AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 6, 1997
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
THE QUICK & REILLY GROUP, INC.
(Exact name of registrant as specified in charter)
DELAWARE 13-308241
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
230 SOUTH COUNTY ROAD
PALM BEACH, FLORIDA 33480
(561) 655-8000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
MR. THOMAS C. QUICK
THE QUICK & REILLY GROUP, INC.
230 SOUTH COUNTY ROAD
PALM BEACH, FLORIDA 33480
(561) 655-8000
(Name and address, including zip code and telephone number,
including area code, of agent for service)
WITH A COPY TO:
JAY R. SCHIFFERLI, ESQ.
KELLEY DRYE & WARREN LLP
TWO STAMFORD PLAZA
281 TRESSER BOULEVARD
STAMFORD, CONNECTICUT 06901
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable after this Registration Statement becomes
effective.
If the securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. |_|
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_| 333-____
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_| 333-____
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
TITLE OF SHARES AMOUNT TO BE PROPOSED MAXIMUM OFFERING PROPOSED MAXIMUM AMOUNT OF REGISTRATION
TO BE REGISTERED REGISTERED PRICE PER UNIT(1) AGGREGATE OFFERING PRICE(1) FEE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.10 738,460 shares $21.937 $16,199,597 $4,909
===================================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) and based on the average of the high and low prices of
the Common Stock on May 1, 1997.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION, DATED MAY 6, 1997
PROSPECTUS 738,460 SHARES
THE QUICK & REILLY GROUP, INC.
COMMON STOCK
This Prospectus relates to the offer and sale of 738,460 shares (the
"Shares") of Common Stock, par value $.10 per share ("Common Stock"), of The
Quick & Reilly Group, Inc. ("Quick & Reilly" or the "Company") by or on behalf
of a certain stockholder of the Company (the "Selling Stockholder").
The Shares may be offered and sold from time to time by the Selling
Stockholder. The Selling Stockholder is not required to offer or sell any of his
Shares. The Selling Stockholder anticipates that, if and when offered and sold,
the Shares will be offered and sold in transactions effected on the New York
Stock Exchange, Inc. (the "NYSE") at then prevailing market prices. The Selling
Stockholder reserves the right, however, to offer and sell the Shares on any
other national securities exchange with which the Common Stock may become listed
or in the over-the-counter market, in each case at then prevailing market
prices, or in privately negotiated transactions at a price then to be
negotiated. All offers and sales made on the NYSE or any other national
securities exchange or in the over-the-counter market will be made through or to
licensed brokers and dealers. The Company will not receive any of the proceeds
from the sales by the Selling Stockholder. No discounts, commissions or other
compensation will be allowed or paid by the Selling Stockholder or the Company
in connection with the offer and sale of the Shares, except that usual and
customary brokers' commissions may be paid by the Selling Stockholder. Upon any
sale of the Shares offered hereby, the Selling Stockholder and participating
agents, brokers or dealers may be deemed to be underwriters as that term is
defined in the Securities Act of 1933, as amended (the "Securities Act"), and
commissions or discounts or any profit realized on the resale of such securities
purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act.
The Company will pay all expenses incurred in connection with this
offering, excluding fees and expenses of Selling Stockholder's counsel and
charges of any broker-dealer acting on behalf of the Selling Stockholder. The
legal, accounting and other fees and expenses related to offer and sale of the
Shares contemplated hereby are estimated to be $15,000.
The Common Stock is traded on the NYSE under the symbol "BQR". On May 1,
1997, the last reported sale price of the Common Stock, as reported on the NYSE,
was $21.75 per share.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is May 6, 1997.
<PAGE>
No dealer, salesman or other person has been authorized to give any
information or to make any representation not contained in this Prospectus in
connection with the offering made hereby. If given or made, such information or
representation must not be relied upon as having been authorized by the Company.
Neither the delivery of this Prospectus nor any sale made hereunder shall under
any circumstances create any implication that the information contained herein
is correct as of any time subsequent to the date hereof. This Prospectus does
not constitute an offer to sell or a solicitation of an offer to buy any
securities in any jurisdiction to any person to whom it would be unlawful to
make such an offer or solicitation in such jurisdiction.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549; at Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661; and at Seven World Trade
Center, 13th Floor, New York, New York 10048. In addition, the Company is
required to file electronic versions of these documents through the Commission's
Electronic Data Gathering, Analysis and Retrieval system (EDGAR). The Commission
maintains a World Wide Web site at http://www.sec.gov that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission. Copies of such material may also
be obtained at prescribed rates from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Judiciary Plaza, Room 1024, Washington, D.C.
20549. The Common Stock is listed with the NYSE. Reports and other information
concerning the Company can be inspected at the NYSE, 20 Broad Street, New York,
New York 10005.
The Company has filed with the Commission in Washington, D.C., a
Registration Statement (the "Registration Statement") under the Securities Act
with respect to the Common Stock being offered by this Prospectus. This
Prospectus does not contain all the information set forth in the Registration
Statement and the exhibits thereto. For further information with respect to the
Company and the offer and sale of the Shares, reference is made to the
Registration Statement and the exhibits thereto. Copies of the Registration
Statement are available from the Commission. Statements contained in this
Prospectus concerning the provisions of documents filed with the Registration
Statement as exhibits are necessarily summaries of such documents, and each such
statement is qualified in its entirety by reference to the copy of the
applicable document filed with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by the Company with the
Commission pursuant to the Exchange Act are hereby incorporated by reference in
this Prospectus:
(a) Annual Report on Form 10-K for the fiscal year ended February 29,
1996;
(b) Quarterly Report on Form 10-Q for the quarters ended May 31, 1996,
August 30, 1996 and November 29, 1996;
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<PAGE>
(c) All other reports filed by the Company pursuant to Section 13(a) or
Section 15(d) of the Exchange Act since May 15, 1996, the date of
the Company's Annual Report on Form 10-K for the fiscal year ended
February 29, 1996;
(d) The Company's definitive Proxy Statement filed pursuant to Section
14 of the Exchange Act in connection with the Company's 1996 Annual
Meeting of Stockholders, which contains, among other things, a list
of the Company's directors and a disclosure of compensation
(provided, however, that the material in such Proxy Statement
appearing under the headings "Board of Directors Report on
Executive Compensation" and "Performance Graph" shall not be
incorporated by reference herein); and
(e) The description of the Common Stock offered hereby contained in the
Company's Registration Statement on Form 8-A, dated June 7, 1983.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
(other than, in the case of the Company's Proxy Statement, portions thereof not
deemed to be "filed" for the purposes of Section 18 of the Exchange Act) and
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Shares to be made hereunder shall be
deemed to be incorporated herein by reference and shall be a part hereof from
the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of the
Registration Statement or this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of such person, a
copy of the documents incorporated herein or in the Registration Statement by
reference (other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into the information the Registration
Statement so incorporates). Written or telephone requests for such documents
should be directed to The Quick & Reilly Group, Inc., 230 South County Road,
Palm Beach, Florida 33480, (561) 655-8000.
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
Certain statements in this Prospectus and in the documents incorporated
herein constitute "forward-looking statements" within the meaning of Section 27A
of the Securities Act and Section 2B of the Exchange Act. For this purpose, any
statements contained herein or incorporated herein that are not statements of
historical fact may be deemed to be forward-looking statements. Without limiting
the foregoing, the words "believes," "plans," "expects" and similar expressions
are intended to identify forward-looking statements. There are a number of
important factors that could cause the results of the Company to differ
materially from those indicated by such forward-looking statements.
THE COMPANY
The Company is a holding company owning all of the capital stock of four
principal operating subsidiaries - Quick & Reilly, Inc., a New York corporation
("Q&R"), U.S. Clearing Corp.,
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<PAGE>
a New York corporation ("U.S. Clearing"), JJC Specialist Corp., a New York
corporation ("JJC") and Nash Weiss & Co., a Delaware corporation ("Nash Weiss").
The Company was originally incorporated in New York on June 25, 1981 and was
subsequently reincorporated in Delaware in 1987.
Q&R is a NYSE member organization performing discount brokerage services
for individual retail customers. U.S. Clearing is a securities clearing
operation which clears all securities transactions for Q&R's customer
accounts and presently carries accounts and clears transactions for 250 other
brokerage firms. JJC is one of the largest specialist firms on the floor of
the NYSE, making a market in the equity securities of over 220 listed companies.
Nash Weiss is a brokerage firm which acts as a Market maker in over-the-counter
securities.
The principal executive offices of the Company are at 230 South County
Road, Palm Beach, Florida 33480, and the Company's telephone number is (561)
655-8000.
SELLING STOCKHOLDER
This Prospectus covers offers from time to time by or on behalf of the
Selling Stockholder of the Shares owned by the Selling Stockholder. Set forth
below are the name of the Selling Stockholder, the number of shares of Common
Stock currently owned by the Selling Stockholder and the number of shares of
Common Stock to be beneficially owned by the Selling Stockholder upon completion
of the offering if all Shares are sold. Any or all of the Shares listed may be
offered for sale by the Selling Stockholder from time to time. The Company
effected a 3-for-2 stock split on March 25, 1997.
All share amounts reflect post-split holdings.
Beneficial Common Stock
Ownership Which May be Beneficial
of Common Offered for Selling Ownership if
Selling Stock Prior Stockholders all Shares
Stockholder to Offering Account are sold
----------- ----------- ------------------- ------------
Lee S. Casty 738,460 738,460 0
492,307 of the Shares offered hereby were originally issued by the
Company to the Selling Stockholder pursuant to an Agreement and Plan of Merger
dated as of March 7, 1997 (the "Merger Agreement") by and among the Company, the
Selling Stockholder, Nash Weiss and NW Acquisition Corp., a wholly-owned
subsidiary of the Company formed for the purpose of effecting the merger. The
foregoing is a summary of certain terms of the Merger Agreement, is not intended
to be complete, and is qualified in its entirety by reference to the more
detailed terms and conditions set forth in the Merger Agreement. 246,153 of the
Shares were issued to the Selling Stockholder on March 25, 1997 in connection
with a 3-for-2 stock split of the Common Stock effected on that date.
Prior to the consummation of the transactions contemplated by the Merger
Agreement, the Selling Stockholder maintained no position, office or other
material relationship with the Company or any of its predecessors or affiliates.
Immediately following the consummation of the Merger Agreement, the Selling
Stockholder became a consultant to Nash, Weiss.
4
<PAGE>
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares by
the Selling Stockholder.
PLAN OF DISTRIBUTION
The Shares may be offered and sold from time to time by the Selling
Stockholder. The Selling Stockholder is not required to offer or sell any of its
Shares. The Selling Stockholder anticipates that, if and when offered and sold,
the Shares will be offered and sold in transactions effected on the NYSE at then
prevailing market prices. The Selling Stockholder reserves the right, however,
to offer and sell the Shares on any other national securities exchange with
which the Common Stock may become listed or in the over-the-counter market, in
each case at then prevailing market prices, or in privately negotiated
transactions at a price then to be negotiated. All offers and sales made on the
NYSE or any other national securities exchange or in the over-the-counter market
will be made through or to licensed brokers and dealers. No agreements,
arrangements or understandings have been entered into with any broker or dealer,
and no brokers or dealers have been selected, in connection with the offer and
sale of the Shares. No discounts, commissions or other compensation will be
allowed or paid by the Selling Stockholder or the Company in connection with the
offer and sale of the Shares, except that usual and customary brokers'
commissions may be paid by the Selling Stockholder. All proceeds from the sale
of the Shares will be paid directly to the Selling Stockholder and will not be
deposited in an escrow, trust or other similar arrangement.
The selling broker may act as agent or may acquire the Shares or
interests therein as principal or pledgee and may, from time to time, effect
distributions of the Shares or interests. If a dealer is utilized in the sale of
the Shares in respect of which the Prospectus is delivered, the Selling
Stockholder will sell the Shares to the dealer, as principal. The dealer may
then resell the Shares to the public at varying prices to be determined by such
dealer at the time of resale.
The legal, accounting and other fees and expenses related to the offer
and sale of the Shares contemplated hereby are estimated to be $10,000 and will
be paid by the Company. The Company will not incur any underwriting or sales
commissions or similar expenses in connection with such offer and sale. If any
such expenses are incurred in connection with the offer and sale of the Shares,
they shall be the responsibility of the Selling Stockholder.
EXPERTS
The consolidated financial statements for the three years in the period
ended February 29, 1996 incorporated by reference in this Prospectus and
elsewhere in the registration statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their report with respect
thereto, and are incorporated by reference herein in reliance upon the authority
of said firm as experts in giving said reports.
5
<PAGE>
LEGAL MATTERS
Certain legal matters in connection with the legality of the Shares have
been passed upon for the Company by Kelley Drye & Warren LLP, 101 Park Avenue,
New York, New York 10178, counsel to the Company. Richard G. Brodrick, a partner
of Kelley Drye & Warren LLP, is a member of the Board of Directors of the
Company.
* * * * *
6
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Amount To
Type or Nature of Expense be Paid
------------------------- ---------
SEC registration fee................................. $ 4,909
Accounting fees and expenses*........................ 2,000
Legal fees and expenses*............................. 7,500
Miscellaneous*....................................... 591
------
Total* ......................................... $15,000
======
- ---------------------
*Estimated
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 145 of the General Corporation Law of the State of Delaware,
the Company's state of incorporation, permits a corporation to indemnify certain
persons, including officers and directors and former officers and directors, and
to purchase insurance with respect to liability arising out of their capacity or
status as officers and directors. Such law provides further that the
indemnification permitted thereunder shall not be deemed exclusive of any other
rights to which officers and directors may be entitled under the corporation's
certificate of incorporation, By-laws, any agreement or otherwise.
The By-Laws of the Company require it to indemnify to the full
extent permitted by Delaware law, any person who is made or threatened to be
made, a party to an action, suit or proceeding (whether civil, criminal,
administrative or investigative) by reason of the fact that he is or was a
director or officer of the Company or serves or served as a director, officer,
partner, trustee, fiduciary, employee or agent of any other enterprise or
organization at the registrant's request.
7
<PAGE>
ITEM 16. EXHIBITS
(a) The exhibits listed below have been filed as part of this Registration
Statement.
EXHIBIT NO. DESCRIPTION OF EXHIBIT
4.1 - Specimen common stock certificate of the registrant (1)
5.1 - Opinion of Kelley Drye & Warren LLP regarding legality
10.1 - Agreement and Plan of Merger by and among the Company, NW
Acquisition Corp., Nash Weiss & Co. and Lee S. Casty, dated
as of March 7, 1997.
23.1 - Consent of Kelley Drye & Warren LLP (2)
23.2 - Consent of Arthur Andersen LLP
24.1 - Powers of Attorney executed by certain officers and
directors of the registrant (3)
(1) Previously filed as an exhibit to the registrant's Registration Statement
on Form S-1 (registration no. 2-83667) and incorporated herein by
reference.
(2) Included in Exhibit 5.1.
(3) Set forth on the signature page to this Registration Statement.
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission, such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification for such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(a) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
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<PAGE>
(b) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the
most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in this Registration Statement; and
(c) To include any material information with respect to the
plan of distribution not previously disclosed in this
Registration Statement or any material change to such information
in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial BONA FIDE offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering thereof.
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<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1933, as amended, the registrant certifies that it
has reasonable ground to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized in the City of New
York, State of New York, on May , 1997.
THE QUICK & REILLY GROUP, INC.
By: /s/ Thomas C. Quick
------------------------
Thomas C. Quick
President
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below hereby constitutes and appoints Leslie C. Quick, Jr. and Thomas C.
Quick, and each of them, his true and lawful agent, proxy and attorney-in-fact,
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to (i) act on, sign and file with
the Securities and Exchange Commission any and all amendments (including
post-effective amendments) to this Registration Statement together with all
schedules and exhibits thereto, (ii) act on, sign and file such certificates,
instruments, agreements and other documents as may be necessary or appropriate
in connection therewith, (iii) act on and file any supplement to any prospectus
included in this Registration Statement or any such amendment and (iv) take any
and all actions which may be necessary or appropriate in connection therewith,
granting unto such agents, proxies and attorneys-in-fact, and each of them, full
power and authority to do and perform each and every act and thing necessary or
appropriate to be done, as fully for all intents and purposes as he might or
could do in person, hereby approving, ratifying and confirming all that such
agents, proxies and attorneys-in-fact, any of them or any of his or their
substitute or substitutes may lawfully do or cause to be done by virtue hereof.
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons on
behalf of the Company and in the capacities and on the dates indicated.
SIGNATURES TITLE OR CAPACITIES DATE
/S/ LESLIE C. QUICK, JR. Chairman of the Board, May 5, 1997
Leslie C. Quick, Jr. Chief Executive Officer,
Chief Financial Officer
and Director (Principal
Executive Officer and
Principal Financial Officer)
/S/ PETER QUICK Vice President, Assistant May 5, 1997
Peter Quick Treasurer and Director
/S/ LESLIE C. QUICK, III Vice President, Treasurer May 5, 1997
Leslie C. Quick, III and Director
/S/ THOMAS C. QUICK President, Chief May 5, 1997
Thomas C. Quick Operating Officer and Director
/S/ CHRISTOPHER C. QUICK Vice President and Director May 5, 1997
Christopher C. Quick
/S/ ROBERT J. RABINOFF Controller May 5, 1997
Robert J. Rabinoff (Principal Accounting Officer)
/S/ JOHN P. LOWTH, III Director May 5, 1997
John P. Lowth, III
/S/ RICHARD G. BRODRICK Director May 5, 1997
Richard G. Brodrick
<PAGE>
SIGNATURES TITLE OR CAPACITIES DATE
/S/ THOMAS E. CHRISTMAN Director May 5, 1997
Thomas E. Christman
/S/ ARLENE B. FRYER Secretary and Director May 5, 1997
Arlene B. Fryer
/S/ HENRY P. KILROY Director May 5, 1997
Henry P. Kilroy
/S/ CLIFFORD W. MAYS Director May 5, 1997
Clifford W. Mays
/S/ PASCAL J. MERCURIO Vice President and Director May 5, 1997
Pascal J. Mercurio
<PAGE>
INDEX TO EXHIBITS
Exhibit
NUMBER DESCRIPTION
4.1 Specimen common stock certificate of the registrant (1)
5.1 Opinion of Kelley Drye & Warren LLP regarding legality
10.1 Agreement and Plan of Merger by and among the Company, NW
Acquisition Corp., Nash Weiss & Co. and Lee S. Casty, dated
as of March 7, 1997.
23.1 Consent of Kelley Drye & Warren LLP (2)
23.2 Consent of Arthur Andersen LLP
24.1 Powers of Attorney executed by certain officers and
directors of the registrant (3)
(1) Previously filed as an exhibit to the registrant's Registration
Statement on Form S-1 (registration no. 2-83667) and incorporated
herein by reference.
(2) Included in Exhibit 5.1.
(3) Set forth on the signature page to this Registration Statement.
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Kelley Drye & Warren LLP
Two Stamford Plaza
281 Tresser Boulevard
Stamford, Connecticut 06901
May 6, 1997
The Quick & Reilly Group Inc.
26 Broadway
New York, New York 10004
Gentlemen:
We have acted as special counsel to The Quick & Reilly Group, Inc.,
a Delaware corporation (the "Company") in connection with the preparation and
filing by the Company of a Registration Statement on Form S-3 (the "Registration
Statement") for the registration under the Securities Act of 1933, as amended,
of the resale by a certain stockholder of the Company of an aggregate of 738,460
shares (the "Shares") of the common stock, par value $.10 per share, of the
Company. Of such Shares, 492,307 were issued to such stockholder on March 7,
1997 pursuant to an Agreement and Plan of Merger by and among the Company, NW
Acquisition Corp., Nash Weiss & Co. and Lee S. Casty, dated as of March 7, 1997
(the "Merger Agreement"). 246,153 of the Shares were issued to such stockholder
in connection with a 3-for- 2 stock split of the Company's common stock which
was effective on March 25, 1997. As such special counsel, you have requested our
opinion as to the matters described herein relating to the issuance of the
Shares.
In connection with this opinion, we have examined and relied upon
copies certified or otherwise identified to our satisfaction of the Certificate
of Incorporation and Bylaws of the Company, minutes of the Company's corporate
proceedings, as made available to us by officers of the Company, an executed
copy of the Registration Statement, together with all schedules and exhibits
thereto, in the form to be filed with the Securities and Exchange Commission, an
executed copy of the Merger Agreement and such matters of law and fact deemed
necessary by us in order to deliver the within opinion. In the course of such
examination, we have assumed the genuineness of all signatures, the authority of
all signatories to sign on behalf of their principals, if any, the authenticity
of all documents submitted to us as original documents and the conformity to
original documents of all documents submitted to us as certified or photostatic
copies. As to certain factual matters, we have relied upon information furnished
to us by officers of the Company.
<PAGE>
The Quick & Reilly Group Inc. -2- May 6, 1997
Based on the foregoing and solely in reliance thereon, it is our
opinion that the Shares have been duly authorized and validly issued, and are
fully paid and non-assessable.
We hereby consent to the filing of this letter as an exhibit to the
Registration Statement and to the reference to us in the Prospectus included
therein under the caption "Legal Matters."
Very truly yours,
Kelley Drye & Warren LLP
<PAGE>
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
DATED: March 7, 1997
by and among
NASH, WEISS & CO.
THE QUICK & REILLY GROUP, INC.,
NW ACQUISITION CORP.
and
LEE S. CASTY
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<PAGE>
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, is being entered into this 7th day
of March, 1997, by and among The Quick & Reilly Group, Inc., a Delaware
corporation ("Quick & Reilly"), NW Acquisition Corp., a Delaware corporation and
a wholly-owned subsidiary of Quick & Reilly ("Acquiror"), Nash, Weiss & Co., a
Delaware corporation ("Nash Weiss"), and Lee S. Casty, the owner of all of the
issued and outstanding shares of capital stock of Nash Weiss (the "Sole
Stockholder").
R E C I T A L S:
WHEREAS, Nash Weiss is a registered broker-dealer engaged solely in the
business of providing market making services in securities traded in the
over-the-counter market (the "Business").
WHEREAS, the Boards of Directors of each of Quick & Reilly and Acquiror
and the Board of Directors of Nash Weiss have determined that it is in the best
interests of their respective companies and their respective stockholders to
consummate the business combination transaction provided for herein, in which
Nash Weiss will, subject to the terms and conditions set forth herein, merge
(the "Merger") with and into Acquiror, so that Acquiror is the surviving
corporation in the Merger; and
WHEREAS, it is intended that the Merger qualify as a reorganization
within the meaning of Section 368(a)(2)(D) of the Internal Revenue Code of 1986,
as amended.
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants, representations, warranties and agreements hereinafter set forth, and
intending to be legally bound hereby, the parties hereto agree as follows:
<PAGE>
ARTICLE I.
DEFINITIONS
SECTION 1.1. DEFINITIONS. In addition to the terms defined elsewhere
herein, the following terms have the meaning specified or referred to in this
SECTION 1.1 and shall be equally applicable to both the singular and plural
forms. Any agreement referred to below shall mean such agreement as amended,
supplemented and modified from time to time to the extent permitted by the
applicable provisions thereof and by this Agreement.
"AFFILIATE" means, with respect to any Person, any other Person which
directly or indirectly controls, is controlled by or is under common control
with such Person.
"AGREEMENT" means this Agreement, including any exhibits, schedules and
attachments hereto.
"ANTITRUST IMPROVEMENTS ACT" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations promulgated
thereunder.
"APPROVAL" means any approval, authorization, consent, qualification or
registration, or any waiver of any of the foregoing, required to be obtained
from, or any notice, statement, declaration or other communication required to
be filed with or delivered to, any Governmental Authority, Regulatory Authority
or other Person.
"CERCLA" means the Comprehensive Environmental Response Compensation
and Liability Act of 1980, 42 U.S.C. ss. 9601 ET SEQ., as amended, and the
rules and regulations promulgated thereunder.
"CLOSING DATE" shall be the date upon which the Closing occurs.
"CODE" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
"CONTRACT" means any contract, agreement, commitment, undertaking,
arrangement, purchase order or stipulation (whether oral or written).
"ENCUMBRANCE" means any lien, claim, charge, security interest,
mortgage, pledge, easement, conditional sale or other title, retention
agreement, defect in title, covenant or other restriction of any kind,
including, any restriction on use, voting transfer or other attributes of
ownership.
"ENVIRONMENTAL LAW" means any environmental or health and/or
safety-related law, regulation, rule, ordinance, order, decree or judgment at
the Federal, state, or local level, whether existing as of the date hereof,
previously enforced, or subsequently enacted, including but not limited to: (i)
CERCLA; (ii) RCRA; (iii) Federal Water Pollution Control Act, as amended by the
Clean Water Act, as amended, 33 U.S.C. ss. 1251 ET SEQ.; (iv) Toxic Substances
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Control Act, 15 U.S.C. ss. 2601 ET SEQ., as amended; (v) Emergency Planning and
Community Right-to-Know Act of 1986, 42 U.S.C. ss. 11001 ET SEQ., as amended;
(vi) Clean Air Act, 42 U.S.C. ss. 7401 ET SEQ., as amended; (vii) Rivers and
Harbors Act, 33 U.S.C. ss. 401 ET SEQ., as amended; (viii) OSHA; (ix) Safe
Drinking Water Act, 42 U.S.C. ss. 300(f) ET SEQ., as amended, and (x) any other
federal, state or local law, regulation, rule, ordinance, order, decree or
judgment currently or hereafter in existence which governs:
a. the existence, cleanup and/or remediation of toxic or
Hazardous Substances;
b. the release or threatened release, emission, discharge
or presence of Hazardous Substances into or in the environment;
c. the control of Hazardous Substances; or
d. the use, generation, transport, treatment, handling,
management, storage, disposal, removal or recovery of Hazardous Substances.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
and as such may be hereafter further amended, and the rules and regulations
promulgated thereunder.
"GOVERNMENTAL AUTHORITY" means any foreign, federal or national, state
or provincial, municipal or local or other governmental authority, regulatory or
administrative agency, governmental commission, department, board, bureau,
agency or instrumentality, political subdivision, court, tribunal, official
arbitrator or arbitral board.
"HAZARDOUS SUBSTANCES" means any substance, chemical or waste that is
listed, or contains material amounts of one or more components that are defined,
designated, classified, considered or listed, as hazardous, toxic, radioactive,
or dangerous under any applicable state or federal law; as well as any asbestos
or asbestos-containing material, petroleum, petroleum product or by-product,
crude oil or any fraction thereof, natural gas, natural gas liquids, liquified
natural gas, synthetic gas usable as fuel, or polychlorinated biphenyls
("PCBS").
"INDEBTEDNESS" means all obligations for borrowed money and accounts
payable, however evidenced, including but not limited to principal and interest.
"INDEMNIFICATION TAX BENEFIT" means the amount by which a Person's
actual tax liability during a particular taxable period is or could have been
reduced as a result of the utilization of tax deductions, credits or other
benefits which are attributable to the payment of Indemnified Liabilities.
"INTELLECTUAL PROPERTY RIGHTS" means all (i) patents, patent
applications, patent disclosures and inventions, (ii) trademarks, service marks,
trade dress, trade names, logos and corporate names and registrations and
applications for registration thereof together with all of the goodwill
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associated therewith, (iii) copyrights (registered or unregistered) and
copyrightable works and registrations and applications for registration thereof,
(iv) mask works and registrations and applications for registration thereof, (v)
computer software, data bases and documentation thereof, (vi) trade secrets,
(vii) other intellectual property rights and (viii) copies and tangible
embodiments thereof (in whatever form or medium).
"LAWS" means all foreign, federal, state and local laws, statutes,
ordinances and all rules, regulations, requirements (that have the force of law
or regulation), and administrative codes of any Governmental Authority or
Regulatory Agency.
"LAWSUIT" means the pending private-class action lawsuits which have
been consolidated under the title IN RE NASDAQ MARKET-MAKERS ANTITRUST
LITIGATION, M21-68 (RWS), 94 Civ. 3996 (RWS) in the United States District Court
for the Southern District of New York including ROBERT KEVIN TISDALE AND LILLIAN
A. TISDALE, ETC., PLAINTIFFS, VS. A.G. EDWARDS & SONS, INC., ET AL., DEFENDANTS,
in the Circuit Court of Montgomery County, Alabama, Case No. CV-95-2679-PR.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the
condition (financial or otherwise), results of operations, prospects, assets,
liabilities or business of a Person.
"NASD" means the National Association of Securities Dealers, Inc.
"NASDAQ" means the NASD's Automated Quotation System.
"NASDAQ PROCEEDINGS" means any and all litigation, claims and
proceedings arising or related to the NASDAQ trading investigation of Nash Weiss
and all civil (individual and class action), regulatory and other liabilities
and obligations arising therefrom or related thereto.
"NASH" means Ronald S. Nash.
"NASH WEISS COMMON STOCK" means the common stock of Nash Weiss, no par
value per share.
"ORDERS" means any consent or other type of decree, injunction,
stipulation, decision, determination, judgment, order, ruling, arbitration or
other award, assessment or writ of any Governmental Authority or Regulatory
Agency.
"OSHA" means the Occupational Safety and Health Act of 1970, 29 U.S.C.
ss. 651 ET SEQ., as amended, and the rules and regulations promulgated
thereunder.
"PERMITS" means permits, certificates, Orders, licenses, approvals,
tariffs, registrations and other authorizations.
"PERMITTED ENCUMBRANCES" means (a) liens for taxes and other
governmental charges and assessments which are not yet due and payable and (b)
liens of landlords and liens of carriers, warehousemen, mechanics and
materialmen and other like liens arising in the ordinary course of business for
sums not yet due and payable; PROVIDED, HOWEVER, that "Permitted Encumbrances"
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shall not include (i) liens of the types referred to in clauses (a) or (b)
above which exceed $5,000 individually or $25,000 in the aggregate or (ii) liens
or imperfections which materially detract from the value of or materially
impair the existing use of the property affected by such lien or imperfection.
"PERSON" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, Governmental Authority or Regulatory Agency.
"PRIME RATE" means the prime rate of interest as announced in THE WALL
STREET JOURNAL from time to time, or if THE WALL STREET JOURNAL no longer
publishes a prime rate, then the prime rate quoted by Citibank, N.A. (or its
successor) in New York City, New York from time to time.
"PURCHASE PRICE" means the sum of (i) $16 million PLUS (ii) the
Adjusted Merger Cash Payment.
"QUICK & REILLY COMMON STOCK" means the common stock of Quick & Reilly,
par value $.01 per share.
"QUICK & REILLY TRANSFER AGENT" means Boston EquiServe in its capacity
as the transfer agent for Quick & Reilly Common Stock.
"RCRA" means the Resource Conservation and Recovery Act, 42 U.S.C. ss.
6901 ET SEQ., as amended, and the rules and regulations promulgated thereunder.
"REGULATORY AGENCY" means any self-regulatory organization, agency or
instrumentality.
"SECURITIES ACT" means the Securities Act of 1933, as amended and as
such may be hereafter further amended, and the rules and regulations promulgated
thereunder.
"TAX DISPUTE" means the dispute between Nash Weiss and the Department
of the Treasury-Division of Taxation of the State of New Jersey relating to the
compensation of Nash and Weiss.
"WEISS" means Ronald M. Weiss.
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INDEX OF TERMS DEFINED IN OTHER SECTIONS
Accounting Firm 2.7
Accounting Firm Fees 2.7
Acquiror First Paragraph
Adjusted Merger Cash Payment 2.7
Aggregate Quick & Reilly Conversion Shares 2.4
Average Stock Price 2.4
Business Recitals
Closing 11.1
Commission 3.26
Confidential Information 8.1(a)
Delivering Party 8.1(a)
DOJ 3.5
Effective Time 2.2
Effective Date 2.2
Effectiveness Period 13.1
Escrow Agreement 2.6
Escrow Agent 2.6
Exchange Agent 2.6
FTC 3.5
Final Certificate 2.7
Final Determination Amount 2.7
Final Net Book Value 2.7
Financial Statements 3.6
GCL 2.1
Initial Certificate 2.7
Interim Financial Statements 3.6
Merger Recitals
Merger Cash Payment 2.7
Nash Weiss First Paragraph
Nash Weiss Certificates 2.6
Nash Weiss Net Book Value 2.7
Non-consenting Party 8.2
Pension Plan 3.18(c)
Plan(s) 3.18(a)
Post-Closing Straddle Period 13.4(b)
Pre-Closing Straddle Period 13.4(a)
Quick & Reilly Certificate 2.6
Receiving Party 8.1(a)
Reportable Event 3.18(e)
Shelf Registration Statement 13.1
SIPC 3.28
Stock Split Payment Date 5.7
Sole Stockholder First Paragraph
Subject Shares 13.1(c)
Surviving Corporation 2.1
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Tax Return 3.15
Taxes 3.15
Transmittal Letter 2.6
SECTION 1.2. KNOWLEDGE. The phrase "to the knowledge of Nash Weiss" as
used herein refers to (i) the actual personal knowledge, after reasonable
inquiry, of any of the officers of Nash Weiss, (ii) the actual personal
knowledge of the Sole Stockholder, with no duty of inquiry, with respect to
matters related to Nash Weiss' operation of the Business, and (iii) the actual
personal knowledge, after reasonable inquiry, of the Sole Stockholder with
respect to the Nash Weiss Common Stock.
ARTICLE II.
THE MERGER
SECTION 2.1. MERGER. Upon and subject to the terms and conditions set
forth in this Agreement and in accordance with the Delaware General Corporation
Law, as amended (the "GCL"), at the effective time Nash Weiss shall be merged
with and into Acquiror. Following the Merger, Acquiror shall continue to exist
as the surviving corporation (sometimes referred herein to as the "Surviving
Corporation"), and the separate corporate existence of Nash Weiss shall cease.
SECTION 2.2. FILING AND EFFECTIVE TIME. At the Closing, Acquiror and
Nash Weiss shall file with the Secretary of State of the State of Delaware the
Certificate of Merger, in the form attached hereto as EXHIBIT A, appropriately
completed and executed in accordance with Section 251 of the GCL. The Merger
shall become effective upon the close of business on the date of filing (the
"Effective Time," and the date thereof is hereinafter referred to as the
"Effective Date") of the Certificate of Merger.
SECTION 2.3. EFFECTS OF THE MERGER. The Merger shall have the effects
set forth in Section 259 of the GCL. In addition:
(a) The certificate of incorporation of Acquiror as in effect
at the Effective Time shall be and constitute the certificate of
incorporation of the Surviving Corporation until amended or changed
in accordance with applicable law;
(b) The by-laws of Acquiror as in effect at the Effective Time
shall be and constitute the by-laws of the Surviving Corporation until
amended or changed in accordance with applicable law; and
(c) The directors of Acquiror immediately prior to the
Effective Time shall become the directors of the Surviving Corporation.
SECTION 2.4. CONVERSION FORMULA. At and as of the Effective Time, by
virtue of the Merger and without any further action on the part of the Sole
Stockholder, all of the issued and outstanding shares of Nash Weiss Common
Stock
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shall be converted into that number of shares of Quick & Reilly Common Stock
equal to the Aggregate Quick & Reilly Conversion Shares. For the purposes of
this Agreement, the "Aggregate Quick & Reilly Conversion Shares" shall equal the
quotient obtained by dividing (A) $16 million by (B) the Average Stock Price (as
defined below) PROVIDED, HOWEVER, that if the Average Stock Price shall be (A)
less than or equal to $28.00 per share, the Average Stock Price shall be deemed
to be $28.00 for all purposes of this Agreement, or (B) equal to or greater than
$32.50 per share, the Average Stock Price shall be deemed to be $32.50 for all
purposes of this Agreement. For purposes of this Agreement, "Average Stock
Price" shall mean the average (rounded to the nearest whole cent) of the last
sale price of the day of one share of Quick & Reilly Common Stock as reported on
the consolidated tape of the New York Stock Exchange ("NYSE") on the three
trading days preceding the Closing Date.
SECTION 2.5. CONVERSION OF NASH WEISS COMMON STOCK. At and as of the
Effective Time, by virtue of the Merger and without any further action on the
part of the Sole Stockholder, each share of Nash Weiss Common Stock issued and
outstanding immediately prior to the Effective Time shall by virtue of the
Merger be converted into such number of shares of Quick & Reilly Common Stock as
is obtained by dividing (i) the Aggregate Quick & Reilly Conversion Shares by
(ii) the number of shares of Nash Weiss Common Stock issued and outstanding on
the Effective Date.
SECTION 2.6. EXCHANGE OF CERTIFICATES; ESCROW OF QUICK & REILLY COMMON
STOCK. At the Closing, the Sole Stockholder shall deliver a transmittal letter
in substantially the form attached hereto as EXHIBIT B (the "Transmittal
Letter") and surrender to the Quick & Reilly Transfer Agent (in such capacity,
the "Exchange Agent") the stock certificates (the "Nash Weiss Certificates")
representing the shares of Nash Weiss Common Stock issued and outstanding
immediately prior to the Effective Time. Upon surrender to the Exchange Agent of
the Nash Weiss Certificates, together with a duly executed Transmittal Letter,
the Exchange Agent, on behalf of the Surviving Corporation, shall cancel such
stock certificates and Quick & Reilly shall issue, in accordance with the
directions set forth in the Transmittal Letter, a certificate (the "Quick &
Reilly Certificate") representing the number of shares of Quick & Reilly Common
Stock into which the shares of Nash Weiss Common Stock previously represented by
the surrendered Nash Weiss Certificate shall have been converted at the
Effective Time. Until so surrendered, the Nash Weiss Certificates shall, at and
after the Effective Time, be deemed for all purposes to represent and evidence
only the right to receive the per share consideration set forth in SECTION 2.4
and SECTION 2.8, for each share represented by such Nash Weiss Certificates, and
no interest shall be paid or accrued thereon. The Transmittal Letter shall
instruct the Exchange Agent to deliver the Quick & Reilly Certificate to an
escrow account established pursuant to an escrow agreement (the "Escrow
Agreement") in substantially the form attached hereto as EXHIBIT C to be dated
as of the Closing Date, among Quick & Reilly, Acquiror, the Sole Stockholder and
an escrow agent (the "Escrow Agent") acceptable to each of Quick & Reilly and
the Sole Stockholder. The Quick & Reilly Certificate and any cash or other
marketable securities deposited by the Sole Stockholder in substitution therefor
shall be held by the Escrow Agent in a separate account, governed by the Escrow
Agreement and shall be released only pursuant to the terms of the Escrow
Agreement.
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SECTION 2.7. NET BOOK VALUE. (a) As additional consideration for the
exchange by the Sole Stockholder of all of the issued and outstanding shares of
Nash Weiss Common Stock, Quick & Reilly shall, on the Closing Date, make a cash
payment (the "Merger Cash Payment") to the Sole Stockholder equal to the Nash
Weiss Net Book Value. For purposes hereof, the "Nash Weiss Net Book Value" means
the amount obtained by subtracting the total liabilities of Nash Weiss
(including liabilities subordinated to claims of general creditors) from the
total assets of Nash Weiss determined as of the Closing Date and determined in
accordance with generally accepted accounting principles.
(b) Quick & Reilly acknowledges that Nash Weiss intends to
declare and pay one or more dividends and/or make one or more other payments in
order to reduce the Nash Weiss Net Book Value prior to the Closing (but not
below zero).
(c) The Nash Weiss Net Book Value shall be estimated in good
faith by Nash Weiss and set forth, together with a detailed statement of the
calculation therefor, in a certificate (the "Initial Certificate") to be
delivered to the Sole Stockholder and Quick & Reilly not later than two business
days prior to the Closing Date. On or before 120 days after the Closing Date,
Quick & Reilly shall deliver to the Sole Stockholder a final calculation of the
Nash Weiss Net Book Value (the "Final Net Book Value"), together with such
supporting documentation as the Sole Stockholder may reasonably request, in a
certificate (the "Final Certificate"), which shall evidence in reasonable detail
the nature and extent of any variances between the amounts estimated in the
Initial Certificate and the amounts set forth in the Final Certificate. The Sole
Stockholder shall review the Final Certificate and shall give written notice to
Quick & Reilly of any objections to the computation shown in such certificate
within 15 days after his receipt thereof. Quick & Reilly and the Sole
Stockholder shall endeavor in good faith to resolve any objections within 10
days after the receipt by Quick & Reilly of any objection from the Sole
Stockholder. If any such objection or dispute has not been resolved at the end
of such 10 day period, the disputed portion shall be submitted to and determined
within the following 30 days by a nationally recognized firm of independent
accountants mutually agreed to by Quick & Reilly and the Sole Stockholder (the
"Accounting Firm") and the aggregate amount determined by the Accounting Firm to
be the Nash Weiss Net Book Value (the "Final Determination Amount") shall be
final and binding upon the parties. Quick & Reilly and the Sole Stockholder
shall bear equally the fees and expenses arising in connection with such
determination by the Accounting Firm (the "Accounting Firm Fees"); PROVIDED,
HOWEVER, that the Accounting Firm Fees shall be borne in full by the Sole
Stockholder if the Final Determination Amount is an amount within $250,000 of
the Final Net Book Value and shall be borne in full by Quick & Reilly if the
Final Determination Amount differs from the Final Net Book Value by an amount
equal to or greater than $250,000. If the Adjusted Merger Cash Payment (as
defined below) is greater than the Merger Cash Payment, Quick & Reilly shall pay
to the Sole Stockholder the difference between the Adjusted Merger Cash Payment
and the Merger Cash Payment together with interest thereon at a per annum rate
equal to the Prime Rate in effect on the Closing Date. If the Adjusted Merger
Cash Payment is less than the Merger Cash Payment, the Sole Stockholder shall
pay to Quick & Reilly the difference between the Merger Cash Payment and
Adjusted Merger Cash Payment together with interest thereon at a per annum rate
equal to the Prime Rate in effect on the Closing Date. For purposes hereof, the
Adjusted Merger Cash Payment shall mean, if finalized by the mutual agreement of
the parties, the Final Net Book Value, as adjusted, and if finalized by the
Accounting Firm, the Final Determination Amount.
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SECTION 2.8. NO FRACTIONAL SHARES. No fractional shares of Quick &
Reilly Common Stock shall be issued in the Merger. The Sole Stockholder shall be
entitled to receive in lieu of any fractional share of Quick & Reilly Common
Stock to which the Sole Stockholder otherwise would have been entitled pursuant
to SECTION 2.4(A) hereof (after taking into account all shares of Nash Weiss
Common Stock then held of record by such holder) cash payable by check in lieu
of any such fractional share of Quick & Reilly Common Stock computed on the
basis of the Average Stock Price. On the Effective Date, the Acquiror shall
deliver to the Exchange Agent cash in an amount sufficient to make the payment,
if any, in lieu of fractional shares as described above.
SECTION 2.9. TAX-FREE REORGANIZATION. Each of the parties hereto agrees
that they intend the Merger to constitute a tax-free reorganization pursuant to
Section 368 of the Code and that this Agreement shall constitute a "plan of
reorganization" for purposes of Section 368 of the Code.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF NASH WEISS
As an inducement to Quick & Reilly and Acquiror to enter into this
Agreement and to consummate the transactions contemplated hereby, Nash Weiss
represents and warrants to each of Quick & Reilly and Acquiror as follows:
SECTION 3.1. ORGANIZATION, QUALIFICATION AND AUTHORITY OF NASH WEISS.
(a) Nash Weiss is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Nash Weiss has full corporate
power and authority and all material licenses, permits and authorizations
necessary to own, lease and operate its properties and to carry on the Business
as presently conducted by it and presently proposed to be conducted by it. Nash
Weiss has been duly qualified or licensed as a foreign corporation for the
transaction of business in, and Nash Weiss is in good standing under the laws
of, each jurisdiction in which it owns, leases or uses property or conducts any
business so as to require such qualification or licensing, a list of which
jurisdictions is set forth as SCHEDULE 3.1(A). Nash Weiss does not have any
subsidiaries, and, except as shown on SCHEDULE 3.1(B) and except for securities
acquired and held as inventory in the ordinary course of the Business not
exceeding 5% of the class thereof, Nash Weiss does not have any direct or
indirect ownership or hold any rights to acquire any capital stock or equity
securities of any corporation or any other direct or indirect equity ownership
interest in any other Person. Except for receivables and indebtedness arising in
the ordinary course of the Business and except for debt acquired and held as
inventory in the ordinary course of the Business not exceeding 5% of the class
thereof, Nash Weiss does not have any direct or indirect ownership of any debt
securities or indebtedness interest in any other Person.
(b) Nash Weiss has full corporate power and authority to enter
into this Agreement and to perform its obligations hereunder. The execution and
delivery of this Agreement by Nash Weiss and the performance of the transactions
contemplated hereby have
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been duly authorized by each of the Board of Directors of Nash Weiss and the
Sole Stockholder and no further corporate action on the part of Nash Weiss is
necessary to authorize this Agreement and the performance of the transactions
contemplated hereby. This Agreement has been duly executed and delivered by Nash
Weiss and constitutes the legal, valid and binding obligation of Nash Weiss
enforceable against it in accordance with its terms.
SECTION 3.2. CAPITALIZATION. (a) The authorized capital stock of Nash
Weiss consists of (i) 1,000 shares of Nash Weiss Common Stock, of which 100
shares are issued and outstanding. All of the issued and outstanding shares of
Nash Weiss Common Stock were validly issued and are fully paid and
non-assessable and are owned beneficially and of record by the Sole Stockholder,
free and clear of any Encumbrances, options, contracts, preemptive rights,
rights of conversion or exchange, or equities. To the knowledge of Nash Weiss,
there are no voting trusts, proxies or other agreements or understandings
relating to the voting of the issued and outstanding shares of Nash Weiss Common
Stock. Nash Weiss has not violated any applicable federal or state securities
laws in connection with the issuance of any of its capital stock.
(b) Except as set forth in SCHEDULE 3.2(B), Nash Weiss has no
outstanding (i) subscriptions, options, puts, calls, warrants, agreements or
other rights (including, without limitation, preemptive rights or rights of
first refusal) or commitments to issue, nor any obligation or commitment to
redeem or purchase, any of its authorized capital stock or (ii) any securities
convertible into or exchangeable for any of its authorized capital stock. There
are no shares of capital stock held in the treasury of Nash Weiss and no shares
of capital stock of Nash Weiss have been issued in violation of, or are subject
to, any preemptive rights, puts, demands, subscription agreements or commitments
of any character. Nash Weiss is not subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any shares of its
capital stock.
SECTION 3.3. CORPORATE ORGANIZATIONAL DOCUMENTS. Copies of (i) the
charter of Nash Weiss, certified by the Secretary of the State of Delaware, and
(ii) the by-laws of Nash Weiss, certified by the secretary of Nash Weiss, each
of which have been delivered to counsel for Quick & Reilly, are true and
complete copies of such documents, as amended to date, and are in full force and
effect on the date hereof.
SECTION 3.4. NO CONFLICT. Except as set forth on SCHEDULE 3.4, neither
the execution and delivery of this Agreement by Nash Weiss, nor the consummation
of the transactions contemplated hereby by Nash Weiss, will (i) conflict with or
result in a breach of the terms, conditions or provisions of, (ii) violate or
constitute a default, an event of default (or an event which, with notice or
lapse of time or both, would constitute a default or an event of default) or an
event creating rights of modification, acceleration, termination, cancellation
or other additional rights, or loss of rights under, or (iii) result in the
creation of any Encumbrance upon any of the capital stock, assets or property of
Nash Weiss pursuant to, the charter or by-laws of Nash Weiss, or any note, bond,
mortgage, indenture, deed of trust, lease, Contract, Permit, agreement, or other
instrument or any Order of any Governmental Authority or Regulatory Agency to
which Nash Weiss is a party or subject, or by which any of its capital stock,
assets or property is bound or (iv) contravene any applicable provision of any
Laws.
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SECTION 3.5. CONSENTS. Except for: (i) filings of applications and
notices with the NASD; (ii) filings of applications and notices with the United
States Federal Trade Commission (the "FTC") and the Antitrust Division of the
United States Department of Justice ("DOJ") pursuant to the Antitrust
Improvements Act; (iii) the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware; and (iv) consents and approvals set
forth on SCHEDULE 3.13, and except as otherwise set forth on SCHEDULE 3.5, no
consent, approval or authorization of, exemption of other action by notice or
declaration, filing or registration with, any Person is required to be obtained,
made or given by Nash Weiss in connection with the execution, delivery and
performance of this Agreement or the consummation by Nash Weiss of the
transactions contemplated by this Agreement.
SECTION 3.6. FINANCIAL STATEMENTS. Nash Weiss has previously delivered
to Quick & Reilly correct and complete copies of the audited financial
statements of Nash Weiss for the years ended June 30, 1994, 1995 and 1996 (the
"Financial Statements") and the unaudited financial statements of Nash Weiss for
the six month period ended December 31, 1996 and each FOCUS Report filed after
June 30, 1995 (collectively, the "Interim Financial Statements") and has made
available for inspection all auditors' work papers related to the foregoing
financial information. Except as set forth on SCHEDULE 3.6, the Financial
Statements and the Interim Financial Statements have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis. The
Financial Statements and the Interim Financial Statements are based on the books
and records of Nash Weiss at the time of their preparation, and, fairly present
the financial condition of Nash Weiss as of the dates they were prepared and the
results of the operations of Nash Weiss for the periods indicated, subject, in
the case of the Interim Financial Statements, to normal recurring year-end
adjustments which, except as set forth on SCHEDULE 3.6 will not, individually or
in the aggregate be material.
SECTION 3.7. NO UNDISCLOSED LIABILITIES. Nash Weiss does not have any
liabilities or obligations (absolute, accrued, contingent or otherwise) which
individually, or in the aggregate, would have a Material Adverse Effect on Nash
Weiss, except for (a) liabilities and obligations reflected in either the
Financial Statements (including the notes thereto) or Interim Financial
Statements, and (b) liabilities and obligations disclosed on SCHEDULE 3.7.
SECTION 3.8. ABSENCE OF CERTAIN CHANGES. Except as contemplated by this
Agreement or except as otherwise set forth in SCHEDULE 3.8, since the date of
the Interim Financial Statements, Nash Weiss has operated its business only in
the ordinary course and there has not been:
(a) any change in the Business or in the financial condition
or in the operations of Nash Weiss (including, without limitation, a loss of
traders) which could reasonably be expected to have a Material Adverse Effect on
Nash Weiss;
(b) any damage, destruction or loss, not covered by insurance,
with respect to any material asset of Nash Weiss;
(c) except in the ordinary course of business, any sale,
assignment, disposition, transfer, lease, mortgage, pledge or Encumbrance of any
material assets of Nash Weiss;
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(d) any loss of any customer which has had or could reasonably
be expected to have a Material Adverse Effect on Nash Weiss;
(e) any increase or decrease by Nash Weiss, except as
consistent with past practices, in the wages, salaries, compensation, pension or
other benefits payable to any employee;
(f) any declaration, setting aside or payment of any dividend
or distribution to any stockholder of Nash Weiss or redemption, purchase or
other acquisition of any Nash Weiss capital stock or any right to acquire Nash
Weiss Common Stock;
(g) any material labor trouble, problem or grievance;
(h) notice from any customer of Nash Weiss that it will or may
cease doing business with Nash Weiss as a result of the transactions
contemplated by this Agreement;
(i) any change in any method of accounting or working
practice; or
(j) any agreement, whether or not in writing, to do any of the
foregoing.
SECTION 3.9. REPORTS. Nash Weiss has timely filed all material reports,
registrations and statements, together with any amendments required to be made
with respect thereto, that it was required to file since January 1, 1991 with
(i) any Governmental Authority, (ii) the NASD and (iii) any other Regulatory
Agencies, and has paid all fees and assessments due and payable in connection
therewith. Except for normal examinations conducted by a Governmental Authority
or Regulatory Agency in the regular course of the business of Nash Weiss, no
Governmental Authority or Regulatory Agency, except the NASD and the Department
of the Treasury-Division of Taxation of the State of New Jersey, in connection
with the NASDAQ Proceedings and the Tax Dispute, respectively, has initiated any
proceeding or, to the knowledge of Nash Weiss, investigation into the business
or operations of Nash Weiss since January 1, 1991. Except for matters related to
each of the NASDAQ Proceedings, including the Lawsuit, and the Tax Dispute,
there are no material unresolved violations, criticisms, or exceptions by any
Governmental Authority or Regulatory Agency with respect to any report or
statement relating to any examinations of Nash Weiss.
SECTION 3.10. TITLE TO REAL PROPERTY. SCHEDULE 3.10 contains a complete
and accurate list of all real properties owned by Nash Weiss (the "Owned Real
Property"). Nash Weiss holds good and marketable fee simple title (both legal
and equitable) to the Owned Real Property, free and clear of any Encumbrances,
except Permitted Encumbrances and Encumbrances set forth on SCHEDULE 3.10.
SECTION 3.11. REAL PROPERTY LEASES. SCHEDULE 3.11 contains a complete
and accurate list of each lease or similar agreement under which (i) Nash Weiss
is lessee of, or holds or uses, any real property owned by any Person or (ii)
Nash Weiss is lessor of any of the Owned Real Property. Except as set forth in
SCHEDULE 3.11, Nash Weiss has the right to quiet enjoyment (subject to
compliance with the terms of any such lease) of all the real property leased by
Nash Weiss for the full term of each such lease or similar agreement relating
thereto, and the leasehold or other interest of Nash Weiss is not subject or
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subordinate to any Encumbrance except for Permitted Encumbrances. All leases and
similar agreements referred to in SCHEDULE 3.11 are legally binding and in full
force and effect, and there exists no material default or event of default (or
an event which, with notice or lapse of time or both, would constitute a default
or event of default) thereunder on the part of Nash Weiss, or, to the knowledge
of Nash Weiss, any other party thereto.
SECTION 3.12. TITLE AND CONDITION OF CERTAIN PERSONAL PROPERTY.
(a) True and correct copies of a fixed asset detail listing of
Nash Weiss has previously been delivered to Quick & Reilly, which listing
reflects all material Personal tangible assets of Nash Weiss. Set forth in
SCHEDULE 3.12 is a list of all equipment and fixtures subject to any lease or
rental agreement to which Nash Weiss is a party and which requires annual
payments in excess of $5,000 per year. Except for those Encumbrances set forth
on SCHEDULE 3.12, there are no Encumbrances, except Permitted Encumbrances, on
any Personal property owned by Nash Weiss.
(b) Except as otherwise stated on SCHEDULE 3.12, the machinery,
equipment and other Personal property used in the Business (i) is in good
operating condition, usable in the ordinary course of business, ordinary wear
and tear excepted, (ii) is in a state of normal maintenance and repair, (iii) is
sufficient and adequate to carry on the Business as now conducted and (iv)
complies in all material respects with all applicable Laws.
SECTION 3.13. CONTRACTS. (a) SCHEDULE 3.13 contains a complete and
correct list of all Contracts of the following types to which Nash Weiss is a
party or by which Nash Weiss is bound:
(i) any Contract relating to the future purchase of
services, products, materials or supplies which (A) has a
remaining obligation in excess of $5,000 or (B) otherwise
materially affects the Business;
(ii) any Contract relating to any obligation for
borrowed money or any guarantee or indemnification of an
obligation for borrowed money or any other obligation or
liability;
(iii) any Contract that limits the right of Nash Weiss
to compete in any line of business or to compete with any
other Person;
(iv) any Contract (A) relating to any outstanding
commitment for capital expenditures in excess of $5,000 for
any single project (so long as all such contracts not
disclosed do not exceed $25,000 in the aggregate for all
projects) or (B) otherwise materially affects the Business;
(v) any Contract relating to the employment of any
Person;
(vi) any Contract relating to management services,
consulting or any other similar type contract;
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(vii) any Contract for clearing services (other than
the agreement with U.S. Clearing Corp.);
(viii) any Contract relating to Permits to or from
Nash Weiss; or
(ix) excluding Contracts covered in subsections (i)
through (viii) above, any Contract which (A) involves the
annual payment or annual receipt by Nash Weiss of more than
$5,000 or (B) otherwise materially affects the Business.
(b) Except as set forth in SCHEDULE 3.13, all the Contracts
referred to in SCHEDULE 3.13 are legally binding, valid and in full force and
effect, and there exists no material violation, default or breach thereunder on
the part of Nash Weiss or, to the knowledge of Nash Weiss, any other party
thereto.
(c) True and complete copies of all documents listed in
SCHEDULE 3.13 have been delivered to Quick & Reilly.
SECTION 3.14. LITIGATION. (a) Except for the NASDAQ Proceedings,
including the Lawsuit, and the Tax Dispute, and except as otherwise set forth in
SCHEDULE 3.14(A), there is no claim, suit, action, arbitration, or other legal,
administrative or governmental investigation or proceeding pending or, to the
knowledge of Nash Weiss, threatened against Nash Weiss which is reasonably
likely to have, if adversely determined, individually or in the aggregate, a
Material Adverse Effect on Nash Weiss, nor is there any Order of any
Governmental Authority or Regulatory Agency to which the Business or the assets
or capital stock of Nash Weiss is subject, or which insofar as can be foreseen,
in the future may have, any such effect on the Business or the assets or capital
stock of Nash Weiss.
(b) The State of New Jersey Department of the
Treasury-Division of Taxation is seeking $889,440 plus interest accrued
subsequent to August 15, 1996 in the Tax Dispute and no other remedy. To the
knowledge of Nash Weiss, based on correspondence received from the State of New
Jersey Department of the Treasury-Division of Taxation, the State of New Jersey
Department of the Treasury-Division of Taxation has not threatened to take any
action with respect to the Tax Dispute which would have a Material Adverse
Effect on Nash Weiss.
SECTION 3.15. TAX MATTERS. (a) Except for the Tax Dispute and except
as otherwise set forth in SCHEDULE 3.15:
(i) All returns, declarations or claims for refund
relating to Taxes (as hereinafter defined), including any schedule or
attachment thereto, and including any amendment thereof, reports and
forms, including information returns and reports, required to be filed
by or with respect to Nash Weiss (for purposes of this SECTION 3.15,
Nash Weiss shall include any predecessor and any corporation or other
entity previously included in a consolidated group with Nash Weiss)
(each, a "Tax Return") with respect to any federal, state, local and
foreign income, gross receipts, license, employment, environmental
(including taxes under Section 59A of the Code), customs, duties,
capital stock, social security, unemployment, disability, franchise,
sales, use, occupation, property (real or personal), property transfer,
alternative or add-on minimum, estimated, excise, payroll, withholding,
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assessments, or governmental charges of any kind or character,
including any interest, additions to tax and penalties (whether
disputed or not) thereon, and including estimated taxes (the above
being hereinafter collectively called "Taxes") (A) relating in whole
or in part to periods or portions thereof after December 31, 1993 (I)
have been timely filed or valid extensions with respect thereto have
been obtained and (II) were correct and complete in all material
respects and all Taxes owed by Nash Weiss (whether or not shown on any
Tax Return and whether or not imposed on Nash Weiss or imposed on a
third party for collection by Nash Weiss), with respect to such
periods have been timely paid and/or remitted, except Taxes relating
to the period after December 31, 1996 to the extent that the same are
taken into account in determining Nash Weiss Net Book Value and (B)
relating solely to periods or portions thereof prior to January 1,
1994, (I) have been timely filed and (II) were correct and complete in
all material respects and all Taxes owed by Nash Weiss (whether or not
shown on any Tax Return) with respect to such periods have been timely
paid. All Taxes for which a notice of assessment or demand for payment
has been received have been timely paid.
(ii) Complete and correct copies of (A) all federal,
state, local and foreign (as applicable) Tax Returns, examination
reports and statements of deficiencies (assessed against or agreed to)
of Nash Weiss for each of the taxable years ended December 30, 1992
through December 30, 1996 and (B) examination reports and statements of
deficiencies (assessed against or agreed to) of Nash Weiss (or combined
or consolidated returns, if any) for each of the taxable years or other
periods ended December 30, 1992 through December 30, 1996 have been
delivered to Quick & Reilly.
(iii) Neither the Internal Revenue Service nor any
other taxing authority is now asserting or, to the knowledge of Nash
Weiss, threatening to assert against Nash Weiss any deficiency or claim
for or relating to Taxes. The Tax Returns related to Taxes filed by or
with respect to Nash Weiss are not being examined by, and no
notification of intention to examine has been received from, the
Internal Revenue Service or any other taxing authority. No currently
pending issues have been raised in writing by the Internal Revenue
Service or any other taxing authority in connection with any Tax Return
related to Taxes filed by or with respect to Nash Weiss. To the
knowledge of Nash Weiss, since the taxable year ended December 31,
1993, no Tax Return has been audited with respect to Nash Weiss.
(iv) Nash Weiss has not (A) filed any consent under
Section 341(f) of the Code, (B) executed or been affected by a waiver
or consent extending any statute of limitations for federal income or
other tax liability which remains outstanding, (C) applied for a tax
ruling that has continuing effect (or been affected by a tax ruling
directed to an affiliated corporation which has continuing effect), (D)
entered into or been affected by a closing agreement with any taxing
authority that has continuing effect, (E) filed an election under
Section 338(g) or Section 338(h)(10) of the Code or caused or been the
subject of a deemed election under Section 338(e) thereof, (F) made an
election, or been required, to treat any asset of Nash Weiss as owned
by another Person pursuant to the provisions of Section 168(f) of the
Code or as tax-exempt bond financed property or tax-exempt use property
within the meaning of Section 168 of the Code, (G) agreed
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to make, or been required to make, any adjustment under Section 481(a)
of the Code to have effect after the Closing or (H) participated in an
international boycott under Section 999 of the Code.
(v) Nash Weiss has not made or become obligated to make
make, and will not, as a result of any event connected with
compensation for certain of the transactions contemplated by this
Agreement, make or become obligated to make, any payment that would not
be deductible under Section 280G of the Code.
(vi) None of the assets of Nash Weiss directly or
indirectly secures the payment of debt the interest on which is
tax-exempt under the Code.
(vii) No written claim has ever been made to Nash
Weiss by an authority in a jurisdiction where Nash Weiss does not file
Tax Returns that it is or may be subject to taxation by that
jurisdiction. There are no Encumbrances on any of the assets of Nash
Weiss, or to the knowledge of Nash Weiss, the issued and outstanding
capital stock of Nash Weiss, that arose in connection with any failure
(or alleged failure) to pay any Taxes.
(viii) Nash Weiss has withheld, paid and reported all
Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor,
creditor, shareholder or third party.
(ix) There is no dispute or claim concerning any Tax
liability of Nash Weiss either: (A) claimed or posed in writing; or (B)
as to which Nash Weiss has knowledge based upon contact with any agent
of any taxing authority.
(x) Nash Weiss has not waived any statute of
limitations in respect of Taxes or agreed to any extension of time with
respect to a Tax assessment or deficiency.
(xi) Nash Weiss has made an election under Section
1362(a) of the Code to be treated as an "S corporation," which election
has been in effect with respect to all periods that Nash Weiss has been
in existence and which will not have "terminated," within the meaning
of Section 1362(d) of the Code, prior to the Closing. To the extent
permitted by applicable law, Nash Weiss has made a corresponding
election which election has been in effect with respect to all periods
that Nash Weiss has been in existence and which election has not been
terminated, under the laws of each jurisdiction in which it is or was
required to file a Tax Return.
(b) Nash Weiss has heretofore delivered to Quick & Reilly
correct and complete copies of all documents relating to the Tax Dispute.
SECTION 3.16. COMPLIANCE WITH LAW; PERMITS. (a) Except as otherwise set
forth on SCHEDULE 3.16, the Business has been conducted in compliance with all
Laws and Orders and does not violate, and Nash Weiss is not in conflict with, or
in default or violation of, any Laws and Orders, and, except for matters related
to the NASDAQ Proceedings, including the Lawsuit
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and the Tax Dispute, Nash Weiss has not received any notice from any
Governmental Authority or Regulatory Agency alleging any such lack of
compliance, violation, conflict or default.
(b) (i) Nash Weiss has made and/or possesses all Permits
necessary or desirable for it to own and use its assets and properties and to
conduct the Business, (ii) Nash Weiss is in compliance with the terms of, and
has not violated, such Permits and (iii) except for matters related to the
NASDAQ Proceedings, no proceedings are pending or, to the knowledge of Nash
Weiss, threatened to revoke or limit any such Permit.
SECTION 3.17. INTELLECTUAL PROPERTY. (a) SCHEDULE 3.17 contains a
complete and accurate list of all (i) patented or registered Intellectual
Property Rights owned or used by Nash Weiss, (ii) pending patent applications
and applications for registrations of other Intellectual Property Rights filed
by Nash Weiss, (iii) material unregistered trade names and corporate names owned
or used by Nash Weiss and (iv) material unregistered trademarks, service marks,
copyrights, mask works and computer software owned or used by Nash Weiss.
SCHEDULE 3.17 also contains a complete and accurate list of all licenses and
other rights granted by Nash Weiss to any third party with respect to any
material Intellectual Property Rights and all licenses and other rights granted
by any third party to Nash Weiss with respect to any material Intellectual
Property Rights, in each case identifying the subject Intellectual Property
Rights. Except as set forth on SCHEDULE 3.17, Nash Weiss owns all right, title
and interest to, or has the right to use pursuant to a valid license, all
Intellectual Property Rights necessary for the operation of the Business as
presently conducted, free and clear of all Encumbrances (except for any such
license). Except as set forth on SCHEDULE 3.17, the loss or expiration of any
Intellectual Property Right or related group of Intellectual Property Rights
owned or used by Nash Weiss has not had and would not reasonably be expected to
have a Material Adverse Effect on Nash Weiss, and no such loss or expiration is,
to the knowledge of Nash Weiss, threatened or pending. Nash Weiss has taken all
necessary actions to maintain and protect the material Intellectual Property
Rights which it owns.
(b) Except as set forth on SCHEDULE 3.17, (i) Nash Weiss owns all
right, title and interest in and to all of the Intellectual Property Rights
listed on such schedule, free and clear of all Encumbrances, (ii) there have
been no claims made against Nash Weiss asserting the invalidity, misuse or
unenforceability of any of such Intellectual Property Rights, (iii) Nash Weiss
has not received any notices of any infringement or misappropriation by, or
conflict with, any third party with respect to such Intellectual Property Rights
(including, without limitation, any demand or request that Nash Weiss license
any rights from a third party), (iv) to the knowledge of Nash Weiss, the conduct
of the Business has not infringed, misappropriated or conflicted with and does
not infringe, misappropriate or conflict with any Intellectual Property Rights
of other Persons, and (v) to the knowledge of Nash Weiss, the Intellectual
Property Rights owned by or licensed to Nash Weiss have not been infringed,
misappropriated or conflicted by other Persons. Except as set forth in SCHEDULE
3.17, the consummation of the transactions contemplated by this Agreement will
have no material adverse effect on the Company's right, title and interest in
and to the Intellectual Property Rights listed on SCHEDULE 3.17.
SECTION 3.18. BENEFIT PLANS OF NASH WEISS. (a) Except as set forth in
SCHEDULE 3.18, Nash Weiss is not, and has never been, a party to (i) any
"employee benefit plan" within the meaning of Section 3(3) of ERISA, (ii) any
profit sharing, pension, defined compensation, bonus, stock option, stock
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purchase, disability, severance, health, welfare or incentive plan or agreement,
or (iii) any written or unwritten plan or policy providing for "fringe benefits"
to its employees, including but not limited to vacation, paid holidays, personal
leave, employee discount, educational benefit or similar programs (individually
a "Plan," and collectively the "Plans").
(b) Each Plan is, and has at all times been, operated in all
aspects in substantial compliance with its governing documents, ERISA, the Code,
all regulations, rulings and announcements promulgated or issued under ERISA and
the Code, and all other applicable law, including without limitation, all
reporting, disclosure and other requirements of ERISA applicable to each such
Plan.
(c) Each Plan which is an employee pension benefit plan (a
"Pension Plan"), as defined in Section 3(2) of ERISA, and which is intended to
be qualified under Section 401(a) of the Code, is so qualified, and any trust
through which any such Plan is or has been funded, is exempt from federal income
tax under Section 501(a) of the Code, and no fact or circumstance exists which
would adversely affect the qualified status of any Plan or trust.
(d) Neither any Plan nor Nash Weiss nor any "party in
interest" (as defined in Section 3(14) of ERISA, nor any "disqualified person"
(as defined in Section 4975 of the Code) nor any fiduciary with respect to any
Plan, nor any other party, has ever been or is presently engaged in any
prohibited transactions as defined by Section 406 of ERISA or Section 4975 of
the Code for which an exemption is not applicable which could subject Nash Weiss
to the tax or penalty imposed by Section 4975 of the Code or to any liability
under Section 502 of ERISA.
(e) With respect to any Pension Plan, there is no event or
condition existing which could be deemed a "reportable event" (within the
meaning of Section 4043 of ERISA) with respect to which the thirty-day notice
requirement has not been waived; no condition exists which could subject Nash
Weiss to a penalty under Section 4071 of ERISA.
(f) Nash Weiss is not, and has never been, a party to any
"multi-employer plan," as that term is defined in Section 3(37) of ERISA.
(g) Quick & Reilly has been provided with a true and correct
copy of (i) all plan documents relating to each Plan; (ii) all material
contracts relating to each Plan, including without limitation insurance
contracts, investment management contracts and record keeping arrangements;
(iii) Form 5500 series and any attached schedules with respect to the last three
plan years for each Plan; (iv) the most recent summary plan description of each
Plan; (v) the most recent determination letter issued by the Internal Revenue
Service for each Pension Plan; and (vi) with respect to each Pension Plan that
is intended to qualify under the Code, true and complete employee census
information that will enable counsel for Quick & Reilly to determine whether
each such Pension Plan satisfies Section 410(b) of the Code and which identifies
by name each employee of Nash Weiss who is a highly compensated employee (as
defined in Section 414(q) of the Code) for the most recent year.
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(h) With respect to each Plan, there are no actions, suits or
claims (other than routine claims for benefits in the ordinary course) pending
or threatened against Nash Weiss, and there are no Orders of any Governmental
Authority or Regulatory Agency outstanding against any Plan or any fiduciary
thereof.
(i) With respect to each welfare benefit plan (as defined in
Section (3)(1) of ERISA) ("Welfare Benefit Plan") to which Nash Weiss is, or has
ever been, a party which constitutes a group health plan subject to Section
4980B of the Code, each such Welfare Benefit Plan complies, and in each case has
materially complied, with all applicable requirements of Section 4980B of the
Code.
(j) Except as required by Section 4980B of the Code, no Plan
that is a Welfare Benefit Plan provides or at any time provided for
non-terminable or non-alterable medical, life or other benefits described in
Section (3)(1) of ERISA, for employees or retirees, and no Welfare Benefit Plan
irrevocably or unalterably commits or at any time committed Nash Weiss to
provide such benefits or any other benefits for any party upon or following
retirement or other termination of employment.
(k) No Pension Plan has suffered an "accumulated funding
deficiency" (as defined in Section 302(a)(2) of ERISA or Section 412(a) of the
Code).
(l) All material contributions, premiums or claim payments
required to be made to or on behalf of each Plan by law, contract or the terms
of the Plan have been made.
(m) No termination or partial termination of a Plan within the
meaning of Section 4042 of ERISA or Section 411(d)(3) of the Code has occurred,
and no condition exists that would constitute grounds for termination or partial
termination of any Plan.
(n) Nash Weiss is not, nor has it been, a party to and Nash
Weiss does not directly or indirectly maintain or contributes, nor has it
directly or indirectly maintained or contributed, to any Welfare Plan that is
separately funded or is intended, through any funding method, trust or
arrangement, to be part of a "voluntary employees beneficiary association" (as
defined in Section 501(c)(9) of the Code) or part of any other funding method,
trust or arrangement described in Section 501(c) of the Code which is intended
to be exempt from taxation under Section 501(a) of the Code.
(o) Nash Weiss does not intend, nor has it at any time, in any
manner, way or under any circumstance committed itself, to (i) create, adopt,
establish, participate in or maintain any benefit plan, fund, program,
agreement, or other benefits arrangement (including, without limitation, any
severance or other post-employment benefit, salary continuation, termination,
disability, death, retirement, health or medical benefit or any other similar
benefit), whether oral or written, other than the Plans, (ii) change, modify,
limit or expand any of the existing Plans, (iii) provide or to cause to be
provided to any person any payments or benefits in addition to, or in lieu of,
those payments or benefits set forth under the Plans, or (iv) continue the
payment of, or accelerate the payment of, benefits under any of the Plans,
except as expressly set forth thereunder.
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(p) No Plan provides benefits, including without limitation,
death, health or medical benefits (whether or not insured), with respect to
current or former employees of Nash Weiss beyond their retirement or other
termination of service (other than (i) coverage mandated by applicable law, (ii)
deferred compensation benefits accrued as liabilities on the books of Nash
Weiss, or (iii) benefits the full cost of which is borne by the current or
former employee (or his beneficiary)).
(q) The consummation of the transactions contemplated by this
Agreement will not (i) entitle any current or former employee or officer of Nash
Weiss to severance pay, unemployment compensation or any other payment, or (ii)
accelerate the time of payment or vesting, or increase the amount of
compensation due, any such employee or officer.
SECTION 3.19. ENVIRONMENTAL AND HEALTH/SAFETY MATTERS. Except as set
forth in SCHEDULE 3.19:
(a) The operation of the Business is and has at all times been
in compliance with all applicable Environmental Laws.
(b) Nash Weiss has obtained, maintained and complied with all
Permits required under Environmental Laws for the operation of the Business and
such Permits will continue to remain in effect without any change to their
respective terms and conditions after the Effective Time and, to the extent
required under any applicable Environmental Law, Nash Weiss will transfer,
re-obtain or otherwise modify such Permits in such manner as to allow the
uninterrupted operation of the Business. SCHEDULE 3.19 hereto sets forth a
complete and correct list of all Permits referenced in this SECTION 3.19(B),
copies of which have been delivered to Quick & Reilly.
(c) No Hazardous Substances have been generated, transported,
stored, treated, recycled, disposed of or otherwise handled in any way in the
operation of the Business, except in compliance with all applicable
Environmental Laws. There are no locations now owned or operated by Nash Weiss
where Hazardous Substances have been generated, transported, stored, treated,
recycled, disposed of or otherwise handled, except in compliance with all
applicable Environmental Laws. There is no past or ongoing release or threat of
release of Hazardous Substances from any of the properties currently owned or
operated by Nash Weiss or any of its affiliates or, to the knowledge of Nash
Weiss, from any properties formerly owned or operated by Nash Weiss or any of
its affiliates. Nash Weiss has not treated, stored for more than 90 days, or
disposed of any hazardous waste, as such term is used within the meaning of RCRA
or similar applicable state or municipal Law, except in compliance with all
applicable Environmental Laws.
(d) Nash Weiss has not received any written notice from any
Governmental Authority, Regulatory Agency or other Person advising that Nash
Weiss is potentially responsible for costs associated with any release or
threatened release of Hazardous Substances or potentially liable for any
violation of any Environmental Law. No pending or, to the knowledge of Nash
Weiss, threatened Order, litigation, settlement or citation with respect to
Hazardous Substances exists with respect to or in connection with the operation
of the Business.
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There has been no environmental investigation conducted by any Governmental
Authority or Regulatory Agency with respect to the operation of the Business.
(e) No underground storage tanks are or, to the knowledge of
Nash Weiss, ever were located on any properties currently or previously owned or
leased by Nash Weiss. To the knowledge of Nash Weiss, no PCBs or
asbestos-containing materials are located on, contained in or otherwise form a
part of any of the assets or properties of Nash Weiss.
(f) Nash Weiss has delivered to Quick & Reilly copies of all
environmental audits, reports and assessments concerning the assets or
properties of Nash Weiss which Nash Weiss possesses or which Nash Weiss has
knowledge of and reasonably can obtain.
SECTION 3.20. CORPORATE RECORDS. All stock certificate books, stock
certificates, transfer ledgers and minute books of Nash Weiss have been made
available to Quick & Reilly and are true and complete and constitute all of the
stock certificate books, stock certificates, transfer ledgers and minute books
thereof. The minute books of Nash Weiss reflect all material action taken and
authorizations given by the Board of Directors of Nash Weiss or any committee
thereof of Nash Weiss and all material action taken and authorizations given by
the stockholders of Nash Weiss. Nash Weiss has maintained all necessary books
and records pertaining to its business and operations as are required to be
maintained by the Exchange Act, the rules and regulations of the NASD and the
Laws of any state in which Nash Weiss is a registered broker-dealer.
SECTION 3.21. DEPOSITORIES. SCHEDULE 3.21 contains a complete list of
the name, location and account numbers of each bank, trust company, securities
broker or other financial institution in which Nash Weiss has an account,
deposits, safe deposit box, lock box or other assets on hand and the names of
all authorized Persons with respect thereto.
SECTION 3.22. INSURANCE. The assets and properties of Nash Weiss and
the conduct of the Business are insured by insurers of recognized responsibility
in such amounts and against such risks and losses as are adequate therefor in
accordance with past practices and with customary industry practices. All
material insurance policies or binders insuring the property, assets or business
liabilities of Nash Weiss are listed in SCHEDULE 3.22 and are in full force
effect and will be in full force and effect, or substantially comparable
replacement policies will be in full force and effect, on the Closing Date.
SCHEDULE 3.22 identifies those pending or threatened claims listed therein as to
which the insurance carrier has denied coverage or has advised Nash Weiss that
it is defending such claim under reservation of right.
SECTION 3.23. TRUE AND COMPLETE COPIES. All copies of agreements,
written contracts and documents delivered and to be delivered hereunder by Nash
Weiss are and will be true and complete copies of such agreements, contracts and
documents as of the respective dates on which such agreements, contracts and
documents were delivered.
SECTION 3.24. BROKERAGE. Neither Nash Weiss nor any of its officers
or directors has retained, employed or incurred any obligation to any investment
banker, broker or finder in connection with the transactions contemplated by
this Agreement.
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SECTION 3.25. TRANSACTIONS WITH AFFILIATES. Except as set forth on
SCHEDULE 3.25, neither the Sole Stockholder nor any officer, director or
employee of Nash Weiss or, to the knowledge of Nash Weiss, any Person in which
the Sole Stockholder or any officer, director or employee of Nash Weiss owns any
beneficial interest (other than a publicly-held corporation whose stock is
traded on a national securities exchange or in the over-the counter market and
less than one percent of the stock of which is beneficially owned by all of such
Persons), has any material agreement, arrangement or understanding with Nash
Weiss or any interest in any assets or property of Nash Weiss.
SECTION 3.26. SECURITIES AND EXCHANGE COMMISSION BROKER-DEALER
REGISTRATION. Nash Weiss is duly registered as a broker-dealer with the
Securities and Exchange Commission (the "Commission") pursuant to Section 15 of
the Exchange Act. Nash Weiss has previously delivered to Quick & Reilly a
complete and correct copy of Nash Weiss' current Form BD.
SECTION 3.27. NASD MATTERS. Nash Weiss is a member in good standing of
the NASD. Except as set forth on SCHEDULE 3.27, there are no special
restrictions or limitations imposed by the NASD on the conduct by Nash Weiss of
the Business, E.G., a "restriction letter."
SECTION 3.28. SIPC/CRD REGISTRATION. Nash Weiss is duly registered with
the Security Investors Protection Corporation (the "SIPC"). Nash Weiss has paid
all SIPC fees due to date. Nash Weiss is registered with the Central
Registration Depository under CRD Number 6470.
SECTION 3.29. STATE BROKER-DEALER REGISTRATIONS. Nash Weiss is
registered as a broker-dealer in the States of Illinois, New Jersey and Florida.
All of such registrations are current and Nash Weiss is in good standing as a
registered broker-dealer in each such state or jurisdiction. As of the date
hereof, no renewal or registration fee is due or owing to any state.
Nash Weiss' state broker-dealer registrations are in good standing.
SECTION 3.30. EMPLOYEES. SCHEDULE 3.30 sets forth the name, job
description and compensation of each employee of Nash Weiss whose earnings
during the last fiscal year of Nash Weiss was $20,000 or more (including bonuses
and other incentive compensation), and all employees who are expected to receive
at least $20,000 (including bonuses and other incentive compensation) in
earnings in respect of the present fiscal year. To the knowledge of Nash Weiss,
there are no pending or threatened disputes between the Nash Weiss and any of
its employees.
SECTION 3.31. REGISTERED PRINCIPALS AND REPRESENTATIVES. Attached
hereto as SCHEDULE 3.31 is a list of each Person registered as a registered
principal or a registered representative with Nash Weiss, and each state or
jurisdiction in which such individual is registered.
SECTION 3.32. BROKERS' BOND. Nash Weiss currently has in effect a
blanket broker-dealer fidelity bond, a copy of which has previously been
delivered to Quick & Reilly.
SECTION 3.33. INTERCOMPANY LIABILITIES. Except as reflected in the
Financial Statements or Interim Financial Statements or except as disclosed on
SCHEDULE 3.33 or SCHEDULE
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3.25 attached hereto, there are no liabilities, contracts or commitments between
Nash Weiss, on the one hand, and the Sole Stockholder or any affiliate of the
Sole Stockholder, on the other. Except as disclosed on SCHEDULE 3.33 or SCHEDULE
3.25 attached hereto, during the period from July 1, 1993 to the date hereof, no
such liabilities, contracts or commitments have been paid and no settlements
thereof have been made except those paid or settled on a basis consistent with
the past practices of Nash Weiss.
SECTION 3.34. FULL DISCLOSURE. No statement by Nash Weiss contained in
this ARTICLE III, the Schedules hereto or in any written certificate furnished
to Quick & Reilly pursuant to this Agreement as of the respective date thereof,
taken as a whole, contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statement contained herein
or therein not materially and adversely misleading; PROVIDED, HOWEVER, that Nash
Weiss makes no representation or warranty as to the general business and
economic condition of the industry in which the Business is conducted.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE SOLE STOCKHOLDER
As an inducement to Quick & Reilly and Acquiror to enter into this
Agreement and to consummate the transactions contemplated hereby, the Sole
Stockholder represents and warrants to each of Quick & Reilly and Acquiror as
follows:
SECTION 4.1. RECORD AND BENEFICIAL OWNERSHIP OF NASH WEISS COMMON
STOCK. All of the issued and outstanding shares of Nash Weiss Common Stock are
owned beneficially and of record by the Sole Stockholder, free and clear of any
Encumbrances, options, puts, calls, contracts, preemptive rights, rights of
first refusals, rights of conversion or exchange, or equities. There are no
voting trusts, proxies or other agreements or understandings relating to the
voting of the issued and outstanding shares of Nash Weiss Common Stock.
SECTION 4.2. DUE EXECUTION. This Agreement has been duly executed
and delivered by the Sole Stockholder and constitutes the legal, valid and
binding obligation of the Sole Stockholder enforceable against him in accordance
with its terms.
SECTION 4.3. NO CONFLICT. Except as set forth on SCHEDULE 4.3, by the
Sole Stockholder neither the execution and delivery of this Agreement by the
Sole Stockholder, nor the consummation of the transactions contemplated hereby
by the Sole Stockholder, will (i) conflict with or result in a breach of the
terms of, (ii) violate or constitute a default, an event of default (or an event
which, with notice or lapse of time or both, would constitute a default or an
event of default) or an event creating rights of modification, acceleration,
termination, cancellation or other additional rights, or loss of rights under,
or (iii) result in the creation of any Encumbrance upon any assets or property
of the Sole Stockholder pursuant to, any note, bond, mortgage, indenture, deed
of trust, lease, Contract, Permit, agreement, or other instrument or any Order
of any Governmental Authority or Regulatory Agency to which the Sole Stockholder
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is a party or subject, or by which the assets or property of the Sole
Stockholder is bound or (iv) contravene any applicable provision of any Laws.
SECTION 4.4. CONSENTS. Except for: (i) filings of applications and
notices with the NASD; (ii) filings of applications and notices with the FTC and
the DOJ pursuant to the Antitrust Improvements Act, and except as otherwise set
forth on SCHEDULE 4.4, no consent, approval or authorization of, exemption of
other action by notice or declaration, filing or registration with, any Person
is required to be obtained, made or given by the Sole Stockholder in connection
with the execution, delivery and performance of this Agreement or the
consummation by the Sole Stockholder of the transactions contemplated by this
Agreement.
SECTION 4.5. BROKERAGE. The Sole Stockholder has not retained,
employed or incurred any obligation to any investment banker, broker or finder
in connection with the transactions contemplated by this Agreement.
SECTION 4.6. INVESTMENT REPRESENTATIONS. (a) The Quick & Reilly Common
Stock being acquired by the Sole Stockholder pursuant to this Agreement is for
the Sole Stockholder's own account. The Sole Stockholder presently intends to
hold such securities for purposes of investment, and the Sole Stockholder has no
intention of selling such securities in a public distribution in violation of
the federal securities laws or any applicable state securities laws.
(b) The Sole Stockholder (i) is an "accredited investor" as
the term is defined in Rule 501(a) promulgated under the Securities Act, (ii) is
an investor experienced in the valuation of businesses similar to Nash Weiss,
(iii) is able to fend for himself in the transactions contemplated by this
Agreement, (iv) has such knowledge and experience in financial, business and
investment matters as to be capable of evaluating the merits and risks of the
transactions contemplated by this Agreement and an investment in Quick & Reilly
Common Stock, (v) has the ability to bear the economic risks of an investment in
Quick & Reilly Common Stock and (vi) without in any way limiting the Sole
Stockholder's right or ability to rely on the representations and warranties
made by each of Quick & Reilly and Acquiror in or pursuant to this Agreement,
has been afforded prior to the Closing the opportunity to ask questions of, and
to receive answers from each of Quick & Reilly and Acquiror and to obtain any
additional information, to the extent each of Quick & Reilly and Acquiror has
such information or can acquire it without unreasonable effort or expense, all
as necessary for the Sole Stockholder to make an informed investment decisions
with respect to the transactions contemplated by this Agreement.
(c) Sole Stockholder understands and acknowledges that (i) the
Quick & Reilly Common Stock to be transferred hereunder is unregistered and may
be required to be held indefinitely, subject to the put right in SECTION
13.1(C), unless it is subsequently registered under the Securities Act or an
exemption from such registration is available; (ii) except as provided in this
Agreement, Quick & Reilly is under no obligation to file a registration
statement with the Commission with respect to the shares of Quick & Reilly
Common Stock to be acquired by the Sole Stockholder in connection with the
consummation of the transactions contemplated by this Agreement; and (iii) Rule
144 promulgated under the Securities Act ("Rule 144"), which provides for
certain limited sales of unregistered securities, is not presently available
with
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respect to the shares of Quick & Reilly Common Stock to be acquired by the Sole
Stockholder in connection with the consummation of the transactions contemplated
by this Agreement.
SECTION 4.7. FULL DISCLOSURE. No statement by the Sole Stockholder
contained in this ARTICLE IV, the Schedules hereto or in any written certificate
furnished to Quick & Reilly or Acquiror pursuant to this Agreement as of the
respective date thereof, taken as a whole, contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statement contained herein or therein not materially and adversely misleading.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF QUICK & REILLY
As an inducement to Nash Weiss and the Sole Stockholder to enter into
this Agreement and to consummate the transactions contemplated hereby, Quick &
Reilly hereby represents and warrants to Nash Weiss as follows:
SECTION 5.1. ORGANIZATION, QUALIFICATION AND AUTHORITY OF QUICK &
REILLY. (a) Quick & Reilly is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware. Quick & Reilly has
full corporate power and authority and all material licenses, permits and
authorizations necessary to own, lease and operate its properties and to carry
on its business as presently conducted and presently proposed to be conducted.
Quick & Reilly has been duly qualified or licensed as a foreign corporation for
the transaction of business in, and is in good standing under the laws of, each
jurisdiction in which it owns, leases or uses property or conducts any business
so as to require such qualification or licensing, except where the failure to so
qualify would not have a Material Adverse Effect on Quick & Reilly.
(b) Quick & Reilly has full corporate power and authority to
enter into this Agreement and to perform its obligations hereunder. The
execution and delivery of this Agreement by Quick & Reilly and the performance
of the transactions contemplated hereby have been duly authorized by the Board
of Directors of Quick & Reilly and no further corporate action on the part of
Quick & Reilly is necessary to authorize this Agreement and its performance of
the transactions contemplated hereby. This Agreement has been duly executed and
delivered by Quick & Reilly and constitutes the legal, valid and binding
obligation of Quick & Reilly enforceable against it in accordance with its
terms.
SECTION 5.2. NO CONFLICT. Except as set forth on SCHEDULE 5.2, neither
the execution and delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (i) conflict with or result in a breach
of the terms, conditions or provisions of, (ii) violate or constitute a default,
an event of default (or an event which, with notice or lapse of time or both,
would constitute a default or an event of default) or an event creating rights
of modification, acceleration, termination, cancellation or other additional
rights, or loss of rights under, or (iii) result in the creation of any
Encumbrance upon any of the capital stock, assets or property of Quick & Reilly
pursuant to, the charter or by-laws of Quick & Reilly, or any note, bond,
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mortgage, indenture, deed of trust, lease, Contract, Permit, agreement, or other
instrument or any Order of any Governmental Authority or Regulatory Agency to
which Quick & Reilly is a party or subject, or by which any of its capital
stock, assets or property is bound or (iv) contravene any applicable provision
of any Laws.
SECTION 5.3. CONSENTS. Except for: (i) filings of applications and
notices with the NASD; (ii) filings of applications and notices with the FTC and
DOJ pursuant to the Antitrust Improvements Act, (iii) the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware and
except as otherwise set forth on SCHEDULE 5.3, no consent, approval or
authorization of, exemption of other action by notice or declaration, filing or
registration with, any Person is required to be obtained, made or given by Quick
& Reilly in connection with the execution, delivery and performance of this
Agreement or the consummation by Quick & Reilly of the transactions contemplated
by this Agreement.
SECTION 5.4. BROKERAGE. Neither Quick & Reilly nor any of its
officers or directors has retained, employed or incurred any obligation to any
investment banker, broker or finder in connection with the transactions
contemplated by this Agreement.
SECTION 5.5. QUICK & REILLY COMMON STOCK. All of the shares of Quick &
Reilly Common Stock to be issued or delivered to the Sole Stockholder in
connection with the transactions contemplated hereby, on the date of issuance or
delivery thereof, shall (a) be duly authorized, validly issued, fully paid and
nonassessable, (b) subject to the Escrow Agreement, free and clear of any
Encumbrances and (c) bear the following legend:
"The securities represented by this certificate are
not registered under the Securities Act of 1933, as
amended (the "Securities Act") and cannot be
transferred or sold unless they are subsequently
registered under the Securities Act or, in the
opinion of counsel for the issuer, an exemption
from such registration is available."
SECTION 5.6. FILINGS WITH THE COMMISSION. All documents filed by Quick
& Reilly with the Commission pursuant to reporting obligations arising under the
Exchange Act were true and correct in all material respects as of the date
specified in such documents or if no date was so specified as of the date such
documents were filed. Except for consummation of the transactions contemplated
hereby, as of the date hereof, there has been no event, development or change in
the business of Quick & Reilly which would give rise to an obligation on behalf
of Quick & Reilly to amend, modify or supplement a filing with the Commission
previously made or to file additional reports, schedules or documents with the
Commission.
SECTION 5.7. RECAPITALIZATIONS. Except for a 2-for-1 split of the Quick
& Reilly Common Stock payable on March 28, 1997 (the "Stock Split Payment Date")
to the Sole Stockholder and the holders of record on March 5, 1997, since
January 1, 1997, there has not been any stock split or consolidation or other
recapitalization involving the Quick & Reilly Common Stock.
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ARTICLE VI.
REPRESENTATIONS AND WARRANTIES OF QUICK & REILLY AND ACQUIROR
As an inducement to Nash Weiss and the Sole Stockholder to enter into
this Agreement and to consummate the transactions contemplated hereby, Quick &
Reilly and Acquiror, jointly and severally, hereby represent and warrant to Nash
Weiss as follows:
SECTION 6.1. ORGANIZATION AND AUTHORITY. (a) Acquiror is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. Acquiror has full corporate power and authority necessary to
own, lease and operate its properties and to engage in the Business. Acquiror
has been duly qualified or licensed as a foreign corporation for the transaction
of business in, and is in good standing under the laws of, each jurisdiction in
which it owns, leases or uses property or conducts any business so as to require
such qualification or licensing. Acquiror does not have any subsidiaries, and,
except as expressly contemplated by this Agreement, Acquiror does not have any
direct or indirect ownership or hold any rights to acquire any capital stock or
equity or debt securities of any corporation or any other direct or indirect
equity ownership interest or Indebtedness interest in any other Person.
(b) Acquiror has full corporate power and authority to enter
into this Agreement and to perform its obligations hereunder. The execution and
delivery of this Agreement by Acquiror and the performance of the transactions
contemplated hereby have been duly authorized by the Board of Directors of
Acquiror and Quick & Reilly, as the holder of all of the issued and outstanding
shares of common stock of Acquiror, and no further corporate action on the part
of Acquiror is necessary to authorize this Agreement and its performance of the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by Acquiror and constitutes the legal, valid and binding obligation of
Acquiror enforceable against it in accordance with its terms.
SECTION 6.2. NO CONFLICT. Except as set forth on SCHEDULE 6.2, neither
the execution and delivery of this Agreement, nor the consummation of the
transactions contemplated herein, will (i) conflict with or result in a breach
of the terms of, (ii) violate or constitute a default, an event of default (or
an event which, with notice or lapse of time or both, would constitute a default
or an event of default) or an event creating rights of modification,
acceleration, termination, cancellation or other additional rights, or loss of
rights under, or (iii) result in the creation of any Encumbrance upon any of the
capital stock, assets or property of Acquiror pursuant to, the charter or
by-laws of Acquiror, or any note, bond, mortgage, indenture, deed of trust,
lease, Contract, Permit, agreement, or other instrument or any Order of any
Governmental Authority or Regulatory Agency to which Acquiror is a party or
subject, or by which any of its capital stock, assets or property is bound or
(iv) contravene any applicable provision of any Laws.
SECTION 6.3. CONSENTS. Except for: (i) filings of applications and
notices with the NASD; (ii) filings of applications and notices with the FTC and
DOJ pursuant to the Antitrust Improvements Act, (iii) the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware and
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except as set forth on SCHEDULE 6.3, no consent, approval or authorization of,
exemption of other action by notice or declaration, filing or registration with,
any Person is required to be obtained, made or given by Acquiror in connection
with the execution, delivery and performance of this Agreement or the
consummation by Acquiror of the transactions contemplated by this Agreement.
SECTION 6.4. ACQUIROR CAPITALIZATION. Acquiror's authorized capital
stock consists of one thousand (1,000) shares of common stock, par value $.01
per share, of which one hundred (100) shares are issued and outstanding, all of
which are validly issued, fully paid and non-assessable. Except for this
Agreement, there are no options, warrants, preemptive rights, conversion
privileges or other contracts which give any Person or entity the right to
acquire any capital stock of Acquiror or any interest therein. Quick & Reilly is
the beneficial and record owner of all of the outstanding shares of common stock
of Acquiror, free and clear of all Encumbrances.
SECTION 6.5. BUSINESS ACTIVITY; INDEBTEDNESS. Acquiror has not engaged
in any business activity of any nature prior to the date of this Agreement and
as of the date hereof Acquiror is not indebted or liable to any Person for any
obligation except as expressly contemplated herein.
ARTICLE VII.
COVENANTS OF THE PARTIES PENDING CLOSING
The respective parties hereto agree as follows with respect to the
period between the date of this Agreement and the Closing Date:
SECTION 7.1. REGULATORY APPROVALS AND COMPLIANCE. (a) Prior to the date
of this Agreement, Quick & Reilly, Nash Weiss and the Sole Stockholder shall
each file or consent to be filed with the FTC and the DOJ any notifications
required to be filed by their respective "ultimate parent" entities under the
Antitrust Improvements Act with respect to the transactions contemplated hereby.
Each of Quick & Reilly, Nash Weiss and the Sole Stockholder warrants that all
such filings by it or he, as the case may be will be, as of the date filed, true
and accurate and in accordance with the requirements of the Antitrust
Improvements Act. Each of Quick & Reilly, Nash Weiss and the Sole Stockholder
agree to make available to each other such information as each of them may
reasonably request relative to their business, assets and property as may be
required of each of them to file the required applications and notices with the
FTC and DOJ and to provide any additional information requested by such agencies
under the Antitrust Improvements Act.
(b) Quick & Reilly shall use its best efforts to have the
shares of Quick & Reilly Common Stock to be issued pursuant to this Agreement to
be listed, subject to official notice of issuance, on the New York Stock
Exchange.
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SECTION 7.2. CONDUCT OF BUSINESS. Except as otherwise contemplated by
the transactions provided for herein, pending the Closing, Nash Weiss shall, and
the Sole Stockholder shall cause Nash Weiss to, operate and carry on the
Business only in the ordinary course consistent with past practices.
Notwithstanding anything to the contrary contained in the immediately preceding
sentence, pending the Closing:
(a) Nash Weiss shall, and the Sole Stockholder shall cause
Nash Weiss to, take reasonable actions to maintain its assets in substantially
their present state of repair, reasonable wear and tear excepted, and to
preserve the goodwill of the Business and Nash Weiss's relationships with its
customers, suppliers, distributors, employees and other Persons or entities
having business relations with it.
(b) Except as contemplated by this Agreement, Nash Weiss shall
not, and the Sole Stockholder shall not permit Nash Weiss to, take any of the
following actions without the prior written approval of Quick & Reilly:
(i) Sell, assign, transfer, lease, consume or
otherwise dispose of any properties or assets except in the
ordinary course of business consistent with past practice or
merge, consolidate or engage in any other business combination
with any Person;
(ii) Amend, modify, cancel or waive any rights under
any Contract listed on SCHEDULE 3.13(A) or enter into any
Contract that would be required to be disclosed on SCHEDULE
3.13(A), other than in the ordinary course of business;
(iii) Make any capital expenditure or commit to make
any capital expenditure in excess of $5,000;
(iv) Mortgage, pledge or subject to Encumbrances
(other than purchase money liens) any properties or assets of
Nash Weiss;
(v) Assume, incur or guarantee any obligations or
liability for borrowed money;
(vi) Make any changes in its accounting methods,
principles or practices;
(vii) Knowingly act or omit to do any act within its
reasonable control which will cause it or the Sole Stockholder
to breach any representation, warranty or obligation of Nash
Weiss or the Sole Stockholder contained in this Agreement;
(viii) Amend its Certificate of Incorporation or
By-laws;
(ix) Issue any of its capital stock or make any
changes in its issued or exchangeable for and outstanding
capital stock, issue any option, warrant or other right
exercisable for or any security convertible into or
exchangeable for its capital stock or redeem, purchase or
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otherwise acquire any shares of its capital stock;
(x) Declare, set aside or pay any dividend or make
any other payment or distribution with respect to its capital
stock;
(xi) Increase or decrease the wages, salaries,
compensation, pension or other benefits payable to any former\
employee or any current employee; or
(xii) Agree to do any of the foregoing, except
as contemplated by this Agreement.
SECTION 7.3. CONDUCT OF BUSINESS OF ACQUIROR. During the period from
the date of this Agreement to the Effective Time, Acquiror shall not engage in
any business or activity of any nature except as provided in or contemplated by
this Agreement.
SECTION 7.4. APPROVALS. Each of Quick & Reilly, Acquiror, Nash Weiss
and the Sole Stockholder will act diligently and reasonably to secure all
Approvals required to be obtained by each of them, respectively, to satisfy the
conditions set forth in SECTION 9.2 with respect to each of Quick & Reilly and
Acquiror and SECTION 10.2 with respect to Nash Weiss and the Sole Stockholder.
SECTION 7.5. ACTIONS WITH RESPECT TO THE MERGER. (a) At or immediately
prior to the Effective Time, Quick & Reilly shall deposit with the Exchange
Agent: (i) the Aggregate Quick & Reilly Conversion Shares and (ii) cash in an
amount sufficient to pay for any fractional share of Quick & Reilly Common Stock
issuable pursuant to SECTION 2.4 hereof.
(b) Quick & Reilly, Acquiror and Nash Weiss shall take all
necessary steps to pre-clear the Certificate of Merger with the Secretary of
State of the State of Delaware, in order that, on the Closing Date, the
Certificate of Merger may be filed with such Secretary of State upon the
exchange of documents required in SECTIONS 11.2 AND 11.3.
SECTION 7.6. ACCESS TO INFORMATION. (a) Nash Weiss shall, and shall
cause its officers, directors, employees and agents to, afford the officers,
employees, representatives and agents of Quick & Reilly to (i) have full access
at reasonable times to all facilities, books, records and documents relating to
the Business (including without limitations, documents relating to regulatory
inquiries, complaints, investigations and ratings), (ii) make copies of such
books, records and documents, (iii) confer with the employees, officers,
directors, attorneys, accountants and other representatives of Nash Weiss with
respect to all matters regarding Nash Weiss or the Business and (iv) confer with
authorities of the Regulatory Agencies overseeing Nash Weiss with respect to all
matters regarding Nash Weiss or the Business. Nash Weiss shall have the right to
have a representative present at any conference undertaken by Quick & Reilly
pursuant to clauses (iii) or (iv) in the preceding sentence.
(b) No investigation pursuant to this SECTION 7.6 shall
affect, add to or subtract from any representations or warranties or the
conditions to the obligations of the parties hereto to consummate the Merger.
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SECTION 7.7. EXCLUSIVITY. From the date hereof until the earlier of (i)
the termination of this Agreement, (ii) the Closing Date or (iii) April 30,
1997, none of Nash Weiss, the Sole Stockholder, Weiss or Nash shall (i) solicit,
initiate or encourage the submission of any inquiries, proposal or offer from
any Person relating to the disposition of any capital stock or other voting
securities, or any portion of the assets or properties (including but not
limited to any acquisition structured as a merger, consolidation, or share
exchange), of Nash Weiss or (ii) participate in any discussions or negotiations
regarding, furnish any information with respect to, assist or participate in, or
facilitate in any other manner any effort or attempt by any Person to do or seek
any of the foregoing; PROVIDED, HOWEVER, that nothing contained in this SECTION
7.7 shall prohibit the Board of Directors of Nash Weiss from responding to any
unsolicited proposal or inquiry by advising the Person making such proposal or
inquiry of the terms of this SECTION 7.7. Nash Weiss will notify Quick & Reilly
immediately if any Person makes any communication, proposal, offer, inquiry or
contact with respect to any of the foregoing.
SECTION 7.8. NOTIFICATION OF CERTAIN MATTERS. Each of Nash Weiss and
the Sole Stockholder shall give prompt notice to Quick & Reilly, and Quick &
Reilly shall give prompt notice to each of Nash Weiss and the Sole Stockholder,
of (i) the occurrence, or failure to occur, of any event which 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 (ii) any material
failure of Nash Weiss, the Sole Stockholder or Quick & Reilly, as the case may
be, or of any officer, director, employee or agent of Nash Weiss or Quick &
Reilly, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by such party hereunder; PROVIDED, HOWEVER, that
failure to give such notice shall not constitute a waiver of any defense which
may be validly asserted.
SECTION 7.9. TAX-FREE REORGANIZATION. None of Quick & Reilly, Nash
Weiss or Sole Stockholder shall take or cause to be taken any action which would
disqualify the Merger as a "reorganization" within the meaning of Section 368(a)
of the Code, except for actions as may be contemplated by the Agreement.
ARTICLE VIII.
CONFIDENTIALITY AND PUBLICITY
SECTION 8.1. CONFIDENTIALITY. (a) All data, reports, records and other
written and oral information of any kind received by any party hereto or
affiliates, shareholders, directors, partners, officers, employees, agents,
representatives, consultants or lenders of such party (such party being
hereinafter referred to as the "Receiving Party") from any other party hereto or
affiliates, shareholders, partners, directors, officers, employees, agents,
representatives or consultants of such other party (such other party being
hereinafter referred to as the "Delivering Party") under this Agreement or in
connection with the transactions contemplated hereby shall be treated as
confidential (collectively, "Confidential Information"). Except as otherwise
provided herein, the Receiving Party shall not disclose or use (and shall not
permit its affiliates, shareholders, directors, officers, partners, employees,
agents, representatives or consultants to use) Confidential Information for its
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own (or their own) benefit and shall use commercially reasonable efforts (and
shall cause its affiliates, shareholders, partners, directors, officers,
employees, agents, representatives or consultants to use commercially reasonable
efforts) to maintain the confidentiality of Confidential Information. If the
Receiving Party or any of its affiliates, shareholders, directors, officers,
partners, employees, agents, representatives or consultants is required to
disclose Confidential Information by or to any court, arbitrator, Governmental
Authority or Regulatory Agency of competent jurisdiction, the Receiving Party
shall, prior to such disclosure, promptly notify the Delivering Party of such
requirement and all particulars related to such requirement. The Delivering
Party shall have the right, at its own cost and expense, to object to such
disclosure and to seek confidential treatment of any Confidential Information to
be so disclosed on such terms as it shall determine.
(b) The restrictions set forth in SECTION 8.1(A) hereof shall
not apply to the use or disclosure of Confidential Information to the extent,
but only to the extent, (i) permitted or required pursuant to any other
agreement between or among the parties hereto, (ii) necessary by a party hereto
in connection with exercising its, his or their rights or performing its, his or
their duties or obligations under this Agreement, or the other agreements
described in clause (i) of this sentence, (iii) contemplated by the last two
sentences of SECTION 8.1(A) hereof or (iv) that the Receiving Party can
demonstrate such Confidential Information (A) is or becomes generally available
to the public through no fault or neglect of the Receiving Party, (B) is
received in good faith on a non-confidential basis from a third party who
discloses such Confidential Information without violating any obligations of
secrecy or confidentiality or (C) was already possessed at the time of receipt
as shown by prior dated written records.
(c) For the purposes of this SECTION 8.1, (i) information
which is specific shall not be deemed to be within an exception set forth in
SECTION 8.1(B) hereof merely because it is embraced by general information which
is within such an exception and (ii) a combination of information shall not be
deemed to be within an exception set forth in SECTION 8.1(B) hereof merely
because individual aspects of such combination are within such an exception
unless the combination of information itself, its principle of operation and its
value or advantages are within such an exception.
SECTION 8.2. PUBLICITY. No party hereto shall or shall permit its
affiliates principals, associates, directors, officers, representatives or
agents to issue any publicity, release or announcement concerning the execution
and delivery of this Agreement, the provisions hereof or the transactions
contemplated hereby without the prior written approval of the form and content
of such publicity, release or announcement by the other parties hereto;
PROVIDED, HOWEVER, that no such approval shall be required when such publicity,
release or announcement is required by (i) applicable Law, (ii) applicable rules
or regulations of, or any listing agreement with, a national or foreign stock
exchange or NASDAQ or (iii) any Order; and, PROVIDED FURTHER, that, prior to
issuing any publicity, release or announcement without such prior written
approval, the party issuing or whose principal, affiliate, associate, directors,
officer, representative or agent is issuing such publicity, release or
announcement shall have given reasonable prior notice to the parties hereto
which have withheld their consent (the "Non- consenting Party") of such intended
issuance and, if requested by the Non-consenting Party, shall have used
reasonable efforts at the Non-consenting Party's own cost and expense to obtain
a protective order or similar protection for the benefit of the Non-consenting
Party. Nothing
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contained herein shall prevent the communication of information with any
Governmental Authority or Regulatory Agency.
SECTION 8.3. RETURN OF CONFIDENTIAL INFORMATION. At any time prior to
the Closing, at the request of Nash Weiss or its legal counsel, Quick & Reilly
and Acquiror shall (and shall use all commercially reasonable efforts to cause
their respective affiliates, shareholders, partners, directors, officers,
employees, agents, representatives and consultants to) promptly return to Nash
Weiss all Confidential Information and shall not retain any copies or other
reproductions or extracts thereof, and Quick & Reilly and Acquiror shall (and
shall use all commercially reasonable efforts to cause their respective
affiliates, shareholders, partners, directors, officers, employees, agents,
representatives and consultants to) destroy or have destroyed all memoranda,
notes, reports and documents, and all copies and other reproductions and
extracts thereof prepared by it in connection with a review of the Confidential
Information.
SECTION 8.4. INJUNCTIVE RELIEF. The parties recognize that any breach
of this ARTICLE VIII would cause irreparable injury and that monetary damages
alone would not be sufficient with respect thereto. Accordingly, each party
agrees that if it breaches or threatens to breach the provisions of this ARTICLE
VIII each other party shall have, in addition to and not in lieu of any other
rights and remedies available at law or in equity, the right to injunctive
relief.
ARTICLE IX.
CONDITIONS TO THE OBLIGATIONS OF QUICK & REILLY AND ACQUIROR
The obligations of Quick & Reilly and Acquiror to consummate, on the
Closing Date, the transactions contemplated by this Agreement will be subject to
the satisfaction, on or before the Closing Date, of each of the following
conditions, unless waived in writing by Quick & Reilly:
SECTION 9.1. REPRESENTATIONS AND WARRANTIES; PERFORMANCE. All
representations and warranties made by each of Nash Weiss and the Sole
Stockholder in this Agreement shall be true and correct in all material respects
on the Closing Date as though made on the Closing Date, except for changes
contemplated by this Agreement. Nash Weiss and the Sole Stockholder shall have
performed and complied in all material respects with all agreements, covenants
and conditions required to be performed and complied with by them, prior to the
Closing Date. Nash Weiss and the Sole Stockholder each shall have certified to
the effect of this SECTION 9.1 in writing to Quick & Reilly, in a form
reasonably satisfactory to Quick & Reilly, as of the Closing Date.
Notwithstanding anything to the contrary contained herein, the Closing of the
transactions contemplated hereby shall not be deemed to be a waiver by Quick &
Reilly or any Indemnitee of any rights to indemnification pursuant to ARTICLE
XIV, irrespective of whether Quick & Reilly or any other Person had knowledge on
or before the Closing Date of the breach by either Nash Weiss or the Sole
Stockholder of any representation, warranty, agreement, covenant or condition
contained in this Agreement.
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SECTION 9.2. APPROVALS. All Approvals required to be obtained by Nash
Weiss and the Sole Stockholder to consummate the transactions contemplated by
this Agreement shall have been validly obtained and shall be in full force and
effect and all statutory waiting periods in respect thereof shall have expired
or been terminated and copies of all such Approvals shall have been delivered to
Quick & Reilly.
SECTION 9.3. NO PROCEEDING OR LITIGATION. No action, suit or proceeding
before any court or any other Governmental Authority or Regulatory Agency shall
have been commenced or threatened, and no investigation by any Governmental
Authority or Regulatory Agency shall have been threatened, against any of the
parties to this Agreement or any of the principals, officers, directors or
stockholders of any of them seeking to restrain, prevent or change the
transactions contemplated hereby or questioning the validity or legality of any
of such transactions or seeking damages in connection with any of such
transactions.
SECTION 9.4. ESCROW AGREEMENT. Quick & Reilly shall have received an
executed Escrow Agreement in substantially the form attached hereto as
EXHIBIT C.
SECTION 9.5. EMPLOYMENT AGREEMENTS. Acquiror shall have received an
executed employment agreement from each of Weiss and Nash substantially in the
form attached hereto as EXHIBIT D-1 AND D-2, RESPECTIVELY.
SECTION 9.6. CONSULTING AGREEMENT. Acquiror shall have received an
executed consulting agreement from the Sole Stockholder substantially in the
form attached hereto as EXHIBIT E.
SECTION 9.7. OTHER DOCUMENTS. Each of Nash Weiss and the Sole
Stockholder shall have furnished or caused to be furnished to Quick & Reilly the
documents set forth in SECTION 11.2 and such other documents and certificates as
may be reasonably requested by Quick & Reilly.
SECTION 9.8. OPINION OF COUNSEL. Quick & Reilly shall have received a
written opinion from Neal, Gerber & Eisenberg, counsel to Nash Weiss and the
Sole Stockholder, addressed to each of Quick & Reilly and Acquiror, dated as of
the Closing Date, substantially in the form attached hereto as EXHIBIT F.
SECTION 9.9. CORPORATE ACTION. Nash Weiss shall have taken all
corporate action necessary to approve the transactions contemplated by the
Agreement and Nash Weiss shall have furnished Quick & Reilly with copies of
resolutions, adopted by the Board of Directors of Nash Weiss and the Sole
Stockholder and certified by the secretary of Nash Weiss as of the Closing Date,
in form and substance reasonably satisfactory to counsel for Quick & Reilly, in
connection with such transactions.
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ARTICLE X.
CONDITIONS TO THE OBLIGATIONS OF NASH WEISS
AND THE SOLE STOCKHOLDER
The obligations of Nash Weiss and the Sole Stockholder to consummate,
on the Closing Date, the transactions contemplated by this Agreement shall be
subject to the satisfaction, on or before the Closing Date, of each of the
following conditions, unless waived in writing by each of Nash Weiss and the
Sole Stockholder:
SECTION 10.1. REPRESENTATIONS AND WARRANTIES; PERFORMANCE. All
representations and warranties made by each of Quick & Reilly and Acquiror in
this Agreement shall be true and correct in all material respects on the Closing
Date as though made on the Closing Date, except for changes contemplated by this
Agreement. Quick & Reilly and Acquiror shall have performed and complied in all
material respects with all agreements, covenants and conditions required by this
Agreement to be performed and complied with by them prior to the Closing Date.
Quick & Reilly and Acquiror each shall have certified to the effect of this
SECTION 10.1 in writing to Nash Weiss and the Sole Stockholder, in a form
reasonably satisfactory to Nash Weiss and the Sole Stockholder, on the Closing
Date. Notwithstanding anything to the contrary contained herein, the closing of
the transactions contemplated hereby shall not be deemed a waiver by the Sole
Stockholder or any Indemnitee of any rights to indemnification pursuant to
ARTICLE XIV, irrespective of whether the Sole Stockholder or any other Person
had knowledge on or before the Closing Date of the breach by either Quick &
Reilly or the Acquiror of any representation, warranty, agreement, covenant or
condition contained in this Agreement.
SECTION 10.2. APPROVALS. All Approvals required to be obtained by Quick
& Reilly and Acquiror to consummate the transactions contemplated by this
Agreement shall have been validly obtained and shall be in full force and effect
and all statutory waiting periods in respect thereof shall have expired or been
terminated and copies of such Approvals shall have been delivered to Nash Weiss
and the Sole Stockholder.
SECTION 10.3. NO PROCEEDING OR LITIGATION. No action, suit or
proceeding before any court or any other Governmental Authority or Regulatory
Agency shall have been commenced or threatened, and no investigation by any
Governmental Authority or Regulatory Agency shall have been threatened, against
any of the parties to this Agreement or any of the principals, officers or
directors of any of them seeking to restrain, prevent or change the transactions
contemplated hereby or questioning the validity or legality of any of such
transactions or seeking damages in connection with any of such transactions.
SECTION 10.4. ESCROW AGREEMENT. Nash Weiss and the Sole Stockholder
shall have received an executed Escrow Agreement in substantially the form
attached hereto as EXHIBIT B.
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SECTION 10.5. EMPLOYMENT AGREEMENTS. Nash and Weiss shall have
received executed employment agreements substantially in the form attached
hereto as EXHIBIT D-1 and D-2 respectively.
SECTION 10.6. CONSULTING AGREEMENT. The Sole Stockholder shall have
received an executed consulting agreement substantially in the form attached
hereto as EXHIBIT E.
SECTION 10.7. OTHER DOCUMENTS. Each of Quick & Reilly and Acquiror
shall have furnished Nash Weiss and the Sole Stockholder with the documents set
forth in SECTION 11.3 and such other documents and certificates as may be
reasonably requested by Nash Weiss or the Sole Stockholder.
SECTION 10.8. OPINION OF COUNSEL. Nash Weiss and the Sole Stockholder
shall have received a written opinion from Kelley Drye & Warren LLP, counsel to
Quick & Reilly, addressed to Nash Weiss and the Sole Stockholder and dated as of
the Closing Date, substantially in the form attached hereto as EXHIBIT G.
SECTION 10.9. CORPORATE ACTION. Each of Quick & Reilly and Acquiror
shall have taken all corporate action necessary to approve the transactions
contemplated by the Agreement, and each of Quick & Reilly and Acquiror shall
have furnished Nash Weiss and the Sole Stockholder with copies of resolutions,
adopted by the Board of Directors of Acquiror and Quick & Reilly, as the sole
holder of the issued and outstanding shares of capital stock of Acquiror and
certified by the secretary of Quick & Reilly as of the Closing Date, in form and
substance reasonably satisfactory to counsel for Nash Weiss and the Sole
Stockholder, in connection with such transactions.
ARTICLE XI.
CLOSING
SECTION 11.1. CLOSING. Unless this Agreement shall have been terminated
pursuant to the provisions of ARTICLE XII, the closing of the transactions
contemplated by this Agreement (the "Closing") shall be held on the later of:
(i) February 28, 1997 or (ii) the last business day of the week following the
week in which the final Approval required to consummate the transactions
contemplated hereby shall have been obtained and all statutory waiting periods
relating thereto shall have expired or been terminated. The Closing shall occur
at the close of the New York Stock Exchange trading day at the offices of Kelley
Drye & Warren LLP, 101 Park Avenue, New York, New York 10178.
SECTION 11.2. DELIVERY OF DOCUMENTS BY NASH WEISS. Nash Weiss agrees
to execute and deliver, or cause to be executed and delivered, to Quick & Reilly
and Acquiror at the Closing, the following:
(a) All of the instruments and documents required to be
delivered under ARTICLE IX.
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(b) Written resignations of the directors of Nash Weiss,
effective as of the Closing Date.
(c) All minute books, stock certificate books, stock
ledgers and the corporate seal of Nash Weiss.
(d) A copy of the Certificate of Incorporation of Nash
Weiss as in effect immediately prior to the Effective Time certified as
of a recent date by the Secretary of the State of Delaware.
(e) Certificates, as of the most recent practicable dates as
to the corporate good standing of Nash Weiss issued by the Secretaries
of State of the States of Delaware, Florida, Illinois, New Jersey and
any other state in which Nash Weiss is required to be qualified or
licensed to transact business, confirming such good standing on or
immediately prior to the Closing Date.
(f) A copy of the By-laws of Nash Weiss in effect on the
Closing Date, certified by the Secretary or Assistant Secretary of Nash
Weiss as of the Closing Date.
(g) Resolutions of the Board of Directors of Nash Weiss and
the Sole Stockholder, authorizing and approving all matters in
connection with this Agreement and the transactions contemplated
hereby, certified by the Secretary or Assistant Secretary of Nash Weiss
as of the Closing Date.
(h) A Certificate of the Secretary or Assistant Secretary of
Nash Weiss dated the Closing Date certifying (i) as to the matters in
(f) and (g), above, (ii) that the Certificate of Incorporation of Nash
Weiss has not been amended, and (iii) to the incumbency and specimen
signature of each officer of Nash Weiss executing this Agreement and
the other agreements contemplated herein.
(i) Such other documents as Quick & Reilly may reasonably
request.
SECTION 11.3. DELIVERY OF DOCUMENTS BY QUICK & REILLY AND ACQUIROR.
Each of Quick & Reilly and Acquiror agrees to execute and deliver, or cause to
be executed and delivered, to Nash Weiss and the Sole Stockholder, as the case
may be, at the Closing, the following:
(a) All of the instruments and documents required to be
delivered under ARTICLE X.
(b) Such other documents as Nash Weiss or the Sole
Stockholder may reasonably request.
SECTION 11.4. FILING OF CERTIFICATE OF MERGER. Concurrent with the
exchange of documents referred to in this ARTICLE XI, and subject to
satisfaction of the conditions set forth herein, Quick & Reilly, Acquiror and
Nash Weiss hereby authorize the filing, on the Closing Date, of the Certificate
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of Merger in the office of the Secretary of State of the State of Delaware.
ARTICLE XII.
TERMINATION AND REMEDIES
SECTION 12.1. METHODS OF TERMINATION. This Agreement may be
terminated prior to the Closing Date under the following circumstances:
(a) by mutual written consent of the Sole Stockholder, Nash
Weiss, Acquiror and Quick & Reilly;
(b) subject to the provisions of SECTION 12.2, by Quick &
Reilly giving written notice to each of Nash Weiss and the Sole Stockholder if
all of the conditions to the obligations of Quick & Reilly and Acquiror set
forth in ARTICLE IX have not been satisfied on or before the Closing Date;
(c) subject to the provisions of SECTION 12.2, by the Sole
Stockholder giving written notice to Quick & Reilly if all of the conditions to
the obligations of Nash Weiss and the Sole Stockholder set forth in ARTICLE X
have not been satisfied on or before the Closing Date;
(d) by Sole Stockholder or Nash Weiss, if a settlement to the
Lawsuit, which is acceptable to the Sole Stockholder, has been proposed by the
class of defendants in the Lawsuit and Quick & Reilly has failed to consent to
such settlement within a period of 5 days after Sole Stockholder has given
written notice of the proposed settlement to Quick & Reilly; or
(e) by any party if the Closing has not occurred for any
reason by April 30, 1997, provided that such terminating party is not then in
breach of this Agreement.
SECTION 12.2. OPPORTUNITY TO CURE. Notwithstanding anything contained
in this Agreement to the contrary and subject to the provisions of Section
12.1(b) and 12.1(c) respectively, none of the Sole Stockholder, Nash Weiss,
Quick & Reilly or Acquiror shall terminate this Agreement under SECTION 12.1(B)
or (C) unless such party shall have first given the other parties notice of its
intent to terminate this Agreement, setting forth the nature of the condition to
the terminating party's obligation to close which remains unsatisfied and the
other parties shall have failed to satisfy such condition within 10 days after
receipt of such notice; PROVIDED that if such condition is of a nature that it
cannot be reasonably satisfied within such 10 day period, then, if the
defaulting or breaching party shall have commenced an attempt to satisfy such
condition within such 10 day period, the period to satisfy such condition shall
be extended until the date which is 30 days after receipt of such notice.
SECTION 12.3. PROCEDURE UPON TERMINATION. In the event of termination
pursuant to SECTION 12.1:
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(a) each party will return all documents and other materials
of the other parties relating to the transactions contemplated hereby, whether
obtained before or after the execution hereof, to the party furnishing the same;
and
(b) such termination shall not relieve any party of any
liability or further obligation to any other party for breach of this Agreement;
PROVIDED, HOWEVER, that termination of this Agreement pursuant to SECTIONS
12.1(A)(D) OR (E) shall not constitute a breach of this Agreement.
ARTICLE XIII.
COVENANTS OF THE PARTIES SUBSEQUENT TO THE CLOSING
SECTION 13.1. SHELF REGISTRATION OF QUICK & REILLY COMMON STOCK;
AVAILABILITY OF RULE 144. (a) As promptly as reasonably practicable after the
Closing Date (but in no event more than 60 days after the Closing Date), Quick &
Reilly shall prepare and file with the Commission a Registration Statement on
Form S-3 (or such other registration statement as may hereafter replace or
supersede Form S-3) relating to the shares of Quick & Reilly Common Stock issued
pursuant to this Agreement and the offer and sale of such shares by the Sole
Stockholder or the Escrow Agent from time to time pursuant to Rule 415 (or any
successor rule or rule broadening Rule 415) under the Securities Act and in
accordance with the methods of distribution set forth therein (which shall be
specified in a written notice by Sole Stockholder to Quick & Reilly), which
registration statement may be substituted for by one or more subsequent
registration statements each relating to the offer and sale by the Sole
Stockholder or the Escrow Agent from time to time of the shares of Quick &
Reilly Common Stock issued pursuant to the Agreement (as in effect from time to
time, the "Shelf Registration Statement"), and Quick & Reilly shall use its
reasonable best efforts to cause such Shelf Registration Statement to be
declared effective by the Commission as promptly as practicable. Quick & Reilly
shall use its reasonable best efforts to keep the Shelf Registration Statement
continuously effective, supplemented and amended for a period (the
"Effectiveness Period") following the Closing Date that will terminate at the
earlier of the date when: (i) all the shares of Quick & Reilly Common Stock
covered by the Shelf Registration Statement are sold or (ii) such shares could
be sold pursuant to Rule 144(k) under the Securities Act, as Rule 144(k) may be
subsequently amended, supplemented or modified. The Sole Stockholder will
provide such cooperation as Quick & Reilly may reasonably request with respect
to the preparation of the Shelf Registration Statement. Quick & Reilly shall
bear all expenses of preparing and filing the Shelf Registration Statement, and,
the Sole Stockholder shall be responsible for the fees and expenses of counsel
he may retain in connection therewith and any commissions or discounts upon sale
of the shares registered thereby. Quick & Reilly will not become a party to any
underwriting agreement related to sales by the Sole Stockholder, but will
indemnify the Sole Stockholder for any liability incurred by the Sole
Stockholder arising out of or based upon an untrue statement contained in the
Shelf Registration Statement or arising out of or based upon an omission to
state therein a material fact required to be stated therein or necessary to make
the statement therein not misleading. The Sole Stockholder shall indemnify Quick
& Reilly for any liability incurred by Quick & Reilly as a result of statements
or omissions from the Shelf Registration made or omitted in reliance upon
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upon information furnished by the Sole Stockholder for use in the Shelf
Registration Statement.
(b) At any time after the Closing that the Shelf Registration
Statement is not available for resale by the Sole Stockholder of the Quick &
Reilly Common Stock issued pursuant to this Agreement, Quick & Reilly shall use
all commercially reasonable efforts to file with the Commission all reports
required to be filed therewith pursuant to the Exchange Act and to make publicly
available such information as is required by Rule 144 to enable the Sole
Stockholder to make sales of such stock pursuant to Rule 144 (or any successor
rule).
(c) If the Shelf Registration Statement is not effective on or
before the 120th day after the Closing or if the Shelf Registration Statement
thereafter fails to be effective for a period of 60 consecutive days during the
Effectiveness Period, and Rule 144 is not available for the resale by the Sole
Stockholder of all or any portion of the Quick & Reilly Common Stock issued to
the Sole Stockholder hereunder and proposed to be sold by the Sole Stockholder
(the "Subject Shares"), then the Sole Stockholder may, by notice delivered
during such period as the Shelf Registration Statement fails to be effective,
elect to have Quick & Reilly purchase all or such number of the Subject Shares
as the Sole Stockholder may designate and Quick & Reilly agrees to purchase the
Subject Shares. Such purchase shall be consummated within fourteen days after
delivery of such notice and shall be at a per share purchase price equal to the
average (rounded to the nearest whole cent) of the last sale price of the day of
one share of Quick & Reilly Common Stock as reported on the consolidated tape of
the NYSE on the three days preceding delivery of such notice. The purchase price
shall be paid in cash against delivery of the certificate(s) representing the
Subject Shares accompanied by appropriate documents of transfer to Quick &
Reilly. Once delivered by the Sole Stockholder, the notice contemplated by this
SECTION 13.1(C) may not be withdrawn without the consent of Quick & Reilly.
SECTION 13.2. ACCESS AND COOPERATION. Following the Closing Date, Quick
& Reilly and the Surviving Corporation shall allow the Sole Stockholder and
representatives and agents of the Sole Stockholder, upon reasonable prior notice
and during regular business hours, to examine and make copies of any books and
records of Nash Weiss, to the extent such documents relate to the conduct of the
Business prior to the Closing, for any reasonable business purpose, including,
without limitation, the preparation or examination of Tax Returns, regulatory
filings, financial statements and defense of any actual or threatened litigation
including the NASDAQ Proceedings and the Tax Dispute. Access to such books and
records may not unreasonably interfere with the business operations of the
Surviving Corporation or any successor company and the Sole Stockholder shall
reimburse the Surviving Corporation for all reasonable out-of-pocket expenses
incurred by the Surviving Corporation in making available and copying such
records. The Surviving Corporation shall retain the books and records of Nash
Weiss delivered at the Closing which are reasonably necessary for the
preparation of Tax Returns for a period of at least 10 years after the Closing
and the Surviving Corporation shall not dispose of such books and records if the
Sole Stockholder has delivered written notice to the Surviving Corporation prior
to the expiration of the 10 year period that the statute of limitations with
respect to tax matters for which such books and records are reasonably necessary
has not expired. The Surviving Corporation shall retain all other books and
records of Nash Weiss delivered at the Closing for a period of at least three
years after the Closing.
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SECTION 13.3. CONTRIBUTION OF NET CAPITAL AND REPAYMENT OF THE NASH
WEISS SUBORDINATED LOAN DUE TO SOLE STOCKHOLDER. On the first business day after
the Closing, Quick & Reilly shall contribute to the Surviving Corporation
capital in a minimum amount equal to the amount of net capital which is required
to be maintained by a registered broker-dealer pursuant to Section 15c3-1 of the
Exchange Act and such additional amount of minimum net capital as may be
required by the NASD. Additionally, on the first business day after the Closing,
PROVIDED, THAT, all necessary consents and approvals have been obtained, the
Surviving Corporation will pay to French American Securities, Inc. the aggregate
principal amount outstanding pursuant to the Subordinated Loan Agreement between
French American Securities Inc. and Nash Weiss, together with interest accrued
thereon through the date of repayment.
SECTION 13.4. TAX MATTERS.
(a) The Sole Stockholder shall be liable for, shall pay to the
relevant tax authorities, and shall indemnify and hold Quick & Reilly and the
Surviving Corporation harmless against, (i) all Taxes that relate to (A) with
respect to any taxable period of Nash Weiss that commences prior to the Closing
Date, but ends on or after the Closing Date, the portion of the taxable period
that commences on the first day of such taxable period and continues up to and
including the Closing Date (the "Pre-Closing Straddle Period"), and (B) any
other taxable period of Nash Weiss ending on or before the Closing Date and (ii)
Taxes incurred by either Quick & Reilly or the Surviving Corporation as a result
of a breach by Nash Weiss of a representation set forth in ARTICLE III hereof or
a failure on the part of the Sole Stockholder to comply with the covenants and
undertakings set forth in this Article XIII.
(b) Except as provided in SECTION 13.4(A) hereof, Quick &
Reilly and the Surviving Corporation shall be liable for, shall pay to the
appropriate tax authorities, and shall hold the Sole Stockholder harmless
against, (i) all Taxes that relate to (A) with respect to any taxable period of
Nash Weiss or the Surviving Corporation that commences prior to the Closing Date
but ends after the Closing Date, the portion of the taxable period that
commences on the first day after the Closing Date and continues up to and
including the last day of such taxable period (the "Post-Closing Straddle
Period") and (B) any taxable period of the Surviving Corporation that begins
after the Closing Date and (ii) Taxes incurred by the Sole Stockholder as a
result of a failure on the part of either Quick & Reilly or the Surviving
Corporation to comply with the covenants and undertakings set forth in this
Article XIII or as a result of breach of a representation set forth in ARTICLES
V or VI.
(c) Whenever it is necessary for purposes of this SECTION 13.4
to determine the liability for Taxes of the Surviving Corporation for a taxable
period that begins before and ends after the Closing Date, the determination
shall be made by assuming that the Surviving Corporation had a taxable year
which ended at the close of business on the Closing Date, except that
exemptions, allowances or deductions that are calculated on an annual basis
(such as the deduction for depreciation) shall be apportioned pro rata on a time
basis.
(d) In the event that the Sole Stockholder or Quick & Reilly
is or becomes entitled to or receives any refund of Taxes attributable to Nash
Weiss in respect of the Pre- Closing Straddle Period or any other taxable period
ending on or prior to the Closing Date, (i) Quick & Reilly, the Surviving
Corporation and the Sole Stockholder shall cooperate with each other and take
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all reasonable actions necessary to obtain such refund and (ii) the amount
thereof plus any interest related thereto, shall be (A) the property of (and
paid over to) the Sole Stockholder (but net of any Taxes imposed on Quick &
Reilly or the Surviving Corporation with respect thereto) if it relates to a tax
period or portion thereof ending on or before the Closing Date and was not
considered as an asset or used to reduce the liability of Nash Weiss for Taxes
in connection with the determination of the Final Net Book Value, and (B) Quick
& Reilly in all other cases.
(e) The Sole Stockholder shall prepare and timely file (or
provide to Quick & Reilly for filing, if applicable) all Tax Returns required or
permitted by applicable law to be filed by Nash Weiss with respect to periods
ending on or before the Closing Date. Quick & Reilly and the Surviving
Corporation shall (i) cooperate with the Sole Stockholder for the purpose of
making any election under applicable Law to permit Nash Weiss to file any short
period Tax Return for the taxable period ending on the Closing Date and (ii)
provide access to all relevant books and records for purposes of preparing such
Tax Returns. Unless otherwise required by applicable Law and disclosed in
writing to Quick & Reilly by the Sole Stockholder in advance of the filing of
the relevant Tax Return, any Tax Return to be prepared by the Sole Stockholder
pursuant to this SECTION 13.4(E) shall be prepared on a basis consistent with
past practice and shall not be prepared in a manner calculated to accelerate or
defer any income or deductions into any taxable period in order to achieve a
result favorable to the Sole Stockholder and detrimental to Quick & Reilly as a
result of the transactions contemplated by this Agreement. Quick & Reilly shall
be given the opportunity to review any such Tax Return not less than 30 days
prior to the due date for the filing of such return (including extensions) with
the relevant Governmental Authority and the Sole Stockholder shall consult with
Quick & Reilly in good faith with respect to any issues that Quick & Reilly may
have regarding such Tax Return. Quick & Reilly shall have the right to approve
(which approval shall not be unreasonably withheld) such Tax Return to the
extent it would require an indemnification payment by Quick & Reilly pursuant to
SECTION 13.4(B) hereof. Unless required by applicable Law, the Sole Stockholder
shall not file an amended Tax Return for Nash Weiss without Quick & Reilly's
consent if such amendment would cause or increase Quick & Reilly's liability for
any Taxes described in SECTION 13.4(B) hereof.
(f) Quick & Reilly shall file or cause to be filed when due
all Tax Returns with respect to Taxes that are required to be filed by or with
respect to the Surviving Corporation for taxable years or periods ending after
the Closing Date. With respect to Tax Returns covering a Pre-Closing Straddle
Period or the first taxable year beginning after the Closing Date, a copy of
such Tax Returns shall, unless otherwise required by applicable law and
disclosed in writing to Sole Stockholder, be prepared on a basis consistent with
past practices of Nash Weiss and shall be provided to the Sole Stockholder
within 30 days prior to the due date (including extensions) for the filing
thereof with the relevant Governmental Authority and Quick & Reilly shall
consult with the Sole Stockholder in good faith with respect to any issues that
the Sole Stockholder may have regarding such Tax Return. The Sole Stockholder
shall have the right to approve (which approval shall not be unreasonably
withheld) such Tax Return to the extent it would require an indemnification
payment by the Sole Stockholder pursuant to SECTION 13.4(A) hereof. Unless
required by applicable law, Quick & Reilly shall not file an amended Tax Return
for the Surviving Corporation without the Sole Stockholder's written consent.
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(g) Quick & Reilly shall promptly but in no event later than
10 days after receipt (i) notify the Sole Stockholder of the commencement of any
claim, audit, examination or other proposed change or adjustment by any
Governmental Authority concerning any Taxes (a "Tax Claim") for which the Sole
Stockholder may be responsible under SECTION 13.4(A) hereof and (ii) furnish the
Sole Stockholder with copies of any correspondence received from any
Governmental Authority in connection with such Tax Claim. The Sole Stockholder
shall promptly (i) notify Quick & Reilly of the commencement of any Tax Claim,
for which Quick & Reilly may be responsible under SECTION 13.4(B) hereof and
(ii) furnish Quick & Reilly with copies of any correspondence received from any
Governmental Authority in connection with such Tax Claim. Notwithstanding the
foregoing, no failure or delay in giving any notice described above shall
relieve any party of its obligations under this SECTION 13.4 or ARTICLE XIV
except, and only to the extent, that the indemnifying party is prejudiced
thereby.
(h) Neither Quick & Reilly nor Sole Stockholder shall take or
cause to be taken any action other than actions set forth in this Agreement or
any other agreement entered into on the date hereof between the parties hereto
which would disqualify the Merger as a "reorganization" described in Section
368(a)(2)(D) of the Code.
(i) Quick & Reilly shall cooperate with the Sole Stockholder
to permit any payment made by or on behalf of the Sole Stockholder pursuant to
ARTICLE XIV of this Agreement to be made at such time and in such manner as
shall permit or enable the Sole Stockholder to claim or preserve any and all
applicable tax deductions, credits or other benefits attributable to the payment
of an Indemnified Liability (as such term is hereinafter defined), PROVIDED,
HOWEVER, that such agreement shall be of no force or effect if such delay or
payment method would have a Material Adverse Effect on Quick & Reilly as
determined in its sole discretion. To the extent payments due to or for the
benefit of Quick & Reilly pursuant to SECTION 14.4 are not made promptly after
such payments become due, Sole Stockholder shall pay to Quick & Reilly interest
on the amount of the Indemnified Liability at a per annum rate equal to the
Prime Rate in effect when the Indemnified Liability became due and payable
pursuant to SECTION 14.4 of this Agreement. Notwithstanding the foregoing, if it
shall be determined by the Internal Revenue Service that Sole Stockholder is not
eligible to claim such tax deductions, credits or other benefits attributable to
payment of an Indemnified Liability, Quick & Reilly agrees to the extent
permitted by law, as determined in its sole discretion, to claim, utilize and
recognize such deductions, credits or benefits and to determine whether such tax
deductions, credits or benefits resulted in any Indemnification Tax Benefits
being realized by it in the form of actual net cash proceeds or savings
(calculated on a "with and without" basis with respect to such deductions,
credits or other benefits). Quick & Reilly further agrees to negotiate in good
faith with Sole Stockholder to determine the method and time of payment to Sole
Stockholder to transfer to Sole Stockholder any such Indemnification Tax Benefit
and to make such appropriate payment(s) within ten (10) days after the date on
which the parties mutually agree the payment is to be made. Notwithstanding the
foregoing, if the parties are unable to reach a mutual agreement with respect to
the form and time of payment, Quick & Reilly agrees to make payment, in cash, to
the Sole Stockholder within thirty (30) days after the date on which Quick &
Reilly actually receives any Indemnification Tax Benefits.
(j) The Sole Stockholder shall cooperate with Quick & Reilly
to permit any payment made by or on behalf of Quick & Reilly pursuant to ARTICLE
XIV of this Agreement to be made at such time and in such manner as shall permit
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or enable Quick & Reilly to claim or preserve any and all applicable tax
deductions, credits or other benefits attributable to the payment of an
Indemnified Liability (as such term is hereinafter defined), PROVIDED, HOWEVER,
that such agreement shall be of no force or effect if such delay or payment
method would have a Material Adverse Effect on the Sole Stockholder as
determined in his sole discretion. To the extent payments due to or for the
benefit of the Sole Stockholder pursuant to SECTION 14.4 are not made promptly
after such payments become due, Quick & Reilly shall pay to the Sole Stockholder
interest on the amount of the Indemnified Liability at a per annum rate equal to
the Prime Rate in effect when payment for the Indemnified Liability became due
and payable pursuant to SECTION 14.4 of this Agreement. Notwithstanding the
foregoing, if it shall be determined by the Internal Revenue Service that Quick
& Reilly is not eligible to claim such tax deductions, credits or other benefits
attributable to the payment of an Indemnified Liability, the Sole Stockholder
agrees to the extent permitted by law, as determined in his sole discretion, to
claim, utilize and recognize such deductions, credits or benefits and to
determine whether such tax deductions, credits or benefits had or could have
resulted in any Indemnification Tax Benefits being realized by the Sole
Stockholder in the form of actual net cash proceeds or savings (calculated on a
"with and without" basis with respect to such deductions, credits or other
benefits). The Sole Stockholder further agrees to negotiate in good faith with
Quick & Reilly to determine the method and time of payment to Quick & Reilly to
transfer to Quick & Reilly any such Indemnification Tax Benefit and to make such
appropriate payment(s) within ten (10) days after the date on which the parties
mutually agree the payment is to be made. Notwithstanding the foregoing, if the
parties are unable to reach a mutual agreement with respect to the form and time
of payment, the Sole Stockholder agrees to make payment, in cash, to Quick &
Reilly within thirty (30) days after the date on which the Sole Stockholder
actually receives such Indemnification Tax Benefits.
SECTION 13.5. GOVERNMENTAL AND REGULATORY APPROVALS AND COMPLIANCE. As
promptly as practicable after the Closing Date, each of Quick & Reilly and
Surviving Corporation shall file or cause to be filed with the appropriate
Governmental Authority and Regulatory Agency any notifications, applications or
other documents required to be filed with respect to the transactions
contemplated hereby and in connection with the registration of the Surviving
Corporation as a registered broker-dealer in the States of Illinois, New Jersey
and Florida, a member in good standing of the NASD and will promptly file an
Uniform Application for Broker-Dealer Registration on Form BD with the NASD. The
Sole Stockholder agrees to make available to each of Quick & Reilly and the
Surviving Corporation such information as each of them may reasonably request to
enable each of them to file the required applications, notices and other
requisite documents with such Governmental Authorities and Regulatory Agencies
and to provide any additional information requested by such agencies.
SECTION 13.6. FURTHER ASSURANCES. (a) Upon the terms and subject to the
conditions provided herein, each of Quick & Reilly, the Surviving Corporation
and the Sole Stockholder shall use commercially reasonable efforts to take,
cause to be taken, all action or do, or cause to be done, all things or execute
or cause to be executed any documents necessary, proper or advisable under
applicable Laws to consummate and make effective the transactions contemplated
by this Agreement, and the other agreements contemplated hereby.
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(b) On and after the Closing Date, each of Quick & Reilly, the
Surviving Corporation and the Sole Stockholder shall take all commercially
reasonable appropriate action and execute any additional documents, instruments
or conveyances of any kind (not containing additional representations and
warranties) which may be reasonably necessary to carry out any of the provisions
of this Agreement.
SECTION 13.7. PARTICIPATION IN STOCK SPLIT. On the Stock Split Payment
Date, Quick & Reilly shall issue to the Sole Stockholder additional shares of
Quick & Reilly Common Stock in such number which will be equal to the Aggregate
Quick & Reilly Conversion Shares.
SECTION 13.8. EXPENSES. Except as otherwise provided in this Agreement,
the Sole Stockholder will pay the legal and other expenses incurred by or on
behalf of himself and Nash Weiss and Quick & Reilly will pay the legal and other
expenses incurred by or on behalf of itself and Acquiror in connection with the
negotiation and preparation of this Agreement and the transactions contemplated
herein whether or not such transactions are completed or this Agreement is
terminated.
ARTICLE XIV.
SURVIVAL OF REPRESENTATIONS, WARRANTIES
AND COVENANTS; INDEMNIFICATION
SECTION 14.1. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS.
Except for the Unlimited Representations and Covenants (as such terms are
defined below), the other representations, warranties, agreements and covenants
of the parties contained in this Agreement (the "Limited Representations and
Covenants") shall survive the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby until the
fifth anniversary of the Closing, or if the Closing shall not have taken place,
for a period of six (6) months following the date hereof. The representations,
warranties, covenants and agreements of the parties contained in Sections 3.1,
3.10, 3.12, 3.15, 3.17(a), 4.1, 5.1, 6.1, 15.7, 15.8, Article VIII and Article
XIII (collectively, the "Unlimited Representations and Covenants") shall
continue in full force after the Closing Date, or if the Closing shall not have
taken place, following the date hereof without any time limitation other than
under applicable statutes of limitation. No suit, action or proceeding may be
commenced by a party with respect to any claim arising out of or relating to the
Limited Representations and Covenants after the fifth anniversary of the
Closing. Notwithstanding the foregoing sentence and subject to the other
provisions of this ARTICLE XIV, the parties shall have the right to commence a
suit, action or proceeding after the fifth anniversary of the Closing with
respect to the Unlimited Representations and Covenants.
SECTION 14.2. INDEMNIFICATION BY QUICK & REILLY. Subject to SECTIONS
14.1 AND 14.4. Quick & Reilly shall indemnify Nash Weiss (prior to the Closing)
and the affiliates, directors and officers of Nash Weiss (prior to the Closing)
and the Sole Stockholder for, and shall hold each of them harmless from, any and
all damages, claims, suits, actions, causes of action, proceedings,
investigations, losses, liabilities, assessments, judgments, deficiencies and
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expenses (including, without limitation, reasonable legal, accounting and other
professional expenses) ("Indemnified Liabilities") asserted against or incurred
or sustained by any of them relating to, associated with or arising out of any
breach of any of the warranties or representations of Quick & Reilly and
Acquiror set forth in ARTICLE V or ARTICLE VI of this Agreement or the covenants
and agreements of Quick & Reilly and Acquiror set forth in this Agreement. In
addition, if a voucher, coupon or other similar payment method constitutes a
part of any settlement to the Lawsuit, any discount between the amount otherwise
payable to the Surviving Corporation or Quick & Reilly and the face value of
such voucher, coupon or other similar payment method shall be deemed to be an
Indemnified Liability for purposes of this Agreement.
SECTION 14.3. INDEMNIFICATION BY THE SOLE STOCKHOLDER. Subject to
SECTIONS 14.1 AND 14.4, the Sole Stockholder shall indemnify Quick & Reilly and
its directors and officers for, and shall hold each of them harmless from, any
and all Indemnified Liabilities asserted against or incurred or sustained by it
or its Affiliates relating to, associated with or arising out of any breach of
any of the warranties or representations set forth in ARTICLE III or ARTICLE IV
of this Agreement or the covenants and agreements of Nash Weiss or the Sole
Stockholder set forth in this Agreement. In addition, the Sole Stockholder shall
indemnify Quick & Reilly and its directors and officers for, and shall hold each
of them or its Affiliates harmless from, any and all Indemnified Liabilities
asserted against, incurred and sustained by any of them relating to, associated
with or arising out of the NASDAQ Proceedings, the Tax Dispute and all other
liabilities or obligations of Nash Weiss other than: (i) obligations fully
reserved for on the balance sheet of Nash Weiss included in the Interim
Financial Statements and (ii) liabilities incurred in connection with the
operation of the Business after the Closing Date. Notwithstanding anything to
the contrary, the maximum liability of the Sole Stockholder arising pursuant to
this Agreement for Indemnified Liabilities shall not exceed the Purchase Price.
SECTION 14.4. INDEMNIFICATION PROCEDURE. (a) Reasonably promptly after
obtaining knowledge thereof, a Person who may be entitled to indemnification
hereunder (the "Indemnitee") shall promptly give the party who may be obligated
to provide such indemnification (the "Indemnitor") written notice of any
Indemnified Liability which the Indemnitee has determined has given or could
give rise to a claim for indemnification hereunder (a "Notice of Claim");
PROVIDED, HOWEVER, that no failure or delay in giving any such Notice of Claim
shall relieve the Indemnitor of its obligations except, and only to the extent,
that it is prejudiced thereby. A Notice of Claim shall specify in reasonable
detail the nature and all known particulars related to an Indemnified Liability.
The Indemnitor shall perform its indemnification obligations in respect of an
Indemnified Liability described in a Notice of Claim under SECTIONS 14.2 or 14.3
hereof, as the case may be, within 30 days after the Indemnitor shall have
received such Notice of Claim; PROVIDED, HOWEVER, such obligation shall be
suspended so long as the Indemnitor is in good faith performing its obligations
under SECTION 14.4(B) hereof with respect to such Indemnified Liability.
(b) The Indemnitor shall (i) promptly inform the Indemnitee of
all material developments with respect to a matter which is the subject of a
Notice of Claim and (ii) inform the Indemnitee promptly after the Indemnitor has
made a good faith determination, based on the facts alleged in such Notice of
Claim or which have otherwise become known to the Indemnitor, either that the
Indemnitor acknowledges that it has an indemnification obligation hereunder in
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respect of such Indemnified Liability or that the Indemnitor has made a good
faith determination that it has no indemnification obligation hereunder in
respect of such Indemnified Liability. Except as set forth in SECTION 14.4(C),
the Indemnitee shall have the right, but not the obligation, to participate, at
its own cost and expense, in the defense, contest or other opposition of any
such third party claim, demand, suit, action or proceeding through legal counsel
selected by it and shall have the right, but not the obligation, to assert any
and all cross-claims or counterclaims which it may have. So long as the
Indemnitor is in good faith performing its obligations under this SECTION
14.4(B), the Indemnitee shall (i) at Indemnitor's cost and expense, cooperate in
all reasonable ways with, make its relevant files and records available for
inspection and copying by, make its employees reasonably available to and
otherwise render reasonable assistance to the Indemnitor upon request and (ii)
not compromise or settle any such claim, demand, suit, action or proceeding
without the prior written consent of the Indemnitor. Notwithstanding the
foregoing, the Indemnitee shall (x) make its employees reasonably available to
the Indemnitor without cost and expense to the Indemnitor provided that the
Indemnitor is in good faith performing its obligations under Section 14.4(b) and
the availability of such employee to the Indemnitor does not materially impair
the performance of such employee's duties to the Indemnitee, and (y) bear all
costs and expenses which it would have incurred in connection with any third
party action, demand, claim, suit or proceeding involving the Indemnitee without
regard for the transactions contemplated by this Agreement. If the Indemnitor
fails to perform its obligations under this SECTION 14.4(B), or if the
Indemnitor shall have informed the Indemnitee in writing in accordance herewith
that the Indemnitor does not have an indemnification obligation hereunder in
respect of such Liability, then the Indemnitee shall have the right, but not the
obligation, to take the actions which the Indemnitor would have had the right to
take in connection with the performance of such obligations and, if the
Indemnitee is entitled to indemnification hereunder in respect of the event or
circumstance as to which the Indemnitee takes such actions, then the Indemnitor
shall, in addition to indemnifying Indemnitee for the Liability, indemnify the
Indemnitee for all of the legal, accounting and other costs, fees and expenses
reasonably and actually incurred in connection therewith. If the Indemnitor
proposes to settle or compromise any such third party action, demand, claim,
suit or proceeding, the Indemnitor shall give written notice to that effect
(together with a statement in reasonable detail of the terms and conditions of
such settlement or compromise) to the Indemnitee a reasonable time prior to
effecting such settlement or compromise. Notwithstanding anything contained
herein to the contrary, the Indemnitee shall have the right to object to the
settlement or compromise of any such third party action, demand, claim, suit or
proceeding whereupon (A) the Indemnitee will assume the defense, contest or
other opposition of any such third party action, demand, claim, suit or
proceeding for its own account and as if it were the Indemnitor and (B) the
Indemnitor shall be released from any and all liability with respect to any such
third party action, demand, claim, suit or proceeding to the extent that such
liability exceeds the liability which the Indemnitor would have had in respect
of such a settlement or compromise.
(c) Notwithstanding anything contained herein to the contrary,
the Sole Stockholder shall have the right, but not the obligation, to direct the
defense of all matters relating to the Lawsuit. The Sole Stockholder shall also
have the right, at his sole expense, to settle or compromise any matter relating
to the Lawsuit for monetary damages or monetary equivalent damages. For purposes
hereof, monetary equivalent damages shall mean services performed for the
benefit of class plaintiffs of the Lawsuit without compensation or at a fee
below the standard established rate for such service pursuant to a voucher,
coupon or other similar payment method. If the Sole Stockholder proposes to
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settle or compromise any third party action, demand, claim, suit or proceeding
relating to the Lawsuit for other than monetary damages or monetary equivalent
damages, the Sole Stockholder shall give written notice to that effect (together
with a statement in reasonable detail of the terms and conditions of such
settlement or compromise) to the Indemnitee a reasonable time prior to effecting
such settlement or compromise. The Indemnitee shall have the right to object to
the settlement or compromise of the Lawsuit other than for monetary damages or
monetary equivalent damages if the terms thereof would have a Material Adverse
Effect on the conduct or economics of the Business.
ARTICLE XV.
MISCELLANEOUS PROVISIONS
SECTION 15.1. AMENDMENT. No addition to, and no cancellation, renewal,
extension, modification or amendment of, or approval under this Agreement shall
be binding upon a party unless such addition, cancellation, renewal, extension,
modification, amendment or approval is set forth in a written instrument which
states that it adds to, amends, cancels, renews or extends this Agreement or
grants an approval hereunder and which is executed and delivered on behalf of
each party, and for each party which is an entity by an officer of, or
attorney-in-fact for, such party.
SECTION 15.2. WAIVER. No waiver of any provision of this Agreement
shall be binding upon a party unless such waiver is expressly set forth in a
written instrument which is executed and delivered on behalf of such party, and
for each party which is an entity by an officer of, or attorney-in-fact for such
party. Such waiver shall be effective only to the extent specifically set forth
in such written instrument. Neither the exercise (from time to time or at any
time) nor the delay or failure (at any time or for any period of time) to
exercise any right, power or remedy shall operate as a waiver of, the right to
exercise, or impair, limit or restrict the exercise of part of any party of any
such right, power or remedy any other right, power or remedy at any time and
from time to time thereafter. No waiver of any right, power or remedy of a party
shall be deemed to be a waiver of any other right, power or remedy of such party
or shall, except to the extent so waived, impair, limit or restrict the exercise
of such right, power or remedy.
SECTION 15.3. INVESTIGATIONS. The respective representations and
warranties of the parties contained herein or in any certificates or other
documents delivered prior to or at the Closing shall not be deemed waived or
otherwise affected by any investigation made by any party hereto.
SECTION 15.4. HEADINGS. The article and section headings contained
in this Agreement are for references purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.
SECTION 15.5. NOTICES. All notices, requests, demands and other
communications required or permitted to be given hereunder shall be in writing
and shall be deemed to have been given as follows: on the day established by the
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sender as having been delivered personally or by telecopier (with confirmation);
on the day delivered by a private courier as established by the sender by
evidence obtained from the courier; or on the third (3rd) day after the date
mailed, by certified or registered mail, return receipt requested, postage
prepaid. Such communications, to be valid, must be addressed as follows:
(a) IF TO NASH WEISS OR THE SOLE STOCKHOLDER:
Mr. Lee S. Casty
French American Securities, Inc.
200 West Adams Street, Suite 1500
Chicago, Illinois 60606
Telecopy No.: (312) 407-5746
WITH A COPY TO:
Neal, Gerber & Eisenberg
Two North LaSalle Street
Chicago, Illinois 60602
Attention: Scott J. Bakal
Telecopy No.: (312) 269-1747
(b) IF TO THE PARENT OR ACQUIROR:
The Quick & Reilly Group, Inc.
230 County Road
Palm Beach, Florida 33480
Attention: President
Telecopy No.: (561) 655-9010
WITH A COPY TO:
U.S. Clearing Corp.
26 Broadway
New York, New York 10004
Attention: President
Telecopy No.: (212) 747-5291
Kelley Drye & Warren LLP
Two Stamford Plaza
281 Tresser Boulevard
Stamford, Connecticut 06901
Attention: Jay R. Schifferli
Telecopy No.: (203) 327-2669
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or to such other address or to the attention of Person or Persons as the
recipient party has specified by prior written notice to the sending party (or
in the case of counsel, to such other readily ascertainable business address as
such counsel may hereafter maintain). If more than one method for sending notice
as set forth above is used, the earliest notice date established as set forth
above shall control.
SECTION 15.6. BINDING EFFECT; ASSIGNMENT. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns. No party shall assign any of its rights or
delegate any of its duties hereunder (in whole or in part and by operation of
law or otherwise) without the prior written consent of the other parties hereto.
Any assignment of rights or delegation of duties under this Agreement by a party
without the prior written consent of the other parties shall be void.
SECTION 15.7. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK AS TO ALL MATTERS, INCLUDING, BUT NOT LIMITED TO,
MATTERS OF VALIDITY, CONSTRUCTION, EFFECT AND PERFORMANCE WITHOUT GIVING EFFECT
TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
SECTION 15.8. CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.
(a) EACH OF THE PARTIES HERETO, TO THE EXTENT THAT SUCH PARTY
MAY LAWFULLY DO SO, HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF THE COURTS
OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK, AS WELL AS TO THE JURISDICTION OF ALL COURTS TO WHICH AN
APPEAL MAY BE TAKEN FROM SUCH COURTS, FOR THE PURPOSE OF ANY SUIT, ACTION OR
OTHER PROCEEDING ARISING OUT OF ANY OF ITS OR HIS OBLIGATIONS ARISING HEREUNDER
OR WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY, AND EXPRESSLY WAIVES
ANY AND ALL OBJECTIONS IT OR HE MAY HAVE AS TO VENUE, INCLUDING, WITHOUT
LIMITATION, THE INCONVENIENCE OF SUCH FORUM, IN ANY OF SUCH COURTS. IN ADDITION,
TO THE EXTENT THAT IT OR HE MAY LAWFULLY DO SO, EACH PARTY HERETO CONSENTS TO
THE SERVICE OF PROCESS BY PersonAL SERVICE OR U.S. CERTIFIED OR REGISTERED MAIL,
RETURN RECEIPT REQUESTED, ADDRESSED TO SUCH AT THE ADDRESS PROVIDED HEREIN. TO
THE EXTENT ANY PARTY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION
OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE,
ATTACHMENT PRIOR TO JUDGMENT ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH
RESPECT TO ITSELF, HIMSELF OR ITS OR HIS PROPERTY, IT OR HE HEREBY IRREVOCABLY
WAIVES SUCH IMMUNITY IN RESPECT OF ITS OR HIS, OBLIGATIONS UNDER THIS AGREEMENT.
(b) WAIVER OF JURY TRIAL. EACH OF THE PARTY HERETO HEREBY
VOLUNTARILY AND IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION BROUGHT ON OR
WITH RESPECT TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY OR ANY
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OTHER AGREEMENTS EXECUTED IN CONNECTION HEREWITH.
(c) The provisions of this SECTION 15.8 shall survive any
termination of this Agreement for any reason.
SECTION 15.9. COUNTERPARTS. This Agreement may be executed by the
parties in any number of counterparts, each of which when so executed and
delivered shall constitute an original instrument, but all such counterparts
shall together constitute one and the same instrument. This Agreement shall
become effective and deemed to have been executed and delivered by all of the
parties at such time as counterparts shall have been executed and delivered by
each of the parties, regardless of whether each of the parties has executed the
same counterpart. It shall not be necessary when making proof of this Agreement
to account for any counterparts other than a sufficient number of counterparts
which, when taken together, contain signatures of each of the parties.
SECTION 15.10. NO THIRD PARTY BENEFICIARIES. This Agreement shall not
confer any rights on any Persons other than parties to this Agreement as
provided herein.
SECTION 15.11. SEVERABILITY. If any provision of this Agreement shall
hereafter be held to be invalid, unenforceable or illegal, in whole or in part,
in any jurisdiction under any circumstances for any reason, (i) such provision
shall be reformed to the minimum extent necessary to cause such provision to be
valid, enforceable and legal while preserving the intent of the parties as
expressed in, and the benefits to the parties provided by, this Agreement or
(ii) if such provision cannot be so reformed, such provision shall be severed
from this Agreement and an equitable adjustment shall be made to this Agreement
(including, without limitation, addition of necessary further provisions to this
Agreement) so as to give effect to the intent as so expressed and the benefits
so provided. Such holding shall not affect or impair the validity,
enforceability or legality of such provision in any other jurisdiction or under
any other circumstances. Neither such holding nor such reformation or severance
shall affect or impair the legality, validity or enforceability of any other
provision of this Agreement.
SECTION 15.12. ENTIRE AGREEMENT. This Agreement (including the
Schedules and Exhibits attached hereto) and the agreements referred to herein
contain the entire agreement and understanding among the parties with respect to
the subject matter hereof, and cancels and supersedes all previous or
contemporaneous written or verbal negotiations, representations, warranties,
commitments, offers, bids, bid solicitations, and other understandings between
or among Acquiror, Quick & Reilly, Nash Weiss and the Sole Stockholder. There
are no agreements, covenants, representations or warranties with respect to the
transactions contemplated hereby other than those expressly set forth herein or
in any agreement or other instrument contemplated hereby.
52
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first written above.
NASH, WEISS & CO.
By: /S/ RONALD WEISS
-----------------------------------
Ronald Weiss
Vice President
/S/ LEE S. CASTY
-----------------------------------
Lee S. Casty
THE QUICK & REILLY GROUP, INC.
By: /S/ LESLIE C. QUICK, III
-------------------------------
Leslie C. Quick, III
Vice President
NW ACQUISITION CORP.
By: /S/ LESLIE C. QUICK, III
------------------------------
Leslie C. Quick, III
Secretary
As to Section 7.7 only:
/S/ RONALD S. NASH
- ---------------------------------
Ronald S. Nash
/S/ RONALD M. WEISS
- ---------------------------------
Ronald M. Weiss
53
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54
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TABLE OF CONTENTS
Page No.
ARTICLE I. DEFINITIONS................................................... 2
SECTION 1.1. Definitions.......................................... 2
SECTION 1.2. Knowledge........................... ................ 7
ARTICLE II. THE MERGER.................................................... 7
SECTION 2.1. Merger.............................................. 7
SECTION 2.2. Filing and Effective Time........................... 7
SECTION 2.3. Effects of the Merger............................... 7
SECTION 2.4. Conversion Formula.................................. 8
SECTION 2.5. Conversion of Nash Weiss Common Stock............... 8
SECTION 2.6. Exchange of Certificates; Escrow of Quick & Reilly
Common Stock....................................... 8
SECTION 2.7. Net Book Value...................................... 9
SECTION 2.8. No Fractional Shares................................ 10
SECTION 2.9. Tax-Free Reorganization............................. 10
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF NASH WEISS.................. 10
SECTION 3.1. Organization, Qualification and Authority of
Nash Weiss ....................................... 10
SECTION 3.2. Capitalization.................................... 11
SECTION 3.3. Corporate Organizational Documents................ 11
SECTION 3.4. No Conflict....................................... 11
SECTION 3.5. Consents.......................................... 12
SECTION 3.6. Financial Statements................ ............. 12
SECTION 3.7. No Undisclosed Liabilities........................ 12
SECTION 3.8. Absence of Certain Changes........................ 12
SECTION 3.9. Reports........................................... 13
SECTION 3.10. Title to Real Property............................ 13
SECTION 3.11. Real Property Leases.............................. 13
SECTION 3.12. Title and Condition of Certain Personal Property.. 14
SECTION 3.13. Contracts......................................... 14
SECTION 3.14. Litigation........................................ 15
SECTION 3.15. Tax Matters....................................... 15
SECTION 3.16. Compliance with Law; Permits...................... 17
SECTION 3.17. Intellectual Property............................. 18
SECTION 3.18. Benefit Plans of Nash Weiss....................... 18
SECTION 3.19. Environmental and Health/Safety Matters........... 21
SECTION 3.20. Corporate Records................................. 22
SECTION 3.21. Depositories...................................... 22
SECTION 3.22. Insurance......................................... 22
SECTION 3.23. True and Complete Copies.......................... 22
SECTION 3.24. Brokerage......................................... 22
SECTION 3.25. Transactions with Affiliates...................... 23
SECTION 3.26. Securities and Exchange Commission Broker-Dealer
Registration..................................... 23
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SECTION 3.27. NASD Matters...................................... 23
SECTION 3.28. SIPC/CRD Registration............................. 23
SECTION 3.29. State Broker-Dealer Registrations................. 23
SECTION 3.30. Employees......................................... 23
SECTION 3.31. Registered Principals and Representatives......... 23
SECTION 3.32. Brokers' Bond..................................... 23
SECTION 3.33. Intercompany Liabilities.......................... 23
SECTION 3.34. Full Disclosure................................... 24
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE
SOLE STOCKHOLDER............................................. 24
SECTION 4.1. Record and Beneficial Ownership of Nash Weiss
Common Stock..................................... 24
SECTION 4.2. Due Execution.... ................................ 24
SECTION 4.3. No Conflict....................................... 24
SECTION 4.4. Consents.......................................... 25
SECTION 4.5. Brokerage......................................... 25
SECTION 4.6. Investment Representations........................ 25
SECTION 4.7. Full Disclosure................................... 26
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF
QUICK & REILLY............................................... 26
SECTION 5.1. Organization, Qualification and Authority
of Quick & Reilly............................... 26
SECTION 5.2. No Conflict...................................... 26
SECTION 5.3. Consents......................................... 27
SECTION 5.4. Brokerage........................................ 27
SECTION 5.5. Quick & Reilly Common Stock............ ......... 27
SECTION 5.6. Filings with the Commission...................... 27
SECTION 5.7. Recapitalizations................................ 27
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF QUICK
& REILLY AND ACQUIROR........................................ 28
SECTION 6.1. Organization and Authority....................... 28
SECTION 6.2. No Conflict...................................... 28
SECTION 6.3. Consents......................................... 28
SECTION 6.4. Acquiror Capitalization.......................... 29
SECTION 6.5. Business Activity; Indebtedness.................. 29
ARTICLE VII. COVENANTS OF THE PARTIES PENDING CLOSING...................... 29
SECTION 7.1. Regulatory Approvals and Compliance.............. 29
SECTION 7.2. Conduct of Business.............................. 30
SECTION 7.3. Conduct of Business of Acquiror.................. 31
SECTION 7.4. Approvals........................................ 31
SECTION 7.5. Actions with Respect to the Merger............... 31
SECTION 7.6. Access to Information............................ 31
SECTION 7.7. Exclusivity...................................... 32
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SECTION 7.8. Notification of Certain Matters.................. 32
ARTICLE VIII. CONFIDENTIALITY AND PUBLICITY............................... 32
SECTION 8.1. Confidentiality.................................. 32
SECTION 8.2. Publicity........................................ 33
SECTION 8.3. Return of Confidential Information............... 34
SECTION 8.4. Injunctive Relief................................ 34
ARTICLE IX. CONDITIONS TO THE OBLIGATIONS OF QUICK & REILLY
AND ACQUIROR............................................... 34
SECTION 9.1. Representations and Warranties; Performance...... 34
SECTION 9.2. Approvals........................................ 35
SECTION 9.3. No Proceeding or Litigation...................... 35
SECTION 9.4. Escrow Agreement................................. 35
SECTION 9.5. Employment Agreements............................ 35
SECTION 9.6. Consulting Agreement............................. 35
SECTION 9.7. Other Documents.................................. 35
SECTION 9.8. Opinion of Counsel............................... 35
SECTION 9.9. Corporate Action................................. 35
ARTICLE X. CONDITIONS TO THE OBLIGATIONS OF NASH WEISS
AND THE SOLE STOCKHOLDER................................... 35
SECTION 10.1. Representations and Warranties; Performance...... 36
SECTION 10.2. Approvals........................................ 36
SECTION 10.3. No Proceeding or Litigation...................... 36
SECTION 10.4. Escrow Agreement................................. 36
SECTION 10.5. Employment Agreements............................ 36
SECTION 10.6. Consulting Agreement............................. 36
SECTION 10.7. Other Documents.................................. 37
SECTION 10.8. Opinion of Counsel............................... 37
SECTION 10.9. Corporate Action ................................ 37
ARTICLE XI. CLOSING..................................................... 37
SECTION 11.1. Closing.......................................... 37
SECTION 11.2. Delivery of Documents by Nash Weiss.............. 37
SECTION 11.3. Delivery of Documents by Quick & Reilly
and Acquiror ................................... 38
SECTION 11.4. Filing of Certificate of Merger.................. 38
ARTICLE XII. TERMINATION AND REMEDIES.................................... 38
SECTION 12.1. Methods of Termination........................... 39
SECTION 12.2. Opportunity to Cure.............................. 39
SECTION 12.3. Procedure Upon Termination....................... 39
ARTICLE XIII. COVENANTS OF THE PARTIES SUBSEQUENT
TO THE CLOSING............................................. 40
SECTION 13.1. Shelf Registration of Quick & Reilly Common Stock;
Availability of Rule 144........................ 40
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SECTION 13.2. Access and Cooperation........................... 41
SECTION 13.3. Contribution of Net Capital and Repayment
of the Nash Weiss Subordinated Loan Due
to Sole Stockholder ............................ 41
SECTION 13.4. Tax Matters..................................... 42
SECTION 13.7. Participation in Stock Split.................... 46
SECTION 13.8. Expenses........................................ 46
ARTICLE XIV. SURVIVAL OF REPRESENTATIONS, WARRANTIES
AND COVENANTS; INDEMNIFICATION............................. 46
SECTION 14.1. Survival of Representations, Warranties
and Covenants ................................. 46
SECTION 14.2. Indemnification by Quick & Reilly.............. 46
SECTION 14.3. Indemnification by the Sole Stockholder........ 47
SECTION 14.4. Indemnification Procedure...................... 47
ARTICLE XV. MISCELLANEOUS PROVISIONS.................................... 49
SECTION 15.1. Amendment..................................... 49
SECTION 15.2. Waiver........................................ 49
SECTION 15.3. Investigations................................ 49
SECTION 15.4. Headings...................................... 49
SECTION 15.5. Notices....................................... 49
SECTION 15.6. Binding Effect; Assignment.................... 51
SECTION 15.7. GOVERNING LAW................................. 51
SECTION 15.8. CONSENT TO JURISDICTION; WAIVER OF
JURY TRIAL .................................. 51
SECTION 15.9. Counterparts.................................. 52
SECTION 15.10. No Third Party Beneficiaries.................. 52
SECTION 15.11. Severability.................................. 52
SECTION 15.12. Entire Agreement.............................. 52
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EXHIBITS
A Certificate of Merger
B Letter of Transmittal
C Escrow Agreement
D-1 Employment Agreement of Ronald S. Nash
D-2 Employment Agreement of Ronald M. Weiss
E Consulting Agreement of Lee S. Casty
F Opinion of Neal, Gerber & Eisenberg
G Opinion of Kelley Drye & Warren LLP
SCHEDULES
3.1(a) States in Which Licensed
3.1(b) Ownership of Other Securities or Indebtedness
3.2 Outstanding Rights for Nash Weiss Capital Stock
3.4 Conflicts
3.5 Company Consents
3.6 Financial Statements and Adjustments Thereto
3.7 Liabilities and Obligations
3.8 Certain Changes
3.10 Owned Real Property and Encumbrances Thereon
3.11 Real Property Leases
3.12 Equipment and Fixtures and Encumbrances Thereon
3.13 Contracts
3.14 Litigation
3.15 Tax Matters
3.16 Compliance; Permits
3.17 Intellectual Property
3.18 Benefit Plans
3.19 Environmental and Health/Safety Matters
3.21 Depositories
3.22 Insurance Policies
3.25 Transactions with Affiliates
3.30 Employees
3.31 Registered Principals and Representatives
3.33 Commission Rates
4.3 Conflicts
4.4 Required Consents
5.2 Conflicts
5.3 Required Consents
6.2 Conflicts
6.3 Required Consents
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ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our report dated
April 17, 1996 on the consolidated financial statements (and schedules) of The
Quick & Reilly Group, Inc. incorporated by reference in the Company's Form 10-K
for the year ended February 29, 1996 and to all references to our Firm included
in this registration statement.
ARTHUR ANDERSEN LLP
May 5, 1997
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