement would constitute a breach of
fiduciary duties of the Special Committee under applicable Law;
(f) by Parent if the Special Committee (i) shall have
withdrawn or modified (including by amendment of the Schedule 14D-9) in a manner
adverse to Purchaser its approval or recommendation of the Offer, this Agreement
or the Merger, (ii) shall have approved or recommended another offer or an
agreement to effect a proposal made by a third party (other than an affiliate of
Parent) to effect an Acquisition Transaction or (iii) shall have resolved to
effect any of the foregoing;
(g) by Parent if the Minimum Condition (as defined in Annex I)
shall not have been satisfied by the initially scheduled expiration date of the
Offer and on or prior to such date any Person (other than Parent or Purchaser or
any affiliate thereof) shall have made a proposal or public announcement or
communication to the Company with respect to an Acquisition Transaction; or
(h) by Parent or by the Company (provided that the terminating
party is not then in material breach of any representation, warranty, covenant
or other agreement contained herein), as the case may be, in the event of any of
(A) a breach by the other party of any representation or warranty contained
herein (subject to the standard set forth in Section 7.2(a) or 7.3(a), as the
case may be), which breach cannot be or has not been cured within 20 business
days after the giving of written notice to the breaching party of such breach;
(B) a material breach by the other party of any of the obligations or agreements
contained herein, which breach cannot be or has not been cured within 20
business days after the giving of written notice to the breaching party of such
breach; or (C) a Company Material Adverse Effect exists (in which case
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Parent may terminate this Agreement) or a Parent Material Adverse Effect exists
(in which case the Company may terminate this Agreement).
Section 8.2. Effect of Termination. In the event of the
termination and abandonment of this Agreement pursuant to Section 8.1, this
Agreement shall forthwith become void and have no effect, without any liability
on the part of any party or its directors, officers or shareholders, other than
the provisions of this Section 8.2 and Section 9.9, which shall survive any such
termination. Nothing contained in this Section 8.2 shall relieve any party from
any liability for any breach of this Agreement.
Section 8.3. Amendment. Subject to applicable Law, this
Agreement may be amended by action taken by the Company, Parent and Purchaser at
any time before or after approval of this Agreement by the stockholders of the
Company (if required by applicable Law) but, after any such approval, no
amendment shall be made which requires the approval of such stockholders under
applicable Law without such approval. This Agreement may not be amended except
by an instrument in writing signed on behalf of the parties hereto.
Section 8.4. Waiver. At any time prior to the Effective Time,
any party hereto may (i) extend the time for the performance of any of the
obligations or other acts of the other party, (ii) waive any inaccuracies in the
representations and warranties of the other party contained herein or in any
document, certificate or writing delivered pursuant hereto, or (iii) waive
compliance by the other party with any of the agreements or conditions contained
herein. Any agreement on the part of any party hereto to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party. The failure of either party hereto to assert any of its
rights hereunder shall not constitute a waiver of such rights.
ARTICLE IX
MISCELLANEOUS
Section 9.1. Nonsurvival of Representations and Warranties.
The representations, warranties and covenants made herein shall not survive
beyond the Effective Time. Notwithstanding the foregoing, the agreements set
forth in Section 2.3, Section 2.9, Article III, Section 6.7 and Section 6.8
shall survive the Effective Time indefinitely (except to the extent a shorter
period of time is explicitly specified therein).
Section 9.2. Entire Agreement; Assignment. This Agreement (i)
constitutes the entire agreement between the parties hereto with respect to the
subject matter hereof and supersedes all other prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof, and (ii) shall not be assigned by operation of Law or
otherwise; provided, however, that Purchaser may assign any or all of its rights
and obligations under this Agreement to any Subsidiary or affiliate of
Purchaser, but no such assignment shall relieve Purchaser or Parent of its
obligations hereunder if such assignee does not perform such obligations.
Section 9.3. Validity. If any provision of this Agreement, or
the application thereof to any Person or circumstance, is held invalid or
unenforceable, such provision shall be
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enforced to the maximum extent permissible in the circumstances, and the
remainder of this Agreement, and the application of such provision to other
Persons or circumstances, shall not be affected thereby, and to such end, shall
be enforced to the greatest extent permitted by applicable Law. The provisions
of this Agreement are thus agreed to be severable.
Section 9.4. Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing (including by facsimile
with written confirmation thereof) and unless otherwise expressly provided
herein, shall be delivered during normal business hours by hand, by Federal
Express, United Parcel Service or other nationally recognized overnight
commercial delivery service, or by facsimile notice, confirmation of receipt
received, addressed as follows, or to such other address as may be hereafter
notified by the respective parties hereto:
(a) If to Metropolitan Life Insurance Company or CC Merger Sub Inc.:
Metropolitan Life Insurance Company
One Madison Avenue
New York, New York 10010
Attention: Terence Lennon
Facsimile Number: (212) 251-1664
With a copy, which will not constitute notice, to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Adam O. Emmerich, Esq.
Facsimile Number: (212) 403-2234
(b) If to Conning Corporation:
Conning Corporation
700 Market Street
St. Louis, Missouri 63101
Attention: John A. Fibiger
Facsimile Number: (314) 444-0726
With copies, which will not constitute notice, to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Attention: Allen I. Isaacson, P.C.
Facsimile Number: (212) 859-8587
and
Paul, Hastings, Janofsky & Walker LLP
399 Park Avenue
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New York, New York 10022-4697
Attention: Thomas L. Fairfield, Esq.
Facsimile Number: (212) 319-4090
Section 9.5. Governing Law. This Agreement shall be governed
by and construed in accordance with the Laws of the State of New York, without
regard to the principles of conflicts of Law thereof. The parties hereto hereby
agree and consent to be subject to the exclusive jurisdiction of the federal and
state courts in the State of New York in any suit, action or proceeding seeking
to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby. Each
party hereto hereby irrevocably waives, to the fullest extent permitted by Law,
(i) any objection that it may now or hereafter have to laying venue of any suit,
action or proceeding brought in such courts, and (ii) any claim that any suit,
action or proceeding brought in such courts has been brought in an inconvenient
forum.
Section 9.6. Descriptive Headings. The descriptive headings
herein are inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Agreement.
Section 9.7. Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of each party hereto and its
successors and permitted assigns, and except as provided in Section 6.7, nothing
in this Agreement, express or implied, is intended to or shall confer upon any
other Person any rights, benefits or remedies of any nature whatsoever under or
by reason of this Agreement.
Section 9.8. Counterparts. This Agreement may be executed in
two or more counterparts (including by facsimile), each of which shall be deemed
to be an original, but all of which shall constitute one and the same agreement.
Section 9.9. Fees and Expenses. Whether or not the Merger is
consummated, except as otherwise specifically provided herein, all costs and
expenses incurred in connection with the Offer, this Agreement and the Merger
shall be paid by the party incurring such expenses.
Section 9.10. Specific Performance. 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 their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, this being in addition to any
other remedy to which they are entitled at Law or in equity, provided, that this
Section 9.10 shall have no force and effect from and after the termination of
this Agreement in accordance with Section 8.1.
Section 9.11. Interpretation; Absence of Presumption. (a) For
the purposes hereof, (1) words in the singular shall be held to include the
plural and vice versa and words of one gender shall be held to include the other
gender as the context requires, (2) the terms "hereof", "herein", and "herewith"
and words of similar import shall, unless otherwise stated, be
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construed to refer to this Agreement as a whole (including all of the Exhibits
hereto) and not to any particular provision of this Agreement, and Article,
Section, paragraph and Exhibit references are to the Articles, Sections,
paragraphs and Exhibits to this Agreement unless otherwise specified, (3) the
word "including" and words of similar import when used in this Agreement shall
mean "including without limitation" unless the context otherwise requires or
unless otherwise specified, (4) the word "or" shall not be exclusive, (5)
provisions shall apply, when appropriate, to successive events and transactions,
and (6) all references to any period of days shall be deemed to be to the
relevant number of calendar days unless otherwise specified.
(b) This Agreement shall be construed without regard to any
presumption or rule requiring construction or interpretation against the party
drafting or causing any instrument to be drafted.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed on its behalf as of the day and year first above
written.
METROPOLITAN LIFE
INSURANCE COMPANY
By: /s/Gary A. Beller
Name: Gary A. Beller
Title:
Senior Executive Vice President
and General Counsel
CC MERGER SUB INC.
By: /s/Gary A. Beller
Name: Gary A. Beller
Title: President
CONNING CORPORATION
By: /s/Arthur C. Reeds, III
Name: Arthur C. Reeds, III
Title: Chairman, President & Chief Executive
Officer
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ANNEX I
CONDITIONS TO THE OFFER
THE CAPITALIZED TERMS USED HEREIN HAVE THE MEANINGS SET FORTH
IN THE AGREEMENT AND PLAN OF MERGER (THE "MERGER AGREEMENT") TO WHICH THIS ANNEX
I IS ATTACHED.
Notwithstanding any other provisions of the Offer, Purchaser
shall not be required to accept for payment or (subject to any applicable rules
and regulations of the SEC) pay for, and may delay the acceptance for payment
of, any Common Shares and may terminate or, subject to the terms of the Merger
Agreement, amend the Offer, unless (i) there shall be validly tendered and not
properly withdrawn prior to the expiration date for the Offer, as it may be
extended in accordance with the Offer (the "Expiration Date") that number of
Common Shares which, when aggregated with the number of Common Shares currently
beneficially owned by Parent, represents at least two-thirds of the total number
of outstanding Common Shares on a fully diluted basis on the date of purchase
(the "Minimum Condition"), and (ii) at any time on or after the date of the
Merger Agreement and prior to the acceptance for payment for Common Shares, none
of the following conditions exists or shall have occurred and remain in effect:
(a) there shall be pending any Action by any Governmental Entity,
or any Law proposed, sought, promulgated, enacted, entered,
enforced or deemed applicable to the Offer, (i) seeking to or
which does prohibit or impose any material limitations on
Parent's or Purchaser's ownership or operation (or that of any of
their respective Subsidiaries or affiliates) of all or a material
portion of their or the Company's or any of its Subsidiaries'
businesses or assets, or to compel Parent or Purchaser or their
respective Subsidiaries and affiliates to dispose of or hold
separate any material portion of the business or assets of the
Company or Parent or Purchaser and their respective Subsidiaries,
in each case taken as a whole, (ii) seeking to or which does make
the acceptance for payment of, or the payment for, some or all of
the Common Shares illegal or otherwise prohibiting, restricting
or significantly delaying consummation of the Offer or the Merger
or the performance of any of the other transactions contemplated
by the Merger Agreement, or seeking to obtain from the Company or
Purchaser any damages that are material in Parent's view in
relation to the Company and its Subsidiaries as taken as a whole,
(iii) seeking to or which does impose material limitations on the
ability of Purchaser, or render Purchaser unable, to acquire or
hold or to exercise effectively all rights of ownership of the
Common Shares, including, the right to vote any Common Shares
purchased by Purchaser on all matters properly presented to the
stockholders of the Company, or effectively to control in any
material respect in Parent's view the business, assets or
operations of the Company, its Subsidiaries or Purchaser or any
of their respective affiliates, (iv) seeking to or which does
impose circumstances under which the purchase or payment for some
or all of the Common Shares pursuant to the Offer and Merger
could reasonably be expected to have a Purchaser Material Adverse
Effect, or (v) which otherwise would reasonably be expected to
have a Company Material Adverse Effect; or
44
(b) there shall have occurred any change that would reasonably be
expected to constitute a Company Material Adverse Effect; or
(c) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on the New
York Stock Exchange, Inc. or The Nasdaq Stock Market for a period
in excess of 24 hours (excluding suspensions or limitations
resulting solely from physical damage or interference with such
exchanges not related to market conditions), (ii) the declaration
of a banking moratorium or any suspension of payments in respect
of banks in the United States (whether or not mandatory), (iii)
the commencement of a war or other international or national
calamity directly or indirectly involving the United States, (iv)
any mandatory limitation by any U.S. governmental authority or
agency that would reasonably be expected to have a material
adverse affect on the extension of credit by banks or other
financial institutions, or (v) in the case of any of the
foregoing, existing at the date of the execution of the Merger
Agreement, a material acceleration or worsening thereof; or
(d) the Merger Agreement shall have been terminated in
accordance with its terms; or
(e) (i) the Special Committee shall have withdrawn, changed or
modified (including by amendment of the Schedule 14D-9) in a
manner adverse to Purchaser or Parent his approval or
recommendation of the Offer, the Merger Agreement or the Merger
or shall have recommended an Acquisition Proposal, or shall have
adopted any resolution to effect any of the foregoing, (ii) the
Special Committee shall have recommended any proposal other than
this Agreement in respect of an Acquisition Proposal, (iii) the
Special Committee shall have continued discussions with any third
party concerning an Acquisition Proposal for more than ten (10)
business days after the date of receipt of such Acquisition
Proposal, or (iv) an Acquisition Proposal that is publicly
disclosed and that contains a proposal as to price (without
regard to whether such proposal specifies a specific price or a
range of potential prices) shall have been commenced, publicly
proposed or communicated to the Company and the Special Committee
shall not have rejected such proposal within ten (10) business
days of the earlier to occur of (A) the Company's receipt of such
Acquisition Proposal and (B) the date such Acquisition Proposal
first becomes publicly disclosed; or
(f) not all consents, permits and approvals of Governmental
Entities and other Persons set forth in Section 4.6 of the
Company Disclosure Schedule shall have been obtained without
material adverse conditions attached and material expenses
imposed on the Company or any of its Subsidiaries; or
(g) the representations and warranties of the Company set forth
in the Merger Agreement shall not be true and correct (without
giving effect to any qualifications as to "Company Material
Adverse Effect," "material" or similar qualifications) as of the
date of the Merger Agreement or on and as of the Expiration Date
as though made on and as of the Expiration Date (except to the
extent any such representation or warranty expressly speaks as of
an earlier or different date, and except for changes contemplated
or permitted by the terms hereof) except, in either case, where
the fail-
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45
ure of such representations and warranties to be so true and
correct (without giving effect to any qualifications as to
"Company Material Adverse Effect," "material" or similar
qualifications) would not, in the aggregate, be reasonably
likely to have a Company Material Adverse Effect; or
(h) the Company shall not have performed in all material
respects all obligations required to be performed by it under
the Merger Agreement at or prior to the Expiration Date.
The parties acknowledge that the Tender Offer Conditions set
forth above in this Annex I are for the sole benefit of Parent and Purchaser,
that Parent or Purchaser may assert the failure of any of the Tender Offer
Conditions regardless of the circumstances (other than any circumstance arising
solely by any action or inaction by Parent or Purchaser) giving rise to any such
failure, that the Company shall not assert the failure of, or waive, any such
condition without the prior written consent of Parent and Purchaser, and that if
Parent or Purchaser elects to waive any such condition to the Offer (which
Parent or Purchaser may do in whole or in part at any time and from time to
time), the Company shall cooperate and comply with such election. The failure by
Parent or Purchaser at any time to exercise any of the foregoing rights shall
not be deemed a waiver of any such right, and each such right shall be deemed an
ongoing right that may be asserted at any time and from time to time.
Should the Offer be terminated pursuant to any of the
foregoing provisions, all tendered Common Shares not theretofore accepted for
payment shall forthwith be returned to the tendering stockholders.
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