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Exhibit 2.1
EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
by and among
BGC PARTNERS, L.P.,
MAGNET ACQUISITION CORP.,
and
MAXCOR FINANCIAL GROUP INC.
Dated as of April 4, 2005
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<TABLE>
<CAPTION>
TABLE OF CONTENTS
ARTICLE I THE MERGER
Page
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<S> <C> <C>
SECTION 1.01 The
Merger....................................................2
SECTION 1.02
Closing.......................................................2
SECTION 1.03 Effective
Time................................................2
SECTION 1.04 Effects of the
Merger.........................................2
SECTION 1.05 Certificate of Incorporation and
By-laws......................2
SECTION 1.06 Directors and
Officers........................................2
ARTICLE II EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS
SECTION 2.01 Effect on Capital
Stock.......................................3
SECTION 2.02 Surrender and
Payment.........................................3
ARTICLE III REPRESENTATIONS AND WARRANTIES
SECTION 3.01 Representations and Warranties of the
Company.................6
SECTION 3.02 Representations and Warranties of Parent and
Sub.............20
ARTICLE IV COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 4.01 Conduct of Business by the
Company...........................22
SECTION 4.02 No Solicitation by the
Company...............................25
ARTICLE V ADDITIONAL AGREEMENTS
SECTION 5.01 Preparation of the Proxy Statement; Stockholders
Meeting.....27
SECTION 5.02 Access to Information;
Confidentiality.......................28
SECTION 5.03 Reasonable Best Efforts;
Cooperation.........................29
SECTION 5.04 Stock
Options................................................29
SECTION 5.05 Indemnification, Exculpation and
Insurance...................30
SECTION 5.06 Fees and
Expenses............................................31
SECTION 5.07 Public
Announcements.........................................33
SECTION 5.08 Stockholder
Litigation.......................................33
SECTION 5.09 Employee Benefit
Plans.......................................33
SECTION 5.10 Sub
Compliance...............................................34
SECTION 5.11 Advice of
Changes............................................34
SECTION 5.12 Company
Employees............................................34
ARTICLE VI CONDITIONS PRECEDENT
SECTION 6.01 Conditions to Each Party's Obligation to Effect the
Merger...35
SECTION 6.02 Conditions to Obligation of Parent and
Sub...................35
SECTION 6.03 Conditions to Obligations of the
Company.....................36
SECTION 6.04 Frustration of Closing
Conditions............................37
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER
SECTION 7.01
Termination..................................................37
SECTION 7.02 Effect of
Termination........................................38
SECTION 7.03
Amendment....................................................38
SECTION 7.04 Extension;
Waiver............................................39
ARTICLE VIII GENERAL PROVISIONS
SECTION 8.01 Nonsurvival of Representations and
Warranties................39
SECTION 8.02
Notices......................................................39
SECTION 8.03
Definitions..................................................40
SECTION 8.04
Interpretation...............................................41
SECTION 8.05
Counterparts.................................................42
SECTION 8.06 Entire Agreement; No Third-Party
Beneficiaries...............42
SECTION 8.07 Governing
Law................................................42
SECTION 8.08
Assignment...................................................42
SECTION 8.09 Consent to
Jurisdiction......................................42
SECTION 8.10 Table of Contents;
Headings..................................42
SECTION 8.11
Severability.................................................42
SECTION 8.12
Disclosure...................................................43
SECTION 8.13 WAIVER OF JURY
TRIAL.........................................43
SECTION 8.14 Specific
Performance.........................................43
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<PAGE>
INDEX OF DEFINED TERMS
Page
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Affected
Employees.........................................................33
affiliate..................................................................41
Agreement...................................................................1
Antitrust
Laws..............................................................9
business
day...............................................................41
Certificate of
Merger.......................................................2
Certificates................................................................4
Change in the Company
Recommendation.......................................27
Closing.....................................................................2
Closing
Date................................................................2
Code.......................................................................13
Company.....................................................................1
Company Acquisition
Agreement..............................................27
Company Capital
Stock.......................................................7
Company Common
Stock........................................................1
Company Disclosure
Schedule.................................................6
Company
Employees..........................................................16
Company Intellectual
Property..............................................19
Company
Investment..........................................................7
Company
Permits............................................................11
Company Preferred
Stock.....................................................7
Company
Recommendation.....................................................27
Company Regulatory
Agreement...............................................12
Company
Rights..............................................................3
Company Rights
Plan.........................................................3
Company SEC
Documents.......................................................9
Company Stock Option
Plans..................................................7
Company Stock
Options.......................................................7
Company Stockholder
Approval...............................................18
Company Stockholders
Meeting...............................................28
Company Superior
Proposal..................................................26
Company Takeover
Proposal..................................................26
DGCL........................................................................2
Dissenting
Shares...........................................................6
Effective
Time..............................................................2
Employee Termination
Event.................................................38
ERISA......................................................................13
ERISA
Affiliate............................................................13
Exchange
Act................................................................9
FSA.........................................................................9
GAAP.......................................................................10
Governmental
Entity.........................................................9
HSR
Act.....................................................................9
Intellectual
Property......................................................19
Investment Company
Act......................................................5
knowledge..................................................................41
Liens.......................................................................7
material adverse
change....................................................41
material adverse
effect....................................................41
material adverse effect on
Parent..........................................20
Merger......................................................................1
Merger
Consideration........................................................3
MFI........................................................................10
Multiemployer
Plan.........................................................14
Multiply Employer
Plan.....................................................14
NASD........................................................................9
Orders.....................................................................12
Parent......................................................................1
Parties.....................................................................1
Paying
Agent................................................................4
person.....................................................................42
Pre-Termination Takeover Proposal
Event....................................32
Principal
Stockholder.......................................................1
Principal
Stockholders......................................................1
Proxy
Statement.............................................................9
Restraints.................................................................36
SEC.........................................................................9
Securities
Act..............................................................9
Sub.........................................................................1
subsidiary.................................................................42
Support
Agreement...........................................................1
Surviving
Corporation.......................................................2
Taxes......................................................................18
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
April 4,
2005, by and among BGC Partners, L.P., a Delaware limited
partnership
("Parent"), Magnet Acquisition Corp., a Delaware corporation and
a direct
wholly owned subsidiary of Parent ("Sub"), and Maxcor Financial
Group Inc., a
Delaware corporation (the "Company"). Parent, Sub and the
Company are
collectively referred to herein as the "Parties."
W I T N E S S E T H:
WHEREAS, each of Parent, Sub and the Company desire to enter
into a
transaction whereby Sub will merge with and into the Company
(the "Merger"),
upon the terms and subject to the conditions set forth in this
Agreement,
whereby each issued and outstanding share of common stock, par
value $0.001 per
share, of the Company ("Company Common Stock"), other than
shares owned by
Parent, the Company or their respective subsidiaries (as defined
in Section
8.03), will be converted into the right to receive the Merger
Consideration (as
defined in Section 2.01(c));
WHEREAS, the respective Boards of Directors of Parent, Sub and
the
Company have each approved this Agreement and the Merger and
determined that
the Merger is advisable, and Parent has adopted this Agreement
and the Merger
as the sole stockholder of Sub;
WHEREAS, as a condition to, and simultaneously with, the
execution of
this Agreement, each of Gilbert D. Scharf, Michael J. Scharf,
Keith E. Reihl,
Robin A. Clark and Roger E. Schwed (each a "Principal
Stockholder" and,
collectively, the "Principal Stockholders") is entering into an
agreement with
Parent in the form attached as Exhibit A (the "Support
Agreement"), pursuant
to which, among other things, each Principal Stockholder has
agreed to vote
all shares of Company Common Stock held by such Principal
Stockholder in favor
of adoption of this Agreement, not to vote in favor of any other
Company
Takeover Proposal (as defined in Section 4.02(a)) and not to
sell or otherwise
transfer any shares of Company Common Stock;
WHEREAS, as a condition to Parent's willingness to enter into
this
Agreement, prior to the date of this Agreement, the Company has
entered into
new employment agreements with, or has received reaffirmations
of existing
employment agreements from, certain employees of the Company and
its
subsidiaries who Parent and the Company consider to be important
to the
business of the Company and its subsidiaries; and
WHEREAS, the parties desire to make certain representations,
warranties, covenants and agreements in connection with the
Merger and also to
prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the representations,
warranties,
covenants and agreements contained in this Agreement, and
intending to be
legally bound, the Parties agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01. The Merger. Upon the terms and subject to the
conditions
set forth in this Agreement, and in accordance with the Delaware
General
Corporation Law (the "DGCL"), Sub shall be merged with and into
the Company at
the Effective Time (as defined in Section 1.03). Following the
Effective Time,
the separate corporate existence of Sub shall cease and the
Company shall be
the surviving corporation (the "Surviving Corporation").
SECTION 1.02 Closing. The closing of the Merger (the "Closing")
will
take place at 10:00 a.m. on a date to be specified by the
Parties (the "Closing
Date"), which shall be no later than the second business day (as
defined in
Section 8.03) after satisfaction or waiver of each of the
conditions set forth
in Article VI (other than those conditions that, by their terms,
are to be
satisfied at the Closing, but subject to the satisfaction or
waiver of such
conditions), unless another time or date is agreed to by the
Parties. The
Closing will be held at the offices of Skadden, Arps, Slate,
Meagher & Flom
LLP, Four Times Square, New York, New York 10036 or at such
other location as
is agreed to by the Parties.
SECTION 1.03 Effective Time. Subject to the provisions of
this
Agreement, as soon as practicable on the Closing Date, the
Parties shall file
or cause to be filed a certificate of merger (the "Certificate
of Merger")
executed in accordance with the relevant provisions of the DGCL
and shall make
all other filings or recordings required under the DGCL to
effectuate the
Merger. The Merger shall become effective at such time as the
Certificate of
Merger is duly filed with the Secretary of State of the State of
Delaware, or
at such subsequent date or time as Sub and the Company shall
agree and specify
in the Certificate of Merger (the time the Merger becomes
effective being
hereinafter referred to as the "Effective Time").
SECTION 1.04 Effects of the Merger. The Merger shall have the
effects
set forth in Section 259 of the DGCL. Without limiting the
generality of the
foregoing, and subject thereto, from and after the Effective
Time, the
Surviving Corporation shall possess all the rights, privileges,
immunities,
powers and purposes and shall assume and be liable for all the
liabilities,
obligations and penalties of the Company and Sub.
SECTION 1.05 Certificate of Incorporation and By-laws. The
certificate
of incorporation of Sub as in effect immediately prior to the
Effective Time
shall be the certificate of incorporation of the Surviving
Corporation until
thereafter changed or amended as provided therein or by
applicable law. The
by-laws of Sub as in effect immediately prior to the Effective
Time shall be
the by-laws of the Surviving Corporation until thereafter
changed or amended as
provided therein and applicable law.
SECTION 1.06 Directors and Officers. Immediately following
the
Effective Time, those individuals set forth on Exhibit 1.06
shall hold the
offices of the Surviving Corporation set forth opposite such
individuals name
on such Exhibit until their successors shall have been duly
elected, appointed
or qualified or until their earlier death, resignation or
removal in accordance
with the certificate of incorporation and by-laws of the
Surviving Corporation.
The initial Board of Directors of the Surviving Corporation
shall be the
directors of Sub until their successors shall have been duly
elected, appointed
or qualified or until their earlier death, resignation or
removal in accordance
with the DGCL, the certificate of incorporation and by-laws of
the Surviving
Corporation.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS
SECTION 2.01 Effect on Capital Stock. As of the Effective Time,
by
virtue of the Merger and without any action on the part of the
holder of any
shares of Company Common Stock or capital stock of Sub:
(a) Capital Stock of Sub. Each issued and outstanding share of
the
common stock, par value $0.01 per share, of Sub issued and
outstanding
immediately prior to the Effective Time shall be converted into
and become one
fully paid and nonassessable share of common stock, par value
$0.01 per share,
of the Surviving Corporation.
(b) Cancellation of Treasury Stock. Each share of Company Common
Stock
held in the Company's treasury or by any of the Company's
subsidiaries, Parent
or any of Parent's subsidiaries shall automatically be cancelled
and retired
and shall cease to exist, and no consideration shall be
delivered in exchange
therefor.
(c) Conversion of Company Common Stock. Each issued and
outstanding
share of Company Common Stock (other than shares to be cancelled
in accordance
with Section 2.01(b) and other than Dissenting Shares (as
defined in Section
2.02(h)), together with the rights (the "Company Rights") issued
pursuant to
the Rights Agreement, dated as of December 6, 1996, between the
Company and
Continental Stock Transfer & Trust Company, as rights agent,
as amended by
Amendment No. 1, dated as of July 26, 2001, and as modified by
the agreement on
removal of rights agent and appointment of successor rights
agent by and among
the Company, Continental Stock Transfer & Trust Company and
the Bank of New
York, dated as of September 9, 2003 (together, the "Company
Rights Plan"),
shall be converted into the right to receive an amount in cash
equal to $14.00,
without interest (the "Merger Consideration").
SECTION 2.02 Surrender and Payment.
(a) Paying Agent. As of the Effective Time, Parent shall enter
into an
agreement with such bank or trust company mutually agreeable to
Parent and the
Company (the "Paying Agent"), which shall provide that Parent
shall deposit
with the Paying Agent as of the Effective Time, for the benefit
of the holders
of shares of Company Common Stock, by wire transfer of
immediately available
funds, cash sufficient to make the cash payments contemplated by
Section
2.01(c), and Parent shall comply with its obligations under such
agreement in
accordance with the terms thereof and hereof.
(b) Payment Procedures. As soon as reasonably practicable after
the
Effective Time, but in any event no later than three business
days after the
Effective Time, Parent shall cause the Paying Agent to mail to
each holder of
record of a certificate or certificates which immediately prior
to the
Effective Time represented outstanding shares of Company Common
Stock (the
"Certificates") whose shares were converted into the right to
receive the
Merger Consideration pursuant to Section 2.01, (i) a letter of
transmittal
(which shall specify that delivery shall be effected, and risk
of loss and
title to the Certificates shall pass, only upon delivery of the
Certificates to
the Paying Agent and shall be in such form and have such other
provisions not
inconsistent with this Agreement as Parent and the Company may
reasonably
specify) and (ii) instructions for use in surrendering the
Certificates in
exchange for the Merger Consideration. Upon surrender of a
Certificate for
cancellation to the Paying Agent, together with such letter of
transmittal,
duly executed, and such other documents as may reasonably be
required by the
Paying Agent, the holder of such Certificate shall be entitled
to receive in
exchange therefor the Merger Consideration in respect of the
shares of Company
Common Stock represented by such Certificate, and the
Certificate so
surrendered shall forthwith be cancelled. If any portion of the
Merger
Consideration is to be paid to a person other than the person in
whose name the
applicable surrendered Certificate is registered, it shall be a
condition to
the payment of such Merger Consideration that (i) the
surrendered Certificate
shall be properly endorsed or otherwise be in proper form for
transfer and (ii)
the person requesting such payment of the Merger Consideration
shall (A) pay to
the Paying Agent any transfer or other taxes required as a
result of such
payment to a person other than the registered holder of such
Certificate or (B)
establish to the reasonable satisfaction of Parent that such tax
either has
been paid or is not payable. Until surrendered as contemplated
by this Section
2.02, each Certificate shall be deemed at any time after the
Effective Time to
represent only the right to receive upon such surrender the
amounts which the
holder thereof has the right to receive in respect of such
Certificate pursuant
to the provisions of this Article II. No interest shall be paid
or will accrue
on the Merger Consideration. Each of the Surviving Corporation,
Parent and the
Paying Agent shall be entitled to deduct and withhold from the
consideration
otherwise payable pursuant to this Agreement to any holder of
shares of Company
Common Stock such amounts as it is required to deduct and
withhold with respect
to the making of such payment under the Code (as defined in
Section
3.01(i)(ii)) or any provision of Tax (as defined in Section
3.01(j)(xiii)) law.
To the extent that amounts are so withheld by the Surviving
Corporation, Parent
or the Paying Agent, as the case may be, and to the extent that
Parent and Sub
promptly pay such withheld amounts to the appropriate
Governmental Entity on
behalf of the applicable holder(s), such withheld amounts shall
be treated for
all purposes of this Agreement as having been paid to the holder
of the shares
of Company Common Stock, in respect of which such deduction and
withholding was
made by the Surviving Corporation, Parent or the Paying Agent,
as the case may
be.
(c) No Further Ownership Rights in Company Common Stock. All
Merger
Consideration to be paid upon the surrender of Certificates in
accordance with
the terms of this Article II shall be deemed to have been paid
in full
satisfaction of all rights pertaining to the shares of Company
Common Stock
represented by such Certificates, subject, however, to the
Surviving
Corporation's obligation to pay any dividends or make any other
distributions
with a record date prior to the Effective Time which may have
been declared or
made by the Company on such shares of Company Common Stock to
the extent such
dividend or other distribution remains unpaid at the Effective
Time, and after
the Effective Time, there shall be no further registration of
transfers of
shares of Company Common Stock on the stock records of, or
relating to, the
Company. If, after the Effective Time, Certificates are
presented to the Paying
Agent, the Surviving Corporation or Parent, they shall be
cancelled and
exchanged for the Merger Consideration provided for, and in
accordance with the
procedures and subject to the limitations set forth, in this
Article II.
(d) Undistributed Merger Consideration. Any portion of the funds
made
available to the Paying Agent pursuant to Section 2.02(a) that
remains
unclaimed by the holders of Certificates six months after the
Effective Time
shall be returned to Parent and any such holder who has not
exchanged such
holder's Certificates for the Merger Consideration in accordance
with this
Section 2.02 prior to that time shall thereafter look only to
Parent for
delivery of the Merger Consideration in respect of such holder's
Certificates
without any interest thereon.
(e) Escheat. None of Parent, Sub, the Company or the Paying
Agent or
their respective representatives shall be liable to any person
for any Merger
Consideration delivered to a public official pursuant to
applicable abandoned
property, escheat or similar laws. If any Certificate shall not
have been
surrendered immediately prior to such date on which any Merger
Consideration
would otherwise escheat to or become the property of any
Governmental Entity
(as defined in Section 3.01(d)), any such Merger Consideration
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.
(f) Investment of Merger Consideration. Parent shall cause the
Paying
Agent to invest the funds deposited with the Paying Agent in
accordance with
Section 2.02(a) in a money market fund registered under the
Investment Company
Act of 1940 (as amended, the "Investment Company Act"), the
principal of which
is invested solely in obligations issued or guaranteed by the
U.S. Government
and repurchase agreements in respect of such obligations. Any
interest and
other income resulting from such investment shall be the
property of, and shall
be paid to, Parent. Any losses resulting from such investment
shall not in any
way diminish Parent's and Sub's payment obligation under Section
2.01(c).
(g) Lost Certificates. If any Certificate shall have been lost,
stolen
or destroyed, upon the making of an affidavit of that fact by
the person
claiming such Certificate to be lost, stolen or destroyed and,
if required by
the Surviving Corporation, the posting by such person of a bond
in such
reasonable amount as the Surviving Corporation may direct as
indemnity against
any claim that may be made against it with respect to such
Certificate, the
Paying Agent shall issue in exchange for such lost, stolen or
destroyed
Certificate the Merger Consideration to be paid with respect to
such
Certificate pursuant to Section 2.01(c).
(h) Dissenting Shares. Notwithstanding Section 2.01(c), shares
of
Company Common Stock 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 demanded appraisal for such shares in
accordance with
the DGCL shall not be converted into a right to receive the
Merger
Consideration, unless such holder fails to perfect, withdraws or
otherwise
loses such holder's right to appraisal. If, after Closing, such
holder fails to
perfect, withdraws or loses such holder's right to appraisal,
such shares of
Company Common Stock shall be treated as if they had been
converted as of the
Closing into a right to receive the Merger Consideration. The
Company shall
give Parent prompt notice of any demands received by the Company
for appraisal
of shares of Company Common Stock, and Parent shall have the
right to
participate in all negotiations and proceedings with respect to
such demands.
Except with the prior written consent of Parent, the Company
shall not make any
payment with respect to, or settle or offer to settle, any such
demands. A
portion of the funds delivered to the Paying Agent pursuant to
Section 2.02(a)
that are not distributed to holders of shares of Company Common
Stock pursuant
to this Section 2.02 because the holders thereof properly
exercised and
perfected their dissenters' rights with respect thereto under
the DGCL (such
shares, "Dissenting Shares") may be paid to the holders of
Dissenting Shares
upon written instruction from Parent to the Paying Agent.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01 Representations and Warranties of the Company.
Except as
set forth on the Disclosure Schedule delivered by the Company to
Parent prior
to the execution of this Agreement (the "Company Disclosure
Schedule"), the
Company represents and warrants to Parent as follows:
(a) Organization, Standing and Corporate Power. Each of the
Company
and its subsidiaries is a corporation or other legal entity duly
organized,
validly existing and in good standing (with respect to
jurisdictions which
recognize such concept) under the laws of the jurisdiction in
which it is
organized and has the requisite corporate or other power, as the
case may be,
and authority to carry on its business as now being conducted in
all material
respects, except, as to subsidiaries, for those jurisdictions
where the failure
to be so organized, existing or in good standing individually or
in the
aggregate would not have a material adverse effect (as defined
in Section 8.03)
on the Company and except for certain subsidiaries that have
discontinued all
business operations prior to the date hereof. Each of the
Company and its
subsidiaries is duly qualified or licensed to do business and is
in good
standing (with respect to jurisdictions which recognize such
concept) in each
jurisdiction in which the nature of its business or the
ownership, leasing or
operation of its properties makes such qualification or
licensing necessary,
except for those jurisdictions where the failure to be so
qualified or licensed
or to be in good standing individually or in the aggregate would
not have a
material adverse effect on the Company. The Company has provided
to Parent
prior to the execution of this Agreement complete and correct
copies of its
certificate of incorporation and by-laws, and the charter
documents, by-laws,
organizational documents and partnership, limited liability
company and joint
venture agreements of each of the Company's subsidiaries
(excluding such
subsidiaries that have discontinued all business operations
prior to the date
hereof), each as amended to date.
(b) Subsidiaries. Section 3.01(b) of the Company Disclosure
Schedule
lists all subsidiaries of the Company that have not discontinued
all business
operations prior to the date hereof and specifies which of the
Company's
subsidiaries are "Significant Subsidiaries" within the meaning
of Rule 1-02 of
Regulation S-X under the Exchange Act. All the outstanding
shares of capital
stock of, or other ownership interests in, each subsidiary (i)
have been
validly issued and are fully paid and nonassessable, (ii) except
for director
qualifying shares, are owned directly or indirectly by the
Company, free and
clear of all material pledges, claims, liens, charges,
encumbrances and
security interests of any kind or nature whatsoever
(collectively, "Liens") and
(iii) are free of any other material restriction (including any
restriction on
the right to vote, sell or otherwise dispose of such capital
stock or other
ownership interests). Except for its interests in such
subsidiaries, neither
the Company nor any such subsidiary (i) owns, has any right to,
or is involved
in negotiations to acquire, directly or indirectly, any capital
stock,
membership interest, partnership interest, joint venture
interest or other
equity interest in any person, except for any such capital stock
or interests
held by the Company and such subsidiaries pursuant to their
business activities
conducted in the ordinary and usual course of business, or (ii)
has the ability
to control (whether through the ownership of voting securities
or otherwise)
any other person (any of such interests under clause (i) or (ii)
other than a
subsidiary of the Company, a "Company Investment"). No Company
Investment is,
individually or when taken together with all other Company
Investments,
material to the business of the Company and its subsidiaries
taken as a whole.
(c) Capital Structure. The authorized capital stock of the
Company
consists of 30,000,000 shares of Company Common Stock and
1,000,000 shares of
preferred stock, par value $0.001 per share (the "Company
Preferred Stock" and
collectively with the Company Common Stock, "Company Capital
Stock"). As of
March 20, 2005, (i) 6,812,232 shares of Company Common Stock and
no shares of
Company Preferred Stock were issued and outstanding, (ii)
6,073,144 shares of
Company Common Stock and no shares of Company Preferred Stock
were held by the
Company in its treasury, and (iii) 1,592,188 shares of Company
Common Stock
were subject to outstanding options to purchase Company Common
Stock ("Company
Stock Options") granted under the Company's 1996 Stock Option
Plan and the
Company's 2002 Stock Option Plan (collectively, the "Company
Stock Option
Plans"). Section 3.01(c) of the Company Disclosure Schedule sets
forth, as of
the date hereof, the holders of all outstanding Company Stock
Options and the
number of shares of Company Common Stock purchasable upon
exercise of, the
exercise price of, the vesting schedule of and expiration date
of all Company
Stock Options. All outstanding shares of capital stock of the
Company are, and
all shares which may be issued will be, when issued, duly
authorized, validly
issued, fully paid and nonassessable and not subject to
preemptive rights.
Except as set forth in this Section 3.01(c), except for changes
since March 20,
2005 resulting from the issuance of shares of Company Common
Stock pursuant to
the Company Stock Option Plans or the issuance of Company
Capital Stock
pursuant to the Company Rights Plan, (x) there are not issued,
reserved for
issuance or outstanding (A) any shares of Company Capital Stock
or other voting
securities of the Company, (B) any securities of the Company
convertible into
or exchangeable or exercisable for shares of Company Capital
Stock or voting
securities of the Company and (C) any warrants, calls, or
options to acquire
from the Company or any Company subsidiary, or obligation of the
Company or any
Company subsidiary to issue, any capital stock, voting
securities or securities
convertible into or exchangeable or exercisable for capital
stock or voting
securities of the Company, and (y) there are no outstanding
obligations of the
Company or any Company subsidiary to repurchase, redeem or
otherwise acquire
any such securities or to issue, deliver or sell, or cause to be
issued,
delivered or sold, any such securities. Neither the Company nor
any Company
subsidiary is a party to any voting agreement with respect to
the voting of any
such securities. There are no outstanding (A) securities of the
Company or any
Company subsidiary convertible into or exchangeable or
exercisable for shares
of capital stock or other voting securities or ownership
interests in any
Company subsidiary, (B) warrants, calls, options or other rights
to acquire
from the Company or any Company subsidiary, or obligation of the
Company or any
Company subsidiary to issue, any capital stock, voting
securities or other
ownership interests in, or any securities convertible into or
exchangeable or
exercisable for any capital stock, voting securities or
ownership interests in,
any Company subsidiary or (C) obligations of the Company or any
Company
subsidiary to repurchase, redeem or otherwise acquire any such
outstanding
securities of the Company subsidiaries or to issue, deliver or
sell, or cause
to be issued, delivered or sold, any such securities. There are
no agreements,
arrangements or commitments of any character (contingent or
otherwise) entered
into in connection with acquisitions pursuant to which any
person is or may be
entitled to any payment based on revenues, earnings or financial
performance of
the Company or any of its subsidiaries or assets or calculated
in accordance
therewith.
(d) Authority; Noncontravention. The Company has all
requisite
corporate power and authority to enter into this Agreement and,
subject to the
Company Stockholder Approval (as defined in Section 3.01(k)), to
consummate the
transactions contemplated by this Agreement. The execution and
delivery of this
Agreement by the Company and the consummation by the Company of
the
transactions contemplated hereby have been duly authorized by
all necessary
corporate action on the part of the Company, subject, in the
case of the
Merger, to the Company Stockholder Approval. This Agreement has
been duly
executed and delivered by the Company and, assuming the due
authorization,
execution and delivery by Parent and Sub, constitutes a legal,
valid and
binding obligation of the Company, enforceable against the
Company in
accordance with its terms, except to the extent that
enforceability may be
limited by applicable bankruptcy, insolvency, moratorium or
other similar laws
affecting the enforcement of creditors' rights generally and
subject to general
principles of equity. The execution and delivery of this
Agreement and the
Support Agreements do not, and the consummation of the
transactions
contemplated by this Agreement and compliance with the
provisions of this
Agreement and the Support Agreements will not, conflict with, or
result in any
violation of, or default (with or without notice or lapse of
time, or both)
under, or give rise to a right of termination, cancellation or
acceleration of
any obligation or loss of a benefit under, or result in the
creation of any
material Lien upon any of the properties or assets of the
Company or any of its
subsidiaries under, (i) the certificate of incorporation or
by-laws of the
Company or the comparable organizational documents of any of its
subsidiaries,
(ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or
other agreement, instrument, permit, concession, franchise,
license or similar
authorization applicable to the Company or any of its
subsidiaries or their
respective properties or assets or (iii) subject to the
governmental filings
and other matters referred to in the following sentence, any
Company Permits or
any judgment, order, decree, statute, law, ordinance, rule or
regulation
applicable to the Company or any of its subsidiaries or their
respective
properties or assets, other than, in the case of clauses (ii)
and (iii), any
such conflicts, violations, defaults, rights, losses or Liens
that individually
or in the aggregate (x) are not material to the Company and its
subsidiaries
taken as a whole or (y) would not reasonably be expected to
materially impair
or delay the ability of the Company to perform its obligations
under this
Agreement. No consent, approval, order or authorization of,
action by, or in
respect of, or registration, declaration or filing with, any
federal, state,
local or foreign government, any court, administrative,
regulatory or other
governmental agency, commission or authority or any
non-governmental U.S. or
foreign self-regulatory agency, commission or authority or any
arbitral
tribunal (each, a "Governmental Entity") is required by the
Company or any of
its subsidiaries in connection with the execution and delivery
of this
Agreement by the Company or the consummation by the Company of
the transactions
contemplated hereby, except for: (1) the filing with the U.S.
Securities and
Exchange Commission (the "SEC") of (A) a proxy statement
relating to the
Company Stockholders Meeting (such proxy statement, as amended
or supplemented
from time to time, the "Proxy Statement"), and (B) such reports
under Section
13(a), 13(d), 15(d) or 16(a) of the Securities Exchange Act of
1934 (the
"Exchange Act"), as may be required in connection with this
Agreement and the
transactions contemplated hereby; (2) the filing of the
Certificate of Merger
with the Secretary of State of the State of Delaware and
appropriate documents
with the relevant authorities of other states in which the
Company is qualified
to do business; (3) the filing of a pre-merger notification and
report form
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended (the
"HSR Act"), and the expiration or termination of the waiting
period thereunder
and the filing of comparable pre-merger notifications in
non-U.S. jurisdictions
pursuant to comparable antitrust or competition laws (together
with the HSR
Act, the "Antitrust Laws"), if applicable, and the expiration of
any mandatory
waiting periods thereunder; (4) compliance with the applicable
requirements of
the National Association of Securities Dealers, Inc. (the
"NASD") and the U.K.
Financial Services Authority (the "FSA"), and (5) such consents,
approvals,
orders or authorizations (y) the failure of which to be made or
obtained
individually or in the aggregate would not be material to the
Company and its
subsidiaries taken as whole.
(e) Reports; Financial Statements.
(i) The Company has filed all required reports, schedules,
forms
and statements (including exhibits and all other information
incorporated
therein) with the SEC since December 31, 2001 (the "Company
SEC
Documents"). As of their respective dates, the Company SEC
Documents
complied in all material respects with the requirements of the
Securities
Act of 1933 (the "Securities Act"), or the Exchange Act, as the
case may
be, and the rules and regulations of the SEC promulgated
thereunder
applicable to such Company SEC Documents, and none of the
Company SEC
Documents when filed (as amended and restated and as
supplemented by
subsequently filed Company SEC Documents) contained any untrue
statement
of a material fact or omitted to state a 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. The
financial statements of the Company included in the Company SEC
Documents
comply as to form, as of their respective dates of filing with
the SEC, in
all material respects with applicable accounting requirements
and the
published rules and regulations of the SEC with respect thereto,
have been
prepared in accordance with U.S. generally accepted accounting
principles
as in effect from time to time, applied on a consistent basis
("GAAP")
(except, in the case of unaudited statements, as permitted by
Form 10-Q of
the SEC), during the periods involved (except as may be
indicated in the
notes thereto) and fairly present in all material respects
the
consolidated financial position of the Company and its
consolidated
subsidiaries as of the dates thereof and the consolidated
results of their
operations and cash flows for the periods then ended (subject,
in the case
of unaudited statements, to normal recurring year-end audit
adjustments).
Except (A) as reflected in such financial statements or in the
notes
thereto, (B) for liabilities incurred in connection with this
Agreement or
the transactions contemplated hereby or (C) for liabilities
(whether
direct, contingent or otherwise) incurred in the ordinary course
of
business consistent with past practice since the respective
dates of such
financial statements, neither the Company nor any of its
subsidiaries has
any material liabilities.
(ii) The audited financial statements of Maxcor Financial
Inc.
("MFI") for the year ended December 31, 2004 set forth on
Section
3.01(e)(ii) of the Company Disclosure Schedule have been
prepared in
accordance with GAAP and fairly present in all material respects
the
financial position of MFI as of the date thereof and the results
of its
operations and cash flows for the period then ended.
(iii) The unaudited consolidating balance sheet of the Company
and
its subsidiaries as of February 28, 2005 and the related
consolidating
income statement for the Company and its subsidiaries for the
two months
then ended, in each case as set forth on Section 3.01(e)(iii) of
the
Company Disclosure Schedule, to the Company's knowledge, fairly
present in
all material respects the consolidated financial position of the
Company
and its subsidiaries as of the date thereof and the consolidated
results
of their operations for the period then ended (subject to the
absence of
footnotes and to normal recurring year-end audit
adjustments).
(f) Information Supplied. None of the information supplied or to
be
supplied by the Company specifically for inclusion or
incorporation by
reference in the Proxy Statement will, at the date it is first
mailed to the
Company's stockholders or at the time of the Company
Stockholders Meeting (as
hereinafter defined), contain any untrue statement of a material
fact or omit
to state any material fact required to be stated therein or
necessary in order
to make the statements therein, in light of the circumstances
under which they
are made, not misleading, except that no representation or
warranty is made by
the Company with respect to information that Parent or Sub
supplied to the
Company for inclusion therein or for incorporation by reference
therein. The
Proxy Statement will comply as to form in all material respects
with the
requirements of the Exchange Act and the rules and regulations
thereunder.
(g) Absence of Certain Changes or Events. Since December 31,
2004, (i)
the Company and its subsidiaries have conducted their business
only in the
ordinary and usual course of business consistent with past
practice, and
neither the Company nor any of its subsidiaries has engaged in
any transaction
material to the Company and its subsidiaries, taken as a whole
(other than this
Agreement and the documents related to this Agreement and the
transactions
contemplated hereby and thereby), (ii) none of the Company or
any of its
subsidiaries has experienced or been affected by any event,
change, effect or
development that, individually or in the aggregate, has had a
material adverse
effect on the Company, (iii) neither the Company nor any of its
subsidiaries
has taken any action that, if taken after the date hereof, would
not be
permitted by Section 4.01.
(h) Compliance with Applicable Laws; Litigation.
(i) The Company and its subsidiaries hold all permits,
licenses,
exemptions, orders, registrations and approvals of all
Governmental
Entities which are required for the operation of the businesses
of the
Company and its subsidiaries as currently conducted
(collectively, the
"Company Permits"), except where the failure to have any such
Company
Permits individually or in the aggregate would not be material
to the
Company and its subsidiaries taken as a whole. None of the
Company or any
of its subsidiaries has received notice that any Company Permit
will be
terminated or modified in any respect material to the Company
and its
subsidiaries taken as a whole or cannot be renewed in the
ordinary course
of business, and to the Company's knowledge, there is no
reasonable basis
for any such termination, modification or nonrenewal. The
Company and its
subsidiaries are and have been since December 31, 2001 in
compliance with
the terms of the Company Permits and all applicable statutes,
laws,
ordinances, rules and regulations, except where the failure to
so comply
individually or in the aggregate have not been, and would not
reasonably
expected to be, material to the Company and its subsidiaries
taken as a
whole. No material disciplinary proceeding or order by any
Governmental
Entity with respect to the Company or any of its subsidiaries or
any of
their respective properties, is pending or, to the knowledge (as
defined
in Section 8.03) of the Company, threatened.
(ii) As of the date of this Agreement, no material action,
demand,
requirement or investigation by any Governmental Entity and no
material
suit, action or proceeding by any person, in each case with
respect to the
Company or any of its subsidiaries or any of their respective
properties
is pending or, to the knowledge of the Company, threatened.
(iii) Section 3.01(h)(iii) of the Company Disclosure Schedule
sets
forth each Governmental Entity with which the Company or any of
its
subsidiaries or any of their respective officers, directors,
employees or
affiliates are required to be registered as a broker-dealer, an
investment
advisor, registered representative or other applicable
regulatory
category. None of the Company or any of its registered
subsidiaries, or to
the knowledge of the Company, any of their respective officers,
directors,
employees or affiliates, has exceeded in any material manner the
business
activities enumerated in any membership agreement or other
limitation
imposed in connection with its respective registrations filed
with the
NASD, FSA or any other Governmental Entity. The Company has
delivered or
made available to Parent a true and complete copy of currently
effective
Forms BD and ADV as filed with the NASD or SEC, as applicable,
by it and
by each applicable subsidiary of the Company, and all such forms
were
true, correct and complete in all material respects as of the
date of
filing thereof and omit no material facts required to be stated
therein.
Each such registration is in full force and effect and all fees
and
assessments due and payable in connection therewith have been
paid.
(iv) None of the Company, any of its subsidiaries or, to the
knowledge of the Company, any of their directors, officers,
employees, or
"associated persons" (as defined in the Exchange Act) has been
the subject
of any (A) disciplinary proceedings of any Governmental Entity
or (B)
continuing decisions, judgments, stipulations, orders, rulings,
decrees or
injunctions issued, made or rendered by any Governmental
Entity
(collectively, "Orders") arising under applicable laws which
would be
required to be disclosed on Forms ADV or BD. No such
disciplinary
proceeding or Order, to the knowledge of the Company, is
threatened. None
of the Company, any Company subsidiary or, to the knowledge of
the
Company, any of their directors, officers, employees or
associated persons
is or has been ineligible to serve as a broker-dealer or an
associated
person of a broker-dealer under Section 15(b) of the Exchange
Act
(including being subject to any "statutory disqualification" as
defined in
Section 3(a)(39) of the Exchange Act), and, to the Company's
knowledge,
there is no reasonable basis for a proceeding or investigation
that is
reasonably likely to result in any such ineligibility.
(v) Neither the Company nor any of its subsidiaries is party to
or
otherwise subject to any written agreement, consent agreement
or
memorandum of understanding with, or a party to any commitment
letter or
similar undertaking to, or has been ordered to pay any civil
penalty by,
or is a recipient of any supervisory letter from, or has adopted
any board
or member resolutions at the request or suggestion of, any
Governmental
Entity that materially restricts the conduct of its business or
that in
any material manner relates to its capital adequacy, its ability
to pay
dividends, its credit or risk management policies, its
management, its
trading privileges or its business (each, a "Company
Regulatory
Agreement"), nor has the Company or any of its subsidiaries been
advised
in writing or, to the knowledge of the Company, in any other
manner by any
Governmental Entity that it is considering issuing or requesting
such a
Company Regulatory Agreement.
(vi) Neither the Company nor any of its subsidiaries is, or
is
required to register as, (C) an "investment company" within the
meaning of
the Investment Company Act or (B) an exchange or transfer agent,
a
clearing agency, a municipal securities dealer under the
Exchange Act.
(vii) Section 3.01(h)(vii) of the Company Disclosure Schedule
sets
forth as of the date hereof a complete list of all securities
exchanges,
commodities exchanges, boards of trade, clearing organizations,
trade
associations and similar organizations in which the Company and
each of
its subsidiaries hold membership or have been granted trading
privileges.
(viii) Except as set forth on Section 3.01(h)(vii) of the
Company
Disclosure Schedule, none of the Company nor any of its
subsidiaries is,
or is required to be, registered as a futures commission
merchant,
commodities trading adviser, commodity pool operator or
introducing broker
under the Commodities Futures Trading Act or any similar state
laws.
(ix) The Company has no knowledge of any facts or
circumstances
that (other than facts or circumstances that are particular to
Parent and
its affiliates and not the Company or any of its subsidiaries)
that would
reasonably be expected to cause the NASD, the FSA or any
other
Governmental Entity to not approve the transfer of control or
ownership of
the Company and its subsidiaries to Parent.
(i) ERISA Compliance; Employees.
(i) Section 3.01(i) of the Company Disclosure Schedule contains
a
true and complete list of each material Plan. As used in this
Agreement,
the term "Plans" shall mean each deferred compensation, bonus,
other
incentive compensation, stock purchase, stock option, and other
equity
compensation plan; each severance or termination pay, medical,
surgical,
hospitalization, life insurance and other "welfare" plan, fund
or program
(within the meaning of section 3(1) of the Employee Retirement
Income
Security Act of 1974, as amended ("ERISA")); each
profit-sharing, stock
bonus or other "pension" plan (within the meaning of section
3(2) of
ERISA); and each other employee benefit plan, in each case, that
is
sponsored, maintained or contributed to or required to be
contributed to
by the Company or by any trade or business, whether or not
incorporated
(an "ERISA Affiliate"), that together with the Company would be
deemed a
"single employer" within the meaning of section 4001(b) of
ERISA, for the
benefit of any employee or former employee of the Company or any
of its
subsidiaries.
(ii) With respect to each material Plan, the Company has
delivered
or made available to Buyer true and complete copies of (A) the
Plan and
any amendments thereto; (B) the two most recent annual reports
and
actuarial reports, if required under ERISA, and the most recent
report
prepared with respect thereto in accordance with Statement of
Financial
Accounting Standards No. 87; (C) the most recent Summary Plan
Description
required under ERISA with respect thereto; (D) if the Plan is
funded
through a trust or any third party funding vehicle, a copy of
the trust or
other funding agreement and the latest financial statements
thereof; (E)
the most recent determination letter received from the Internal
Revenue
Service with respect to each Plan intended to qualify under
section 401 of
the Internal Revenue Code of 1986, as amended (the "Code"); and
(F) all
material communications with respect to the Plan.
(iii) No Plan is subject to Title IV or Section 302 of ERISA
or
Section 412 of the Code. No liability under Title IV or section
302 of
ERISA has been incurred by the Company or any ERISA Affiliate
that has not
been satisfied in full, and no condition exists that presents a
material
risk to the Company or any ERISA Affiliate of incurring any
such
liability, other than liability for premiums due the Pension
Benefit
Guaranty Corporation (which premiums have been paid when due).
Insofar as
the representation made in this Section 3.01(i)(iii) applies to
sections
4064, 4069 or 4204 of Title IV of ERISA, it is made with respect
to any
employee benefit plan, program, agreement or arrangement subject
to Title
IV of ERISA to which the Company or any ERISA Affiliate made, or
was ever
required to make, contributions. No Plan is a "multiemployer
plan" subject
to Title IV of ERISA (a "Multiemployer Plan") or a plan that has
two or
more contributing sponsors at least two of whom are not under
common
control, subject to Title IV of ERISA (a "Multiple Employer
Plan" ). None
of the Company or any of its subsidiaries or any of their
respective ERISA
Affiliates has, at any time since December 31, 2001, contributed
to or
been obligated to contribute to any Multiemployer Plan or any
Multiple
Employer Plan. None of the Company or any of its subsidiaries or
any of
their respective ERISA Affiliates has incurred any liability to
any
Multiemployer Plan as a result of a complete or partial
withdrawal from
such Multiemployer Plan, as those terms are defined in Part I of
Subtitle
E of Title IV or ERISA that has not been satisfied in full.
There does not
now exist, nor do any circumstances exist that could reasonably
likely
result in, any Controlled Group Liability that would be a
liability of the
Company or any of its subsidiaries following the Closing.
"Controlled
Group Liability" means any and all liabilities (A) under Title
IV of
ERISA, (B) under Section 302 of ERISA, (C) under Sections 412 or
4971 of
the Code, (D) as a result of a failure to company with the
continuations
coverage requirements of Section 601 et seq. of ERISA or 4980B
of the
Code, or (E) under corresponding or similar provisions of
foreign laws or
regulations.
(iv) Each Plan complies by its terms in all material respects
with
applicable law, including ERISA and the Code, and has been
operated and
administered in all material respects in accordance with its
terms and
applicable law, including but not limited to ERISA and the
Code.
(v) None of the Company, any of its subsidiaries or affiliates,
any
Plan, any trust created thereunder, or any trustee or
administrator
thereof have engaged in a transaction in connection with which
the Company
or any subsidiary of the Company, any Plan, any such trust or
any trustee
or administrator thereof, or any party dealing with any Plan or
any such
trust could be subject to either a material civil penalty
assessed
pursuant to section 409 or 502(i) of ERISA or a material tax
imposed
pursuant to section 4975 or 4976 of the Code.
(vi) With respect to each Plan intended to be "qualified"
within
the meaning of section 401(a) of the Code, the Company has
received a
determination letter from the Internal Revenue Service to the
effect that
such Plan is so qualified and that the trust maintained
thereunder is
exempt from taxation under section 501(a) of the Code; and to
the
knowledge of the Company no event has occurred and no condition
exists
that would reasonably be expected to adversely affect such
qualification.
(vii) No Plan provides medical, surgical, hospitalization,
death,
welfare or similar benefits (whether or not insured) for
employees or
former employees of the Company or any of its subsidiaries for
periods
extending beyond their retirement or other termination of
service, other
than (A) coverage mandated by applicable law, (B) death benefits
under any
"pension plan" or (C) benefits the full cost of which is borne
by the
current or former employee (or his beneficiary).
(viii) None of the execution of this Agreement, the receipt
of
Company Stockholder Approval or the consummation of the
transactions
contemplated by this Agreement will, either alone or in
combination with
another event, (A) entitle any current or former employee or
officer of
the Company or any ERISA Affiliate to severance pay,
unemployment
compensation or any other payment, except as expressly provided
in this
Agreement, (B) accelerate the time of payment or vesting, or
increase the
amount of compensation due any such employee or officer or (C)
limit the
right of the Company or any of its subsidiaries to amend, merge,
terminate
or receive a reversion of assets from any Plan or related trust.
Prior to
the date of this Agreement, the Company has delivered to Parent
a report
that sets forth the Company's good faith estimate, as of the
date of such
report, of the amount of the "parachute payments" within the
meaning of
Section 280G of the Code that could become payable (and
gross-ups in
respect of any applicable taxes) (subject to the exceptions
described in
such report and based upon the assumptions described in such
report) to
the current executive officers of the Company and its
subsidiaries in
connection with (i) the execution and delivery of this
Agreement, (ii) the
obtaining of the Company Stockholder Approval, (iii) the
consummation of
the Merger or any other transaction contemplated by this
Agreement or (iv)
the termination or constructive termination of the employment of
such
officers following one of the events set forth in clauses (i)
through
(iii) of this Section 3.01(i)(viii).
(ix) There are no pending, threatened or anticipated claims by
or
on behalf of any Plan, by any employee or beneficiary covered
under any
such Plan, or otherwise involving any such Plan or trust under
any such
Plan (other than routine claims for benefits), and, to the
Company's
knowledge, no circumstances exist that could reasonably be
expected to
give rise to a claim or lawsuit against any Plan, any fiduciary
thereof,
the assets thereof or any trust thereunder (other than r
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