AGREEMENT AND PLAN OF REORGANIZATION
by and among
BLUE CROSS AND BLUE SHIELD OF MISSOURI,
a Missouri nonprofit health services corporation
RIGHTCHOICE MANAGED CARE, INC.,
a Missouri corporation
THE MISSOURI FOUNDATION FOR HEALTH,
a Missouri nonprofit public benefit corporation and
RIGHTCHOICE MANAGED CARE, INC.,
a Delaware corporation
DATED ____________ ___, 2000
TABLE OF CONTENTS
ARTICLE I TERMS OF REORGANIZATION; CLOSING 3
Section 1.01. Sequence of Transactions 3
Section 1.02. Transfer and Assumption Transaction 3
(a) Assumption Reinsurance Agreement 3
(b) Regulatory Approvals 4
(c) Consummation of Transaction 4
(d) Tax Consequences 4
Section 1.03. Charter Conversion Transaction 4
(a) Filing of Articles of Incorporation; Bylaws 4
(b) Effective Time 4
(c) Issuance of Stock 4
(d) Regulatory Approvals 4
(e) Directors and Officers 5
(f) Consummation of Transaction 5
(g) Tax Consequences 5
Section 1.04. Reincorporation Merger Transaction 5
(a) Structure of Merger 5
(b) Effective Time 5
(c) Conversion of Shares 5
(d) Effects of Merger 6
(e) Regulatory Approvals 6
(f) Certificate of Incorporation and Bylaws 6
(g) Directors and Officers 6
(h) Consummation of Transaction 6
(i) Tax Consequences 6
(j) Dissenters' Rights 6
Section 1.05. RIT/New RIT Merger Transaction 6
(a) Structure of Merger 7
(b) Effective Time 7
(c) Conversion of Shares 7
(d) Treasury Shares 7
(e) Dissenters' Rights 7
(f) Effects of Merger 8
(g) Regulatory Approvals 8
(h) Certificate of Incorporation and Bylaws 8
(i) New RIT Directors and Officers 8
(j) Exchange of Certificates 8
(1) Exchange Agent 8
(2) Exchange Procedure for Public Shareholders 8
(3) Exchange Procedure for Foundation 9
(4) Distributions With Respect to Unexchanged Shares 9
(5) Transfers of Ownership 9
(6) No Liability 10
(7) Lost, Stolen or Destroyed Certificates 10
(k) Stock Transfer Books 10
(l) Tax Consequences 10
(m) Consummation of Transaction 10
Section 1.06. Stock Options 10
Section 1.07. Closing; Closing Date 11
ARTICLE II REPRESENTATIONS AND WARRANTIES 11
Section 2.01. Disclosure Schedule; Standard 11
(a) Disclosure Schedule 11
(b) Standard 12
Section 2.02. Representations and Warranties of RIT 12
(a) Corporate Existence and Power 12
(b) Authorization; No Defaults 12
(c) Capitalization 13
(d) Financial Information 13
(e) Reports 13
(f) Absence of Changes 14
(g) Undisclosed Liabilities 14
Section 2.03. Representations and Warranties of BCBSMo 14
(a) Authorization; No Defaults 14
(b) Capitalization 15
(c) Financial Information 15
(d) Reports 15
(e) Absence of Changes 15
(f) Undisclosed Liabilities 15
Section 2.04. Representations and Warranties of New RIT 16
(a) Corporate Existence and Power 16
(b) Authorization; No Defaults 16
(c) Capitalization 16
Section 2.05. Representations and Warranties of the Foundation 16
(a) Corporate Existence and Power 17
(b) Authorization; No Defaults 17
ARTICLE III COVENANTS 17
Section 3.01. Pre-Closing Covenants of RIT 17
(a) Submission to Shareholders 17
(b) Consummation of Reorganization 18
(c) Consents and Approvals 18
Section 3.02. Pre-Closing Covenants of BCBSMo 18
(a) Agreement to Vote in Favor 18
(b) Consummation of Reorganization 18
(c) Consents and Approvals 18
Section 3.03. Pre-Closing Covenants of New RIT 18
(a) Other Actions 18
(b) Consummation of Reorganization 18
(c) Plans of Merger 19
Section 3.04. Pre-Closing Covenants of Foundation 19
(a) No Sale or Transfer 19
(b) Agreements to Vote in Favor 19
(1) Reincorporation Merger Transaction 19
(2) RIT/New RIT Merger Transaction 19
(c) Consummation of Reorganization 19
(d) Tax Opinion 19
Section 3.05.Proxy Statement/Prospectus; Registration Statement 20
Section 3.06. Public Announcements 20
Section 3.07. Registration Rights Agreement 20
Section 3.08. Indemnification Agreement 20
Section 3.09. Voting Trust and Divestiture Agreement 20
Section 3.10. Public Offering 20
Section 3.11. Indemnification and Insurance 21
Section 3.12. Accountants' Letters 21
Section 3.13. Foundation Governance 21
Section 3.14. Due Diligence 21
Section 3.15. Payment to Foundation 22
ARTICLE IV CONDITIONS PRECEDENT TO REORGANIZATION 22
Section 4.01. Conditions to Reorganization 22
(a) Injunction 22
(b) Regulatory and Shareholder Approval 22
(c) Effective Registration Statement 22
(d) Tax Determination 22
(e) NYSE Listing 22
(f) Resolution of Sarkis Litigation 22
Section 4.02. Conditions to Obligations of BCBSMo 23
(a) Representations and Warranties 23
(b) Compliance with Agreements 23
(c) Delivery of Documents 23
(d) Other Consents 23
(e) Comfort Letter 23
(f) Favorable Ruling 23
(g) Tax Opinions 24
(h) BCBSMo Board Legal Opinion 24
(i) Resolution of Pending Litigation 24
(j) Legal Opinions 24
(k) Confirmation From Attorney General and DOI 25
Section 4.03. Conditions to Obligations of RIT 25
(a) Representations and Warranties 25
(b) Compliance with Agreements 25
(c) Delivery of Documents 25
(d) Other Consents 25
(e) Comfort Letter 25
(f) Favorable Ruling 26
(g) Tax Opinions 26
(h) Association Approval 26
(i) Opinion of Financial Advisor to RIT 26
(j) Confirmation From Attorney General and DOI 26
(k) Bank Approval 27
(l) Legal Opinions 27
Section 4.04. Conditions to Obligations of New RIT 27
(a) Representations and Warranties 27
(b) Compliance with Agreements 27
(c) Delivery of Documents 27
(d) Comfort Letter 27
(e) Legal Opinions 27
Section 4.05. Conditions to Obligations of Foundation 27
(a) Representations and Warranties 28
(b) Compliance with Agreements 28
(c) Delivery of Documents 28
(d) Other Consents 28
(e) Comfort Letter 28
(f) Favorable Ruling 28
(g) Tax Opinions 28
(h) Legal Opinions 29
ARTICLE V TERMINATION 29
ARTICLE VI GENERAL PROVISIONS 30
Section 6.01. Fees and Expenses 30
Section 6.02. Nonsurvival of Representations,
Warranties and Agreements 30
Section 6.03. Notices 30
Section 6.04. Amendment 30
Section 6.05. Waiver 31
Section 6.06. Entire Agreement 31
Section 6.07. Parties in Interest 31
Section 6.08. Governing Law 31
Section 6.09. Counterparts 31
Section 6.10. Recitals 31
Section 6.11. Fair Construction 31
Section 6.12. Headings and Captions 31
Section 6.13. Assignment 31
LIST OF EXHIBITS Exhibit Description
A Amended and Restated Settlement Agreement (without
Exhibits thereto).
B Form of Assumption Reinsurance Agreement.
C Form of Articles of Incorporation of New BCBSMo.
D Form of Bylaws of New BCBSMo.
E Intercompany Liabilities.
F Certificate of Incorporation of New RIT.
G Bylaws of New RIT.
H Form of Foundation Reincorporation Merger Resolution.
I Form of Foundation RIT/New RIT Merger Resolution.
J Form of Registration Rights Agreement.
K Form of Indemnification Agreement.
L Form of Voting Trust and Divestiture Agreement.
INDEX OF DEFINED TERMS
DEFINED TERM LOCATION
Agreement Preamble
Ancillary Agreements Section 2.02(b)
Association Recital A
Assumption Reinsurance Agreement Section 1.02(a)
Attorney General Recital D
Bank Approvals Section 4.03(k)BCBSMo Preamble
BCBSMo Board Recital J
BCBSMo Disclosure Schedule Section 2.01(a)
BCBSMo Financial Statements Section 2.03(c)
BCBSMo Independent Committee Recital J
BCBSMo Legal Opinion Section 4.03(l)
BCBSMo/RIT Stock Option Section 1.06(a)
BCBSMo/RIT Stock Option Plans Section 1.06(a)
Charter Conversion Effective Time Section 1.03(b)
Charter Conversion Transaction Recital H(2)
Closing Section 1.07
Closing Date Section 1.07
Code Recital F
Delaware Corporate Law Section 1.04(a)
DOI Recital D
Exchange Act Section 2.02(f)
Exchange Agent Section 1.05(j)(1)
Existing Licenses Section 4.03(h)
Favorable Ruling Section 4.02(f)
Favorable Ruling Matter Section 4.02(f)Foundation Preamble
Foundation Legal Opinion Section 4.02(j)
Foundation Litigation Legal Opinion Section 4.02(j)
Foundation Reincorporation Merger Resolution Section 3.04(b)(1)
Foundation RIT/New RIT Merger Resolution Section 3.04(b)(2)
HALIC Recital H(1)
Health Benefit Products Section 3.13
Indemnification Agreement Section 3.08
Indemnified Party Section 3.11(a)
Litigation Recital D
Marks Recital A
Material Adverse Effect Section 2.01(b)
Missouri Corporate Law Section 1.03(a)
New BCBSMo Recital H(2)
New BCBSMo Articles Section 1.03(a)
New BCBSMo Board Section 1.03(a)
New BCBSMo Bylaws Section 1.03(a)
New BCBSMo Stock Recital H(2)
New RIT Preamble
New RIT Board Section 1.04(g)
New RIT Bylaws Section 1.04(f)
New RIT Certificate of Incorporation Section 1.04(f)
New RIT Certificates Section 1.05(j)(1)
New RIT Legal Opinion Section 4.02(j)
New RIT Stock Recital G
NYSE Recital C
Proxy Statement/Prospectus Section 3.05
Public Exchange Ratio Section 1.05(c)
Registration Rights Agreement Section 3.07
Registration Statement Section 3.05
Regulatory Authority Section 2.02(e)
Reincorporation Merger Effective Time Section 1.04(b)
Reincorporation Merger Transaction Recital H(3)
Reorganization Recital I
RIT Preamble
RIT Board Recital J
RIT Certificates Section 1.05(j)(2)
RIT Class A Stock Recital C
RIT Class B Stock Recital C
RIT Disclosure Schedule Section 2.01(a)
RIT Financial Statements Section 2.02(d)
RIT Independent Committee Recital J
RIT Legal Opinion Section 4.02(j)
RIT Preferred Stock Section 2.02(c)
RIT Shareholders' Meeting Section 3.01(a)
RIT Stock Recital C
RIT/New RIT Merger Effective Time Section 1.05(b)
RIT/New RIT Merger Transaction Recital H(4)
SEC Section 1.06(c)
Securities Act Section 1.06(c)
Settlement Agreement Recital E
Transfer and Assumption Transaction Recital H(1)
Voting Trust and Divestiture Agreement Section 3.09
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this
"Agreement"), dated as of ________ ___, 2000, is made and entered
into by and among BLUE CROSS AND BLUE SHIELD OF MISSOURI, a
Missouri non-profit health services corporation ("BCBSMo"),
RIGHTCHOICE MANAGED CARE, INC., a Missouri corporation ("RIT"),
THE MISSOURI FOUNDATION FOR HEALTH, a Missouri non-profit public
benefit corporation (the "Foundation"), and RIGHTCHOICE MANAGED
CARE, INC., a Delaware corporation and wholly-owned subsidiary of
the Foundation ("New RIT"). RECITALS
A. BCBSMo is a Missouri non-profit non-stock health
services corporation that offers health benefits and related
products and services. BCBSMo holds a license from the Blue
Cross and Blue Shield Association (the "Association") to use the
Blue Cross and Blue Shield names and service marks (the "Marks").
B. RIT is a Missouri general business corporation, doing
business under the name "Alliance Blue Cross Blue Shield," that
provides health care products and services. RIT also holds a
license from the Association to use the Marks.
C. RIT has outstanding 3,710,426 shares of Class A Common
Stock (the "RIT Class A Stock") [to be updated by RIT based on
signing date] and 14,962,500 shares of Class B Common Stock (the
"RIT Class B Stock;" together with the RIT Class A Stock, the
"RIT Stock"). Each share of RIT Class A Stock has one vote per
share, and each share of RIT Class B Stock has ten votes per
share. The issued and outstanding shares of RIT Class B Stock,
representing approximately 80.1% of the issued and outstanding
shares of RIT Stock and approximately 97.6% of the voting power
of the issued and outstanding shares of RIT Stock, are owned by
BCBSMo. The issued and outstanding shares of RIT Class A Stock,
representing approximately 19.9% of the issued and outstanding
shares of RIT Stock and approximately 2.4% of the voting power of
the issued and outstanding shares of RIT Stock, are listed for
trading on the New York Stock Exchange, Inc. (the "NYSE").
D. RIT and BCBSMo were involved in the following
litigation with the Missouri Attorney General, Jeremiah W. "Jay"
Nixon (the "Attorney General"), the Director of the Missouri
Department of Insurance, Jay B. Angoff, and the Missouri
Department of Insurance (together, the "DOI"): Blue Cross Blue
Shield of Missouri, Plaintiff v. Jay Angoff, Director of the
Missouri Department of Insurance, the Missouri Department of
Insurance and Jeremiah W. "Jay" Nixon, No. CV196-619CC, in the
Circuit Court of Cole County, Missouri; and Blue Cross Blue
Shield of Missouri v. Jay Angoff, Director of the Missouri
Department of Insurance and Jeremiah W. "Jay" Nixon, No. 81172,
in the Supreme Court of Missouri (on transfer from Appeal WD
53798, in the Missouri Court of Appeals, Western District
(collectively, the "Litigation").
E. BCBSMo, RIT, the Attorney General and the DOI have
entered into an Amended and Restated Settlement Agreement, dated
__________, 2000 (the "Settlement Agreement"), to resolve the
Litigation. The Settlement Agreement is specifically contingent
upon the consummation of the transactions set forth in this
Agreement. The Settlement Agreement is attached hereto as
Exhibit A.
F. The Foundation was recently organized pursuant to the
Settlement Agreement as a Missouri non-profit public benefit
corporation that will apply for an exemption from federal income
tax under Section 501(c)(4) of the Internal Revenue Code of 1986,
as amended (the "Code"). The Foundation was established to serve
the purposes set forth in its Articles of Incorporation and to,
among other things, receive and hold for those purposes the New
RIT Stock (as defined in Recital G hereof) that it will receive
upon consummation of the Reorganization (as defined in Recital Ihereof).
G. New RIT was recently organized pursuant to the
Settlement Agreement as a Delaware corporation solely to
facilitate the Reorganization. The one (1) share of common stock
of New RIT, par value $_____ [to be determined by RIT prior to
signing date] per share (the "New RIT Stock"), issued and
outstanding as of the date hereof is owned by the Foundation.
H. The Reorganization shall be comprised of the following
transactions, which shall be consummated in the following order,
and which shall be conditioned upon the satisfaction (or, where
permissible, waiver) of each of the conditions set forth in
Article IV of this Agreement:
(1) BCBSMo shall transfer certain assets, contracts
and agreements, including its existing contracts
of insurance and certain other assets required to
satisfy policy liabilities and applicable
statutory reserve and Association capital
requirements, to Healthy Alliance Life Insurance
Company ("HALIC"), a wholly-owned subsidiary of
RIT, and HALIC shall assume all liabilities
related thereto (such transaction is referred to
herein as the "Transfer and Assumption
Transaction" and is described in Section 1.02 hereof);
(2) BCBSMo shall change from a Missouri non-profit non-
stock corporation to a Missouri for-profit stock
corporation by, among other things, amending and
restating its Amended and Restated Articles of
Incorporation in accordance with applicable law
(such transaction is referred to herein as the
"Charter Conversion Transaction" and is described
in Section 1.03 hereof). BCBSMo, upon its
conversion to a stock form corporation pursuant to
the Charter Conversion Transaction, is referred to
herein as "New BCBSMo." As part of the Charter
Conversion Transaction, New BCBSMo shall issue one
(1) share of its common stock, par value $.01 per
share (the "New BCBSMo Stock"), to the Foundation
(which shall then be the sole shareholder of New BCBSMo);
(3) New BCBSMo shall be reincorporated under the
corporate laws of the State of Delaware by means
of the merger of New BCBSMo (which shall be wholly-
owned by the Foundation), with and into New RIT
(which also shall be wholly-owned by the
Foundation), and New RIT shall be the surviving
corporation (such transaction is referred to
herein as the "Reincorporation Merger Transaction"
and is described in Section 1.04 hereof). In the
Reincorporation Merger Transaction, (a) the one
(1) issued and outstanding share of New RIT Stock
owned by the Foundation shall remain issued,
outstanding and unaffected, and (b) the one (1)
issued and outstanding share of New BCBSMo Stock
owned by the Foundation shall be cancelled; and
(4) RIT shall merge with and into New RIT (which
immediately prior to such merger shall be wholly-
owned by the Foundation), and New RIT shall be the
surviving corporation (such transaction is
referred to herein as the "RIT/New RIT Merger
Transaction" and is described in Section 1.05
hereof). In the RIT/New RIT Merger Transaction,
(a) each issued and outstanding share of RIT Class
A Stock shall be converted into one (1) share of
New RIT Stock, (b) each issued and outstanding
share of RIT Class B Stock (which immediately
prior to the RIT/New RIT Merger Transaction shall
be owned by New RIT) shall be cancelled, and (c)
the one (1) issued and outstanding share of New
RIT Stock (which immediately prior to the RIT/New
RIT Merger Transaction shall be owned by the
Foundation) shall be converted into a number of
shares of New RIT Stock equal to the number of
shares of RIT Class B Stock issued and outstanding
immediately prior to the consummation of the
RIT/New RIT Merger Transaction.
I. The Transfer and Assumption Transaction, the Charter
Conversion Transaction, the Reincorporation Merger Transaction
and the RIT/New RIT Merger Transaction are referred to herein
collectively as the "Reorganization." Upon consummation of the
Reorganization, (i) BCBSMo and RIT shall cease to exist as
separate entities, and (ii) the issued and outstanding shares of
New RIT Stock shall be owned (a) by the public in the same
aggregate amount that the RIT Class A Stock was owned by the
public immediately prior to the Reorganization, and (b) by the
Foundation in the same aggregate amount that the RIT Class B
Stock was owned by BCBSMo immediately prior to theReorganization.
J. The Board of Directors of BCBSMo (the "BCBSMo Board")
and the committee comprised of the five members of the BCBSMo
Board who are not employees or officers of BCBSMo or RIT or
directors of RIT (the "BCBSMo Independent Committee"), on the one
hand, and the Board of Directors of RIT (the "RIT Board") and the
committee comprised of four members of the RIT Board who are not
employees or officers of RIT or BCBSMo or directors of BCBSMo
(the "RIT Independent Committee"), on the other hand, have each
determined that it is advisable and in the best interests of
BCBSMo and RIT, respectively, to enter into this Agreement and to
consummate the Reorganization and the other transactions
contemplated by this Agreement. AGREEMENT
In consideration of the foregoing and the mutual covenants
and agreements contained in this Agreement, BCBSMo, RIT, the
Foundation and New RIT agree as follows:
ARTICLE I
TERMS OF REORGANIZATION; CLOSING
Section 1.01. Sequence of Transactions. The Reorganization
shall be accomplished by means of the Transfer and Assumption
Transaction, the Charter Conversion Transaction, the
Reincorporation Merger Transaction and the RIT/New RIT Merger
Transaction, each of which shall be consummated in sequential
order on the Closing Date (as defined in Section 1.07 hereof).
Section 1.02. Transfer and Assumption Transaction. On the
Closing Date, BCBSMo shall consummate the Transfer and Assumption
Transaction as provided below in this Section 1.02.
(a) Assumption Reinsurance Agreement. BCBSMo shall, and RIT
shall cause HALIC to, sign on the date hereof the Assumption
Reinsurance Agreement (the "Assumption Reinsurance Agreement") in
the form attached hereto as Exhibit B and shall consummate the
Transfer and Assumption Transaction in accordance with the terms
of the Assumption Reinsurance Agreement.
(b) Regulatory Approvals. BCBSMo and RIT shall file, or shall
cause to be filed, all necessary applications, notices,
agreements and other documents reasonably required to obtain the
approval of the Association and all Regulatory Authorities (as
defined in Section 2.02(e) hereof) having jurisdiction with
respect to the Transfer and Assumption Transaction.
(c) Consummation of Transaction. BCBSMo and RIT shall take all
reasonable and lawful action and shall execute all documents,
certificates and other papers as may be necessary or appropriate
in order to consummate the Transfer and Assumption Transaction in
accordance with this Agreement and the Assumption ReinsuranceAgreement.
(d) Tax Consequences. It is intended by the parties hereto that
the Transfer and Assumption Transaction shall constitute a tax-
free transfer to a controlled corporation.
Section 1.03. Charter Conversion Transaction. On the Closing
Date, immediately upon consummation of the Transfer and
Assumption Transaction, BCBSMo and the Foundation shall
consummate the Charter Conversion Transaction as provided below
in this Section 1.03.
(a) Filing of Articles of Incorporation; Bylaws. BCBSMo shall,
in accordance with Section 351.025.2 of The General and Business
Corporation Law of Missouri (the "Missouri Corporate Law") and
Section 354.065 of the Missouri Health Services Corporations law,
take all action reasonably necessary to convert to a for-profit
corporation governed by the Missouri Corporate Law including,
without limitation, filing amended and restated Articles of
Incorporation with the Missouri Secretary of State in
substantially the form of that attached hereto as Exhibit C (the
"New BCBSMo Articles"). The New BCBSMo Articles shall be the
Articles of Incorporation of New BCBSMo until thereafter amended
in accordance with applicable law. At the Charter Conversion
Effective Time (as defined in Section 1.03(b) hereof), the Board
of Directors of New BCBSMo, as designated in the New BCBSMo
Articles (the "New BCBSMo Board"), shall adopt the Bylaws in
substantially the form of that attached hereto as Exhibit D (the
"New BCBSMo Bylaws"). The New BCBSMo Bylaws shall be the Bylaws
of New BCBSMo until thereafter amended in accordance with
applicable law.
(b) Effective Time. The Charter Conversion Transaction shall
become effective (the "Charter Conversion Effective Time") upon
approval of all Regulatory Authorities having jurisdiction with
respect to the Charter Conversion Transaction and on the date and
at the time that BCBSMo files a certificate of acceptance of the
Missouri Corporate Law with the Missouri Secretary of State and
the Missouri Secretary of State accepts the New BCBSMo Articles
for filing. BCBSMo shall use its best efforts to cause the
Charter Conversion Effective Time to occur immediately after
consummation of the Transfer and Assumption Transaction on the
Closing Date.
(c) Issuance of Stock. At the Charter Conversion Effective
Time, New BCBSMo shall issue one (1) share of New BCBSMo Stock to
the Foundation. The Foundation shall be the sole shareholder of
New BCBSMo immediately after and following the Charter Conversion
Effective Time.
(d) Regulatory Approvals. BCBSMo shall file, or shall cause to
be filed, all necessary applications, notices, agreements and
other documents reasonably required to obtain the approval of
the Association and all Regulatory Authorities having
jurisdiction with respect to the Charter Conversion Transaction.
(e) Directors and Officers. The persons who were serving as
directors and officers of BCBSMo immediately prior to the Charter
Conversion Effective Time shall resign as directors and officers
of BCBSMo effective as of the Charter Conversion Effective Time.
The New BCBSMo Board shall appoint the officers of New BCBSMo at
the Charter Conversion Effective Time.
(f) Consummation of Transaction. BCBSMo and the Foundation
shall take all reasonable and lawful action and shall execute all
documents, certificates and other papers as may be necessary or
appropriate in order to effectuate the Charter Conversion
Transaction in accordance with this Agreement and applicable law.
(g) Tax Consequences. It is intended by the parties hereto that
the Charter Conversion Transaction shall constitute a tax-free
reorganization within the meaning of Section 368(a)(1)(E) of the
Code. The parties hereto hereby adopt this Agreement as a "plan
of reorganization" within the meaning of Sections 1.368-2(g) and
1.368-3(a) of the United States Treasury Regulations.
Section 1.04. Reincorporation Merger Transaction. On the
Closing Date, immediately upon consummation of the Charter
Conversion Transaction, New BCBSMo, New RIT and the Foundation
shall consummate the Reincorporation Merger Transaction as
provided below in this Section 1.04.
(a) Structure of Merger. Subject to the terms and conditions of
this Agreement, the Delaware General Corporation Law (the
"Delaware Corporate Law") and the Missouri Corporate Law, New
BCBSMo shall merge with and into New RIT. New BCBSMo shall be
the merging corporation in the Reincorporation Merger Transaction
and its corporate identity and existence, separate and apart from
New RIT, shall cease to exist upon consummation of the
Reincorporation Merger Transaction. New RIT shall be the
surviving corporation resulting from the Reincorporation Merger
Transaction and shall continue to be governed by the Delaware
Corporate Law.
(b) Effective Time. The Reincorporation Merger Transaction
shall become effective (the "Reincorporation Merger Effective
Time") on the date and time when the Certificate of Merger
reflecting the Reincorporation Merger Transaction becomes
effective with the Delaware Secretary of State. New BCBSMo and
New RIT shall use their best efforts to cause the Reincorporation
Merger Effective Time to occur immediately after the Charter
Conversion Effective Time on the Closing Date.
(c) Conversion of Shares. At the Reincorporation Merger
Effective Time, by virtue of the Reincorporation Merger
Transaction and without any action on the part of New BCBSMo, New
RIT or the shareholder of either New RIT and New BCBSMo, (i) the
one (1) share of New RIT Stock issued and outstanding immediately
prior to the Reincorporation Merger Effective Time shall remain
issued and outstanding and unaffected by the Reincorporation
Merger Transaction; and (ii) the one (1) share of New BCBSMo
Stock issued and outstanding immediately prior to the
Reincorporation Merger Effective Time shall be cancelled and
retired and all rights with respect thereto shall cease to exist
without any conversion thereof.
(d) Effects of Merger. The Reincorporation Merger Transaction
shall have all of the effects provided for in this Agreement and
under the Delaware Corporate Law and the Missouri Corporate Law.
Without limiting the generality of the foregoing, and subject
thereto, at the Reincorporation Merger Effective Time, all
property, rights and powers and franchises of New BCBSMo and New
RIT shall vest in New RIT, and all debts, liabilities and duties
of New BCBSMo and New RIT shall become the debts, liabilities and
duties of New RIT.
(e) Regulatory Approvals. BCBSMo and New RIT shall file, or
shall cause to be filed, all necessary applications, notices,
agreements and other documents reasonably required to obtain the
approval of the Association and all Regulatory Authorities having
jurisdiction with respect to the Reincorporation MergerTransaction.
(f) Certificate of Incorporation and Bylaws. No changes in the
Certificate of Incorporation of New RIT, attached hereto as
Exhibit F (the "New RIT Certificate of Incorporation"), or Bylaws
of New RIT, attached hereto as Exhibit G (the "New RIT Bylaws"),
shall be effected by the Reincorporation Merger Transaction.
(g) Directors and Officers. At the Reincorporation Merger
Effective Time, the Board of Directors of New RIT (the "New RIT
Board") and the officers of New RIT shall be identical to the
Board of Directors and officers of New RIT immediately prior to
the Reincorporation Merger Effective Time, and each such director
and officer shall hold his or her position until his or her
resignation or removal or the election or appointment of his or
her successor in the manner provided by the New RIT Certificate
of Incorporation and the New RIT Bylaws and applicable law. The
persons who were serving as directors and officers of New BCBSMo
immediately prior to the Reincorporation Merger Effective Time
shall resign as directors and officers of the New BCBSMo
effective as of the Reincorporation Merger Effective Time.
(h) Consummation of Transaction. Each of New BCBSMo, New RIT
and the Foundation shall take all reasonable and lawful action
and shall execute all documents, certificates and other papers as
may be necessary or appropriate in order to effectuate the
Reincorporation Merger Transaction in accordance with this
Agreement. If, at any time after the Reincorporation Merger
Transaction, any such further action is necessary or desirable to
carry out the purposes of this Agreement and to vest New RIT with
full right and title to and possession of all assets, property,
rights, privileges, powers, liabilities, obligations and
franchises of New BCBSMo, the responsible officers and directors
of New RIT and New BCBSMo are fully authorized to take, and shall
take, all such lawful and necessary action.
(i) Tax Consequences. It is intended by the parties hereto that
the Reincorporation Merger Transaction shall constitute a tax-
free reorganization within the meaning of Section 368(a)(1)(F) of
the Code. The parties hereto hereby adopt this Agreement as a
"plan of reorganization" within the meaning of Sections 1.368-
2(g) and 1.368-3(a) of the United States Treasury Regulations.
(j) Dissenters' Rights. The Foundation, as the sole holder of
New BCBSMo Stock and New RIT Stock immediately prior to the
Reincorporation Merger Effective Time, shall not be entitled to
dissent, and hereby waives any right it may have to dissent, from
the Reincorporation Merger Transaction.
Section 1.05. RIT/New RIT Merger Transaction. On the Closing
Date, immediately upon consummation of the Reincorporation Merger
Transaction, RIT, New RIT and the Foundation shall consummate the
RIT/New RIT Merger Transaction as provided below in this Section1.05.
(a) Structure of Merger. Subject to the terms and conditions of
this Agreement, the Delaware Corporate Law and the Missouri
Corporate Law, RIT shall merge with and into New RIT. RIT shall
be the merging corporation in the RIT/New RIT Merger Transaction
and its corporate identity and existence, separate and apart from
New RIT, shall cease to exist upon consummation of the RIT/New
RIT Merger Transaction. New RIT shall be the surviving
corporation resulting from the RIT/New RIT Merger Transaction and
shall continue to be governed by the Delaware Corporate Law.
(b) Effective Time. The RIT/New RIT Merger Transaction shall
become effective (the "RIT/New RIT Merger Effective Time") on the
date and time when the Certificate of Merger reflecting the
RIT/New RIT Merger Transaction becomes effective with the
Delaware Secretary of State. RIT and New RIT shall use their
best efforts to cause the RIT/New RIT Merger Effective Time to
occur immediately after the Reincorporation Merger Effective Time
on the Closing Date.
(c) Conversion of Shares. At the RIT/New RIT Merger Effective
Time, by virtue of the RIT/New RIT Merger Transaction and without
any action on the part of RIT, New RIT or the shareholders of
either of RIT or New RIT, (i) each share of RIT Class A Stock
issued and outstanding immediately prior to the RIT/New RIT
Merger Effective Time (other than shares of RIT Class A Stock
held in the treasury of RIT or by any direct or indirect
subsidiary of RIT (as provided in Section 1.05(d) hereof) or
shares the holders of which have duly exercised and perfected
their dissenters' rights under the Missouri Corporate Law (as
provided in Section 1.05(e) hereof) shall cease to be outstanding
and shall be converted into the right to receive one (1) share of
New RIT Stock (the "Public Exchange Ratio"); (ii) each share of
RIT Class B Stock issued and outstanding immediately prior to the
RIT/New RIT Merger Effective Time shall cease to be outstanding
and shall be cancelled and retired and all rights with respect
thereto shall cease to exist without any conversion thereof; and
(iii) the one (1) share of New RIT Stock issued and outstanding
immediately prior to the RIT/New RIT Merger Effective Time shall
cease to be outstanding and shall be converted into the right to
receive a number of shares of New RIT Stock equal to the number
of shares of RIT Class B Stock issued and outstanding immediately
prior to the RIT/New RIT Merger Effective Time.
(d) Treasury Shares. Each share, if any, of RIT Stock that is
held as treasury stock of RIT or held by any direct or indirect
subsidiary of RIT immediately prior to the RIT/New RIT Merger
Effective Time shall, by virtue of the RIT/New RIT Merger and
without any action on the part of the holder thereof, cease to be
outstanding and shall be cancelled and retired without payment of
any consideration therefor and shall cease to exist.
(e) Dissenters' Rights. Holders of RIT Class A Stock shall be
entitled to dissent from the RIT/New RIT Merger Transaction
pursuant to the procedures set forth in the Missouri Corporate
Law. Any shares of RIT Class A Stock held by a dissenting holder
shall not be converted as described in Section 1.05(c) hereof
but, from and after the RIT/New RIT Merger Effective Time, shall
represent only the right to receive such consideration as may be
determined to be due such dissenting holder pursuant to the
Missouri Corporate Law. New RIT, as the holder of the RIT
Class B Stock immediately prior to the RIT/New RIT Merger
Effective Time, shall not be entitled to dissent, and hereby
waives any rights it may have to dissent, from the RIT/New RIT
Merger Agreement.
(f) Effects of Merger. The RIT/New RIT Merger Transaction shall
have all of the effects provided for in this Agreement and under
the Delaware Corporate Law and the Missouri Corporate Law.
Without limiting the generality of the foregoing, and subject
thereto, at the RIT/New RIT Merger Effective Time, all of the
property, rights, privileges, powers and franchises of RIT and
New RIT shall vest in New RIT, and all debts, liabilities and
duties of RIT and New RIT shall become the debts, liabilities and
duties of New RIT and all debts, liabilities and duties owed by
New RIT to RIT and by RIT to New RIT (including, without
limitation, certain agreements listed in Exhibit E attached
hereto, which shall be updated by RIT as of the Closing Date)
shall terminate and be of no effect.
(g) Regulatory Approvals. RIT and New RIT shall file, or shall
cause to be filed, all necessary applications, notices,
agreements and other documents reasonably required to obtain the
approval of the Association and all Regulatory Authorities having
jurisdiction with respect to the RIT/New RIT Merger Transaction.
(h) Certificate of Incorporation and Bylaws. No changes in the
New RIT Certificate of Incorporation or the New RIT Bylaws shall
be affected by the RIT/New RIT Merger Transaction.
(i) New RIT Directors and Officers. The directors of New RIT
immediately upon consummation of the RIT/New RIT Merger
Transaction shall be those persons designated by RIT and included
on a list to be delivered by RIT to New RIT and the Foundation on
or before the date that the Proxy Statement/Prospectus (as
defined in Section 3.05 hereof) shall be mailed to the
shareholders of RIT in connection with the RIT Shareholders'
Meeting (as defined in Section 3.01(a) hereof), and such persons
shall serve in such capacities for New RIT after the RIT/New RIT
Merger Effective Time and until their resignation or removal or
the election or appointment of their successors in the manner
provided in the New RIT Certificate of Incorporation, the New RIT
Bylaws and applicable law. The persons who were serving as
officers of RIT immediately prior to the Reincorporation Merger
Transaction shall serve in such capacities (retaining their
respective positions and terms of office) for New RIT after the
RIT/New RIT Effective Time and until their resignation or removal
or the election or appointment of their successors in the manner
provided in the New RIT Bylaws and applicable law. New RIT shall
have such additional officers as may be determined by the Board
of Directors of New RIT after the RIT/New RIT Merger Effective
Time. The persons who were serving as directors and officers of
RIT and New RIT, respectively, immediately prior to the RIT/New
RIT Merger Effective Time shall resign as directors and officers
of RIT and New RIT, respectively, effective as of the RIT/New RIT
Merger Effective Time.
(j) Exchange of Certificates.
(1) Exchange Agent. As of the RIT/New RIT Merger Effective
Time, New RIT shall supply, or shall cause to be supplied, to or
for the account of a bank or trust company designated by RIT (the
"Exchange Agent"), in trust for the benefit of the holders of
shares of RIT Class A Stock to be exchanged through the Exchange
Agent in accordance with this Section 1.05, certificates (the
"New RIT Certificates") evidencing the shares of New RIT Stock
issuable in exchange for outstanding shares of RIT Class A Stock
pursuant to Section 1.05(c) hereof.
(2) Exchange Procedure for Public Shareholders. As soon as
reasonably practicable after the RIT/New RIT Merger Effective
Time, New RIT shall instruct the Exchange Agent to mail to each
holder of record of a certificate or certificates which
immediately prior to the RIT/New RIT Merger Effective Time
evidenced outstanding shares of RIT Class A Stock (the "RIT
Certificates") (i) a letter of transmittal (which shall specify
that delivery shall be effected, and risk of loss and title to
the RIT Certificates shall pass, only upon proper delivery of the
RIT Certificates to the Exchange Agent and shall be in such form
and have such other provisions as RIT may reasonably specify),
and (ii) instructions to effect the surrender of the RIT
Certificates in exchange for New RIT Certificates. Upon
surrender of a RIT Certificate for cancellation to the Exchange
Agent together with such letter of transmittal, duly executed,
and such other customary documents as may be required pursuant to
such instructions, the holder of such RIT Certificate shall be
entitled to receive in exchange therefor New RIT Certificate(s)
evidencing that number of shares of New RIT Stock which such
holder has the right to receive in accordance with the Public
Exchange Ratio in respect of the shares of RIT Class A Stock
formerly evidenced by such RIT Certificate and the RIT
Certificate so surrendered shall forthwith be cancelled. In the
event of a transfer of ownership of shares of RIT Class A Stock
to a person who is not registered in the transfer records of RIT
as of the RIT/New RIT Merger Effective Time, New RIT Stock may be
issued and paid in accordance with this Section 1.05(j) to a
transferee of the registered shares if the RIT Certificate
evidencing such shares of RIT Class A Stock is presented to the
Exchange Agent, accompanied by all documents required to evidence
and effect such transfer pursuant to this Section 1.05(j) and by
evidence that any applicable stock transfer taxes have been paid.
Until surrendered, each RIT Certificate that, prior to the
RIT/New RIT Merger Effective Time, represented outstanding shares
of RIT Class A Stock shall be deemed from and after the RIT/New
RIT Merger Effective Time, for all corporate purposes, other than
the payment of dividends, to evidence the ownership of the number
of shares of New RIT Stock into which such shares shall have been
so converted.
(3) Exchange Procedure for Foundation. The Foundation
authorizes and directs New RIT to issue [insert number of shares
necessary to comply with Section 2.01 of the Voting Trust and
Divestiture Agreement] shares of New RIT Stock issuable in
exchange for the outstanding share of New RIT Stock pursuant to
Section 1.05(c) hereof directly to the trustee designated by the
Voting Trust and Divestiture Agreement (as defined in
Section 3.09 hereof) to be held in the voting trust established
by the Voting Trust and Divestiture Agreement. New RIT shall
issue to the Foundation a certificate or certificates
representing the remaining __________ shares of New RIT Stock
issuable in exchange for the outstanding shares of New RIT Stock
pursuant to Section 1.05(c) hereof.
(4) Distributions With Respect to Unexchanged Shares. No
dividends or other distributions, if any, declared or made after
the RIT/New RIT Merger Effective Time with respect to New RIT
Stock with a record date after the RIT/New RIT Merger Effective
Time shall be paid to the holder of any unsurrendered RIT
Certificate with respect to the shares of New RIT Stock such
holder is entitled to receive pursuant to Section 1.05(c) hereof
until the holder of such RIT Certificate shall surrender such RIT
Certificate. Subject to applicable law, following surrender of
any such RIT Certificate, there shall be paid to the record
holder of New RIT Certificates representing shares of New RIT
Stock issued in exchange therefor, without interest, at the time
of such surrender, the amount of dividends or other distributions
with a record date after the RIT/New RIT Merger Effective Time
theretofore paid with respect to such shares of New RIT Stock.
(5) Transfers of Ownership. If any New RIT Certificate
is to be issued in a name other than that in which the RIT Certificate
surrendered in exchange therefor is registered, it will be a
condition of the issuance thereof that the RIT Certificate so
surrendered shall have been properly endorsed and otherwise in
proper form for transfer and that the person requesting such
exchange shall have paid to New RIT, or any agent designated by
it, any transfer or other taxes required by reason of the
issuance of the New RIT Certificate in any name other than that
of the registered holder of the RIT Certificate surrendered, or
established to the satisfaction of New RIT, or any agent
designated by it, that such tax has been paid or is not payable.
(6) No Liability. Neither RIT nor New RIT shall be
liable to any holder of shares of RIT Class A Stock or New RIT Stock for
any RIT/New RIT Merger Transaction consideration (or dividends or
distributions with respect thereto) delivered to a public
official pursuant to any applicable abandoned property, escheat
or similar law.
(7) Lost, Stolen or Destroyed Certificates. In the
event that any RIT Certificates shall have been lost, stolen or destroyed,
the Exchange Agent shall issue in exchange for such lost, stolen
or destroyed RIT Certificate, upon the making of an affidavit of
the fact by the holder thereof, such shares of New RIT Stock as
may be required pursuant to Section 1.05(c); provided, however,
that New RIT may, in its discretion and as a condition precedent
to the issuance thereof, require the owner of such lost, stolen
or destroyed RIT Certificate to deliver a bond in such sum as it
may reasonably direct as indemnity against any claim that may be
made against New RIT or the Exchange Agent with respect to the
RIT Certificate alleged to have been lost, stolen or destroyed.
(k) Stock Transfer Books. At the RIT/New RIT Merger Effective
Time, the stock transfer books of RIT shall be closed, and there
shall be no further registration of transfers of shares of RIT
Stock on the records of RIT.
(l) Tax Consequences. It is intended by the parties hereto that
the RIT/New RIT Merger Transaction shall constitute both (i) a
tax free liquidation of a subsidiary under Sections 332 and 337
of the Code as to New RIT and RIT, and (ii) a tax-free
reorganization within the meaning of Section 368(a)(1)(A) of the
Code. The parties hereto hereby adopt this Agreement as (i) a
plan of liquidation within the meaning of Section 332(b)(2) of
the Code and Sections 1.332-2(a) and 1.332-6 of the United States
Treasury Regulations, and (ii) a "plan of reorganization" within
the meaning of Sections 1.368-2(g) and 1.368-3(a) of the United
States Treasury Regulations.
(m) Consummation of Transaction. Each of RIT and New RIT shall
take all reasonable and lawful action and shall execute all
documents, certificates and other papers as may be necessary or
appropriate in order to effectuate the RIT/New RIT Merger
Transaction in accordance with this Agreement. If, at any time
after the RIT/New RIT Merger Effective Time, any such further
action is necessary or desirable to carry out the purposes of
this Agreement and to vest New RIT with full right and title to
and possession of all assets, property, rights, privileges,
powers, liabilities, obligations and franchises of RIT, the
responsible officers and directors of New RIT and RIT are fully
authorized to take, and shall take, all such lawful and necessaryaction.
Section 1.06. Stock Options.
(a) At the RIT/New RIT Merger Effective Time, each outstanding
option (a "BCBSMo/RIT Stock Option") to purchase shares of RIT
Class A Stock issued, granted or awarded pursuant to the
RightCHOICE Managed Care, Inc. 1994 Equity Incentive Plan, the
RightCHOICE Managed Care, Inc. Nonemployee Directors' Stock
Option Plan or the Blue Cross and Blue Shield of Missouri Stock
Option Agreements, as the case may be (collectively, the
"BCBSMo/RIT Stock Option Plans"), whether or not exercisable or
vested, shall cease to represent a right to acquire shares of RIT
Class A Stock and shall be converted automatically into an option
to acquire, from and after the RIT/New RIT Effective Time, on the
same terms and conditions as were applicable under such
BCBSMo/RIT Stock Option, the number of shares of New RIT Stock as
the holder of such BCBSMo/RIT Stock Option would have been
entitled to receive pursuant to the RIT/New RIT Merger
Transaction had such holder exercised such option in full
immediately prior to the RIT/New RIT Merger Effective Time
(determined by multiplying the aggregate number of shares of RIT
Class A Stock covered by such BCBSMo/RIT Stock Option by the
Public Exchange Ratio), at a price per share equal to the price
per share under the BCBSMo/RIT Stock Option. New RIT shall
acknowledge and assume, from and after the RIT/New RIT Merger
Effective Time, all obligations of RIT and BCBSMo under the
BCBSMo/RIT Stock Option Plans as provided in this Section 1.06.
(b) As soon as practicable after the RIT/New RIT Merger
Effective Time, New RIT shall deliver to each holder of a
BCBSMo/RIT Stock Option appropriate notices setting forth such
holders' rights with respect to such BCBSMo/RIT Stock Option, and
the BCBSMo/RIT Stock Option Plans shall continue in effect on the
same terms and conditions (subject to the conversion required by
this Section 1.06 after giving effect to the RIT/New RIT Merger
Transaction and the assumption by New RIT as provided herein).
To the extent necessary to effectuate the provisions of this
Section 1.06, New RIT shall deliver new or amended agreements
reflecting the terms of each BCBSMo/RIT Stock Option assumed by
New RIT and amend the BCBSMo/RIT Stock Option Plans to reflect
the terms hereof.
(c) As soon as practicable after the RIT/New RIT Merger
Effective Time, New RIT shall file with the Securities and
Exchange Commission (the "SEC") pursuant to the Securities Act of
1933, as amended (the "Securities Act"), a registration statement
on an appropriate form with respect to the shares of New RIT
Stock subject to such BCBSMo/RIT Stock Options and shall use its
best efforts to maintain the effectiveness of such registration
statement or registration statements (and maintain the current
status of the prospectus or prospectuses with respect thereto)
for so long as such BCBSMo/RIT Stock Options remain outstanding.
Section 1.07. Closing; Closing Date. The closing (the
"Closing") of the Reorganization shall take place at the offices
of Lewis, Rice & Fingersh, L.C., 500 North Broadway, Suite 2000,
St. Louis, Missouri as promptly as practicable (but in any event
within five (5) days) after the last day upon which each of the
conditions described in Article IV is satisfied or waived by the
appropriate party (the "Closing Date").
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.01. Disclosure Schedule; Standard.
(a) Disclosure Schedule. BCBSMo has delivered to RIT, New RIT
and the Foundation a confidential schedule (the "BCBSMo
Disclosure Schedule"), executed by the parties hereto
concurrently with the delivery and execution hereof, and RIT has
delivered to BCBSMo, New RIT and the Foundation a confidential
schedule (the "RIT Disclosure Schedule"), executed by the parties
hereto concurrently with the delivery and execution hereof. The
BCBSMo Disclosure Schedule and the RIT Disclosure Schedule set
forth, among other things, items the disclosure of which shall be
necessary or appropriate either in response to an express
disclosure requirement contained in a provision hereof or as an
exception to one or more representations or warranties contained
in this Article II; provided, that (a) no such item shall be
required to be set forth in the BCBSMo Disclosure Schedule or the
RIT Disclosure Schedule, as the case may be, as an exception to a
representation or warranty if its absence would not be reasonably
likely to result in the related representation or warranty being
deemed untrue or incorrect under the standard established by
Section 2.01(b) hereof, (b) the mere inclusion of an item in the
BCBSMo Disclosure Schedule or the RIT Disclosure Schedule, as the
case may be, as an exception to a representation or warranty
shall not be deemed an admission by BCBSMo or RIT, as the case
may be, that such item represents a material exception or fact,
event or circumstance or that such item is reasonably likely to
result in a Material Adverse Effect (as defined in Section
2.01(b) hereof), (c) any matter described in the public filings
made by RIT with the SEC, the DOI or the Attorney General shall
be deemed incorporated by reference in the RIT Disclosure
Schedule, and (d) any matter described in the public filings made
by BCBSMo with the DOI or the Attorney General shall be deemed
incorporated by reference in the BCBSMo Disclosure Schedule.
(b) Standard. No representation or warranty of BCBSMo or RIT
contained in this Article II shall be deemed untrue or incorrect,
and BCBSMo and RIT, as the case may be, shall not be deemed to
have breached a representation or warranty, as a consequence of
the existence of any fact, event or circumstance unless such
fact, circumstance or event, individually or taken together with
all other facts, events or circumstances inconsistent with any
representation or warranty contained in this Article II has had
or is reasonably likely to have a Material Adverse Effect on the
party making such representation or warranty. The term "Material
Adverse Effect," as used herein, means, with respect to BCBSMo or
RIT, any effect that is, or is reasonably expected to be,
material and adverse to the financial position, results of
operations or business of BCBSMo and its subsidiaries taken as a
whole, or RIT and its subsidiaries taken as a whole,
respectively; provided, however, that Material Adverse Effect
shall not be deemed to include the impact of (i) changes in laws,
regulations and rules of the United States and of the various
states governing insurance company holding systems, health
maintenance organizations, health care service plans, third party
administrators, utilization review agents, preferred provider
organizations and managed healthcare organizations and similar
laws of general applicability or interpretations thereof by
courts or Regulatory Authorities, and (ii) changes in generally
accepted accounting principles or regulatory accounting
requirements applicable to BCBSMo, RIT and their respective
subsidiaries, and (iii) the Litigation and the other matters
covered by the Settlement Agreement, and (iv) the litigation
styled Blue Cross Blue Shield of Missouri v. Jeremiah W. "Jay"
Nixon, No. CV197-1558CC, pending in the Circuit Court of Cole
County, Missouri.
Section 2.02. Representations and Warranties of RIT. Subject to
Section 2.01 hereof and except as disclosed in any portion of the
RIT Disclosure Schedule, RIT hereby makes the following
representations and warranties with respect to itself and its
subsidiaries:
(a) Corporate Existence and Power. RIT is a corporation duly
organized, validly existing and in good standing under the laws
of the State of Missouri and has the corporate power to own all
of its property and assets, incur all of its liabilities and to
carry on its business as now being conducted and to consummate
the transactions contemplated hereby.
(b) Authorization; No Defaults. The RIT Board and the RIT
Independent Committee each have, by all appropriate action,
approved this Agreement and each of the other agreements
contemplated hereby, described herein or attached hereto
(collectively, the "Ancillary Agreements") to which RIT is or
will be a party and authorized the execution hereof and thereof
on RIT's behalf by its duly authorized officers and the
performance by RIT of its obligations hereunder and thereunder.
Except for the adoption and approval of this Agreement and the
transactions contemplated herein by RIT's shareholders to the
extent required by applicable law, NYSE rules and regulations and
as described herein, no other corporate proceedings on the part
of RIT are necessary to approve this Agreement and the Ancillary
Agreements to which it is a party and to consummate the
transactions contemplated hereby and thereby. Nothing contained
in the Articles of Incorporation, as amended, or Bylaws, as
amended, of RIT or any other agreement, instrument, decree,
proceeding, law or regulation (except as specifically referred to
in or contemplated by this Agreement) by or to which it or any of
its subsidiaries are bound or subject would prohibit or inhibit
RIT from consummating this Agreement and the Ancillary Agreements
to which it is or will be a party and the transactions
contemplated herein and therein on the terms and conditions
contained herein and therein. This Agreement has been duly and
validly executed and delivered by RIT an
