AGREEMENT AND PLAN OF MERGER
BY AND AMONG
WIT CAPITAL GROUP, INC.
W/S MERGER CORP.
AND
SOUNDVIEW TECHNOLOGY GROUP, INC.
DATED AS OF: OCTOBER 31, 1999
TABLE OF CONTENTS
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ARTICLE I
THE MERGER; EFFECTIVE TIME; CLOSING
1.1 The Merger.................................................. 1
1.2 Effective Time.............................................. 2
1.3 Effects of the Merger....................................... 3
1.4 Closing..................................................... 3
ARTICLE II
CERTIFICATE OF INCORPORATION AND
BYLAWS OF THE SURVIVING CORPORATION
2.1 Certificate of Incorporation................................ 3
2.2 The Bylaws.................................................. 3
ARTICLE III
DIRECTORS AND OFFICERS OF THE
SURVIVING CORPORATION
3.1 Directors................................................... 3
3.2 Officers.................................................... 3
ARTICLE IV
MERGER CONSIDERATION; CONVERSION OR
CANCELLATION OF SHARES IN THE MERGER
Share Consideration for the Merger; Conversion or
4.1 Cancellation of Shares in the Merger........................ 4
4.2 Exchange of Shares in the Merger............................ 7
4.3 Fractional Shares........................................... 8
ARTICLE V
ELECTION PROCEDURE; OTHER AGREEMENTS
5.1 Limitation on Election...................................... 9
5.2 Form of Election............................................ 9
5.3 Revocation of Election...................................... 9
5.4 Decision of Exchange Agent.................................. 9
5.5 Certain Employee Actions and Agreements..................... 10
5.6 Employment Agreements....................................... 10
5.7 Retention Pool.............................................. 10
5.8 Soundview Stock and Option Arrangements..................... 10
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SOUNDVIEW
6.1 Organization; Qualification................................. 11
6.2 Subsidiaries and Affiliates................................. 12
6.3 Capitalization.............................................. 12
6.4 Authorization; Validity of Agreement; SoundView Action...... 13
6.5 Board Approvals Regarding Transactions...................... 13
6.6 Vote Required............................................... 13
6.7 Consents and Approvals; No Violations....................... 14
6.8 Governmental Documents and Financial Statements............. 14
6.9 Compliance with Applicable Law.............................. 15
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6.10 Books and Records........................................... 16
6.11 Ineligible Persons.......................................... 16
6.12 No Undisclosed Liabilities.................................. 16
6.13 Interim Operations.......................................... 17
6.14 Absence of Certain Changes.................................. 17
6.15 Technology and Intellectual Property........................ 18
6.16 Legal Proceedings........................................... 19
6.17 Employee Benefit Plans...................................... 19
6.18 Tax Matters; Government Benefits............................ 21
6.19 Labor and Employment Matters................................ 22
6.20 Contracts and Commitments................................... 23
6.21 Insurance................................................... 23
6.22 Personnel................................................... 23
6.23 Insider Interests........................................... 23
6.24 Brokers or Finders.......................................... 24
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PARENT
7.1 Organization; Qualification................................. 24
7.2 Subsidiaries and Affiliates................................. 24
7.3 Capitalization.............................................. 25
7.4 Authorization; Validity of Agreement; Parent Action......... 26
7.5 Board Approvals Regarding Transactions...................... 26
7.6 Vote Required............................................... 26
7.7 Consents and Approvals; No Violations....................... 26
7.8 Governmental Documents and Financial Statements............. 27
7.9 Compliance with Applicable Law.............................. 27
7.10 Books and Records........................................... 29
7.11 Ineligible Persons.......................................... 29
7.12 No Undisclosed Liabilities.................................. 29
7.13 Interim Operations.......................................... 30
7.14 Absence of Certain Changes.................................. 30
7.15 Technology and Intellectual Property........................ 31
7.16 Legal Proceedings........................................... 32
7.17 Employee Benefit Plans...................................... 32
7.18 Tax Matters; Government Benefits............................ 35
7.19 Labor and Employment Matters................................ 36
7.20 Contracts and Commitments................................... 37
7.21 Insurance................................................... 37
7.22 Insider Interests........................................... 37
7.23 Brokers or Finders.......................................... 37
ARTICLE VIII
COVENANTS
8.1 Interim Operations of SoundView............................. 37
8.2 Interim Operations of Parent................................ 40
8.3 Access; Confidentiality..................................... 42
8.4 Reasonable Best Efforts..................................... 42
Shareholders Meetings; Proxy Statement/Registration
8.5 Statement................................................... 43
8.6 No Solicitation of Competing Transaction.................... 44
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8.7 Publicity................................................... 44
8.8 Notification of Certain Matters............................. 45
8.9 State Takeover Laws......................................... 45
8.10 Merger Sub Compliance....................................... 45
8.11 Expenses.................................................... 45
8.12 Appointment of Director..................................... 45
8.13 Tax-Free Reorganization..................................... 45
ARTICLE IX
CONDITIONS
9.1 Conditions to the Obligations of Parent and Merger Sub...... 46
9.2 Conditions to the Obligations of SoundView.................. 48
ARTICLE X
TERMINATION/SURVIVAL
10.1 Termination................................................. 50
10.2 Effect of Termination....................................... 52
No Survival of Representations and Warranties and
10.3 Covenants................................................... 52
ARTICLE XI
DEFINITIONS
11.1 Definitions................................................. 52
ARTICLE XII
MISCELLANEOUS
12.1 Disputes.................................................... 60
12.2 Amendments; Extension; Waiver............................... 60
12.3 Entire Agreement............................................ 60
12.4 Specific Performance; Injunctive Relief..................... 61
12.5 Interpretation.............................................. 61
12.6 Severability................................................ 61
12.7 Notices..................................................... 61
12.8 Binding Effect; Persons Benefitting; No Assignment.......... 63
12.9 Counterparts................................................ 63
12.10 Governing Law............................................... 63
12.11 Jurisdiction; Waiver of Jury Trial and Certain Damages...... 63
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (hereinafter called this "Agreement"), dated as
of October 31, 1999, among Wit Capital Group, Inc., a Delaware corporation
("Parent"), W/S Merger Corp., a Delaware corporation and a direct wholly owned
subsidiary of Parent ("Merger Sub"), and SoundView Technology Group, Inc., a
Delaware corporation ("SoundView").
RECITALS
WHEREAS, the Boards of Directors of Parent, Merger Sub and SoundView each
have determined that it is in the best interests of their respective
stockholders for Merger Sub to merge with and into SoundView upon the terms and
subject to the conditions of this Agreement;
WHEREAS, for federal income tax purposes, it is intended that the Merger (as
hereinafter defined in Section 1.1) shall qualify as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the
"Code"); and
WHEREAS, Parent, Merger Sub and SoundView desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein, Parent,
Merger Sub and SoundView hereby agree as follows:
ARTICLE I
THE MERGER; EFFECTIVE TIME; CLOSING
1.1 THE MERGER. Subject to the terms and conditions of this Agreement and
the Delaware General Corporation Law (the "DGCL"), at the Effective Time (as
hereinafter defined), SoundView and Merger Sub shall consummate a merger (the
"Merger") in which (a) Merger Sub shall be merged with and into SoundView and
the separate corporate existence of Merger Sub shall thereupon cease, (b)
SoundView shall be the successor or surviving corporation in the Merger and
shall continue to be governed by the laws of the State of Delaware, and (c) the
separate corporate existence of SoundView with all its rights, privileges,
immunities, powers and franchises shall continue unaffected by the Merger. The
corporation surviving the Merger is sometimes hereinafter referred to as the
"Surviving Corporation." At the election of Parent, with prior notice and
consultation with SoundView, any direct wholly owned subsidiary of Parent may be
substituted for Merger Sub as a constituent corporation in the Merger. In such
event, the parties agree to execute an appropriate amendment to this Agreement
in order to reflect the foregoing. If at any time after December 15, 1999,
Parent is unable to satisfy the condition set forth in Section 9.1(i), Parent
shall be entitled to restructure the Merger so that at the Effective Time,
SoundView shall be merged with and into Merger Sub and the separate corporate
existence of SoundView shall thereupon cease, Merger Sub shall be the successor
or surviving corporation in the Merger and shall continue to be governed by the
laws of the State of Delaware, and the separate corporate existence of Merger
Sub with all its rights, privileges, immunities, powers and franchises shall
continue unaffected by the Merger, except that the name of Merger Sub shall be
changed to SoundView Technology Group, Inc.; provided, however, that no such
election shall be effective if such restructuring would be materially adverse to
the stockholders of SoundView or if within 5 business days after the date such
election is communicated in writing to SoundView, Parent shall have received an
opinion of Morrison & Foerster LLP or other counsel reasonably acceptable to
Parent addressed to Parent to the effect set forth in Section 9.1(i) and such
Section 9.1(i) shall thereafter be amended so as to replace references to
"Skadden Arps Slate Meagher & Flom LLP" with "Morrison & Foerster LLP" or such
other counsel in all places where it appears therein. In the event the foregoing
election is effective, the parties hereto agree to execute an appropriate
amendment to this Agreement in order to reflect the foregoing. If at any time
after December 15, 1999, SoundView is unable to satisfy the condition set forth
in Section 9.2(h), SoundView shall be entitled to
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restructure the Merger so that at the Effective Time, SoundView shall be merged
with and into Merger Sub and the separate corporate existence of SoundView shall
thereupon cease, Merger Sub shall be the successor or surviving corporation in
the Merger and shall continue to be governed by the laws of the State of
Delaware, and the separate corporate existence of Merger Sub with all its
rights, privileges, immunities, powers and franchises shall continue unaffected
by the Merger, except that the name of Merger Sub shall be changed to "SoundView
Technology Group, Inc."; provided, however, that no such election shall be
effective if such restructuring would be materially adverse to the business,
operations or financial condition of SoundView or if within 5 business days
after the date such election is communicated in writing to Parent, SoundView
shall have received, an opinion of Skadden Arps Slate Meagher & Flom LLP or
other counsel reasonably acceptable to SoundView addressed to SoundView to the
effect set forth in Section 9.2(h) and such Section 9.2(h) shall thereafter be
amended so as to replace references to "Morrison & Foerster LLP" with "Skadden
Arps Slate Meagher & Flom LLP" or such other counsel in all places where it
appears therein. In the event the foregoing election is effective, the parties
hereto agree to execute an appropriate amendment to this Agreement in order to
reflect the foregoing.
1.2 EFFECTIVE TIME. Subject to the terms and conditions of this Agreement,
as soon as practicable after the satisfaction of the conditions set forth in
Article IX, Parent, Merger Sub and SoundView will cause an appropriate
Certificate of Merger (the "Certificate of Merger") to be executed and filed on
the date of the Closing (as hereinafter defined in Section 1.4) (or on such
other date as Parent and SoundView may agree) with the Secretary of State of the
State of Delaware in the manner provided in the DGCL. The Merger shall become
effective on the close of business on the date on which the Certificate of
Merger has been duly filed with the Secretary of State of the State of Delaware
or such other time as is agreed upon by the parties and specified in the
Certificate of Merger, and such time is hereinafter referred to as the
"Effective Time."
1.3 EFFECTS OF THE MERGER. The Merger shall have the effects set forth in
Delaware law. Without limiting the generality of the foregoing, at the Effective
Time, all the properties, rights, privileges, powers and franchises of SoundView
and Merger Sub shall vest in the Surviving Corporation, and all debts,
liabilities and duties of SoundView and Merger Sub shall become the debts,
liabilities and duties of the Surviving Corporation.
1.4 CLOSING. The closing of the Merger (the "Closing") shall take place
(a) at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 919 Third
Avenue, New York, New York 10022, at 10:00 a.m. on the first business day
following the later of (i) the date on which the last of the conditions set
forth in Article IX hereof shall be fulfilled or waived in accordance with this
Agreement and (ii) January 7, 2000 or (b) at such other place, time and date as
Parent and SoundView may agree.
ARTICLE II
CERTIFICATE OF INCORPORATION AND BYLAWS
OF THE SURVIVING CORPORATION
2.1 CERTIFICATE OF INCORPORATION. At the Effective Time and in accordance
with the DGCL, the Restated Certificate of Incorporation of Merger Sub shall be
the Certificate of Incorporation of the Surviving Corporation except that the
name of the corporation shall be "SoundView Technology Group, Inc., until
thereafter amended in accordance with applicable law.
2.2 THE BYLAWS. At the Effective Time and without any further action on
the part of SoundView, Merger Sub or the Surviving Corporation, the Bylaws of
Merger Sub shall be the Bylaws of the Surviving Corporation.
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ARTICLE III
DIRECTORS AND OFFICERS
OF THE SURVIVING CORPORATION
3.1 DIRECTORS. Ronald Readmond, Mark Loehr and Russell Crabs shall, from
and after the Effective Time, be the directors of the Surviving Corporation
until their successors have been duly elected or appointed and qualified.
3.2 OFFICERS. The officers of SoundView at the Effective Time shall, from
and after the Effective Time, be the officers of the Surviving Corporation until
their successors have been duly elected or appointed and qualified.
ARTICLE IV
MERGER CONSIDERATION; CONVERSION OR CANCELLATION OF SHARES IN THE MERGER
4.1 SHARE CONSIDERATION FOR THE MERGER; CONVERSION OR CANCELLATION OF SHARES
IN THE MERGER. The manner of converting or canceling shares of SoundView and
Merger Sub in the Merger shall be as follows:
(a) NON-ELECTING SHARES. At the Effective Time, each share of common
stock, par value $0.01 per share, of SoundView ("SoundView Common Stock") issued
and outstanding immediately prior to the Effective Time (such shares of
SoundView Common Stock being referred to hereinafter as the "Shares"), other
than (i) Shares as to which an election to receive cash has been properly made
pursuant to Article V hereof and not revoked, relinquished or lost (such Shares
being referred to hereinafter as "Electing Shares"), (ii) Shares as to which
dissenters' rights have been properly asserted and not withdrawn or lost under
Section 262 of the DGCL (such Shares being referred to hereinafter as
"Dissenting Shares") and (iii) Shares owned by Parent, Merger Sub or any direct
or indirect wholly owned subsidiary of Parent (collectively, "Parent Companies")
or SoundView, shall, by virtue of the Merger and without any action on the part
of the holder thereof, cease to be outstanding, be canceled and retired and be
converted into (x) that number of shares of common stock, par value $.01 per
share, of Parent ("Parent Common Stock") together with the associated rights
(the "Parent Rights") to purchase shares of Series A Junior Participating
Preferred Stock of Parent issued pursuant to the Rights Agreement dated June 7,
1999 between Parent and American Stock Transfer Company as Rights Agent (the
"Parent Rights Agreement") (the shares of Parent Common Stock together with the
Parent Rights being referred to herein as the "Parent Shares"), rounded to the
nearest thousandth of a share (with "5" being rounded downward), equal to the
quotient (the "Exchange Ratio") derived by dividing $81.2387 by the average of
the mean between the closing bid and ask prices (as reported for the primary
trading session (currently ending at 4:00 p.m.) on the Nasdaq National Market
("NNM")) of Parent Shares during the period (the "Exchange Rate Period")
comprised of the seven consecutive trading days ending on the fifth trading day
prior to such date not more than twenty and not less than ten days prior to the
date then scheduled for the Closing as is determined in advance by resolution of
Parent's Board of Directors (the "Average Stock Price"); PROVIDED, HOWEVER, that
the Exchange Ratio shall not be greater than 5.220 or less than 4.376 and (y)
cash in lieu of fractional Parent Shares as contemplated by Section 4.3. Shares
other than Electing Shares, Dissenting Shares and Parent Companies Shares are
sometimes referred to herein as "Non-electing Shares").
(b) ELECTING SHARES. At the Effective Time, on the terms and subject to
the conditions hereinafter set forth in Article IX, each Electing Share shall,
by virtue of the Merger and the election made with respect thereto, cease to be
outstanding, be canceled and retired and be converted into cash in an amount
equal to $81.2387 without interest thereon at any time (the "Cash Value per
Share").
(c) DISSENTING SHARES. Dissenting Shares shall not be converted into or
represent a right to receive the consideration set forth in Section 4.1 but the
holder of such Shares shall be entitled only to such rights as are provided by
the DGCL, and Parent shall be solely responsible for the payment of any amounts
due
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in respect of such Dissenting Shares pursuant to the DGCL. If any holder of
Shares which theretofore were Dissenting Shares effectively withdraws or loses
(through failure to perfect or otherwise) such holder's right to appraisal under
Section 262 of the DGCL, then as of the occurrence of such withdrawal or loss
such holder's Share shall automatically be restored to the status of
Non-electing Shares.
(d) PARENT HOLDINGS. At the Effective Time, each Share issued and
outstanding and owned by Parent or any Parent Subsidiary immediately prior to
the Effective Time shall, by virtue of the Merger and without any action on the
part of the holder thereof, cease to be outstanding and be canceled and retired
without payment of any consideration therefor.
(e) MERGER SUB SHARES. At the Effective Time, each share of common stock
of Merger Sub issued and outstanding immediately prior to the Effective Time
shall, by virtue of the Merger and without any action on the part of Merger Sub
or the holder thereof, cease to be outstanding, be canceled and retired and be
converted into and become one fully paid and nonassessable share of common stock
of the Surviving Corporation.
(f) SOUNDVIEW STOCK OPTIONS. Except as set forth below, the terms and
provisions of the SoundView Stock Option Plan (as defined below) shall continue
in full force and effect and shall govern each option (or portion thereof, as
the case may be) outstanding immediately prior to the Effective Time under any
SoundView Stock Option Plan, whether vested, unvested, exercisable or
unexercisable (a "SoundView Stock Option"). At the Effective Time, each
SoundView Stock Option then outstanding shall be automatically converted,
without any further action, into an option to purchase Parent Shares. The number
of shares of SoundView Common Stock to be substituted for shall be equal to the
number of shares of Parent Common Stock together with the Parent Rights, rounded
down to the nearest whole number, which is equal to the number of shares of
SoundView Common Stock that were subject to such SoundView Stock Option
immediately prior to the Effective Time multiplied by the Exchange Ratio, at an
exercise price equal to the per share exercise price of each such SoundView
Stock Option immediately prior to the Effective Time divided by the Exchange
Ratio. Notwithstanding any vesting schedule set forth in or pursuant to any
SoundView Stock Option Plan or SoundView Stock Option, any SoundView Stock
Options of any SoundView employee outstanding and not yet vested at the
Effective Time shall, except to the extent forfeited pursuant to the terms of
the applicable SoundView Stock Option Plan or SoundView Stock Option, vest on
each March 31, June 30, September 30 and December 31 commencing March 31, 2000
and ending December 31, 2002 at the rate as nearly as practical equal to
one-twelfth of such unvested SoundView Stock Options of such SoundView employee.
Such options for Parent Common Stock shall for purposes of this Agreement be
called "Parent Common Stock Options." All of the Parent Common Stock Options
held by an employee shall vest immediately upon the occurrence of (i) the
termination by Parent of such employee's employment by Parent and its
Subsidiaries without Cause; (ii) the acquisition or creation by Parent of an
additional business as a result of which SoundView's institutional brokerage
business, as developed and expanded within Parent, is no longer Parent's primary
institutional brokerage business; (iii) the acquisition or creation by Parent of
an additional business as a result of which SoundView's investment banking
technology group or research technology group, as developed and expanded within
Parent, is no longer Parent's primary investment banking technology group or
research technology group, respectively; or (iv) the completion by Parent of a
merger or consolidation or the completion by another Person of a tender offer or
exchange offer for, or purchase of, shares of capital stock of Parent as a
result of which both (A) the Persons who were the holders of all of the shares
of common stock of Parent immediately prior to completion of such merger,
consolidation, tender offer, purchase or exchange offer hold shares of capital
stock of Parent or a company of which Parent is then a Subsidiary representing
less than 50% of the voting power of all classes of capital stock of Parent or
such other company, as the case may be, and (B) the individuals constituting the
Board of Directors of Parent immediately prior to completion of such merger,
consolidation, tender offer, purchase or exchange offer constitute less than 50%
of the Board of Directors of Parent or such other company, as the case may be.
Notwithstanding any other provisions of the SoundView Stock Options and
SoundView Stock Option
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Plans to the contrary, with respect to any Parent Common Stock Option that was
vested prior to the Effective Time (x) upon exercise thereof after the Effective
Time and prior to the first anniversary of the Effective Time, Parent shall
issue to the Person exercising such option three certificates for the Parent
Shares issuable upon such exercise, each of which shall be for a number of
Parent Shares as nearly equal as practicable to one-third of such Parent Shares,
(A) the first of which shall contain no restrictive legend other than as may be
required by the Securities Act, (B) the second of which shall be subject to a
restrictive legend substantially in the form set forth in Exhibit A hereto
providing for a one-year restriction from the Effective Time on transfer and (C)
the third of which shall be subject to a restrictive legend substantially in the
form set forth in Exhibit B hereto providing for a two-year restriction from the
Effective Time on transfer or (y) upon exercise thereof on or after the first
anniversary of the Effective Time and prior to the second anniversary of the
Effective Time, Parent shall issue to the Person exercising such option two
certificates for the Parent Shares issuable upon such exercise, (A) one of which
shall be for a number of Parent Shares as nearly equal as practicable to
two-thirds of such Parent Shares and which shall contain no restrictive legend
other than as may be required by the Securities Act and (B) the other of which
shall be for the balance of such Parent Shares and which shall contain a
restrictive legend substantially in the form set forth in Exhibit A hereto
providing for a restriction on transfer through the second anniversary of the
Effective Time. Parent and SoundView shall take such actions as may be necessary
to amend their stock option plans and stock option agreements to reflect the
foregoing agreements for all periods on and after the Effective Time. For
purposes of this Agreement, the term "SoundView Stock Option Plan" means
SoundView's 1995 Stock Option Plan (the "SoundView Stock Option Plan"). Parent
shall use all reasonable efforts to cause to be reserved for issuance the number
of Parent Shares issuable upon exercise of the Parent Common Stock Options
referred to in this Section 4.1(f) and, as soon as reasonably practicable after
the Effective Time, Parent shall use all reasonable efforts to cause to be filed
a registration statement on Form S-8 (or any successor or other appropriate
form) under the Securities Act, or an amendment to an existing registration
statement of Form S-8, to register the Parent Shares issuable upon exercise of
the Parent Common Stock Options.
(g) CHANGES IN CAPITALIZATION. If between the date of this Agreement and
the Effective Time, the outstanding Parent Shares shall be changed into a
different number of shares or a different class by reason of any
reclassification, reorganization, consolidation, merger, recapitalization,
split-up, combination or exchange of shares or if a stock dividend thereon shall
be declared with a record date within said period, the number of Parent Shares
to be issued in the Merger shall be appropriately adjusted. Nothing in this
Section 4.1(g) shall be deemed to constitute a waiver by SoundView of the
provisions of Section 8.2 hereof.
4.2 EXCHANGE OF SHARES IN THE MERGER. The manner of making exchange of
Shares in the Merger shall be as follows:
(a) At the Effective Time, Parent shall make available to American Stock
Transfer Company or such other exchange agent as may be selected by Parent (the
"Exchange Agent") for the benefit of the holders of Shares, a sufficient number
of certificates representing the aggregate number of Parent Shares issuable
pursuant to Section 4.1 (the certificates representing such aggregate number of
Parent Shares being hereinafter referred to as the "Stock Merger Exchange
Fund"). The Exchange Agent shall, pursuant to irrevocable written instructions,
deliver the Parent Shares contemplated to be issued pursuant to Section 4.1 out
of the Stock Merger Exchange Fund. The Stock Merger Exchange Fund shall not be
used for any other purpose.
(b) Promptly after the Effective Time, the Exchange Agent shall mail to each
holder of record of a certificate or certificates which immediately prior to the
Effective Time represented outstanding Shares (the "Certificates") (i) a form of
letter of transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon proper delivery
of the Certificates to the Exchange Agent) and (ii) instructions for use in
effecting the surrender of the Certificates for payment therefor. Upon surrender
of Certificates for cancellation to the Exchange Agent, together with such
letter of transmittal duly executed and any other required documents, the holder
of such Certificates shall be
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entitled to receive for the Shares represented by such Certificates the
consideration applicable to such Shares and the Certificates so surrendered
shall forthwith be canceled. Upon such surrender, the Exchange Agent shall issue
to each holder three certificates for the Parent Shares included in such
consideration, (A) the first of which shall be for a number of Parent Shares as
nearly equal as practicable to 34.84% of such Parent Shares and shall contain no
restrictive legend other than as may be required by the Securities Act, (B) the
second of which shall be for a number of Parent Shares as nearly equal as
practicable to 32.58% of such Parent Shares and shall be subject to a
restrictive legend substantially in the form set forth in Exhibit A hereto
providing for a one-year restriction on transfer and (C) the third of which
shall be for a number of Parent Shares as nearly equal as practicable to 32.58%
of such Parent Shares and shall be subject to a restrictive legend substantially
in the form set forth in Exhibit B hereto providing for a two-year restriction
on transfer. Until so surrendered, such Certificates shall represent solely the
right to receive the consideration applicable to such Share. No dividends or
other distributions that are declared after the Effective Time on Parent Shares
and payable to the holders of record thereof after the Effective Time will be
paid to Persons entitled by reason of the Merger to receive Parent Shares until
Certificates representing the right to receive such Parent Shares are
surrendered in appropriate form. Upon such surrender, there shall be paid to the
Person in whose name the Parent Shares are issued any dividends or other
distributions having a record date after the Effective Time and a payment date
prior to the time of such surrender. After such surrender there shall be paid to
the Person in whose name the Parent Shares are issued any dividends or other
distributions on such Parent Shares which shall have a record date after the
Effective Time and prior to such surrender and a payment date after such
surrender. In no event shall the Persons entitled to receive such dividends or
other distributions be entitled to receive interest on such dividends or other
distributions. If any certificate representing Parent Shares is to be issued or
cash payment in lieu of fractional share interests is to be made to a Person
other than the one in whose name the Certificate surrendered in exchange
therefor is registered, it shall be a condition of such exchange that the
Certificate so surrendered shall be properly endorsed and otherwise in proper
form for transfer and that the Person requesting such exchange shall pay to the
Exchange Agent any applicable transfer or other similar taxes, or shall
establish to the satisfaction of the Exchange Agent that any such tax has been
paid or is not applicable. Notwithstanding the foregoing, neither the Exchange
Agent nor any party hereto shall be liable to a holder of Shares for any Parent
Shares or dividends thereon, or, in accordance with Section 4.3, cash in lieu of
fractional Parent Shares, delivered to a public official when and if required by
applicable escheat law. The Exchange Agent shall not be entitled to vote or
exercise any rights of ownership with respect to the Parent Shares held by it
from time to time hereunder, except that it shall receive and hold all dividends
or other distributions paid or distributed with respect to such Parent Shares
for the account of the Persons entitled thereto.
(c) Any portion of the Stock Merger Exchange Fund and the Fractional
Securities Fund (as hereinafter defined in Section 4.3) which remains unclaimed
by the former stockholders of SoundView for six months after the Effective Time
shall be delivered to Parent, upon demand of Parent, and any former stockholders
of SoundView shall thereafter look only to Parent for payment of their claim for
the consideration for the Shares, including any cash in lieu of fractional
Parent Shares.
4.3 FRACTIONAL SHARES. No fractional Parent Shares shall be issued in the
Merger. In lieu of any such fractional securities, each holder of Shares who
would otherwise be entitled to a fraction of a Parent Share upon surrender of
Certificates for exchange pursuant to this Article IV will be paid an amount in
cash (without interest) determined by multiplying (i) the Average Stock Price
(but not more than $18.5625 or less than $15.5625) by (ii) the fraction of a
Parent Share to which such holder would otherwise be entitled. Parent shall make
available to the Exchange Agent sufficient funds (herein referred to as the
"Fractional Securities Fund") as and when necessary to enable the Exchange Agent
to make the cash payments contemplated hereby. In no event shall interest be
paid or accrued on any such cash payments.
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ARTICLE V
ELECTION PROCEDURE; OTHER AGREEMENTS
5.1 LIMITATION ON ELECTION. No holder of Shares may elect to receive cash
with respect to a number of Shares in excess of the product of (a) the number of
Shares of which such holder is the holder of record at the Effective Time times
(b) a fraction the numerator of which is the excess of (i) the lesser of the
shareholders' equity of SoundView as of December 31, 1999 or $30 million, in
each case less any distributions in respect of the Shares declared or made after
December 31, 1999 and not reflected in such shareholders' equity over (ii) the
product of the sum of (A) the number of Dissenting Shares that are not Electing
Shares times the Cash Value per Share plus (B) the number of Old Agreement
Securities that are not Dissenting Shares or Electing Shares and the denominator
of which is the product of the number of Shares issued and outstanding plus the
number of Shares subject to unexercised SoundView Stock Options immediately
prior to the Effective Time times the Cash Value per Share.
5.2 FORM OF ELECTION. A form of election (the "Form of Election") shall be
mailed to holders of Shares of record as of ten days prior to the then-scheduled
Effective Date. Any such holder's election to receive cash pursuant to this
Article V shall have been properly made only if the Exchange Agent shall have
received at its designated office, by 5:00 p.m. New York time on the business
day preceding the fifth day prior to the Effective Date, a Form of Election
properly completed and accompanied by certificates for the shares to which such
Form of Election relates (or an appropriate guarantee of delivery guaranteeing
that the certificates for such shares will be delivered prior to the Effective
Time), as set forth in such Form of Election, duly endorsed in blank or
otherwise in form acceptable for transfer on the books of SoundView.
5.3 REVOCATION OF ELECTION. Any Form of Election may be revoked by the
person submitting such Form to the Exchange Agent only by written notice
received by the Exchange Agent prior to 5:00 p.m. New York time on the business
day before the third day prior to the Effective Date. At such time any cash
election by a holder of Dissenting Shares shall be deemed revoked. If a Form of
Election is so revoked, the certificate or certificates (or guarantee of
delivery, as appropriate) for the Shares to which such Form of Election relates
shall be promptly returned to the person submitting the same to the Exchange
Agent.
5.4 DECISION OF EXCHANGE AGENT. The Exchange Agent shall have discretion
to determine (a) whether or not elections to receive cash have been properly
made or revoked pursuant to this Article V with respect to any Shares and (b)
when elections and revocations were received by it. If the Exchange Agent
determines that any election to receive cash was not properly made with respect
to any Shares, such Shares shall be treated by the Exchange Agent as Shares
which were not Electing Shares at the Effective Time of the Merger, and such
Shares shall be exchanged in the Merger for Parent Shares pursuant to Section
4.1(a) hereof. The Exchange Agent may, with the mutual agreement of Parent and
SoundView, make such equitable changes in the procedures set forth in this
Article V for the implementation of the cash election provided for in this
Article V as shall be necessary or desirable to fully effect such elections.
5.5 CERTAIN EMPLOYEE ACTIONS AND AGREEMENTS. On the date hereof, each of
the holders of Shares named on Schedule 5.5 (a) has executed and delivered to
SoundView and Parent a written consent with respect to all of his or her Shares
approving the Merger and this Agreement in the form set forth as Exhibit C
hereto; (b) has executed and delivered to Parent a Voting Agreement (including
an irrevocable proxy) in the form set forth as Exhibit D hereto; and (c) has
executed and delivered to SoundView (and SoundView has executed and delivered to
Parent) an agreement implementing the provisions of Section 5.8 (each, a "Put
Termination Agreement") in the form set forth as Exhibit E. SoundView hereby
consents and agrees to the giving of each such consent and the entering into of
each such Voting Agreement and granting of each such irrevocable proxy.
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5.6 EMPLOYMENT AGREEMENTS. On or about the date hereof, each of the
individuals named on Schedule 5.6 has entered into an Employment Agreement with
Parent, the term of which shall commence at the Effective Time.
5.7 RETENTION POOL. At the Effective Time, Parent shall issue to the
employees of SoundView and the SoundView Subsidiaries named on a Schedule (the
"Retention Schedule") to be agreed upon by Parent and SoundView in writing prior
to the Effective Time an aggregate number of Parent Shares (the "Retention
Shares") equal to the product of (a) the quotient resulting from dividing $25
million by $81.2387 times (b) the Exchange Ratio. The Retention Shares shall be
allocated among the employees listed on the Retention Schedule in the amounts
set forth in the Retention Schedule for each such employee. Subject to
applicable income tax withholding requirements, 50% of the Retention Shares
allocated to an employee who is continuously employed by Parent and its
Subsidiaries (including SoundView and its Subsidiaries) from the Effective Time
through the end of the thirtieth month after and including the month in which
the Effective Time occurs shall, on the last day of such thirtieth month, be
vested in and released to such employee, and 50% of the Retention Shares
allocated to an employee who is continuously employed by Parent and its
Subsidiaries (including SoundView and its Subsidiaries) from the Effective Time
through the end of the forty-second month after and including the month in which
the Effective Time occurs shall, on the last day of such forty-second month, be
vested in and released to such employee. If the employment by Parent or any of
its Subsidiaries of an employee to whom any Retention Shares have been allocated
is terminated for any reason other than by Parent without Cause, all of the
Retention Shares allocated to such employee shall be forfeited by such employee
and shall become treasury stock. All of the Retention Shares allocated to an
employee shall vest in and be released to such employee immediately upon the
occurrence of any of Section 4.1(f)(i)-(iv) hereof.
5.8 SOUNDVIEW STOCK AND OPTION ARRANGEMENTS. SoundView will use its
reasonable best efforts to complete each of the following actions at the
earliest practicable date: (a) to amend, effective immediately prior to the
Effective Time, the bylaws of SoundView to delete Sections 7 and 8 of
Article VI thereof; (b) to amend, effective immediately prior to the Effective
Time, the SoundView Stock Option Plan to delete Article XVI thereof and to
implement the matters set forth in Section 4.1(f) hereof; (c) to amend,
effective immediately prior to the Effective Time, each SoundView Stock Option
outstanding at such time and each associated stock appreciation right to
implement the matters set forth in Section 4.1(f) hereof and to eliminate the
right of the holder of such option or right to invoke the rights, under
Article XVI of the SoundView Stock Option Plan or any similar rights under such
holder's SoundView Stock Option, of a holder of a SoundView Stock Option or
Parent Common Stock Option or associated stock appreciation right or of any
Shares or Parent Shares acquired upon exercise of such option; and (d) to
terminate, effective immediately prior to the Effective Time, each Stock
Purchase and Transfer Restriction Agreement with each stockholder of SoundView
who is a party to such an agreement. Any Shares and SoundView Stock Options as
to which the foregoing deletions, amendments and terminations are not effective
immediately prior to the Effective Time are hereinafter referred to as the "Old
Agreement Securities."
ARTICLE VI
REPRESENTATIONS AND
WARRANTIES OF SOUNDVIEW
Except as set forth in the Disclosure Schedule prepared and signed by
SoundView and delivered to Parent prior to the execution hereof (provided that
the listing of an item in one section of the Disclosure Schedule shall be deemed
to be a listing in another section of such Disclosure Schedule and apply to any
other representation and warranty of such party in this Agreement but only to
the extent that it is reasonably apparent from a reading of such disclosure
item), SoundView represents and warrants to Parent and Merger Sub that all of
the statements contained in this Article VI are true and correct as of the date
of this Agreement (or, if made as of a specified date, as of such date).
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6.1 ORGANIZATION; QUALIFICATION. SoundView (i) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware; (ii) has full corporate power and authority to carry on its business
as it is now being conducted and to own, lease or operate the properties and
assets it now owns, leases or operates; and (iii) is duly qualified or licensed
to do business as a foreign corporation in good standing in every jurisdiction
in which ownership of property or the conduct of its business requires such
licensing or qualification or, if SoundView is not so licensed or qualified in
any such jurisdiction, it can become so qualified in such jurisdiction without
any material adverse effect (including assessment of state taxes for prior
years) upon its business and properties. SoundView has heretofore delivered to
Parent complete and correct copies of the certificate of incorporation and
by-laws of SoundView, as presently in effect.
6.2 SUBSIDIARIES AND AFFILIATES. The Disclosure Schedule sets forth the
name, jurisdiction of incorporation and authorized and outstanding capital stock
of each SoundView Subsidiary and the jurisdictions in which each SoundView
Subsidiary is licensed or qualified to do business. SoundView does not own,
directly or indirectly, any capital stock or other equity securities of any
corporation or have any direct or indirect equity or ownership interest in any
business other than publicly traded securities constituting less than five
percent of the outstanding equity of the issuing entity. All the outstanding
capital stock of each SoundView Subsidiary is owned directly or indirectly by
SoundView free and clear of all liens, options or encumbrances of any kind and
all material claims or charges of any kind, and is validly issued, fully paid
and nonassessable, and there are no outstanding options, rights or agreements of
any kind relating to the issuance, sale or transfer of any capital stock or
other equity securities of any such SoundView Subsidiary to any person except
SoundView or another SoundView Subsidiary. Each SoundView Subsidiary (i) is a
corporation duly organized, validly existing and in good standing under the laws
of its state of incorporation; (ii) has full corporate power and authority to
carry on its business as it is now being conducted and to own, lease or operate
the properties and assets it now owns, leases or operates; and (iii) is duly
qualified or licensed to do business as a foreign corporation in good standing
in every jurisdiction in which ownership of property or the conduct of its
business requires such licensing or qualification or, if a SoundView Subsidiary
is not so licensed or qualified in any such jurisdiction, it can become so
licensed or qualified in such jurisdiction without any material adverse effect
(including assessment of state taxes for prior years) upon its business and
properties. SoundView has heretofore delivered to Parent complete and correct
copies of the certificate of incorporation and by-laws of each SoundView
Subsidiary, as presently in effect.
6.3 CAPITALIZATION. (a) The authorized capital stock of SoundView consists
of 6,000,000 Shares. As of the date hereof, (i) 2,515,562 Shares are issued and
outstanding, (ii) no Shares are issued and held in the treasury of SoundView and
(iii) 1,577,962 Shares are reserved for issuance upon exercise of SoundView
Stock Options. All the outstanding shares of SoundView's capital stock are, and
all Shares which may be issued pursuant to the exercise of outstanding SoundView
Stock Options will be, when issued in accordance with the respective terms
thereof, duly authorized, validly issued, fully paid and nonassessable. There is
no Voting Debt of SoundView or any SoundView Subsidiary issued and outstanding.
Except as set forth above and except for the Transactions, as of the date
hereof, (i) there are no shares of capital stock of SoundView authorized, issued
or outstanding; (ii) there are no existing options, warrants, calls, pre-
emptive rights, subscriptions or other rights, agreements, arrangements or
commitments of any character, relating to the issued or unissued capital stock
of SoundView or any SoundView Subsidiary, obligating SoundView or any SoundView
Subsidiary to issue, transfer or sell or cause to be issued, transferred or sold
any shares of capital stock or Voting Debt of, or other equity interest in,
SoundView or any SoundView Subsidiary or securities convertible into or
exchangeable for such shares or equity interests, or obligating SoundView or any
SoundView Subsidiary to grant, extend or enter into any such option, warrant,
call, subscription or other right, agreement, arrangement or commitment and
(iii) there are no outstanding contractual obligations of SoundView or any
SoundView Subsidiary to repurchase, redeem or otherwise acquire any Shares or
any of the capital stock of SoundView or any SoundView Subsidiary or to provide
funds to make any investment (in the form of a loan, capital contribution or
otherwise) in any SoundView Subsidiary or any other entity. The Disclosure
Schedule sets forth a complete schedule of each SoundView
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Stock Option outstanding as of the date hereof, including the name of the
optionee, number of shares, exercise price, date of grant and vesting schedule.
(b) There are no voting trusts or other agreements or understandings to
which SoundView or any SoundView Subsidiary is a party with respect to the
voting of the capital stock of SoundView or any of the SoundView Subsidiaries.
(c) No Indebtedness of SoundView or any SoundView Subsidiary contains any
restriction upon (i) the prepayment of any Indebtedness of SoundView or any
SoundView Subsidiary, (ii) the incurrence of Indebtedness by SoundView or any
SoundView Subsidiary or (iii) the ability of SoundView or any SoundView
Subsidiary to grant any lien on the properties or assets of SoundView or any
SoundView Subsidiary.
6.4 AUTHORIZATION; VALIDITY OF AGREEMENT; SOUNDVIEW ACTION. SoundView has
full corporate power and authority to execute and deliver this Agreement, and to
consummate the Transactions. The execution, delivery and performance by
SoundView of this Agreement and the consummation by it of the Transactions have
been duly authorized by the SoundView Board of Directors and by written consent
of holders of SoundView Common Stock representing a majority of the Shares and
no other corporate action on the part of SoundView is necessary to authorize the
execution and delivery by SoundView of this Agreement or the consummation by it
of the Transactions. This Agreement has been duly executed and delivered by
SoundView and, assuming due and valid authorization, execution and delivery
thereof by Parent and Merger Sub, this Agreement is a valid and binding
obligation of SoundView enforceable against SoundView in accordance with its
terms.
6.5 BOARD APPROVALS REGARDING TRANSACTIONS. SoundView's Board of
Directors, at a meeting duly called and held, has (i) unanimously determined
that each of this Agreement and the Merger are fair to and in the best interests
of the shareholders of SoundView and (ii) approved the Transactions, and none of
the aforesaid actions by SoundView's Board of Directors has been amended,
rescinded or modified. The action taken by SoundView's Board of Directors
constitutes approval of the Merger and the other Transactions by SoundView's
Board of Directors under the provisions of Section 203 of the DGCL such that
Section 203 of the DGCL does not apply to this Agreement or the other
Transactions. No other state takeover statute is applicable to the Merger or the
other Transactions.
6.6 VOTE REQUIRED. The affirmative written consent of the holders of a
majority of the outstanding Shares, which is the only vote or consent of the
holders of any class or series of SoundView's capital stock necessary to approve
the Merger, has been obtained and copies of such consents have been provided to
Parent. No action of the holders of any class or series of SoundView's capital
stock, acting in their capacity as stockholders, is necessary to approve any of
the Transactions other than the Merger.
6.7 CONSENTS AND APPROVALS; NO VIOLATIONS. Except for the filings,
permits, authorizations, consents and approvals as may be required under, and
other applicable requirements of, the Advisers Act, the Exchange Act, the
Securities Act, the rules and regulations of the NASD, the HSR Act, state
securities or blue sky laws, and the DGCL, none of the execution, delivery or
performance of this Agreement by SoundView, the consummation by SoundView of the
Transactions or compliance by SoundView with any of the provisions hereof will
(i) conflict with or result in any breach of any provision of the certificate of
incorporation, the by-laws or similar organizational documents of SoundView or
any SoundView Subsidiary, (ii) require any filing with, or permit,
authorization, consent or approval of, any Governmental Entity, (iii) result in
a violation or breach of, or constitute (with or without due notice or the
passage of time or both) a default (or give rise to any right of termination,
amendment, cancellation or acceleration) under, any of the terms, conditions or
provisions of any SoundView Agreement, or (iv) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to SoundView, any to
which SoundView or any SoundView Subsidiary is a party or by which any of the
assets of any of them is bound, any SoundView Subsidiary or any of their
properties or assets, excluding from the foregoing clauses (ii), (iii) and (iv)
such violations, breaches or defaults which would not, individually or in the
aggregate, have a material adverse
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effect on SoundView and the SoundView Subsidiaries, taken as a whole. There are
no third party consents or approvals required to be obtained under any SoundView
Agreement prior to the consummation of the Transactions, except for such
consents and approvals the failure of which to be obtained would not,
individually or in the aggregate, have a material adverse effect on SoundView
and the SoundView Subsidiaries, taken as a whole.
6.8 GOVERNMENTAL DOCUMENTS AND FINANCIAL STATEMENTS. SoundView and each
SoundView Subsidiary has filed with the appropriate Governmental Entity, and has
heretofore made available to Parent, true and complete copies of, the
Governmental Documents of SoundView and each SoundView Subsidiary. As of their
respective dates or, if amended, as of the date of the last such amendment filed
prior to the date hereof, the Governmental Documents of SoundView and each
SoundView Subsidiary, including, without limitation, any financial statements or
schedules included therein (a) did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading and (b) complied in all
material respects with the applicable requirements of Applicable Law. SoundView
has previously delivered to Parent copies of the audited balance sheets of
SoundView and the SoundView Subsidiaries as of December 31 for the fiscal years
1996, 1997 and 1998 and the related audited statements of income, changes in
shareholders' equity and cash flows for the fiscal years 1996, 1997 and 1998,
inclusive, together with the related notes thereto, accompanied by the audit
report of Ernst & Young LLP, independent public accountants with respect
thereto, and the unaudited balance sheets of each of them as of June 30, 1999
and the related unaudited statements of income, changes in shareholders' equity
and cash flows for the period then ended (collectively, the balance sheets and
the statements above being referred to as the "SoundView Financial Statements"
and the June 30, 1999 balance sheet as the "SoundView Balance Sheet"). The
audited balance sheets previously delivered to Parent (including the related
notes) fairly present in accordance with GAAP the financial position of
SoundView and the SoundView Subsidiaries as of the dates thereof, and the other
SoundView Financial Statements fairly present in accordance with GAAP (subject,
in the case of the unaudited statements, to recurring adjustments normal in
nature and amount and the addition of footnotes) the results of the operations,
cash flows and changes in shareholders' equity of SoundView and the SoundView
Subsidiaries for the respective fiscal periods therein set forth; and such
balance sheets and statements (including the related notes, where applicable)
have been prepared in accordance with GAAP consistently applied throughout the
periods involved except as noted therein.
6.9 COMPLIANCE WITH APPLICABLE LAW. (a) SoundView and each SoundView
Subsidiary is, if so required by the nature of its business or assets, duly
registered with the SEC as a broker-dealer or an investment adviser and the
Commodity Futures Trading Commission as a commodity pool operator or commodity
trading adviser.
(b) SoundView, each SoundView Subsidiary, each SoundView Pooled Product and
each employee of each of them holds, and has at all pertinent times held, all
material licenses, franchises, permits, qualifications and authorizations
(collectively, "SoundView Permits") necessary for the lawful ownership and use
of the respective properties and assets of SoundView, the SoundView Subsidiaries
and the SoundView Pooled Products and the conduct of their respective businesses
under and pursuant to every, and have complied with each, and are not in default
in any material respect under any, Applicable Law relating to any of them or any
of their respective assets, properties or operations, and SoundView does not
know of any violations of any of the above and has not received notice asserting
any such violation. To SoundView's knowledge, all such SoundView Permits are
valid and in good standing and are not subject to any proceeding for the
suspension, modification or revocation thereof.
(c) Except for normal examinations conducted by any Governmental Entity in
the regular course of the business of SoundView, the SoundView Subsidiaries and
the SoundView Pooled Products, no Governmental Entity has at any time initiated
or, to SoundView's knowledge, threatened any proceeding or investigation into
the business or operations of any of them or any of their officers, directors or
employees
I-11
or (other than SoundView Pooled Products) equityholders in their capacity as
such. There is no unresolved violation, criticism, or exception by any
Governmental Entity with respect to any examination of SoundView, the SoundView
Subsidiaries or the SoundView Pooled Products.
(d) SoundView and each of the SoundView Subsidiaries has at all times since
December 31, 1994 or its date of formation, whichever is later, rendered
investment advisory services to investment advisory clients, including SoundView
Pooled Products, with whom such entity is or was a party to an investment
advisory agreement or similar arrangement in material compliance with all
applicable requirements as to portfolio composition and portfolio management
including, but not limited to, the terms of such investment advisory agreements,
written instructions from such investment advisory clients, the organizational
documents of such investment advisory clients that are SoundView Pooled
Products, prospectuses or other offering materials, board of director or trustee
directives and Applicable Law.
(e) Each of SoundView, the SoundView Subsidiaries and the SoundView Pooled
Products has timely filed all reports, registration statements and other
documents, together with any amendments required to be made with respect
thereto, that it was required to file with any Governmental Entity, in a form
which was accurate in all material respects and has paid all fees and
assessments due and payable in connection therewith.
(f) As of their respective dates, the Governmental Documents of SoundView,
the SoundView Subsidiaries and the SoundView Pooled Products complied in all
material respects with the requirements of the Securities Laws applicable to
such Governmental Documents. SoundView has previously delivered or made
available to the Parent a complete copy of each Governmental Document filed by
any of the foregoing entities or any of their employees since December 31, 1994
and prior to the date hereof and will deliver or by notice make available to the
Parent at the same time as the filing thereof a complete copy of each
Governmental Document filed after the date hereof and prior to the Closing Date
by or on behalf of any of them.
(g) Since inception, each SoundView Pooled Product has been excluded from
the definition of an investment company under the Investment Company Act by
virtue of Section 3(c)(1) or Section 3(c)(7) thereof.
6.10 BOOKS AND RECORDS. Each of SoundView, the SoundView Subsidiaries and
SoundView Pooled Products has at all times since formation maintained Records
which accurately reflect its transactions in reasonable detail, and have at all
times maintained accounting controls, policies and procedures reasonably
designed to provide that such transactions are executed in accordance with its
management's general or specific authorization, as applicable, and recorded in a
manner which permits the preparation of financial statements in accordance with
GAAP and applicable regulatory accounting requirements and other account and
financial data, and the documentation pertaining thereto is retained, protected
and duplicated in accordance with applicable regulatory requirements.
6.11 INELIGIBLE PERSONS. None of SoundView or any SoundView Subsidiary, or
any "associated person" (as defined in the Advisers Act or the Exchange Act) of
any thereof, is ineligible pursuant to Section 203 of the Advisers Act or
Section 15(b) of the Exchange Act to serve as a registered investment adviser or
broker-dealer or as an associated person of a registered investment adviser or
broker-dealer.
6.12 NO UNDISCLOSED LIABILITIES. Except for liabilities and obligations
(a) disclosed in the Financial Statements, (b) incurred in the ordinary course
of business and consistent with past practice since the Balance Sheet Date or
(c) incurred in accordance with the terms of this Agreement or with the prior
written consent of Parent, neither SoundView nor any SoundView Subsidiary has,
to the best of SoundView's knowledge, any liabilities or obligations of any
nature, whether or not accrued, contingent or otherwise, that have, or would be
reasonably likely to have, material adverse effect on SoundView and the
SoundView Subsidiaries, taken as a whole. The reserves reflected in the
Financial Statements are adequate, appropriate and reasonable and have been
calculated in a consistent manner.
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