<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
----------------
AMERICAN RESIDENTIAL HOLDING CORPORATION
(NAME OF SUBJECT COMPANY)
----------------
CHAMRES, INC.
CHASE MANHATTAN MORTGAGE HOLDINGS, INC.
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION)
THE CHASE MANHATTAN CORPORATION
(BIDDERS)
----------------
COMMON STOCK, PAR VALUE $.04 PER SHARE
(TITLE OF CLASS OF SECURITIES)
----------------
02926R107
(CUSIP NUMBER OF CLASS OF SECURITIES)
----------------
ROBERT J. JACOBS, ESQ.
SENIOR VICE PRESIDENT AND SECRETARY
CHASE MANHATTAN MORTGAGE HOLDINGS, INC.
4915 INDEPENDENCE PARKWAY
FSII-2
TAMPA, FLORIDA 33634-7523
TELEPHONE NUMBER (813) 881-2110
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS)
----------------
WITH COPIES TO:
ALBERT F. LILLEY, ESQ.
MILBANK, TWEED, HADLEY & MCCLOY
1 CHASE MANHATTAN PLAZA
NEW YORK, NEW YORK 10005-1413
TELEPHONE: (212) 530-5754
CALCULATION OF FILING FEE
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<TABLE>
<CAPTION>
TRANSACTION
VALUE* AMOUNT OF FILING FEE**
- ---------------------------------------
<S> <C>
$332,280,511.50 $66,456.10
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<FN>
* Pursuant to, and as provided by, Rule 0-11(d), this amount is based upon the
purchase of 11,762,142 shares of Common Stock of the Subject Company at
$28.25 cash per share.
** 1/50 of 1% of Transaction Valuation.
</TABLE>
[_]Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and
identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form or
schedule and the date of its filing.
AMOUNT PREVIOUSLY PAID: NONE FILING PARTY: N/A
FORM OR REGISTRATION NO.: N/A DATE FILED: N/A
<PAGE>
CUSIP NO. 02926R107 14D-1 PAGE 2 OF 5
1 Name of Reporting Persons: Chamres, Inc.
S.S. or I.R.S. Identification No. of Above Persons: 59-
3257990
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2 Check the Appropriate box if a Member of a Group (See
Instructions) (a) [_]
(b) [_]
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3 SEC Use Only
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4 Source of Funds (See Instructions)
AF
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5 Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(e) or 2(f). [_]
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6 Citizenship or Place of Organization
Delaware
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7 Aggregate Amount Beneficially Owned by Each Reporting Person
None
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8 Check if the Aggregate Amount in Row 7 Excludes Certain
Shares (See Instructions). [_]
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9 Percent of Class Represented by Amount in Row 7
0%
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10 Type of Reporting Person (See Instructions)
CO
2
<PAGE>
CUSIP NO. 02926R107 14D-1 PAGE 3 OF 5
1 Name of Reporting Persons: Chase Manhattan Mortgage
Holdings, Inc.
S.S. or I.R.S. Identification No. of Above Persons: 59-
3187852
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2 Check the Appropriate box if a Member of a Group (See
Instructions) (a) [_]
(b) [_]
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3 SEC Use Only
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4 Source of Funds (See Instructions)
AF
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5 Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(e) or 2(f). [_]
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6 Citizenship or Place of Organization
Delaware
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7 Aggregate Amount Beneficially Owned by Each Reporting Person
None
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8 Check if the Aggregate Amount in Row 7 Excludes Certain
Shares (See Instructions). [_]
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9 Percent of Class Represented by Amount in Row 7
0%
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10 Type of Reporting Person (See Instructions)
CO
3
<PAGE>
CUSIP NO. 02926R107 14D-1 PAGE 4 OF 5
1 Name of Reporting Persons: The Chase Manhattan Bank
(National Association)
S.S. or I.R.S. Identification No. of Above Persons: 13-
2633612
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2 Check the Appropriate box if a Member of a Group (See
Instructions) (a) [_]
(b) [_]
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3 SEC Use Only
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4 Source of Funds (See Instructions)
WC
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5 Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(e) or 2(f). [_]
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6 Citizenship or Place of Organization
Organized under the laws of the United States
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7 Aggregate Amount Beneficially Owned by Each Reporting Person
None
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8 Check if the Aggregate Amount in Row 7 Excludes Certain
Shares (See Instructions). [_]
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9 Percent of Class Represented by Amount in Row 7
0%
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10 Type of Reporting Person (See Instructions)
BK
4
<PAGE>
CUSIP NO. 02926R107 14D-1 PAGE 5 OF 5
1 Name of Reporting Persons: The Chase Manhattan Corporation
S.S. or I.R.S. Identification No. of Above Persons: 13-
2633613
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2 Check the Appropriate box if a Member of a Group (See
Instructions) (a) [_]
(b) [_]
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3 SEC Use Only
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4 Source of Funds (See Instructions)
AF
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5 Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(e) or 2(f). [_]
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6 Citizenship or Place of Organization
Delaware
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7 Aggregate Amount Beneficially Owned by Each Reporting Person
None
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8 Check if the Aggregate Amount in Row 7 Excludes Certain
Shares (See Instructions). [_]
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9 Percent of Class Represented by Amount in Row 7
0%
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10 Type of Reporting Person (See Instructions)
HC
5
<PAGE>
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is American Residential Holding
Corporation, a Delaware corporation, and the address of its principal
executive offices is 11355 North Torrey Pines Road, La Jolla, California
92037-1013.
(b) This Tender Offer Statement on Schedule 14D-1 relates to the offer by
Chamres, Inc., a Delaware corporation (the "Purchaser") and an indirect
wholly-owned subsidiary of The Chase Manhattan Bank (National Association), a
national banking association ("Parent"), to purchase all outstanding shares of
Common Stock, par value $.04 per share (the "Shares"), of American Residential
Holding Corporation, a Delaware corporation (the "Company"), at a price of
$28.25 per share, net to the seller in cash and without interest thereon, on
the terms and subject to the conditions set forth in the Offer to Purchase,
dated August 9, 1994 (the "Offer to Purchase"), and in the related Letter of
Transmittal, copies of which are attached hereto as Exhibits (a)(1) and
(a)(2), respectively (which collectively constitute the "Offer"). The
information concerning the number of outstanding Shares, which is set forth in
the Introduction to the Offer to Purchase, is incorporated herein by
reference.
(c) Information concerning the principal market in which the Shares are
traded and the high and low sales price of the Shares for each quarterly
period during the past two years (or such shorter period as the Shares may
have been outstanding) is set forth in Section 6 ("Price Range of the Shares;
Dividends") of the Offer to Purchase and is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d), (g) This Statement is filed by the Purchaser, Chase Manhattan
Mortgage Holdings, Inc., a Delaware corporation ("CMMHI"), Parent and The
Chase Manhattan Corporation, a Delaware corporation ("Chase"). The Purchaser
is a Delaware corporation and a wholly-owned subsidiary of CMMHI, which is a
wholly-owned subsidiary of Parent. Parent is a national banking association
and a wholly-owned subsidiary of Chase. Information concerning the principal
business and the address of the principal offices of the Purchaser, CMMHI,
Parent and Chase is set forth in the Introduction and Section 9 ("Certain
Information Concerning the Purchaser, CMMHI, Parent and Chase") of the Offer
to Purchase and is incorporated herein by reference. The names, business
addresses, present principal occupations or employment, material occupations,
positions, offices or employment during the last five years and citizenship of
the directors and executive officers of the Purchaser, CMMHI, Parent and Chase
are set forth in Schedule I to the Offer to Purchase and are incorporated
herein by reference.
(e)-(f) Neither the Purchaser, CMMHI, Parent nor Chase nor, to their
knowledge, any of the persons listed in Schedule I to the Offer to Purchase,
has during the last five years (i) been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) been a party to
a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
activities subject to, Federal or state securities laws or finding any
violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) The information set forth in Section 9 ("Certain Information Concerning
the Purchaser, CMMHI, Parent and Chase") and Section 10 ("Background of the
Offer; Contacts with the Company; the Merger Agreement; Appraisal Rights;
Arrangements with Officers of the Company; Other Agreements") of the Offer to
Purchase is incorporated herein by reference.
(b) The information set forth in Section 10 ("Background of the Offer;
Contacts with the Company; the Merger Agreement; Appraisal Rights;
Arrangements with Officers of the Company; Other Agreements") of the Offer to
Purchase is incorporated herein by reference. Except as set forth therein,
since January 1, 1991 there have been no contacts, negotiations or
transactions required to be set forth in this item.
<PAGE>
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The information set forth in Section 12 ("Source and Amount of Funds") of
the Offer to Purchase is incorporated herein by reference.
(b)-(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDERS.
(a)-(e) The information set forth in the Introduction, Section 9 ("Certain
Information Concerning the Purchaser, CMMHI, Parent and Chase"), Section 10
("Background of the Offer; Contacts with the Company; the Merger Agreement;
Appraisal Rights; Arrangements with Officers of the Company; Other Agreements")
and Section 11 ("Purpose of the Offer; Plans for the Company") of the Offer to
Purchase is incorporated herein by reference.
(f)-(g) The information set forth in Section 7 ("Effect of the Offer on the
Market for the Shares; NASDAQ Quotation; Exchange Act Registration; Margin
Regulations") of the Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) The information set forth in Section 9 ("Certain Information
Concerning the Purchaser, CMMHI, Parent and Chase") and Section 10 ("Background
of the Offer; Contacts with the Company; the Merger Agreement; Appraisal
Rights; Arrangements with Officers of the Company; Other Agreements") of the
Offer to Purchase is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information in the Introduction, Section 9 ("Certain Information
Concerning the Purchaser, CMMHI, Parent and Chase"), Section 10 ("Background of
the Offer; Contacts with the Company; the Merger Agreement; Appraisal Rights;
Arrangements with Officers of the Company; Other Agreements) and Section 11
("Purpose of the Offer; Plans for the Company") of the Offer to Purchase is
incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Introduction and Section 16 ("Certain Fees
and Expenses") of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
Not applicable. Certain information with respect to the ability of the
Purchaser and Parent to finance the Offer and the Merger is set forth in
Section 12 ("Source and Amount of Funds") of the Offer to Purchase and is
incorporated herein by reference. The incorporation by reference herein of the
above-specified information does not constitute an admission that such
information is material to a decision by a stockholder of the Company as to
whether to sell, tender or hold Shares being sought in the Offer.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in Section 10 ("Background of the Offer;
Contacts with the Company; the Merger Agreement; Appraisal Rights; Arrangements
with Officers of the Company; Other Agreements") of the Offer to Purchase is
incorporated herein by reference.
(b)-(c) The information set forth in Section 15 ("Certain Legal Matters;
Required Regulatory Approvals") of the Offer to Purchase is incorporated herein
by reference.
(d) Not applicable.
2
<PAGE>
(e) The information set forth in Section 15 ("Certain Legal Matters; Required
Regulatory Approvals") of the Offer to Purchase is incorporated herein by
reference.
(f) The information set forth in the Offer to Purchase, the Letter of
Transmittal, the Summary Advertisement dated August 9, 1994, the Press Releases
dated August 3, 1994 and August 9, 1994, the Agreement and Plan of Merger,
dated as of August 3, 1994, among the Company, Parent and the Purchaser copies
of which are attached hereto as Exhibits 99.(a)(1), 99.(a)(2), 99.(a)(7),
99.(a)(8), 99.(a)(9) and 99.(c)(i), respectively, is incorporated herein by
reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<S> <C> <C>
99.(a)(1) -- Offer to Purchase, dated August 9, 1994.
99.(a)(2) -- Letter of Transmittal.
99.(a)(3) -- Notice of Guaranteed Delivery.
99.(a)(4) -- Letter from the Dealer Managers to Brokers, Dealers, Banks,
Trust Companies and Other Nominees.
99.(a)(5) -- Letter to Clients for use by Brokers, Dealers, Banks, Trust
Companies and Other Nominees.
99.(a)(6) -- Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9.
99.(a)(7) -- Summary Advertisement, dated August 9, 1994.
99.(a)(8) -- Text of Press Release issued by Parent, dated August 3, 1994.
99.(a)(9) -- Text of Press Release issued by Parent, dated August 9, 1994.
99.(c)(1) -- Agreement and Plan of Merger, dated as of August 3, 1994,
among the Company, Parent and the Purchaser.
99.(d) -- Not applicable.
99.(e) -- Not applicable.
99.(f) -- Not applicable.
</TABLE>
3
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, the undersigned
certify that the information set forth in this statement is true, complete and
correct.
Dated: August 9, 1994
CHAMRES, INC.
/s/ Robert J. Jacobs
By __________________________________
Name:Robert J. Jacobs
Title:Senior Vice President and
Secretary
CHASE MANHATTAN MORTGAGE HOLDINGS,
INC.
/s/ Robert J. Jacobs
By __________________________________
Name:Robert J. Jacobs
Title:Senior Vice President and
Secretary
THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION)
/s/ Arjun K. Mathrani
By __________________________________
Name:Arjun K. Mathrani
Title: Chief Financial Officer
Executive Vice President
THE CHASE MANHATTAN CORPORATION
/s/ Arjun K. Mathrani
By __________________________________
Name:Arjun K. Mathrani
Title: Chief Financial Officer
Executive Vice President
4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE NO.
------- --------
<S> <C> <C>
99.(a)(1) Offer to Purchase, dated August 9, 1994.
99.(a)(2) Letter of Transmittal.
99.(a)(3) Notice of Guaranteed Delivery.
99.(a)(4) Letter from the Dealer Managers to Brokers, Dealers,
Banks, Trust Companies and Other Nominees.
99.(a)(5) Letter to Clients for use by Brokers, Dealers, Banks,
Trust Companies and Other Nominees.
99.(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
99.(a)(7) Summary Advertisement, dated August 9, 1994.
99.(a)(8) Text of Press Release issued by Parent, dated August 3,
1994.
99.(a)(9) Text of Press Release issued by Parent, dated August 9,
1994.
99.(c)(1) Agreement and Plan of Merger, dated as of August 3, 1994,
among the Company, Parent and the Purchaser.
</TABLE>
<PAGE>
EXHIBIT 99.(a)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
AMERICAN RESIDENTIAL HOLDING CORPORATION
AT
$28.25 NET PER SHARE
BY
CHAMRES, INC.
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION)
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, SEPTEMBER 7, 1994, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY TENDERED
AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE THAT NUMBER OF SHARES WHICH
CONSTITUTES AT LEAST 80% OF THE TOTAL NUMBER OF SHARES OUTSTANDING ON THE DATE
OF PURCHASE. THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS CONTAINED
IN THIS OFFER TO PURCHASE. SEE THE INTRODUCTION AND SECTIONS 1, 14 AND 15
HEREOF.
----------------
THE BOARD OF DIRECTORS OF AMERICAN RESIDENTIAL HOLDING CORPORATION (THE
"COMPANY") HAS UNANIMOUSLY APPROVED THE OFFER AND THE MERGER REFERRED TO
HEREIN, AND HAS DETERMINED THAT THE OFFER AND THE MERGER ARE FAIR TO, AND IN
THE BEST INTERESTS OF, THE COMPANY AND THE STOCKHOLDERS OF THE COMPANY AND
UNANIMOUSLY RECOMMENDS THAT SUCH STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR
SHARES PURSUANT TO THE OFFER.
----------------
IMPORTANT
Any stockholder desiring to tender all or any portion of its Shares should
either (a) complete and sign the Letter of Transmittal (or a facsimile copy
thereof) in accordance with the instructions in the Letter of Transmittal, have
such stockholder's signature thereon guaranteed if required by Instruction 1 to
the Letter of Transmittal, mail or deliver the Letter of Transmittal (or such
facsimile) and any other required documents to the Depositary for the Offer and
either deliver the certificate(s) for the Shares tendered to the Depositary
along with the Letter of Transmittal or deliver such Shares pursuant to the
procedure for book-entry transfer set forth in Section 2 hereof, or (b) request
its broker, dealer, bank, trust company or other nominee to effect the
transaction for such stockholder. A stockholder whose Shares are registered in
the name of a broker, dealer, bank, trust company or other nominee must contact
such broker, dealer, bank, trust company or other nominee if he or she desires
to tender such Shares.
A stockholder who desires to tender Shares and whose certificates
representing such Shares are not immediately available, or who cannot comply in
a timely manner with the procedures for book-entry transfer, or who cannot
deliver all required documents to the Depositary prior to the expiration of the
Offer, may tender such Shares by following the procedures for guaranteed
delivery set forth in Section 3 hereof.
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Managers at their respective addresses and telephone
numbers set forth on the back cover of this Offer to Purchase. Additional
copies of this Offer to Purchase, the Letter of Transmittal, the Notice of
Guaranteed Delivery and other related materials may be obtained from the
Information Agent or from brokers, dealers, banks and trust companies.
----------------
The Dealer Managers for the Offer are:
SMITH BARNEY INC. CHASE SECURITIES, INC.
August 9, 1994
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
Introduction............................................................. 1
1. Terms of the Offer.................................................. 2
2. Procedures for Accepting the Offer and Tendering Shares............. 4
3. Withdrawal Rights................................................... 7
4. Acceptance for Payment and Payment.................................. 7
5. Certain Tax Consequences............................................ 8
6. Price Range of the Shares; Dividends................................ 9
7. Effect of the Offer on the Market for the Shares; NASDAQ Quotation;
Exchange Act Registration; Margin Regulations...................... 10
8. Certain Information Concerning the Company.......................... 11
Certain Information Concerning the Purchaser, CMMHI, Parent and
9. Chase.............................................................. 15
10. Background of the Offer; Contacts with the Company; the Merger
Agreement; Appraisal Rights; Arrangements with Officers of the
Company; Other Agreements.......................................... 16
11. Purpose of the Offer; Plans for the Company......................... 24
12. Source and Amount of Funds.......................................... 25
13. Dividends and Distributions......................................... 25
14. Certain Conditions of the Offer..................................... 25
15. Certain Legal Matters; Required Regulatory Approvals................ 27
16. Certain Fees and Expenses........................................... 30
17. Miscellaneous....................................................... 31
Schedule I--Directors and Executive Officers
</TABLE>
ii
<PAGE>
TO: ALL HOLDERS OF SHARES OF COMMON STOCK OFAMERICAN RESIDENTIAL HOLDING
CORPORATION:
INTRODUCTION
Chamres, Inc., a Delaware corporation (the "Purchaser") and an indirect
wholly-owned subsidiary of The Chase Manhattan Bank (National Association), a
national banking association ("Parent"), hereby offers to purchase all
outstanding shares of Common Stock, par value $.04 per share (the "Shares"), of
American Residential Holding Corporation, a Delaware corporation (the
"Company"), at a price of $28.25 per Share, net to the seller in cash, without
interest thereon (the "Offer Price"), upon the terms and subject to the
conditions set forth in this Offer to Purchase and in the related Letter of
Transmittal (which together constitute the "Offer").
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the sale of Shares pursuant to the Offer.
The Purchaser will pay all charges and expenses of Smith Barney Inc. ("Smith
Barney") and Chase Securities, Inc. ("Chase Securities"), as Dealer Managers
(in such capacity, the "Dealer Managers"), The Chase Manhattan Bank (National
Association), as Depositary (the "Depositary"), and MacKenzie Partners, Inc.,
as Information Agent (the "Information Agent"), incurred in connection with the
Offer. See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER AND
THE MERGER (AS DEFINED BELOW), AND HAS DETERMINED THAT THE OFFER AND THE MERGER
ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY AND THE STOCKHOLDERS OF
THE COMPANY AND RECOMMENDS THAT SUCH STOCKHOLDERS ACCEPT THE OFFER AND TENDER
THEIR SHARES PURSUANT TO THE OFFER.
Salomon Brothers Inc ("Salomon Brothers" or the "Financial Advisor") has
advised the Company's Board of Directors that as of August 3, 1994 (the date of
the Merger Agreement (as defined below)), the $28.25 per Share in cash to be
received by the holders of Shares in the Offer and the Merger is fair to such
holders from a financial point of view (the "Fairness Opinion"). A copy of the
Fairness Opinion is included as Annex A to the Solicitation/Recommendation
Statement on Schedule 14D-9 (the "Schedule 14D-9") to be filed by the Company
with the Securities and Exchange Commission (the "Commission" or the "SEC") in
connection with the Offer and which is being mailed to stockholders herewith.
Stockholders are urged to read the Fairness Opinion in its entirety for a
description of the assumptions made, factors considered and procedures followed
by the Financial Advisor and also the Schedule 14D-9 in its entirety, including
Item 5 thereof, for a description of the fees payable to the Financial Advisor
for its services relating to the Offer and the Merger, including the rendering
of the Fairness Opinion. The Fairness Opinion is directed only to the
consideration to be received by the stockholders of the Company in the Offer
and the Merger and does not constitute a recommendation to any stockholder to
tender Shares in the Offer or to approve the Merger.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED BELOW) THAT
NUMBER OF SHARES WHICH CONSTITUTES AT LEAST 80% OF THE TOTAL NUMBER OF SHARES
OUTSTANDING ON THE DATE THAT SHARES ARE ACCEPTED FOR PAYMENT UNDER THE OFFER
(THE "MINIMUM CONDITION"). SUBJECT TO THE APPLICABLE RULES AND REGULATIONS OF
THE COMMISSION AND THE TERMS OF THE MERGER AGREEMENT, THE PURCHASER RESERVES
THE RIGHT, WHICH IT PRESENTLY HAS NO INTENTION OF EXERCISING, TO WAIVE OR
REDUCE THE MINIMUM CONDITION AND TO ELECT TO PURCHASE, PURSUANT TO THE OFFER,
LESS THAN THE MINIMUM NUMBER OF SHARES NECESSARY TO SATISFY THE MINIMUM
CONDITION, PROVIDED, THAT WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY, THE
PURCHASER MAY NOT REDUCE THE MINIMUM CONDITION BELOW 51% OF THE OUTSTANDING
SHARES. THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS CONTAINED IN
THIS OFFER TO PURCHASE. SEE SECTIONS 1, 14 AND 15.
The Offer is being made pursuant to an Agreement and Plan of Merger (the
"Merger Agreement"), dated as of August 3, 1994, among the Company, Parent and
the Purchaser. The Merger Agreement provides,
1
<PAGE>
among other things, that as soon as practicable after the consummation of the
Offer, and the satisfaction and waiver of certain other conditions, the
Purchaser will be merged with and into the Company (the "Merger"), and the
Company shall be the surviving corporation (the "Surviving Corporation"). In
the Merger, each outstanding Share (other than Shares held in the treasury of
the Company or any of its subsidiaries, or Shares owned by the Purchaser,
Parent or any of their respective subsidiaries, and other than Shares, if any,
held by stockholders who perfect their appraisal rights under Delaware law)
will, by virtue of the Merger and without any action on the part of the
Purchaser, Parent, the Company or any stockholders of the Company, be converted
into the right to receive an amount in cash equal to the price per Share paid
pursuant to the Offer (the "Merger Consideration"), which shall be payable to
the holder thereof, without interest thereon, upon surrender of the certificate
formerly representing such Share. The Merger Agreement is more fully described
in Section 10 below. Certain Federal income tax consequences of the sale of
Shares pursuant to the Offer and the Merger are described in Section 5 below.
The Company has advised the Purchaser that, as of August 1, 1994, there were
11,762,142 Shares outstanding and 1,117,787 Shares reserved for issuance
pursuant to options (the "Options") outstanding under the Company's stock
option plans (the "Option Plans"). Based on the information supplied by the
Company, the Purchaser will need to purchase at least 5,998,693 Shares
(assuming no Shares are issued in addition to those outstanding on August 1,
1994) in order to have sufficient voting power to approve the Merger without
the affirmative vote of any other stockholder of the Company and 10,585,927
Shares (assuming no Shares are issued in addition to those outstanding on
August 1, 1994) in order to effect the Merger as a "short-form" merger without
a meeting or vote of any other stockholder of the Company.
As of August 1, 1994, according to the Company, the directors and executive
officers of the Company owned beneficially an aggregate of 3,556,738 Shares, or
approximately 29.7% of the then outstanding Shares. The Company has represented
to the Purchaser and Parent that each member of the Company's Board of
Directors and each officer of the Company has advised the Company that such
director's or officer's current intention is to tender all Shares (if any)
beneficially owned by such director or officer pursuant to the Offer.
1. TERMS OF THE OFFER. Upon the terms and subject to the conditions of the
Offer (including, if the Offer is extended or amended, the terms and conditions
of any such extension or amendment), the Purchaser will accept for payment (and
thereby purchase) and pay for all Shares validly tendered on or prior to the
Expiration Date and not withdrawn in accordance with the procedures set forth
in Section 3. The term "Expiration Date" means 12:00 Midnight, New York City
time, on Wednesday, September 7, 1994, unless and until the Purchaser shall
have extended the period of time for which the Offer is open, in which event
the term "Expiration Date" shall mean the latest time and date at which the
Offer, as so extended by the Purchaser, shall expire.
Subject to the terms of the Merger Agreement and the applicable rules and
regulations of the Commission, the Purchaser expressly reserves the right, in
its sole discretion, at any time and from time to time, and regardless of
whether or not any of the events set forth in Section 14 below shall have
occurred or shall have been determined by the Purchaser to have occurred, to
(i) extend the period of time during which the Offer is open, and thereby delay
acceptance for payment of and payment for any Shares, by giving oral or written
notice of such extension to the Depositary and (ii) amend the Offer in any
other respect by giving oral or written notice of such amendment to the
Depositary.
In the Merger Agreement, the Purchaser has agreed that, following the
satisfaction or waiver of all the conditions to the Offer, the Purchaser shall
accept for payment, in accordance with the terms of the Offer, all Shares
validly tendered and not withdrawn as soon as it is permitted to do so under
applicable law, except as otherwise agreed to by the Company and subject to the
right of the Purchaser to extend the Offer in its sole discretion for a period
of up to ten (10) business days if less than 90% of the Shares have been
validly tendered and not properly withdrawn pursuant to the Offer. For purposes
of the Offer, "business day" means any day other than a Saturday, Sunday or
Federal holiday and consists of the time period from 12:01 a.m. through 12:00
Midnight, New York City time.
2
<PAGE>
In addition, the Purchaser has agreed in the Merger Agreement that it will
not, without the prior written consent of the Company, (i) decrease the Offer
Price, (ii) decrease the number of Shares sought pursuant to the Offer, (iii)
impose additional conditions to the Offer, or change the conditions set forth
in Section 14 below in a manner adverse to the holders of Shares (other than to
waive any conditions, provided that no such waiver may reduce the Minimum
Condition to below 51% of the outstanding Shares), or (iv) change the form of
consideration payable in the Offer.
If by 12:00 Midnight, New York City time, on Wednesday, September 7, 1994 (or
any other date or time then set as the Expiration Date), any or all conditions
to the Offer have not been satisfied or waived, the Purchaser reserves the
right (but shall not be obligated), subject to the terms and conditions
contained in the Merger Agreement and to the applicable rules and regulations
of the Commission, to (i) terminate the Offer and not accept for payment any
Shares and return all tendered Shares, (ii) waive all the unsatisfied
conditions and, subject to complying with the terms of the Merger Agreement and
the applicable rules and regulations of the Commission, accept for payment and
pay for all Shares validly tendered prior to the Expiration Date and not
theretofore withdrawn, (iii) extend the Offer and, subject to the right of
stockholders to withdraw Shares until the Expiration Date, retain the Shares
that have been tendered during the period or periods for which the Offer is
extended, or (iv) amend the Offer.
There can be no assurance that the Purchaser will exercise its right to
extend the Offer. See Section 10 below. Any extension, amendment or termination
will be followed as promptly as practicable by public announcement. In the case
of an extension, Rule 14e-1(d) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), requires that the announcement be issued no later
than 9:00 a.m., New York City time, on the next business day following the
previously scheduled Expiration Date in accordance with the public announcement
requirements of Rule 14d-4(c) under the Exchange Act. Subject to applicable law
(including Rules 14d-4(c) and 14d-6(d) under the Exchange Act, which require
that any material change in the information published sent or given to
stockholders in connection with the Offer be promptly disseminated to
stockholders in a manner reasonably designed to inform stockholders of such
change), and without limiting the manner in which the Purchaser may choose to
make any public announcement, the Purchaser will not have any obligation to
publish, advertise or otherwise communicate any such public announcement other
than by making a release to the Dow Jones News Service.
If the Purchaser extends the Offer or if the Purchaser (whether before or
after its acceptance for payment of Shares) is delayed in its acceptance for
payment of or payment for Shares or the Purchaser is unable to pay for Shares
pursuant to the Offer for any reason, then, without prejudice to the
Purchaser's rights under the Offer, the Depositary may retain tendered Shares
on behalf of the Purchaser, and such Shares may not be withdrawn except to the
extent tendering stockholders are entitled to withdrawal rights as described in
Section 3 below. However, the ability of the Purchaser to delay the payment for
Shares that the Purchaser has accepted for payment is limited by Rule 14e-1(c)
under the Exchange Act, which requires that a bidder pay the consideration
offered or return the securities deposited by or on behalf of holders of
securities promptly after the termination or withdrawal of such bidder's offer.
Consummation of the Offer is conditioned upon satisfaction of the Minimum
Condition, the expiration or termination of all waiting periods imposed by the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the
regulations thereunder (the "HSR Act"), and the other conditions set forth in
Section 14 below. The Purchaser reserves the right (but shall not be obligated)
to waive any or all such conditions to the extent permitted under applicable
law, subject to the terms of the Merger Agreement.
If the Purchaser makes a material change in the terms of the Offer, or if it
waives a material condition of the Offer (including, to the extent permitted by
the Merger Agreement, a waiver or reduction of the Minimum Condition), the
Purchaser will extend the Offer to the extent required by Rules 14d-4(c), 14d-
6(d) and 14e-1 under the Exchange Act. The minimum period during which an offer
must remain open following material changes in the terms of the offer, other
than a change in price or a change in percentage of securities sought, will
depend upon the facts and circumstances then existing, including the relative
materiality of the changes.
3
<PAGE>
In the Commission's view, an offer should remain open for a minimum of five
business days from the date a material change is first published, sent or given
to securityholders, and, if material changes are made with respect to
information that approaches the significance of price or share levels, a
minimum of ten business days may be required to allow for adequate
dissemination and investor response. With respect to a change in price or a
change in percentage of securities sought or a change in any dealer's
solicitation fee, a minimum ten business day period from the date of such
change is generally required to allow for adequate dissemination to
stockholders and investor response. Accordingly, if prior to the Expiration
Date, subject to the terms of the Merger Agreement, the Purchaser should
decrease the number of Shares being sought, or increase or decrease the
consideration offered pursuant to the Offer, or change the dealer's
solicitation fee, and if the Offer is scheduled to expire at any time earlier
than the period ending on the tenth business day from and including the date
that notice of such increase or decrease is first published, sent or given to
holders of Shares, the Offer will be extended at least until the expiration of
such ten business day period.
The Company has provided the Purchaser with the Company's stockholder list
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase, the related Letter of Transmittal
and other related materials will be mailed to record holders of Shares whose
names appear on the Company's stockholder list and will be furnished, for
subsequent transmittal to beneficial owners of Shares, to brokers, dealers,
banks, trust companies and similar persons whose names, or the names of whose
nominees, appear on the stockholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing for subsequent
transmittal to beneficial owners of Shares.
2. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES.
Valid Tender of Shares
For a stockholder to validly tender Shares pursuant to the Offer, either (a)
a properly completed and duly executed Letter of Transmittal (or a facsimile
thereof), together with any required signature guarantees and any other
required documents, must be received by the Depositary at one of its addresses
set forth on the back cover of this Offer to Purchase on or prior to the
Expiration Date and either (i) certificates representing tendered Shares must
be received by the Depositary at one of such addresses or (ii) such Shares must
be delivered pursuant to the procedures for book-entry transfer set forth below
(and a Book-Entry Confirmation (as defined below) must be received by the
Depositary), in each case on or prior to the Expiration Date, or (b) the
tendering stockholder must comply with the guaranteed delivery procedures set
forth below.
The Depositary will establish accounts with respect to the Shares at each of
The Depository Trust Company, the Midwest Securities Trust Company and the
Philadelphia Depository Trust Company (collectively, the "Book-Entry Transfer
Facilities") for purposes of the Offer within two business days after the date
of this Offer to Purchase. Any financial institution that is a participant in
the system of any Book-Entry Transfer Facility may make book-entry delivery of
Shares by causing a Book-Entry Transfer Facility to transfer such Shares into
the Depositary's account at such Book-Entry Transfer Facility in accordance
with such Book-Entry Transfer Facility's procedures for such transfer. However,
although delivery of Shares may be effected through book-entry transfer into
the Depositary's account at a Book-Entry Transfer Facility, the Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed,
with any required signature guarantees and any other required documents, must,
in any case, be transmitted to and received by, the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase on or prior to
the Expiration Date, or the tendering stockholder must comply with the
guaranteed delivery procedure set forth below. The confirmation of a book-entry
transfer of Shares into the Depositary's account at a Book-Entry Transfer
Facility as described above is referred to herein as a "Book-Entry
Confirmation." DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN
ACCORDANCE WITH SUCH BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE DEPOSITARY.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING STOCKHOLDER,
AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY
4
<PAGE>
RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Signature Guarantees
No signature guarantee is required on the Letter of Transmittal if (i) the
Letter of Transmittal is signed by the registered holder of Shares (which term,
for purposes of this Section, includes any participant in any of the Book-Entry
Transfer Facilities systems whose name appears on a security position listing
as the owner of the Shares) tendered therewith and such registered holder has
not completed either the box entitled "Special Delivery Instructions" or the
box entitled "Special Payment Instructions" on the Letter of Transmittal, or
(ii) such Shares are tendered for the account of a bank, broker, dealer, credit
union, savings association or other entity which is a member in good standing
of a recognized Medallion Program approved by the Securities Transfer
Association, Inc. (an "Eligible Institution"). In all other cases, all
signatures on the Letter of Transmittal must be guaranteed by an Eligible
Institution. See Instructions 1 and 5 of the Letter of Transmittal. If the
certificates for Shares tendered are registered in the name of a person other
than the signer of the Letter of Transmittal, or if payment is to be made or
certificates for Shares not tendered or not accepted for payment are to be
issued to a person other than the registered holder of the certificates, then
the tendered certificates must be endorsed or accompanied by appropriate stock
powers, in either case signed exactly as the name or names of the registered
holder or holders appear on the certificates, with the signatures on the
certificates or stock powers guaranteed by an Eligible Institution as provided
in the Letter of Transmittal. See Instruction 5 of the Letter of Transmittal.
If the certificates for tendered Shares are forwarded separately to the
Depositary, a properly completed and duly executed Letter of Transmittal (or a
facsimile thereof) must accompany each such delivery.
Guaranteed Delivery
If a stockholder desires to tender Shares pursuant to the Offer and such
stockholder's certificates for Shares are not immediately available or the
procedure for book-entry transfer cannot be completed on a timely basis, or
time will not permit all required documents to reach the Depositary on or prior
to the Expiration Date, such Shares may nevertheless be tendered if the
stockholder complies with all the following guaranteed delivery procedures:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser, is received
by the Depositary, as provided below, on or prior to the Expiration Date;
and
(iii) the certificates in proper form for transfer (or a Book-Entry
Confirmation with respect to such Shares) representing all tendered Shares,
together with a properly completed and duly executed Letter of Transmittal
(or a facsimile thereof), with any required signature guarantees and any
other documents required by the Letter of Transmittal are received by the
Depositary within five National Association of Securities Dealers ("NASD")
Automatic Quotation System ("NASDAQ") trading days after the date of
execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
facsimile transmission or mailed to the Depositary and must include a signature
guarantee by an Eligible Institution and a representation that the tender of
Shares effected thereby complies with Rule 14e-4 under the Exchange Act, each
in the form set forth in such Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) certificates for, or of Book-Entry
Confirmation with respect to, such Shares, (ii) a properly completed and duly
executed Letter of Transmittal (or a facsimile thereof), together with any
required signature guarantees and (iii) any other
5
<PAGE>
documents required by the Letter of Transmittal. Accordingly, payment might not
be made to all tendering stockholders at the same time, and will depend upon
when certificates for, or Book-Entry Confirmations of, such Shares are received
into the Depositary's account at a Book-Entry Transfer Facility. UNDER NO
CIRCUMSTANCES WILL INTEREST BE PAID BY THE PURCHASER ON THE PURCHASE PRICE FOR
THE SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR DELAY IN MAKING SUCH
PAYMENT.
Appointment as Proxy
By executing the Letter of Transmittal, a tendering stockholder irrevocably
appoints designees of the Purchaser, and each of them, as such stockholder's
attorneys-in-fact and proxies, with full power of substitution, in the manner
set forth in the Letter of Transmittal, to the full extent of such
stockholder's rights with respect to the Shares tendered by such stockholder
and accepted for payment and paid for by the Purchaser and with respect to any
and all other Shares and other securities or rights issued or issuable in
respect of such Shares on or after August 3, 1994. All such proxies shall be
considered coupled with an interest in the tendered Shares. Such appointment
will be effective when, and only to the extent that, the Purchaser pays for
such Shares by depositing the purchase price therefor with the Depositary. Upon
such payment, all prior powers of attorney and proxies given by such
stockholder with respect to such Shares and such other securities or rights
will, without further action, be revoked and no subsequent powers of attorney
and proxies may be given by such stockholder (and, if given, will not be deemed
effective). The designees of the Purchaser will, with respect to the Shares for
which such appointment is effective, be empowered to exercise all voting and
other rights of such stockholder as they in their sole discretion may deem
proper at any annual or special meeting of the Company's stockholders, or any
adjournment or postponement thereof. The Purchaser reserves the right to
require that, in order for Shares to be deemed validly tendered, immediately
upon the payment for such Shares, the Purchaser or its designee must be able to
exercise full voting rights with respect to such Shares and other securities,
including voting at any meeting of stockholders then scheduled.
Determination of Validity
All questions as to the form of documents and validity, eligibility
(including time of receipt) and acceptance for payment of any tender of Shares
will be determined by the Purchaser, in its sole discretion, which
determination shall be final and binding on all parties. The Purchaser reserves
the absolute right to reject any or all tenders determined by the Purchaser not
to be in proper form or the acceptance of or payment for which, in the opinion
of the Purchaser's counsel, may be unlawful. The Purchaser also reserves the
absolute right to waive any defect or irregularity in any tender of Shares of
any particular stockholder whether or not similar defects or irregularities are
waived in the case of other stockholders. No tender of Shares will be deemed to
have been validly made until all defects and irregularities have been cured or
waived. None of the Purchaser, Parent, any of their affiliates or assigns, if
any, the Dealer Managers, the Depositary, the Information Agent or any other
person will be under any duty to give any notification of any defects or
irregularities in tenders or incur any liability for failure to give any such
notification. The Purchaser's interpretation of the terms and conditions of the
Offer (including the Letter of Transmittal and the instructions thereto) will
be final and binding.
Backup Federal Tax Withholding
In order to avoid "backup withholding" of Federal income tax on payments of
cash pursuant to the Offer, a stockholder surrendering Shares in the Offer must
provide the Depositary with such stockholder's correct taxpayer identification
number ("TIN") and certify under penalties of perjury that such TIN is correct
and that such stockholder is not subject to backup withholding. Certain
stockholders (including, among others, all corporations and certain foreign
individuals and entities) are not subject to backup withholding. If a
stockholder does not provide its correct TIN or fails to provide the
certifications described above, the Internal Revenue Service ("IRS") may impose
a penalty on such stockholder and payment of cash to such stockholder pursuant
to the Offer may be subject to backup withholding of 31%. All stockholders
6
<PAGE>
surrendering Shares pursuant to the Offer should complete and sign the main
signature form and the Substitute Form W-9 included as part of the Letter of
Transmittal to provide the information and certification necessary to avoid
backup withholding (unless an applicable exemption exists and is provided in a
manner satisfactory to the Purchaser and the Depositary). Noncorporate foreign
stockholders should complete and sign the main signature form and a Form W-8,
Certificate of Foreign Status, a copy of which may be obtained from the
Depositary, in order to avoid backup withholding. See Instruction 10 of the
Letter of Transmittal.
3. WITHDRAWAL RIGHTS. Except as otherwise provided in this Section 3, tenders
of Shares made pursuant to the Offer are irrevocable. Shares tendered pursuant
to the Offer may be withdrawn pursuant to the procedures set forth below at any
time on or prior to the Expiration Date and, unless theretofore accepted for
payment by the Purchaser pursuant to the Offer, may also be withdrawn at any
time after October 7, 1994.
If, for any reason whatsoever, acceptance for payment of any Shares tendered
pursuant to the Offer is delayed, or the Purchaser is unable to accept for
payment or pay for Shares tendered pursuant to the Offer, then, without
prejudice to the Purchaser's rights set forth herein, the Depositary may,
nevertheless, on behalf of the Purchaser retain tendered Shares and such Shares
may not be withdrawn except to the extent that the tendering stockholder is
entitled to and duly exercises withdrawal rights as described in this Section
3. Any such delay will be by an extension of the Offer to the extent required
by law.
For a withdrawal to be effective, a written or facsimile transmission notice
of withdrawal must be timely received by the Depositary at one of its addresses
set forth on the back cover of this Offer to Purchase and must specify the name
of the person who tendered the Shares to be withdrawn, the number of Shares to
be withdrawn, and the name of the registered holder of the Shares, if different
from that of the person who tendered such Shares. If certificates have been
delivered or otherwise identified to the Depositary, then, prior to the
physical release of such certificates, the serial numbers shown on the
particular certificates evidencing the Shares must be submitted to the
Depositary and, unless such Shares have been tendered by an Eligible
Institution, the signature on the notice of withdrawal must be guaranteed by an
Eligible Institution. If Shares have been tendered pursuant to the procedures
for book-entry transfer set forth in Section 2 above, any notice of withdrawal
must also specify the name and number of the account at the appropriate Book-
Entry Transfer Facility to be credited with the withdrawn Shares and otherwise
comply with such Book-Entry Transfer Facility's procedures. Withdrawals of
Shares may not be rescinded and any Shares properly withdrawn will be deemed
not validly tendered for purposes of the Offer. However, withdrawn Shares may
be retendered by again following one of the procedures described in Section 2
above at any time prior to the Expiration Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination shall be final and binding. None of the
Purchaser, Parent, any of their affiliates or assigns, if any, the Dealer
Managers, the Depositary, the Information Agent or any other person will be
under any duty to give any notification of any defects or irregularities in any
notice of withdrawal or incur any liability for failure to give any such
notification.
4. ACCEPTANCE FOR PAYMENT AND PAYMENT. Upon the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of the Offer as so extended or amended), the Purchaser
will purchase, by accepting for payment, and will pay for all Shares validly
tendered and not withdrawn (as permitted by Section 3) prior to the Expiration
Date promptly after the Expiration Date. Any determination concerning the
satisfaction of such terms and conditions will be within the sole discretion of
the Purchaser, and such determination will be final and binding on all holders
of Shares. See Section 1 above and Section 14 below. The Purchaser expressly
reserves the right, in its sole discretion, to delay acceptance for payment of
or payment for Shares in order to comply in whole or in part with any
applicable law, including, without limitation, the HSR Act. See Section 15. Any
such delays will be effected in compliance with Rule 14e-1(c) under the
Exchange Act (relating to the Purchaser's obligation to pay for or return
tendered Shares promptly after the termination or withdrawal of the Offer).
7
<PAGE>
The Chase Manhattan Corporation ("Chase") intends to file a Notification and
Report Form with respect to the Offer under the HSR Act on or about August 10,
1994. The waiting period under the HSR Act with respect to the Offer will
expire at 11:59 p.m., New York City time, on the fifteenth calendar day after
the date of filing (anticipated to be on or about August 25, 1994), unless
early termination of the waiting period is granted. In addition, the Antitrust
Division of the Department of Justice (the "Antitrust Division") or the Federal
Trade Commission (the "FTC") may extend the waiting period by requesting
additional information or documentary material from Chase. If such a request is
made, such waiting period will expire at 11:59 p.m., New York City time, on the
tenth calendar day after substantial compliance by Chase with such request. See
Section 15 for additional information regarding the HSR Act and the
applicability of the antitrust laws to the Offer.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) certificates
for such Shares (or timely Book- Entry Confirmation of the book-entry transfer
of such Shares as described in Section 2 above), (ii) the Letter of Transmittal
(or a facsimile thereof) properly completed and duly executed, with any
required signature guarantees, and (iii) any other documents required by the
Letter of Transmittal.
For purposes of this Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not withdrawn as,
if and when the Purchaser gives oral or written notice to the Depositary of the
Purchaser's acceptance of such Shares for payment. Upon the terms and subject
to the conditions of the Offer, payment for Shares accepted for payment
pursuant to the Offer will be made by deposit of the purchase price therefor
with the Depositary, which will act as agent for tendering stockholders for the
purpose of receiving payment from the Purchaser and transmitting payment to
validly tendering stockholders. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID BY
THE PURCHASER ON THE PURCHASE PRICE OF THE SHARES TENDERED PURSUANT TO THE
OFFER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH
PAYMENT.
If, prior to the Expiration Date, the Purchaser shall increase the
consideration to be paid for the Shares pursuant to the Offer, such increased
consideration shall be paid to all holders of Shares that are purchased
pursuant to the Offer, whether or not such Shares were tendered prior to such
increase in consideration.
The Purchaser reserves the right to transfer or assign, in whole or from time
to time in part, to one or more of Parent's subsidiaries or affiliates the
right to purchase Shares tendered pursuant to the Offer, but any such transfer
or assignment will not relieve the Purchaser of its obligations under the Offer
or prejudice the rights of tendering stockholders to receive payment for Shares
validly tendered and accepted for payment pursuant to the Offer.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, or if certificates are submitted representing more Shares than are
tendered, certificates representing unpurchased or untendered Shares will be
returned, without expense to the tendering stockholder (or, in the case of
Shares delivered by book-entry transfer into the Depositary's account at a
Book-Entry Transfer Facility pursuant to the procedures set forth in Section 2,
such Shares will be credited to an account maintained within such Book-Entry
Transfer Facility), as promptly as practicable following the expiration,
termination or withdrawal of the Offer.
5. CERTAIN TAX CONSEQUENCES. The summary of tax consequences set forth below
is for general information only and is based on the law as currently in effect.
The tax treatment of each stockholder will depend in part upon such
stockholder's particular situation.
The following discussion may not be applicable to certain types of
stockholders, including stockholders who acquired Shares pursuant to the
exercise of employee stock options or otherwise as compensation, individuals
who are not citizens or residents of the United States and foreign
corporations, or entities that are otherwise subject to special tax treatment
under the Internal Revenue Code of 1986, as amended (the "Code"), such as
insurance companies, tax-exempt entities and regulated investment companies.
ALL
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STOCKHOLDERS SHOULD CONSULT WITH THEIR OWN TAX ADVISORS AS TO THE PARTICULAR
TAX CONSEQUENCES OF THE OFFER AND THE MERGER TO THEM, INCLUDING THE
APPLICABILITY AND EFFECT OF THE ALTERNATIVE MINIMUM TAX, AND ANY STATE, LOCAL
OR FOREIGN INCOME AND OTHER TAX LAWS AND OF CHANGES IN SUCH TAX LAWS.
The receipt of cash pursuant to the Offer or the Merger will be a taxable
transaction for Federal income tax purposes under the Code, and may also be a
taxable transaction under applicable state, local or foreign income or other
tax laws. Generally, for Federal income tax purposes, a tendering stockholder
will recognize gain or loss in an amount equal to the difference between the
cash received and the stockholder's adjusted tax basis in the Shares tendered
by the stockholder and purchased pursuant to the Offer or the Merger, as the
case may be. Gain or loss will be calculated for each block of Shares tendered
and purchased pursuant to the Offer. For Federal income tax purposes, such gain
or loss will be a capital gain or loss if the Shares are a capital asset in the
hands of the stockholder, and any such capital gain or loss will be long-term
if the stockholder's holding period is more than one year, or short-term if the
stockholder's holding period is one year or less, as of the date of the sale of
the Shares or the effective date of the Merger, as the case may be. Long-term
capital gain of individuals is currently subject to a maximum marginal Federal
income tax rate of 28%. Short-term capital gain of individuals is subject to a
maximum marginal Federal income tax rate of 39.6%. There are limitations on the
deductibility of capital losses.
6. PRICE RANGE OF THE SHARES; DIVIDENDS. The Company has confirmed that prior
to August 14, 1992, the date of the Company's initial public offering at $13
per Share, there was no public market for the Shares, and that since that time
the Shares have been traded principally in the over-the-counter market and are
quoted through the Nasdaq National Market. The Shares are quoted on the Nasdaq
National Market under the symbol "AMRS." The following table sets forth, for
the periods indicated, the reported high and low sale prices for the Shares as
reported on the Nasdaq National Market, all as reported in published financial
sources.
<TABLE>
<CAPTION>
HIGH LOW
------- -------
<S> <C> <C>
1992
Third Quarter (from August 14, 1992)..................... $15 1/4 $13
Fourth Quarter........................................... 17 1/4 13 3/4
1993
First Quarter............................................ $24 1/4 $17 1/4
Second Quarter........................................... 20 5/8 16 3/4
Third Quarter............................................ 21 3/4 18 3/4
Fourth Quarter........................................... 23 16 3/8
1994
First Quarter............................................ $20 1/4 $16
Second Quarter........................................... 22 3/4 15 1/2
Third Quarter (through August 8, 1994)................... 27 7/8 22 1/2
</TABLE>
The Company does not pay regular dividends and there are currently no plans
to commence payments of regular dividends. The Merger Agreement prohibits the
payment of dividends by the Company. See Section 10.
On June 24, 1994, the last full day of trading before the issuance by the
Company of a press release announcing that it had retained Salomon Brothers to
advise the Company with respect to the sale of the Company, the reported
closing price for the Shares on the Nasdaq National Market was $17 1/4 per
Share, according to published sources.
On August 2, 1994, the last full day of trading before the issuance by Parent
and the Company of a press release announcing Parent's proposed acquisition of
the Company for a cash purchase price equal to
9
<PAGE>
$28.25 per Share (see Section 10), the reported closing price for the Shares on
the Nasdaq National Market was $24 7/8 per Share, according to published
sources.
On August 8, 1994, the last full day of trading prior to the commencement of
the Offer, the reported closing price for the Shares on the Nasdaq National
Market was $27 7/8 per Share, according to published sources.
STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; NASDAQ QUOTATION;
EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS.
Effect of the Offer on the Market for the Shares
The purchase of Shares pursuant to the Offer will reduce the number of Shares
that might otherwise trade publicly and, depending upon the number of Shares so
purchased, could adversely affect the liquidity and market value of the
remaining Shares, if any, held by the public. The purchase of Shares pursuant
to the Offer can also be expected to reduce the number of holders of Shares.
NASDAQ Quotation
Depending upon the aggregate market value and per share price of any Shares
not purchased pursuant to the Offer, the Shares may no longer meet the
standards for continued inclusion in the Nasdaq National Market, which require
that an issuer have at least 200,000 publicly held shares with an aggregate
market value of $1 million. If these standards are not met, quotations might
continue to be published in the over-the-counter "additional list" or in one of
the "local lists," but if the aggregate market value of the publicly held
Shares falls below $1 million, or if the current bid price is less than $1.00,
or if the number of holders of Shares falls below 300, or if the number of
publicly held Shares falls below 100,000, or there are not at least two market
makers for the Shares, NASD rules provide that the securities would no longer
be "authorized" for NASDAQ reporting and NASDAQ would cease to provide any
quotations. Shares held directly or indirectly by an officer or director of the
Company or by any beneficial owner of more than 10% of the Shares will
ordinarily not be considered as being publicly held for this purpose.
In the event the Shares are no longer eligible for NASDAQ quotation,
quotations might still be available from other sources. The extent of the
public market for the Shares and the availability of such quotations would,
however, depend upon the number of stockholders and/or the aggregate market
value of the Shares remaining at such time, the interest in maintaining a
market in the Shares on the part of securities firms, the possible termination
of registration of the Shares under the Exchange Act as described below, and
other factors. The Purchaser cannot predict whether the reduction in the number
of Shares that might otherwise trade publicly would have an adverse or
beneficial effect on the market price for or marketability of the Shares or
whether it would cause future market prices to be greater or less than the
price to be paid pursuant to the Offer.
Exchange Act Registration
The Shares are currently registered under the Exchange Act. Registration of
the Shares may be terminated upon application of the Company to the Commission
if the Shares are neither listed on a "national securities exchange" nor held
by 300 or more record holders. Termination of registration of the Shares under
the Exchange Act would substantially reduce the information required to be
furnished by the Company to its stockholders and the Commission and would cause
certain provisions of the Exchange Act, such as the short-swing profit recovery
provisions of Section 16(b), the requirements of furnishing a proxy statement
in connection with stockholders' meetings pursuant to Section 14(a) and the
requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transactions to no longer be applicable to the Company. Furthermore,
the ability of "affiliates" of the Company and persons holding "restricted
securities" of the
10
<PAGE>
Company to dispose of such securities pursuant to Rule 144 or Rule 144A
promulgated under the Securities Act of 1933, as amended, may be impaired or
eliminated.
THE PURCHASER INTENDS TO SEEK DELISTING OF THE SHARES FROM THE NASDAQ
NATIONAL MARKET AND THE TERMINATION OF THE REGISTRATION OF THE SHARES UNDER THE
EXCHANGE ACT AS SOON AFTER THE COMPLETION OF THE OFFER AS THE REQUIREMENTS FOR
SUCH DELISTING AND TERMINATION ARE MET. IF THE NASDAQ NATIONAL MARKET LISTING
AND THE EXCHANGE ACT REGISTRATION OF THE SHARES ARE NOT TERMINATED PRIOR TO THE
MERGER, THEN THE SHARES WILL BE DELISTED FROM THE NASDAQ NATIONAL MARKET AND
THEIR REGISTRATION UNDER THE EXCHANGE ACT TERMINATED FOLLOWING CONSUMMATION OF
THE MERGER.
Margin Regulations
The Shares are presently "margin securities" under the regulations of the
Board of Governors of the Federal Reserve System (the "Federal Reserve Board"),
which have the effect, among other things, of allowing brokers to extend credit
on the collateral of such Shares for the purpose of buying, carrying or trading
in securities ("Purpose Loans"). Depending on factors similar to those
discussed above regarding listing and market regulations, it is possible that,
following the purchase of Shares pursuant to the Offer, the Shares might no
longer constitute "margin securities" for purposes of the Federal Reserve
Board's margin regulations and, therefore, could no longer be used as
collateral for Purpose Loans made by brokers. In addition, if registration of
the Shares under the Exchange Act were terminated, the Shares would no longer
constitute "margin securities."
8. CERTAIN INFORMATION CONCERNING THE COMPANY. The Company is a Delaware
corporation with its principal executive offices located at 11355 North Torrey
Pines Road, La Jolla, California 92037-1013. The following general description
of the Company's business has been taken from the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1993.
"The Company is a holding company which, through its wholly-owned subsidiary,
American Residential Mortgage Corporation, is engaged in the mortgage banking
business, including the origination, purchase, sale and servicing of
residential first mortgage loans secured by one- to four-family homes and the
acquisition and sale of servicing rights associated with such loans. The
Company's ongoing business strategy is to: (i) efficiently originate high
quality mortgage loans for sale into the secondary mortgage market, (ii) retain
a significant percentage of the servicing rights on mortgage loans sold into
the secondary market, (iii) purchase additional servicing rights from third
parties as opportunities arise, (iv) cost efficiently perform the servicing
function, and (v) take advantage of acquisition opportunities afforded by the
consolidation currently taking place in the mortgage lending industry."
The selected consolidated financial data of the Company and its subsidiaries
set forth below has been excerpted and derived from the Company's Annual Report
to Stockholders for the fiscal year ended December 31, 1993 and the Company's
Quarterly Reports on Form 10-Q for the quarters ended June 30, 1993 and June
30, 1994. More comprehensive financial information is included in such reports
and the Company's Annual Report on Form 10-K (including management's analysis
of results of operations and financial position) and other documents filed with
the Commission and the following summary financial information is qualified in
its entirety by reference to such documents and all other reports and documents
filed with the Commission and all of the financial statements and related notes
contained therein. Such reports and certain other reports may be examined and
copies may be obtained at the offices of the Commission in the manner set forth
below.
11
<PAGE>
AMERICAN RESIDENTIAL HOLDING CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30, YEAR ENDED DECEMBER 31,
---------------------- -------------------------------------------------
1994 1993 1993 1992 1991 1990(1) 1989(2)
---------- ---------- ---------- --------- --------- --------- -------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Revenue:
Mortgage originations.. $ (10,910) $ 21,030 $ 59,015 $ 42,601 $ 27,834 $ 11,671 $ -- (2)
Servicing.............. 27,679 19,865 41,615 40,884 24,943 4,428 1,645
Sale of servicing
rights................ 43,651 22,528 52,146 21,363 8,059 7,870 23,674
Net interest income.... 9,278 9,683 22,706 15,781 11,227 3,883 745
Management fees........ -- -- -- -- -- -- 33,491(2)
Other.................. 694 301 888 378 108 742 256
---------- ---------- ---------- --------- --------- --------- -------
Total revenue.......... 70,392 73,407 176,370 121,007 72,171 28,594 59,811
Total expenses......... 80,878 55,183 133,036 88,425 51,884 41,156 54,157
---------- ---------- ---------- --------- --------- --------- -------
Income (loss) before
income taxes,
extraordinary item and
cumulative effect of
change in accounting
principle.............. (10,486) 18,224 43,334 32,582 20,287 (12,562) 5,654
Income taxes (benefit).. (4,212) 7,195 17,716 12,894 8,193 -- 2,406
---------- ---------- ---------- --------- --------- --------- -------
Income (loss) before
extraordinary item and
cumulative effect of
change in accounting
principle.............. (6,274) 11,029 25,618 19,688 12,094 (12,562) 3,248
Extraordinary item...... -- -- -- -- 1,137 -- --
Cumulative effect of
change in accounting
principle.............. -- (2,784) 2,784 -- -- -- --
---------- ---------- ---------- --------- --------- --------- -------
Net income (loss)....... $ (6,274) $ 13,813 $ 28,402 $ 19,688 $ 13,231 $ (12,562) $ 3,248
========== ========== ========== ========= ========= ========= =======
PER SHARE DATA:
Primary:
Net income (loss)
before extraordinary
item and cumulative
effect of change in
accounting principle.. $ (0.52) $ 1.01 $ 2.24 $ 2.48 $ 1.71 $ (2.47) $ --
Net income (loss)...... $ (0.52) $ 1.27 $ 2.48 $ 2.48 $ 1.88 $ (2.47) $ --
Fully diluted:
Net income (loss)
before extraordinary
item and cumulative
effect of change in
accounting principle.. $ (0.52) $ 1.01 $ 2.24 $ 2.47 $ 1.68 $ (2.47) $ --
Net income (loss)...... $ (0.52) $ 1.27 $ 2.48 $ 2.47 $ 1.85 $ (2.47) $ --
Pro forma(3):
Net income before
extraordinary item.... $ -- $ -- $ -- $ 2.03 $ 1.30 $ -- $ --
Net income............. $ -- $ -- $ -- $ 2.03 $ 1.41 $ -- $ --
Weighted average shares
outstanding:
Primary................ 12,005,029 10,881,839 11,441,221 7,938,503 6,649,459 5,449,275 --
Fully diluted.......... 12,098,231 10,894,457 11,441,302 7,966,076 6,757,617 5,449,275 --
Pro forma(3)........... -- 9,928,153 9,899,117 -- --
---------- ---------- ---------- --------- --------- --------- -------
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30, YEAR ENDED DECEMBER 31,
------------------- ---------------------------------------------
1994 1993 1993 1992 1991 1990 1989
---------- -------- ---------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING DATA (IN
MILLIONS):
Loan origination
(volume)............... $ 4,408 $ 3,488 $ 9,730 $ 5,544 $ 2,931 $ 2,211 $ 3,124
Loan servicing portfolio
(at end of period)..... 14,485 10,270 16,122 9,659 5,488 1,401 170
Loan subservicing
portfolio (at end of
period)................ 342 1,303 306 287 3,351 163 1,574
---------- -------- -------- -------- -------
BALANCE SHEET DATA (AT
END OF PERIOD):
(in thousands)
Mortgage loans.......... $ 913,190 $656,879 $ 842,996 $555,935 $283,897 $251,624 $ 5,146
Total assets............ 1,146,706 753,929 1,089,942 629,509 339,034 266,214 60,020
Notes payable and other
borrowings............. 940,193 868,187 868,187 497,727 261,140 231,285 5,416
Total shareholders'
equity................. 148,564 138,890 154,527 87,519 32,568 15,645 12,730
---------- -------- -------- -------- -------
<FN>
- --------
(1) The financial data of the Company for the pro forma year ended December 31,
1990 gives effect to pro forma adjustments, as if the Company acquired its
predecessor, American Residential Mortgage Corporation ("American
Residential"), on January 1, 1990.
(2) The financial data for the year ended December 31, 1989 reflects the
operation of the Company's predecessor, American Residential, as a service
corporation of its parent, First Nationwide Bank ("FNB"). In this capacity
American Residential provided loan origination, hedging, loan sales and
servicing activities on behalf of FNB. In lieu of mortgage origination and
other revenues, American Residential earned various management fees for
performance of these services, and as a result, revenue line items for the
period are not directly comparable to other periods.
(3) Pro forma earnings per share and weighted average shares outstanding give
effect to the initial public offering ("IPO") in the third quarter of 1992,
as if the 3,141,500 shares issued in the IPO were outstanding for the
entire periods presented and with adjustments to net income for reduced
borrowings in the periods by the amount of the IPO proceeds.
</TABLE>
Certain Projections. The Company does not as a matter or course make public
forecasts as to future sales or earnings. However, in connection with the
Company's discussions with Parent concerning the Offer and the Merger,
projections of financial performance of the Company for the Company's 1994 and
1995 fiscal years were provided to Parent as part of the due diligence review
of the Company and its operations conducted by Parent and Chase Manhattan
Mortgage Holdings, Inc., a wholly-owned subsidiary of Parent ("CMMHI"). A
summary of these projections is set forth below. The projections do not give
effect to the Offer or the Merger.
AMERICAN RESIDENTIAL HOLDING CORPORATION
OVERVIEW 1994-1995 FORECAST
<TABLE>
<CAPTION>
1994 1995
------------------- -------------------
($ IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C>
Loan volume........................... $ 9,500,000 $ 11,000,000
Market share.......................... 1.5% 2.0%
Average number of branches............ 100 110
Servicing--E.O.Y...................... $ 14,300,000 $ 16,700,000
Total revenues........................ 193,000 250,000
Total expenses........................ 192,000 204,000
Secondary gain (loss)................. (33,000) 3,000
Net income............................ 7,000 25,000
Earnings per share.................... .56 2.06
Percentage service sales.............. 94% 60%
</TABLE>
The foregoing projections reflect a two-year plan for the years ending
December 31, 1994 and 1995 and were prepared in connection with the anticipated
sale of the Company. Such projections were provided to Parent and CMMHI, and to
other interested parties, during their initial due diligence investigation. The
projections set forth below relate to the quarter ended September 30, 1994 and
to the six months ended
13
<PAGE>
December 31, 1994, and were provided to Parent and CMMHI as a part of their
detailed due diligence investigation of the Company and its operations
conducted from July 24, 1994 through July 30, 1994.
AMERICAN RESIDENTIAL HOLDING CORPORATION
OVERVIEW 1994-1995 FORECAST
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED ENDED
SEPT. 30, DEC. 31,
------------ ----------
(IN MILLIONS)
<S> <C> <C>
Total single-family residential originations............ $1,412 $7,601
Ending servicing portfolio.............................. 15,313 16,465
Gross revenues.......................................... 32 189
Gross expenses.......................................... 49 223
Earnings before interest & taxes........................ (17) (35)
Net loss................................................ (11) (25)
Percentage of servicing sales to originations........... 5% 71%
Net loss per share...................................... (0.35) (2.05)
</TABLE>
The Company has informed Parent that the Company arrived at the foregoing
projections assuming that long-term interest rates would remain in the range of
8.5% to 9.5% and that the overall market size of single-family mortgage
originations would be approximately $650 billion for 1994 and $550 billion for
1995. Using regional branch managers' projections for expected levels of
funding, distribution mix, revenues and expenses, the Company derived
projections for its loan origination system. The assumed distribution mix of
the retail, wholesale, wholesale table funded and correspondent channels was
approximately, 40%, 15%, 37% and 9%, respectively. The regional branch managers
also provided estimates for the subsidy level for each of the retail,
wholesale, wholesale table funded and correspondent channels, which were
assumed to be approximately .4%, .4%, .75% and .85%, respectively. With the
recent rise in interest rates, the Company's projected level of loan
originations has decreased. The servicing activity generated by the Company is
directly affected by the level of loan originations. Based on the projected
level of loan originations and the level of servicing activity, the Company
projected revenues and expenses for the servicing operations. Levels of
servicing sales are determined by the Company's management to achieve earnings
targets. Other underlying assumptions including corporate overhead and
secondary marketing income are based on management budgets. The amortization of
servicing rights, which has been assumed to approximate an annualized average
of 12%, is based on the interest rate assumptions described above.
BECAUSE THE ESTIMATES AND ASSUMPTIONS UNDERLYING THE ABOVE PROJECTIONS ARE
INHERENTLY SUBJECT TO SIGNIFICANT ECONOMIC AND COMPETITIVE UNCERTAINTIES BEYOND
THE COMPANY'S CONTROL, THERE CAN BE NO ASSURANCE THAT THE PROJECTED RESULTS CAN
BE REALIZED, OR THAT ACTUAL RESULTS WOULD NOT BE MATERIALLY HIGHER OR LOWER
THAN THOSE PROJECTED. NONE OF THE COMPANY, PARENT, THE PURCHASER OR ANY OTHER
PARTY ASSUMES ANY RESPONSIBILITY FOR THE ACCURACY OF SUCH INFORMATION.
MOREOVER, THE PROJECTIONS WERE NOT PREPARED WITH A VIEW TOWARD PUBLIC
DISCLOSURE OR COMPLYING WITH PUBLISHED GUIDELINES OF THE COMMISSION OR THE
GUIDELINES ESTABLISHED BY THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC
ACCOUNTANTS. THE PROJECTIONS ARE INCLUDED IN THIS OFFER TO PURCHASE ONLY
BECAUSE SUCH INFORMATION WAS PROVIDED TO PARENT. PARENT AND THE PURCHASER DID
NOT RELY ON THE FOREGOING PROJECTIONS AND RELATED ASSUMPTIONS IN CONNECTION
WITH THIS OFFER TO PURCHASE.
The Company is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith is required to file periodic reports,
proxy statements and other information with the Commission relating to its
business, financial condition and other matters. Certain information, as of
particular dates, concerning the Company's directors and officers (including
their remuneration, the stock options granted to them and the Shares held by
them), the principal holders of the Company's securities, any material
interests of such persons in transactions with the Company and other matters is
required to be disclosed in proxy statements and annual reports distributed to
the Company's stockholders and filed with the Commission. Such reports, proxy
statements and other information may be inspected and copied at the
Commission's public reference facilities at 450 Fifth Street, N.W., Washington,
D.C. 20549, and should also
14
<PAGE>
be available for inspection at the following regional offices of the
Commission: 7 World Trade Center, Suite 1300, New York, New York 10048; and 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2551; and copies may
be obtained by mail at prescribed rates, from the principal office of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. Copies should
also be available at the offices of the NASD, 1735 K Street, N.W., Washington,
D.C. 20006.
9. CERTAIN INFORMATION CONCERNING THE PURCHASER, CMMHI, PARENT AND CHASE.
The Purchaser, a Delaware corporation, was incorporated on July 28, 1994 for
the purpose of acquiring the Company, and has engaged in no activities to date,
other than those incidental to its organization and making the Offer. The
Purchaser is a wholly-owned subsidiary of CMMHI, which in turn is a wholly-
owned subsidiary of Parent.
CMMHI is a Delaware corporation headquartered in Tampa, Florida and is a
wholly-owned subsidiary of Parent. CMMHI is a holding company, the sole assets
of which are the shares of capital stock of the Purchaser and Chase Manhattan
Mortgage Corporation ("CMMC"), Parent's current mortgage lending entity.
Parent is a national banking association headquartered in New York, New York
and a wholly-owned subsidiary of Chase. At June 30, 1994, Parent had total
assets of $94.7 billion and total stockholders' equity of $6.75 billion. Parent
is a commercial bank offering a wide range of banking and trust services to its
customers throughout the United States and around the world.
Chase is a bank holding company that was incorporated in 1969 and is
registered under the Bank Holding Company Act of 1956, as amended. Chase's
principal subsidiary is Parent. As of June 30, 1994, Chase was the sixth
largest bank holding company in the United States, with consolidated total
assets of $114.5 billion, total deposits of $68.9 billion and total
stockholders' equity of $8.6 billion.In addition to the banking activities
conducted through Parent, Chase holds investments in other subsidiaries that
provide a variety of financial services, including commercial and consumer
financing, investment banking, securities trading and investment advisory
services.
The principal offices of the Purchaser and CMMHI are located at 4915
Independence Parkway, FSII-2, Tampa, Florida 33634-7523. The principal offices
of Parent and Chase are located at 1 Chase Manhattan Plaza, New York, New York
10081-0001. The name, business address, citizenship, present principal
occupation or employment, five-year employment history and citizenship of each
of the directors and executive officers of the Purchaser, CMMHI, Parent and
Chase are set forth in Schedule I to this Offer to Purchase.
Except as set forth elsewhere in this Offer to Purchase: (i) none of the
Purchaser, CMMHI, Parent or Chase, or, to their knowledge, any of the persons
listed in Schedule I hereto or any associate or majority-owned subsidiary or
any pension, profit-sharing or similar plan of the Purchaser, CMMHI, Parent and
Chase or any of the persons so listed, beneficially owns or has a right to
acquire any Shares or any other equity securities of the Company; and (ii) none
of the Purchaser, CMMHI, Parent or Chase or, to their knowledge, any of the
persons or entities referred to in clause (i) above or any of their executive
officers, directors or subsidiaries, has effected any transaction in the Shares
or any other equity securities of the Company during the past 60 days. As of
August 4, 1994, bank affiliates of the Purchaser held a total of 38,550 Shares
in various custodial accounts maintained in the ordinary course of their
banking business for the benefit of others. Neither the Purchaser nor any of
its affiliates has any voting power or discretionary investment authority with
respect to any of such Shares and disclaim beneficial ownership thereof.
Except as described in this Offer to Purchase, (i) there have not been any
contacts, negotiations or transactions between the Purchaser, CMMHI, Parent and
Chase or any of their respective subsidiaries or, to their knowledge, any of
the persons listed in Schedule I hereto, on the one hand, and the Company or
its directors, officers or affiliates, on the other hand, that are required to
be disclosed pursuant to the rules and regulations of the Commission, and (ii)
none of the Purchaser, CMMHI, Parent or Chase, or, to their knowledge, any of
the persons listed in Schedule I, hereto has any contract, arrangement,
understanding or
15
<PAGE>
relationship with any other person with respect to any securities of the
Company. From time to time Parent and certain of its directors and officers and
their respective affiliates and associates have engaged in ordinary business
transactions with the Company and expect to engage in such transactions with
the Company in the future.
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY; THE MERGER AGREEMENT;
APPRAISAL RIGHTS; ARRANGEMENTS WITH OFFICERS OF THE COMPANY; OTHER AGREEMENTS.
The mortgage market comprises the largest segment of the consumer credit
market. While mortgage banking has remained a fragmented industry with no
single dominant competitor, Parent has pursued a business strategy of expanding
its presence in residential mortgage activities in order to achieve a
significant share position in mortgage originations and servicing. Parent,
through the activities of CMMHI has routinely had discussions with mortgage
banks, investment banks and others regarding the potential acquisition of
mortgage banks, origination networks and servicing portfolios.
In 1994, the trend toward consolidation in the mortgage industry has
accelerated and various mortgage bank acquisitions have been announced.
Consistent with past practice, CMMHI took steps to identify and evaluate
possible mortgage bank acquisitions which could strategically enhance Parent's
goals.
As a part of CMMHI's strategy of growing its mortgage banking business
through strategic acquisitions, in early June, 1994, CMMC engaged Smith Barney
to assist it in evaluating certain mortgage companies that were considered
potentially attractive acquisition candidates.
In early June, 1994, CMMHI contacted a director of the Company and expressed
an interest in acquiring the Company, and was informed that the Company had
retained a financial advisor for the purpose of seeking acquisition proposals
from interested parties. Subsequent to this contact, CMMHI received and
executed a confidentiality agreement, dated June 16, 1994, and thereafter was
furnished with a confidential memorandum describing the Company.
On June 27, 28, and 29, 1994, CMMHI and its advisors conducted preliminary
due diligence and met with members of the Company's management team. On July 7,
1994, CMMHI received a letter from Salomon Brothers inviting CMMHI to submit a
definitive offer to acquire 100% of the Company's stock. On July 20, 1994,
CMMHI submitted its offer to acquire the Company for a purchase price equal to
$29.50 per Share. The offer was subject to, among other things, satisfactory
completion of a due diligence review to confirm the facts and assumptions upon
which CMMHI had initially valued the Company, and on the execution and delivery
of a mutually satisfactory definitive acquisition agreement. On July 22, 1994,
after having clarified certain technical matters relating to CMMHI's offer, the
Company accepted CMMHI's offer by countersigning CMMHI's offer letter, and
invited CMMHI to commence a detailed due diligence review of the Company and
its operations. CMMHI and Parent conducted detailed due diligence from July 24,
1994 through July 30, 1994.
Following completion of this due diligence review, at the request of CMMHI,
Smith Barney contacted Salomon Brothers to discuss the results of CMMHI's due
diligence and the impact thereof on the price per Share originally offered by
CMMHI. Smith Barney informed Salomon Brothers that CMMHI had identified various
areas in which its due diligence had failed to confirm certain of the
assumptions underlying CMMHI's initial valuation of the Company. From August 1
through August 2, 1994 the parties negotiated the final terms and conditions of
a definitive acquisition agreement and settled on a purchase price of $28.25
per Share.
The Board of Directors of the Company approved CMMHI's $28.25 per Share offer
and the terms of the proposed definitive acquisition agreement at a special
meeting held on August 2, 1994. The Merger Agreement was thereafter executed
and delivered by the Company, Parent and the Purchaser on August 3, 1994.
The Merger Agreement
The following description of the Merger Agreement is only a summary and is
not a complete statement of the terms and conditions of the Merger Agreement.
The complete statement of such terms and conditions
16
<PAGE>
is made in the Merger Agreement which is incorporated herein by reference. A
copy of the Merger Agreement has been filed with the Commission as an exhibit
to the Schedule 14D-1, and may be examined, and copies obtained, as set forth
in Section 8 above (except that it will not be available at the regional
offices of the Commission).
The Offer. The Merger Agreement provides that, subject to the terms and
conditions thereof, the Purchaser will commence the Offer and that the
obligation of the Purchaser to consummate the Offer and to accept for payment
and to pay for any Shares tendered pursuant to the Offer shall be subject to
only those conditions set forth in the Merger Agreement, which are described in
Section 14 below. The Purchaser has the right to modify the conditions or terms
of the Offer in any manner that would not adversely affect the holders of the
Shares, except that the Purchaser has agreed in the Merger Agreement that,
without the prior written consent of the Company, the Purchaser will not
decrease the Offer Price or decrease the number of Shares sought pursuant to
the Offer, change the form of consideration, impose conditions to the Offer in
addition to or in modification of the conditions contained in the Merger
Agreement or, except as described below, waive the Minimum Condition. The
Purchaser expressly reserves the right, in its sole discretion, to waive any of
the conditions to consummation of the Offer and to reduce the Minimum
Condition, provided, that in no such event shall such reduction reduce the
Minimum Condition to below 51% of the Shares. Parent and the Purchaser have
agreed in the Merger Agreement that, assuming the prior satisfaction or waiver
of the conditions to the Offer, the Purchaser shall accept for payment, in
accordance with the terms of the Offer, Shares validly tendered pursuant to the
Offer and not withdrawn as soon as is legally permissible (subject to Parent's
and the Purchaser's right to extend the Offer for up to ten business days after
all the conditions thereto have been satisfied or waived if less than 90% of
the outstanding Shares have been validly tendered and not withdrawn as of such
time). The Purchaser and Parent may, in their sole discretion, extend the Offer
from time to time if all of the conditions to the consummation of the Offer
have not been satisfied or waived on or prior to the Expiration Date.
In the Merger Agreement, the Company consented to the Offer and represented
that its Board of Directors has unanimously (i) determined that the Offer and
the Merger are fair to and in the best interests of the Company and its
stockholders, (ii) resolved to recommend acceptance of the Offer by the holders
of Shares and approval and adoption of the Merger Agreement by the stockholders
of the Company, and (iii) approved and adopted the Merger Agreement and the
Merger for purposes of Sections 203 and 251 of the Delaware General Corporation
Law ("DGCL"). The Merger Agreement provides that, subject to the fiduciary
duties of the Company's Board of Directors under applicable law as advised by
counsel, the Company's Schedule 14D-9 shall contain the foregoing
recommendation of the Company's Board of Directors.
The Merger. The Merger Agreement provides that, upon the terms and subject to
the conditions of the Merger Agreement, and in accordance with the relevant
provisions of the DGCL, the Purchaser shall be merged with and into the Company
as soon as practicable following the satisfaction or waiver of the conditions
set forth in the Merger Agreement, which are described in Section 14 below.
Following the Merger, the Company shall continue as the Surviving Corporation
and the separate corporate existence of the Purchaser shall cease.
At the effective time of the Merger (the "Effective Time"), each Share issued
and outstanding immediately prior thereto (other than Shares held in the
treasury of the Company or any of its subsidiaries or owned by the Purchaser,
Parent or any other wholly-owned subsidiary of Parent, all of which shall be
canceled, and Shares, if any, held by stockholders who have perfected appraisal
rights under Delaware law), shall, by virtue of the Merger and without any
action on the part of the Purchaser, Parent or the holder thereof, be converted
into the right to receive the Merger Consideration, payable to the holder
thereof, without interest thereon, upon surrender of the certificate formerly
representing such Share.
In addition, each outstanding stock option, warrant and stock purchase right
granted under the Company's option plans, whether or not presently vested,
shall terminate, and each holder thereof will be entitled to receive from the
Company immediately prior to the Effective Time, in exchange for each Share
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subject to such option, warrant or stock purchase right, a cash payment equal
to the excess (if any) of the Merger Consideration over the per Share exercise
price of such option, warrant or stock purchase right.
At the Effective Time, each share of common stock of the Purchaser issued and
outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of the holder thereof, be converted
into and shall thereafter evidence one share of common stock of the Surviving
Corporation.
Pursuant to the Merger Agreement, if required by applicable law in order to
consummate the Merger, the Company, acting through its Board of Directors,
shall, in accordance with applicable law as soon as practicable following the
expiration or termination of the Offer: (i) call, give notice of and convene a
special meeting of its stockholders for the purpose of considering and taking
action on the Merger Agreement; and (ii) prepare and file with the Commission a
preliminary proxy or information statement pertaining to the Merger, use its
best efforts to have any review thereof conducted by the Commission promptly
and cause the definitive proxy or information statement to be mailed to the
Company's stockholders promptly following the completion of any review by, or
in absence of any review, the termination of any applicable waiting period of,
the Commission. Subject to the fiduciary duties of the Board of Directors under
applicable law, the Company has agreed in the Merger Agreement to use its best
efforts to obtain the necessary approvals by its stockholders of the Merger
Agreement and the Merger, and to include in the proxy or information statement
the recommendation of the Board of Directors that the Company's stockholders
vote in favor of the approval and adoption of the Merger Agreement. The
Purchaser and Parent have agreed that, at any such special meeting of
stockholders, all of the Shares owned by them will be voted in favor of
approval and adoption of the Merger Agreement and the Merger. If, following the
Offer, the Purchaser owns a majority of outstanding Shares, the Purchaser will
have the ability to approve the Merger and the Merger Agreement and to effect
the Merger without the approval of any other stockholders. If, following the
Offer, the Purchaser owns over 90% of the outstanding Shares and is able to
consummate the Merger without such a meeting of stockholders, the Company,
Parent and the Purchaser have agreed to take such actions, subject to the terms
and conditions of the Merger Agreement, as are necessary to consummate the
Merger under Section 253 of the DGCL.
Conditions to Each Party's Obligation to Effect the Merger. The Merger
Agreement provides that the respective obligations of each party to effect the
Merger are subject to the satisfaction or waiver, where permissible, prior to
the Effective Time of the following conditions: (1) the Merger shall have been
approved and adopted by the requisite vote of the holders of the outstanding
Shares, if such vote is required by the DGCL or the Company's By-laws; (2)
there shall not be any judgment, decree, injunction, ruling or order of any
court, governmental department, commission, agency or instrumentality
outstanding against the Company, the Purchaser or Parent that prohibits,
restricts or delays the consummation of the Merger or, with respect to the
Purchaser or Parent, limits in any material respect the right of Parent to
control the Company or any material aspect of the business of the Company and
its subsidiaries; (3) any waiting period under the HSR Act shall have expired
or been terminated; and (4) the Purchaser or Parent shall have purchased the
Shares tendered pursuant to the Offer, unless the Offer shall have been
terminated or shall have expired without the purchase of Shares thereunder by
reason of the failure of Parent or the Purchaser to perform in any material
respect its covenants and agreements contained in the Merger Agreement.
Conduct of Business Until the Merger. The Merger Agreement provides that,
prior to the Effective Time, unless Parent shall otherwise agree in writing or
as otherwise contemplated by the Merger Agreement:
(a) the business of the Company and its subsidiaries shall be conducted
only in, and the Company and its subsidiaries shall not take any action
except in, the ordinary course of business and consistent with past
practice;
(b) the Company shall not directly or indirectly do any of the following:
(A) issue, sell, pledge, dispose of or encumber (or permit any of its
subsidiaries to issue, sell, pledge, dispose of or encumber) (x) any
capital stock of any of its subsidiaries or (y) any assets of the Company
or any of its subsidiaries other than in the ordinary course of business
consistent with past practice; (B) amend or propose to amend its
Certificate of Incorporation or By-laws; (C) declare, set aside or pay any
dividend payable in
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cash, stock, property or otherwise with respect to such shares; (D) redeem,
purchase, acquire or offer to acquire (or permit any subsidiary to redeem,
purchase, acquire or offer to acquire) any shares of its capital stock; or
(E) enter into any contract, agreement, commitment or arrangement with
respect to any of the matters set forth in this paragraph (b);
(c) neither the Company nor any of its subsidiaries shall: (A) issue,
sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of,
any additional shares of, or securities convertible into or exchangeable
for, or any options, warrants or rights of any kind to acquire any shares
of, its capital stock of any class or other property or assets whether
pursuant to any rights agreement, Stock Plan or otherwise; provided that
the Company may issue Shares pursuant to currently outstanding options,
warrants or stock purchase rights referred to in Section 3.01(c) of the
Merger Agreement; (B) acquire (by merger, consolidation or acquisition of
stock or assets) any corporation, partnership or other business
organization or division thereof (except an existing wholly-owned
subsidiary); (C) incur any indebtedness for borrowed money or issue any
debt securities, except in the ordinary course of business and consistent
with past practice and provided that any such indebtedness or debt
securities are prepayable without penalty or premium; (D) enter into or
modify any material contract, lease, agreement or commitment, except in the
ordinary course of business and consistent with past practice; (E)
terminate, modify, assign, waive, release or relinquish any material
contract rights or amend any material rights or claims except in the
ordinary course of business and consistent with past practice; or (F)
dissolve or otherwise alter its corporate existence;
(d) neither the Company nor any subsidiary shall materially alter its
methods or policies of underwriting, pricing, originating, warehousing,
selling and servicing, or buying or selling rights to service, mortgage
loans, or hedging its mortgage loan positions or commitments, except that
such limitation shall not apply to changes required in order to comply with
any rules, regulations or requirements of any governmental or quasi-
governmental authority or agency, including without limitation the FNMA,
FHLMC, GNMA, FHA or VA (as such terms are defined in the Merger Agreement),
or changes required by American Residential Mortgage Corporation's
traditional conduits for the sale of non-conventional loans;
(e) other than (i) pursuant to contractual arrangements in effect on the
date of the Merger Agreement, (ii) the purchase of mortgage loans and/or
servicing rights in the ordinary course of business, (iii) short-term
investment for cash management purposes, or (iv) pursuant to hedging
transactions (which term includes both buying futures and forward
commitments from financial institutions) consistent with past practice,
neither the Company nor any subsidiary will acquire any assets in any
single transaction or series of related transactions for a consideration in
excess of $250,000 or enter into any contract with respect thereto,
provided, however, that such contract or acquisition is reasonably
necessary or appropriate for the operation of the business in the ordinary
course and consistent with past practice;
(f) other than pursuant to contractual arrangements in effect on the date
of the Merger Agreement which have been disclosed in writing to Parent
prior to the date of the Merger Agreement, neither the Company nor any of
its subsidiaries will (i) purchase, sell, assign, encumber or other
transfer any rights to service mortgage loans (except in connection with
the purchase and sale of Mortgage Loans (as defined in the Merger
Agreement) on a "servicing released" basis in the ordinary course of
business and consistent with past practice), (ii) sell, transfer, lease or
encumber any residential mortgage loans or other assets (except in
connection with the sale of nonconforming Mortgage Loans or mortgage
related securities in the ordinary course of business and consistent with
past practice), (iii) terminate, modify or amend any existing servicing
contracts or (iv) enter into any servicing contracts (except in connection
with the sale of Mortgage Loans in the ordinary course of business and
consistent with past practice);
(g) the Company will use its reasonable efforts to preserve intact the
business organization of the Company and the subsidiaries, to keep
available the services of their present key officers and employees, to
preserve their goodwill and to maintain its relationship with those having
business relationships with the Company and the subsidiaries, provided,
however, that to satisfy the foregoing obligation, the Company shall not be
required to make any payment or to enter into or amend any contractual
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arrangements or understandings except in the ordinary course of business
and consistent with past practice;
(h) except in the ordinary course of business and consistent with past
practice, neither the Company nor any of its subsidiaries shall change any
method of accounting, make any tax election or settle or compromise any tax
liability material to the Company;
(i) neither the Company nor any subsidiary shall open any new branch
offices or close any branch offices;
(j) neither the Company nor any subsidiary shall grant any increase in
the salary or other compensation of its employees except, in the case of
employees who are not executive officers of the Company, in the ordinary
course of business and consistent with past practice, or grant any bonus to
any employee or enter into any employment agreement or make any loan to or
enter into any material transaction of any other nature with any employee
of the Company or any subsidiary;
(k) neither the Company nor any subsidiary shall take any action to
institute any new severance or termination pay practices with respect to
any directors, officers or employees of the Company or the subsidiaries or
to increase the benefits payable under its severance or termination pay
practices;
(l) neither the Company nor any subsidiary shall (except for salary
increases for employees who are not executive officers of the Company and
in the ordinary course of business and consistent with past practice) adopt
or amend, in any respect, except as contemplated in the Merger Agreement or
as may be required by applicable law or regulation, any collective
bargaining, bonus, profit sharing, compensation, stock option, restricted
stock, pension, retirement, deferred compensation, employment or other
employee benefit plan, agreement, trust, fund, plan or arrangement for the
benefit or welfare of any directors, officers or employees; and
(m) neither the Company nor any subsidiary shall hire any personnel to
fill positions with the Company or any subsidiary at the assistant vice
president level or higher.
The Company has agreed to afford two representatives of Parent access to its
corporate headquarter buildings in La Jolla, California so as to enable such
representatives to monitor such activities of the Company and its subsidiaries
as they deem appropriate.
Board of Directors. The Merger Agreement provides that, subject to compliance
with Section 14(f) of the Exchange Act and Rule 14f-1 thereunder, following the
acquisition of at least a majority of the Shares by the Purchaser pursuant to
the Offer, the Purchaser will be entitled to designate up to such number of
directors, rounded up to the next whole number, of the Company's Board of
Directors as will make the percentage of the Company's directors designated by
the Purchaser equal to not less than the percentage of outstanding Shares held
by the Purchaser and Parent, and the Company will, upon the request of Parent,
increase the size of the Board and/or secure the resignation of such number of
directors as is necessary to enable the Purchaser's designees to be elected to
the Company's Board of Directors. At such times, the Company shall use its
reasonable efforts to cause persons designated by the Purchaser to constitute
the same percentage as persons designated by the Purchaser shall constitute of
the board of directors of the Company of (i) each committee of the board of
directors of the Company, (ii) each board of directors of each domestic
subsidiary and (iii) each committee of each such board, in each case, only to
the extent permitted by applicable law. Notwithstanding the foregoing, until
the earlier of (x) the time the Purchaser acquires a majority of the then
outstanding Shares and (y) the Effective Time, the Company shall use its
reasonable efforts to ensure that all the members of the board of directors of
the Company and such boards and committees of the domestic subsidiaries as of
the date of the Merger Agreement who are not employees of the Company shall
remain members of the board of directors of the Company and of such boards and
committees. Additionally, until the Effective Time, at least two of the members
of the Company's Board of Directors shall be persons who are not (i) employees
of the Company or any of its subsidiaries, (ii) affiliated with the Purchaser
or Parent or (iii) investors or potential investors in Parent (collectively,
the "Disinterested Directors"). The Merger Agreement provides that following
the election or appointment of such designees, the concurrence of a majority of
the Disinterested Directors then in office will be required to take any action
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by the Company to amend or terminate the Merger Agreement, to extend the time
for performance or waive compliance thereunder or to amend the Certificate of
Incorporation or By-laws of the Company.
Benefit Plans. Parent has agreed in the Merger Agreement that during the
period commencing at the Effective Time and ending on the second anniversary
thereof, the employees of the Company will continue to be provided with
employee benefit plans (other than stock option or other plans involving the
potential issuance of securities of the Company or of Parent) which in the
aggregate are substantially comparable to those currently provided by the
Company to such employees.
Indemnification. Parent has agreed in the Merger Agreement that all rights to
indemnification or exculpation now existing in favor of the past and present
directors or officers of the Company as provided in its Restated Certificate of
Incorporation or By-laws, as permitted by Delaware law, in effect as of the
date of the Merger Agreement with respect to claims arising from service as
officers or directors whether or not existing or occurring asserted or claimed
prior to the Effective Time will survive the Merger and continue in full force
and effect for a period of seven years from the Effective Time. In addition,
during this period, Parent has agreed to cause the Surviving Corporation to
exercise the powers granted to it by its certificate of incorporation, its by-
laws and applicable law to indemnify to the fullest extent possible under
applicable law present or former directors and officers of the Company against
claims made against them arising from their service in such capacities with
respect to matters arising prior to the Effective Time. The Merger Agreement
provides that, subject to certain limitations, Parent will cause the Surviving
Corporation to maintain for a period of seven years from the Effective Time,
directors' and officers' liability insurance for all persons who are directors
and officers of the Company on the date of the Merger Agreement with respect to
matters occurring prior to the Merger, on terms and conditions no less
advantageous than the terms of the existing policy.
Reasonable Efforts. The Merger Agreement provides that, on the terms and
subject to the conditions of the Merger Agreement, each of the parties will use
all reasonable efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, all things necessary, proper or advisable to consummate
and make effective, the transactions contemplated by the Merger Agreement.
Representations and Warranties. The Merger Agreement contains various
customary representations and warranties, including as to the Company's
financial statements, the absence of material adverse changes, compliance with
laws and certain other financial and legal matters. The Merger Agreement also
contains certain representations and warranties from the Company that relate
specifically to the operation of its mortgage banking business.
Amendments. The Merger Agreement may only be amended by an instrument in
writing signed on behalf of all parties thereto; provided, however, that after
approval of the Merger by the stockholders of the Company, no amendment may be
made that decreases the consideration to which the holders of Shares are
entitled pursuant to the Merger Agreement or otherwise materially affects the
stockholders of the Company without the further approval of the holders of the
Shares. During the period from the consummation of the Offer to the Effective
Time, any amendment to the Merger Agreement on behalf of the Company, any
extension by the Company of the time for performance of any of the obligations
or acts of the Purchaser or Parent, or any waiver of any of the Company's
rights under the Merger Agreement, may be authorized only by a majority vote of
the Disinterested Directors.
Acquisition Proposals; Termination Fee; Expenses. The Merger Agreement
provides that, prior to the termination of the Merger Agreement, the Company
will not, directly or indirectly, through any officer, director, agents or
otherwise, initiate contact with any potential bidder for the purpose of
encouraging that potential bidder to submit proposals or offers relating to any
liquidation, dissolution, recapitalization, merger, consolidation, or
acquisition or purchase of all or a material portion of the assets of, or any
equity interest in, the Company or any of its subsidiaries or other similar
transaction or business combination involving the Company or any of its
subsidiaries. With respect to potential bidders who initiate contact with the
Company after the date of the Merger Agreement and prior to any such
termination (including without limitation
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parties with whom the Company shall have held discussions prior to the date of
the Merger Agreement), the Company may furnish information and access to that
potential bidder or bidders pursuant to confidentiality agreements, and, if the
Board (or a special committee thereof) by a majority vote determines in its
good faith judgment that such action is necessary to satisfy its fiduciary
responsibilities, may participate in discussions and negotiate with that
potential bidder concerning any acquisition of the Company. The Company has
agreed to give to Parent prompt notice of any such contact by any potential
bidder (including the substance of any proposal made by such potential bidder)
and to keep Parent informed of any and all subsequent contacts or discussions
with such potential bidder. The Merger Agreement provides that, except as set
forth above, prior to any termination of the Merger Agreement, neither the
Company nor any of its subsidiaries nor any of its or their respective
officers, directors, employees, representatives or agents, shall directly or
indirectly encourage, solicit, participate in or initiate discussions or
negotiations with, or provide any information to, any corporation, partnership,
person or other entity or group (other than Parent or the Purchaser) concerning
any tender offer, merger, sale or assets, sale of shares of capital stock or
similar transaction involving the Company or any subsidiary or division of the
Company, provided, however, that nothing in the Merger Agreement shall prevent
the Board from taking, and disclosing to the Company's stockholders, any
position contemplated by Rules 14d-9 and 14e-2 promulgated under the Exchange
Act with regard to any tender offer in accordance with the Board's judgment of
what action shall be in the stockholders' best interests.
The Company has agreed that if a Third Party Acquisition (as hereinafter
defined) shall occur (i) prior to the termination of the Merger Agreement, or
(ii) within nine (9) months after a termination of the Merger Agreement by
Parent or the Purchaser, provided that neither Parent nor the Purchaser is in
breach in a material respect of its material obligations under the Merger
Agreement, the Company shall pay to Parent, within five business days following
consummation of such Third Party Acquisition, a fee, in cash, equal to
$10,000,000 plus all reasonable and documented out-of-pocket fees, costs and
expenses of Parent and the Purchaser.
"Third Party Acquisition" means the occurrence of any of the following
events: (i) the Company is acquired by merger or otherwise by any "person" (as
such term is defined in Section 13(d)(3) of the Exchange Act) other than the
Purchaser or any affiliate thereof (a "Third Party"); (ii) a Third Party
acquires more than 50% of the total assets of the Company and its subsidiaries
taken as a whole; (iii) a Third Party acquires more than 50% of the outstanding
Shares; (iv) the Company adopts and implements a plan of liquidation or
extraordinary dividend relating to more than 50% of its total assets; or (v)
the Company or any of its subsidiaries repurchases more than 50% of the
outstanding Shares, provided, that no such transaction shall fall within this
definition unless the Company or the holders of Shares receive consideration
per Share having an indicated value (including the value of any stub equity) in
excess of the Offer Price or the Company acting through its disinterested
directors determines such transaction or proposed transaction is more favorable
to the stockholders of the Company than the Offer and the Merger. In any case
in which the consideration is other than all cash, the good faith judgment of
the Company's Board of Directors as to the value of that consideration shall be
controlling for purposes of this definition.
Whether or not the Merger is consummated, all costs and expenses incurred in
connection with the Merger Agreement and the transactions contemplated thereby
shall be paid by the party incurring such expense except that expenses incurred
in connection with the printing and mailing by the Company of the Schedule 14D-
9 (and a proxy statement, if necessary, in connection with the Merger) shall be
shared by Parent and the Company; provided, however, that if the Merger
Agreement shall have been terminated as a result of the willful and material
misrepresentations by a party or the willful and material breach by a party of
any of its covenants or agreements set forth therein, such party shall pay the
costs and expenses incurred by the other parties in connection with the Merger
Agreement.
Termination of the Merger Agreement. The Merger Agreement may be terminated
at any time prior to the Effective Time, whether before or after approval by
the stockholders of the Company:
(1) by mutual action of the Board of Directors of the Company, the
Purchaser and Parent; or
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(2) by either the Company or Parent and the Purchaser if the Offer shall
have expired or terminated without any Shares being purchased thereunder as
a result of the occurrence of any event that would result in the failure to
satisfy any of the conditions set forth in Section 14 below; or
(3) by the Purchaser and Parent if the conditions to the obligation of
the Purchaser and Parent to effect the Merger shall not have been complied
with or performed in any material respect and such noncompliance or
nonperformance shall not have been cured or eliminated (or by its nature
cannot be cured or eliminated) by the Company on or before December 31,
1994; or
(4) by the Company if:
(a) the conditions to the obligation of the Company to effect the
Merger shall not have been complied with or performed in any material
respect and such noncompliance or nonperformance shall not have been
cured or eliminated (or by its nature cannot be cured or eliminated) by
the Purchaser or Parent on or before December 31, 1994; or
(b) prior to the purchase of Shares pursuant to the Offer (i) the
Company shall have received a Higher Proposal (as hereinafter defined)
and (ii) Parent does not make, within five business days of receipt of
written notice of the Company's desire to accept such Higher Proposal,
an offer that the Board of Directors of the Company believes, in good
faith after consultation with its financial advisors, is at least as
favorable as the Higher Proposal, from a financial point of view, to
the stockholders of the Company. As used herein, the term "Higher
Proposal" means any proposal or offer (including, without limitation,
any proposal or offer to holders of Shares) with respect to a merger,
consolidation or similar transaction involving, or any purchase of all
or any equity securities of, the Company that the Board of Directors of
the Company determines in good faith after consultation with its
financial advisors would be more favorable than the Offer, from a
financial point of view, to the holders of Shares; or
(5) by the Company or Parent if the Merger has not been effected on or
prior to the close of business on December 31, 1994 (unless such event has
been caused by the breach of the Merger Agreement by the party seeking such
termination).
In the event the Merger Agreement is terminated by any of the Company, Parent
and the Purchaser as described above, the Merger Agreement will become null and
void and have no effect, and, except as provided below, no party shall have any
liability to any other party to the Merger Agreement or to the Company's
directors, officers or stockholders, except that the provisions of the Merger
Agreement described under the heading "Acquisition Proposals; Termination Fee;
Expenses," and certain provisions of the Merger Agreement relating to certain
confidentiality obligations of the parties will continue to be effective as
provided in the Merger Agreement and except that no party will be relieved from
liability for any breach of the Merger Agreement.
Appraisal Rights
No appraisal rights are available in connection with the Offer. However, if
the Merger is consummated, holders of Shares may have certain rights under the
DGCL to dissent and demand appraisal of, and payment in cash for the fair value
of, their Shares. Such rights, if the statutory procedures are complied with,
could lead to a judicial determination of the fair value (excluding any element
of value arising from accomplishment or expectation of the Merger) required to
be paid in cash to such dissenting holders for their Shares. Any such judicial
determination of the fair value of Shares could be based upon considerations
other than or in addition to the price paid in the Offer and the market value
of the Shares, including asset values and the investment value of the Shares.
In Weinberger v. UOP, Inc., the Delaware Supreme Court stated, among other
things, that "proof of value by any techniques or methods which are generally
considered acceptable in the financial community and otherwise admissible in
court" should be considered in an appraisal proceeding. The value so determined
could be more or less than the purchase price per Share pursuant to the Offer
or the consideration per Share to be paid in the Merger.
In addition, several decisions by Delaware courts have held that, in certain
circumstances, a controlling stockholder of a corporation involved in a merger
has a fiduciary duty to other stockholders that requires
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that the merger be fair to other stockholders. In determining whether a merger
is fair to minority stockholders, Delaware courts have considered, among other
things, the type and amount of the consideration to be received by the
stockholder and whether there was fair dealing among the parties. The Delaware
Supreme Court states in Weinberger and Rabkin v. Philip A. Hunt Chemical Corp.
that the remedy ordinarily available to minority stockholders in a cash-out
merger is the right to appraisal described above. However, a damages remedy or
injunctive relief may be available if a merger is found to be the product of
procedural unfairness, including fraud, misrepresentation or other misconduct.
THE FOREGOING SUMMARY OF THE RIGHTS OF OBJECTING STOCKHOLDERS DOES NOT
PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY
STOCKHOLDERS DESIRING TO EXERCISE THEIR DISSENTERS' RIGHTS. The preservation
and exercise of dissenters' rights are conditioned on strict adherence to the
applicable provisions of the DGCL.
Arrangements with Officers of the Company; Other Agreements
While Parent and the Purchaser have had discussions with Mr. John M. Robbins,
Chairman, Chief Executive Officer and President of the Company, with respect to
a consulting arrangement and with Mr. James P. Gilcrest, Executive Vice
President of the Company, with respect to employment with Parent or its
affiliates, no definitive agreements have been reached among the parties.
American Residential is party to a Mortgage Loan Warehouse Agreement dated
November 11, 1993 with various lenders named therein, including Parent. Under
the terms of the Agreement, American Residential is entitled to draw up to $1.4
billion of which Parent would be required to lend $65 million. Parent entered
into a Mortgage Loan Sale Agreement and a Subservicing Agreement, each dated as
of July 2, 1993, with American Residential pursuant to which mortgage loan sale
commitments are entered into from time to time. The rights and obligations of
Parent under these agreements have been assumed by CMMC and, as of August 8,
1994 two commitments, one for up to $125 million and the other for up to $75
million, were outstanding. Parent acts as trustee and issuing and paying agent
under an Indenture, dated as of October 1, 1993 among American Residential and
Parent. Parent and its affiliates entered into the foregoing arrangements in
the ordinary course of business and prior to any discussions among the Company,
Parent and the Purchaser regarding the Offer and the Merger.
11. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY.
Purpose of the Offer
The purpose of the Offer is to enable Parent to acquire control of, and the
entire equity interest in, the Company. The purpose of the Merger is to acquire
all Shares not tendered and purchased pursuant to the Offer or otherwise. The
Offer, as the first step in the acquisition of the Company, is intended to
facilitate the acquisition of all Shares by Parent. The Purchaser currently
intends, as soon as practicable following completion of the Offer, to seek to
consummate the Merger.
Plans for the Company
If the Purchaser obtains control of the Company pursuant to the Offer, CMMHI
intends to integrate certain activities of the Company with those of CMMC. It
is expected that the loan servicing activities of the Company will be
transferred as soon as practicable to CMMC's existing servicing operations in
Tampa, Florida and Monroe, Louisiana. The Company's loan origination operations
will continue to be operated in substantially the same manner as currently
operated. The Company's overhead and support functions will be evaluated,
however, no detailed plans for their integration with CMMC have been developed.
It is anticipated that various activities and operations will continue to be
conducted in the Company's corporate headquarters for some time and that
portions of the Company's management and personnel will be retained.
Except as otherwise described in this Offer to Purchase, Parent and the
Purchaser have no present plans or proposals that would result in (i) an
extraordinary corporate transaction, such as a merger, consolidation,
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reorganization or liquidation involving the Company or any of its subsidiaries,
(ii) sale or transfer of a material amount of assets involving the Company or
any of its subsidiaries, (iii) any change in the present board of directors or
management of the Company, (iv) any material changes in the Company's present
capitalization or dividend policy of the Company, (v) any other material change
in the Company's corporate structure or business, (vi) causing a class of
securities of the Company to be delisted from a national securities exchange or
to cease to be authorized to be quoted in an inter-dealer quotation system of a
registered national securities association, or (vii) a class of equity
securities of the Company becoming eligible for termination of registration
pursuant to Section 12(g)(4) of the Exchange Act.
12. SOURCE AND AMOUNT OF FUNDS.
The total amount of funds required by the Purchaser to consummate the Offer
and the Merger, and to pay fees and expenses of Parent, CMMHI and the Purchaser
related to the Offer and the Merger, is estimated to be approximately $358
million. The Offer is not subject to a financing condition. Parent has agreed
to make available to the Purchaser all such funds as may be necessary for the
consummation of the Offer and the Merger through a capital contribution, an
inter-company loan or some combination thereof. Parent intends to obtain such
funds from internally generated funds and from available working capital.
13. DIVIDENDS AND DISTRIBUTIONS.
If, on or after the date of the Merger Agreement, the Company should: (i)
split, combine or otherwise change the Shares or its capitalization, (ii)
redeem, purchase or acquire or otherwise cause a reduction in the number of
currently outstanding Shares, or (iii) issue or sell additional Shares (other
than pursuant to certain options, warrants or stock purchase rights outstanding
as of August 1, 1994), shares of any other class of capital stock, other voting
securities or any securities convertible into, options, warrants or rights,
conditional or otherwise, to acquire any of the foregoing, then, subject to the
provisions of Section 14 below, the Purchaser, in its sole discretion, may make
such adjustments as it deems appropriate in the Offer Price and the terms of
the Offer, including, without limitation, the number or type of securities
offered to be purchased.
If, on or after the date of the Merger Agreement, the Company should declare
or pay any dividend on the Shares or make any other distribution on the Shares
or issue with respect to the Shares any additional Shares, shares of any other
class of capital stock, other voting securities or any securities convertible
into, or options, warrants or rights, conditional or otherwise, to acquire, any
of the foregoing, payable or distributable to stockholders of record on a date
prior to the transfer of Shares purchased pursuant to the Offer into the name
of the Purchaser or its nominees or transferees on the Company's stock transfer
records, then, without prejudice to the Purchaser's rights under Section 14,
(i) the purchase price per Share payable by the Purchaser pursuant to the Offer
shall be reduced by the amount of any such cash dividend or cash distribution
and (ii) any such non-cash dividend, distribution, issuance, proceeds or right
to be received by the tendering stockholders shall (a) be received and held by
the tendering stockholders for the account of the Purchaser and will be
required to be promptly remitted and transferred by each tendering stockholder
to the Depositary for the account of the Purchaser, accompanied by appropriate
documentation of transfer, or (b) at the direction of the Purchaser, be
exercised for the benefit of the Purchaser, in which case the proceeds of such
exercise will promptly be remitted to the Purchaser. Pending such remittance
and subject to applicable law, the Purchaser will be entitled to all rights and
privileges as owner of any such non-cash dividend, distribution, issuance,
proceeds or right and may withhold the entire purchase price or deduct from the
purchase price the amount of value thereof, as determined by the Purchaser in
its sole discretion.
Pursuant to the terms of the Merger Agreement, the Company is prohibited from
taking any actions described in the preceding two paragraphs, and nothing
herein shall constitute a waiver by the Purchaser or Parent of any of its
rights under the Merger Agreement or a limitation of the remedies available to
the Purchaser or Parent for any breach of the Merger Agreement, including
termination thereof.
14. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provisions of the Offer, the Purchaser shall not be
required to accept for payment or, subject to Rule 14e-1(c) under the Exchange
Act, purchase or pay for any Shares tendered
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<PAGE>
pursuant to the Offer and may postpone the purchase of or payment for Shares
tendered and to be purchased by it, and may in its discretion amend or
terminate the Offer, if the number of Shares validly tendered and not withdrawn
prior to the expiration of the Offer shall be less than 80% of the outstanding
Shares on the date that Shares are accepted for payment under the Offer (the
"Minimum Condition") or if, on or after the date of the Merger Agreement and at
or before the time of payment (the "Payment Time") for any such Shares (whether
or not any Shares have theretofore been accepted for payment pursuant to the
Offer), any of the following shall occur (provided that in the case of (c) and
(i) below, such condition shall apply only at the Payment Time):
(a) there shall have occurred (i) any general suspension of, or
limitation on prices for, or trading in, securities on the New York Stock
Exchange, the American Stock Exchange or the NASDAQ System, (ii) a
declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States, (iii) the commencement of a war,
armed hostilities or other international or national calamity directly or
indirectly involving the United States and having a material adverse effect
on the Company and its subsidiaries or materially adversely affecting (or
materially delaying) the consummation of the Offer, (iv) any general
limitation by any governmental authority on, or any other event that, in
the reasonable judgment of Parent, is substantially likely to materially
and adversely affect the extension of credit by banks or other lending
institutions, or (v) in the case of any of the foregoing existing at the
time of the commencement of the Offer, a material acceleration or worsening
thereof; or
(b) at the Payment Time, there shall be any action or proceeding taken,
instituted or threatened or any statute, rule, regulation, judgment, order
or injunction proposed, promulgated, enacted, entered, enforced or deemed
applicable to the Offer, the Merger or any other transaction contemplated
by the Merger Agreement by or before any domestic or foreign court or
government or governmental agency, authority or instrumentality, or any
official or representative of any of the foregoing or by any other person,
domestic or foreign, that (i) challenges or enjoins the making or
completion of the Offer, the Merger or any other transaction contemplated
by the Merger Agreement or seeks to obtain material damages as a result
thereof, or (ii) would or, in the reasonable judgment of Parent, is likely
to (A) restrict the ability of the Purchaser or Parent, or render them
unable, to accept for payment or to pay for some or all the Shares tendered
pursuant to the Offer, (B) make the acceptance for payment or payment for
some or all the Shares illegal or otherwise restrict or prohibit
consummation of the Offer or the Merger or any other transaction
contemplated by the Merger Agreement, (C) prohibit ownership or require the
divestiture by Parent or the Purchaser of any Shares or impose any material
limitation on its ability to acquire or own such Shares, (D) impose
limitation on the ability of Parent or the Purchaser to exercise
effectively all rights of ownership with respect to the Shares, including,
without limitation, the right to vote all such Shares purchased by it on
all matters properly presented to the stockholders of the Company, (E)
prohibit or impose any material limitation upon Parent's or the Purchaser's
ownership, operation or control of all or any material portion of the
business or assets or properties of the Company or any of its subsidiaries
or compel Parent, the Purchaser or the Company to divest or hold separate
all or any material portion of the business or assets of the Company or any
subsidiary; or
(c) the applicable waiting period under the HSR Act shall not have
expired or been terminated; or
(d) the Company or any of its subsidiaries shall have taken any action
with respect to the conduct of the Company's or such subsidiary's business
that conflicts with or constitutes a material breach of its obligations
pursuant to Section 4.01 of the Merger Agreement and which the Company
fails to cure within five business days after notice thereof is given by
Parent; or
(e) (A) the Company shall have breached, or failed to comply in any
material respect with, any of its covenants or other obligations under the
Merger Agreement, which covenants and obligations are to have been
performed on or prior to the Payment Time and which the Company fails to
cure within five business days after notice thereof is given by Parent, or
any representation or warranty contained in the Merger Agreement shall not
have been true and correct in any material respect when made or (B) any
representations or warranties made as of a specific date, shall have ceased
to be true and correct in any material respect as if made on and as of any
date subsequent to the date of the Merger Agreement; or
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<PAGE>
(f) one or more of the following events shall have occurred on or after
the date of the Merger Agreement, or Parent shall have become aware on or
after the date of the Merger Agreement of the occurrence of one or more of
the following events prior to the date of the Merger Agreement: (A) any
person, corporation, partnership or other entity or group (such person,
corporation, partnership or other entity or group being hereinafter,
singularly or collectively, called a "Person"), other than Parent or its
affiliates, shall have acquired, made an offer to acquire or become the
beneficial owner of 20% or more of the Shares, other than acquisitions for
bona fide arbitrage purposes, or acquisitions by any Person that has
publicly disclosed such ownership in a Schedule 13D or 13G (or an amendment
thereto) filed with the SEC prior to the date of the Merger Agreement; (B)
any Person that has publicly disclosed it was the beneficial owner of 20%
or more of the outstanding Shares, in a Schedule 13D or 13G filed with the
SEC prior to the date of the Merger Agreement, shall have acquired, made an
offer to acquire or become the beneficial owner of, in each case after the
date of the Merger Agreement, additional outstanding Shares equal to or in
excess of 2% of the outstanding Shares, other than acquisitions for bona
fide arbitrage purposes, or is granted any option or right conditional or
otherwise, to acquire additional Shares equal to or in excess of 2% of the
outstanding Shares, other than acquisitions for bona fide arbitrage
purposes; (C) any new group shall have been formed which beneficially owns
20% or more of the Shares; (D) the Company shall have entered into, or
shall have made a public announcement that it proposes to enter into, an
agreement, including, without limitation, an agreement in principle,
providing for an Alternative Transaction (as defined in the Merger
Agreement); or (E) there is a public announcement with respect to a plan or
intention by the Company or any Person, other than Parent or the Purchaser,
to effect any of the foregoing transactions (for purposes of this
paragraph, the terms "group" and "beneficial owner" shall be defined by
reference to Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder); or
(g) the Merger Agreement shall have been terminated in accordance with
its terms; or
(h) the Company's Board of Directors shall have materially modified or
withdrawn its recommendation of the Offer or shall have resolved to do so
or shall have withdrawn or modified the determination set forth in Section
1.02 of the Merger Agreement; or
(i) the Company shall not have obtained the consent of the Federal
National Mortgage Association, the Federal Home Loan Mortgage Corporation
and the Government National Mortgage Association to the contract between it
and American Residential Mortgage Corporation;
which, in the sole judgment of Parent and the Purchaser in any such matter and
regardless of the circumstances giving rise to any such condition (including
any action or inaction by Parent or the Purchaser) makes it inadvisable to
proceed with the Offer and/or with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Parent and the Purchaser
and may be asserted by Parent or the Purchaser regardless of the circumstances
giving rise to any such conditions (including any action or inaction by Parent
or the Purchaser) or may be waived by Parent or the Purchaser in whole or in
part at any time from time to time in its sole discretion, except that the
Minimum Condition may not be waived by Parent or the Purchaser without the
prior written consent of the Company; provided, however, that the Minimum
Condition may be reduced, but in no event below 51% of the Shares, without the
prior written consent of the Company. The failure by Parent or the Purchaser at
any time to exercise any of the foregoing rights shall not be deemed a waiver
of any such right and each such right shall be deemed an ongoing right and may
be asserted at any time and from to time.
15. CERTAIN LEGAL MATTERS; REQUIRED REGULATORY APPROVALS.
Except as set forth in this Offer to Purchase, based on a review of publicly
available information regarding the Company and certain representations made by
the Company to the Purchaser and Parent in the Merger Agreement, neither the
Purchaser nor Parent is aware of any licenses or regulatory permits that appear
to be material to the business of the Company and its subsidiaries, taken as a
whole, that might be adversely affected by the Purchaser's acquisition of
Shares (and the indirect acquisition of the stock of the Company's
subsidiaries) as contemplated herein. Should any such approval or other action
be required, the
27
<PAGE>
Purchaser and Parent currently contemplate that such approval or other action
will be sought, except as described below under the heading "State Takeover
Laws." While, except as otherwise expressly described in this Section 15, the
Purchaser does not presently intend to delay the acceptance for payment of or
payment for Shares tendered pursuant to the Offer pending the outcome of any
such matter, there can be no assurance that any such approval or other action,
if needed, would be obtained or would be obtained without substantial
conditions or that failure to obtain any such approval or other action might
not result in consequences adverse to the Company's business, or that certain
parts of the Company's or Parent's business might not have to be disposed of if
such approvals were not obtained or such other actions were not taken, any of
which could cause the Purchaser to decline to accept for payment or pay for any
Shares tendered. See Section 14 for certain other conditions to the Offer.
Delaware Litigation
On or about August 3, 1994, a purported class action lawsuit on behalf of the
Company's stockholders was filed in the Court of Chancery of the State of
Delaware in and for New Castle County against the Company, its directors, and
The Chase Manhattan Corporation. The action is styled 7547 Partners, a Florida
partnership v. American Residential Holding Corporation, John M. Robbins, Jr.,
Matthew J. Shevlin, Jr., Samuel A. Alvarado, Bruce K. Anderson, James A.
Conroy, Thomas E. McInerney, Mark J. Riedy and The Chase Manhattan Corporation,
Case No. 13655 (the "Delaware Action"). The Delaware Action alleges, inter
alia, that the directors of the Company breached their fiduciary duties to
maximize stockholder value and to obtain the highest price in the sale of the
Company. The Complaint in the Delaware Action purports to seek to enjoin the
consummation of the sale of the Company, and in the alternative seeks to
recover damages caused by the alleged breach of fiduciary duties on the part of
the Company's directors. Chase believes, and has been informed by the Company
that the Company and its directors believe, that the allegations made in the
Delaware Action are without merit.
Mortgage Banking Licenses and Qualifications
The Company's operating subsidiary, American Residential Mortgage
Corporation, is qualified by the FHA as a mortgagee and servicer for FHA loans,
by the VA as a lender and servicer for VA loans, by the FNMA and the FHLMC as a
seller/servicer of first mortgages to such entities, and by the GNMA as an
authorized issuer and servicer of GNMA-guaranteed mortgage-backed securities.
The prior written consent of each of the foregoing entities is required in
order to maintain American Residential Mortgage Corporation's qualification
with such respective entities following consummation of the Offer and the
Merger. American Residential Mortgage Corporation and Parent are in the process
of seeking the prior written consent of the foregoing entities to the
transactions contemplated by the Offer and the Merger.
Loss of any or all of such qualifications could have a material adverse
effect on the business and operations of American Residential Mortgage
Corporation and, accordingly, the Purchaser does not presently intend to accept
for payment or pay for any Shares until appropriate consents and approvals have
been received from each of the foregoing entities. See Section 14.
American Residential Mortgage Corporation is also licensed as a mortgage
banker in California and a number of other states in which it originates or
services mortgages. The prior consent or approval of the relevant state
authorities may be required in all or a substantial number of such states for
consummation of a transaction that would result in a change of control (as
defined by applicable state law and regulation) of American Residential
Mortgage Corporation. Parent intends to apply promptly for such prior consent
or approval in each of such states, but no assurance can be given that such
consents or approvals will be obtained on a timely basis. If any action is
taken prior to completion of the Offer by any such governmental authority and
such action would, among other things, have a material adverse effect on the
Company or impose material limitations on Parent's operation of the Company or
ownership of the Shares, the Purchaser may not be required to accept for
payment or pay for tendered Shares. See Section 14.
Bank Regulatory Approvals
Parent has previously been advised by the Office of the Comptroller of the
Currency ("OCC") that it had no objection to the acquisition by Parent of an
operating subsidiary engaged in the mortgage banking
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business. On this basis, under current OCC regulations Parent may acquire an
additional subsidiary (such as the Company) to engage in the mortgage banking
business without further approvals from the OCC. No other bank regulatory
notices or approvals are required in connection with the Offer and the Merger.
State Takeover Laws
A number of states throughout the United States have enacted takeover
statutes that purport, in varying degrees, to be applicable to attempts to
acquire securities of corporations that are incorporated or have assets,
stockholders, executive offices or places of business in such states. In Edgar
v. MITE Corp., the Supreme Court of the United States held that the Illinois
Business Takeover Act, which involved state securities laws that made the
takeover of certain corporations more difficult, imposed a substantial burden
on interstate commerce and therefore was unconstitutional. In CTS Corp. v.
Dynamics Corp. of America, however, the Supreme Court of the United States held
that a state may, as a matter of corporate law and, in particular, those laws
concerning corporate governance, constitutionally disqualify a potential
acquiror from voting on the affairs of a target corporation without prior
approval of the remaining stockholders, provided that such laws were applicable
only under certain conditions.
Neither the Purchaser nor Parent has currently complied with any state
takeover statute or regulations in connection with the Offer, the Merger or the
transactions contemplated by the Merger Agreement. The Purchaser reserves the
right to challenge the applicability or validity of any state law purportedly
applicable to the Offer or the Merger and nothing in this Offer to Purchase or
any action taken in connection with the Offer or the Merger is intended as a
waiver of such right. If it is asserted that any state takeover statute is
applicable to the Offer or the Merger and an appropriate court does not
determine that it is inapplicable or invalid as applied to the Offer or the
Merger, the Purchaser might be required to file certain information with, or to
receive approvals from, the relevant state authorities, and the Purchaser might
be unable to accept for payment or pay for Shares tendered pursuant to the
Offer, or be delayed in consummating the Offer or the Merger. In such case, the
Purchaser may not be obligated to accept for payment or pay for any Shares
tendered pursuant to the Offer.
The Company is incorporated under the laws of Delaware. Section 203 of the
DGCL prevents an "Interested Stockholder" (defined generally as a person with
15% or more of the corporation's outstanding voting stock) from engaging in a
"Business Combination" (defined to include a variety of transactions, including
mergers) with a Delaware corporation for three years following the date such
person becomes an Interested Stockholder, unless (i) before such person became
an Interested Stockholder, the board of directors of the corporation approved
the transaction in which the Interested Stockholder became an Interested
Stockholder or approved the Business Combination, (ii) upon consummation of the
transaction which resulted in the Interested Stockholder becoming an Interested
Stockholder such person owned at least 85% of the voting stock of the
corporation outstanding at the time the transaction commenced (excluding stock
held by directors who are also officers of the corporation and by certain
employee stock ownership plans), or (iii) following the transaction in which
such person became an Interested Stockholder, the Business Combination is
approved by the board of directors of the corporation and authorized at a
meeting of stockholders by the affirmative vote of the holders of two-thirds of
the outstanding voting stock of the corporation not owned by the Interested
Stockholder. The Board of Directors of the Company has unanimously approved the
Merger Agreement and the transactions contemplated thereby, including the
Offer, for purposes of DGCL Section 203, and the restrictions of DGCL Section
203 are, accordingly, not applicable to the transactions contemplated by this
Offer to Purchase or to the Merger.
Antitrust
Under the provisions of the HSR Act applicable to the Offer, the purchase of
Shares under the Offer may be consummated following expiration of a 15-calendar
day waiting period following the filing by Parent of a Notification and Report
Form with respect to the Offer, unless Parent receives a request for additional
information or documentary material from the Antitrust Division or the FTC or
unless early termination of the waiting period is granted. Chase intends to
make such filing on or about August 10, 1994. If, within the 15-calendar day
waiting period, either the Antitrust Division or the FTC requests additional
information or
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<PAGE>
material from Chase concerning the Offer, the waiting period will be extended
and would expire at 11:59 p.m., New York City time, on the tenth calendar day
after the date of substantial compliance by Chase with such request. Only one
extension of the waiting period pursuant to a request for additional
information is authorized under the HSR Act. Thereafter, such waiting period
may be extended only by court order or with the consent of Chase. In practice,
complying with a request for additional information or material can take a
significant amount of time. In addition, if the Antitrust Division or the FTC
raises substantive issues in connection with the proposed transaction, the
parties frequently engage in negotiations with the relevant governmental agency
concerning possible means of addressing those issues and may agree to delay
consummation of the transaction while such negotiations continue.
The Merger will not require an additional waiting period under the HSR Act if
the Purchaser owns 50% or more of the outstanding Shares at the time of the
Merger or if the Merger occurs within one year after the HSR Act waiting period
applicable to the Offer expires or is terminated.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the acquisition of Shares by the
Purchaser. At any time before or after the Purchaser's purchase of Shares
pursuant to the Offer, the Antitrust Division or the FTC could take such action
under the antitrust laws as either deems necessary or desirable in the public
interest, including seeking to enjoin the purchase of Shares pursuant to the
Offer, the divestiture of Shares purchased thereunder or the divestiture of
substantial assets of the Company or Parent. Private parties as well as state
attorneys general may also bring legal actions under the antitrust laws under
certain circumstances. There can be no assurance that a challenge to the Offer
on antitrust grounds will not be made, or, if such challenge is made, what the
result will be.
"Going Private" Transactions
The Commission has adopted Rule 13e-3 under the Exchange Act which is
applicable to certain "going private" transactions and which may under certain
circumstances be applicable to the Merger. However, Rule 13e-3 would be
inapplicable if (i) the Shares are deregistered under the Exchange Act prior to
the Merger or other business combination or (ii) the Merger or other business
combination is consummated within one year after the purchase of the Shares
pursuant the Offer and the amount paid per Share in the Merger or other
business combination is at least equal to the amount paid per Share in the
Offer. If applicable, Rule 13e-3 requires, among other things, that certain
financial information concerning the fairness of the proposed transaction and
the consideration offered to minority stockholders in such transaction be filed
with the Commission and disclosed to stockholders prior to the consummation of
the transaction.
16. CERTAIN FEES AND EXPENSES
Smith Barney and Chase Securities are acting as Dealer Managers in connection
with the Offer and Smith Barney has provided certain financial advisory
services to Parent, CMMC and the Purchaser in connection with the proposed
acquisition of the Company. Parent, CMMC and the Purchaser have agreed jointly
and severally to pay Smith Barney (i) a retainer fee of $75,000 which became
payable upon Parent's decision to submit a bid for the Company, and (ii) a
success fee of $1,000,000, payable on the date that the Shares are acquired
pursuant to the Offer or otherwise. In the event that the Purchaser does not
acquire Shares pursuant to the Offer or otherwise, Parent, CMMC and the
Purchaser have agreed jointly and severally to pay to Smith Barney a fee equal
to 10% of the sum of all payments of cash or other consideration made by the
Company to Parent, CMMC or the Purchaser. In addition to the foregoing fees,
Parent, CMMC and the Purchaser have agreed jointly and severally to pay the
Dealer Managers aggregate fees of $250,000 for their services as Dealer
Managers in connection with the Offer. Parent, CMMC and the Purchaser have also
agreed to reimburse Smith Barney and Chase Securities for all out-of-pocket
expenses incurred by them, including the fees of their counsel, and to
indemnify Smith Barney and Chase Securities against certain liabilities and
expenses in connection with the Offer, including certain liabilities under the
Federal securities laws. Smith Barney has from time to time, and continues to,
render various investment banking services to Parent and its affiliates for
which it is paid its customary fees.
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MacKenzie Partners, Inc. has been retained by the Purchaser as Information
Agent in connection with the Offer. The Information Agent may contact holders
of Shares by mail, telephone, telex, telegraph and personal interview and may
request brokers, dealers and other nominee stockholders to forward material
relating to the Offer to beneficial owners. Customary compensation will be paid
for all such services in addition to reimbursement of reasonable out-of-pocket
expenses. The Purchaser has agreed to indemnify the Information Agent against
certain liabilities and expenses, including liabilities under the Federal
securities laws.
In addition, The Chase Manhattan Bank (National Association) has been
retained as the Depositary. The Depositary has not been retained to make
solicitations or recommendations in its role as Depositary. The Depositary will
receive reasonable and customary compensation for its services in connection
with the Offer, will be reimbursed for its reasonable out-of-pocket expenses
and will be indemnified against certain liabilities and expenses in connection
therewith.
Except as set forth above, neither the Purchaser nor Parent will pay any fees
or commissions to any broker, dealer or other person (other than the
Information Agent and the Dealer Managers) for soliciting tenders of Shares
pursuant to the Offer. Brokers, dealers, banks and trust companies and other
nominees will, upon request, be reimbursed by the Purchaser for customary
clerical and mailing expenses incurred by them in forwarding materials to their
customers.
17. MISCELLANEOUS.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) stockholders in any jurisdiction in which the making of the Offer or
the acceptance thereof would not be in compliance with the laws of such
jurisdiction. Neither the Purchaser nor Parent is aware of any jurisdiction in
which the making of the Offer or the tender of the Shares in connection
therewith would not be in compliance with the laws of such jurisdiction. If the
Purchaser or Parent becomes aware of any valid state law prohibiting the making
of the Offer or the acceptance of the Shares pursuant thereto in such state,
the Purchaser will make a good faith effort to comply with any such state
statute or seek to have such statute declared inapplicable to the Offer. If
after such good faith effort, the Purchaser cannot comply with any state
statute, the Offer will not be made to (nor will tenders be accepted from or on
behalf of) the stockholders of Shares in such state. In any jurisdiction where
the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer will be deemed to be made on behalf of the
Purchaser by one of the Dealer Managers or one or more registered brokers or
dealers that are licensed under the laws of such jurisdiction.
Parent and the Purchaser have filed with the Commission the Schedule 14D-1
pursuant to Rule 14d-3 under the Exchange Act, furnishing certain additional
information with respect to the Offer. In addition, the Company has filed with
the Commission the Schedule 14D-9 pursuant to Rule 14d-9 under the Exchange
Act, setting forth its recommendation with respect to the Offer and the reasons
for such recommendation and furnishing certain additional related information.
Such Schedules and any amendments thereto, including exhibits, may be inspected
and copies may be obtained from the office of the Commission in the same manner
as described in Section 8 with respect to information concerning the Company,
except that they will not be available at the regional offices of the
Commission.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR PARENT NOT CONTAINED IN THIS OFFER
TO PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, ANY SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. NEITHER THE DELIVERY OF THIS OFFER TO PURCHASE NOR ANY PURCHASE
PURSUANT TO THE OFFER, SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF PARENT, THE PURCHASER OR THE
COMPANY SINCE THE DATE AS OF WHICH INFORMATION IS FURNISHED OR THE DATE OF THIS
OFFER TO PURCHASE.
CHAMRES, INC.
August 9, 1994
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SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF CHASE
The following table sets forth the name, business address and present
principal occupation or employment and material occupation, position, offices
or employments for the last five years of each director and executive officer
of Chase. Except for E. Michel Kruse, who is a citizen of the Federal Republic
of Germany, and John H. McArthur, who is a citizen of Canada, and except as
otherwise noted, each such person is a citizen of the United States and the
business address of each such person is c/o Chase, 1 Chase Manhattan Plaza, New
York, New York 10081-0001. Except as otherwise noted, each occupation set forth
opposite a person's name refers to employment with Chase and each such person
has held such occupation for at least the past five years.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND POSITION
NAME AND FIVE-YEAR EMPLOYMENT HISTORY
- ---- --------------------------------
<S> <C>
Thomas G. Labrecque...... Director of Chase since 1980; became chairman of
the board and chief executive officer of Chase and
Parent in 1990, after serving as president and
chief operating officer from 1981. He is also a di-
rector of Alumax Inc., the Federal Reserve Bank of
New York and Pfizer Inc.
Arthur F. Ryan........... Director of Chase since 1985; became president and
chief operating officer of Chase and Parent in
1990, after serving as an executive vice president
from 1982 to 1985 and as a vice chairman of the
board from 1985.
Richard J. Boyle......... Director of Chase since 1987; became a vice chair-
man of the board of Chase and Parent in 1987, after
serving as a senior vice president from 1975 to
1984 and as an executive vice president from 1984.
Mr. Boyle is also a trustee of Prudential Realty
Trust.
M. Anthony Burns......... Director of Chase since 1990; has served as chair-
man of the board of Ryder System, Inc. since 1985
and has also served as chief executive officer of
Ryder since 1983 and as president since 1979. Mr.
Burns is also a director of J.C. Penney Company,
Inc. and Pfizer Inc. Mr. Burns' business address is
Ryder System, Inc., 3600 N.W. 82nd Avenue, Miami,
Florida 33166.
Joan Ganz Cooney......... Director of Chase since 1983; has served as chair-
man of the executive committee of the Children's
Television Workshop since 1990. She cofounded the
Workshop in 1968, and served as president and chief
executive officer from 1970 to 1988, and as chair-
man and chief executive officer from 1988 to 1990.
Mrs. Cooney is also a director of Johnson & John-
son, Metropolitan Life Insurance Company and Xerox
Corporation. Mrs. Cooney's business address is
Children's Television Workshop, 1 Lincoln Plaza,
4th Floor, New York, New York 10023.
Deborah L. Duncan........ Was appointed senior vice president and treasurer
in August, 1994. She became a senior vice president
of Parent in July, 1991, after serving as a vice
president of Parent from September, 1984.
A. Wright Elliott........ Has served as executive vice president since April,
1983.
Michael P. Esposito, Has served as executive vice president since April,
Jr....................... 1983 and chief corporate compliance, control and
administrative officer since August, 1992. He also
served as chief financial officer from January,
1987 to August, 1992.
</TABLE>
I-1
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND POSITION
NAME AND FIVE-YEAR EMPLOYMENT HISTORY
- ---- --------------------------------
<S> <C>
Jairo A. Estrada......... Director of Chase since 1993; has served as chair-
man of the board and chief executive officer of
Garden Way Incorporated since 1985. Mr. Estrada is
also a director of Rochester Telephone Company. Mr.
Estrada's business address is Garden Way Incorpo-
rated, 102nd Street & 9th Avenue, Troy, New York
12180.
James L. Ferguson........ Director of Chase since 1975; retired as chairman
of the executive committee of General Foods Corpo-
ration in 1989. He became chief executive officer
of General Foods in 1973 and chairman in 1974,
holding these positions until 1987 when he became
chairman of the executive committee. Mr. Ferguson
is also a director of DNA Plant Technology Corpora-
tion, Glaxo Holdings p.l.c. and ICOS Corporation.
Mr. Ferguson's business address is 134 Meeting
Street, Suite 202, Charleston, S.C. 29401.
Edward S. Finkelstein.... Director of Chase since 1981; became chairman of
the board and president of Finkelstein Associates,
Inc. in October, 1992, after serving as chairman of
the board of directors and chief executive officer
of R.H. Macy & Co., Inc. and its predecessor from
1980 to April, 1992. He is also a director of Time
Warner Inc. Mr. Finkelstein's business address is
Finkelstein Associates, Inc., 712 Fifth Avenue,
18th Floor, New York, New York 10019.
H. Laurance Fuller....... Director of Chase since 1985; has served as chair-
man of the board and chief executive officer of
Amoco Corporation since 1991. He has also served as
president of Amoco since 1983. Mr. Fuller is also a
director of Abbott Laboratories. Mr. Fuller's busi-
ness address is Amoco Corporation, 200 East Ran-
dolph Drive, Chicago, Illinois 60601.
William H. Gray, III..... Director of Chase since 1992; has served as presi-
dent and chief executive officer of the United Ne-
gro College Fund, Inc. since 1991. He was a member
of the United States House of Representatives from
1979 to 1991. Mr. Gray is also a director of Lotus
Development Corporation, MBIA Inc., The Prudential
Insurance Company of America, Rockwell Interna-
tional Corporation, Scott Paper Company, Union Pa-
cific Corporation, Warner-Lambert Company and West-
inghouse Electric Corporation. Mr. Gray's business
address is United Negro College Fund, Inc., 500
East 62nd Street, 17th Floor, New York, New York
10021.
David T. Kearns.......... Director of Chase since 1982; has been senior uni-
versity fellow at Harvard University since August,
1993. He is retired chairman and chief executive
officer of Xerox Corporation, having served as
chairman from 1985 to 1991. From 1991 to January,
1993 he served as deputy secretary of education.
Mr. Kearns was a director of Chase from 1982 to
1991, and was reappointed as a director in Febru-
ary, 1993. He is also a director of Ryder System,
Inc. and Time Warner Inc. Mr. Kearns' business ad-
dress is The Xerox Corporation, P.O. Box 10340,
Stamford, Connecticut 06904-2340.
E. Michel Kruse..........
Has served as executive vice president since Au-
gust, 1992, and from August, 1992 through July,
1994 also served as chief financial officer. Has
also served as executive vice president of Parent
since 1991.
</TABLE>
I-2
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND POSITION
NAME AND FIVE-YEAR EMPLOYMENT HISTORY
- ---- --------------------------------
<S> <C>
Delano E. Lewis.......... Director of Chase since 1993; became president and
chief executive officer of National Public Radio in
January, 1994, after serving as chief executive of-
ficer of Chesapeake & Potomac Telephone Company
from 1990 and as its president from 1988. Mr. Lewis
is also a director of Colgate-Palmolive Company and
GEICO Corporation. Mr. Lewis' business address is
National Public Radio, 635 Massachusetts Avenue.,
NW, 6th Floor, Washington, D.C. 20001.
Paul W. MacAvoy.......... Director of Chase since 1992; has served as dean of
the Yale School of Management since July, 1992 and
as the Williams Brothers Professor of Management
Studies at Yale since 1991. He was dean of the Wil-
liam E. Simon School of Business Administration at
the University of Rochester from 1983 to 1991. Mr.
MacAvoy is also a director of Alumax Inc., American
Cyanamid Company and Lafarge Corporation. Mr.
McAvoy's business address is Yale School of Manage-
ment, 135 Prospect Street, New Haven, Connecticut
06520.
Arjun K. Mathrani........ Has served as executive vice president since Sep-
tember, 1991 and from June, 1991 through his ap-
pointment as Chief Financial Officer in August,
1994 he also served as Treasurer.
John H. McArthur......... Director of Chase since 1980; has served as dean of
the Harvard Graduate School of Business Administra-
tion since 1980. He is also a director of Cabot
Corporation, Rohm & Haas Company and Springs Indus-
tries, Inc. Mr. McArthur's business address is Har-
vard Graduate School of Business Administration,
Morgan 124, Solders Field Road, Boston, Massachu-
setts 02163.
David T. McLaughlin...... Director of Chase since 1980; was reelected chair-
man of the Aspen Institute in July, 1994 after
serving in that capacity from 1987 to 1988. In ad-
dition, he has served as its chief executive offi-
cer since 1988 and was also president from 1988 to
July, 1994. From 1981 to 1987 he served as presi-
dent of Dartmouth College. Mr. McLaughlin is also a
director of Atlantic Richfield Company, PartnerRe
Holdings Ltd. and Westinghouse Electric Corpora-
tion. Mr. McLaughlin's business address is The As-
pen Institute, P. O. Box 222, Queenstown, Maryland
21658.
Edmund T. Pratt, Jr.,.... Director of Chase since 1974; became chairman emer-
itus of Pfizer Inc. in March, 1992, after serving
as chairman of the board of that company from 1972
and as its chief executive officer from 1972 to
April, 1991. He continues as a director of Pfizer,
and is also a director of Celgene Corporation, Gen-
eral Motors Corporation, International Paper Com-
pany and Minerals Technologies Inc. Mr. Pratt's
business address is Pfizer Inc., 235 East 42nd
Street, 23rd Floor, New York, New York 10017.
Henry B. Schacht......... Director of Chase since 1982; served as chairman of
the board and chief executive officer of Cummins
Engine Company, Inc. from 1977 to July 1994 and as
chairman of the board since July, 1994. He is also
a director of American Telephone and Telegraph Com-
pany and CBS Inc. Mr. Schacht's business address is
Cummins Engine Company, Inc., P. O. Box 3005, Co-
lumbus, Indiana 47202-3005.
</TABLE>
I-3
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND POSITION
NAME AND FIVE-YEAR EMPLOYMENT HISTORY
- ---- --------------------------------
<S> <C>
John V. Scicutella....... Has served as executive vice president since Au-
gust, 1987.
L. Edward Shaw, Jr....... Has served as executive vice president since Decem-
ber, 1985 and General Counsel since February, 1983.
Lester J. Stephens, Jr... Has served as senior vice president since March,
1985 and Controller since January, 1987.
Donald H. Trautlein...... Director of Chase since 1981; is retired chairman
and chief executive officer of Bethlehem Steel Cor-
poration, having served in those capacities from
1980 until 1986. He is also a director of Data Gen-
eral Corporation and PXRE Corporation. Mr.
Trautlein's business address is Martin Tower, Beth-
lehem, Pennsylvania 18016.
</TABLE>
I-4
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT
The following table sets forth the name, business address and present
principal occupation or employment and material occupation, position, offices
or employments for the last five years of each director and executive officer
of Parent. Except for E. Michel Kruse, who is a citizen of the Federal Republic
of Germany, and except as otherwise noted, each such person is a citizen of the
United States and the business address of each such person is c/o Parent, 1
Chase Manhattan Plaza, New York, New York 10081-0001. Except as otherwise
noted, each occupation set forth opposite a person's name refers to employment
with Parent and each such person has held such occupation for at least the past
five years.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND POSITION
NAME AND FIVE-YEAR EMPLOYMENT HISTORY
- ---- --------------------------------
<S> <C>
Thomas G. Labrecque...... Director of Parent since 1980; became chairman of
the board and chief executive officer of Chase and
Parent in 1990, after serving as president and
chief operating officer from 1981. He is also a di-
rector of Alumax Inc., the Federal Reserve Bank of
New York and Pfizer Inc.
Arthur F. Ryan........... Director of Parent since 1985; became president and
chief operating officer of Chase and Parent in
1990, after serving as an executive vice president
from 1982 to 1985 and as a vice chairman of the
board from 1985.
Richard J. Boyle......... Director of Parent since 1987; became a vice chair-
man of the board of Chase and Parent in 1987, after
serving as a senior vice president from 1975 to
1984 and as an executive vice president from 1984.
Mr. Boyle is also a trustee of Prudential Realty
Trust.
M. Anthony Burns......... Director of Parent since 1992; has served as chair-
man of the board of Ryder System, Inc. since 1985
and has also served as chief executive officer of
Ryder since 1983 and as president since 1979. Mr.
Burns is also a director of J.C. Penney Company,
Inc. and Pfizer Inc. Mr. Burns' business address is
Ryder System, Inc., 3600 N.W. 82nd Avenue, Miami,
Florida 33166.
Joan Ganz Cooney......... Director of Parent since 1983; has served as chair-
man of the executive committee of the Children's
Television Workshop since 1990. She cofounded the
Workshop in 1968, and served as president and chief
executive officer from 1970 to 1988, and as chair-
man and chief executive officer from 1988 to 1990.
Mrs. Cooney is also a director of Johnson & John-
son, Metropolitan Life Insurance Company and Xerox
Corporation. Mrs. Cooney's business address is
Children's Television Workshop, 1 Lincoln Plaza,
4th Floor, New York, New York 10023.
Deborah L. Duncan........ Has served as senior vice president since July,
1991, after serving as a vice president from Sep-
tember, 1984. Was appointed senior vice president
and treasurer of Chase in August, 1994.
A. Wright Elliott........ Has served as executive vice president since April,
1983.
Michael P. Esposito, Has served as executive vice president since April,
Jr....................... 1983 and chief corporate compliance, control and
administrative officer since August, 1992. He also
served as Chief Financial Officer from January,
1987 to August, 1992.
</TABLE>
I-5
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND POSITION
NAME AND FIVE-YEAR EMPLOYMENT HISTORY
- ---- --------------------------------
<S> <C>
Jairo A. Estrada......... Director of Parent since 1993; has served as chair-
man of the board and chief executive officer of
Garden Way Incorporated since 1985. Mr. Estrada is
also a director of Rochester Telephone Company. Mr.
Estrada's business address is Garden Way Incorpo-
rated, 102nd Street & 9th Avenue, Troy, New York
12180.
Edward S. Finkelstein.... Director of Parent since 1981, became chairman of
the board and president of Finkelstein Associates,
Inc. in October, 1992, after serving as chairman of
the board of directors and chief executive officer
of R.H. Macy & Co., Inc. and its predecessor from
1980 to April, 1992. He is also a director of Time
Warner Inc. Mr. Finkelstein's business address is
Finkelstein Associates, Inc., 712 Fifth Avenue,
18th Floor, New York, New York 10019.
H. Laurance Fuller....... Director of Parent since 1985; has served as chair-
man of the board and chief executive officer of
Amoco Corporation since 1991. He has also served as
president of Amoco since 1983. Mr. Fuller is also a
director of Abbott Laboratories. Mr. Fuller's busi-
ness address is Amoco Corporation, 200 East Ran-
dolph Drive, Chicago, Illinois 60601.
David T. Kearns.......... Director of Parent since 1982; has been senior uni-
versity fellow at Harvard University since August,
1993. He is retired chairman and chief executive
officer of Xerox Corporation, having served as
chairman from 1985 to 1991. From 1991 to January,
1993 he served as deputy secretary of education.
Mr. Kearns was a director of Parent from 1982 to
1991, and was reappointed as a director in Febru-
ary, 1993. He is also a director of Ryder System,
Inc. and Time Warner Inc. Mr. Kearns' business ad-
dress is The Xerox Corporation, P.O. Box 10340,
Stamford, Connecticut 06904-2340.
E. Michel Kruse.......... Has served as executive vice president since Sep-
tember, 1991, and from August, 1992 through July,
1994 also served as chief financial officer.
Paul W. MacAvoy.......... Director of Parent since 1992; has served as dean
of the Yale School of Management since July, 1992
and as the Williams Brothers Professor of Manage-
ment Studies at Yale since 1991. He was dean of the
William E. Simon School of Business Administration
at the University of Rochester from 1983 to 1991.
Mr. MacAvoy is also a director of Alumax Inc.,
American Cyanamid Company and Lafarge Corporation.
Mr. McAvoy's business address is Yale School of
Management, 135 Prospect Street, New Haven, Con-
necticut 06520.
Arjun K. Mathrani........ Has served as executive vice president since Sep-
tember, 1991. Appointed chief financial officer in
August, 1994.
David T. McLaughlin...... Director of Parent since 1980; was reelected chair-
man of the Aspen Institute in July, 1994 after
serving in that capacity from 1987 to 1988. In ad-
dition, he has served as its chief executive offi-
cer since 1988 and was also president from 1988 to
July, 1994. From 1981 to 1987 he served as presi-
dent of Dartmouth College. Mr. McLaughlin is also a
director of Atlantic Richfield Company, PartnerRe
Holdings Ltd. and Westinghouse Electric Corpora-
tion. Mr. McLaughlin's business address is The As-
pen Institute, P. O. Box 222, Queenstown, Maryland
21658.
</TABLE>
I-6
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND POSITION
NAME AND FIVE-YEAR EMPLOYMENT HISTORY
- ---- --------------------------------
<S> <C>
Edmund T. Pratt, Jr.,.... Director of Parent since 1974; became chairman
emeritus of Pfizer Inc. in March, 1992, after serv-
ing as chairman of the board of that company from
1972 and as its chief executive officer from 1972
to April, 1991. He continues as a director of Pfi-
zer, and is also a director of Celgene Corporation,
General Motors Corporation, International Paper
Company and Minerals Technologies Inc. Mr. Pratt's
business address is Pfizer Inc., 235 East 42nd
Street, 23rd Floor, New York, New York 10017.
Henry B. Schacht......... Director of Parent since 1982; served as chairman
of the board and chief executive officer of Cummins
Engine Company, Inc. from 1977 to July 1994 and as
chairman of the board since July, 1994. He is also
a director of American Telephone and Telegraph Com-
pany and CBS Inc. Mr. Schacht's business address is
Cummins Engine Company, Inc., P. O. Box 3005, Co-
lumbus, Indiana 47202-3005.
John V. Scicutella....... Has served as executive vice president since Au-
gust, 1987.
L. Edward Shaw, Jr....... Has served as executive vice president since Decem-
ber, 1985 and general counsel since February, 1983.
Lester J. Stephens, Jr... Has served as senior vice president since March,
1985 and Controller since January, 1987.
Donald H. Trautlein...... Director of Parent since 1981; is retired chairman
and chief executive officer of Bethlehem Steel Cor-
poration, having served in those capacities from
1980 until 1986. He is also a director of Data Gen-
eral Corporation and PXRE Corporation. Mr.
Trautlein's business address is Martin Tower, Beth-
lehem, Pennsylvania 18016.
</TABLE>
I-7
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS OF CMMHI
The following table sets forth the name, business address and present
principal occupation or employment and material occupation, position, offices
or employments for the last five years of each director and executive officer
of CMMHI. Except as otherwise noted, each such person is a citizen of the
United States and the business address of each such person is c/o CMMHI, 4915
Independence Parkway, Tampa, Florida 33634. Except as otherwise noted, each
occupation set forth opposite a person's name refers to employment with CMMHI
and each such person has held such occupation for at least the past five years.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND POSITION
NAME AND FIVE-YEAR EMPLOYMENT HISTORY
---- --------------------------------
<S> <C>
Fred B. Koons..... Chairman of the board and president of CMMHI since June,
1993; also chairman and chief executive officer of Chase
Manhattan Mortgage Corporation since December, 1984 and
chairman and president of the Purchaser. He joined Chase
Manhattan Mortgage Corporation in 1980 and has served in
various positions, including regional executive, production
executive and president. He has been chairman and president
of Chase Home Mortgage Corporation of the Southeast since
May, 1985, chairman and chief executive officer of Chase
Mortgage Finance Corporation since May, 1991, chairman and
president of Chase Education Finance Center, Inc. since
1991, a director of Chase U.S. Consumer Services, Inc. and
executive vice president of Parent since September, 1993.
Richard A. Mirro.. Director and executive vice president CMMHI since June,
1993; also a director and executive vice president of the
Purchaser, a senior vice president of Parent and has been a
director, executive vice president and head of operations
and systems of Chase Manhattan Mortgage Corporation since
1992. He has been employed by Parent and its affiliates in
various capacities since 1987, including appointments as
president of Chase Manhattan Mortgage Corporation from 1989
to 1991, as Manhattan regional banking executive from 1991
to 1992, and as Western Hemisphere consumer executive in
1992.
Adolfo F. Marzol.. Director and executive vice president of CMMHI since June,
1993; also a director, executive vice president and chief
financial officer of the Purchaser and senior vice president
of Chase Home Mortgage Corporation of the Southeast. He
served as senior vice president of interest rate risk
management of Chase Manhattan Mortgage Corporation from
January, 1991 to July, 1994. He joined Chase Manhattan
Mortgage Corporation in 1988 and served as vice president in
charge of corporate development from 1988 to January, 1991.
Samuel H. Cooper.. Executive vice president of CMMHI since June, 1993; also a
director and president of Chase Mortgage Finance Corporation
and has been a senior vice president of Parent since
October, 1993. He joined Parent in 1974 as a financial
analyst in the controllers department and since that time
has served in various positions with Parent, including
financial special project manager, senior development
officer in the corporate development area, chief financial
officer for personal financial services, and mortgage
portfolio executive for Chase Manhattan Mortgage
Corporation. He was appointed executive vice president of
Chase Manhattan Mortgage Corporation in 1987 and director in
January, 1986.
</TABLE>
I-8
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND POSITION
NAME AND FIVE-YEAR EMPLOYMENT HISTORY
---- --------------------------------
<S> <C>
Geoffery H. Dreyer...... Executive vice president of CMMHI since June, 1993; also a
director and executive vice president of Chase Manhattan
Mortgage Corporation, executive vice president of the
Purchaser, vice president of Chase Mortgage Finance
Corporation, and senior vice president of Parent. He has
served in various positions since joining Parent in 1983,
including president of Troy & Nichols, Inc. from July, 1993
to June, 1994, vice president/manager of corporate
development from 1986 to 1987, vice president/manager of
finance and planning from 1985 to 1986, vice
president/controller of the portfolio management division
from 1984 to 1985, and assistant vice president/planning
officer from 1983 to 1984.
Thomas M. Garvey........ Executive vice president of CMMHI since June, 1993; also
president of Chase Manhattan Personal Financial Services,
Inc., a director of Chase Manhattan Mortgage Corporation, a
director of Chase Mortgage Finance Corporation, and senior
vice president of Parent. He began his career with Parent in
1974 and has served in various positions including Personal
Financial Services, Inc. relationship manager from 1981 to
1984, regional credit officer from 1984 to 1986, regional
manager from 1986 to 1990, credit executive for personal
financial services from 1990 to 1992, and area manager for
all western Personal Financial Services, Inc. district
offices from 1992 to 1993.
Deane W. Hall........... Executive vice president of CMMHI since June, 1993; also a
director and executive vice president and head of
originations division of Chase Manhattan Mortgage
Corporation since 1993, executive vice president of Chase
Home Mortgage Corporation of the Southeast since October,
1989, and senior vice president of Parent since September,
1993. He joined Chase Manhattan Mortgage Corporation in
January, 1989 as the credit policy executive.
</TABLE>
I-9
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER
The following table sets forth the name, business address and present
principal occupation or employment and material occupation, position, offices
or employments for the last five years of each director and executive officer
of the Purchaser. Except as otherwise noted, each such person is a citizen of
the United States and the business address of each such person is c/o the
Purchaser, 4915 Independence Parkway, Tampa, Florida 33634. Except as otherwise
noted, each occupation set forth opposite a person's name refers to employment
with the Purchaser and each such person has held such occupation for at least
the past five years.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND POSITION
NAME AND FIVE-YEAR EMPLOYMENT HISTORY
---- --------------------------------
<S> <C>
Fred B. Koons........... Chairman of the board and president of the Purchaser; also
chairman and president of CMMHI since June, 1993, and
chairman and chief executive officer of Chase Manhattan
Mortgage Corporation since December, 1984. He joined Chase
Manhattan Mortgage Corporation in 1980 and has served in
various positions, including regional executive, production
executive and president. He has also been chairman and
president of Chase Home Mortgage Corporation of the
Southeast since May, 1985, chairman and chief executive
officer of Chase Mortgage Finance Corporation since May,
1991, chairman and president of Chase Education Finance
Center, Inc. since 1991, a director of Chase U.S. Consumer
Services, Inc., and executive vice president of Parent since
September, 1993.
Richard A. Mirro........ Director and executive vice president of the Purchaser; also
a director and executive vice president of CMMHI since June,
1993, a director, executive vice president and head of
operations and systems of Chase Manhattan Mortgage
Corporation since 1992 and a senior vice president of
Parent. He has been employed by Parent and its affiliates in
various capacities since 1987, including appointments as
president of Chase Manhattan Mortgage Corporation from 1989
to 1991, as Manhattan regional banking executive from 1991
to 1992, and as Western Hemisphere consumer executive in
1992.
Adolfo F. Marzol........ Director, executive vice president and chief financial
officer of the Purchaser; also a director and executive vice
president of CMMHI since June, 1993 and a senior vice
president of Chase Home Mortgage Corporation of the
Southeast. Mr. Marzol served as senior vice president of
interest rate risk management of Chase Manhattan Mortgage
Corporation from January, 1991 to July, 1994. He joined
Chase Manhattan Mortgage Corporation in 1988 and served as
vice president in charge of corporate development from 1988
to January, 1991.
Geoffery H. Dreyer...... Executive vice president of the Purchaser; also a director
and executive vice president of Chase Manhattan Mortgage
Corporation, vice president of Chase Mortgage Finance
Corporation, senior vice president of Parent and has been
executive vice president of CMMHI since June, 1993. He has
served in various positions since joining Parent in 1983,
including president of Troy & Nichols, Inc. from July, 1993
to June, 1994, vice president/manager of corporate
development from 1986 to 1987, vice president/manager of
finance and planning from 1985 to 1986, vice
president/controller of the portfolio management division
from 1984 to 1985, and assistant vice president/planning
officer from 1983 to 1984.
</TABLE>
I-10
<PAGE>
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
and any other required documents should be sent or delivered by each
stockholder of the Company or his broker, dealer, bank, trust company or other
nominee to the Depositary at one of its addresses set forth below:
The Depositary for the Offer is:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By Overnight Delivery: By Hand
By Mail:
(9:00 a.m.--5:00
p.m.
New York City Time):
c/o Chase Securities Processing Corp.
Box 2020 Ft. Lee Executive Park 1 Chase Manhattan
4 Chase MetroTech Center 1 Executive Drive, 6th Floor Plaza Floor 1-B
Brooklyn, NY 11245 Ft. Lee, NJ 07024 Nassau and Liberty
Streets
New York, NY 10081
By Facsimile Transmission:
(201) 592-1804
Confirm by Telephone:
(201) 592-4715
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Managers at their respective addresses and telephone
numbers listed below. Additional copies of this Offer to Purchase, the Letter
of Transmittal and other tender offer materials may be obtained from the
Information Agent as set forth below, and will be furnished promptly at the
Purchaser's expense. You may also contact your broker, dealer, bank, trust
company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
MACKENZIE PARTNERS, INC.
156 Fifth Avenue, 9th Floor
New York, New York 10010
212-929-5500 (Call Collect)
or
TOLL-FREE 1-800-322-2885
The Dealer Managers for the Offer are:
Smith Barney Inc. Chase Securities, Inc.
1345 Avenue of the 1 Chase Manhattan Plaza
Americas New York, New York 10081
New York, New York 10105
For Information Call:
212-698-6602 (Call Collect)
<PAGE>
EXHIBIT 99.(a)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
AMERICAN RESIDENTIAL HOLDING CORPORATION
AT
$28.25 NET PER SHARE
BY
CHAMRES, INC.
AN INDIRECT WHOLLY-OWNED SUBSIDIARY
OF
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION)
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON WEDNESDAY, SEPTEMBER 7, 1994, UNLESS
THE OFFER IS EXTENDED.
The Depositary for the Offer is:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By Mail: By Overnight Delivery: By Hand (9:00 a.m. -
5:00 p.m. New York
City Time):
Box 2020 4 Chase c/o Chase Securities Processing Corp. 1 Chase Manhattan
MetroTech Center Ft. Lee Executive Park Plaza Floor 1-B
Brooklyn, NY 11245 1 Executive Drive, 6th Floor Nassau and Liberty
Ft. Lee, NJ 07024 Streets New York, NY
10081
By Facsimile Transmission:
(201) 592-1804
Confirm by Telephone:
(201) 592-4715
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO A NUMBER
OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by stockholders either if
certificates for Shares (as defined below) are to be forwarded herewith or if
delivery of Shares is to be made by book-entry transfer to an account
maintained by The Chase Manhattan Bank (National Association) (the
"Depositary") at The Depository Trust Company, the Midwest Securities Trust
Company or the Philadelphia Depository Trust Company (each, a "Book-Entry
Transfer Facility" and collectively, the "Book-Entry Transfer Facilities")
pursuant to the procedures set forth in Section 2 of the Offer to Purchase.
Stockholders who deliver Shares by book-entry transfer are referred to herein
as "Book-Entry Stockholders."
Holders of Shares whose certificates for such Shares (the "Share
Certificates") are not immediately available or who cannot deliver their Share
Certificates and all other required documents to the Depositary prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase) or who
cannot complete the procedures for book-entry transfer on a timely basis, must
tender their Shares in accordance with the guaranteed delivery procedures set
forth in Section 2 of the Offer to Purchase. See Instruction 2. Delivery of
documents to a Book-Entry Transfer Facility does not constitute delivery to the
Depositary.
<PAGE>
DESCRIPTION OF SHARES TENDERED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NAME(S) AND
ADDRESS(ES) OF
REGISTERED
HOLDER(S)
(PLEASE FILL
IN, IF BLANK,
EXACTLY AS
NAME(S)
APPEAR(S)
ON SHARE SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
- ------------------------------------------------------------------
TOTAL NUMBER
OF SHARES
REPRESENTED BY NUMBER
SHARE CERTIFICATE SHARE OF SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
<S> <C> <C> <C>
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
TOTAL SHARES
<FN>
- --------------------------------------------------------------------------------
* Need not be completed by Book-Entry Stockholders.
** Unless otherwise indicated, it will be assumed that all Shares
represented by certificates delivered to the Depositary are being
tendered. See Instruction 4.
</TABLE>
[_]CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN
ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER FACILITY AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution: _____________________________________________
Check Box of Book-Entry Transfer Facility:
[_]The Depository Trust Company
[_]Midwest Securities Trust Company
[_]Philadelphia Depository Trust Company
Account Number: _________________Transaction Code Number: __________________
[_]CHECK HERE IF SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING
(PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY):
Name(s) of Registered Holder(s): ___________________________________________
Window Ticket Number (if any): _____________________________________________
Date of Execution of Notice of Guaranteed Delivery: ________________________
Name of Institution which Guaranteed Delivery: _____________________________
If delivered by Book-Entry Transfer, check box of Book-Entry Transfer
Facility:
[_]The Depository Trust Company
[_]Midwest Securities Trust Company
[_]Philadelphia Depository Trust Company
NOTE: SIGNATURE(S) MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
<PAGE>
LADIES AND GENTLEMEN:
The undersigned hereby tenders to Chamres, Inc., a Delaware corporation (the
"Purchaser") and an indirect wholly-owned subsidiary of The Chase Manhattan
Bank (National Association), a national banking association ("Parent"), the
above-described shares of Common Stock, par value $.04 per share (the
"Shares"), of American Residential Holding Corporation, a Delaware corporation
(the "Company"), at a purchase price of $28.25 per Share, net to the seller in
cash, without interest thereon, upon the terms and subject to the conditions
set forth in the Offer to Purchase, dated August 9, 1994 (the "Offer to
Purchase"), receipt of which is hereby acknowledged, and in this Letter of
Transmittal (which together constitute the "Offer"). The undersigned
understands that the Purchaser reserves the right to transfer or assign, in
whole or from time to time in part, to one or more of its or Parent's
affiliates, the right to purchase all or any portion of the Shares tendered
pursuant to the Offer.
Upon the terms of the Offer, subject to, and effective upon, acceptance for
payment of, or payment for, Shares tendered herewith in accordance with the
terms and subject to the conditions of the Offer (including, if the Offer is
extended or amended, the terms or conditions of any such extension or
amendment), the undersigned hereby sells, assigns and transfers to, or upon the
order of, the Purchaser all right, title and interest in and to all of the
Shares that are being tendered hereby and any and all dividends (other than
regular quarterly cash dividends having a customary and usual record date prior
to the Purchaser purchasing and becoming a record holder of such Shares),
distributions, other Shares, rights or other securities issued or issuable in
respect thereof on or after August 8, 1994 (a "Distribution"), and irrevocably
constitutes and appoints the Depositary the true and lawful agent and attorney-
in-fact of the undersigned with respect to such Shares (and any Distributions),
with full power of substitution (such power of attorney being deemed to be an
irrevocable power coupled with an interest), to (i) deliver Share Certificates
(and any Distributions) or transfer ownership of such Shares (and any
Distributions) on the account books maintained by a Book-Entry Transfer
Facility together, in any such case, with all accompanying evidences of
transfer and authenticity to, or upon the order of, the Purchaser, upon receipt
by the Depositary, as the undersigned's agent, of the purchase price (adjusted,
if appropriate, as provided in the Offer to Purchase), (ii) present such Shares
(and any Distributions) for transfer on the books of the Company, and (iii)
receive all benefits and otherwise exercise all rights of beneficial ownership
of such Shares (and any Distributions), all in accordance with the terms and
subject to the conditions of the Offer.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby (and any Distributions) and that, when the same are accepted for payment
and paid for by the Purchaser, the Purchaser will acquire good, marketable and
unencumbered title thereto, free and clear of all liens, restrictions, charges
and encumbrances and that the Shares tendered hereby (and any Distributions)
will not be subject to any adverse claim. The undersigned, upon request, will
execute and deliver any additional documents deemed by the Depositary or the
Purchaser to be necessary or desirable to complete the sale, assignment and
transfer of Shares tendered hereby (and any Distributions). In addition, the
undersigned shall promptly remit and transfer to the Depositary for the account
of the Purchaser any and all other Distributions in respect of the Shares
tendered hereby, accompanied by appropriate documentation of transfer, and,
pending such remittance or appropriate assurance thereof, the Purchaser shall
be, subject to applicable law, entitled to all rights and privileges as owner
of any such Distributions, and may withhold the entire purchase price of Shares
tendered hereby, or deduct from such purchase price the amount or value thereof
as determined by the Purchaser in its sole discretion.
All authority conferred or agreed to be conferred in this Letter of
Transmittal shall be binding upon successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.
<PAGE>
The undersigned hereby irrevocably appoints each designee of the Purchaser,
the attorney-in-fact and proxy of the undersigned, with full power of
substitution, to the full extent of the undersigned's rights with respect to
all Shares tendered hereby and accepted for payment and paid for by the
Purchaser (and any Distributions). All such proxies shall be considered coupled
with an interest in the Shares tendered herewith. Such appointment will be
effective when, and only to the extent that, the Purchaser pays for such Shares
by depositing the purchase price therefor with the Depositary. Upon such
acceptance for payment, all prior powers of attorney and proxies given by the
undersigned with respect to such Shares and such other securities or rights
will be revoked, without further action, and no subsequent powers of attorneys
and proxies may be given (and, if given, will be deemed ineffective). The
designees of the Purchaser will, with respect to the Shares for which such
appointment is effective, be empowered to exercise all voting and other rights
of the undersigned as they in their sole discretion may deem proper at any
annual or special meeting of the Company's stockholders, or any adjournment or
postponement thereof. The Purchaser reserves the right to require that, in
order for Shares to be deemed validly tendered, immediately upon the payment of
such Shares, the Purchaser or its designee must be able to exercise full voting
rights with respect to such Shares and other securities, including voting at
any meeting of stockholders then scheduled. This power of attorney and proxy
are irrevocable and are granted in consideration of the acceptance for payment
of such Shares in accordance with the terms of the Offer.
Tender of Shares made pursuant to the Offer are irrevocable, except that
Shares tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date (as defined in the Offer to Purchase) and, unless theretofore
accepted for payment by the Purchaser pursuant to the Offer, may also be
withdrawn at any time after October 7, 1994. See Section 3 of the Offer to
Purchase.
Unless otherwise indicated herein under "Special Payment Instructions",
please issue the check for the purchase price and/or return any Share
Certificates not tendered or not accepted for payment in the name(s) of the
registered holder(s) appearing under "Description of Shares Tendered".
Similarly, unless otherwise indicated under "Special Delivery Instructions",
please mail the check for the purchase price and/or return any Share
Certificates not tendered or not accepted for payment (and accompanying
documents, as appropriate) to the address(es) of the registered holder(s)
appearing under "Description of Shares Tendered". In the event that both the
Special Payment Instructions and the Special Delivery Instructions are
completed, please issue the check for the purchase price and/or return any
Share Certificates not tendered or not accepted for payment in the name of, and
deliver such check and/or return Share Certificates to, the person(s) so
indicated. The undersigned recognizes that the Purchaser has no obligation
pursuant to the Special Payment Instructions to transfer any Shares from the
name of the registered holder thereof if the Purchaser does not accept for
payment any of the Shares tendered hereby.
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7) (SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Share To be completed ONLY if Share
Certificates not tendered or not Certificates not tendered or not
accepted for payment and/or the accepted for payment and/or the
check for the purchase price of check for the purchase price of
Shares accepted for payment are to Shares accepted for payment are to
be issued in the name of someone be sent to someone other than the
other than the undersigned. undersigned or to the undersigned
at an address other than that shown
above.
Issue [_] check [_] certificates
to:
Mail [_] check [_] certificate(s)
Name: ______________________________ to:
(Please Type or Print)
Name: ______________________________
Address: ___________________________ (Please Type or Print)
Address: ___________________________
------------------------------------
(Include Zip Code) ------------------------------------
(Include Zip Code)
------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL
SECURITY NO.)
(See Substitute Form W-9 on reverse
side)
<PAGE>
IMPORTANT
STOCKHOLDER: SIGN HERE AND COMPLETE SUBSTITUTE FORM W-9 ON REVERSE
---------------------------------------------
---------------------------------------------
(SIGNATURE(S) OF STOCKHOLDER(S))
Dated: ________________________, 19_
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on
the Share Certificates or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by trustees, executors,
administrators, guardians, attorneys-in-fact, agents, officers of
corporations or others acting in a fiduciary or representative capacity,
please provide the following information. See instruction 5.)
Name(s):____________________________________________________________________
(PLEASE TYPE OR PRINT)
____________________________________________________________________________
Capacity (Full Title): (See Instruction 5) _________________________________
Address:____________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
Area Codes and Telephone Numbers:___________________________________________
HOME
____________________________________________________________________________
BUSINESS
Taxpayer Identification or Social Security No.: ____________________________
(COMPLETE SUBSTITUTE FORM W-9 ON REVERSE)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED--INSTRUCTIONS 1 AND 5)
Authorized Signature: ______________________________________________________
Name: ______________________________________________________________________
(PLEASE TYPE OR PRINT)
Title: _____________________________________________________________________
Name of Firm: ______________________________________________________________
Address:____________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
(Area Code and Tel. No.) ___________ Dated: _______________________________
Dated: ___________________, 1994
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee is required on this Letter
of Transmittal if (i) this Letter of Transmittal is signed by the registered
holder of Shares (which term, for purposes of this document, includes any
participant in any of the Book-Entry Transfer Facilities' systems whose name
appears on a security position listing as the owner of the Shares) tendered
therewith and such registered holder has not completed either the box entitled
"Special Delivery Instructions" or the box entitled "Special Payment
Instructions" above, or (ii) such Shares are tendered for the account of a
bank, broker, dealer, credit union, savings association or other entity which
is a member in good standing of a recognized Medallion Program approved by The
Securities Transfer Association, Inc. (an "Eligible Institution"). In all other
cases, all signatures on this Letter of Transmittal must be guaranteed by an
Eligible Institution. See Instruction 5.
2. REQUIREMENTS OF TENDER. This Letter of Transmittal is to be used either if
Share Certificates are to be forwarded herewith or if deliveries of Shares are
to be made pursuant to the procedures for tender by book-entry transfer set
forth in Section 2 of the Offer to Purchase. For a stockholder to validly
tender Shares pursuant to the Offer, either (a) a properly completed and duly
executed Letter of Transmittal (or a facsimile thereof), together with any
required signature guarantees and any other required documents, must be
received by the Depositary at one of its addresses set forth herein on or prior
to the Expiration Date and either (i) certificates representing tendered Shares
must be received by the Depositary at one of such addresses, or (ii) such
Shares must be delivered pursuant to the procedures for book-entry transfer set
forth herein (and a Book-Entry Confirmation (as defined in Section 2 of the
Offer to Purchase) must be received by the Depositary), in each case on or
prior to the Expiration Date, or (b) the tendering stockholder must comply with
the guaranteed delivery procedures set forth below.
Stockholders whose Share Certificates are not immediately available or who
cannot deliver their Share Certificates and all other required documents to the
Depositary prior to the Expiration Date or who cannot complete the procedures
for delivery by book-entry transfer on a timely basis may tender their Shares
by properly completing and duly executing a Notice of Guaranteed Delivery
pursuant to the guaranteed delivery procedures set forth in Section 2 of the
Offer to Purchase.
Pursuant to such procedure: (i) such tender must be made by or through an
Eligible Institution, (ii) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form made available by the Purchaser
must be received by the Depositary prior to the Expiration Date, and (iii) the
Share Certificates (or a Book-Entry Confirmation) representing all tendered
Shares, in proper form for transfer, together with a Letter of Transmittal (or
a facsimile thereof), properly completed and duly executed, with any required
signature guarantees and any other documents required by this Letter of
Transmittal, must be received by the Depositary within five National
Association of Securities Dealers Automated Quotation System trading days after
the date of execution of such Notice of Guaranteed Delivery. If Share
Certificates are forwarded separately to the Depositary, a properly completed
and duly executed Letter of Transmittal (or a facsimile thereof) must accompany
each such delivery.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THIS LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY
TRANSFER FACILITY, IS AT THE OPTION AND SOLE RISK OF THE TENDERING STOCKHOLDER
AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering stockholders, by execution
of this Letter of Transmittal (or a facsimile thereof), waive any right to
receive any notice of the acceptance of their Shares for payment.
<PAGE>
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
signed schedule attached hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO BOOK-ENTRY STOCKHOLDERS). If fewer than
all the Shares represented by any Share Certificates delivered to the
Depositary herewith are to be tendered hereby, fill in the number of Shares
which are to be tendered in the box entitled "Number of Shares Tendered". In
such case, a new Share Certificate for the untendered Shares will be sent to
the person(s) signing this Letter of Transmittal, unless otherwise provided in
the box entitled "Special Delivery Instructions" on this Letter of Transmittal,
as soon as practicable after the Expiration Date. All Shares represented by
certificate(s) delivered to the Depositary will be deemed to have been tendered
unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written
on the face of the certificate(s) without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby are owned of record by two or more joint
owners, all such owners must sign this Letter of Transmittal.
If any of the tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal or any certificates or stock powers are signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and proper evidence satisfactory
to the Purchaser of such person's authority so to act must be submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made, or Share
Certificates not tendered or not purchased are to be issued or returned, to a
person other than the registered holder(s). Signatures on such certificates or
stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the registered
holder(s) of the Shares evidenced by the certificate(s) listed and transmitted
hereby, the certificate(s) must be endorsed or accompanied by appropriate stock
powers, in either case signed exactly as the name(s) of the registered
holder(s) appear on the certificate(s). Signatures on such certificate(s) or
stock powers must be guaranteed by an Eligible Institution.
6. STOCK TRANSFER TAXES. The Purchaser will pay or cause to be paid any stock
transfer taxes with respect to the transfer and sale of purchased Shares to it
or its order pursuant to the Offer. If, however, payment of the purchase price
is to be made to, or (in the circumstances permitted hereby) if Share
Certificates not tendered or not purchased are to be registered in the name of,
any person other than the registered holder(s), or if tendered Share
Certificates are registered in the name of any person other than the person(s)
signing this Letter of Transmittal, the amount of any stock transfer taxes
(whether imposed on the registered holder(s) or such person) payable on account
of the transfer to such person will be deducted from the purchase price unless
satisfactory evidence of the payment of such taxes or exemption therefrom is
submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATE(S) LISTED IN THIS LETTER
OF TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check and/or Share
Certificates for unpurchased Shares are to be issued in the name of a person
other than the signer of this Letter of Transmittal or if a check is to be sent
and/or such Share Certificates are to be returned to someone other than the
signer of this Letter of Transmittal or to an address other than that shown
above, the appropriate boxes on this Letter of Transmittal should be completed.
<PAGE>
8. WAIVER OF CONDITIONS. The conditions of the Offer may be waived by the
Purchaser, in whole or in part, at any time or from time to time in the
Purchaser's sole discretion.
9. BACKUP WITHHOLDING TAX. Each tendering stockholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on
Substitute Form W-9, which is provided under "Important Tax Information" below.
FAILURE TO PROVIDE THE INFORMATION ON THE SUBSTITUTE FORM W-9 MAY SUBJECT THE
TENDERING STOCKHOLDER TO 31% FEDERAL INCOME TAX BACKUP WITHHOLDING ON THE
PAYMENT OF THE PURCHASE PRICE. The box in Part 3 of the form may be checked if
the tendering stockholder has not been issued a TIN and has applied for a
number or intends to apply for a number in the near future. If the box in Part
3 is checked and the Depositary is not provided with a TIN within 60 days, the
Depositary will withhold 31% of all payments of the purchase price, if any,
made thereafter pursuant to the Offer until a TIN is provided to the
Depositary.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for
assistance may be directed to the Information Agent or the Dealer Managers at
their respective addresses or telephone numbers set forth below and additional
copies of the Offer to Purchase, this Letter of Transmittal and the Notice of
Guaranteed Delivery may be obtained at the Purchaser's expense from the
Information Agent or the Dealer Managers at their respective addresses set
forth below or from a broker, dealer, bank or trust company.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE THEREOF (TOGETHER WITH
CERTIFICATES FOR OR A BOOK-ENTRY CONFIRMATION WITH RESPECT TO, TENDERED SHARES
WITH ANY REQUIRED SIGNATURE GUARANTEES AND ALL OTHER REQUIRED DOCUMENTS), MUST
BE RECEIVED BY THE DEPOSITARY, OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE
OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY, PRIOR TO THE
EXPIRATION DATE.
IMPORTANT TAX INFORMATION
Under Federal income tax law, a stockholder whose tendered Shares are
accepted for payment is required to provide the Depositary (as payer) with such
stockholder's correct TIN on Substitute Form W-9 below. If such stockholder is
an individual, the TIN is his or her social security number. The Certificate of
Awaiting Taxpayer Identification Number should be completed if the tendering
stockholder has not been issued a TIN and has applied for a number or intends
to apply for a number in the near future. If the Depositary is not provided
with the correct TIN, the stockholder may be subject to a $50 penalty imposed
by the Internal Revenue Service. In addition, payments that are made to such
stockholders with respect to Shares purchased pursuant to the Offer may be
subject to 31% backup withholding.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, that stockholder must submit a Form W-8, signed under penalties of
perjury, attesting to that individual's exempt status. A Form W-8 can be
obtained from the Depositary. See the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 for additional
instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any payments made to the stockholder or other payee. Backup withholding is not
an additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the Internal
Revenue Service.
To prevent backup federal income tax withholding with respect to payment of
the purchase price for Shares purchased pursuant to the Offer, a stockholder
must provide the Depositary with his or her correct TIN by completing the
Substitute Form W-9 below certifying that the TIN provided on Substitute Form
W-9 is correct (or that such stockholder is awaiting a TIN) and that (1) such
stockholder has not been notified by the Internal Revenue Service that he or
she is subject to backup withholding as a result of failure to report all
interest or dividends or (2) the Internal Revenue Service has notified the
stockholder that he or she is no longer subject to backup withholding.
<PAGE>
The stockholder is required to give the Depositary the TIN (e.g. the social
security number or employer identification number) of the record holder of the
Shares tendered hereby. If the Shares are in more than one name or are not in
the name of the actual owner, consult the enclosed Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9 for additional
guidance on which number to report.
PAYER'S NAME:
- --------------------------------------------------------------------------------
SUBSTITUTE PART 1 -- PLEASE PROVIDE Social Security Number
FORM W-9 YOUR TIN IN THE BOX AT OR
RIGHT AND CERTIFY BY Employer Identification
SIGNING AND DATING BELOW. Number
---------------------------
DEPARTMENT OF ----------------------------------------------------------
THE TREASURY PART 2 -- CERTIFICATION -- UNDER PENALTIES OF PERJURY, I
INTERNAL CERTIFY THAT:
REVENUE (1) The number shown on this form is my correct Taxpayer
SERVICE PAYER'S Identification Number (or I am waiting for a number
REQUEST FOR to be issued for me) and
TAXPAYER (2) I am not subject to backup withholding because: (a) I
IDENTIFICATION am exempt from backup withholding, or (b) I have not
NUMBER ("TIN") been notified by the Internal Revenue Service (the
"IRS") that I am no longer subject to backup
withholding.
CERTIFICATION INSTRUCTIONS -- YOU MUST CROSS OUT ITEM
(2) ABOVE IF YOU HAVE BEEN NOTIFIED BY THE IRS THAT
YOU ARE CURRENTLY SUBJECT TO BACKUP WITHHOLDING
BECAUSE OF UNDER-REPORTING INTEREST OR DIVIDENDS ON
YOUR TAX RETURN. HOWEVER, IF AFTER BEING NOTIFIED BY
THE IRS THAT YOU WERE SUBJECT TO BACKUP WITHHOLDING
YOU RECEIVED ANOTHER NOTIFICATION FROM THE IRS THAT
YOU ARE NO LONGER SUBJECT TO BACKUP WITHHOLDING, DO
NOT CROSS OUT SUCH ITEM (2).
------------------------------------------------------------
PART 3[_Check]this box if you have not been issued a TIN
and have applied for one or intend to
apply for one in the near future.
SIGNATURE _________________ DATE __________________ , 1994
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART 3 OF SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, as either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office, or
(2) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number within
sixty (60) days 31% of all reportable payments made to me thereafter will be
withheld until I provide a number.
Signature: ____________________________ Date: ___ , 1994
<PAGE>
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. Questions and requests for assistance may be
directed to the Information Agent or the Dealer Managers at their respective
addresses and telephone numbers listed below. Additional copies of this Offer
to Purchase, the Letter of Transmittal and other tender offer materials may be
obtained from the Information Agent as set forth below, and will be furnished
promptly at the Purchaser's expense. You may also contact your broker, dealer,
bank, trust company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
MACKENZIE
PARTNERS, INC.
156 Fifth Avenue, 9th Floor
New York, New York 10010
212-929-5500 (Call Collect)
or
Toll-Free 1-800-322-2885
The Dealer Managers for the Offer are:
SMITH BARNEY INC. CHASE SECURITIES, INC.
1 Chase Manhattan Plaza
1345 Avenue of the New York, New York 10081
Americas
New York, New York
10105
For Information Call:
212-698-6602 (Call Collect)
<PAGE>
EXHIBIT 99.(a)(3)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
AMERICAN RESIDENTIAL HOLDING CORPORATION
This Notice of Guaranteed Delivery or one substantially equivalent hereto
must be used to accept the Offer (as defined below) if certificates
representing shares of Common Stock, par value $.04 per share (the "Shares") of
American Residential Holding Corporation, a Delaware corporation (the
"Company"), are not immediately available or time will not permit all required
documents to reach The Chase Manhattan Bank (National Association), acting in
its capacity as depositary (the "Depositary"), on or prior to the Expiration
Date (as defined in Section 1 of the Offer to Purchase (as defined below)), or
the procedure for delivery by book-entry transfer cannot be completed on a
timely basis. This Notice of Guaranteed Delivery may be delivered by hand or
sent by facsimile transmission or mail to the Depositary and must include a
guarantee by an Eligible Institution (as defined in Section 2 of the Offer to
Purchase). See Section 2 of the Offer to Purchase.
THE DEPOSITARY FOR THE OFFER IS:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By Mail: By Overnight Delivery: By Hand
(9:00 a.m. - 5:00 p.m.
New York City Time):
Box 2020 c/o Chase Securities 1 Chase Manhattan Plaza
4 Chase MetroTech Center Processing Corp. Floor 1-B
Brooklyn, NY 11245 Ft. Lee Executive Park Nassau and Liberty Streets
1 Executive Drive, 6th Floor New York, NY 10081
Ft. Lee, NJ 07024
By Facsimile Transmission:
(201) 592-1804
Confirm by Telephone:
(201) 592-4715
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO
A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE SIGNATURES.
IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN
ELIGIBLE INSTITUTION UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE
MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER
OF TRANSMITTAL.
<PAGE>
LADIES AND GENTLEMEN:
The undersigned hereby tenders to Chamres, Inc., a Delaware corporation (the
"Purchaser") and an indirect wholly-owned subsidiary of The Chase Manhattan
Bank (National Association), a national banking association, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated August 9,
1994 (the "Offer to Purchase"), and in the related Letter of Transmittal (which
together constitute the "Offer"), receipt of each of which is hereby
acknowledged, the number of Shares indicated below pursuant to the guaranteed
delivery procedures set forth in Section 2 of the Offer to Purchase.
Name(s) of Record Holder(s):
Number of Shares: ____________________ ______________________________________
Account Number: ______________________ ______________________________________
Certificate No(s).
(if available): _____________________ Address(es): _________________________
______________________________________ ______________________________________
Area Code and Telephone Number(s): ___________________
If Share(s) will be tendered by book-entry transfer, check one box
[_] The Depository Trust Company
[_] Midwest Securities Trust Company
[_] Philadelphia Depository Trust Company
Account Number: _____________________ Signature(s): _______________________
Date: _______________________________ _____________________________________
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a firm that is a bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of a recognized
Medallion Program approved by The Securities Transfer Association, Inc., hereby
guarantees to deliver to the Depositary, at one of its addresses set forth
above, either the certificates representing all tendered Shares, in proper form
for transfer, or a Book-Entry Confirmation (as defined in Section 2 of the
Offer to Purchase), in each case with a properly completed and duly executed
Letter of Transmittal (or a manually signed facsimile thereof), with any
required signature guarantees, and any other documents required by the Letter
of Transmittal within five National Association of Securities Dealers Automated
Quotation System trading days after the date of execution of this Notice of
Guaranteed Delivery.
Name of Firm: ________________________ ______________________________________
(Authorized Signature)
Address: _____________________________ Title: _______________________________
______________________________________
(Zip Code) Name: ________________________________
(Please type or print)
Area Code and
Telephone Number: ____________________ Date: ________________________________
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE OF GUARANTEED
DELIVERY. CERTIFICATES FOR SHARES SHOULD BE SENT WITH YOUR LETTER OF
TRANSMITTAL.
2
<PAGE>
EXHIBIT 99.(a)(4)
SMITH BARNEY INC. CHASE SECURITIES, INC.
1345 Avenue of the 1 Chase Manhattan
Americas Plaza
New York, New York New York, New York
10105 10081
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
AMERICAN RESIDENTIAL HOLDING CORPORATION
AT
$28.25 NET PER SHARE
BY
CHAMRES, INC.
AN INDIRECT WHOLLY-OWNED SUBSIDIARY
OF
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION)
----------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, SEPTEMBER 7, 1994, UNLESS THE OFFER IS EXTENDED.
----------------
August 9, 1994
To Brokers, Dealers, Banks, Trust Companies and Other Nominees:
We have been appointed by Chamres, Inc., a Delaware corporation (the
"Purchaser") and an indirect wholly-owned subsidiary of The Chase Manhattan
Bank (National Association), a national banking association ("Parent"), to act
as Dealer Managers in connection with the Purchaser's offer to purchase for
cash all the outstanding shares of Common Stock, par value $.04 per share (the
"Shares"), of American Residential Holding Corporation, a Delaware corporation
(the "Company"), at a price of $28.25 per Share, net to the seller in cash,
without interest thereon, upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated August 9, 1994 (the "Offer to Purchase"),
and in the related Letter of Transmittal (which together constitute the
"Offer") enclosed herewith. Holders of Shares whose certificates for such
Shares (the "Share Certificates") are not immediately available or who cannot
deliver their Share Certificates and all other required documents to the
Depositary (as defined below) prior to the Expiration Date (as defined in the
Offer to Purchase), or who cannot complete the procedures for book-entry
transfer on a timely basis, must tender their Shares according to the
guaranteed delivery procedures set forth in Section 2 of the Offer to Purchase.
Please furnish copies of the enclosed materials to those of your clients for
whose accounts you hold Shares registered in your name or in the name of your
nominee. Enclosed herewith for your information and forwarding to your clients
are copies of the following documents:
1. The Offer to Purchase, dated August 9, 1994.
2. The blue Letter of Transmittal to tender Shares for your use and for
the information of your clients. Facsimile copies of the Letter of
Transmittal may be used to tender Shares.
3. The Letter to Securityholders of the Company from the Chairman of the
Board, Chief Executive Officer and President of the Company accompanied by
the Company's Solicitation/Recommendation Statement in Schedule 14D-9.
<PAGE>
4. The yellow Notice of Guaranteed Delivery for Shares to be used to
accept the Offer if Share Certificates are not immediately available or if
such certificates and all other required documents cannot be delivered to
The Chase Manhattan Bank (National Association) (the "Depositary") by the
Expiration Date or if the procedure for book-entry transfer cannot be
completed by the Expiration Date.
5. The beige printed form of letter which may be sent to your clients for
whose accounts you hold Shares registered in your name or in the name of
your nominee, with space provided for obtaining such clients' instructions
with regard to the Offer.
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
7. A return envelope addressed to the Depositary.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE
AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, SEPTEMBER 7, 1994 UNLESS
THE OFFER IS EXTENDED.
The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the Expiration Date that number of Shares
which constitutes at least 80% of the total number of Shares outstanding on the
date that Shares are accepted for payment under the Offer. The Offer is also
subject to other terms and conditions contained in the Offer to Purchase. See
the Introduction and Sections 1, 14 and 15 of the Offer to Purchase.
In all cases, for a stockholder to validly tender Shares pursuant to the
Offer, a properly completed and duly executed Letter of Transmittal (or a
facsimile thereof), together with any required signature guarantees and any
other required documents, must be received by the Depositary at one of its
addresses set forth herein on or prior to the Expiration Date and either (i)
certificates representing tendered Shares must be received by the Depositary at
one of such addresses, or (ii) such Shares must be delivered pursuant to the
procedures for book-entry transfer set forth herein (and a Book-Entry
Confirmation (as defined in Section 2 of the Offer to Purchase) must be
received by the Depositary), in each case on or prior to the Expiration Date.
If holders of Shares wish to tender, but it is impracticable for them to
forward their Share Certificates or other required documents on or prior to the
Expiration Date or to comply with the book-entry transfer procedures on a
timely basis, a tender may be effected by following the guaranteed delivery
procedures specified in Section 2 of the Offer to Purchase.
Neither the Purchaser nor Parent will pay any commissions or fees to any
broker, dealer or other person (other than the Dealer Managers, the Depositary
and MacKenzie Partners, Inc. (the "Information Agent"), as described in the
Offer to Purchase) for soliciting tenders of Shares pursuant to the Offer. The
Purchaser will, however, upon request, reimburse you for customary clerical and
mailing expenses incurred by you in forwarding any of the enclosed materials to
your clients. The Purchaser will pay or cause to be paid any stock transfer
taxes payable on the transfer of Shares to it, except as otherwise provided in
Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to,
and additional copies of the enclosed material may be obtained from Smith
Barney Inc. and Chase Securities, Inc., the Dealer Managers, or the Information
Agent, at their respective addresses and telephone numbers set forth on the
back cover of the Offer to Purchase.
Very truly yours,
SMITH BARNEY INC.
CHASE SECURITIES, INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON THE AGENT OF THE PURCHASER, PARENT, EITHER DEALER MANAGER, THE
COMPANY, THE DEPOSITARY OR THE INFORMATION AGENT, OR ANY AFFILIATE OF ANY OF
THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY
DOCUMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE
ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
2
<PAGE>
EXHIBIT 99.(a)(5)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
AMERICAN RESIDENTIAL HOLDING CORPORATION
at
$28.25 NET PER SHARE
by
CHAMRES, INC.
an indirect wholly-owned subsidiary
of
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION)
----------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, SEPTEMBER 7, 1994, UNLESS THE OFFER IS EXTENDED.
----------------
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated August 9,
1994 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer") relating to the offer by Chamres, Inc., a
Delaware corporation (the "Purchaser") and an indirect wholly-owned subsidiary
of The Chase Manhattan Bank (National Association), a national banking
association ("Parent"), to purchase all outstanding shares of Common Stock, par
value $.04 per share (the "Shares"), of American Residential Holding
Corporation, a Delaware corporation (the "Company"), at a price of $28.25 per
Share, net to the seller in cash, without interest thereon, upon the terms and
subject to the conditions set forth in the Offer. Also enclosed is the
Solicitation/Recommendation Statement on Schedule 14D-9 of the Company.
We are the holder of record of Shares held by us for your account. A TENDER
OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO
YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR
INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR
ACCOUNT.
Accordingly, we request instructions as to whether you wish to have us tender
on your behalf any or all Shares held by us for your account pursuant to the
terms and conditions set forth in the Offer.
Please note the following:
1. The tender price is $28.25 per Share net to you in cash without
interest thereon, upon the terms and subject to the conditions set forth in
the Offer.
2. The Board of Directors of the Company has unanimously approved the
Offer and the Merger referred to herein, and has determined that the Offer
and the Merger are fair to, and in the best interests
<PAGE>
of, the Company and the stockholders of the Company and unanimously
recommends that such stockholders accept the Offer and tender their shares
pursuant to the Offer.
3. The Offer is being made for all outstanding Shares.
4. The Offer is being made pursuant to the Agreement and Plan of Merger
(the "Merger Agreement"), dated as of August 3, 1994, among the Company,
Parent and the Purchaser. The Merger Agreement provides, among other
things, that as soon as practicable following the consummation of the
Offer, subject to the terms and conditions contained in the Merger
Agreement and in accordance with the relevant provisions of the Delaware
General Corporation Law (the "DGCL"), the Purchaser will be merged with and
into the Company ("Merger") and the Company will be the surviving
corporation. On the effective date of the Merger, each outstanding Share
(other than Shares owned by Parent, any direct or indirect subsidiary of
Parent or the Company and Shares held by stockholders who perfect their
appraisal rights under the DGCL) will be converted into the right to
receive an amount in cash equal to the price per Share paid pursuant to the
Offer.
5. The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the Expiration Date (as defined in the
Offer to Purchase) that number of Shares which constitutes at least 80% of
the total number of Shares outstanding on the date that Shares are accepted
for payment under the Offer. The Offer is also subject to other terms and
conditions contained in the Offer to Purchase. See the Introduction and
Sections 1, 14 and 15 of the Offer to Purchase.
6. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on Wednesday, September 7, 1994, unless the Offer is
extended.
7. Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 6 of the Letter
of Transmittal, stock transfer taxes on the purchase of Shares by Purchaser
pursuant to the Offer.
If you wish to have us tender any or all of the Shares held by us for your
account, please so instruct us by completing, executing, detaching and
returning to us the instruction form set forth on page 3 hereof. If you
authorize the tender of your Shares, all such Shares will be tendered unless
otherwise specified below. Your instructions should be forwarded to us in ample
time to permit us to submit a tender on your behalf prior to the expiration of
the Offer.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares residing in any jurisdiction in which the making
of the Offer or the acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction.
In any jurisdiction where the securities, blue sky or other laws require the
Offer to be made by a licensed broker or dealer, the Offer will be deemed to be
made on behalf of the Purchaser by one of the Dealer Managers or one or more
registered brokers or dealers that are licensed under the laws of such
jurisdiction.
2
<PAGE>
Instructions with Respect to the Offer to Purchase
for Cash All Outstanding Shares of Common Stock
of
AMERICAN RESIDENTIAL HOLDING CORPORATION
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase dated August 9, 1994 and the related Letter of Transmittal in
connection with the offer by Chamres, Inc., a Delaware corporation (the
"Purchaser") and an indirect wholly-owned subsidiary of The Chase Manhattan
Bank (National Association), a national banking association to purchase all
outstanding shares of Common Stock, par value $.04 per share (the "Shares"), of
American Residential Holding Corporation, a Delaware corporation.
This will instruct you to tender to the Purchaser the number of Shares
indicated below (or if no number is indicated below, all Shares) which are held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer.
SIGN HERE
Dated , 1994
------------------------------------------
------------------------------------------
Number of Shares to Be Signature(s)
Tendered:* Shares
------------------------------------------
(Print Name(s))
------------------------------------------
(Print Address(s))________________________
(Area Code and
Telephone Number(s))______________________
(Taxpayer Identification
or Social Security Number(s))_____________
- --------
* Unless otherwise indicated, it will be assumed that all Shares are to be
tendered.
3
<PAGE>
EXHIBIT 99.(a)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.-- Social Security numbers have nine digits separated by two hyphens:
i.e. 000-00-0000. Employer identification numbers have nine digits separated by
only one hyphen: i.e. 00-0000000. The table below will help determine the
number to give the payer.
- ----------------------------------------------
<TABLE>
<CAPTION>
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ----------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals The actual owner
(joint account) of the account
or, if combined
funds, the first
individual on
the account(1)
3. Husband and wife (joint The actual owner
account) of the account
or, if joint
funds, either
person(1)
4. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
5. Adult and minor (joint The adult or, if
account) the minor is the
only
contributor, the
minor(1)
6. Account in the name of The ward, minor,
guardian or committee for or incompetent
a designated ward, minor, person(3)
or incompetent person
7.a The usual revocable The grantor-
savings trust account trustee(1)
(grantor is also trustee)
b So-called trust account The actual
that is not a legal or owner(1)
valid trust under State
law
8. Sole proprietorship The owner(4)
account
- ----------------------------------------------
</TABLE>
- ----------------------------------------------
<TABLE>
<CAPTION>
- ----------------------------------------------
GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ----------------------------------------------
<S> <C>
9. A valid trust, estate, The legal entity
or pension trust (Do not furnish
the identifying
number of the
personal
representative
or trustee
unless the legal
entity itself is
not designated
in the account
title.)(5)
10. Corporate account The corporation
11. Religious, charitable, The organization
or educational
organization account
12. Partnership account The partnership
held in the name of
the business
13. Association, club, or The organization
other tax-exempt
organization
14. A broker or registered The broker or
nominee nominee
15. Account with the The public
Department of entity
Agriculture in the
name of a public
entity (such as a
State or local
government, school
district, or prison)
that receives
agricultural program
payments
- ----------------------------------------------
<FN>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension
trust.
</TABLE>
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or
Form SS-4, Application for Employer Identification Number, at the local office
of the Social Security Administration or the Internal Revenue Service and
apply for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include
the following:
. A corporation.
. A financial institution.
. An organization exempt from tax under section 501(a), or an individual
retirement plan.
. The United States or any agency or instrumentality thereof.
. A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
. A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
. An international organization or any agency, or instrumentality thereof.
. A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
. A real estate investment trust.
. A common trust fund operated by a bank under section 584(a).
. An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
. An entity registered at all times under the investment Company Act of
1940.
. A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
. Payments to nonresident aliens subject to withholding under section 1441.
. Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident partner.
. Payments of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals. Note: You may
be subject to backup withholding if this interest is $600 or more and is
paid in the course of the payer's trade or business and you have not
provided your correct taxpayer identification number to the payer.
. Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
. Payments described in section 6049(b)(5) to nonresident aliens.
. Payments on tax-free covenant bonds under section 1451.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT
TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS,
ALSO SIGN AND DATE THE FORM.
Certain payments other than interest dividends, and patronage dividends, that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Beginning January 1, 1984, payers must generally
withhold 31% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer.
Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you
fail to furnish your taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is due
to reasonable cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to
include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 5% on any portion of an
under-payment attributable to that failure unless there is clear and
convincing evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE>
EXHIBIT 99.(a)(7)
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares. The Offer is made solely by the Offer to Purchase dated
August 9, 1994 and the related Letter of Transmittal, and is being made to
all holders of Shares. The Purchaser is not aware of any state where the
making of the Offer is prohibited by administrative or judicial action
pursuant to any valid state statute. If the Purchaser becomes aware of
any valid state statute prohibiting the making of the Offer or the
acceptance of Shares pursuant thereto, the Purchaser will make a good
faith effort to comply with such state statute. If, after such good
faith effort, the Purchaser cannot comply with such state statute,
the Offer will not be made to (nor will tenders be accepted from
or on behalf of) the holders of Shares in such state. In any
jurisdiction where the securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer,
the Offer shall be deemed to be made on behalf of the
Purchaser by one of the Dealer Mangers or one or more
registered brokers or dealers licensed under the laws of
such jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
AMERICAN RESIDENTIAL HOLDING CORPORATION
AT
$28.25 NET PER SHARE
BY
CHAMRES, INC.
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION)
Chamres, Inc., a Delaware corporation (the "Purchaser") and an indirect
wholly-owned subsidiary of The Chase Manhattan Bank (National Association), a
national banking association ("Parent"), hereby offers to purchase all of the
outstanding shares of Common Stock, par value $.04 per share (the "Shares"), of
American Residential Holding Corporation, a Delaware corporation (the
"Company"), at a price of $28.25 per Share, net to the seller in cash, without
interest thereon, upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated August 9, 1994 (the "Offer to Purchase"), and in the
related Letter of Transmittal (which together constitute the "Offer").
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON WEDNESDAY, SEPTEMBER 7, 1994, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE THAT NUMBER OF SHARES
WHICH CONSTITUTES AT LEAST 80% OF THE TOTAL NUMBER OF SHARES OUTSTANDING ON THE
DATE THAT SHARES ARE ACCEPTED FOR PAYMENT UNDER THE OFFER. THE OFFER IS ALSO
SUBJECT TO OTHER TERMS AND CONDITIONS CONTAINED IN THE OFFER TO PURCHASE. SEE
THE INTRODUCTION AND SECTIONS 1, 14 AND 15 OF THE OFFER TO PURCHASE.
<PAGE>
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER AND
THE MERGER REFERRED TO HEREIN, AND HAS DETERMINED THAT THE OFFER AND THE MERGER
ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY AND THE STOCKHOLDERS OF
THE COMPANY AND RECOMMENDS THAT SUCH STOCKHOLDERS ACCEPT THE OFFER AND TENDER
THEIR SHARES PURSUANT TO THE OFFER.
THE OFFER IS BEING MADE PURSUANT TO THE AGREEMENT AND PLAN OF MERGER (THE
"MERGER AGREEMENT"), DATED AS OF AUGUST 3, 1994, AMONG THE COMPANY, PARENT AND
THE PURCHASER. THE MERGER AGREEMENT PROVIDES, AMONG OTHER THINGS, THAT AS SOON
AS PRACTICABLE FOLLOWING THE CONSUMMATION OF THE OFFER, SUBJECT TO THE TERMS
AND CONDITIONS CONTAINED IN THE MERGER AGREEMENT AND IN ACCORDANCE WITH THE
RELEVANT PROVISIONS OF THE DELAWARE GENERAL CORPORATION LAW (THE "DGCL"), THE
PURCHASER WILL BE MERGED WITH AND INTO THE COMPANY (THE "MERGER") AND THE
COMPANY WILL BE THE SURVIVING CORPORATION. ON THE EFFECTIVE DATE OF THE MERGER,
EACH OUTSTANDING SHARE (OTHER THAN SHARES OWNED BY PARENT, ANY DIRECT OR
INDIRECT SUBSIDIARY OF PARENT OR THE COMPANY AND SHARES HELD BY STOCKHOLDERS
WHO PERFECT THEIR APPRAISAL RIGHTS UNDER THE DGCL) WILL BE CONVERTED INTO THE
RIGHT TO RECEIVE AN AMOUNT IN CASH EQUAL TO THE PRICE PER SHARE PAID PURSUANT
TO THE OFFER.
The term "Expiration Date" means 12:00 Midnight, New York City time, on
Wednesday, September 7, 1994, unless and until the Purchaser shall have
extended the period of time for which the Offer is open, in which event the
term "Expiration Date" shall mean the latest time and date at which the Offer,
as so extended by the Purchaser, shall expire.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not withdrawn as,
if and when the Purchaser gives oral or written notice to The Chase Manhattan
Bank (National Association), acting in its capacity as Depositary (the
"Depositary") of the Purchaser's acceptance of such Shares for payment. Upon
the terms and subject to the conditions of the Offer, payment for Shares
accepted for payment pursuant to the Offer will be made by deposit of the
purchase price therefor with the Depositary, which will act as agent for
tendering stockholders for the purpose of receiving payment from the Purchaser
and transmitting payment to validly tendering stockholders. UNDER NO
CIRCUMSTANCES WILL INTEREST BE PAID BY THE PURCHASER ON THE PURCHASE PRICE OF
THE SHARES TENDERED PURSUANT TO THE OFFER, REGARDLESS OF ANY EXTENSION OF THE
OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) certificates
for such Shares (or timely Book-Entry Confirmation of the book-entry transfer
of such Shares as described in Section 2 of the Offer to Purchase), (ii) the
Letter of Transmittal (or a facsimile thereof) properly completed and duly
executed, with any required signature guarantees, and (iii) any other documents
required by the Letter of Transmittal.
If, for any reason whatsoever, acceptance for payment of any Shares tendered
pursuant to the Offer is delayed, or the Purchaser is unable to accept for
payment or pay for Shares tendered pursuant to the Offer, then, without
prejudice to the Purchaser's rights set forth herein, the Depositary may,
nevertheless, on behalf of the Purchaser retain tendered Shares and such Shares
may not be withdrawn except to the extent that the tendering stockholder is
entitled to and duly exercises withdrawal rights as described in Section 3 of
the Offer to Purchase. Any such delay will be by an extension of the Offer to
the extent required by law.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, or if certificates are submitted representing more Shares than are
tendered, certificates representing unpurchased or untendered Shares will be
returned, without expense to the tendering stockholder (or, in the case of
Shares delivered by book-entry transfer into the Depositary's account at a
Book-Entry Transfer Facility (as defined in the Offer to Purchase) pursuant to
the procedures set forth in Section 2 of the Offer to Purchase, such Shares
will be credited to an account maintained within such Book-Entry Transfer
Facility), as promptly as practicable following the expiration, termination or
withdrawal of the Offer.
2
<PAGE>
Subject to the terms of the Merger Agreement and the applicable rules and
regulations of the Securities and Exchange Commission, the Purchaser expressly
reserves the right, in its sole discretion, at any time and from time to time,
and regardless of whether or not any of the events set forth in Section 14 of
the Offer to Purchase shall have occurred or shall have been determined by the
Purchaser to have occurred, to (i) extend the period of time during which the
Offer is open, and thereby delay acceptance for payment of and the payment for
any Shares, by giving oral or written notice of such extension to the
Depositary, and (ii) amend the Offer in any other respect by giving oral or
written notice of such amendment to the Depositary. Any such extension will be
followed as promptly as practicable by public announcement thereof, and such
announcement will be made no later than 9:00 A.M., New York City time, on the
next business day after the previously scheduled Expiration Date. During any
such extension, all Shares previously tendered and not withdrawn will remain
subject to the Offer, subject to the right of a tendering stockholder to
withdraw such stockholder's Shares.
Except as otherwise provided for in Section 3 of the Offer to Purchase,
tenders of Shares made pursuant to the Offer are irrevocable. Shares tendered
pursuant to the Offer may be withdrawn at any time on or prior to the
Expiration Date and, unless theretofore accepted for payment pursuant to the
Offer to Purchase, may also be withdrawn at any time after October 7, 1994. For
a withdrawal to be effective, a written or facsimile transmission notice of
withdrawal must be timely received by the Depositary at one of its addresses
set forth on the back cover of the Offer to Purchase and must specify the name
of the person who tendered the Shares to be withdrawn, the number of Shares to
be withdrawn, and the name of the registered holder of the Shares, if different
from that of the person who tendered such Shares. If certificates have been
delivered or otherwise identified to the Depositary, then, prior to the
physical release of such certificates, the serial numbers shown on the
particular certificates evidencing the Shares must be submitted to the
Depositary and, unless such Shares have been tendered by an Eligible
Institution (as defined in the Offer to Purchase), the signature on the notice
of withdrawal must be guaranteed by an Eligible Institution. If Shares have
been tendered pursuant to the procedures for book-entry transfer set forth in
Section 2 of the Offer to Purchase, any notice of withdrawal must also specify
the name and number of the account at the appropriate Book-Entry Transfer
Facility to be credited with the withdrawn Shares and otherwise comply with
such Book-Entry Transfer Facility's procedures. Withdrawals of Shares may not
be rescinded and any Shares properly withdrawn will be deemed not validly
tendered for purposes of the Offer. However, withdrawn Shares may be retendered
by again following one of the procedures described in Section 2 of the Offer to
Purchase at any time prior to the Expiration Date. All questions as to the form
and validity (including time of receipt) of notices of withdrawal will be
determined by the Purchaser, in its sole discretion, whose determination shall
be final and binding.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference.
The Company has provided the Purchaser, the Depositary and the Information
Agent with the Company's stockholder list and security position listings for
the purpose of disseminating the Offer to holders of Shares. The Offer to
Purchase and the related Letter of Transmittal will be mailed to record holders
of Shares whose names appear on the Company's stockholder list and will be
furnished, for subsequent transmittal to beneficial owners of Shares, to
brokers, dealers, banks, trust companies and similar persons whose names, or
the names of whose nominees, appear on the stockholder list or, if applicable,
who are listed as participants in a clearing agency's security position listing
for subsequent transmittal to beneficial owners of Shares.
THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Managers at their respective addresses and telephone
numbers listed below. Copies of the Offer to Purchase, the Letter of
Transmittal and other related materials may be obtained from the Information
Agent or from brokers,
3
<PAGE>
dealers, banks and trust companies. The Purchaser will not pay any fees or
commissions to brokers, dealers or other persons (other than the Information
Agent and the Dealer Managers) for soliciting tenders of Shares pursuant to the
Offer.
The Information Agent for the Offer is:
MACKENZIE PARTNERS, INC.
156 Fifth Avenue, 9th Floor
New York, New York 10010
212-929-5500 (Call Collect)
or
Toll-Free 1-800-322-2885
The Dealer Managers for the Offer are:
SMITH BARNEY INC. CHASE SECURITIES, INC.
1345 Avenue of the 1 Chase Manhattan Plaza
Americas New York, New York 10081
New York, New York 10105
For Information Call:
212-698-6602 (Call Collect)
August 9, 1994
4
<PAGE>
EXHIBIT 99.(a)(8)
August 3, 1994
Contacts:
The Chase Manhattan Bank American Residential
Charlotte Gilbert - Media Holding Corporation
(212) 552-4507 Kasey Emmel - Media
William Maletz - Investor (619) 677-4310
(212) 552-5329 Clay Strittmatter -
Investor
(619) 677-4433
CHASE MANHATTAN BANK TO ACQUIRE
AMERICAN RESIDENTIAL HOLDING CORPORATION
The Chase Manhattan Bank, N.A. and American Residential Holding Corporation
(AMRS, NASDAQ) today jointly announced the signing of a definitive merger
agreement, whereby a subsidiary of Chase will seek to acquire through a tender
offer all of the outstanding common stock of AMRS, for a total of approximately
$348 million.
AMRS is the parent company of American Residential Mortgage Corporation,
one of the nation's leading residential mortgage lenders. Headquartered in La
Jolla, California, AMRS operates approximately 100 branches in 32 states and
originates and services single-family and multi-family residential mortgages.
AMRS ranked tenth in origination of single-family residential mortgages for the
first half of 1994 and serviced a loan portfolio of approximately $15.4 billion
at June 30, 1994.
- more -
<PAGE>
- 2 -
The combination of Chase and AMRS would rank in the top five nationwide in
mortgage originations with a volume of approximately $11.5 billion, based on
figures for the first half of 1994, and would rank fifth in mortgage servicing,
with a combined servicing volume of $62.1 billion as of June 30, 1994.
Fred Koons, chairman of Chase Manhattan Mortgage Holdings, Chase's mortgage
banking subsidiary, said, "As a leading provider of mortgages, Chase offers
flexible financing opportunities to meet the diverse home buying needs of our
customers. The acquisition of American Residential, a top quality retail and
wholesale mortgage originator will strengthen Chase's presence in both channels.
Chase will gain geographic diversity from entrance into 25 new locations. This
acquisition will also significantly increase conforming loan volume for Chase
complementing our leading position in jumbo loans."
This acquisition is part of Chase's ongoing strategy to grow and expand in
the mortgage business and follows Chase's purchase in July, 1993, of Troy &
Nichols, a mortgage origination and servicing company based in Monroe, LA.
"The combination of American Residential with Chase's other mortgage
origination entities will position us toward our goal of becoming a top three
mortgage lender by 1997," Koons continued.
- more -
<PAGE>
- 3 -
John M. Robbins, Jr., chairman and chief executive officer of American
Residential Holding Corporation, said, "The major strategy of American
Residential has been to maximize shareholder returns by building a cost
effective, customer driven origination system and a high quality residential
loan servicing portfolio. Our board believes the purchase price fairly values
the company's past performance and recognized position as a leader in our
industry."
Under the terms of the agreement, which has been approved by the boards of
directors of both companies, Chase's newly formed subsidiary, Chamres, Inc.,
will begin a cash tender offer no later than August 9, 1994, for all outstanding
shares of AMRS's common stock at $28.25 per share, net to seller in cash. The
tender offer will be subject to, among other things, certain regulatory
approvals and the valid tender of not less than 80% of AMRS's outstanding common
stock.
Following completion of the tender offer and receipt of any necessary
stockholders' approval, shares of AMRS common stock not acquired in the tender
offer will be acquired through a merger at the same price.
# # # #
<PAGE>
EXHIBIT 99.(a)(9)
August 9, 1994
Press Contact: Information Agent:
Charlotte Gilbert Jeanne Carr,
(212) 552-4507 MacKenzie Partners
Investor Contact: (212) 929-5748
William Maletz
(212) 552-5329
CHASE MANHATTAN COMMENCES CASH TENDER OFFER
FOR AMERICAN RESIDENTIAL HOLDING CORPORATION
The Chase Manhattan Corporation (CMB, NYSE) announced today that Chamres,
Inc., a wholly-owned subsidiary of The Chase Manhattan Bank, N.A., has
commenced a cash tender offer for all outstanding shares of common stock of
American Residential Holding Corporation (AMRS, NASDAQ) at a price of $28.25
per share, net to the seller in cash.
The tender offer is being made pursuant to a merger agreement with American
Residential (AMRS) which was announced on August 3, 1994. The tender offer is
conditioned on, among other things, a minimum of 80% of American Residential's
outstanding common stock being validly tendered and not withdrawn. The
transaction is not subject to any bank regulatory approvals or to any financing
contingency.
The offer will expire at 12:00 midnight, New York City time, on Wednesday,
September 7, 1994, unless extended.
The Board of Directors of American Residential has unanimously approved the
tender offer and the merger and determined that the terms of the offer and the
merger are fair to and in the best interest of the stockholders of American
Residential. The American Residential Board has unanimously recommended that
stockholders of American Residential accept the offer and tender their common
stock.
Following completion of the tender offer and receipt of any necessary
stockholder approvals, remaining shares of common stock not purchased in the
tender offer will be acquired in a merger at the same price.
Smith Barney Inc. and Chase Securities, Inc. are the dealer managers for the
tender offer. The information agent is MacKenzie Partners, Inc.
The tender offer materials are being filed with the United States Securities
and Exchange Commission. Copies of these materials may be obtained by calling
MacKenzie Partners, Inc. toll-free at (800) 322-2885.
<PAGE>
EXHIBIT 99.(c)(1)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
AMONG
AMERICAN RESIDENTIAL HOLDING CORPORATION
AND
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION)
AND
CHAMRES, INC.
DATED AS OF AUGUST 3, 1994
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
ARTICLE I
THE OFFER
<S> <C>
Section 1.01 The Offer...................................................... 1
Section 1.02 Company Actions................................................ 2
Section 1.03 Board of Directors............................................. 3
Section 1.04 Funding of Tender Offer........................................ 3
</TABLE>
ARTICLE II
THE MERGER
<TABLE>
<S> <C>
Section 2.01 The Merger..................................................... 4
Section 2.02 Effective Time................................................. 4
Section 2.03 Effects of the Merger.......................................... 4
Section 2.04 Certificate of Incorporation and By-Laws....................... 4
Section 2.05 Directors...................................................... 4
Section 2.06 Officers....................................................... 4
Section 2.07 Conversion of Securities....................................... 4
Section 2.08 Stock Plans.................................................... 4
Section 2.09 Appraisal Rights............................................... 5
Section 2.10 Payment for Shares............................................. 5
Section 2.11 Short-Form Merger.............................................. 6
</TABLE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES
<TABLE>
<S> <C>
Section 3.01 Representations and Warranties of the Company.................. 6
Section 3.02 Representations and Warranties of Parent....................... 15
Section 3.03 Representations and Warranties of Acquisition Sub.............. 16
</TABLE>
ARTICLE IV
ADDITIONAL COVENANTS AND AGREEMENTS
<TABLE>
<S> <C>
Section 4.01 Conduct of the Company's Business.............................. 18
Section 4.02 Stockholder Approval........................................... 19
Section 4.03 Expenses....................................................... 20
Section 4.04 Other Negotiations and Third Party Acquisitions................ 20
Section 4.05 Notification of Certain Matters................................ 21
Section 4.06 Access to Information.......................................... 21
Section 4.07 Further Assurances............................................. 23
Section 4.08 Employee Benefits.............................................. 23
Section 4.09 Indemnification; Directors' and Officers' Insurance............ 23
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
ARTICLE V
CONDITIONS TO THE MERGER
<S> <C>
Section 5.01 Conditions to the Merger Relating to Parent and Acquisition
Sub....................................................................... 25
Section 5.02 Conditions to the Merger Relating to the Company.............. 25
</TABLE>
ARTICLE VI
TERMINATION AND ABANDONMENT
<TABLE>
<S> <C>
Section 6.01 Termination and Abandonment.................................... 25
Section 6.02 Effect of Termination.......................................... 26
Section 6.03 Amendment...................................................... 26
Section 6.04 Waiver......................................................... 26
</TABLE>
ARTICLE VII
MISCELLANEOUS
<TABLE>
<S> <C>
Section 7.01 Brokers........................................................ 27
Section 7.02 Public Disclosure.............................................. 27
Section 7.03 Closing........................................................ 27
Section 7.04 Notices........................................................ 27
Section 7.05 Counterparts................................................... 27
Section 7.06 Headings....................................................... 27
Section 7.07 Survival of Representations and Warranties..................... 27
Section 7.08 Miscellaneous.................................................. 28
TESTIMONIUM................................................................. 28
</TABLE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- ------- -----------
<S> <C>
A Tender Offer Conditions
</TABLE>
ii
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of August 3, 1994 among AMERICAN
RESIDENTIAL HOLDING CORPORATION, a Delaware corporation (the "Company"), THE
CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), a national banking association
("Parent"), and CHAMRES, INC., a Delaware corporation and a wholly-owned,
indirect subsidiary of Parent ("Acquisition Sub").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of Parent, Acquisition Sub and
the Company have approved the acquisition of the Company by Acquisition Sub
pursuant to a tender offer by Acquisition Sub for all the outstanding shares
(the "Shares") of Common Stock, $.04 par value, of the Company ("Company Common
Stock"), at a price of $28.25 per share, net to the seller in cash (such per
share price, or any higher price as Acquisition Sub elects to offer for the
Shares in its sole discretion, is hereinafter referred to as the "Offer
Price"), upon the terms and subject to the conditions set forth in the Offer to
Purchase (as hereinafter defined), followed by a merger of Acquisition Sub with
and into the Company upon the terms and subject to the conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the mutual representations, warranties,
covenants, agreements and conditions contained herein, and in order to set
forth the terms and conditions of the Merger and the mode of carrying the same
into effect, the parties hereto hereby agree as follows:
ARTICLE I
THE OFFER
Section 1.01 The Offer. (a) Provided that this Agreement shall not have been
terminated in accordance with Section 6.01 below and none of the events set
forth in paragraphs (a), (b) and (d)-(h) of Exhibit A hereto shall have
occurred, (i) Parent and Acquisition Sub shall, not later than the first
business day following the date of this Agreement, publicly announce their
execution and delivery of this Agreement and their intention to commence a
tender offer (the "Offer") for all Shares at the Offer Price), and (ii) as
promptly as practicable, but in no event later than the fifth business day
following public announcement of this Agreement, Parent shall cause Acquisition
Sub to commence, and Acquisition Sub shall commence, in accordance with Rule
14d-2(b)(2) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), the Offer. The obligations of Parent and Acquisition Sub to
announce and commence the Offer shall be subject only to the condition that
none of the events set forth in paragraphs (a), (b) and (d)-(h) of Exhibit A
hereto shall have occurred on and after the date hereof. Acquisition Sub's
obligation to accept for payment and pay for Shares validly tendered and not
properly withdrawn pursuant to the Offer shall be subject only to the
conditions set forth in Exhibit A hereto. Parent shall cause Acquisition Sub to
keep the Offer open (i) for at least 20 business days after its commencement
and (ii) if as of any scheduled expiration time of the Offer (as originally
scheduled or as extended as permitted or required by this Section 1.01) any of
the conditions set forth in Exhibit A hereto has not been satisfied and
Acquisition Sub determines to waive the occurrence of such condition, for such
additional period of time as Parent and Acquisition Sub determine is required
by law. Parent and Acquisition Sub may, in their sole discretion, extend the
expiration time of the Offer at any time and from time to time if, as of any
scheduled expiration time of the Offer (as originally scheduled or as extended
as permitted or required by this Section 1.01), (A) any condition to the Offer
shall not have been satisfied or waived, or (B) all the conditions thereto have
been satisfied or waived but less than 90% of the Shares have been validly
tendered and not properly withdrawn pursuant to the Offer, provided that any
extension of the Offer pursuant to this clause (B) may not extend beyond a
period of ten business days after the date on which all the conditions to the
Offer have been satisfied or waived. Subject to the
<PAGE>
foregoing, Parent shall cause Acquisition Sub to accept for payment Shares
validly tendered pursuant to the Offer and not withdrawn, and to pay for all
such Shares, as soon as legally permissible, following the satisfaction or
waiver of the conditions set forth in Exhibit A. Parent shall not permit
Acquisition Sub to, and Acquisition Sub shall not, (i) decrease the Offer Price
or the number of Shares for which the Offer is made, (ii) change the form of
consideration or impose conditions to the Offer in addition to or in
modification of the conditions set forth in Exhibit A, or (iii) except as set
forth in (y) below, waive the Minimum Condition (as defined in Exhibit A)
without the prior written consent of the Company. Subject to the foregoing,
Parent and Acquisition Sub, in their sole discretion, shall be permitted to (x)
waive the occurrence of any condition to consummation of the Offer and
otherwise amend the Offer in any manner that would not adversely affect the
holders of Shares or (y) reduce the Minimum Condition, provided that in no
event shall such reduction reduce the Minimum Condition below 51% of the
Shares.
(b) As soon as practicable on the date of the commencement of the Offer,
Parent and Acquisition Sub shall file with the Securities and Exchange
Commission (the "SEC") a Tender Offer Statement on Schedule 14D-1 (together
with all amendments and supplements thereto, the "Schedule 14D-1") with respect
to the Offer. The Schedule 14D-1 shall contain (including as an exhibit) or
will incorporate by reference the offer to purchase relating to the Offer (the
"Offer to Purchase") and forms of the related letter of transmittal and any
summary advertisement (which documents, together with any supplements or
amendments thereto, are hereinafter referred to collectively as the "Offer
Documents").
Section 1.02 Company Actions. (a) The Company hereby consents to the Offer
and represents that the Company's Board of Directors, at meetings duly called
and held, subject to the terms and conditions set forth herein, has unanimously
(i) determined that the Offer and the Merger are fair to and in the best
interests of the Company and holders of Shares, (ii) resolved to recommend
acceptance of the Offer and approval and adoption of this Agreement by holders
of Shares and (iii) approved and adopted the Merger and this Agreement, for
purposes of Sections 203 and 251 of the Delaware General Corporation Law (the
"DGCL"). The Company further represents that Salomon Brothers Inc (the
"Financial Advisor") has delivered to the Company's Board of Directors its
written opinion that the cash consideration to be received by the stockholders
pursuant to the Offer and the Merger is fair to the Company's stockholders from
a financial point of view. The Company has been authorized by the Financial
Advisor to include the fairness opinion in the Offer Documents.
(b) Contemporaneously with the commencement of the Offer, the Company shall
file with the SEC and mail to the holders of Shares a
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9"),
copies of the proposed form of which shall be delivered to Parent prior to
commencement of the Offer. The Schedule 14D-9 and the Offer Documents shall
reflect the recommendations of the Board of Directors of the Company (the
"Board"). The Board may modify, amend or withdraw any recommendation regarding
the Offer, the Merger or this Agreement, including the statement in the
Schedule 14D-9 (without such modification, amendment or withdrawal constituting
a breach of this Agreement), or (in accordance with Section 4.04(a) hereof)
recommend any other offer or proposal, if a bona fide proposal is made for a
merger, consolidation, sale of substantial assets, shares of capital stock, or
other equity securities, recapitalization, debt restructuring or similar
transaction involving the Company or any substantial subsidiary (an
"Alternative Transaction") and the Board determines that such other offer or
proposal for an Alternative Transaction is more favorable to the holders of
Shares than the Offer and the Merger. The Company agrees promptly to correct
any information in the Schedule 14D-9 that shall have become false or
misleading and to take all steps necessary to cause the Schedule 14D-9 as so
corrected to be filed with the SEC and disseminated to the holders of Shares as
and to the extent required by law. Subject to compliance by Parent and
Acquisition Sub with the provisions of Section 1.03(b) hereof, the Company
shall include in the Schedule 14D-9 the information with respect to the
proposed designees of Acquisition Sub for election as directors of the Company
as is required by Section 14(f) of the Exchange Act and Rule 14f-1 thereunder.
(c) In connection with the Offer, the Company will cause its transfer agent
promptly to furnish Parent with mailing labels, security position listings and
any available listing or computer file containing the names and addresses of
the record holders of Shares as of a recent date and will cause its transfer
agent to furnish
2
<PAGE>
Parent with such additional information and assistance as Parent or its agents
may reasonably request in communicating and disseminating the Offer to the
holders of Shares.
Section 1.03 Board of Directors. (a) Promptly upon the payment by Acquisition
Sub for Shares pursuant to the Offer and from time to time thereafter,
Acquisition Sub shall be entitled to designate up to such number of directors,
rounded up to the next whole number, of the Board as will give Acquisition Sub
representation on the Board equal to the product of the number of directors on
the Board, after giving effect to such representation, multiplied by the
percentage that such number of Shares so purchased bears to the total number of
outstanding Shares (on a fully-diluted basis), and the Company shall use its
best efforts to, upon request by Acquisition Sub, promptly, at the Company's
election, either increase the size of the Board or secure the resignation of
such number of directors as is necessary to enable Acquisition Sub's designees
to be elected to the Board and to cause Acquisition Sub's designees to be so
elected. At such times, the Company shall use its reasonable efforts to cause
persons designated by Acquisition Sub to constitute the same percentage as
persons designated by Acquisition Sub shall constitute of the Board of (i) each
committee of the Board, (ii) each board of directors of each domestic
Subsidiary and (iii) each committee of each such board, in each case only to
the extent permitted by applicable law. Notwithstanding the foregoing, until
the earlier of (x) the time Acquisition Sub acquires a majority of the then
outstanding Shares and (y) the Effective Time (as hereinafter defined), the
Company shall use its reasonable efforts to ensure that all the members of the
Board and each committee of the Board and such boards and committees of the
domestic Subsidiaries as of the date hereof who are not employees of the
Company shall remain members of the Board and of such boards and committees.
(b) The Company's obligations to appoint designees to the Board shall be
subject to Section 14(f) of the Exchange Act and Rule 14f-1 thereunder. The
Company shall promptly take all actions required pursuant to Section 14(f) and
Rule 14f-1 and shall provide to holders of Shares such information with respect
to the Company and its officers and directors as is required under Section
14(f) and Rule 14f-1. Parent and Acquisition Sub will provide the Company with
all necessary assistance, in order to fulfill the Company's obligations under
this Section 1.03 and Section 1.02(b) above and will supply to the Company in
writing and be solely responsible for any information with respect to either of
them and their nominees, officers, directors and affiliates required by Section
14(f) and Rule 14f-1.
(c) Following the election of Acquisition Sub's designees pursuant to this
Section 1.03 and prior to the Effective Time (as hereinafter defined), any
amendment of this Agreement or the Certificate of Incorporation or By-laws of
the Company, any termination of this Agreement by the Company, any extension by
the Company of the time for the performance of any of the obligations or other
acts of Parent or Acquisition Sub or any consent given by the Company or waiver
of any of the Company's rights hereunder, will require the concurrence of a
majority of the directors of the Company then in office who are disinterested
directors, or by the sole remaining disinterested director if there shall only
be one. For purposes of this Agreement, the terms "disinterested director" or
"disinterested member of the Board" shall mean a member of the Board who was a
member thereof on the date hereof and who is not (i) an employee of the Company
or any of its subsidiaries, (ii) affiliated with Parent or Acquisition Sub or
(iii) an investor or a potential investor in the equity of Parent. In the event
that the number of disinterested directors shall be reduced below two for any
reason, the remaining disinterested director shall be entitled to designate a
person to fill such vacancy and such person shall be deemed to be an
independent director for purposes of this Agreement, or if no independent
directors then remain, the other directors shall designate two persons to fill
such vacancies who shall not be stockholders or affiliates of Parent or
Acquisition Sub and such persons shall be deemed disinterested directors for
purposes of this Agreement.
Section 1.04 Funding of Tender Offer. Parent shall make available or cause to
be made available to Acquisition Sub on a timely basis funds that are necessary
to pay for the Shares that Acquisition Sub becomes obligated to accept for
payment and pay for pursuant to the Offer.
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ARTICLE II
THE MERGER
Section 2.01 The Merger. At the Effective Time (as hereinafter defined) and
upon the terms and subject to the conditions of this Agreement and the DGCL,
Acquisition Sub shall be merged with and into the Company. Following the
Merger, the Company shall continue as the surviving corporation (the "Surviving
Corporation") and the separate corporate existence of Acquisition Sub shall
cease.
Section 2.02 Effective Time. As soon as practicable after the satisfaction or
waiver of the conditions set forth in Article V, the parties hereto will file
articles of merger or a certificate of merger with the Secretary of State of
the State of Delaware and make all other filings or recordings required by the
DGCL in connection with the Merger. The Merger shall become effective at such
time as the certificate of merger (or a certificate of ownership and merger
pursuant to Section 2.11) is duly filed with the Secretary of State of the
State of Delaware, or at such later time as is specified in the certificate of
merger (or certificate of ownership and merger as aforesaid) (the "Effective
Time").
Section 2.03 Effects of the Merger. The Merger shall have the effects set
forth in Section 259 of the DGCL. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, all the properties,
rights, privileges, powers and franchises of the Company and Acquisition Sub
shall vest in the Surviving Corporation, and all debts, liabilities and duties
of the Company and Acquisition Sub shall become the debts, liabilities and
duties of the Surviving Corporation.
Section 2.04 Certificate of Incorporation and By-Laws. (a) The Certificate of
Incorporation of Acquisition Sub, as in effect immediately prior to the
Effective Time, shall be the Certificate of Incorporation of the Surviving
Corporation until thereafter amended as provided therein and under the DGCL.
(b) The By-laws of Acquisition Sub, as in effect immediately prior to the
Effective Time, shall be the By-laws of the Surviving Corporation until
thereafter amended as provided therein and under the DGCL.
Section 2.05 Directors. The directors of Acquisition Sub at the Effective
Time shall be the initial directors of the Surviving Corporation, each to hold
office in accordance with the Certificate of Incorporation and By-laws of the
Surviving Corporation and until his or her successor is duly elected and
qualified.
Section 2.06 Officers. The officers of the Company at the Effective Time
shall be the initial officers of the Surviving Corporation, each to hold office
in accordance with the Certificate of Incorporation and By-laws of the
Surviving Corporation and until his or her successor is duly elected or
appointed and qualified.
Section 2.07 Conversion of Securities. At the Effective Time, by virtue of
the Merger and without any action on the part of Parent, Acquisition Sub, the
Company or any stockholders of the Company:
(a) Each Share that is held in the treasury of the Company or of any of
its subsidiaries or owned by Acquisition Sub or Parent or any of their
subsidiaries shall be canceled and retired and no capital stock of the
Surviving Corporation, cash or other consideration shall be paid or
delivered in exchange therefor.
(b) Except for any Dissenting Shares (as defined in Section 2.09 hereof),
each remaining outstanding Share shall be converted into the right to
receive an amount in cash, without interest, equal to the Offer Price (the
"Merger Consideration").
(c) Each share of Common Stock, $ 1.00 par value, of Acquisition Sub
outstanding immediately prior to the Effective Time shall be converted into
and become one validly issued, fully paid and nonassessable share of Common
Stock, $1.00 par value, of the Surviving Corporation.
Section 2.08 Stock Plans. All stock options, warrants and stock purchase
rights outstanding at the Effective Time under the Company's Key Employee Stock
Option and Restricted Stock Plan and the Company's Stock Option and Restricted
Stock Plan (collectively, the "Stock Plans"), whether or not vested
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as of the date hereof, shall terminate effective as of the Effective Time and
each holder of any such stock option, warrant or stock purchase right
thereunder shall be entitled to receive from the Company, immediately prior to
the Effective Time, for each share of Company Common Stock subject to such
option, warrant or stock purchase right an amount in cash in cancellation
thereof equal to the excess, if any, of the Merger Consideration over the per
share exercise price of such option, warrant or stock purchase right. Except to
the extent applicable to such outstanding stock options, warrants and stock
purchase rights, the Stock Plans shall terminate effective as of the Effective
Time.
Section 2.09 Appraisal Rights. Notwithstanding anything in this Agreement to
the contrary, Shares that are outstanding immediately prior to the Effective
Time and that are held by any stockholder who has delivered to the Company,
prior to the vote of stockholders required by Section 4.02 hereof, a written
demand for appraisal of such Shares in the manner provided in Section 262 of
the DGCL and shall not have failed to perfect and shall not have effectively
withdrawn or lost such rights to appraisal and payment under Section 262 of the
DGCL and who shall have not voted such Shares in favor of the approval and
adoption of this Agreement ("Dissenting Shares") shall not be converted into or
be exchangeable for the right to receive the Merger Consideration, but the
holders of Dissenting Shares shall be entitled to payment of the fair value of
such Dissenting Shares in accordance with the provisions of said Section 262,
provided, however, that if such stockholder shall waive his or her right to
demand payment under Section 262 of the DGCL or a court of competent
jurisdiction shall determine that such stockholder is not entitled to the
relief provided by said Section 262, then the right of such holder of
Dissenting Shares to be paid the fair value of his or her Shares shall cease
and such Dissenting Shares shall thereupon be deemed to have been converted
into and to have become exchangeable for, as of the Effective Time, the right
to receive the Merger Consideration, without any interest thereon.
Section 2.10 Payment for Shares. (a) Parent and the Company agree that Mellon
Bank, N.A. or another bank or trust company reasonably acceptable to the
Company shall be designated by Parent as a paying agent for the Merger (the
"Merger Paying Agent"). Parent shall cause the Surviving Corporation to deposit
with the Merger Paying Agent at the Effective Time such funds as are required
for the conversion of Shares pursuant to Section 2.07(b) hereof and the
payments in respect of stock options, warrants and stock purchase rights
pursuant to Section 2.08 hereof (the "Payment Fund"). As soon as practicable
after the Effective Time, Parent shall cause the Merger Paying Agent to make
the payments provided for in the preceding sentence out of the Payment Fund,
upon surrender to the Merger Paying Agent of one or more certificates for such
Shares for cancellation, or the termination of such stock options, warrants or
stock purchase rights. The Payment Fund may be invested by the Merger Paying
Agent, as directed by the Surviving Corporation, in (i) obligations of or
guaranteed by the United States, (ii) commercial paper rated A-1, P-1 or A-2,
P-2, and (iii) time deposits with, including certificates of deposit issued by,
any office located in the United States of any bank or trust company organized
under Federal law or under the law of any state of the United States or of the
District of Columbia and that has capital, surplus and undivided profits of at
least $500 million, and any net earnings with respect thereto shall be paid to
the Surviving Corporation as and when requested by the Surviving Corporation.
If for any reason (including losses) the Payment Fund is inadequate to pay the
amounts to which holders of Shares shall be entitled under Section 2.07(b)
hereof and to which holders of stock options, warrants and stock purchase
rights shall be entitled under Section 2.08 hereof, Parent shall be liable for
and shall make the payment thereof.
(b) In no event shall the holder of any surrendered certificates for Shares
be entitled to receive interest on any of the funds to be received in the
Merger. If payment is to be made to a person other than the person in whose
name the certificates for Shares surrendered for conversion are registered, it
shall be a condition of the payment that the certificate so surrendered shall
be properly endorsed and the signatures thereon properly guaranteed and
otherwise in proper form for transfer and that the person requesting such
payment shall pay to the Merger Paying Agent any transfer or other taxes
required by reason of the delivery of such check to a person other than the
registered holder of the certificate surrendered, or shall establish to the
satisfaction of the Merger Paying Agent that such tax has been paid or is not
applicable. Notwithstanding the foregoing,
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neither the Merger Paying Agent nor any party hereto shall be liable to a
holder of Shares for any amount paid to a public official pursuant to any
applicable abandoned property, escheat or similar law.
(c) The cash paid upon the surrender of certificates representing Shares or
in respect of the termination of any stock option, warrant or stock purchase
right in accordance with the terms hereof shall be deemed to have been paid,
issued and distributed in full satisfaction of all rights pertaining to such
Shares, stock options, warrants or stock purchase rights.
(d) Any cash delivered or made available to the Merger Paying Agent pursuant
to this Section 2.10 and not exchanged for certificates representing Shares or
paid in respect of stock options, warrants and stock purchase rights within six
months after the Effective Time pursuant hereto shall be returned by the Merger
Paying Agent to the Surviving Corporation which shall thereafter act as paying
agent subject to the rights of holders of unsurrendered certificates
representing Shares under this Article II.
(e) At the Effective Time, the stock transfer books of the Company shall be
closed and no transfer of Shares shall thereafter be made.
Section 2.11 Short-Form Merger. In the event that after consummation of the
Offer, Acquisition Sub and its affiliates shall own at least 90% of the
outstanding Shares, then as soon as practicable thereafter, Acquisition Sub and
appropriate officers of Acquisition Sub shall execute a certificate of
ownership and merger and shall cause such certificate to be filed with the
Delaware Secretary of State pursuant to Section 253 of the DGCL. The Company
and Acquisition Sub shall also take any other actions which shall be necessary
to cause the Merger to occur in accordance with Section 253 of the DGCL and
shall provide all notices to stockholders and take such other actions as shall
be required by the DGCL or other applicable governmental requirements by reason
of the consummation of the Merger.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, Parent and Acquisition Sub as
follows:
(a) Organization and Qualification. The Company and each of its subsidiaries
is a corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation and has all requisite
corporate power and authority to own or lease and operate its properties and
assets and to carry on its business as it is now being conducted. The Company
and each of its subsidiaries is duly qualified as a foreign corporation to do
business, and is in good standing, in each jurisdiction in which the character
of its properties owned or leased or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified would not
in the aggregate have a material adverse effect on the financial condition or
business of the Company and its subsidiaries taken as a whole. The Company has
previously delivered to Parent true and complete copies of the articles or
certificates of incorporation and the By-laws of the Company and each of its
subsidiaries as in effect on the date hereof.
(b) Subsidiaries. The only subsidiaries of the Company (individually a
"Subsidiary" and collectively the "Subsidiaries"), are those named in Exhibit
22 to the Company's Annual Report on Form 10-K for the year ended December 31,
1993 and those set forth in Section 3.01(b) of the Company's disclosure
schedule as delivered to Parent (the "Company Disclosure Schedule"). All the
outstanding shares of capital stock of the Subsidiaries are validly issued,
fully paid and nonassessable and, except as set forth in Section 3.01(b) of the
Company Disclosure Schedule, are owned by the Company and/or by one or more
other Subsidiaries, free and clear of any liens, claims, charges or
encumbrances, and there are no proxies outstanding with respect to any such
shares. For purposes of this Agreement, the term "subsidiary," when used with
respect to the Company, means any corporation or other business entity a
majority of whose outstanding voting stock entitled to vote for the election of
directors is at the time owned by the Company and/or one or more other
subsidiaries.
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(c) Capitalization. The authorized capital stock of the Company consists of
(i) 25,000,000 shares of Common Stock, $.04 par value, and (ii) 10,000,000
shares of Preferred Stock ("Preferred Stock"). On August 1, 1994, 11,762,142
shares of Company Common Stock were issued and outstanding, all of which were
validly issued, fully paid and nonassessable and none of which were held in
treasury, and no shares of Preferred Stock had been issued. Since August 1,
1994, no shares of capital stock of the Company have been issued or, in the
case of treasury shares, reissued, except shares of Company Common Stock issued
or reissued upon the exercise of stock options, warrants or stock purchase
rights pursuant to Stock Plans. Except for outstanding stock options granted
under the Stock Plans to purchase not more than 1,117,787 shares of Company
Common Stock (of which stock options for 337,558 shares are currently
exercisable), and except as set forth in Section 3.01(c) of the Company
Disclosure Schedule, (A) no subscription, warrant, option, convertible
security, stock appreciation or other right (contingent or other) to purchase
or acquire from the Company or any Subsidiary any shares of any class of
capital stock of the Company or any Subsidiary is authorized or outstanding and
(B) there is not any commitment of the Company or any Subsidiary to issue any
shares, warrants, options or other such rights or to distribute to holders of
any class of its capital stock any evidences of indebtedness or assets. Neither
the Company nor any Subsidiary has any obligation (contingent or other) to
purchase, redeem or otherwise acquire any shares of its capital stock or any
interest therein or to pay any dividend or make any other distribution in
respect thereof.
(d) Authority Relative to Agreement. The Company has all requisite corporate
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder. The execution, delivery and performance of this
Agreement by the Company and the consummation by it of the transactions
contemplated hereby have been duly authorized by the Board and no other
corporate proceedings on the part of the Company are necessary to authorize
this Agreement and the transactions contemplated hereby (other than, with
respect to the Merger, the approval and adoption of this Agreement by the
stockholders of the Company as required by the DGCL). This Agreement has been
duly executed and delivered by the Company and, subject to such stockholder
approval, constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency or other similar
laws affecting the enforcement of creditors' rights generally and by general
principles of equity (whether applied in a proceeding in equity or at law).
(e) Consents; Approvals; Non-Contravention. Except as set forth in Section
3.01(e) of the Company Disclosure Schedule, the execution and delivery of this
Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby will not (i) conflict with any provision of
the Certificate of Incorporation or By-laws of the Company or of any
Subsidiary; or (ii) require any consent, approval, order, authorization or
permit of, or filing with or notification to, any governmental or regulatory
authority by reason of the Company's or any of the Subsidiaries status or
operations except (A) in connection with applicable requirements, if any, of
the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act"), (B)
pursuant to the Exchange Act and the rules and regulations promulgated by the
SEC thereunder, (C) the filing of articles of merger or a certificate of merger
with the Secretary of State of the State of Delaware, (D) pursuant to
applicable requirements of the Federal National Mortgage Association (the
"FNMA"), the Federal Housing Administration (the "FHA"), the Federal Home Loan
Mortgage Corporation (the "FHLMC"), the Government National Mortgage
Association (the "GNMA") and the Veterans Administration (the "VA") and various
state and local regulatory authorities, (E) such filings and approvals as may
be required under the "blue sky," takeover and securities laws of various
states, or (F) where the failure to obtain such consent, approval, order,
authorization or permit, or to make such filing or notification, would not, in
the aggregate, materially adversely affect the ability of the Company to
consummate the transactions contemplated hereby or the ability of the Company
and the Subsidiaries to conduct their respective businesses after the Effective
Time; or (iii) result in a violation of or default under, or permit the
acceleration of any obligation under, any mortgage, indenture, lease, agreement
or other instrument to which the Company or any of the Subsidiaries is a party
or by which any of their respective assets may be bound, except for such
violations or defaults (or rights of termination, cancellation, or acceleration
or lien or other charge or encumbrance) as to which requisite waivers or
consents have been obtained or which, in the aggregate, would not have a
material adverse effect on the financial condition or
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business of the Company and the Subsidiaries taken as a whole or prohibit the
consummation of the transactions contemplated hereby; or (iv) assuming that the
consents, approvals, authorizations or permits, and the filings or
notifications referred to in this Section 3.01(e) have been duly and timely
obtained or made, violate any judgment, order, decree, statute, law, ordinance,
rule or regulation applicable to the Company or any of the Subsidiaries or
their respective properties, except for violations that would not in the
aggregate have a material adverse effect on the financial condition or business
of the Company and the Subsidiaries taken as a whole or prohibit the
consummation of the transactions contemplated hereby.
(f) SEC Filings. The Company has made available to Parent and Acquisition Sub
a true and complete copy of each report, schedule, registration statement and
definitive proxy statement filed by the Company with the SEC since January 1,
1992, including, without limitation, the Quarterly Report on Form 10-Q for the
Quarter Ended June 30, 1994 (together referred to as the "Company SEC
Filings"). As of their respective dates, the Company SEC Filings did not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading,
except, in the case of any Company SEC Filing, any statement or omission
therein which has been corrected or otherwise disclosed or updated in a
subsequent Company SEC Filing or in an amendment to the original Company SEC
Filing. The financial statements of the Company included in the Company SEC
Filings have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis (except as may be indicated therein or
in the notes thereto) and fairly present the financial position of the Company
as of the dates thereof and the results of its operations and changes in
financial position for the periods then ended, subject, in the case of the
unaudited interim financial statements, to the omission of footnote
information, to normal year-end audit adjustments and any other adjustment
described therein.
(g) Absence of Certain Changes or Events. (i) Since December 31, 1993, and
except as disclosed in the Company SEC Filings or as disclosed in the Company
Disclosure Schedule, there has not been any material adverse change in the
financial condition or business of the Company and the Subsidiaries taken as a
whole. Since June 30, 1994, except as disclosed in Section 3.01(g)(i) of the
Company Disclosure Schedule, no actions have been taken and no events have
occurred that would constitute a breach or violation of any covenant or
agreement set forth in Section 4.01 hereof.
(ii) Neither the Company nor any Subsidiary has any liabilities (whether
absolute, accrued, contingent or otherwise) that would be required to be
reflected on a consolidated balance sheet of the Company and its
subsidiaries prepared in accordance with generally accepted accounting
principles, including the notes thereto, except (A) liabilities that are
disclosed in the Company SEC Filings, (B) liabilities incurred since June
30, 1994 in the ordinary course of business consistent with past practice,
(C) liabilities disclosed in the Company Disclosure Schedule or (D)
liabilities which, in the aggregate, have not had and are not reasonably
expected to have a material adverse effect on the financial condition or
business of the Company and the Subsidiaries taken as a whole.
(h) Schedule 14D-9; Proxy Statement; Other Information. If a Proxy Statement
(as hereinafter defined) is required for the consummation of the Merger under
applicable law, the Proxy Statement and any amendments or supplements thereto
will comply in all material respects with the Exchange Act. The Proxy Statement
and any amendments or supplements thereto shall not, at the time they are
mailed, at the time of the Meeting (as hereinafter defined), or at the
Effective Time, contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, except that the
Company makes no representation with respect to any information that has been
supplied by Parent or Acquisition Sub for inclusion in the Proxy Statement. The
Schedule 14D-9 and any amendments or supplements thereto shall not, on the date
filed with the SEC and on the date first published, sent or given to the
stockholders of the Company, contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, except
that the Company makes no representation with respect to any information that
has been supplied by Parent or Acquisition Sub for inclusion in the Schedule
14D-9. None of the information supplied by the Company for inclusion in the
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Schedule 14D-1 to be filed by Parent and Acquisition Sub in connection with the
Offer and the Offer Documents shall, on the date filed with the SEC and on the
date first published, sent or given to the stockholders of the Company, contain
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The Schedule 14D-9 and the Proxy
Statement will comply in all material respects, as to form and otherwise, with
the requirements of the Exchange Act and the rules and regulations promulgated
by the SEC thereunder.
(i) Employment Agreements, Etc. Except as disclosed in the Company SEC
Filings and as set forth in Section 3.01(i) of the Company Disclosure Schedule,
neither the Company nor any Subsidiary is party to any employment, consulting,
non-competition, severance or indemnification agreement with any current or
former executive officer or director of the Company.
(j) Taxes. Within the times and in the manner provided by law, all material
Tax Returns (as defined below) which are required to be filed by or with
respect to the Company or any of the Subsidiaries have been filed, and all
material Taxes (as defined below) (including interest and penalties) payable
by, or due from the Company or any of the Subsidiaries (or for which the
Company or the Subsidiaries are liable) have been fully paid or adequately
disclosed and fully provided for in the books and financial statements of the
Company and its subsidiaries (other than any Tax Returns or Taxes with respect
to any of the Subsidiaries arising from inclusion of such Subsidiaries in a
consolidated or combined group for Tax prior to being included as a member of
the consolidated group of the Company). Except as set forth in Section 3.01(j)
of the Company Disclosure Schedule, (i) no audit of any Tax Return of the
Company or any of the Subsidiaries is being conducted by a Tax authority, and
(ii) no extension of the statute of limitations on the assessment of any Taxes
has been granted by the Company or any of the Subsidiaries and is currently in
effect. As used herein, "Tax" and "Taxes" shall mean all taxes of any kind,
including without limitation those on or measured by or referred to as income,
gross receipts, sales, use, ad valorem, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp, occupation,
premium, value added, property or windfall profit taxes, customs, duties or
similar fees, assessments or charges of any kind whatsoever, together with any
interest and any penalties, additions to tax or additional amounts imposed by
any governmental authority, domestic or foreign. As used herein, "Tax Return"
shall mean any return, report or statement required to be filed with any
governmental authority with respect to Taxes.
(k) Agreements. Neither the Company nor any of the Subsidiaries is in default
in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any material agreement or instrument to
which it is a party, other than defaults under such agreements or instruments
that would not, in the aggregate, have a material adverse effect on the
financial condition or business of the Company and the Subsidiaries taken as a
whole.
(l) Compliance with Law. Neither the Company nor any of the Subsidiaries is
in default under any order of any court, governmental authority or arbitration
board or tribunal or, to the best knowledge of the Company, under any laws,
ordinances, governmental rules or regulations to which the Company or any of
the Subsidiaries is subject, except where such defaults in the aggregate, would
not have a material adverse effect on the financial condition or business of
the Company and the Subsidiaries taken as a whole. The Company and the
Subsidiaries hold all permits, licenses, variances, exemptions, orders and
approvals of all governmental and regulatory authorities necessary for the
lawful conduct of their respective businesses ("Company Permits"), except where
the failure to hold such Company Permits would not, in the aggregate, have a
material adverse effect in the financial condition or business of the Company
and the Subsidiaries taken as a whole.
(m) Employee Benefit Plans. Except as set forth in Section 3.01(m) of the
Company Disclosure Schedule:
(i) Each employee benefit plan (as defined under Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"))
maintained by the Company or any Subsidiary (the "Plans") that is a
qualified plan has received a determination letter from the Internal
Revenue Service indicating that the Plan satisfies in form the requirements
of Section 401(a) of the Internal Revenue Code
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of 1986, as amended (the "Code"), and no such determination letter has been
rescinded or revoked. The Plans are in compliance, in all material
respects, with the applicable provisions of ERISA and/or the Code with
respect to each of the Plans.
(ii) Neither the Company nor any Subsidiary has incurred (A) any material
liability under Title IV of ERISA in connection with the termination of, or
the complete or partial withdrawal from, any plan (including the Plans)
covered by Title IV of ERISA or (B) any material obligation with respect to
any multi-employer plan (as defined in Section 3(37) of ERISA).
(iii) No Plan, other than a Plan which is an employee pension benefit
plan (within the meaning of Section 3(2)(A) of ERISA), provides benefits,
including, without limitation, death, health or medical benefits (whether
or not insured), with respect to current or former employees of the Company
beyond their retirement or other termination of service with the Company
(other than (A) coverage mandated by applicable law, (B) deferred
compensation benefits accrued as liabilities on the books of the Company or
any Subsidiary or (C) benefits the full cost of which is borne by the
current or former employee (or his or her beneficiary)).
(iv) The Company has provided to Parent true and complete copies of the
following with respect to each of the Plans: (A) each plan document and
summary plan description, (B) each trust agreement, insurance policy or
other instrument relating to the funding or the management of the assets
thereof, (C) the most recent Annual Report (Form 5500 series) and
accompanying schedules filed with the Internal Revenue Service or the
United States Department of Labor, (D) the most recent audited financial
statement report and (E) the most recent actuarial report.
(v) Section 3.01(m) of the Company Disclosure Schedule contains a
complete and accurate copy of all severance plans maintained by the Company
or any of the Subsidiaries as in effect on the date hereof.
(n) Material Contracts. Section 3.01(n) of the Company Disclosure Schedule
sets forth a complete and accurate list of all contracts, agreements and other
written arrangements (collectively "Contracts") to which the Company or any of
the Subsidiaries is a party and which relate to the following:
(i) any Contract (including the lease of personal property from or to
third parties) providing for payments in excess of $25,000 per annum, other
than those that are terminable without penalty on 60 days' notice or less;
(ii) any Contract in which the Company or any of the Subsidiaries is
participating as a general partner or joint venturer;
(iii) any Contract under which the Company or any of the Subsidiaries has
created, incurred, assumed or guaranteed (or which provides for the
possible creation, incurrence, assumption or guaranty by the Company or any
of the Subsidiaries of) indebtedness for borrowed money (including
capitalized lease obligations) involving more than $50,000;
(iv) any Contract pursuant to which the Company or any of the
Subsidiaries leases real property;
(v) any Contract containing any provision or covenant prohibiting or
limiting the ability of the Company or any of the Subsidiaries to engage in
any business activity or compete with any person or prohibiting or limiting
the ability of any person to compete with the Company or any of the
Subsidiaries;
(vi) any Contract pursuant to which the Company or any of the
Subsidiaries has promised to pay, or lend any amount to, or sold,
transferred or leased any property or assets to or from, any person in such
person's capacity as an officer, director or other employee of the Company
or any of the Subsidiaries (other than under the Stock Plans);
(vii) all Contracts with the ten principal (measured by dollar volume)
brokers and other third-party originators of Mortgage Loans (as hereinafter
defined) made or purchased by the Company or any of the Subsidiaries during
the fiscal year ended December 31, 1993, with respect to such origination;
(viii) any Contract providing for the future sale of servicing rights by
the Company or any of the Subsidiaries and any agreement relating to the
sale subsequent to May 1, 1990 of servicing rights by the
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Company or any Subsidiary pursuant to which the Company or such Subsidiary
retains contingent liabilities to the purchaser;
(ix) any Contract providing for the mandatory future sale of Mortgage
Loans by the Company or any of the Subsidiaries;
(x) any Contract with an insurer or insurance broker pursuant to which
the Company or any Subsidiary performs services for a fee or commission;
and
(xi) any Contract to which the Company or any Subsidiary is a party which
is used as a hedge for interest rate risk management with respect to the
mortgage banking business of the Company and its Subsidiaries.
The Company has made available to Parent a correct and complete copy of each
written Contract listed in Section 3.01(n) of the Company Disclosure Schedule.
With respect to each Contract so listed, and except as would not in the
aggregate have a material adverse effect on the financial condition of the
Company and the Subsidiaries taken as a whole: (A) the Contract is valid,
binding and in full force and effect; (B) the Company or the Subsidiary which
is a party to such Contract is not in material breach or default thereof, and
no event has occurred which, with notice or lapse of time or both, would
constitute a material breach or default by the Company or the Subsidiary which
is a party to such Contract, or permit termination, adverse modification or
acceleration against the Company or the Subsidiary which is a party to such
Contract; (C) the Company or the Subsidiary which is a party to such Contract
has not repudiated or waived any material provision of any such Contract except
for waivers in the ordinary course of business consistent with past practice
and where such waivers have not resulted in losses to the Company or the
Subsidiaries in excess of $250,000 since January 1, 1994; (D) all amounts due
and payable by the Company or any of the Subsidiaries pursuant to such Contract
have been or will be paid or will be adequately reserved against on the books
of the Company; and (E) no other party to any such Contract is, to the
knowledge of the Company, in default in any material respect thereunder. With
respect to any lease of real property set forth in Section 3.01(n) of the
Company Disclosure Schedule, and except as set forth therein: all rents and
other amounts currently due thereunder from the Company or any Subsidiary have
been paid (except for nondelinquent amounts which the Company or a Subsidiary,
as the case may be, proposes to pay in the ordinary course of business);
neither the Company nor any Subsidiary has entered into any sublease or
assignment with respect to its interest in such lease; and neither the Company
nor any Subsidiary has received written notice that it has breached any
material term, condition or covenant of such lease.
(o) Environmental Protection. The Company and the Subsidiaries have not, to
the knowledge of the Company, received from any source with respect to any
property that it owns or leases (an "Operating Facility"), any written notice
or claim to the effect that the Company, any Subsidiary or any Operating
Facility is not in compliance with any applicable environmental law, rule,
regulation, standard or requirement relating to pollution (including the
discharge of materials into the environment or outdoors) or protection of the
environment ("Environmental Laws"), nor, to the knowledge of the Company, after
due inquiry, has any such claim been threatened against the Company, any
Subsidiary or any Operating Facility.
(p) Insurance. (i) Section 3.01(p) of the Company Disclosure Schedule sets
forth a list of (A) all policies of insurance maintained by the Company or any
of the Subsidiaries with respect to the Company's and the Subsidiaries'
properties, assets, operations, business or other insurable risks and (B) each
life insurance policy of which the Company or any of the Subsidiaries is the
owner or beneficiary. Prior to the execution of this Agreement, true and
correct copies of each such insurance policy were made available to the Parent.
(ii) All the insurance policies, binders or bonds maintained by the Company
or any of the Subsidiaries are in full force and effect; neither the Company
nor any of the Subsidiaries is in default thereunder; all claims thereunder
have been filed in due and timely fashion; and, except as set forth in Section
3.01(p) of the Company Disclosure Schedule, all such policies, binders and
bonds will remain in full force and effect after the Effective Date, unaffected
by the transactions contemplated hereby.
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(q) Intellectual Property. Section 3.01(q) of the Company Disclosure Schedule
sets forth a list of the trademarks, service marks, trademark and service mark
applications, trade names, copyrights and licenses of any of the foregoing
currently owned or held by the Company or any of the Subsidiaries. The business
conducted by the Company and the Subsidiaries as currently conducted does not,
to the knowledge of the Company, constitute an infringement of or violation of
any trademark, service mark, trade name, copyright, trade secret (or license of
any of the foregoing) of any other person or entity.
(r) Physical Damage. There exists no material physical damage to any real
property owned by the Company or any Subsidiary, any property which serves as
collateral for a Mortgage Loan or which was acquired by the Company or any
Subsidiary upon foreclosure of a Mortgage Loan from fire, flood, windstorm,
earthquake, tornado, hurricane or any other similar casualty, which physical
damage is not adequately insured against, except as would not, individually or
in the aggregate, have a material adverse effect on the financial condition or
business of the Company and the Subsidiaries taken as a whole.
(s) Representations Regarding ARMC's Business. Except as set forth in Section
3.01(s) of the Company Disclosure Schedule, and except for breaches of the
following representations and warranties that would not have a material adverse
effect on the financial condition or business of the Company and the
Subsidiaries taken as a whole:
(i) Mortgage Banking Licenses and Qualifications. The Company's mortgage
banking subsidiary, American Residential Mortgage Corporation ("ARMC") (A)
is qualified (w) by the FHA as a mortgagee and servicer for FHA loans, (x)
by the VA as a lender and servicer for VA loans, (y) by the FNMA and the
FHLMC as a seller/servicer of first mortgages to FNMA and FHLMC and (z) by
the GNMA as an authorized issuer and servicer of GNMA-guaranteed mortgage-
backed securities; and (B) has all other certifications, authorizations,
licenses, permits and other approvals necessary to conduct its current
mortgage banking business and is in good standing under all applicable
Federal, state and local laws and regulations thereunder as a mortgage
lender and servicer.
(ii) Warehouse Loan Portfolio. All mortgage loans held for ARMC's
account, including mortgage loans held for future sale or delivery to an
investor ("Warehouse Loans") are owned by ARMC free and clear of any
encumbrances other than encumbrances in favor of ARMC's lender banks
pursuant to warehouse lines of credit and other financing facilities and
forward sale commitments and similar agreements to sell Warehouse Loans in
the ordinary course of ARMC's business. All such Warehouse Loans meet all
requirements for sale to the intended investors in the secondary market.
The mortgage or deed of trust securing each such Warehouse Loan or an
assignment thereof has been duly recorded or submitted for recordation in
due course in the appropriate filing office in the name of ARMC as
mortgagee. ARMC has not released any security for any Warehouse Loan except
upon receipt of reasonable consideration for such release, or accepted
prepayment of any such Warehouse Loan which has not been promptly applied
to such Warehouse Loan.
(iii) Compliance. Each Warehouse Loan, and each mortgage loan that is
being serviced by ARMC for the account of others ("Serviced Loans";
Serviced Loans, together with Warehouse Loans, being herein referred to as
"Mortgage Loans"), was underwritten or originated, and the loan documents
and loan files maintained by ARMC with respect thereto are being maintained
by ARMC, in compliance with applicable laws and regulations and, to the
extent applicable, the requirements of the investor acquiring such Mortgage
Loan and the requirements of the governmental or private insurer insuring
such mortgage loan, if any, in effect at the time such insurance was
obtained. Each mortgage loan sold by ARMC on a "servicing released" basis
and all other servicing rights sold by ARMC, since May 1, 1990, complied
with the terms of the sale agreement relating thereto.
(iv) Loan Files. The loan documents and loan files maintained by ARMC
with respect to Mortgage Loans (A) contain originals (or where necessitated
by the terms of the applicable mortgage servicing agreement, contain true
and correct copies) of the documents relating to each Mortgage Loan and (B)
are maintained by ARMC in compliance with applicable laws and regulations.
Except as set forth in the loan documents relating to a Mortgage Loan
maintained in such loan files of ARMC, the terms of the mortgage note,
bond, deed of trust or mortgage relating to such Mortgage Loan have not
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been impaired, waived, altered or modified in any material respect from the
date of their origination except by a written instrument that has been duly
recorded or submitted for recordation in due course, if recordation is
necessary to protect the interests of the owner thereof, the terms of which
have been approved, to the extent required, by the relevant investor and
insurer (if any) and title insurer (to the extent required by the relevant
policy) and are reflected in the loan documents included in ARMC's loan
files. Except as reflected in the loan documents maintained in ARMC's loan
files, no mortgagor has been released from its obligations under the
applicable Mortgage Loan.
(v) Mortgage Servicing Agreements. The Company has previously made
available to Parent true and complete copies of all mortgage servicing
agreements to which ARMC is a party (the "Mortgage Servicing Agreements").
All the Mortgage Servicing Agreements are (A) valid and binding obligations
of ARMC and, to the best knowledge of ARMC, of all the other parties
thereto, (B) are in full force and effect and are enforceable in accordance
with their respective terms, except as enforcement thereof may be limited
by bankruptcy, insolvency or other similar laws affecting the enforcement
of creditors' rights generally and by general principles of equity (whether
applied in a proceeding in equity or at law) and (C) are owned by ARMC free
and clear of any encumbrances (other than pursuant to loan and security
agreements referred to in the Company Disclosure Schedule). There is no
default or claim of default by any party under any such Mortgage Servicing
Agreement, and, except as set forth in Section 3.01(s) of the Company
Disclosure Schedule, no event has occurred which with the passage of time
or the giving of notice or both would constitute a default by ARMC or, to
the best knowledge of ARMC, any other party under any such Mortgage
Servicing Agreement or would result in any such Mortgage Servicing
Agreement being terminable by any party thereto. There is no pending or, to
the best knowledge of the Company, threatened cancellation of any Mortgage
Servicing Agreement and all Mortgage Servicing Agreements are being
performed in accordance with all applicable rules and regulations.
(vi) Tape. ARMC has previously delivered to Parent a tape (magnetic
media) on which certain information regarding the loans serviced by ARMC
pursuant to Mortgage Servicing Agreements is recorded. Such tape contains a
list of the aggregate $15.49 billion principal amount of loans serviced by
ARMC as of July 30, 1994 (including $476 million principal amount of loans
in ARMC's warehouse), adjusted to exclude $2.87 billion outstanding
principal amount of loans the servicing rights to which are in the process
of being sold or acquired by ARMC to or from third parties, and $16 million
principal amount of loans subserviced by ARMC. The information contained in
such tape with respect to the loans included therein is true and correct in
all material respects.
(vii) No Recourse. None of ARMC's servicing rights are subject to
recourse against the servicer for losses upon liquidation of a mortgage
loan, borrower defaults or repurchase obligations upon the occurrence of
non-payment or other events except insofar as (A) such recourse is based
upon breach by ARMC of a customary representation, warranty or undertaking,
including, without limitation, as specified in standard FNMA, FHLMC and
GNMA agreements, or (B) ARMC incurs expenses such as legal fees in excess
of the customary reimbursement limits, if any, set forth in the applicable
Mortgage Servicing Agreement or (C) as set forth in Section 3.01(s) of the
Company Disclosure Schedule, a borrower fails to make payments within the
first six months of the term of a loan.
(viii) Custodial Accounts. ARMC has full power and authority to maintain
escrow accounts ("Custodial Accounts") for certain serviced loans. Subject
to the provisions of Section 3.01(s) of the Company Disclosure Schedule,
such Custodial Accounts comply in all material respects with (A) all
Federal, state and other applicable laws and regulations and (B) any terms
of the mortgage loans (and Mortgage Servicing Agreements) relating thereto.
The Custodial Accounts contain the amounts shown in the records of ARMC,
which amounts represent all monies received or advanced by ARMC as required
by the applicable Mortgage Servicing Agreements, less amounts remitted by
or on behalf of ARMC pursuant to applicable Mortgage Servicing Agreements,
except for checks in process.
(ix) Advances. There are no pooling, participation, servicing or other
agreements to which ARMC is a party which obligate it to make servicing
advances for principal and interest payments with respect to defaulted or
delinquent mortgage loans, other than as provided in the Mortgage Servicing
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Agreements. The advances that have been made by ARMC are valid and
subsisting amounts owing to ARMC, subject to the terms of the applicable
Mortgage Servicing Agreement.
(x) Single Family Loans. All the Mortgage Loans are secured by single
family (i.e., one to four family) residential real property or, to the
extent that a Mortgage Loan is secured by property other than a single
family residential property, such Mortgage Loan is not a Warehouse Loan,
except as permitted by the terms of ARMC's warehouse line of credit, and
has not been sold to any person where ARMC has any recourse obligation,
except as set forth in (vii) above.
(xi) ARM Adjustments. With respect to each Mortgage Loan where the
interest rate is not fixed for the term of the loan, ARMC has, since the
date it commenced servicing such loan and, to the best of the Company's
knowledge, all prior servicers have (A) properly and accurately entered
into its system all data required to service the mortgage loan in
accordance with all regulations, (B) properly and accurately adjusted the
mortgage interest rate on each interest adjustment date, (C) properly and
accurately adjusted the monthly payment on each payment adjustment date,
(D) properly and accurately calculated the amortization of principal and
interest on each payment adjustment date, in each case in compliance with
all applicable laws, rules and regulations and the related mortgage
documents, and (E) executed and delivered any and all necessary notices
required under, and in a form that complies with, all applicable laws,
rules and regulations and the terms of the related mortgage documents
regarding the interest rate and payment adjustments.
(xii) Pools. Each Mortgage Loan included in a pool of Mortgage Loans
originated, acquired or serviced by ARMC (a "Pool") meets all eligibility
requirements (including, without limitation, all applicable requirements
for obtaining mortgage insurance certificates and loan guaranty
certificates) for inclusion in such Pool. All such Pools have, if required,
been certified or recertified in accordance with all applicable laws, rules
and regulations, except where the time for certification or recertification
has not expired. No Pools have been improperly certified. The loan file for
each Mortgage Loan included in a Pool contains all documents and
instruments necessary for the final certification or recertification of
such Pool. No mortgage loan has been bought out of a Pool without all
required prior written approvals of the applicable investors. The aggregate
unpaid principal balance outstanding of the Mortgage Loans in each Pool
equals or exceeds the amount owing to the applicable investors in such
Pool.
(xiii) Mortgage Insurance. Each Mortgage Loan which is indicated in the
loan documents relating to such loan to have FHA insurance is insured under
the National Housing Act or qualifies for insurance. Each Mortgage Loan
which is indicated in the loan documents relating to such loan to be
guaranteed by the VA is guaranteed under the provisions of Chapter 37 of
Title 38 of the United States Code to the extent required by the applicable
investor or qualifies for such guarantee. As to each FHA insurance
certificate, each VA guarantee certificate, and each Mortgage Loan that is
indicated in the loan file to be insured by private mortgage insurance,
ARMC has complied with applicable provisions of the insurance or guarantee
contract and Federal statutes and regulations, the insurance or guarantee
is in full force and effect with respect to each such Mortgage Loan, and,
to the best knowledge of the Company, there does not exist any event or
condition which, but for the passage of time or the giving of notice or
both, can result in a revocation of any such insurance or guarantee or
constitute adequate grounds for the applicable insurer to refuse to provide
insurance or guarantee payments thereunder.
(xiv) Taxes and Insurance. Each Mortgage Loan has been covered by a
policy of hazard insurance and flood insurance, to the extent required by
the mortgage servicing agreements relating thereto or any laws, rules and
regulations or investor or insurer requirements applicable to such Mortgage
Loan, all in a form usual and customary in the industry and which is in
full force and effect, and all amounts due and payable under each policy
have been, or will be, paid prior to the date such payments are due; and
all taxes, assessments, ground rents or other applicable charges or fees
due and payable as to each Mortgage Loan have been, or will be, paid prior
to the date such payments are due. Any and all claims under such insurance
policies have been submitted and processed in accordance with the
applicable investor's requirements.
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(xv) Title Insurance. To the extent required by the applicable investor,
each Mortgage Loan is covered by an ALTA lender's title insurance policy or
other generally acceptable form of policy of insurance acceptable to the
relevant investor, and each such title insurance policy is issued by a
title insurer acceptable to the applicable investor and qualified to do
business in the jurisdiction where the collateral securing such loan is
located, and insures the originator and its successors and assigns as to
the first priority lien of the mortgage in the original principal amount of
the Mortgage Loan. The applicable investor, as assignee of the originator's
rights, is an insured of such lender's title insurance policy, and such
lender's policy is in full force and effect. Neither ARMC nor, to the best
of the Company's knowledge, any prior servicer has performed any act or
omission which would impair the coverage of such lender's policy.
(xvi) Condemnation. The Company has no notice of and has no knowledge of
any proceeding pending or threatened for the partial or total condemnation
of any of the collateral securing any of the Mortgage Loans, and the
Company has no notice or knowledge that all or any part of such collateral
has been or will be condemned.
(xvii) Disclaimer. Except as expressly provided herein, no representation
or warranty of any kind or nature (express or implied) is being made by the
Company or ARMC with respect to the mortgage banking business of the
Company and ARMC, the results of the operations or future operations or
prospects of the Company or ARMC or the nature, condition or value of any
assets or liabilities of the Company or ARMC.
Section 3.02 Representations and Warranties of Parent. Parent represents and
warrants to, and agrees with, the Company as follows:
(a) Organization and Qualification, Etc. Parent is a national banking
association, duly organized, validly existing and in good standing under the
laws of the United States of America and has all requisite corporate power and
authority to own or lease and operate its properties and assets and to carry on
its business as it is now being conducted. Parent is duly qualified as a
foreign corporation to do business, and is in good standing, in each
jurisdiction in which the character of its properties owned or leased or the
nature of its activities makes such qualification necessary, except where the
failure to be so qualified would not have a material adverse effect on the
financial condition, operating results or business of Parent. Parent owns
beneficially and of record all the issued and outstanding capital stock of
Acquisition Sub, free and clear of all liens, claims, security interests or
other encumbrances. Parent has previously delivered to the Company true and
complete copies of the Articles of Association and the By-laws of Parent, as in
effect on the date hereof.
(b) Authority Relative to Agreements. Parent has all requisite corporate
power and authority to enter into this Agreement and to perform its obligations
hereunder. The execution and delivery of this Agreement by Parent and the
consummation by Parent of the transactions contemplated hereby have been duly
authorized by the Board of Directors of Parent and no other corporate
proceedings on the part of Parent are necessary to authorize this Agreement and
the transactions contemplated hereby. This Agreement has been duly executed and
delivered by Parent and constitutes the valid and binding obligation of Parent,
enforceable against Parent in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity (whether applied in a proceeding in equity or at law).
(c) Non-Contravention. The execution and delivery of this Agreement by Parent
and the consummation by Parent of the transactions contemplated hereby except
as enforcement thereof may be limited by bankruptcy, insolvency or other
similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity (whether applied in a proceeding in equity or at
law) will not (i) conflict with any provision of the Articles of Association or
By-laws of Parent or (ii) result in any violation of or default or loss of a
benefit under, or permit the acceleration of any obligation under, any
mortgage, indenture, lease, agreement or other instrument, permit, concession,
grant, franchise, license, judgment, order, decree, statute, law, ordinance,
rule or regulation applicable to Parent or its properties, other than any such
violation, default, loss or acceleration that would not materially adversely
affect the ability of Parent to consummate
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the transactions contemplated hereby or to conduct the business of the Company
and the Subsidiaries after the Effective Time.
(d) Consents. No consent, approval, order or authorization of, or
registration, declaration or filing with, any Federal, state, local or foreign
governmental or regulatory authority is required to be made or obtained by
Parent in connection with the execution and delivery of this Agreement by
Parent or the consummation by Parent of the transactions contemplated hereby,
except (A) in connection with compliance by Parent with applicable
requirements, if any, of the HSR Act, (B) pursuant to the Exchange Act and the
rules and regulations promulgated by the SEC thereunder, (C) the filing of
articles of merger or a certificate of merger with the Secretary of State of
the State of Delaware, (D) any applicable consents of the FNMA, the FHA, the
FHLMC, the GNMA, the VA or various state and local regulatory authorities, (E)
such filings and approvals as may be required under the "blue sky," takeover
and securities laws of various states, or (F) where the failure to obtain such
consent, approval, order, authorization or registration, or to make such
declaration or filing, would not prevent or delay the consummation of the Offer
or the Merger and would not otherwise prevent Parent from performing its
obligations under this Agreement or conducting the business of the Surviving
Corporation after the Effective Time.
(e) Proxy Statement; Other Information. None of the information supplied by
Parent or Acquisition Sub for inclusion in the Schedule 14D-9 or the Proxy
Statement (as defined in Section 4.02(b) hereof), and none of the information
included in the Schedule 14D-1 will, at the respective times such documents or
any amendments or supplements thereto are filed with the SEC or distributed,
mailed or given to the stockholders of the Company, contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading, except that no representation is made by Parent or
Acquisition Sub with respect to information contained in the Company SEC
Filings or information which is supplied by the Company for inclusion in the
Schedule 14D-1 or the Proxy Statement and which relates to the Company or any
affiliate or associate of the Company. The Schedule 14D-1 will comply in all
material respects, as to form and otherwise, with the requirements of the
Exchange Act and the rules and regulations promulgated by the SEC thereunder.
Each of Parent and Acquisition Sub agrees to correct promptly any such
information provided by it for use in the Offer Documents that shall have
become false or misleading and Parent and Acquisition Sub shall take all steps
necessary to cause the Offer Documents as so corrected to be filed with the SEC
and such Offer Documents as so corrected to be disseminated to holders of
Shares, in each case as and to the extent required by applicable law. The Offer
Documents shall comply as to form in all material respects with the provisions
of applicable laws.
(f) Financing. Parent has on hand or access to, and will make available to
Acquisition Sub on or prior to the Effective Time, funds sufficient to pay the
Offer Price and the Merger Consideration for all issued and outstanding Shares
and the cancellation of stock options, warrants and stock purchase rights
pursuant to Section 2.08 hereof, and to pay all other amounts owing by the
Company or any Subsidiary in connection with the transactions contemplated by
this Agreement.
(g) Mortgage Banking Licenses and Qualifications. Parent (or a subsidiary of
Parent performing the origination or servicing of mortgages, as the case may
be) (A) is qualified (w) by the FHA as a mortgagee and servicer for FHA loans,
(x) by the VA as a lender and servicer for VA loans, (y) by the FNMA and the
FHLMC as a seller/servicer of first mortgages to FNMA and FHLMC and (z) by the
GNMA as an authorized issuer and servicer of GNMA-guaranteed mortgage-backed
securities; (B) has all other certifications, authorizations, licenses, permits
and other approvals necessary to conduct its current mortgage banking business;
and (C) is in good standing under all applicable Federal, state and local laws
and regulations thereunder as a mortgage lender and servicer.
Section 3.03 Representations and Warranties of Acquisition Sub. Acquisition
Sub represents and warrants to, and agrees with, the Company as follows:
(a) Organization and Qualification. Acquisition Sub is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and
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authority to own or lease and operate its properties and assets and to carry on
its business as it is now being conducted. Acquisition Sub is duly qualified as
foreign corporation to do business, and is in good standing, in each
jurisdiction in which the character of its properties owned or leased or the
nature of its activities makes such qualification necessary, except where the
failure to be so qualified would not have a material adverse effect on the
financial condition, operating results or business of Acquisition Sub.
(b) Capitalization. The authorized capital stock of Acquisition Sub consists
of 1,000 shares of Common Stock, $1.00 par value. As of the date hereof, 1,000
shares of Common Stock are validly issued and outstanding, fully paid and
nonassessable and are owned by Parent, and no shares of Common Stock are held
in the treasury of Acquisition Sub. Acquisition Sub has no commitments to issue
or sell any shares of its capital stock or any securities or obligations
convertible into or exchangeable for, or giving any person any right to
subscribe for or acquire from Acquisition Sub, any shares of its capital stock,
and no securities or obligations evidencing any such rights are outstanding.
(c) Authority Relative to Agreement. Acquisition Sub has all requisite
corporate power and authority to enter into this Agreement and to perform its
obligations hereunder. The execution and delivery of this Agreement by
Acquisition Sub and the consummation by Acquisition Sub of the transactions
contemplated hereby have been duly authorized by the Board of Directors of
Acquisition Sub and by Parent as its sole stockholder, and no other corporate
proceedings on the part of Acquisition Sub are necessary to authorize this
Agreement and the transactions contemplated hereby. This Agreement has been
duly executed and delivered by Acquisition Sub and constitutes a valid and
binding obligation of Acquisition Sub, enforceable against Acquisition Sub in
accordance with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity (whether
applied in a proceeding in equity or at law).
(d) Non-Contravention. The execution and delivery of this Agreement by
Acquisition Sub and the consummation by Acquisition Sub of the transactions
contemplated hereby will not (A) conflict with any provision of the Certificate
of Incorporation or By-laws of Acquisition Sub or (B) result in any violation
of or default or loss of a benefit under, or permit the acceleration of any
obligation under, any mortgage, indenture, lease, agreement, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to
Acquisition Sub or its properties, other than any such violation, default, loss
or acceleration that would not materially adversely affect the ability of
Acquisition Sub to consummate the transactions contemplated hereby.
(e) Consents. No consent, approval, order or authorization of, or
registration, declaration or filing with, any Federal, state, local or foreign
governmental or regulatory authority is required to be made or obtained by
Acquisition Sub in connection with the execution and delivery of this Agreement
by Acquisition Sub or the consummation by Acquisition Sub of the transactions
contemplated hereby, except (A) the filing of articles of merger or a
certificate of merger with the Secretary of State of the State of Delaware, (B)
compliance by Acquisition Sub with the HSR Act, (C) pursuant to the Exchange
Act and the rules and regulations promulgated by the SEC thereunder, (D) any
applicable consents of the FNMA, the FHA, the FHLMC, the GNMA, the VA or
various state and local regulatory authorities, (E) such filings and approvals
as may be required under the "blue sky," takeover and securities laws of
various states, or (F) where the failure to obtain such consent, approval,
order, authorization or registration, or to make such declaration or filing,
would not prevent or delay the consummation of the Offer or the Merger or
otherwise prevent Acquisition Sub from performing its obligations under this
Agreement or conducting the business of the Surviving Corporation after the
Effective Time.
(f) Other Matters. Except as contemplated by this Agreement, Acquisition Sub
has no material liabilities or obligations.
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ARTICLE IV
ADDITIONAL COVENANTS AND AGREEMENTS
Section 4.01 Conduct of the Company's Business. The Company covenants and
agrees that, prior to the Effective Time, unless Parent shall otherwise agree
in writing or as otherwise expressly contemplated by this Agreement:
(a) the business of the Company and the Subsidiaries shall be conducted only
in, and the Company and the Subsidiaries shall not take any action except in,
the ordinary course of business and consistent with past practice;
(b) the Company shall not directly or indirectly do any of the following: (A)
issue, sell, pledge, dispose of or encumber (or permit any of the Subsidiaries
to issue, sell, pledge, dispose of or encumber) (x) any capital stock of any of
the Subsidiaries or (y) any assets of the Company or any of the Subsidiaries
other than in the ordinary course of business consistent with past practice;
(B) amend or propose to amend its Certificate of Incorporation or By-laws; (C)
declare, set aside or pay any dividend payable in cash, stock, property or
otherwise with respect to such shares; (D) redeem, purchase, acquire or offer
to acquire (or permit any Subsidiary to redeem, purchase, acquire or offer to
acquire) any shares of its capital stock; or (E) enter into any contract,
agreement, commitment or arrangement with respect to any of the matters set
forth in this paragraph (b);
(c) neither the Company nor any of the Subsidiaries shall: (A) issue, sell,
pledge or dispose of, or agree to issue, sell, pledge or dispose of, any
additional shares of, or securities convertible into or exchangeable for, or
any options, warrants or rights of any kind to acquire any shares of, its
capital stock of any class or other property or assets whether pursuant to any
rights agreement, Stock Plan or otherwise; provided that the Company may issue
shares of Company Common Stock pursuant to currently outstanding options,
warrants or stock purchase rights referred to in Section 3.01(c) hereof; (B)
acquire (by merger, consolidation or acquisition of stock or assets) any
corporation, partnership or other business organization or division thereof
(except an existing wholly-owned subsidiary); (C) incur any indebtedness for
borrowed money or issue any debt securities, except in the ordinary course of
business and consistent with past practice and provided that any such
indebtedness or debt securities are prepayable without penalty or premium; (D)
enter into or modify any material contract, lease, agreement or commitment,
except in the ordinary course of business and consistent with past practice;
(E) terminate, modify, assign, waive, release or relinquish any material
contract rights or amend any material rights or claims except in the ordinary
course of business and consistent with past practice; or (F) dissolve or
otherwise alter its corporate existence;
(d) neither the Company nor any Subsidiary shall materially alter its methods
or policies of underwriting, pricing, originating, warehousing, selling and
servicing, or buying or selling rights to service, mortgage loans, or hedging
its mortgage loan positions or commitments, except that such limitation shall
not apply to changes required in order to comply with any rules, regulations or
requirements of any governmental or quasi-governmental authority or agency,
including without limitation the FNMA, FHLMC, GNMA, FHA or VA, or changes
required by ARMC's traditional conduits for the sale of non-conventional loans;
(e) other than (i) pursuant to contractual arrangements in effect on the date
hereof, (ii) the purchase of mortgage loans and/or servicing rights in the
ordinary course of business, (iii) short-term investment for cash management
purposes or (iv) pursuant to hedging transactions (which term includes both
buying futures and forward commitments from financial institutions) consistent
with past practice, neither the Company nor any Subsidiary will acquire any
assets in any single transaction or series of related transactions for a
consideration in excess of $250,000 or enter into any Contract with respect
thereto, provided, however, that such Contract or acquisition is reasonably
necessary or appropriate for the operation of the business in the ordinary
course and consistent with past practice;
(f) other than pursuant to contractual arrangements in effect on the date
hereof which have been disclosed in writing to Parent prior to the date hereof,
neither the Company nor any of its Subsidiaries will (i) purchase, sell,
assign, encumber or otherwise transfer any rights to service mortgage loans
(except in
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connection with the purchase or sale of Mortgage Loans on a "servicing
released" basis in the ordinary course of business and consistent with past
practice), (ii) sell, transfer, lease or encumber any residential mortgage
loans or other assets (except in connection with the sale of nonconforming
Mortgage Loans or mortgage-related securities in the ordinary course of
business and consistent with past practice), (iii) terminate, modify or amend
any existing servicing contracts or (iv) enter into any servicing contracts
(except in connection with the sale of Mortgage Loans in the ordinary course of
business and consistent with past practice);
(g) the Company will use its reasonable efforts to preserve intact the
business organization of the Company and the Subsidiaries, to keep available
the services of their present key officers and employees, to preserve their
goodwill and to maintain its relationship with those having business
relationships with the Company and the Subsidiaries, provided, however, that to
satisfy the foregoing obligation, the Company shall not be required to make any
payments or to enter into or amend any contractual arrangements or
understandings except in the ordinary course of business and consistent with
past practice;
(h) except in the ordinary course of business and consistent with past
practice, neither the Company nor any of the Subsidiaries shall change any
method of accounting, make any Tax election or settle or compromise any Tax
liability material to the Company;
(i) except as set forth in Section 4.01 of the Company Disclosure Schedule,
neither the Company nor any Subsidiary shall open any new branch offices or
close any branch offices;
(j) neither the Company nor any Subsidiary shall grant any increase in the
salary or other compensation of its employees except, in the case of employees
who are not executive officers of the Company, in the ordinary course of
business and consistent with past practice, or grant any bonus to any employee
or enter into any employment agreement or make any loan to or enter into any
material transaction of any other nature with any employee of the Company or
any Subsidiary;
(k) neither the Company nor any Subsidiary shall take any action to institute
any new severance or termination pay practices with respect to any directors,
officers or employees of the Company or the Subsidiaries or to increase the
benefits payable under its severance or termination pay practices;
(l) neither the Company nor any Subsidiary shall (except for salary increases
for employees who are not executive officers of the Company and in the ordinary
course of business and consistent with past practice) adopt or amend, in any
respect, except as contemplated hereby or as may be required by applicable law
or regulation, any collective bargaining, bonus, profit sharing, compensation,
stock option, restricted stock, pension, retirement, deferred compensation,
employment or other employee benefit plan, agreement, trust, fund, plan or
arrangement for the benefit or welfare of any directors, officers or employees;
and
(m) neither the Company nor any Subsidiary shall hire any personnel to fill
positions with the Company or any Subsidiary at the assistant vice-president
level or higher.
Section 4.02 Stockholder Approval. (a) As soon as reasonably practicable
following the expiration of the Offer, the Company shall, if required by the
DGCL, take all action necessary in accordance with the laws of the State of
Delaware, its Certificate of Incorporation and By-laws and the Exchange Act and
any applicable rules of the National Association of Securities Dealers, Inc.,
to call, give notice of and convene a meeting of its stockholders (the
"Meeting") to consider and vote upon the approval and adoption of this
Agreement and the Merger and for such other purposes as may be necessary or
desirable. The Board has determined that the Merger is advisable and in the
best interests of the stockholders and, subject to its fiduciary obligations as
advised by counsel, shall recommend that the stockholders vote to approve and
adopt this Agreement and the Merger and any other matters to be submitted to
the stockholders in connection therewith. The Company shall, subject as
aforesaid, use its best efforts to solicit and secure from stockholders of the
Company such approval and adoption. Parent and Acquisition Sub agree that they
will vote all Shares owned by them in favor of approval and adoption of this
Agreement and the Merger.
(b) As promptly as reasonably practicable following expiration of the Offer,
the Company shall prepare and file with the SEC under the Exchange Act and the
rules and regulations promulgated by the SEC thereunder a preliminary proxy or
information statement pertaining to the Merger (the "Proxy Statement").
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Parent and Acquisition Sub shall cooperate fully with the Company in the
preparation and filing of the Proxy Statement and any amendments and
supplements thereto. The Proxy Statement shall not be filed, and no amendment
or supplement thereto shall be made by the Company, without consultation with
Parent and its counsel. The Company will use its best efforts to have any
review thereof conducted by the SEC promptly. The Company shall cause to be
mailed a definitive Proxy Statement to its stockholders entitled to vote at the
Meeting promptly following completion of any review by, or in the absence of
such review, the termination of any applicable waiting period of, the SEC.
Section 4.03 Expenses. Whether or not the Merger is consummated, all costs
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expense, except
that expenses incurred in connection with the printing and mailing by the
Company of the Schedule 14D-9 and the Proxy Statement shall be shared by Parent
and the Company; provided, however, that if this Agreement shall have been
terminated as a result of the wilful and material misrepresentations by a party
or the wilful and material breach by a party of any of its covenants or
agreements set forth herein, such party shall pay the costs and expenses
incurred by the other parties in connection with this Agreement.
Section 4.04 Other Negotiations and Third Party Acquisitions. (a) After the
date of this Agreement and prior to any termination hereof, the Company will
not directly or indirectly, through any officer, director, agent or otherwise,
initiate contact with any potential bidder for the purpose of encouraging that
potential bidder to submit proposals or offers relating to any liquidation,
dissolution, recapitalization, merger, consolidation or acquisition or purchase
of all or a material portion of the assets of, or any equity interest in, the
Company or any of its subsidiaries or other similar transaction or business
combination involving the Company or any of the Subsidiaries. With respect to
potential bidders who initiate contact with the Company after the date hereof
and prior to any such termination (including without limitation parties with
whom the Company shall have held discussions prior to the date hereof), the
Company may furnish information and access to the same extent permitted by
Section 4.06 hereof to that potential bidder or bidders pursuant to
confidentiality agreements, and, if the Board (or a special committee thereof)
by a majority vote determines in its good faith judgment that such action is
necessary to satisfy its fiduciary responsibilities, may participate in
discussions and negotiate with that potential bidder concerning any acquisition
of the Company. The Company shall give to Parent prompt notice of any such
contact by any potential bidder (including the substance of any proposal made
by such potential bidder) and shall keep Parent informed of any and all
subsequent contacts or discussions with such potential bidder. Except as set
forth above, prior to any termination of this Agreement, neither the Company or
any of the Subsidiaries nor any of its or their respective officers, directors,
employees, representatives or agents, shall directly or indirectly encourage,
solicit, participate in or initiate discussions or negotiations with, or
provide any information to, any corporation, partnership, person or other
entity or group (other than Parent or Acquisition Sub) concerning any tender
offer, merger, sale or assets, sale of shares of capital stock or similar
transaction involving the Company or any subsidiary or division of the Company,
provided, however, that nothing herein shall prevent the Board from taking, and
disclosing to the Company's stockholders, any position contemplated by Rules
14d-9 and 14e-2 promulgated under the Exchange Act with regard to any tender
offer in accordance with the Board's judgment of what action shall be in the
stockholders' best interests.
(b) If a Third Party Acquisition (as hereinafter defined) shall occur (i)
prior to the termination of this Agreement or (ii) within nine (9) months after
a termination of this Agreement by Parent or Acquisition Sub pursuant to the
provisions of Section 6.01, with the exception of Sections 6.01(a), 6.01(c)
and, to the extent that termination is pursuant to clause (g) of Exhibit A,
6.01(e), provided that neither Parent nor Acquisition Sub is in breach in a
material respect of its material obligations under this Agreement, the Company
shall pay to Parent, within five business days following consummation of such
Third Party Acquisition, a fee, in cash, equal to $10,000,000 plus all
reasonable and documented out-of-pocket fees, costs and expenses of Parent and
Acquisition Sub.
"Third Party Acquisition" means the occurrence of any of the following
events: (i) the Company is acquired by merger or otherwise by any "person" (as
such term is defined in Section 13(d)(3) of the Exchange
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Act) other than Acquisition Sub or any affiliate thereof (a "Third Party");
(ii) a Third Party acquires more than 50% of the total assets of the Company
and its subsidiaries taken as a whole; (iii) a Third Party acquires more than
50% of the outstanding Shares; (iv) the Company adopts and implements a plan of
liquidation or extraordinary dividend relating to more than 50% of its total
assets; or (v) the Company or any of the Subsidiaries repurchases more than 50%
of the outstanding Shares, provided, that no such transaction shall fall within
this definition unless the Company or the holders of Shares receive
consideration per Share having an indicated value (including the value of any
stub equity) in excess of the Offer Price or the Company acting through its
disinterested directors determines such transaction or proposed transaction is
more favorable to the stockholders of the Company than the Offer and the
Merger. In any case in which the consideration is other than all cash, the good
faith judgment of the Company's Board as to the value of that consideration
shall be controlling for purposes of this paragraph.
Section 4.05 Notification of Certain Matters. The Company shall give prompt
notice to Parent and Acquisition Sub, and Parent and Acquisition Sub shall give
prompt notice to the Company, of (a) the occurrence, or failure to occur, of
any event that such party believes would be likely to cause any of its
representations or warranties contained in this Agreement to be untrue or
inaccurate in any material respect at any time from the date hereof to the
Effective Time and (b) any material failure of the Company, Parent or
Acquisition Sub, as the case may be, or any officer, director, employee or
agent thereof, to comply with or satisfy any covenant, condition or agreement
to be complied with or satisfied by it hereunder; provided, however, that
failure to give such notice shall not constitute a waiver of any defense that
may be validly asserted.
Section 4.06 Access to Information. (a) The Company shall, and shall cause
the Subsidiaries and its and their respective officers, directors, employees,
representatives and agents, including attorneys and accountants, to, afford,
from the date hereof to the Effective Time, the officers, employees,
representatives, financing sources and agents of Parent and Acquisition Sub
complete access at all reasonable times to its officers, employees, agents,
properties, books, records and work papers, and shall furnish Parent and
Acquisition Sub all financial, operating and other information and data as
Parent or Acquisition Sub, through its officers, employees or agents, may
reasonably request. In furtherance of the foregoing, the Company shall afford
to the representatives of Parent designated in writing to the Company
(collectively the "Designees") ongoing access to its corporate headquarters
buildings in La Jolla, California so as to enable such Designees to monitor
such activities of the Company and the Subsidiaries as the Designees deem
appropriate, including, among other matters, (i) Company compliance with its
representations, warranties, covenants and agreements contained in this
Agreement, (ii) secondary marketing trading, including pricing activities,
(iii) accounting activities, including cash management, check payments and wire
transfers and (iv) servicing activities, including investor accounting and
remittances, provided, however, that the parties acknowledge that such
Designees are authorized to act only in a monitoring capacity and, as deemed
appropriate by the Designees, to proffer advice to representatives of the
Company and the Subsidiaries and that the Company shall remain exclusively
responsible for the Company's business and shall not be under any obligation to
accept any advice so proffered and shall not hold the Designees, Parent or its
Affiliates responsible for any acts or omissions of the Company arising out of
such monitoring and advisory activities of the Designees, provided, further,
however, that such activities shall be conducted during normal business hours
and in such a manner as not to interfere with the conduct of the business of
the Company and the Subsidiaries.
(b) Each of Parent and Acquisition Sub shall promptly, upon written request
of the Company, provide to the Company such affidavits or certificates of
officers of Parent or Acquisition Sub as the Company may reasonably request
from time to time in order to verify to the Company the accuracy and
completeness of the information supplied by Parent and Acquisition Sub for
inclusion in any pre-merger notification report filed by the Company under the
HSR Act (and any additional information or documentary material supplied by the
Company in response to any request pursuant to Section 7A(e) of the HSR Act and
the regulations thereunder) or in the 14D-9 or the Proxy Statement and to
verify the performance of and compliance with their representations,
warranties, covenants and conditions herein contained.
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(c) No investigation pursuant to this Section 4.06 shall affect, add to or
subtract from any representations or warranties of the parties hereto or the
conditions to the obligations of the parties hereto to effect the Merger. If
during such investigation Parent or Acquisition Sub or any of their respective
representatives becomes aware of facts or circumstances that Parent believes
may constitute a material breach of any representation or warranty made by the
Company herein or would be reasonably likely to cause a failure of a condition
to the consummation of the Offer or the Merger, Parent shall give the Company
prompt notice of such facts or circumstances.
(d) Whether or not this Agreement is terminated, Parent and Acquisition Sub
will hold and will cause their respective officers, directors, employees,
representatives and agents to hold in strict confidence, unless compelled to
disclose by judicial or administrative process, or, in the opinion of their
counsel, by other requirements of law, all documents and information concerning
the Company and the Subsidiaries furnished to Parent and/or Acquisition Sub in
connection with the transactions contemplated by this Agreement (except to the
extent that such information can be shown to have been (A) previously known by
Parent or Acquisition Sub, (B) in the public domain through no fault of
Parent's or Acquisition Sub's or (C) later lawfully acquired by Parent or
Acquisition Sub from other sources), and will not release or disclose such
information to any other person, except their auditors, attorneys, financial
advisors and other consultants and advisors in connection with this Agreement
(it being understood that such persons shall be informed by Parent or
Acquisition Sub of the confidential nature of such information and shall be
directed in writing by Parent or Acquisition Sub to treat such information
confidentially). If this Agreement is terminated, Parent and Acquisition Sub
will, and will cause their officers, directors, employees, representatives and
agents to, destroy or deliver to the Company all non-public documents, work
papers and other materials, and all copies thereof, obtained by Parent or
Acquisition Sub or on their behalf from the Company as a result of this
Agreement or in connection herewith, whether so obtained before or after the
execution and delivery hereof. Notwithstanding the above obligation to destroy
non-public documents, work papers and other materials, outside legal counsel
for Parent shall be permitted to maintain one complete copy of such materials
solely for the purpose of defending against a claimed breach of this Agreement,
provided that such copy is sealed and such counsel agrees in writing to release
the same to Parent only if such a claim is asserted in a court or other forum
of competent jurisdiction.
(e) Whether or not this Agreement is terminated, the Company and each
Subsidiary will hold and will cause its officers, directors, employees,
representatives and agents to hold in strict confidence, unless compelled to
disclose by judicial or administrative process, or, in the opinion of their
counsel, by other requirements of law, all documents and information concerning
Parent and Acquisition Sub furnished to the Company or any Subsidiary in
connection with the transactions contemplated by this Agreement (except to the
extent that such information can be shown to have been (A) previously known by
the Company or any Subsidiary, (B) in the public domain through no fault of the
Company's or any Subsidiary's or (C) later lawfully acquired by the Company or
a Subsidiary from other sources), and will not release or disclose such
information to any other person, except their auditors, attorneys, financial
advisors and other consultants and advisors and lending institutions (including
banks) in connection with this Agreement (it being understood that such persons
shall be informed by the Company or the appropriate Subsidiary of the
confidential nature of such information and shall be directed in writing by the
Company or such Subsidiary to treat such information confidentially). If this
Agreement is terminated, the Company and each Subsidiary will, and will cause
their officers, directors, employees, representatives and agents to, destroy or
deliver to Parent all non-public documents, work papers and other materials,
and all copies thereof, obtained by the Company or a Subsidiary or on their
behalf from Parent or Acquisition Sub as a result of this Agreement or in
connection herewith, whether so obtained before or after the execution and
delivery hereof. Notwithstanding the above obligation to destroy non-public
documents, work papers and other materials, outside legal counsel for the
Company shall be permitted to maintain one complete copy of such materials
solely for the purpose of defending against a claimed breach of this Agreement,
provided that such copy is sealed and such counsel agrees in writing to release
the same to the Company only if such a claim is asserted in a court or other
forum of competent jurisdiction.
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Section 4.07 Further Assurances. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use all reasonable efforts to
take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable, to consummate and make effective as
promptly as practicable the transactions contemplated by this Agreement,
including, without limitation, using all reasonable efforts to obtain all
necessary waivers, consents and approvals and to effect all necessary
registrations and filings, including, but not limited to, filings required
under the Exchange Act, filings that may be required under the HSR Act and
submissions of information requested by other governmental authorities;
provided that the foregoing shall not require Parent to agree to make, or to
permit the Company or any of the Subsidiaries to make, any divestiture of a
significant asset in order to obtain any waiver, consent or approval.
Section 4.08 Employee Benefits. (a) Parent agrees that, during the period
commencing at the Effective Time and ending on the second anniversary thereof,
the employees of the Company will continue to be provided with employee benefit
plans (other than stock option or other plans involving the potential issuance
of securities of the Company or of any of the Parent) which in the aggregate
are substantially comparable to those currently provided by the Company to such
employees.
(b) The Company shall, promptly following the date hereof and in any event
prior to the scheduled expiration date of the Offer, prepare and disseminate to
all affected employees of the Company and the Subsidiaries, summary plan
descriptions (complying in all material respects with the applicable provisions
of ERISA) of the severance plans contained in Section 3.01(m) of the Company
Disclosure Schedule.
Section 4.09 Indemnification; Directors' and Officers' Insurance. (a) Parent
agrees that all rights permitted under Delaware law (including case law) to
indemnification, including provisions relating to advances of expenses incurred
in defense of any action or suit, existing in favor of the present or former
directors, officers, employees, fiduciaries and agents of the Company
(individually an "Indemnified Party" and, collectively, the "Indemnified
Parties") as provided in the Company's Certificate of Incorporation or By-laws
or pursuant to other agreements, as permitted by Delaware law (including case
law) and in effect as of the date hereof with respect to matters (including the
transactions contemplated by this Agreement) whether or not existing or
occurring or asserted or claimed prior to the Effective Time, shall survive the
Merger and shall continue in full force and effect for a period of seven years
from the Effective Time; and the Surviving Corporation will pay expenses in
advance of the final disposition of any such claim, action, suit, proceeding or
investigation to each Indemnified Party upon receipt of any undertaking
contemplated by Section 145(e) of the DGCL in each case to the full extent that
(x) a corporation is permitted under Delaware law to indemnify its own
directors, officers or employees, as the case may be, and (y) such
indemnification otherwise is permitted by applicable law. In the event any such
claim, action, suit, proceeding or investigation is asserted or commenced
against any Indemnified Party (whether before or after the Effective Time), the
Surviving Corporation will be entitled to participate in and, to the extent it
may wish, to assume the defense thereof, except that if the Surviving
Corporation and/or Parent also is a subject of such claim, action, suit,
proceeding or investigation and there is, under applicable standards of
professional conduct, a conflict on any significant issue between the position
of the Surviving Corporation and/or Parent and the position of such Indemnified
Party, or if the Surviving Corporation shall fail to assume responsibility for
such defense, such Indemnified Party may, subject to Section 4.09(b), retain
counsel who will represent such Indemnified Party, and the Surviving
Corporation shall pay all reasonable fees and expenses of such counsel promptly
as statements therefor are received; provided, however, that such Indemnified
Party shall defend (or, if the defense is assumed by the Surviving Corporation,
use its reasonable efforts to assist in the defense of) any such matter;
provided, further, that the Surviving Corporation shall not be liable for any
settlement effected without its written consent, which consent shall not be
unreasonably withheld; and provided, further, that the Surviving Corporation
shall not have any further obligation hereunder to any Indemnified Party with
respect to a claim for indemnification hereunder when and if a court of
competent jurisdiction shall ultimately determine, after exhaustion of all
avenues of appeal, that such Indemnified Party is not entitled to
indemnification hereunder with respect to such claim. The participants intend,
to the extent not prohibited by applicable law, that the indemnification
provided for in this Section 4.09 shall apply without limitation to
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negligent acts or omissions by an Indemnified Party. This covenant is intended
to benefit each of the Indemnified Parties. The indemnification provided for
herein shall not be deemed exclusive of any other rights to which an
Indemnified Party is entitled whether pursuant to law or otherwise.
(b) Any Indemnified Party wishing to claim indemnification under Section
4.09(a), upon learning of any such claim, action, suit, proceeding or
investigation, shall promptly notify the Surviving Corporation and shall
deliver to the Surviving Corporation an undertaking to repay any amounts
advanced pursuant thereto when and if a court of competent jurisdiction shall
ultimately determine, after exhaustion of all avenues of appeal, that such
Indemnified party is not entitled to indemnification hereunder with respect to
such claim. In no event may the Indemnified Parties retain more than one law
firm to represent them with respect to any such matter unless there is, under
applicable standards of professional conduct, a conflict on any significant
issue between the position of any two or more Indemnified Parties in which case
the Indemnified Parties may retain, at the expense of the Surviving
Corporation, such number of additional counsel as are necessary to eliminate
all conflicts of the type referred to above.
(c) The Surviving Corporation shall cause to be maintained, at no expense to
the beneficiaries, in effect for not less than seven years from the Effective
Time, directors' and officers' liability insurance with respect to matters
occurring at or prior to the Effective Time providing at least the same
insurance coverage with respect to the Company's officers and directors as the
current policies maintained by the Company and containing terms and conditions
which are substantially no less advantageous, with respect to matters occurring
prior to the Effective Time (to the extent such insurance is at the time
available with respect to such matters unless the annual premium therefor shall
exceed 150% of the annual premium currently being paid by the Company for such
coverage, in which event the Surviving Corporation shall be obligated to
provide the maximum amount of such insurance coverage as at the time shall be
available for an annual premium equal to 150% of such current annual premium.
In the event any claim is made against present or former directors, officers or
employees of the Company that is covered or potentially covered by insurance,
the Surviving Corporation and the Parent shall do nothing that would forfeit,
jeopardize, restrict or limit the insurance coverage available for that claim
until the final disposition of that claim.
(d) Incident to any information furnished by Parent on the one hand, or by
the Company on the other hand, in connection with the Proxy Statement, and
subject to applicable law, the furnishing party will indemnify and hold
harmless the other party, its directors, officers, employees, fiduciaries and
agents, against all losses, claims, damages, costs, expenses, liabilities or
judgments or amounts that are paid in settlement of or in connection with any
claim, action, suit, proceeding or investigation arising under the Securities
Act, the Exchange Act or other Federal or state statutory law or regulation
based in whole or in part on or arising in whole or in part out of (A) any
untrue statement or alleged untrue statement of a material fact contained in
such documents (including any amendment or supplement to such document), (B)
any omission or alleged omission to state in such document a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or (C) any violation by Parent or Acquisition Sub, on the one hand,
or the Company on the other hand, of the Securities Act and the Exchange Act or
any rule or regulation thereunder in connection with such document. The
procedure for indemnification pursuant to this Section 4.09(d) shall conform to
the extent possible with that provided in Section 4.09(b).
(e) Should any claim be made against any present or former director, officer,
employee or agent of the Company, arising from his or her services as such, on
or prior to the tenth anniversary of the Effective Time, the provisions of this
Section 4.09 respecting the Certificate of Incorporation and By-laws of the
Company shall continue in effect until the final disposition.
(f) This Section 4.09 is intended to be for the benefit of and shall be
enforceable by each of the Indemnified Parties and his or her heirs and legal
representatives.
(g) To the extent the Surviving Corporation fails to perform any of its
obligations pursuant to this Section 4.09, Parent shall assume the obligations
and rights of the Surviving Corporation under this Section 4.09.
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ARTICLE V
CONDITIONS TO THE MERGER
Section 5.01 Conditions to the Merger Relating to Parent and Acquisition
Sub. The obligation of Parent and Acquisition Sub to effect the Merger is, at
their option, subject to the satisfaction, on or before the Effective Time, of
each of the following conditions:
(a) Stockholder Approval. If required by the DGCL, this Agreement and the
Merger shall have been approved and adopted by the requisite vote of the
holders of the outstanding Shares in accordance with the DGCL and By-laws of
the Company.
(b) Purchase of Company Common Stock. Parent or Acquisition Sub shall have
purchased the Shares tendered pursuant to the Offer, unless the Offer shall
have been terminated or shall have expired without the purchase of Shares
thereunder by reason of the failure of Parent or Acquisition Sub to perform in
any material respect its covenants and agreements contained in this Agreement.
(c) Injunctions, Etc. There shall not be any judgment, decree, injunction,
ruling or order of any court, governmental department, commission, agency or
instrumentality outstanding against Parent, Acquisition Sub or the Company that
prohibits, restricts or delays consummation of the Merger or limits in any
material respect the right of Parent to control the Company or any material
aspect of the business of the Company and the Subsidiaries after the Effective
Time.
(d) HSR Act. Any waiting period applicable to the Merger under the HSR Act
shall have terminated or expired.
Section 5.02 Conditions to the Merger Relating to the Company. The obligation
of the Company to effect the Merger is, at its option, subject to the
satisfaction, on or before the Effective Time, of each of the following
conditions:
(a) Stockholder Approval. If required by the DGCL, this Agreement and the
Merger shall have been approved and adopted by the requisite vote of the
holders of the outstanding Shares in accordance with the DGCL and By-laws of
the Company.
(b) Injunctions, Etc. There shall not be any judgment, decree, injunction,
ruling or order of any court, governmental department, commission, agency or
instrumentality outstanding against Parent, Acquisition Sub or the Company that
prohibits, restricts or delays consummation of the Merger.
(c) Purchase of Company Common Stock. Parent or Acquisition Sub shall have
purchased the Shares tendered pursuant to the Offer.
(d) HSR Act. Any waiting period applicable to the Merger under the HSR Act
shall have terminated or expired.
ARTICLE VI
TERMINATION AND ABANDONMENT
Section 6.01 Termination and Abandonment. This Agreement may be terminated
and the Merger may be abandoned at any time prior to the Effective Time,
whether before or after approval by the stockholders of the Company:
(a) by mutual action of the Board of Directors of Parent, Acquisition Sub and
the Company; or
(b) by Parent and Acquisition Sub, if the conditions set forth in Section
5.01 shall not have been complied with or performed in any material respect and
such noncompliance or nonperformance shall not have been cured or eliminated
(or by its nature cannot be cured or eliminated) by the Company on or before
December 31, 1994; or
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(c) by the Company, if the conditions set forth in Section 5.02 shall not
have been complied with or performed in any material respect and such
noncompliance or nonperformance shall not have been cured or eliminated (or by
its nature cannot be cured or eliminated) by Parent and Acquisition Sub on or
before December 31, 1994; or
(d) by Parent and Acquisition Sub if the conditions specified in the first
sentence of Section 1.01(a) to Parent's obligation to cause Acquisition Sub to
commence the Offer shall not have been satisfied or waived within five business
days of the date of this Agreement, and Parent shall elect, by written notice
to the Company, not to cause Acquisition Sub to commence the Offer; or
(e) by the Company, Parent or Acquisition Sub if the Offer shall have expired
or been terminated without any Shares being purchased thereunder as a result of
the occurrence of any event that would result in the failure to satisfy any of
the conditions set forth in Exhibit A; or
(f) by Parent or the Company, in the event the Merger has not been effected
on or prior to the close of business on December 31, 1994 (unless such event
has been caused by the breach of this Agreement by the party seeking such
termination); or
(g) by the Company, if prior to the purchase of Shares pursuant to the Offer,
(A) the Company shall have received a Higher Proposal (as hereinafter defined)
and, (B) Parent does not make, within five business days of receipt of written
notice of the Company's desire to accept such Higher Proposal, an offer that
the Board believes, in good faith after consultation with its financial
advisors, is at least as favorable as the Higher Proposal, from a financial
point of view, to the stockholders of the Company. As used herein, the term
"Higher Proposal" means any proposal or offer (including, without limitation,
any proposal or offer to holders of Shares) with respect to a merger,
consolidation or similar transaction involving, or any purchase of all or any
significant portion of the assets or any equity securities of, the Company that
the Board determines in good faith after consultation with its financial
advisors would be more favorable than the Offer, from a financial point of
view, to the holders of Shares.
Section 6.02 Effect of Termination. Except as provided in Sections 4.03 and
4.04 hereof with respect to expenses and fees, and except as provided in
Section 4.06(d) and (e) hereof with respect to information obtained in
connection with the transactions contemplated hereby, in the event of the
termination of this Agreement and the abandonment of the Merger, this Agreement
shall thereafter become null and void and have no effect, and no party hereto
shall have any liability to any other party hereto or its stockholders or
directors or officers in respect thereof, and each party shall be responsible
for its own expenses, except that nothing herein shall relieve any party for
liability for any willful breach hereof.
Section 6.03 Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto, provided,
however, that, after approval of the Merger by the stockholders of the Company,
no amendment may be made that decreases the consideration to which the holders
of Shares are entitled pursuant to this Agreement or otherwise materially
adversely affects the stockholders of the Company without the further approval
of the holders of Shares. During the period from the consummation of the Offer
to the Effective Time, any amendment to this Agreement on behalf of the
Company, any termination of this Agreement by the Company, any extension by the
Company of the time for performance of any of the obligations or other acts of
Parent or Acquisition Sub, or any waiver of any of the Company's rights
hereunder, may be authorized only by a majority vote of the disinterested
directors.
Section 6.04 Waiver. At any time prior to the Effective Time, whether before
or after any meeting of the Company's stockholders to consider and vote upon
this Agreement and the Merger, any party hereto may (a) in the case of Parent
or Acquisition Sub, extend the time for the performance of any of the
obligations or other acts of the Company or waive compliance with any of the
agreements of the Company or with any conditions to the respective obligations
of Parent or Acquisition Sub, or (b) in the case of the Company, extend the
time for the performance of any of the obligations or other acts of Parent
and/or Acquisition Sub, or waive compliance with any conditions to its own
obligations. Any agreement on the part of a party hereto to any such extension
or waiver shall be valid if set forth in an instrument in writing signed on
behalf of such party by a duly authorized officer.
26
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ARTICLE VII
MISCELLANEOUS
Section 7.01 Brokers. (a) The Company represents and warrants that no broker,
finder or investment banker is entitled to any brokerage, finder's or other fee
or commission in connection with the Merger or any other transaction
contemplated hereby based upon arrangements made by or on behalf of the Company
other than Salomon Brothers Inc, which is entitled to receive a fee for certain
investment banking services provided to the Company. The Company's fee
arrangements with Salomon Brothers Inc, in the form previously delivered to
Parent, shall not be modified or amended prior to the Effective Time without
the consent of Parent.
(b) Parent and Acquisition Sub represent and warrant that no broker, finder
or investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the Merger based upon arrangements made by or on
behalf of Parent or Acquisition Sub other than Smith Barney Inc., which is
entitled to receive a fee for certain investment banking services provided to
Parent and Acquisition Sub.
Section 7.02 Public Disclosure. None of the parties hereto shall issue any
press release or otherwise make any public statement with respect to the
transactions contemplated hereby without consulting the Company, in the case of
Parent and/or Acquisition Sub, or without consulting Parent or Acquisition Sub,
in the case of the Company.
Section 7.03 Closing. Evidence of the fulfillment or waiver of the conditions
set forth in Article V shall be provided by the parties hereto to each other at
the offices of Reboul, MacMurray, Hewitt, Maynard & Kristol, 45 Rockefeller
Plaza, New York, New York at 11:00 a.m., local time, on the later of (a) the
date of the Meeting and (b) the business day on which the last of the
conditions set forth in Article V is fulfilled or waived or at such other time
and place as the parties hereto may agree.
Section 7.04 Notices. Any notices or other communications required or
permitted hereunder shall be deemed given when received:
in the case of the Company, at 11355 North Torrey Pines Road, La Jolla,
California 92037, attention: President, with a copy to Reboul, MacMurray,
Hewitt, Maynard & Kristol, 45 Rockefeller Plaza, New York, New York 10111,
attention: William J. Hewitt, and
in the case of Parent, at 1 Chase Manhattan Plaza, New York, New York
10005, attention: Corporate Secretary, and in the case of Acquisition Sub,
c/o Chase Manhattan Mortgage Holdings, Inc., 4915 Independence Parkway,
Tampa, Florida 33634, attention: General Counsel, in either case, with a
copy to Milbank, Tweed, Hadley & McCloy, 1 Chase Manhattan Plaza, New York,
New York 10005, attention: Albert F. Lilley,
or such other address as shall be furnished in writing by any party to the
others prior to the giving of the applicable notice or communication.
Section 7.05 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 7.06 Headings. The headings herein are for convenience of reference
only, do not constitute a part of this Agreement, and shall not be deemed to
limit or affect any of the provisions hereof.
Section 7.07 Survival of Representations and Warranties. The representations
and warranties included or provided for herein or in any schedule and
certificate or other document delivered pursuant to this Agreement shall not
survive the consummation of the Offer as provided in Article I hereof.
27
<PAGE>
Section 7.08 Miscellaneous. This Agreement (a) constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, among the parties, with respect to the subject matter hereof; (b) is
not intended to confer upon any other person any rights or remedies hereunder;
(c) shall not be assigned, by operation of law or otherwise; and (d) shall be
governed in all respects, including validity, interpretation and effect, by the
laws of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
AMERICAN RESIDENTIAL HOLDING
CORPORATION
By
-----------------------------------
THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION)
By
-----------------------------------
CHAMRES, INC.
By
-----------------------------------
28
<PAGE>
EXHIBIT A
TENDER OFFER CONDITIONS
The capitalized terms used in this Exhibit that are not otherwise defined
herein shall have the meanings set forth in the Agreement and Plan of Merger
(the "Agreement") to which this Exhibit is attached.
Notwithstanding any other provisions of the Offer, Acquisition Sub shall not
be required to accept for payment, purchase or pay for any Shares tendered
pursuant to the Offer, may postpone the purchase of or payment for Shares
tendered and to be purchased by it, and may in its discretion amend or
terminate the Offer if the number of Shares validly tendered and not withdrawn
prior to the expiration of the Offer shall be less than 80% of the outstanding
Shares on the date Shares are accepted for payment under the Offer (the
"Minimum Condition") or if on or after the date of the Agreement and at or
before the time of payment (the "Payment Time") for any such Shares (whether or
not any Shares have theretofore been accepted for payment pursuant to the
Offer), any of the following shall occur (provided that in the case of (c) and
(i) below, such condition shall apply only at the Payment Time):
(a) there shall have occurred (i) any general suspension of, or
limitation on prices for, or trading in, securities on the New York Stock
Exchange, the American Stock Exchange or the National Association of
Securities Dealers Automated Quotations System, (ii) a declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States, (iii) the commencement of a war, armed hostilities or other
international or national calamity directly or indirectly involving the
United States and having a material adverse effect on the Company and the
Subsidiaries or materially adversely affecting (or materially delaying) the
consummation of the Offer, (iv) any general limitation by any governmental
authority on, or any other event that, in the reasonable judgment of
Parent, is substantially likely to materially and adversely affect the
extension of credit by banks or other lending institutions, or (v) in the
case of any of the foregoing existing at the time of the commencement of
the Offer, a material acceleration or worsening thereof; or
(b) at the Payment Time, there shall be any action or proceeding taken,
instituted or threatened or any statute, rule, regulation, judgment, order
or injunction proposed, promulgated, enacted, entered, enforced or deemed
applicable to the Offer, the Merger or any other transaction contemplated
by the Agreement by or before any domestic or foreign court or government
or governmental agency, authority or instrumentality, or any official or
representative of any of the foregoing or by any other person, domestic or
foreign, that (i) challenges or enjoins the making or completion of the
Offer, the Merger or any other transaction contemplated by the Agreement or
seeks to obtain material damages as a result thereof, or (ii) would or, in
the reasonable judgment of Parent, is likely to (A) restrict the ability of
Acquisition Sub or Parent, or render them unable, to accept for payment or
to pay for some or all the Shares tendered pursuant to the Offer, (B) make
the acceptance for payment or payment for some or all the Shares illegal or
otherwise restrict or prohibit consummation of the Offer or the Merger or
any other transaction contemplated by the Agreement, (C) prohibit ownership
or require the divestiture by Parent or Acquisition Sub of any Shares or
impose any material limitation on its ability to acquire or own such
Shares, (D) impose any limitation on the ability of Parent or Acquisition
Sub to exercise effectively all rights of ownership with respect to the
Shares, including, without limitation, the right to vote all such Shares
purchased by it on all matters properly presented to the stockholders of
the Company, (E) prohibit or impose any material limitation upon Parent's
or Acquisition Sub's ownership, operation or control of all or any material
portion of the business or assets or properties of the Company or any of
the Subsidiaries or compel Parent, Acquisition Sub or the Company to divest
or hold separate all or any material portion of the businesses or assets of
the Company or any Subsidiary; or
(c) the applicable waiting period under the HSR Act shall not have
expired or been terminated; or
(d) the Company or any of the Subsidiaries shall have taken any action
with respect to the conduct of the Company's or such Subsidiary's business
that conflicts with or constitutes a material breach of its obligations
pursuant to Section 4.01 of the Agreement and which the Company fails to
cure within five business days after notice thereof is given by Parent; or
A-1
<PAGE>
(e) (A) the Company shall have breached, or failed to comply in any
material respect with, any of its covenants or other obligations under the
Agreement, which covenants and obligations are to have been performed on or
prior to the Payment Time and which the Company fails to cure within five
business days after notice thereof is given by Parent, or any
representation or warranty contained in the Agreement shall not have been
true and correct in any material respect when made or (B) any
representation or warranty contained in the Agreement, except for any
representations or warranties made as of a specific date, shall have ceased
to be true and correct in any material respect as if made on and as of any
date subsequent to the date of the Agreement; or
(f) one or more of the following events shall have occurred on or after
the date hereof, or Parent shall have become aware on or after the date
hereof of the occurrence of one or more of the following events prior to
the date hereof: (A) any person, corporation, partnership or other entity
or group (such person, corporation, partnership or other entity or group
being hereinafter, singularly or collectively, called a "Person"), other
than Parent or its affiliates, shall have acquired, made an offer to
acquire or become the beneficial owner of 20% or more of the Shares, or
shall have been granted any option or right, conditional or otherwise, to
acquire 20% or more of the Shares, other than acquisitions for bona fide
arbitrage purposes, or acquisitions by any Person that has publicly
disclosed such ownership in a Schedule 13D or 13G (or an amendment thereto)
filed with the SEC prior to the date of the Agreement; (B) any Person that
has publicly disclosed it was the beneficial owner of 20% or more of the
outstanding shares of Company Common Stock, in a Schedule 13D or 13G filed
with the SEC prior to the date hereof, shall have acquired, made an offer
to acquire or become the beneficial owner of, in each case after the date
of the Agreement, additional outstanding shares of Company Common Stock
equal to or in excess of 2% of the outstanding shares of Company Common
Stock, other than acquisitions for bona fide arbitrage purposes, or is
granted any option or right, conditional or otherwise, to acquire
additional shares of Company Common Stock equal to or in excess of 2% of
the outstanding shares of Company Common Stock, other than acquisitions for
bona fide arbitrage purposes; (C) any new group shall have been formed
which beneficially owns 20% or more of the Shares; (D) the Company shall
have entered into, or shall have made a public announcement that it
proposes to enter into, an agreement, including, without limitation, an
agreement in principle, providing for an Alternative Transaction; or (E)
there is a public announcement with respect to a plan or intention by the
Company or any Person, other than Parent or Acquisition Sub, to effect any
of the foregoing transactions (for purposes of this paragraph, the terms
"group" and "beneficial owner" shall be defined by reference to Section
13(d) of the Exchange Act and the rules and regulations promulgated
thereunder); or
(g) the Agreement shall have been terminated in accordance with its
terms; or
(h) the Company's Board shall have materially modified or withdrawn its
recommendation of the Offer or shall have resolved to do so or shall have
withdrawn or modified the determination set forth in Section 1.02 of the
Agreement; or
(i) the Company shall not have obtained the consent of any party set
forth on Schedule I attached hereto to the contract between it and ARMC;
which, in the sole judgment of Parent and Acquisition Sub in any such matter
and regardless of the circumstances giving rise to any such condition
(including any action or inaction by Parent or Acquisition Sub) makes it
inadvisable to proceed with the Offer and/or with such acceptance for payment
or payment.
The foregoing conditions are for the sole benefit of Parent and Acquisition
Sub and may be asserted by Parent or Acquisition Sub regardless of the
circumstances giving rise to any such conditions (including any action or
inaction by Parent or Acquisition Sub) or may be waived by Parent or
Acquisition Sub in whole or in part at any time and from time to time in its
sole discretion, except that the Minimum Condition may not be waived by Parent
or Acquisition Sub without the prior written consent of the Company; provided,
however, that the Minimum Condition may be reduced, but in no event below 51%
of the Shares, without the prior written consent of the Company. The failure by
Parent or Acquisition Sub at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right and each such right shall be
deemed an ongoing right and may be asserted at any time and from time to time.
A-2
<PAGE>
SCHEDULE I TO EXHIBIT A
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CONTRACTUAL CONSENTS
--------------------
Consents or Approvals Required with Respect to Servicing Agreements from:
Federal National Mortgage Association
Federal Home Loan Mortgage Corporation
Government National Mortgage Association
A-3
