<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Reinsurance Group of America, Incorporated
(Name of Issuer)
Common Stock, Par Value $.01 Per Share
(Title of Class of Securities)
759351 10 9
(CUSIP Number)
Dorothy L. Murray
Metropolitan Life Insurance Company
4100 Boy Scout Blvd.
Tampa, FL 33607
(813) 801-2063
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
Copies of all notices should be sent to:
Linda E. Ransom, Esq.
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, NY 10019-6092
(212) 259-8000
November 23, 1999
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
/ /.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE> 2
SCHEDULE 13D
- ---------------------- -----------------------------
CUSIP No. 759351 10 9 Page 2 of 11 Pages
- ---------------------- -----------------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Metropolitan Life Insurance Company
13-5581829
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 4,784,689*
SHARES --------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
EACH --------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH 4,784,689*
--------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,784,689*
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.6%*
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IC
- --------------------------------------------------------------------------------
* See Items 3, 4 and 5 below.
<PAGE> 3
Item 1. Security and Issuer.
This Statement relates to the common stock, par value of $.01 per
share (the "Shares"), of Reinsurance Group of America, Incorporated, a Missouri
corporation ("RGA"). The address of the principal executive offices of RGA is
1370 Timberlake Manor Parkway, Chesterfield, Missouri 63017.
Item 2. Identity and Background.
(a) through (c) and (f). This Statement is filed on behalf of
Metropolitan Life Insurance Company ("MetLife"). MetLife, a mutual life
insurance company, is a New York corporation with its principal office and
business at One Madison Avenue, New York, NY 10010. MetLife is not controlled by
any person or persons.
Set forth on Schedule A to this Statement, and incorporated herein
by reference, is the name, business address, present principal occupation or
employment and citizenship of each director and executive officer of MetLife.
(d) During the last five years, neither MetLife nor any of its
executive officers or directors has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors).
(e) During the last five years, neither MetLife nor any of its
executive officers or directors has been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
Item 3. Source and Amount of Funds or other Consideration.
Using $125,000,000.13 of working capital, MetLife purchased
4,784,689 Shares pursuant to a Stock Purchase Agreement, dated as of November
23, 1999 (the "RGA Agreement"), by and between RGA and MetLife, as described in
Item 6 below. See also Item 4 below.
Item 4. Purpose of Transaction.
MetLife has purchased the Shares to which this Statement relates
in order to provide RGA with an equity infusion for general corporate purposes.
Upon the terms and subject to the conditions set forth in the
Stock Purchase Agreement, dated as of August 26, 1999, as amended (the "General
American Agreement"), by and between General American Mutual Holding Company, a
Missouri mutual insurance holding company ("General American"), and MetLife,
General American agreed to sell to MetLife, and MetLife agreed to purchase from
General American, all of the issued and outstanding shares of capital stock of
GenAmerica Corporation, a Missouri corporation ("GenAmerica"), for a purchase
price of $1,200,000,000, subject to adjustment
Page 3 of 11 Pages
<PAGE> 4
as provided in the General American Agreement. Prior to MetLife's purchase of
the Shares to which this Statement relates, GenAmerica was the beneficial owner
of approximately 53% of the outstanding Shares, according to RGA's Quarterly
Report on Form 10-Q for the quarterly period ended September 30, 1999, and, upon
completion of the acquisition of GenAmerica, MetLife will indirectly own such
Shares. Such Shares are not included in Items 5(a) and (b) below because the
acquisition of GenAmerica has not yet been completed.
From time to time, as market conditions warrant, MetLife may
acquire additional securities or dispose of securities of RGA. Except as
contemplated by the RGA Agreement or as set forth in the General American
Agreement, MetLife has no present plans or proposals which relate to or would
result in any of the following:
(a) The acquisition of additional securities or the disposition of
securities of RGA;
(b) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving RGA or any of its subsidiaries;
(c) A sale or transfer of a material amount of assets of RGA or of
any of its subsidiaries;
(d) Any change in the present board of directors or management of
RGA, including any plans or proposals to change the number or term of directors
or to fill any existing vacancies on the board of directors;
(e) Any material change in the present capitalization or dividend
policy of RGA;
(f) Any other material change in RGA's business or corporate
structure;
(g) Changes in RGA's charter, bylaws or instruments corresponding
thereto or other actions which may impede the acquisition of control of RGA by
any person;
(h) Causing a class of securities of RGA to be delisted from a
national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
(i) A class of equity securities of RGA becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Act; or
(j) Any action similar to any of those enumerated above.
The descriptions of the RGA Agreement, the General American
Agreement and the transactions contemplated thereby set forth in this Statement
are qualified in their entirety by reference to the RGA Agreement and the
General American Agreement
Page 4 of 11 Pages
<PAGE> 5
included as Exhibits 1 and 2, respectively, to this Statement, each of which is
incorporated herein in its entirety by reference.
Item 5. Interest in Securities of the Issuer.
(a) and (b). As of November 23, 1999, MetLife beneficially owned
4,784,689 Shares, or approximately 9.6 percent of the outstanding Shares. Such
percentage amount is based upon the number of Shares issued and outstanding as
of October 29, 1999, as described in RGA's Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 1999, and assumes (as represented by RGA in
the RGA Agreement) that the source of the Shares to which this Statement relates
are treasury Shares or authorized and unissued Shares. See also Item 4 above.
(c) In the 60 days prior to the date of filing of this Statement,
neither MetLife nor, the best knowledge of MetLife, any of its directors and
executive officers has effected any transactions in the Shares, except as
disclosed in this Statement.
(d) No other person is known to have the right to receive or the
power to direct the receipt of dividends from, and the proceeds from the sale
of, the Shares to which this Statement relates.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer.
Pursuant to the RGA Agreement, MetLife purchased 4,784,689 Shares
from RGA for a purchase price of $26.125 per share, or $125,000,000.13 in the
aggregate (less $50,000 for MetLife's legal fees which RGA agreed to pay). RGA
agreed to use such proceeds for general corporate purposes. In connection with
the purchase and sale of such Shares under the RGA Agreement, (i) RGA and
MetLife executed and delivered a Registration Rights Agreement, dated as of
November 23, 1999 (the "Registration Rights Agreement"), and (ii) RGA, MetLife,
GenAmerica, and two subsidiaries of GenAmerica (General American Life Insurance
Company and Equity Intermediary Company ("EIM")) executed and delivered a
Stockholders Agreement, dated as of November 23, 1999 (the "Stockholders
Agreement").
The Registration Rights Agreement requires RGA, following a
request from MetLife, to register the offer and sale of all or any part of the
Shares to which this Statement relates under the Securities Act of 1933, as
amended (the "Securities Act"). The Registration Rights Agreement also permits
MetLife to include all or any part of the Shares to which this Statement relates
in certain other proposed registrations by RGA of its Shares under the
Securities Act.
Pursuant to the Stockholders Agreement, MetLife has the right
to include a certain amount of the Shares to which this Statement relates in
proposed transfers of Shares
Page 5 of 11 Pages
<PAGE> 6
held by EIM or its affiliates, with certain exceptions. In addition to other
specified termination events, the Stockholders Agreement will terminate upon the
completion of MetLife's purchase from General American of all of the outstanding
shares of capital stock of GenAmerica pursuant to the General American
Agreement.
The descriptions of the Registration Rights Agreement and the
Stockholders Agreement set forth in this Statement are qualified in their
entirety by reference to such agreements, included as Exhibits 3 and 4,
respectively, to this Statement, each of which is incorporated herein in its
entirety by reference.
See also Items 3, 4 and 5 above.
Item 7. Materials to be Filed as Exhibits.
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
1 RGA Agreement
2 General American Agreement
3 Registration Rights Agreement
4 Stockholders Agreement
</TABLE>
Page 6 of 11 Pages
<PAGE> 7
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: December 1, 1999
METROPOLITAN LIFE INSURANCE COMPANY
By: /s/ Dorothy L Murray
----------------------------------------
Name: Dorothy L. Murray
Title: Assistant Vice-President
I, Thomas C. Hoi, Assistant Secretary of Metropolitan Life Insurance Company, a
New York corporation, do hereby certify that the following is a full, true and
correct copy of Section 4.1 of the By-Laws of Metropolitan Life Insurance
Company:
"Any officer, or any employee designated for the purpose by the chief
executive officer, shall have power to execute all instruments in
writing necessary or desirable for the Company to execute in the
transaction and management of its business and affairs (including,
without limitation, contracts and agreements, transfers of bonds,
stocks, notes and other securities, proxies, powers of attorney, deeds,
leases, releases, satisfactions and instruments entitled to be recorded
in any jurisdiction, but excluding, to the extent otherwise provided
for in the Bylaws, authorizations for the disposition of the funds of
the Company deposited in its name and policies, contracts, agreements,
amendment and endorsements of, for or in connection with insurance or
annuities) and to affix the corporate seal."
I further certify that the following person is an officer of Metropolitan Life
Insurance Company and the the signature is the signature of such officer:
Name Title Signature
Dorthy L. Murray Assistant Vice President /s/ Dorothy L. Murray
---------------------
In witnes whereof I have hereunto set my hand and
have caused to be affixed the corporate seal of
Metropolitan Life Insurance Company this 1st
day of December, 1999.
/s/ Thomas C. Hoi
-----------------
Page 7 of 11 Pages
<PAGE> 8
Index to Exhibits
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
1 RGA Agreement
2 General American Agreement
3 Registration Rights Agreement
4 Stockholders Agreement
</TABLE>
Page 8 of 11 Pages
<PAGE> 9
SCHEDULE A
DIRECTORS AND EXECUTIVE OFFICERS OF METLIFE
Set forth below is the name and present principal occupation
or employment of each director and executive officer of MetLife. Except as set
forth below, each present principal occupation set forth opposite an
individual's name refers to MetLife. The principal business address of MetLife
is One Madison Avenue, New York, NY 10010. Each person listed below is a citizen
of the United States, except for Mr. Tweedie who is a citizen of the United
States and Canada.
Directors
<TABLE>
<CAPTION>
Name and Business Address Present Principal Occupation or Employment
- ------------------------- ------------------------------------------
<S> <C>
Curtis H. Barnette Chairman and Chief Executive Officer, Bethlehem Steel
Bethlehem Steel Corporation Corporation (steel manufacturing)
1170 Eighth Avenue, Martin Tower 2118
Bethlehem, Pennsylvania 18016
Robert H. Benmosche Chairman of the Board, President and Chief Executive
Officer
Gerald Clark Vice-Chairman of the Board and Chief Investment
Officer
Joan Ganz Cooney Chairman, Executive Committee, Children's Television
Children's Television Workshop Workshop (broadcasting)
One Lincoln Plaza
New York, New York 10023
Burton A. Dole, Jr. Retired Chairman, President and Chief Executive
Puritan Bennett Officer, Puritan Bennett (medical device
P.O. Box 208 manufacturing)
Pauma Valley, California 92061
James R. Houghton Chairman of the Board Emeritus, Corning Incorporated
Corning Incorporated (ceramics manufacturing)
80 East Market Street, 2nd Floor
Corning, New York 14830
Harry P. Kamen Retired Chairman of the Board and Chief Executive
Metropolitan Life Insurance Company Officer
200 Park Avenue, Suite 5700
New York, New York 10166
</TABLE>
Page 9 of 11 Pages
<PAGE> 10
<TABLE>
<CAPTION>
<S> <C>
Helene L. Kaplan Of Counsel, Skadden, Arps, Slate, Meagher & Flom, LLP
Skadden, Arps, Slate, Meagher & (law firm)
Flom, LLP
919 Third Avenue
New York, New York 10022
Charles M. Leighton Retired Chairman and Chief Executive Officer, CML
CML Group, Inc. Group, Inc. (exercise and leisure products)
P.O. Box 247
Bolton, Massachusetts 01740
Allen E. Murray Retired Chairman of the Board and Chief Executive
Mobil Corporation Officer, Mobil Corporation (petroleum refining)
375 Park Avenue, Suite 2901
New York, New York 10152
Stewart G. Nagler Vice-Chairman of the Board and Chief Financial Officer
John J. Phelan, Jr. Retired Chairman and Chief Executive Officer, New
New York Stock Exchange, Inc. York Stock Exchange, Inc. (securities trading
P.O. Box 312 exchange)
Mill Neck, New York 11765
Hugh B. Price President and Chief Executive Officer, National Urban
National Urban League, Inc. League, Inc. (charitable institution)
120 Wall Street, 7th & 8th Floors
New York, New York 10005
Robert G. Schwartz Retired Chairman of the Board, President and Chief
Metropolitan Life Insurance Company Executive Officer
200 Park Avenue, Suite 5700
New York, New York 10166
Ruth J. Simmons, Ph.D. President, Smith College (educational institution)
Smith College
College Hall 20
Northampton, Massachusetts 01063
William C. Steere, Jr. Chairman of the Board and Chief Executive Officer,
Pfizer Inc. Pfizer Inc. (pharmaceutical manufacturing)
235 East 42nd Street
New York, New York 10017
</TABLE>
Page 10 of 11 Pages
<PAGE> 11
Executive Officers
(Who Are Not Directors)
<TABLE>
<CAPTION>
Name Present Principal Occupation or Employment
- ---- ------------------------------------------
<S> <C>
Gary A. Beller Senior Executive Vice-President and General Counsel
James M. Benson President, Individual Business; Chairman, Chief Executive Officer and
President, New England Life Insurance Company
C. Robert Henrikson President, Institutional Business
Catherine A. Rein Senior Executive Vice-President; President and Chief Executive Officer,
Metropolitan Property and Casualty Insurance Company
William J. Toppeta President, Client Services; Chief Administrative Officer
John H. Tweedie Senior Executive Vice-President
Lisa M. Weber Senior Vice President, Human Resources
Judy E. Weiss Executive Vice-President and Chief Actuary
</TABLE>
Page 11 of 11 Pages
<PAGE> 1
Exhibit 1
=============================================================================
STOCK PURCHASE AGREEMENT
BY AND BETWEEN
REINSURANCE GROUP OF AMERICA, INCORPORATED
AND
METROPOLITAN LIFE INSURANCE COMPANY
DATED AS OF NOVEMBER 23, 1999
=============================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I DEFINITIONS..................................................................................1
ARTICLE II PURCHASE AND SALE OF PURCHASED SHARES; CLOSING..............................................5
Section 2.1 Purchase and Sale......................................................................5
Section 2.2 Additional Agreements..................................................................6
Section 2.3 Closing................................................................................6
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY..............................................6
Section 3.1 Organization and Qualification; Subsidiaries...........................................6
Section 3.2 Authority Relative to Agreements.......................................................7
Section 3.3 Capital Stock..........................................................................7
Section 3.4 No Conflicts...........................................................................8
Section 3.5 SEC Documents; Financial Statements; Undisclosed Liabilities...........................9
Section 3.6 Litigation............................................................................10
Section 3.7 Compliance with Law...................................................................11
Section 3.8 Absence of Certain Changes or Events..................................................11
Section 3.9 Tax Matters...........................................................................11
Section 3.10 Assets................................................................................12
Section 3.11 Employees and Employee Benefit Plans..................................................13
Section 3.12 Insurance.............................................................................14
Section 3.13 State Takeover Statutes and Shareholder Rights Plans..................................14
Section 3.14 Brokers or Finders....................................................................15
Section 3.15 Year 2000 Matters.....................................................................15
Section 3.16 Affiliate Transactions................................................................15
Section 3.17 No Significant Stock Acquisition......................................................15
Section 3.18 Use of Proceeds.......................................................................15
Section 3.19 Disclosure............................................................................15
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER....................................................16
Section 4.1 Investment Intent of Buyer............................................................16
Section 4.2 Organization and Qualification........................................................16
Section 4.3 Authority Relative to Agreements......................................................16
Section 4.4 No Conflicts..........................................................................17
Section 4.5 Interested Shareholder................................................................17
Section 4.6 No Reliance on Projections............................................................17
</TABLE>
-i-
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE V COVENANTS...................................................................................17
Section 5.1 Confidentiality.......................................................................17
Section 5.2 Public Announcements..................................................................18
Section 5.3 Information and Access................................................................18
Section 5.4 Use of Proceeds.......................................................................18
Section 5.5 Further Assurances....................................................................18
Section 5.6 Legend................................................................................18
ARTICLE VI CLOSING DELIVERIES.........................................................................19
Section 6.1 Company's Deliveries to Buyer.........................................................19
Section 6.2 Buyer's Deliveries to the Company.....................................................20
ARTICLE VII SURVIVAL..................................................................................20
Section 7.1 Survival..............................................................................20
ARTICLE VIII EXPENSES.................................................................................21
Section 8.1 Expenses..............................................................................21
ARTICLE IX MISCELLANEOUS..............................................................................21
Section 9.1 Counterparts..........................................................................21
Section 9.2 Governing Law.........................................................................21
Section 9.3 Entire Agreement......................................................................21
Section 9.4 Notices...............................................................................22
Section 9.5 Successors and Assigns................................................................23
Section 9.6 Headings..............................................................................23
Section 9.7 Amendments and Waivers................................................................23
Section 9.8 Severability..........................................................................23
</TABLE>
EXHIBITS
<TABLE>
<CAPTION>
<S> <C> <C>
Exhibit A Registration Rights Agreement
Exhibit B Stockholders Agreement
Exhibit C-1 Opinion of Bryan Cave LLP
C-2 Opinion of Lewis, Rice & Fingersh, L.C.
C-3 Opinion of the General Counsel of the Company
</TABLE>
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<PAGE> 4
SCHEDULES
<TABLE>
<CAPTION>
<S> <C>
Schedule 3.1(d) Insurance Licenses
Schedule 3.1(e) Company Subsidiaries
Schedule 3.3(a) Equity Securities and Pro Forma Capitalization
Schedule 3.3(b) Investments
Schedule 3.4 Conflicts
Schedule 3.5(a) Company Reports
Schedule 3.5(e) Reserves and Liability Amounts
Schedule 3.6 Litigation
Schedule 3.8 Changes or Events
Schedule 3.9(a) Tax Audits and Examinations; Tax Disputes and Claims
Schedule 3.9(b) Tax Sharing Agreements
Schedule 3.16 Affiliate Transactions
</TABLE>
-iii-
<PAGE> 5
STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of
November 23, 1999, by and between REINSURANCE GROUP OF AMERICA, INCORPORATED, a
Missouri corporation (the "Company"), and METROPOLITAN LIFE INSURANCE COMPANY, a
New York mutual life insurance company ("Buyer").
W I T N E S S E T H:
WHEREAS, Buyer wishes to purchase from the Company, and the
Company wishes to sell to Buyer, shares of the Company's common stock, par value
$0.01 per share (the "Company Common Stock"), on the terms and conditions set
forth herein;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the parties
hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the
following respective meanings:
"Action" shall mean any action, suit, arbitration, inquiry,
proceeding or investigation by or before any Government Authority or before any
private dispute resolution panel, including, without limitation, the New York
State Exchange, Inc., the National Association of Securities Dealers, Inc. and
similar organizations.
"Affiliate" shall mean, with respect to any person, any other
person who directly or indirectly controls, is controlled by or is under common
control with such first person. The term "control", for the purposes of this
definition, means the power to direct or cause the direction of the management
or policies of the controlled person, whether through stock ownership, contract
or otherwise.
"Agreement" shall have the meaning set forth in the first
paragraph hereof.
"Applicable Insurance Laws" shall have the meaning set forth
in Section 3.5(e).
"Board" shall mean the Board of Directors of the Company.
"Business Day" shall mean any day other than (i) a Saturday,
(ii) a Sunday or (iii) any other day on which banks are authorized or required
to close in New York, New York.
<PAGE> 6
"Buyer" shall have the meaning set forth in the first
paragraph hereof.
"Charter Documents" shall mean, with respect to any person,
(i) the articles of incorporation, articles of organization, certificate of
formation or equivalent organizational document of such person and any amendment
or supplement thereto, as in effect on the date hereof and (ii) the by-laws,
operating agreement, partnership agreement or equivalent organizational document
of any such person and any amendment or supplement thereto, as in effect on the
date hereof.
"Closing" shall mean the consummation of the purchase and sale
of the Purchased Shares hereunder.
"Closing Date" shall mean the date on which the Closing shall
occur.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and any successor thereto, including all of the Treasury regulations
promulgated thereunder.
"Company" shall have the meaning set forth in the first
paragraph hereof.
"Company Common Stock" shall have the meaning set forth in the
recitals hereto.
"Company Plan" shall have the meaning set forth in Section
3.11(b).
"Company Preferred Stock" shall have the meaning set forth in
Section 3.3(a).
"Company Reports" shall have the meaning set forth in Section
3.5(a).
"EIM" shall mean Equity Intermediary Company, a Missouri
corporation and an indirect wholly-owned subsidiary of General American.
"Equity Securities" shall mean, with respect to any person,
all shares, interests, participations, rights in or other equivalent (however
designated and whether voting or non-voting) of such person's capital stock or
any form of membership interests, as applicable, whether outstanding on the
Closing Date or issued after the Closing Date and any and all rights, warrants
or options exercisable or exchangeable for or convertible into such capital
stock or such form of membership interest, including, without limitation, any
"equity security" within the meaning of Rule 3a11-1 under the Exchange Act.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended, and any successor thereto.
"ERISA Affiliates" shall mean any entity which is under
"common control" with the Company, within the meaning of Section 4001(b)(1) of
ERISA.
"Exchange Act" shall have the meaning set forth in Section
3.5(a).
-2-
<PAGE> 7
"GAAP" shall have the meaning set forth in Section 3.5(b).
"GALIC" shall mean General American Life Insurance Company, a
Missouri life insurance company.
"GenAmerica" shall mean GenAmerica Corporation, a Missouri
corporation.
"General American" shall mean General American Mutual Holding
Company, a Missouri mutual insurance holding company.
"General American Agreement" shall mean the Stock Purchase
Agreement, dated as of August 26, 1999, by and between General American and
Buyer, as amended from time to time.
"Government Authority" shall mean any government or state (or
any subdivision thereof) of, in or outside the United States, or any agency,
authority, bureau, commission, department or similar body or instrumentality
thereof, or any governmental court or tribunal.
"IRS" shall mean the Internal Revenue Service.
"Law" shall mean any statute, ordinance, code, rule,
regulation or order enacted, adopted, promulgated, applied or followed by any
Government Authority.
"Liabilities" shall mean, as to any person, all indebtedness,
adverse claims, liabilities and obligations, direct, indirect, absolute or
contingent of such person, whether fixed, unfixed, matured, unmatured, known or
unknown, accrued, vested or otherwise, whether in contract, tort, strict
liability or otherwise and whether or not actually reflected, or required by
GAAP to be reflected, in such person's balance sheets or other books and
records, including, without limitation, (i) all obligations arising from
non-compliance with any Law, (ii) all indebtedness or liability of such person
for borrowed money, or for the purchase price of property or services (including
trade obligations), (iii) all obligations of such person as lessee under leases,
capital or other, (iv) all liabilities of such person in respect of plans
covered by Title IV of ERISA, or otherwise arising in respect of plans for
current or former employees or their respective families or beneficiaries, (v)
all reimbursement obligations of such person in respect of letters of credit,
(vi) all obligations of such person arising under acceptance facilities, (vii)
all liabilities of other persons or entities, directly or indirectly,
guaranteed, endorsed (other than for collection or deposit in the ordinary
course of business) or discounted with recourse by such person or with respect
to which the person in question is otherwise directly or indirectly liable,
(viii) all obligations secured by any Lien on property of such person, whether
or not the obligations have been assumed, and (ix) all other items which have
been, or in accordance with GAAP would be, included in determining total
liabilities on the liability side of the balance sheet.
-3-
<PAGE> 8
"Liens" shall mean all liens, mortgages, deeds of trust, deeds
to secure debt, security interests, pledges, claims, charges, limitations,
restrictions, easements and other encumbrances of any nature whatsoever.
"Material Adverse Effect" shall mean a material adverse effect
on the condition (financial or otherwise), results of operations, assets,
prospects or business of the Company and its Subsidiaries on a consolidated
basis.
"Material Subsidiaries" shall mean Reinsurance Company of
Missouri, Incorporated, RGA Reinsurance Company, RGA Reinsurance Company
(Barbados) Ltd., RGA International Ltd., RGA Canada Management Company Ltd. and
RGA Life Reinsurance Company of Canada.
"Permitted Liens" shall mean (i) Liens for taxes or other
assessments or charges of Government Authorities that are not yet delinquent or
that are being contested in good faith by appropriate proceedings, in each case,
with respect to which adequate reserves are being maintained by the Company or
its Subsidiaries to the extent required by GAAP, (ii) assets held in trust or in
special deposits in order to meet insurance regulatory requirements, and (iii)
statutory Liens of landlords, carriers, warehousemen, mechanics, materialmen and
other Liens imposed by Law and created in the ordinary course of business or in
order to meet insurance regulatory requirements for amounts not yet overdue or
which are being contested in good faith by appropriate proceedings, in the case
of clauses (i) and (iii), with respect to which adequate reserves or other
appropriate provisions are being maintained by the Company or its Subsidiaries
to the extent required by GAAP and which do not exceed $1,000,000 in the
aggregate.
"person" shall mean any individual, entity or group,
including, without limitation, any individual, corporation, partnership, limited
liability company, joint venture, trust, association, joint stock company,
unincorporated organization, other form of business or legal entity or
Government Authority.
"Purchase Price" shall have the meaning set forth in Section
2.1.
"Purchased Shares" shall have the meaning set forth in Section
2.1.
"Registration Rights Agreement" shall have the meaning set
forth in Section 2.2.
"Rights" shall mean the rights issued pursuant to the Rights
Agreement.
"Rights Agreement" shall mean the Rights Agreement, dated as
of May 4, 1993, between the Company and Chase Mellon Shareholder Services,
L.L.C. (as successor to Boatman's Trust Company), as amended.
"SAP Financial Statements" shall have the meaning set forth in
Section 3.5(d).
"SEC" shall mean the Securities and Exchange Commission.
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"Securities Act" shall have the meaning set forth in Section 3.3(c).
"Securities Laws" shall have the meaning set forth in Section
3.5(a).
"Significant Stock Acquisition" shall mean such time as (i) a
"person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the
Exchange Act), other than General American or any of its Subsidiaries, becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of more
than 5% of the outstanding voting capital stock of the Company; or (ii) during
any period of two consecutive calendar years, individuals who at the beginning
of such period constituted the Board (together with any new directors whose
election by the Board or whose nomination for election was approved by a vote of
at least two-thirds of the directors then still in office who either were
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the directors then in office.
"Stockholders Agreement" shall have the meaning set forth in Section
2.2.
"Subsidiaries" shall mean with respect to any person, any other
person, of which such first person, directly or indirectly, owns or controls 50%
or more of the securities or other interests entitled to vote under ordinary
circumstances in the election of directors or others performing similar
functions with respect to such other person, or to otherwise control such other
person. Without limiting the generality of the foregoing, when used herein
without reference to any person, "Subsidiary" shall mean a Subsidiary of the
Company, all of which are set forth on Schedule 3.1(e).
"Tax" means any federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code Section
59A), customs duties, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-
on minimum, estimated, or other tax of any kind whatsoever, including any
interest, penalty or addition thereto, whether disputed or not. The term "Tax"
also includes any amounts payable pursuant to any tax sharing agreement to which
any relevant entity is liable as a successor or pursuant to contract.
"Tax Return" means any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
ARTICLE II
PURCHASE AND SALE OF PURCHASED SHARES; CLOSING
Section 2.1 Purchase and Sale. Upon the terms and subject to the
conditions set forth in this Agreement, at the Closing, the Company shall issue,
sell and deliver to Buyer, and Buyer shall purchase, acquire and accept from the
Company, an
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aggregate of 4,784,689 shares of Company Common Stock (the "Purchased Shares"),
for a purchase price of $26.125 per share, or One Hundred Twenty-Five Million
Dollars and Thirteen Cents ($125,000,000.13) in the aggregate (the "Purchase
Price").
Section 2.2 Additional Agreements. At the Closing, the Company and
Buyer shall enter into a registration rights agreement substantially in the form
attached hereto as Exhibit A (the "Registration Rights Agreement"), and the
Company, Buyer, EIM, GALIC and GenAmerica shall enter into a stockholders
agreement substantially in the form attached hereto as Exhibit B (the
"Stockholders Agreement").
Section 2.3 Closing. The Closing shall take place upon execution of
this Agreement, at the offices of Dewey Ballantine LLP, 1301 Avenue of the
Americas, New York, New York, or at such other place and time as the Company and
Buyer shall mutually agree. At the Closing, the Company shall deliver or cause
to be delivered to Buyer the items listed in Section 6.1, and Buyer shall
deliver or cause to be delivered to the Company the items listed in Section 6.2.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Buyer as follows:
Section 3.1 Organization and Qualification; Subsidiaries.
(a) The Company is a corporation duly incorporated, validly existing
and in good standing under the Laws of the State of Missouri. The Company has
all requisite corporate power and authority to own, operate and lease its
properties and assets, to carry on its business as now conducted, and to enter
into this Agreement, the Registration Rights Agreement and the Stockholders
Agreement and to perform its obligations hereunder and thereunder.
(b) Each of the Subsidiaries of the Company is a corporation duly
organized, validly existing and in good standing under the Laws of the
jurisdiction of its incorporation or organization, and has the corporate power
and authority to own, operate and lease its properties and assets and to carry
on its business as now conducted.
(c) The Company and each of its Subsidiaries is duly licensed or
qualified to do business and in good standing and has all insurance licenses in
each jurisdiction in which the ownership or leasing of its property or the
conduct of its business requires such licensing or qualification, except for any
failures to be so licensed or qualified or to be in good standing that would
not, individually or in the aggregate, be reasonably expected to have a Material
Adverse Effect.
(d) Each insurance license of the Company and its Subsidiaries,
including, but not limited to, each authorization to transact reinsurance, is in
full force and effect without amendment, limitation or restriction other than as
described in
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Schedule 3.1(d), and the Company is not aware of any event, inquiry or
proceeding which would reasonably be expected to lead to the revocation,
amendment, failure to renew, limitation, suspension or restriction of any such
insurance license, except, in each case, such failures to be in full force and
effect and such revocations, amendments, failures to renew, limitations,
suspensions and restrictions that would not, individually or in the aggregate,
be reasonably expected to have a Material Adverse Effect.
(e) Schedule 3.1(e) sets forth the name of each Subsidiary of the
Company (whether owned, directly or indirectly, through one or more
intermediaries), its jurisdiction of incorporation or organization, and all
jurisdictions where it is licensed or qualified to do business. All of the
outstanding shares of capital stock of, or other equity interest in, each of the
Subsidiaries are duly authorized, validly issued, fully paid and nonassessable,
and are owned, directly or indirectly, by the Company free and clear of all
Liens, except as set forth in Schedule 3.1(e). Except as set forth on Schedule
3.1(e), there are no outstanding Equity Securities of any of the Subsidiaries,
other than Equity Securities owned directly or indirectly by the Company. None
of the Subsidiaries, other than the Material Subsidiaries, individually
accounted for more than 10 percent of the consolidated assets of the Company and
its Subsidiaries as of September 30, 1999 or 10 percent of the consolidated
revenues of the Company and its Subsidiaries for the nine months ended September
30, 1999. There is no state of affairs relating to any of the Subsidiaries,
other than the Material Subsidiaries, that would, individually or in the
aggregate, be reasonably expected to have a Material Adverse Effect.
Section 3.2 Authority Relative to Agreements. The execution,
delivery and performance of this Agreement, the Registration Rights Agreement
and the Stockholders Agreement have been duly and validly authorized by all
necessary corporate action on the part of the Company and no other corporate
proceedings are necessary therefor. This Agreement, the Registration Rights
Agreement and the Stockholders Agreement have been duly executed and delivered
by the Company and constitute the valid and legally binding obligations of the
Company, enforceable against the Company in accordance with their terms (except
as enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting creditors' rights generally
and by general principles of equity).
Section 3.3 Capital Stock.
(a) The authorized capital stock of the Company consists of
75,000,000 shares of Company Common Stock, par value $0.01 per share, and
10,000,000 shares of Preferred Stock, par value $0.01 per share ("Company
Preferred Stock"). As of the date hereof, (i) 45,151,264 shares of Company
Common Stock are issued and outstanding, (ii) 1,117,320 shares of Company Common
Stock are held in the Company's treasury, (iii) 2,007,282 shares of Company
Common Stock are reserved for issuance pursuant to the Company Plans and 500,000
shares of Company Preferred Stock are reserved for issuance pursuant to the
Rights Agreement and (iv) no shares of Company Preferred Stock are issued,
outstanding or held in its treasury. Except as set forth in the immediately
preceding sentence, no Equity Securities of the Company are issued, outstanding,
held in the Company's treasury or reserved for issuance. All such issued
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and outstanding shares of Company Common Stock are duly authorized, validly
issued, fully paid, nonassessable and free of preemptive rights. Neither the
Company nor any of its Subsidiaries has any outstanding obligations pursuant to
which the holders thereof have the right to vote (or which are convertible into
or exercisable or exchangeable for securities pursuant to which the holders
thereof have the right to vote) with the stockholders of the Company on any
matter. As of the date hereof, except as set forth in this Section 3.3(a) or in
Schedule 3.3(a), there are no outstanding Equity Securities of the Company.
Schedule 3.3(a) shows the pro forma capitalization of the Company as of
September 30, 1999 after giving effect to the Closing.
(b) Except for interests in the Subsidiaries of the Company and
except as set forth in Schedule 3.3(b), none of the Company or any of its
Subsidiaries owns or holds, directly or indirectly, any interest or investment
(whether equity or debt) in any person (other than (i) investments made in the
ordinary course and held in the portfolios of the Subsidiaries which are
insurance companies or (ii) fixed income investments made in the ordinary course
and held in the portfolio of the Company).
(c) The Purchased Shares have been duly authorized for issuance, and
upon issuance at the Closing will be duly and validly issued, fully paid and
nonassessable. The source of the Purchased Shares is the Company's treasury
shares or authorized and unissued shares of Company Common Stock. Upon issuance
at the Closing, the Purchased Shares will be listed on the New York Stock
Exchange, Inc. Upon the Closing, the Company will duly issue all of the
Purchased Shares to Buyer free and clear of all Liens (other than any transfer
restrictions under the Securities Laws). The issuance and sale of the Purchased
Shares hereunder will not give any stockholder of the Company the right to
demand payment for its shares or give rise to any preemptive or similar rights.
Neither the Company nor any person acting on its behalf has taken, or will take,
any action that would subject the offer, sale or issuance of the Purchased
Shares to the registration requirements of (i) Section 5 of the Securities Act
of 1933, as amended (the "Securities Act") or (ii) state securities Laws. On the
basis of the representations contained in Article IV hereof, the offer, sale and
issuance of the Purchased Shares by the Company to Buyer are exempt from the
registration requirements of (i) Section 5 of the Securities Act and (ii) state
securities Laws. No further approval or authorization of the stockholders or
directors of the Company is required for the issuance and sale of the Purchased
Shares to Buyer.
Section 3.4 No Conflicts. Neither the execution and delivery by the
Company of this Agreement, the Registration Rights Agreement and the
Stockholders Agreement nor the performance by the Company of its obligations
hereunder or thereunder will conflict with, result in a breach of the terms,
conditions or provisions of, constitute a default under, result in the creation
of any Lien upon any of the properties or assets of the Company or any of the
Material Subsidiaries pursuant to, trigger any payment or other obligations
pursuant to, accelerate vesting under, or require any consent, approval or other
action by or any notice to or filing by the Company or any Material Subsidiary
with any person pursuant to, the Charter Documents of the Company or any of the
Material Subsidiaries, any Company Plan, any grant or award made under any
Company Plan or any agreement, instrument, license, permit, order, judgment,
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injunction, writ, decree or Laws applicable to the Company or any of the
Material Subsidiaries or by which any of their properties or assets is bound,
except as set forth in Schedule 3.4.
Section 3.5 SEC Documents; Financial Statements; Undisclosed
Liabilities.
(a) Schedule 3.5(a) sets forth a list of each registration
statement, report, form, schedule, statement or other document and all
amendments and supplements thereto prepared by the Company or relating to its
properties or assets filed with the SEC since June 1, 1996 (collectively, the
"Company Reports"). Except as set forth in Schedule 3.5(a), the Company Reports
were filed with the SEC in a timely manner and include all registration
statements, reports, forms, schedules, statements and other documents required
to be filed by the Company under the Securities Act, the Securities Exchange Act
of 1934, as amended (the "Exchange Act") and the rules and regulations
promulgated thereunder (collectively, the "Securities Laws"). As of their
respective dates, the Company Reports (i) complied in all material respects with
all applicable requirements of the Securities Laws and (ii) were complete and
correct in all material respects and did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. There is no unresolved violation
asserted by any Government Authority with respect to any of the Company Reports.
(b) Each of the balance sheets included in or incorporated by
reference into the Company Reports (including the related notes and schedules)
fairly presented in all material respects the financial position of the person
or persons to which it relates as of its date and each of the statements of
income, stockholders' equity and cash flows included in or incorporated by
reference into the Company Reports (including any related notes and schedules)
fairly presented in all material respects the results of operations, retained
earnings or cash flows, as the case may be, of the person or persons to which it
relates for the periods set forth therein, in each case in accordance with
United States generally accepted accounting principles consistently applied
("GAAP") during the periods involved, except as may be noted therein and except,
in the case of the unaudited statements, normal recurring year-end adjustments
which have not been and will not be material in nature or amount.
(c) Except as and to the extent set forth in the Company Reports and
the Company's financial statements filed with the SEC, neither the Company nor
any of the Material Subsidiaries has any Liabilities (nor is the Company aware
of any circumstances that would result in any such Liabilities) that would,
individually or in the aggregate, be reasonably expected to have a Material
Adverse Effect.
(d) The Company has previously furnished Buyer with copies of
audited statutory financial statements of each of the Material Subsidiaries as
of and for the years ended December 31, 1998 and 1997, and unaudited statutory
financial statements of RGA Life Insurance Company of Canada as of and for the
period ended June 30, 1999 and
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RGA Reinsurance Company as of and for the period ended September 30, 1999, in
each case prepared in conformity with accounting practices prescribed or
permitted by their respective jurisdictions of domicile, and in each case to the
extent that such statutory financial statements have been prepared or are
required by Law to be prepared (collectively, the "SAP Financial Statements").
Each of the balance sheets included in the SAP Financial Statements fairly
presented in all material respects the financial position of the reporting
person as of its date and each of the statements of operations and cash flows
included in the SAP Financial Statements fairly presented in all material
respects the results of operations and cash flows of the reporting person for
the period therein set forth, in each case in accordance with statutory
accounting practices prescribed or permitted by the applicable jurisdiction on a
consistent basis. As of their respective dates, the SAP Financial Statements
complied in all material respects with all applicable Laws. No material
deficiencies or unresolved violations have been asserted by any Government
Authority with respect to the SAP Financial Statements.
(e) Each reserve and other liability amount in respect of the
insurance or reinsurance business, established or reflected in the SAP Financial
Statements of each reporting person was determined in accordance with generally
accepted actuarial standards consistently applied, was based on actuarial
assumptions that were in accordance with or stronger than those called for in
relevant policy and contract provisions, is fairly stated in all material
respects in accordance with sound actuarial principles and is in compliance with
the requirements of the insurance Laws of their respective jurisdictions of
domicile as well as those of any other applicable jurisdictions (collectively,
"Applicable Insurance Laws"). Except as set forth on Schedule 3.5(e), such
reserves and liability amounts with respect to each reporting person were
adequate in all material respects to cover the total amount of all Liabilities
of such reporting person under all its outstanding insurance, reinsurance and
other similar contracts as of December 31, 1998 and 1997, June 30, 1999 or
September 30, 1999, as appropriate. Such investment assumptions were reasonable
as of December 31, 1998 or 1997, June 30, 1999 or September 30, 1999, as
appropriate. Each reporting person owns assets that qualify as admitted assets
in an amount at least equal to the sum of all such reserves and liability
amounts and its minimum statutory capital and surplus as required by Applicable
Insurance Laws.
Section 3.6 Litigation. Except as set forth on Schedule 3.6, there
are no Actions pending or, to the Company's knowledge, threatened against or
affecting (i) the Company, (ii) any of the Material Subsidiaries, (iii) any
director, officer, agent, employee, consultant or other person authorized to act
on behalf of the Company or any of the Material Subsidiaries, arising out of or
in connection with his or her capacity as a director, officer, agent, employee
or consultant of, the Company or any of the Material Subsidiaries, or (iv) any
properties of any of the foregoing, that would, individually or in the
aggregate, be reasonably likely to result in a Material Adverse Effect, or which
question the validity of this Agreement, the Registration Rights Agreement or
the Stockholders Agreement or any of the transactions contemplated hereby or
thereby. Except as disclosed in Schedule 3.6, there are no continuing orders,
injunctions or decrees of any Government Authority to which the Company or any
of the Material Subsidiaries is a party or by which any of its properties or
assets are bound.
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Section 3.7 Compliance with Law.
(a) None of the Company or any of the Material Subsidiaries is in
violation of any Law, order, writ, decree or injunction of any Government
Authority or any body having jurisdiction over them or any of their respective
properties or assets which, if enforced, would, individually or in the
aggregate, be reasonably expected to result in a Material Adverse Effect.
Neither the Company nor any of the Material Subsidiaries is in violation of, or
in default under (and there does not exist any event or condition which, after
notice or lapse of time or both, would constitute such a default under), any
term of its Charter Documents, or of any term of any agreement, contract,
instrument, judgment, decree, writ, determination, arbitration award, or Law
applicable to the Company or any of the Material Subsidiaries or to which the
Company or any of the Material Subsidiaries is bound, or to any properties or
assets of the Company or any of the Material Subsidiaries, except in each case
to the extent that such violations or defaults would not, individually or in the
aggregate, be reasonably expected to (i) affect the validity or enforceability
of this Agreement, the Registration Rights Agreement or the Stockholders
Agreement, (ii) have a Material Adverse Effect, or (iii) impair the ability of
the Company or any of the Material Subsidiaries to perform fully on a timely
basis any obligation which the Company or any such Material Subsidiary will have
under this Agreement, the Registration Rights Agreement or the Stockholders
Agreement.
(b) The Company and each of the Material Subsidiaries have filed all
reports, registrations and statements, together with any amendments required to
be made with respect thereto, that they were required to file with any
Government Authority, to be filed, and have paid all fees or assessments due and
payable in connection therewith except, in each case, such failure to file or
pay fees or assessments that would not, individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect.
Section 3.8 Absence of Certain Changes or Events. Except as
disclosed in the Company Reports filed with the SEC prior to the date hereof or
in Schedule 3.8, since December 31, 1998, the Company and each of the Material
Subsidiaries has conducted its business only in the ordinary course, and there
has not been (a) any change, circumstance or event that would, individually or
in the aggregate, be reasonably expected to have a Material Adverse Effect, (b)
any declaration, setting aside or payment of any dividend or other distribution
with respect to the Company Common Stock, (c) any Liability, capital
expenditure, commitment or transaction incurred by the Company or any of the
Material Subsidiaries, other than Liabilities, capital expenditures, commitments
and transactions incurred in the ordinary course of business consistent with the
Company's past practices, or (d) any Lien placed on any of the properties or
assets of the Company or any of the Material Subsidiaries that remains in
existence on the date hereof, other than Permitted Liens.
Section 3.9 Tax Matters.
(a) Except where the failure would not, individually or in the
aggregate, be reasonably expected to have a Material Adverse Effect, the Company
and each of the
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Material Subsidiaries has timely filed with the appropriate Government Authority
all Tax Returns required to be filed by it or has timely requested extensions
and any such request has been granted and has not expired. Each such Tax Return
is complete and accurate in all material respects. All Taxes shown as owed by
the Company or any of the Material Subsidiaries on any Tax Return or claimed or
asserted to be due, from or with respect to any of them, have been paid, except
for Taxes being contested in good faith and for which adequate reserves have
been taken on the balance sheet of the person taking such reserves. The Company
and each of the Material Subsidiaries have properly made due and sufficient
accruals for all Taxes for such periods subsequent to the periods covered by
such Tax Returns as required by GAAP. The Company and each of the Material
Subsidiaries have made all required current estimated Tax payments in an amount
sufficient to avoid any understatement penalties. Except as set forth in
Schedule 3.9(a), none of the Company or any of the Material Subsidiaries is
being audited or examined by any Government Authority with respect to any Tax or
is a party to any pending action or proceedings by any Government Authority for
assessment or collection of any Tax, and no claim for assessment or collection
of any Tax has been asserted against it. Except as set forth in Schedule 3.9(a),
there is no dispute or claim concerning any Tax liability of the Company or any
of the Material Subsidiaries, (i) claimed or raised by any Government Authority
in writing or (ii) as to which the Company or any of the Material Subsidiaries
has knowledge, except to the extent such dispute or claim would not,
individually or in the aggregate, be reasonably expected to have a Material
Adverse Effect.
(b) Except as set forth in Schedule 3.9(b), neither the Company nor
any of the Material Subsidiaries is a party to, bound by, or obligated under,
any Tax sharing agreement (whether written or oral).
(c) The Company and each of the Material Subsidiaries (i) have
complied in all material respects with the provisions of the Code relating to
the withholding and payment of Taxes, including, without limitation, the
withholding and reporting requirements under Code Sections 1441 through 1464,
3401 through 3406, and 6041 through 6049, and any similar provisions under any
other Laws, (ii) have within the time and in the manner prescribed by Law
withheld from employee wages and paid over to the proper Government Authorities
all amounts required, and (iii) have complied in all material respects with the
requirements for classifying persons who provide services to the Company and the
Material Subsidiaries as employees for purposes of such tax withholding
requirements.
Section 3.10 Assets.
(a) Each agreement to which the Company or any of the Material
Subsidiaries is a party or by which it is bound and which is material to the
business of the Company or such Material Subsidiary is in full force and effect.
Neither the Company nor any of the Material Subsidiaries is in material breach,
violation or default thereunder. The Company is not aware of a breach, violation
or default thereunder by any other parties thereto that, when taken together
with all of the other breaches, violations and
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defaults under the other material agreements of the Company or any Material
Subsidiary, would reasonably be expected to have a Material Adverse Effect.
(b) Neither the Company nor any of the Material Subsidiaries owns or
has owned any real property. Each of the leases for office space occupied by the
Company or any of the Material Subsidiaries (the "Leases") is in full force and
effect and there are no existing defaults under any of the Leases nor does there
exist any event or condition which, with notice or lapse of time or both, would
give rise to a default or constitute grounds for termination or re-entry under
any of the Leases that would, individually or in the aggregate, be reasonably
expected to have a Material Adverse Effect.
(c) All copyrights, patents, trademarks, licenses, trade names,
logos, assumed or other names and other intangible property rights owned or, to
the Company's knowledge, used by the Company or any of the Material Subsidiaries
in their businesses, are valid, subsisting and in full force and effect without
interference by any other person, except for such instances which would not,
individually or in the aggregate, be reasonably expected to have a Material
Adverse Effect. Neither the Company nor any of the Material Subsidiaries has
received any notice with respect to any alleged infringement or unlawful use of
any intangible property right owned or alleged to be owned by others that would,
individually or in the aggregate, be reasonably expected to have a Material
Adverse Effect.
(d) The Company and each of the Material Subsidiaries has good and
marketable title to all of the assets owned by the Company or such Material
Subsidiary, as the case may be, free and clear of all Liens (except for
Permitted Liens and Liens which do not materially interfere with the current and
intended use of such assets). All assets used in or necessary for the conduct of
the business of the Company and each of the Material Subsidiaries as currently
conducted are owned by or leased or licensed to it. No other person owns, or has
any rights whatsoever in, any such assets (except in the case of assets leased
or licensed to the Company or any of the Material Subsidiaries, the ownership
interest in such assets by the lessor or licensor), except where such ownership
or rights would not, individually or in the aggregate, be reasonably expected to
have a Material Adverse Effect. Such assets have been properly maintained and
are in good operating condition and repair, ordinary wear and tear excepted, and
are reasonably adequate for the uses to which they are being put.
Section 3.11 Employees and Employee Benefit Plans.
(a) With respect to each Company Plan, the Company and each of its
Subsidiaries is in compliance in all material respects with the terms of each
Company Plan and with the requirements prescribed by all applicable statutes,
orders or governmental rules or regulations. As to each Company Plan intended to
be qualified under Section 401(a) of the Code, the Company has received a
favorable determination letter from the IRS and nothing has occurred since the
date of such letter to impair its continued validity and effectiveness, assuming
that the plan is amended on a timely basis to comply with any changes in
legislative, regulatory or administrative requirements as to
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which the remedial amendment period has not yet ended. No Company Plan, nor any
fiduciary of party in interest thereof, has engaged in any material, non-exempt
prohibited transaction under ERISA of the Code.
(b) For purposes hereof, "Company Plan" means any employee benefit
or compensation plan, policy, program, arrangement or agreement, including, but
not limited to, any "employee benefit plan" as defined in Section 3(3) of ERISA,
maintained or contributed to by the Company or a Subsidiary or in which the
Company or a Subsidiary participates or participated and which provides benefits
to current or former employees of the Company or a Subsidiary.
(c) With respect to each Company Plan and each plan of an ERISA
Affiliate that is subject to Title IV or Section 302 of ERISA or Section 412 or
4971 of the Code: (i) there does not exist any accumulated funding deficiency
within the meaning of Section 412 of the Code or Section 302 of ERISA, whether
or not waived, (ii) no reportable event within the meaning of Section 4043(c) of
ERISA has occurred in the past 3 years, with respect to which notice has not
been waived, and (iii) there is no liability, contingent or otherwise, under
Title IV of ERISA, except for payment of PBGC premiums. Neither the Company nor
any ERISA Affiliate participates in any "multiemployer plan" (as defined in
Section 3(37) of ERISA) nor has the Company or any ERISA Affiliate incurred any
withdrawal liability under any multiemployer plan that has not been satisfied in
full.
Section 3.12 Insurance. The Company maintains insurance policies,
including liability policies, covering the assets, business, equipment,
properties, operations, employees, officers and directors of the Company and
each of the Material Subsidiaries, which are of a type and in amounts
customarily carried by persons conducting businesses similar to those of the
Company and the Material Subsidiaries.
Section 3.13 State Takeover Statutes and Shareholder Rights Plans.
The Company has caused to be taken all actions necessary such that no "fair
price," "moratorium," "control share acquisition," "business combination" or
other form of antitakeover statute, regulation or provision of the Company
Charter (assuming Buyer's representations in Section 4.5 are accurate) is
applicable to any of the transactions contemplated hereby or by the Registration
Rights Agreement or the Stockholders Agreement, including, without limitation,
Sections 351.407 and 351.459 of the Missouri Revised Statutes; provided that
with respect to Section 351.459 of the Missouri Revised Statutes, the Company
has not taken any action that would permit the assignment of the Purchased
Shares by Buyer to an "interested shareholder" as defined in such Section. The
Company has caused to be taken all actions necessary such that, for all purposes
under the Rights Agreement, neither Buyer nor any of its Affiliates shall be
deemed an Acquiring Person (as defined in the Rights Agreement), the
Distribution Date (as defined in the Rights Agreement) shall not be deemed to
occur, and the Rights will not separate from the Company Common Stock, in each
case as a result of Buyer's entering into this Agreement, the Registration
Rights Agreement and the Stockholders Agreement or consummating the acquisition
of the Purchased Shares pursuant hereto, and there shall be no effect under the
Rights Agreement or with respect to the Rights as a result of such
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<PAGE> 19
transactions, other than the issuance of Rights to Buyer pursuant thereto. For
the avoidance of doubt, references to "Buyer" in this Section shall only refer
to Buyer and not any of its successors or permitted assigns.
Section 3.14 Brokers or Finders. Neither the Company nor any of its
Subsidiaries, stockholders, officers, directors or employees has engaged any
agent, broker, investment banker or other firm or person that will be entitled
to any broker's or finder's fee or any other commission or similar fee in
connection with this Agreement or any of the transactions contemplated hereby
for which the Buyer or any of its Affiliates will be responsible.
Section 3.15 Year 2000 Matters. All information technology presently
expected to be used by the Company or any Material Subsidiary following December
31, 1999 in the administration and the business operations of the Company or any
Material Subsidiary, including, without limitation, in all products and services
(i) provided by the Company or any Material Subsidiary whether to third parties
or for internal use or (ii) to the best of the Company's knowledge after
reasonable investigation, used in combination with any information technology of
its clients, customers, suppliers or vendors, accurately processes or will
process all date and time data (including, but not limited to calculating,
comparing and sequencing) from, into and between the years 1999 and 2000 and the
twentieth century and the twenty-first century, including leap year
calculations, and neither the performance nor the functionality of such
technology will be affected by dates prior to, during and after the year 2000
which would, individually or in the aggregate, be reasonably expected to have a
Material Adverse Effect. Neither the Company nor any Material Subsidiary has any
obligation under warranty agreements, service agreements or otherwise to remedy
any information technology defect relating to the year 2000 which would,
individually or in the aggregate, be reasonably expected to have a Material
Adverse Effect.
Section 3.16 Affiliate Transactions. Schedule 3.16 sets forth a
complete and accurate list and description of all transactions entered into by
the Company or any of the Material Subsidiaries since January 1, 1999 or
currently proposed which are of the type required to be disclosed by the Company
pursuant to Item 404 of Regulation S-K of the Securities Laws.
Section 3.17 No Significant Stock Acquisition. Except pursuant to
the General American Agreement, since June 30, 1999, to the Company's knowledge,
no Significant Stock Acquisition of the Company has occurred and no event has
occurred which is reasonably likely to lead to a Significant Stock Acquisition.
Section 3.18 Use of Proceeds. The Company will apply the proceeds of
the sale of the Purchased Shares solely for general corporate purposes.
Section 3.19 Disclosure. Neither this Agreement (including the
schedules and exhibits hereto) nor any certificate, instrument or written
statement furnished to Buyer by or on behalf of the Company pursuant to this
Agreement contains any untrue statement of a material fact or omits to state a
material fact necessary in order
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<PAGE> 20
to make the statements contained herein and therein in light of the
circumstances under which they were made not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to the Company as follows:
Section 4.1 Investment Intent of Buyer. Buyer understands that the
offer and sale of the Purchased Shares have not been registered under the
Securities Act. Buyer also understands that the Purchased Shares are being
offered and sold pursuant to an exemption from registration contained in the
Securities Act based in part upon Buyer's representations contained in this
Agreement. Taking into account its personnel and resources, Buyer is
knowledgeable, sophisticated and experienced in making, and is qualified to
make, decisions with respect to investments in shares presenting an investment
decision like that involved in the purchase of the Purchased Shares, including
investments in securities issued by the Company, and has requested, received,
reviewed and considered all information it deems relevant in making an informed
decision to purchase the Purchased Shares. Buyer is acquiring the Purchased
Shares for its own account for investment only and with no present intention of
distributing any of the Purchased Shares and has no arrangement or understanding
with any other persons regarding the distribution of the Purchased Shares. Buyer
will not, directly or indirectly, offer, sell, pledge, transfer or otherwise
dispose of (or solicit any offers to buy, purchase or otherwise acquire or take
a pledge of) any of the Purchased Shares except in compliance with the
Securities Act and applicable state securities laws, the rules and regulations
promulgated thereunder and the terms and conditions hereof. Buyer is an
"accredited investor" within the meaning of Rule 501 of Regulation D promulgated
under the Securities Act.
Section 4.2 Organization and Qualification. Buyer is a corporation
duly incorporated, validly existing and in good standing under the Laws of the
State of New York. Buyer has all requisite corporate power and authority to
enter into this Agreement, the Registration Rights Agreement and the
Stockholders Agreement and to perform its obligations hereunder and thereunder.
Section 4.3 Authority Relative to Agreements. The execution,
delivery and performance of this Agreement, the Registration Rights Agreement
and the Stockholders Agreement have been duly and validly authorized by all
necessary corporate action on the part of Buyer and no other corporate
proceedings are necessary therefor. This Agreement, the Registration Rights
Agreement and the Stockholders Agreement have been duly executed and delivered
by Buyer and constitute the valid and legally binding obligations of Buyer,
enforceable against Buyer in accordance with their terms (except as
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting creditors' rights generally
and by general principles of equity).
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<PAGE> 21
Section 4.4 No Conflicts. Neither the execution and delivery by
Buyer of this Agreement, the Registration Rights Agreement and the Stockholders
Agreement nor the performance by Buyer of its obligations hereunder or
thereunder will conflict with, result in a breach of the terms, conditions or
provisions of the Charter Documents of Buyer, or require any consent, approval
or other action by or any notice to or filing by Buyer with any Governmental
Authority pursuant to any Laws applicable to Buyer, except to the extent that
any such conflict or breach or lack of consent, approval, action, notice or
filing would not reasonably be expected to (i) affect the validity or
enforceability of this Agreement, the Registration Rights Agreement or the
Stockholders Agreement, or (ii) impair the ability of Buyer to perform any of
its material obligations under this Agreement, the Registration Rights Agreement
or the Stockholders Agreement.
Section 4.5 Interested Shareholder. Buyer represents and warrants
that, except to the extent that Buyer may be deemed to have a beneficial
ownership interest in, or be the direct or indirect owner of, Company Common
Stock (or "voting power" or "voting stock" with respect thereto, or entitled to
exercise or direct the exercise of the foregoing) owned by GenAmerica or any of
its direct or indirect Subsidiaries (including, without limitation, EIM) under
Section 351.407 or 351.459 of the Missouri Revised Statutes or under the Rights
Agreement as a result of the execution and delivery of the General American
Agreement, at no time from March 1, 1993 through the date hereof has Buyer,
alone or as part of a group, been, within the meaning of Section 351.407 or
351.459 of the Missouri Revised Statutes or the Rights Agreement, the
"beneficial owner" or the direct or indirect owner of, or entitled to exercise
or direct the exercise of, twenty percent (20%) or more of the Company's then
outstanding "voting power" and/or "voting stock."
Section 4.6 No Reliance on Projections. The purchase of the
Purchased Shares and the consummation of the transactions contemplated hereby by
Buyer are not done in reliance by Buyer upon any projections as to future
financial performance or condition or business prospects prepared by the Company
or any of its Subsidiaries or any of their Affiliates.
ARTICLE V
COVENANTS
Section 5.1 Confidentiality. Buyer agrees that all confidential or
proprietary information of the Company provided to it pursuant to this Agreement
shall be kept confidential, and Buyer shall not use such information except in
connection with the consummation of the transactions contemplated by this
Agreement and shall not disclose such information to any persons other than the
directors, officers, employees, financial advisors, investors, lenders, legal
advisors, accountants, consultants and Affiliates of Buyer who reasonably need
to have access to the confidential or proprietary information and who are
advised of the confidential or proprietary nature of such information and who
agree for the benefit of the Company (in writing, with respect to
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<PAGE> 22
financial advisors, investors, lenders, legal advisors, accountants and
consultants) to be bound hereby; provided, however, the foregoing obligation of
Buyer as to disclosure shall not (i) relate to any such information that (x) is
or becomes generally available other than as a result of unauthorized disclosure
by Buyer or by persons to whom Buyer has made such information available, or (y)
is or becomes available to Buyer on a non-confidential basis from a third party
that is not, to Buyer's knowledge, bound by any other confidentiality agreement
or obligation with the Company, or (ii) prohibit disclosure of any such
information if required by Law.
Section 5.2 Public Announcements. Subject to each party's disclosure
obligations imposed by Law and any stock exchange or similar rules and the
confidentiality provisions contained in Section 5.1, the Company and Buyer will
cooperate with each other in the development and distribution of all news
releases and other public information disclosures with respect to this
Agreement, the Registration Rights Agreement, the Stockholders Agreement and any
of the transactions contemplated hereby or thereby. If a party is required by
Law or any stock exchange or similar rule to issue a news release or other
public announcement, it shall advise the other party in advance thereof and
cooperate with the other party to cause a mutually agreeable release or
announcement to be issued.
Section 5.3 Information and Access. So long as Buyer and its
Subsidiaries and Affiliates continue to hold in the aggregate at least 1,000,000
shares of Company Common Stock purchased pursuant to this Agreement (and so
certify in writing to the Company following the Company's written request
therefor), the Company and each of the Material Subsidiaries shall afford to
Buyer and its accountants, counsel and other representatives full and reasonable
access during normal business hours (and at such other times as the parties may
mutually agree) to its properties, books, contracts, commitments, records and
personnel and shall furnish promptly to Buyer (i) a copy of each report,
schedule, form, statement and other document filed or received by it pursuant to
the requirements of the Securities Laws, and (ii) all other information
concerning their businesses, personnel and the Company Properties as Buyer may
reasonably request from time to time.
Section 5.4 Use of Proceeds. The Company will apply the proceeds of
the sale of the Purchased Shares solely for general corporate purposes.
Section 5.5 Further Assurances. The Company and Buyer agree that,
from time to time, whether before, at or after any Closing Date, each of them
will execute and deliver such further instruments of conveyance and transfer and
take such other action as may be necessary to carry out the purposes and intents
hereof.
Section 5.6 Legend. Buyer agrees that the certificates representing
the Purchased Shares may bear legends substantially to the effect that the
Purchased Shares have not been registered under the Securities Act or state
securities Laws and may not be resold without registration or delivery of a
legal opinion reasonably satisfactory to the Company from counsel who is
reasonably satisfactory to the Company that registration is not required.
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<PAGE> 23
ARTICLE VI
CLOSING DELIVERIES
Section 6.1 Company's Deliveries to Buyer. At the Closing, the
Company will deliver, or cause to be delivered, to Buyer the following (to the
extent any such delivery is not waived in writing by Buyer):
(a) Purchased Shares. A certificate representing the Purchased
Shares, free and clear of all Liens, with all necessary share transfer and other
documentary stamps attached, and the Purchased Shares shall be listed on the New
York Stock Exchange, Inc.
(b) Secretary's Certificate. A certificate executed by the Secretary
of the Company dated the Closing Date, which certifies that (i) attached is a
true, correct and complete copy of the Articles of Incorporation of the Company
and each of the Material Subsidiaries, as amended, certified as of a recent date
by the Secretary of State or equivalent Government Authority in the jurisdiction
of incorporation or organization; (ii) attached is a true, correct and complete
copy of the Bylaws of the Company and each of the Material Subsidiaries, as in
full force and effect; (iii) attached are certificates issued by the appropriate
Government Authority evidencing the good standing of the Company and each
Material Subsidiary in its jurisdiction of incorporation or organization; (iv)
attached are true, correct and complete copies of certificates of authority to
conduct insurance business issued by the appropriate Government Authorities with
respect to the Company and each Material Subsidiary in each jurisdiction in
which the Company or such Material Subsidiary conducts any insurance business;
(v) attached are true, correct and complete resolutions of the Board authorizing
this Agreement, the Registration Rights Agreement and the Stockholders
Agreement, and authorizing the acquisition by Buyer of the Purchased Shares
(which constitutes all action necessary for the representations in Section 3.13
to be true and correct); (vi) such resolutions were duly adopted, are in full
force and effect and have not been rescinded or amended; (vii) there are no
proceedings or other action for dissolution, liquidation or reorganization of
the Company or any of its Material Subsidiaries; and (viii) the incumbency and
specimen signatures of officers who have executed instruments, agreements and
other documents in connection with transactions contemplated hereby.
(c) Consents. The consents set forth in Schedule 3.4.
(d) Registration Rights Agreement and Stockholders Agreement. The
Registration Rights Agreement as executed by the Company, and the Stockholders
Agreement as executed by the Company, EIM, GALIC and GenAmerica.
(e) Legal Opinion. Opinions dated the Closing Date covering the
matters set forth in Exhibits C-1, C-2 and C-3 attached hereto from Bryan Cave
LLP, counsel for the Company, Lewis, Rice & Fingersh, L.C., counsel for
GenAmerica, and the General Counsel of the Company, respectively.
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<PAGE> 24
(f) Counsel Fees. The fees of Dewey Ballantine LLP, counsel for the
Buyer, not to exceed $50,000, as an offset to the payment of the Purchase Price,
as set forth in Section 6.2(a).
(g) Listing. Notice of listing of the Purchased Shares on the New
York Stock Exchange, Inc., subject to official notice of issuance.
(h) Receipt. An acknowledgement by the Company of its receipt of the
Purchase Price, less the fees of Dewey Ballantine LLP, counsel for Buyer.
Section 6.2 Buyer's Deliveries to the Company At the Closing, Buyer
will deliver, or cause to be delivered, to the Company the following:
(a) Purchase Price. The Purchase Price by wire transfer of
immediately available funds in U.S. dollars to the account or accounts specified
by the Company, less the fees of Dewey Ballantine LLP, counsel for Buyer, not to
exceed $50,000.
(b) Registration Rights Agreement and Stockholders Agreement. The
Registration Rights Agreement as executed by Buyer, and the Stockholders
Agreement as executed by Buyer.
ARTICLE VII
SURVIVAL
Section 7.1 Survival. All representations, warranties and covenants
and agreements of the parties contained herein (including the schedules or
exhibits hereto), or any certificate, document or other instrument delivered in
connection herewith, shall survive the Closing for three years, regardless of
any investigation made at any time by Buyer or on its behalf, and shall
thereupon expire except with respect to claims asserted at or prior to such
time; provided, however, that (i) the representations and warranties set forth
in Sections 3.2 and 3.3(c) shall survive the Closing forever, regardless of any
investigation made at any time by Buyer or on its behalf, and (ii) the covenant
in Section 5.1 shall survive the Closing but shall expire on the earlier of the
date of the Closing (as defined in the General American Agreement) under the
General American Agreement or one year after the disposition of the Purchased
Shares by Buyer; provided, further, that (i) such representations, warranties
and covenants and agreements shall apply only with respect to the transactions
contemplated by this Agreement and shall not apply to, or be used or relied on
in any other transaction, including, without limitation, the transactions
contemplated by the General American Agreement.
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ARTICLE VIII
EXPENSES
Section 8.1 Expenses. The Company agrees to pay, and hold Buyer
harmless against liability for the payment of, (a) Buyer's reasonable
out-of-pocket costs and legal fees arising in connection with the negotiation
and execution of this Agreement, the Registration Rights Agreement and the
Stockholders Agreement, and the Closing and completion of the transactions
contemplated by this Agreement, including, without limitation, reasonable fees
and expenses of up to $50,000 of Dewey Ballantine LLP, counsel for Buyer; (b)
stamp and other transfer taxes which may be payable in respect of (i) the
execution and delivery of this Agreement, and (ii) the issuance of the Purchased
Shares; (c) reasonable fees and expenses (including, without limitation,
reasonable attorneys' fees) incurred in respect of the enforcement by Buyer of
any material rights granted to Buyer under this Agreement, the Registration
Rights Agreement or the Stockholders Agreement, provided that Buyer succeeds in
any material respect in the enforcement of such rights; and (d) reasonable fees
and expenses (including, without limitation, reasonable attorneys' fees)
incurred in connection with any consent relating to material matters requested
to be given by Buyer pursuant to this Agreement, the Registration Rights
Agreement or the Stockholders Agreement.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more counterparts have been signed by
each party hereto and delivered to the other party. Copies of executed
counterparts transmitted by telecopy, telefax or other electronic transmission
service shall be considered original executed counterparts for purposes of this
Section, provided receipt of copies of such counterparts is confirmed.
Section 9.2 Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of Missouri without reference
to the choice of Law principles thereof, except for the validity of corporate
action of the parties hereto, which shall be governed by and construed in
accordance with the Laws of the jurisdiction of incorporation or organization of
such party.
Section 9.3 Entire Agreement. This Agreement (including the
schedules and exhibits hereto), and the certificates, instruments and other
documents delivered pursuant hereto, contain the entire agreement between the
parties hereto with respect to the subject matter hereof and there are no
agreements, understandings, representations or warranties between the parties
hereto other than those set forth or referred to herein. This Agreement is not
intended to confer upon any person not a party hereto any rights or remedies
hereunder.
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<PAGE> 26
Section 9.4 Notices. All notices and other communications hereunder
shall be sufficiently given for all purposes hereunder if in writing and
delivered personally, sent by documented overnight delivery service or, to the
extent receipt is confirmed, telecopy, telefax or other electronic transmission
service to the appropriate address or number as set forth below. If sent via
overnight delivery service, such notice is deemed to have been received on the
next succeeding Business Day. Notices to the Company shall be addressed to:
Reinsurance Group of America, Incorporated
1370 Timberlake Manor Parkway
Chesterfield, Missouri 63107-6039
Attention: Jack B. Lay, Executive Vice President and
Chief Financial Officer
Telecopy: 636-736-7839
with copies to:
Reinsurance Group of America, Incorporated
c/o General American Life Insurance Company
700 Market Street
St. Louis, Missouri 63101
Attention: James E. Sherman, Esq.
Telecopy: 314-444-0510
Bryan Cave LLP
One Metropolitan Square
211 North Broadway
St. Louis, Missouri 63102-2750
Attention: R. Randall Wang, Esq.
Telecopy: 314-259-2020
Notices to Buyer shall be addressed to:
Metropolitan Life Insurance Company
One Madison Avenue
New York, New York 10010
Attention: William Wheeler, Treasurer
Telecopy: 212-578-0266
with a copy to:
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, New York 10019
Attention: Linda E. Ransom, Esq.
Telecopy: 212-259-6333
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<PAGE> 27
Either party may change the person, address and number to which notices are to
be sent by giving written notice of any such change in the manner provided
herein.
Section 9.5 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. This Agreement may not be assigned by either
party hereto without the prior written consent of the other party, except that
Buyer may assign its rights and obligations hereunder to a Subsidiary or
Affiliate of Buyer without the consent of the Company (provided that Buyer shall
remain, become or be deemed the primary obligor hereunder if such Subsidiary or
Affiliate has a net worth of less than $50 million at the time of such
assignment or thereafter and, in all other cases, such Subsidiary or Affiliate
shall execute a counterpart of this Agreement as if it were the original party
hereto and assumes Buyer's obligations hereunder pursuant to an instrument in
form and substance reasonably satisfactory to the Company).
Section 9.6 Headings. The headings contained in this Agreement are
inserted for convenience of reference only and will not affect the meaning or
interpretation of this Agreement. All references to Sections, Articles or
Exhibits mean Sections or Articles of or Exhibits to this Agreement unless
otherwise stated.
Section 9.7 Amendments and Waivers. This Agreement shall not be
modified or amended except by an instrument or instruments in writing signed by
the party against whom enforcement of any such modification or amendment is
sought. Either party hereto may waive compliance by the other party hereto with
any term or provision hereof on the part of such other party hereto to be
performed or complied with only by an instrument in writing. The waiver by any
party hereto of a breach of any term or provision hereof shall not be construed
as a waiver of any subsequent breach.
Section 9.8 Severability. Any provision hereof which is invalid or
unenforceable shall be ineffective to the extent of such invalidity or
unenforceability, without affecting in any way the remaining provisions hereof.
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<PAGE> 28
IN WITNESS WHEREOF, this Agreement has been duly executed by or on
behalf of each of the parties hereto as of the date first above written.
REINSURANCE GROUP OF AMERICA, INCORPORATED
By: /s/ Jack B. Lay
----------------------------------------
Name: Jack B. Lay
Title: Executive Vice President and
Chief Financial Officer
METROPOLITAN LIFE INSURANCE COMPANY
By: /s/ William J. Wheeler
----------------------------------------
Name: William J. Wheeler
Title: Senior Vice-President & Treasurer
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<PAGE> 1
Exhibit 2
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of August 26, 1999, by and
between GENERAL AMERICAN MUTUAL HOLDING COMPANY, a Missouri mutual insurance
holding company ("Seller"), and METROPOLITAN LIFE INSURANCE COMPANY, a New York
mutual life insurance company ("Buyer").
RECITALS
WHEREAS, Seller is the owner of 1,000 shares (the "Shares") of the
common stock, no par value, of GenAmerica Corporation, a Missouri corporation
(the "Company"), which Shares constitute all of the issued and outstanding
shares of the Company's capital stock; and
WHEREAS, Seller desires to sell, and Buyer desires to purchase, the
Shares, upon the terms and subject to the conditions set forth herein and
pursuant to a plan of reorganization containing the terms specified in Exhibit A
and such other terms as are reasonably acceptable to Buyer and Seller (as
amended from time to time, the "Reorganization Plan") to be implemented through
a proceeding (the "Reorganization Proceeding") proposed to be commenced under
the Missouri Insurance Code.
NOW THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements contained herein, and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be bound hereby, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. For all purposes of this Agreement, the
following terms shall have the respective meanings set forth in this Section 1.1
(such definitions to be equally applicable to both the singular and plural forms
of the terms herein defined):
"Action" means any legal, administrative, arbitration or other
similar proceeding, claim, action or governmental or regulatory investigation of
any nature.
"Actual Section 338(h)(10) Tax Liability" has the meaning set forth
in Section 8.6(c).
"Affiliate" means, with respect to any Person, any other Person who
directly or indirectly controls, is controlled by or is under common control
with such Person. The term
<PAGE> 2
"control", for the purposes of this definition, means the power to direct or
cause the direction of the management or policies of the controlled Person.
"Agreement" means this Stock Purchase Agreement, including the
Schedules and Exhibits hereto, as it may hereafter be amended from time to time.
"Allocation" has the meaning set forth in Section 8.6(b).
"Alternative Transaction" has the meaning set forth in Section
6.13(b).
"Ancillary Agreements" means the Escrow Agreement, and any other
agreements entered into by Buyer and Seller in connection with the interim
arrangements described in Article VII.
"Applicable Insurance Laws" has the meaning set forth in Section
4.17(b).
"Applicable Law" means any federal, state, local or foreign law
(including common law), statute, ordinance, rule, regulation, permit, regulatory
agreement with a Governmental Authority, order, writ, injunction, judgment or
decree applicable to a Person or any such Person's subsidiaries, properties,
assets, officers, directors, employees or agents.
"Asserted Liability" has the meaning set forth in Section 10.4(a).
"Audit" has the meaning set forth in Section 4.14(e).
"Business Day" means any day other than a Saturday, a Sunday or a
day on which banks in St. Louis, Missouri or New York, New York are required to
be closed for regular banking business.
"Buyer" has the meaning set forth in the first paragraph of this
Agreement.
"Claims Notice" has the meaning set forth in Section 10.4(a).
"Closing" has the meaning set forth in Section 3.1.
"Closing Date" means the date of the Closing.
"COBRA" means Title X of the Consolidated Omnibus Budget
Reconciliation Act of 1985.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor statute.
2
<PAGE> 3
"Company" has the meaning set forth in the Recitals of this
Agreement.
"Company Confidentiality Agreements" means those certain agreements
between Seller and the potential bidders for the Shares with respect to the
confidentiality of information about Seller, the Company and their respective
Affiliates and other related Persons that were provided to such potential
bidders by or at the request of Seller or the Company, as such agreements may be
amended from time to time.
"Company Employees" means those current or former employees of the
Company, any Subsidiary, Conning, any Conning Subsidiary, RGA or any RGA
Subsidiary, each of whom, on the Closing Date, is either:
(a) actively employed by the Company, any Subsidiary, Conning, any
Conning Subsidiary, RGA or any RGA Subsidiary, including an employee who,
on the Closing Date, is absent from employment due to illness, vacation,
injury, military service or other authorized absence (including an
employee who is "disabled" within the meaning of either the short-term or
the long-term disability plan currently applicable to such employee
(collectively, the "Disability Plans") or who is on approved leave under
the Family Medical and Leave Act);
(b) a former employee who, on the Closing Date, is receiving
long-term disability benefits under the Disability Plans;
(c) a former employee who, on the Closing Date, has previously
satisfied the requirements for retiree medical and/or life insurance
coverage under the retiree medical and/or life insurance plans currently
applicable to the Company, any Subsidiary, Conning, any Conning
Subsidiary, RGA or any RGA Subsidiary;
(d) a former employee who, on the Closing Date, is receiving COBRA
benefits or who is in an election period following a COBRA qualifying
event under the terms of the plans currently applicable to the Company,
any Subsidiary, Conning, any Conning Subsidiary, RGA or any RGA
Subsidiary; or
(e) a former employee who, on the Closing Date, has previously
satisfied the requirements for benefits under the terms of the retirement
plan and profit sharing/401(k) plan currently applicable to the Company,
any Subsidiary, Conning, any Conning Subsidiary, RGA or any RGA
Subsidiary;
but does not mean (i) other former employees and (ii) Persons not otherwise
actively employed by the Company, any Subsidiary,
3
<PAGE> 4
Conning, any Conning Subsidiary, RGA or any RGA Subsidiary (other than any
employee specifically included above).
"Company GAAP Financial Statements" has the meaning set forth in
Section 4.6(a).
"Confidentiality Agreement" means that certain agreement dated
August 13, 1999, between Buyer and Seller with respect to the confidentiality of
information about Seller, the Company and their respective Affiliates and other
related Persons which was provided to Buyer by or at the request of Seller or
the Company, as such agreement may be amended from time to time.
"Conning" means Conning Corporation, a Missouri corporation.
"Conning GAAP Financial Statements" has the meaning set forth in
Section 4.6(c).
"Conning Interim Financial Statements" has the meaning set forth in
Section 4.6(c).
"Conning Subsidiary" means the Persons listed on Schedule 1.1(c).
"Consolidated Return" has the meaning set forth in Section 8.3(a).
"Contacts" has the meaning set forth in Section 6.1(a).
"Contest" has the meaning set forth in Section 8.5(a).
"Control Transaction" has the meaning set forth in Section 6.13(b).
"Contracts" has the meaning set forth in Section 4.15(a).
"Department" means the Missouri Department of Insurance.
"Director" means the Director of the Department.
"Disability Plans" has the meaning set forth in the definition of
"Company Employees."
"Election" has the meaning set forth in Section 8.6(a).
"Encumbrance" means any lien, pledge, security interest, claim,
easement, limitation, restriction or encumbrance of any kind or nature
whatsoever, or any agreement to give any of the foregoing; provided, however,
that this definition of "Encumbrance" shall not include: (a) with respect to all
property other than the Shares,(i) the Supervision Order, (ii) liens for
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current Taxes and assessments not yet due and payable, including, without
limitation, liens for nondelinquent ad valorem Taxes and nondelinquent statutory
liens arising other than by reason of any default on the part of Seller, the
Company or any Subsidiary for which appropriate reserves have been established
and are reflected on the relevant financial statements, (iii) such liens, minor
imperfections of title or easements on real property, leasehold estates or
personalty as do not detract from the value thereof in a material respect and do
not interfere in a material respect with the present use of the property subject
thereto, and (iv) materialmen's, mechanics', workmen's, repairmen's, employees',
carriers', warehousemen's and other like liens arising in the ordinary course of
business or relating to any construction, rebuilding or repair of any property
leased pursuant to any lease agreement, so long as any such lien does not
materially impair the value of such leased property; and (b) with respect to the
Shares only, (i) any such lien, pledge, security interest, claim, easement,
limitation, restriction or encumbrance arising solely as a result of any action
taken by Buyer or any of its Affiliates, and (ii) any limitation or restriction
imposed upon the transfer of the Shares by any registration provision of the
Securities Act of 1933, as amended, or any applicable state securities or
insurance law regulating the disposition of the Shares.
"Environmental Laws" means any Applicable Law that relates to or
otherwise imposes liability or standards of conduct concerning the environment
(including ambient air, surface water, groundwater, land and subsurface strata),
natural resources or human health and safety, each with respect to the
discharges, emissions, releases, or threatened releases, presence, manufacture,
processing, generation, distribution, use, treatment, storage, disposal,
cleanup, transport or handling of Hazardous Materials, including the
Comprehensive Environmental Response, Compensation and Liability Act, as amended
by the Superfund Amendments and Reauthorization Act, as amended, the Resource
Conservation and Recovery Act, as amended, the Toxic Substances Control Act, as
amended, the Federal Water Pollution Control Act, as amended, the Clean Water
Act, as amended, the Clean Air Act, as amended, any so-called "Superlien" law,
and any other similar federal, state or local law currently in effect.
"Environmental Permits" means all permits, approvals, identification
numbers, licenses and other authorizations required under any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and the regulations thereunder.
"ERISA Affiliate" as to any Person means any entity required to be
aggregated with such Person pursuant to Section 414(b) or (c) of the Code and/or
Section 4001(b) of ERISA.
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"Escrow" means the escrow account created pursuant to and
intended to operate in accordance with the terms of the Escrow Agreement.
"Escrow Agent" means the Escrow Agent identified in the Escrow
Agreement, which Escrow Agent shall be a commercial banking institution with
capital equal to at least $100 million and mutually agreed to by Buyer and
Seller prior to the Closing.
"Escrow Agreement" means an Escrow Agreement substantially in
the form of Exhibit B hereto.
"GAAP" means generally accepted accounting principles as used
in the United States of America as in effect at the time any applicable
financial statements were prepared or any act requiring the application of GAAP
was performed.
"GALIC" means General American Life Insurance Company, a
Missouri insurance company.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, or any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the rules and regulations promulgated thereunder.
"Hazardous Material" means any (i) hazardous substance, toxic
substance, chemical substance, hazardous waste, hazardous material, contaminant,
toxic pollutant, extremely hazardous substance, chemical or pollutant (as such
terms are defined by or within the meaning of any Environmental Law), (ii) any
other substance (including any product), in relevant quantity or concentration,
regulated as harmful or potentially harmful to human health or the environment,
(iii) petroleum, petroleum products, by-products or additives, crude oil or
fraction thereof, (iv) asbestos and asbestos-containing material, (v)
polychlorinated biphenyls, (vi) lead-based paint, or (vii) radioactive material.
"Hypothetical Stock Sales Tax Liability" has the meaning set
forth in Section 8.6(c).
"Indemnified Litigation" has the meaning set forth in Section
10.2.
"Indemnifying Party" has the meaning set forth in Section
10.4(a).
"Indemnitee" has the meaning set forth in Section 10.4(a).
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"Independent Accounting Firm" has the meaning set forth in
Section 8.6(b).
"Intellectual Property Right" has the meaning set forth in
Section 4.12(a).
"Interim Financial Statements" has the meaning set forth in
Section 4.6(a).
"IRS" means the Internal Revenue Service.
"Leased Real Property" means the real property leased by the
Company or any Subsidiary, as tenant, together with, to the extent leased by the
Company or any Subsidiary, all buildings and other structures, facilities or
improvements currently located thereon.
"Life Insurance Subsidiaries" means the Persons listed on
Schedule 1.1(a).
"Loss" means any and all claims, losses, liabilities, damages,
costs and expenses (including attorney's, accountant's, consultant's and
expert's fees and expenses) that are imposed upon or otherwise incurred or
suffered by the relevant party.
"Material Adverse Effect" means a material adverse effect on
the financial condition or results of operations of the Company, the
Subsidiaries, Conning, the Conning Subsidiaries, RGA and the RGA Subsidiaries,
taken as a whole; provided, however, to the extent such effect results from any
of the following, such effect shall not be considered a Material Adverse Effect:
(i) general conditions applicable to the economy of the United States or
elsewhere, including changes in interest rates and changes in the stock or other
financial markets; (ii) conditions generally affecting the life insurance, life
reinsurance or securities industries; or (iii) conditions or effects resulting
from or relating to the announcement or the existence or terms of this Agreement
or the consummation of the transactions contemplated hereby (including, without
limitation, any indication by any rating agency that the claims paying ability
rating of the Company or any Subsidiary will be adversely affected as result of
the consummation of the transactions contemplated hereby); and provided,
further, none of the following shall be considered a Material Adverse Effect:
(a) the inability or any limit on the ability of any of the Life Insurance
Subsidiaries or RGA or any RGA Subsidiary to write new or renewal insurance or
reinsurance business, provided that any such limit imposed by a state insurance
department is reasonably likely to be removed prior to 60 days after the Closing
Date (it being understood that Buyer will use all commercially reasonable
efforts to have any such limit removed); (b) any changes prior to the date
hereof in the value of the investment portfolios of the Company, any Life
Insurance Subsidiary, RGA, any RGA Subsidiary, Conning or any
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Conning Subsidiary; (c) the Supervision Order and the Reorganization Proceeding
including any rehabilitation proceeding involving GALIC; (d) any alleged
breaches of contracts relating to the Stable Value Business and the direct
consequences thereof; (e) any alleged default in connection with 8.525% Capital
Securities issued by a wholly owned trust of the Company or the 7.625% Surplus
Notes issued by GALIC and the direct consequences thereof; or (f) any downgrade
of the financial strength or claims paying rating of the Company, any
Subsidiary, RGA, any RGA Subsidiary, Conning or any Conning Subsidiary.
"MEC" has the meaning set forth in Section 4.26(iv).
"Missouri Insurance Code" means title XXIV of the Revised
Statutes of Missouri, section 374 et seq., as amended from time to time.
"Owned Real Property" means the real property owned by the
Company or any Subsidiary, together with all buildings and other structures,
facilities or improvements currently located thereon, and all fixtures, systems,
equipment of the Company or any Subsidiary attached or appurtenant thereto.
"Permits" has the meaning set forth in Section 4.10(a).
"Person" means any individual, corporation, company,
partnership (limited or general), joint venture, limited liability company,
association, trust or other entity.
"Proposal" has the meaning set forth in Section 6.13(b).
"Purchase Price" has the meaning set forth in Section 2.1.
"Records" means all records and other documents which are used
by the Company, any Subsidiary, Conning, any Conning Subsidiary, RGA or any RGA
Subsidiary, to administer, reflect, monitor, evidence or record information
relating to such Person's business or conduct and all such records and other
documents, including all such records maintained on electronic or magnetic
media, or in any electronic database system of the Company, any Subsidiary,
Conning, any Conning Subsidiary, RGA or any RGA Subsidiary, or necessary to
comply with any Applicable Law with respect to the business of the Company, any
Subsidiary, Conning, any Conning Subsidiary, RGA or any RGA Subsidiary.
"Reorganization Plan" has the meaning set forth in the
Recitals of this Agreement.
"Reorganization Proceeding" has the meaning set forth in the
Recitals of this Agreement.
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"Representative" has the meaning set forth in Section 6.13(a).
"RGA" means Reinsurance Group of America, Incorporated, a
Missouri corporation.
"RGA GAAP Financial Statements" has the meaning set forth in
Section 4.6(b).
"RGA Interim Financial Statements" has the meaning set forth
in Section 4.6(b).
"RGA Subsidiaries" means the Persons listed on Schedule
1.1(d).
"Rights" means the rights issued pursuant to the Rights
Agreement.
"Rights Agreement" means the Rights Agreement, dated as of May
4, 1993, between RGA and Chase Mellon Shareholder Services, L.L.C. (as successor
to Boatman's Trust Company), as amended.
"SAP Financial Statements" has the meaning set forth in
Section 4.6(d).
"SEC" means the Securities and Exchange Commission.
"SEC Documents" has the meaning set forth in Section 4.24.
"Seller" has the meaning set forth in the first paragraph of
this Agreement.
"Seller Plans" has the meaning set forth in Section 4.13(a).
"Shares" has the meaning set forth in the Recitals of this
Agreement.
"Stable Value Business" means funding agreements and
guaranteed investment contracts issued by GALIC.
"Subsidiaries" means the Persons listed on Schedule 1.1(b).
"Supervision Order" means that order entered on August 10,
1999 placing GALIC under the Department's supervision, as such order may from
time to time be modified, amended, supplemented or replaced.
"Supplemental Schedules" has the meaning set forth in Section
6.8(b).
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"Tax" means all taxes, charges, fees and levies based upon
gross or net income, gross receipts, franchises, premiums, profits, sales, use,
value added, transfer, employment or payroll, including, without limitation, any
ad valorem, environmental, excise, license, occupation, property, severance,
stamp, withholding, or windfall profit tax, any custom duty or other tax,
together with any interest credit or charge, penalty, addition to tax or
additional amount imposed by or payable to any Taxing Authority.
"Tax Allocation Agreements" means the tax allocation
agreements of which the Company, the Subsidiaries, RGA, the RGA Subsidiaries,
Conning or the Conning Subsidiaries are parties, which are noted on Schedule
1.1(e), true and correct copies of which were previously provided to Buyer.
"Tax Election Amount" has the meaning set forth in Section
8.6(c).
"Tax-Qualified Retirement Contract" means any insurance policy
or annuity that is held as part of or in connection with a tax-qualified
retirement plan described in section 401(a), section 403(a) or section 403(b) of
the Code or as part of or in connection with any individual retirement annuity
described in section 408(b) of the Code.
"Tax Return" means with respect to any corporation or group of
corporations, all reports, estimates, extension requests, information statements
and returns relating to, or required to be filed in connection with, any payment
of any Tax.
"Taxing Authority" means the Internal Revenue Service and any
other domestic or foreign Governmental Authority responsible for the
administration of any Tax.
"Undisputed Amount" has the meaning set forth in Section
8.6(d).
"Wire Transfer" means a payment in immediately available funds
by wire transfer in lawful money of the United States of America to such account
or accounts as shall have been designated by notice to the paying party.
ARTICLE II
PURCHASE OF SHARES
Section 2.1 Purchase of Shares. Upon the terms and subject to
the conditions set forth in this Agreement, at the Closing Seller shall sell to
Buyer, and Buyer shall purchase from Seller, the Shares for a purchase price of
One Billion Two Hundred Million Dollars ($1,200,000,000), subject to adjustment
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in accordance with Section 2.2 (as so adjusted, the "Purchase Price"). The
Purchase Price shall be deposited into the Escrow.
Section 2.2 Adjustment of Purchase Price. The Purchase Price
shall be adjusted as follows:
(a) In the event that all approvals required from
Governmental Authorities (other than the Department or the court before which
the Reorganization Proceeding is brought) have been obtained and in the event
that the Closing Date is a date 120 or more but less than 180 calendar days
after the date of this Agreement, the Purchase Price shall be reduced by One
Million Dollars ($1,000,000) for each calendar day in the period commencing on
the later of the date that the last approval from a Governmental Authority
(other than the Department or the court before which the Reorganization
Proceeding is brought) has been obtained or the 120th day after the date of this
Agreement and ending on the Closing Date (inclusive).
(b) In the event that all approvals required from
Governmental Authorities (other than the Department or the court before which
the Reorganization Proceeding is brought) have been obtained, and in the event
that the Closing Date is a date 180 or more calendar days after the date of this
Agreement, the Purchase Price shall be reduced by One Million Dollars
($1,000,000) for each calendar day in the period commencing on the 120th day and
ending on the 179th day after the date of this Agreement (inclusive), and Two
Million Dollars ($2,000,000) for each calendar day in the period commencing on
the 180th day after the date of this Agreement and ending on the Closing Date
(inclusive); provided, however, that any reductions in the Purchase Price
pursuant to this Section 2.2(b) shall not commence until the date that the last
approval from a Governmental Authority (other than the Department or the court
before which the Reorganization Proceeding is brought) has been obtained if so
obtained after the 120th day after the date of this Agreement.
ARTICLE III
THE CLOSING
Section 3.1 Closing. Upon the terms and subject to the
conditions of this Agreement, the closing of the purchase and sale of the Shares
(the "Closing") shall be at 10:00 A.M. local time at the offices of LeBoeuf,
Lamb, Greene & MacRae, L.L.P., 125 West 55th Street, New York, New York 10019,
on the second Business Day following the date on which all of the conditions set
forth in Article IX (other than those conditions designating instruments,
certificates or other documents to be delivered at the Closing) shall have been
satisfied or waived, or such other location, date and time as Buyer and Seller
shall agree upon in writing.
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Section 3.2 Closing Deliveries. At the Closing, the parties
hereto shall take the following actions:
(a) Seller shall deliver to Buyer one or more certificates
representing all of the Shares, duly executed in blank or accompanied
by stock powers duly executed in blank, in proper form for transfer,
with all appropriate stock transfer tax stamps affixed, such Shares
being free and clear of all Encumbrances;
(b) Except as set forth on Schedule 3.2(b), Seller shall
deliver to Buyer certificates as to the good standing of the Company
and the Subsidiaries in the respective jurisdictions of their
incorporation, together with a copy of the Certificate of Incorporation
of the Company certified by the Secretary of State of the State of
Missouri;
(c) Seller shall deliver to Buyer a copy of any approvals
required in connection with the Reorganization Proceeding;
(d) Seller shall deliver to Buyer resolutions of the board of
directors of Seller, certified by the Secretary or Assistant Secretary
of Seller, approving and authorizing the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby;
(e) Seller shall deliver a certificate of the Secretary or
Assistant Secretary of Seller as to the incumbency of the officers
executing this Agreement and the Ancillary Agreements and the
genuineness of their signatures;
(f) Seller shall deliver the minute books, stock ledgers,
corporate seal and all other corporate books and records of the
Company;
(g) Buyer shall deliver to the Escrow Agent the Purchase Price
by Wire Transfer;
(h) Buyer shall deliver to Seller a receipt evidencing receipt
by Buyer of the Shares;
(i) Buyer shall deliver to Seller resolutions of the board of
directors of Buyer, certified by the Secretary or Assistant Secretary
of Buyer, approving and authorizing the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby;
(j) Seller shall deliver to Buyer resolutions of the board of
directors of RGA, certified by the Secretary or Assistant Secretary of
RGA, approving and authorizing the indirect acquisition by Buyer of RGA
Common Shares for purposes of Section 351.459 of the Missouri Revised
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Statutes, making the Rights Agreement inapplicable to the transactions
contemplated hereby and by the Ancillary Agreements and taking such
actions as are necessary to provide that Section 351.407 of the
Missouri Revised Statutes does not apply to the transactions
contemplated hereby and by the Ancillary Agreements; and
(k) Seller shall deliver to Buyer resolutions of the board of
directors of Conning, certified by the Secretary or Assistant Secretary
of Conning, approving and authorizing the indirect acquisition by Buyer
of Conning common shares.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as follows:
Section 4.1 Organization and Related Matters. (a) The Company
is a corporation duly incorporated, validly existing and in good standing under
the laws of the State of Missouri and has the corporate power and authority to
carry on its business as it is now being conducted and to own, lease or operate
all of its properties and assets, and is duly licensed or qualified to do
business and is in good standing in each jurisdiction in which the nature of the
business conducted by it or the character of the assets owned by it makes such
qualification or licensing necessary, except where the failure to be so
qualified or licensed would not, individually or in the aggregate, have a
Material Adverse Effect.
(b) Seller is a mutual insurance holding company duly
incorporated, validly existing and in good standing under the laws of the State
of Missouri.
Section 4.2 Subsidiaries. (a) Except as set forth on Schedule
4.2, all of the outstanding shares of capital stock of the Subsidiaries,
Conning, the Conning Subsidiaries, RGA and the RGA Subsidiaries are owned
beneficially and of record, directly or indirectly, by the Company, free and
clear of any Encumbrances. Except as set forth on Schedule 4.2, each Subsidiary,
Conning, each Conning Subsidiary, RGA and each RGA Subsidiary is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has the corporate power and authority to
carry on its business as now being conducted and to own, lease and operate all
of its properties and assets. Each Subsidiary, Conning, each Conning Subsidiary,
RGA and each RGA Subsidiary is duly licensed or qualified to do business and is
in good standing and has all insurance licenses in each jurisdiction in which
the nature of the business conducted by it or the character of the assets owned
by it makes such qualification or licensing
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necessary, except where the failure to be so qualified or licensed would not,
individually or in the aggregate, have a Material Adverse Effect. Each insurance
license of the Subsidiaries, including but not limited to each authorization to
transact reinsurance, is in full force and effect without amendment, limitation
or restriction other than as described in Schedule 4.2, and, except for the
Supervision Order and the Reorganization Proceeding (including any
rehabilitation proceeding involving GALIC), Seller does not have knowledge of
any event, inquiry or proceeding which could reasonably be expected to lead to
the revocation, amendment, failure to renew, limitation, suspension or
restriction of any such insurance license, except, in each case, such failures
to be in full force and effect and such revocations, amendments, failures to
renew, limitations, suspensions and restrictions that would not, individually or
in the aggregate, have a Material Adverse Effect. Other than Conning, the
Conning Subsidiaries, RGA and the RGA Subsidiaries, the Company has no direct or
indirect subsidiaries except as set forth on Schedule 1.1(b). Conning has no
direct or indirect subsidiaries except the Conning Subsidiaries. RGA has no
direct or indirect subsidiaries except the RGA Subsidiaries.
(b) Except as set forth on Schedule 4.2, and except for the
stock of the Subsidiaries, Conning, each Conning Subsidiary, RGA and each RGA
Subsidiary and portfolio investments made in the ordinary course of business
(consistent with past practice), there are no corporations, partnerships or
other entities in which the Company owns, of record or beneficially, any direct
or indirect equity interest or any right (contingent or otherwise) to acquire
the same.
Section 4.3 Authority; No Violation. (a) Seller has full
corporate power and authority to execute and deliver this Agreement and,
assuming the approval of the Director required by the Supervision Order and the
Reorganization Proceeding (including any rehabilitation proceeding involving
GALIC), to consummate the transactions contemplated hereby, the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly and validly approved by all requisite corporate action on
the part of Seller, and no other corporate proceedings on the part of Seller are
necessary to approve this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Seller and (assuming (i) the approval of the Director required by
the Supervision Order, (ii) any approvals required in connection with the
Reorganization Proceeding and (iii) the due authorization, execution and
delivery of this Agreement by Buyer) constitute valid and binding obligations of
Seller, enforceable against Seller in accordance with their terms.
(b) Except as set forth on Schedule 4.3(b) and assuming that
the consents and approvals referred to in Section 4.4 are duly obtained, neither
the execution and delivery of this
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Agreement by Seller, nor the consummation by Seller of the transactions
contemplated hereby to be performed by it, nor compliance by Seller with any of
the terms or provisions hereof, will (i) violate any provision of the
Certificate of Incorporation or Bylaws of Seller, the Company, any Subsidiary,
Conning, any Conning Subsidiary, RGA and any RGA Subsidiary, or (ii) (A) violate
in any respect any Applicable Law with respect to Seller, the Company, any
Subsidiary, Conning, any Conning Subsidiary, RGA and any RGA Subsidiary, or any
of their respective properties or assets, (B) result in the creation of any
Encumbrance upon any of the Shares or upon any of the assets or properties of
the Seller, the Company, any Subsidiary, Conning, any Conning Subsidiary, RGA
and any RGA Subsidiary, or (C) violate, conflict with, result in a breach of any
provision of, or constitute a default under, any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other instrument or
obligation to which Seller, the Company, any Subsidiary, Conning, any Conning
Subsidiary, RGA and any RGA Subsidiary, is a party, or by which Seller, the
Company, any Subsidiary, Conning, any Conning Subsidiary, RGA and any RGA
Subsidiary, or any of their respective properties or assets, may be bound or
affected, except for such violations, Encumbrances, conflicts, breaches or
defaults which would not, individually or in the aggregate, have a Material
Adverse Effect.
Section 4.4 Consents and Approvals. Except for (i) the
approval of the Director required by the Supervision Order, (ii) any approvals
or orders required in connection with the Reorganization Proceeding, (iii)
approvals or consents of Governmental Authorities under the insurance holding
company laws of Missouri, California, New York, Illinois, and Texas, (iv)
consents or approvals required under the Investment Company Act of 1940, as
amended, the Investment Advisers Act of 1940, as amended, or the Securities
Exchange Act of 1934, as amended, (v) the applicable filings under the HSR Act,
(vi) the matters set forth on Schedule 4.4, and (vii) such other filings,
notifications, authorizations, consents or approvals the failure to make or
obtain which would not, individually or in the aggregate, have a Material
Adverse Effect, no consents or approvals of or filings or registrations with any
Governmental Authority or third party are necessary in connection with the
execution and delivery by Seller of this Agreement, and the consummation by
Seller of the transactions contemplated hereby. Seller is not aware of any
consents specified in the preceding sentence that it believes it is not
reasonably likely to obtain. Seller has delivered to Buyer a true and correct
copy of the Supervision Order.
Section 4.5 Stock Ownership. Seller owns beneficially and of
record all of the Shares, free and clear of all Encumbrances. Upon consummation
of the transactions contemplated hereby, Buyer will own all of the issued and
outstanding capital stock of the Company free and clear of all Encumbrances.
Upon approval of the Director required by the
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Supervision Order and any approvals required in connection with the
Reorganization Proceeding, Seller shall have the full and unrestricted power to
sell, assign, transfer and deliver the Shares to Buyer upon the terms and
subject to the conditions of this Agreement free and clear of Encumbrances.
There are no shares of capital stock of the Company issued or outstanding other
than the Shares. All of the Shares are duly authorized, validly issued, fully
paid, nonassessable and free of any preemptive rights. There is no outstanding
option, warrant, right, subscription, call, unsatisfied preemptive right,
convertible or exchangeable security, or other agreement or right of any kind to
purchase or otherwise acquire any capital stock of the Company. Except as set
forth on Schedule 4.5, all of the issued and outstanding shares of capital stock
of the Subsidiaries, RGA, the RGA Subsidiaries, Conning and the Conning
Subsidiaries are duly authorized, validly issued, fully paid, nonassessable and
free of any preemptive rights, and are owned beneficially and of record by the
Company or another of the Subsidiaries, free and clear of all Encumbrances.
Except as set forth on Schedule 4.5, there is no outstanding option, warrant,
right, subscription, call, unsatisfied preemptive right, convertible or
exchangeable security, or other agreement or right of any kind to purchase or
otherwise acquire, in each case from the Company, any Subsidiary, Conning, any
Conning Subsidiary, RGA or any RGA Subsidiary, any capital stock of any
Subsidiary, Conning, any Conning Subsidiary, RGA or any RGA Subsidiary. Except
as set forth on Schedule 4.5, there is no outstanding security of any kind
convertible into or exchangeable for the capital stock of any Subsidiary,
Conning, any Conning Subsidiary, RGA or any RGA Subsidiary and there is no
outstanding contract or other agreement of Seller, the Company, any Subsidiary,
Conning, any Conning Subsidiary, RGA or any RGA Subsidiary to purchase, redeem
or otherwise acquire any outstanding shares of capital stock or any other equity
security of the Company, any Subsidiary, Conning, any Conning Subsidiary, RGA or
any RGA Subsidiary.
Section 4.6 Financial Statements. (a) Seller has previously
furnished Buyer with true and correct copies of audited consolidated financial
statements for the Company and the Subsidiaries as of and for the years ended
December 31, 1998, 1997 and 1996 (collectively, the "Company GAAP Financial
Statements") and interim unaudited consolidated financial statements for the
Company and the Subsidiaries as of and for the quarterly periods ended March 31,
1999, and June 30, 1999 (collectively, the "Interim Financial Statements").
Seller has also previously furnished Buyer with a summary of adjustments
proposed to be made to certain future financial statements. Subject to the
adjustments referred to in the second sentence of this Section 4.6, each of the
balance sheets included in the Company GAAP
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<PAGE> 17
Financial Statements fairly presents in all material respects the financial
position of the Company and the Subsidiaries as of its date and each of the
statements of operations and cash flow statements included in the Company GAAP
Financial Statements fairly presents in all material respects the results of
operations and cash flows of the Company and the Subsidiaries for the period
therein set forth, in each case in accordance with GAAP applied on a consistent
basis (except as may be disclosed in the notes thereto). Subject to the
adjustments referred to in the second sentence of this Section 4.6, the Interim
Financial Statements were prepared in a manner consistent with that employed in
the Company GAAP Financial Statements. The Interim Financial Statements do not
contain footnote disclosures and are subject to normal recurring year-end
adjustments, but otherwise fairly present in all material respects the financial
position and results of operations of the Company and the Subsidiaries for the
periods and as of the dates therein set forth.
(b) Seller has previously furnished Buyer with true and
correct copies of audited consolidated financial statements for RGA and the RGA
Subsidiaries as of and for the years ended December 31, 1998, 1997 and 1996
(collectively, the "RGA GAAP Financial Statements") and interim unaudited
consolidated financial statements for RGA and the RGA Subsidiaries as of and for
the quarterly periods ended March 31, 1999, and June 30, 1999 (collectively, the
"RGA Interim Financial Statements"). Each of the balance sheets included in the
RGA GAAP Financial Statements fairly presents in all material respects the
financial position of RGA and the RGA Subsidiaries as of its date and each of
the statements of operations and cash flow statements included in the RGA GAAP
Financial Statements fairly presents in all material respects the results of
operations and cash flows of RGA and the RGA Subsidiaries for the period therein
set forth, in each case in accordance with GAAP applied on a consistent basis
(except as may be disclosed in the notes thereto). The RGA Interim Financial
Statements were prepared in a manner consistent with that employed in the RGA
GAAP Financial Statements. The RGA Interim Financial Statements do not contain
footnote disclosures and are subject to normal recurring year-end adjustments,
but otherwise fairly present in all material respects the financial position and
results of operations of RGA and the RGA Subsidiaries for the periods and as of
the dates therein set forth.
(c) Seller has previously furnished Buyer with true and
correct copies of audited consolidated financial statements for Conning and the
Conning Subsidiaries as of and for the years ended December 31, 1998, 1997 and
1996 (collectively, the "Conning GAAP Financial Statements") and interim
unaudited consolidated financial statements for Conning and the Conning
Subsidiaries as of and for the quarterly periods ended March 31, 1999, and June
30, 1999 (collectively, the "Conning Interim Financial Statements"). Each of the
balance sheets included in the Conning GAAP Financial Statements fairly presents
in all material respects the financial position of Conning and the Conning
Subsidiaries as of its date and each of the statements of operations and cash
flow statements included in the Conning GAAP
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Financial Statements fairly presents in all material respects the results of
operations and cash flows of Conning and the Conning Subsidiaries for the period
therein set forth, in each case in accordance with GAAP applied on a consistent
basis (except as may be disclosed in the notes thereto). The Conning Interim
Financial Statements were prepared in a manner consistent with that employed in
the Conning GAAP Financial Statements. The Conning Interim Financial Statements
do not contain footnote disclosures and are subject to normal recurring year-end
adjustments, but otherwise fairly present in all material respects the financial
position and results of operations of Conning and the Conning Subsidiaries for
the periods and as of the dates therein set forth.
(d) Seller has previously furnished Buyer with copies of
audited statutory financial statements of each Life Insurance Subsidiary and
each RGA Subsidiary as of and for the years ended December 31, 1998, 1997 and
1996, and unaudited statutory financial statements of each Life Insurance
Subsidiary and each RGA Subsidiary as of and for the period ended June 30, 1999,
prepared in conformity with accounting practices prescribed or permitted by
their respective jurisdictions of domicile (collectively, the "SAP Financial
Statements"). Each of the balance sheets included in the SAP Financial
Statements fairly presents in all material respects the financial position of
the reporting Person as of its date and each of the statements of operations and
cash flows included in the SAP Financial Statements fairly presents in all
material respects the results of operations and cash flows of the reporting
Person for the period therein set forth, in each case in accordance with
statutory accounting practices prescribed or permitted by the applicable
jurisdiction on a consistent basis. No material deficiencies have been asserted
by any Governmental Authority with respect to the SAP Financial Statements, and
the SAP Financial Statements comply in all material respects with all Applicable
Law.
(e) The books of account and other financial records of the
Company and each material Subsidiary: (i) reflect all material items of income
and expense and all material assets and liabilities required to be reflected
therein in accordance with GAAP or statutory accounting principles, as
applicable, (ii) are in all material respects complete and correct, and (iii)
have been maintained in accordance with what the Company or such Subsidiary
believes to be good business, accounting and actuarial practices, as applicable.
Section 4.7 No Other Broker. Other than Morgan Stanley & Co.
Incorporated and Goldman, Sachs & Co., the fees and expenses of which will be
paid by Seller, no broker, finder or similar intermediary has acted for or on
behalf of Seller or the Company or the Subsidiaries, or is entitled to any
broker's, finder's or similar fee or other commission from Seller, the
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Company or the Subsidiaries in connection with this Agreement or the
transactions contemplated hereby.
Section 4.8 Legal Proceedings. Except (i) as set forth on
Schedule 4.8, (ii) for the Supervision Order, (iii) for the Reorganization
Proceeding, including any rehabilitation proceeding involving GALIC, and (iv)
for Actions arising in the ordinary course of business consistent with past
practice from or related to the obligations of any Life Insurance Subsidiary,
RGA or any RGA Subsidiary under any insurance policy or similar instrument
written, assumed or reinsured by such Life Insurance Subsidiary, RGA or RGA
Subsidiary, neither the Company, any Subsidiary, Conning, any Conning
Subsidiary, RGA nor any RGA Subsidiary is a party to any, and there are no
pending or, to the knowledge of Seller, threatened, Actions against or otherwise
affecting the Company, any Subsidiary, Conning, any Conning Subsidiary, RGA or
any RGA Subsidiary, or any of their respective properties or assets, or
challenging the validity or propriety of the transactions contemplated by this
Agreement or the Ancillary Agreements which, if adversely determined, would
have, individually or in the aggregate, a Material Adverse Effect, and there is
no injunction, order, judgment, decree or regulatory restriction imposed upon
the Company, any Subsidiary, Conning, any Conning Subsidiary, RGA or any RGA
Subsidiary, or any of their respective properties, or assets which has had or
would have, individually or in the aggregate, a Material Adverse Effect.
Section 4.9 Undisclosed Liabilities. Except for (i) those
liabilities or items set forth on Schedule 4.9 or any other Schedule to this
Agreement, (ii) those liabilities that may result from any alleged breaches of
any contracts constituting Stable Value Business, (iii) those liabilities that
may result from any alleged default in connection with the 8.525% Capital
Securities issued by a wholly owned trust of the Company or the 7.625% Surplus
Notes issued by GALIC, (iv) those liabilities that are reflected or reserved
against on the Interim Financial Statements as of June 30, 1999, and (vi)
liabilities incurred in the ordinary course of business consistent with past
practice since June 30, 1999, no liabilities have been incurred by the Company
or the Subsidiaries other than those that would not, individually or in the
aggregate, have a Material Adverse Effect.
Section 4.10 Compliance with Applicable Law; Insurance
Operations. (a) Except as set forth on Schedule 4.10, each of the Company and
the Subsidiaries holds in full force and effect all licenses, franchises,
permits and authorizations, other than Environmental Permits (which are
addressed solely in Section 4.21) ("Permits"), necessary for the lawful
ownership and use of their respective properties and assets and the conduct of
their respective businesses under and pursuant to Applicable Laws relating to
the Company and the Subsidiaries, and there has been no violation of any Permit
nor has the Seller, the Company or any Subsidiary received written notice
asserting any such violation,
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except for such failures to be in full force and effect and for such violations,
if any, which would not, individually or in the aggregate, have a Material
Adverse Effect.
(b) Except as set forth on Schedule 4.10, each of the Company
and the Subsidiaries is in compliance with each Applicable Law relating to it or
any of its assets, properties or operations, except where noncompliance with any
such Applicable Law would not, individually or in the aggregate, have a Material
Adverse Effect.
(c) Each Subsidiary which is either a broker-dealer or an
investment advisor is duly registered as such with all applicable Governmental
Authorities, including without limitation the SEC and state securities or "blue
sky" authorities (with such registrations being in full force and effect), and
is in good standing, except for failures to be so registered or in good standing
as would not, individually or in the aggregate, have a Material Adverse Effect.
(d) ERISA Compliance. Except as set forth on Schedule 4.10
with respect to any actions of the Company or any of its Subsidiaries or
Affiliates, or agents, directors, officers or employees of such entities, where
such entities or parties have acted or could be deemed to have acted as an ERISA
fiduciary (within the meaning of Section 3(21)(A) of ERISA) or have performed
services as a result of which any such person was a party in interest (within
the meaning of Section 3(14) of ERISA) or a disqualified person (within the
meaning of Section 4975(e)(2) of the Code), such actions have been in compliance
with ERISA's and the Code's fiduciary and prohibited transaction requirements
(to the extent applicable), except for such violations as would not,
individually or in the aggregate, have a Material Adverse Effect.
Section 4.11 Absence of Certain Changes. Except (i) as set
forth on Schedule 4.11, (ii) with respect only to clause (x) and subclauses (a),
(k) and (l) (insofar as (l) applies to (a) and (k)) of clause (y), as a result
of the Supervision Order and the Reorganization Proceeding, including any
rehabilitation proceeding involving GALIC, (iii) with respect only to clause (x)
and subclauses (a), (k) and (l)(insofar as (l) applies to (a) and (k)) of clause
(y) as a result of any alleged breaches of Stable Value Business, (iv) with
respect only to clauses (x) and subclauses (a), (k) and (l) (insofar as (l)
applies to (a) and (k)) of clause (y) as a result of any alleged default in
connection with the 8.525% Capital Securities issued by a wholly owned trust of
the Company or the 7.625% Surplus Notes issued by GALIC, (v) with respect only
to clauses (x) and subclauses (a), (k) and (l) (insofar as (l) applies to (a)
and (k)) of clause (y),as a result of any downgrade of the financial strength
and claims paying ability ratings of the Company, any Subsidiary, RGA, any RGA
Subsidiary, Conning or any Conning Subsidiary, (vi) as reflected on the Company
GAAP Financial Statements, the
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Interim Financial Statements, the RGA GAAP Financial Statements, the RGA Interim
Financial Statements, the Conning GAAP Financial Statements or the Conning
Interim Financial Statements, or (vii) as otherwise contemplated or permitted by
this Agreement or the Ancillary Agreements, since December 31, 1998, the Company
and its Subsidiaries, taken as a whole, (x) have conducted their business in the
ordinary course of business consistent with past practice and (y) have not:
(a) made any change in its fiscal year, or, if a Life
Insurance Subsidiary, made any change in underwriting, reinsurance,
marketing, claim processing and payment, reserving, financial or
accounting practices or policies of any Life Insurance Subsidiary,
except as required by law, GAAP or statutory accounting practices of
its state of domicile or as would not, individually or in the
aggregate, have a Material Adverse Effect;
(b) issued, sold, pledged, encumbered or disposed of, any of
its capital stock, notes, bonds or other securities, or any option,
warrant or other right to acquire the same;
(c) split, combined or reclassified any shares of capital
stock, or redeemed, repurchased or otherwise acquired any of its
capital stock or declared, made or paid any dividends or distributions
(whether in cash, securities or other property) to the holders of its
capital stock;
(d) merged with, entered into a consolidation with or acquired
an interest of 5% or more in any Person or acquired, in one transaction
of a series of transactions, a substantial portion of the assets or
business of any Person or any division or line of business thereof, or
otherwise acquired any assets or securities (other than fixed maturity
securities, cash and short-term investments) with an aggregate value in
excess of $10,000,000 other than in the ordinary course of the
Company's business consistent with past practice;
(e) made any capital expenditure or commitment for any capital
expenditure including, without limitation, capital lease obligations,
in excess of $5,000,000 in the aggregate;
(f) incurred indebtedness for money borrowed in excess of
$10,000,000 in the aggregate;
(g) made any loan to, guaranteed any indebtedness for money
borrowed of, or otherwise incurred such indebtedness on behalf of, any
Person in excess of $5,000,000 in the aggregate other than investments
made in the ordinary course of business;
(h) except as required by law, rule or regulation or any
collective bargaining agreement or involving increases
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<PAGE> 22
in the ordinary course of business consistent with past practice, (i)
granted any increase, or announced any increase, in the wages,
salaries, compensation, bonuses, incentives, pension or other benefits
payable to any of its senior officers who in the preceding 12 months
received compensation in excess of $200,000, or any director including,
without limitation, any increase or change pursuant to any Seller Plan,
or (ii) established or promised to establish any plan or benefit
program or increased or promised to increase any benefits under any
Seller Plan (including any severance arrangement or employee retention
arrangement);
(i) amended or restated its charter or Bylaws (or other
organizational documents);
(j) paid, discharged, settled or satisfied any claim,
liability or obligation (absolute, accrued, asserted or unasserted,
contingent or otherwise) other than (i) for an amount of $5,000,000 or
less, (ii) an insurance claim arising in the ordinary course of
business consistent with past practice, (iii) ordinary course repayment
of indebtedness or payment of contractual obligations when due and (iv)
payments made to holders of contracts relating to the Stable Value
Business;
(k) renewed, amended, modified or terminated any of its
contracts, agreements or arrangements, or otherwise waived, released,
cancelled or assigned any of its rights, claims or benefits thereunder
except renewals, amendments, modifications and terminations as would
not, individually or in the aggregate, have a Material Adverse Effect;
or
(l) agreed, whether in writing or otherwise, to take any of
the actions specified in this Section 4.11, except as expressly
contemplated by this Agreement.
Section 4.12 Technology and Intellectual Property. (a) Except
as set forth on Schedule 4.12, the Company or a Subsidiary owns or possesses, or
has rights or licenses to use, the patents, trademarks (including common law
trademarks), service marks, copyrights (including any registrations or
applications relating to any of the foregoing), trade names, technology, trade
secrets, inventions, know-how and computer programs which are reasonably
necessary to carry on its business as currently conducted (each, an
"Intellectual Property Right"), and neither the Company nor any Subsidiary has
engaged in any infringement of the intellectual property rights of others with
respect to any such Intellectual Property Right that, if such infringement is
determined to be unlawful, is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect. Except as set forth on Schedule 4.12, the
execution and delivery of this Agreement and the Ancillary Agreements by Seller,
and the consummation of the transactions contemplated
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hereby and thereby, will neither cause the Company or any Subsidiary to be in
violation or default under any licenses, sublicenses or other agreements to
which the Company or any Subsidiary is a party and pursuant to which the Company
or any Subsidiary is authorized to use any Intellectual Property Right, nor
entitle any other party to any such license, sublicense or agreement to
terminate such license, sublicense or agreement, except where any such
violation, default, termination or modification would not, individually or in
the aggregate, have a Material Adverse Effect. Schedule 4.12 sets forth a
complete and correct list, as of the date hereof, of the trademarks that are
material to the business as currently conducted by the Company or any Subsidiary
and all registrations and applications for registration of any Intellectual
Property Rights. Except as set forth on Schedule 4.12, Seller has no knowledge
of any infringement by third parties of the Intellectual Property Rights.
(b) Except as set forth on Exhibit 4.12, the use of any
Intellectual Property Right in the business as currently conducted by the
Company or any Subsidiary does not breach, violate or infringe any intellectual
property rights of any third party or (except for the payment of computer
software or other licensing fees) does not require any payment for the use of
any patent, trade name, service mark, trade secret, trademark, copyright or
other intellectual property right or technology owned by any third party except
where any such breaches, violations, infringements, or payments, would not,
individually or in the aggregate, have a Material Adverse Effect.
Section 4.13 Employee Benefit Plans; ERISA. (a) Each "employee
benefit plan" (as such term is defined in Section 3(3) of ERISA) or other
employment or compensation plan, agreement or arrangement (whether or not
subject to ERISA) under which any Company Employees, or any current or former
director or independent contractor of the Company, any Subsidiary, Conning, any
Conning Subsidiary, RGA or any RGA Subsidiary, in their capacity as such, shall
have any benefit entitlements as of the Closing Date or in which any of such
Persons otherwise participates (collectively, the "Seller Plans") for which
Seller will have no liability or responsibility after the Closing Date is listed
on Schedule 4.13, other than any Seller Plan which does not have an aggregate
lifetime present value liability in excess of $500,000.
(b) Except as set forth on Schedule 4.13 each Seller Plan has
been maintained and administered at all times in compliance with its terms and
Applicable Law including, in the case of any Seller Plan intended to be
qualified under Code Section 401(a), the provisions of Code Section 401(a),
there is no audit, investigation or proceeding pending or threatened involving
any Seller Plan before the IRS, Department of Labor or any other Governmental
Authority, there has not occurred with respect to any Seller Plan (and no person
or entity is
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contractually bound to enter into) any transaction constituting a non-exempt
"prohibited transaction" within the meaning of Section 4975 of the Code or
Section 406 of ERISA, and a determination letter has been received from the IRS
as to each Seller Plan that is intended to be qualified under Code Section
401(a), and neither Seller nor Company is aware of any circumstances likely to
result in the revocation of any such determination letter except where any such
non-compliance, prohibited transaction or failure to have a determination letter
would not, individually or in the aggregate, have a Material Adverse Effect.
(c) None of Seller, RGA or Conning nor any ERISA Affiliate
thereof has incurred or expects to incur any liability under Title IV of ERISA
(other than for payment of Pension Guaranty Corporation insurance premiums) or
Section 412 of the Code which would have, individually or in the aggregate, a
Material Adverse Effect. None of such entities has any obligation to contribute
to, or any liability under, any multiemployer plan (as defined in ERISA Section
4001(a)(3)). Based on the most recent actuarial valuations, the accrued
liabilities of the Seller Plans subject to Title IV of ERISA do not exceed such
Seller Plans' assets.
Section 4.14 Taxes. Except as set forth on Schedule 4.14:
(a) Each of Seller, the Company (and any affiliated group of
which the Company is a member) and the Subsidiaries has timely filed
with the appropriate taxing authorities all Tax Returns required to be
filed (taking into account all valid extensions) and all such Tax
Returns are complete and accurate;
(b) All Taxes shown in the Tax Returns referred to in Section
4.14(a) that are due and payable by the Company and the Subsidiaries
before the date hereof have been timely paid;
(c) There are no Encumbrances on any of the assets of the
Company or any Subsidiary that arose in connection with any failure (or
alleged failure) to pay any Taxes (other than Taxes that are not due as
of the date hereof);
(d) The Company and the Subsidiaries have withheld and paid
all Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor,
creditor, stockholder or other third party;
(e) No federal, state, local or foreign audit or other
administrative proceeding or court proceeding (each an "Audit") exists
or has been initiated with regard to Taxes or Tax Returns of the
Company or any Subsidiary, and neither the Company nor any Subsidiary
has received any notice that
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any such Audit is pending or threatened with respect to any Taxes due
from or with respect to the Company or any Subsidiary or any Tax Return
filed by or with respect to the Company or any Subsidiary;
(f) Neither the Company nor any Subsidiary has requested an
extension of time within which to file any Tax Return in respect of any
taxable year which has subsequently not been filed and no outstanding
waivers or comparable consents regarding the application of the statute
of limitations with respect to any Taxes or Tax Returns has been given
by or on behalf of the Company or any Subsidiary;
(g) No power of attorney has been granted by or with respect
to the Company or any Subsidiary with respect to any matter relating to
Taxes; and
(h) Any representation or warranty with respect to Taxes
contained in this Section 4.14 shall be deemed to be accurate unless an
inaccuracy contained therein would have, individually or in the
aggregate, a Material Adverse Effect.
Section 4.15 Contracts. (a) Schedule 4.15 sets forth a
complete and accurate list, as of the date hereof, of (i) all contracts to which
the Company or any Subsidiary is a party (excluding policies of insurance or
reinsurance in the ordinary course of business) or by which any of their
respective assets are bound which contain obligations of the Company or any
Subsidiary in excess of $5,000,000, and (ii) all contracts and agreements that
limit or purport to limit the Company, GALIC, Conning or RGA to compete in any
line of business or with any Person or in any geographic area (collectively, the
"Contracts"). Neither Seller, the Company, nor any Subsidiary has received
written notice of a cancellation of or an intent to cancel any Contract whose
cancellation would have, individually or in the aggregate, a Material Adverse
Effect.
(b) Except as set forth on Schedule 4.15, assuming the due
authorization, execution and delivery by the other parties thereto, each
Contract is legal, valid, binding, enforceable against the other parties thereto
and in full force and effect, and will not cease to be in full force and effect
on terms identical to those currently in effect as a result of the consummation
of the transactions contemplated by this Agreement or the Ancillary Agreements,
nor will the consummation of the transactions contemplated by this Agreement
constitute a breach or default under such Contract, except such failures to be
enforceable or to be in full force and effect or such breaches or defaults as
would not have, individually or in the aggregate, a Material Adverse Effect.
(c) Except as set forth on Schedule 4.15, assuming the due
authorization, execution and delivery by the other parties thereto, neither the
Company nor any Subsidiary is in breach of,
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<PAGE> 26
or default under, any Contract and, to the knowledge of Seller, no other party
to any Contract is in beach thereof or default thereunder, except for such
breaches or defaults as would not have, individually or in the aggregate, a
Material Adverse Effect.
Section 4.16 Portfolio Investments. Seller has previously
delivered to Buyer true and complete lists of all assets held in the investment
portfolios of the Life Insurance Subsidiaries as of August 11, 1999.
Section 4.17 Liabilities and Reserves. (a) The consolidated
balance sheets as of December 31, 1998 and June 30, 1999 included as part of the
Company GAAP Financial Statements and the Interim Financial Statements,
respectively, reflect adequate provision for all obligations and liabilities of
the Company and the Subsidiaries, Conning and the Conning Subsidiaries and RGA
and the RGA Subsidiaries, at such date for which provision is required under the
accounting principles specified in Section 4.6 pursuant to which such balance
sheets were prepared, and except to the extent specifically disclosed, reflected
or reserved against in such balance sheets and the notes thereto, none of the
Company and the Subsidiaries, Conning and the Conning Subsidiaries and RGA and
the RGA Subsidiaries, has any material obligations or liabilities of any nature
(whether accrued, absolute, contingent or otherwise, and whether or not due, or
arising out of transactions entered into, or any state of facts existing, prior
to such date) required under such accounting principles to be set forth on a
consolidated balance sheet of any of the Company and the Subsidiaries or in the
notes thereto, except (x) liabilities incurred since December 31, 1998, in the
ordinary course of business consistent with past practice and (y) as disclosed
in Schedule 4.17(a).
(b) Each reserve and other liability amount in respect of the
insurance business, including without limitation reserve and other liability
amounts in respect of insurance policies, annuity contracts or guaranteed
investment or reinsurance, coinsurance or other similar insurance contracts,
whether direct or assumed by reinsurance, established or reflected in the
respective Annual Statements for the year ended December 31, 1998, and the
Quarterly Statements for the period ended June 30, 1999 of each of the Life
Insurance Subsidiaries was determined in accordance with generally accepted
actuarial standards consistently applied, was based on actuarial assumptions
that were in accordance with or stronger than those called for in relevant
policy and contract provisions, is fairly stated in accordance with sound
actuarial principles and is in compliance with the requirements of the insurance
laws, rules and regulations of their respective jurisdictions of domicile as
well as those of any other applicable jurisdictions (collectively, "Applicable
Insurance Laws"). Except as set forth on Schedule 4.17(b), such reserves and
liability amounts with respect to each Life Insurance Subsidiary were adequate
to cover the total amount
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of all matured and unmatured liabilities and obligations of such Life Insurance
Subsidiary under all its outstanding insurance policies, funding agreements and
annuity, guaranteed interest, reinsurance, coinsurance and other similar
contracts as of December 31, 1998 or June 30, 1999, as appropriate. Such
investment assumptions were reasonable as of December 31, 1998 or June 30, 1999,
as appropriate. Each Life Insurance Subsidiary owns assets that qualify as
admitted assets under Applicable Insurance Laws in an amount at least equal to
the sum of all such reserves and liability amounts and its minimum statutory
capital and surplus as required by Applicable Insurance Laws.
(c) Except for regular periodic assessments in the ordinary
course of business and except as set forth in Schedule 4.8, no claim or
assessment is pending nor, to the knowledge of the Seller, threatened against
any Life Insurance Subsidiary by any State insurance guaranty association in
connection with such association's fund relating to insolvent insurers.
Section 4.18 Title to Assets. Except as set forth in Schedule
4.18, and subject to the Supervision Order and the approval of the
Reorganization Plan, the Company and the Subsidiaries have good and marketable
title to, or valid and subsisting leasehold interests in, all real and personal
property and other assets on their books and reflected on the Company's balance
sheet at December 31, 1998 and June 30, 1999 included as part of the Company
GAAP Financial Statements and the Interim Financial Statements, respectively, or
acquired in the ordinary course of business consistent with past practice since
December 31, 1998 or June 30, 1999, as appropriate, which would have been
required to be reflected on such balance sheet if acquired on or prior to such
date, other than assets which have been disposed of in the ordinary course of
business and those assets the failure of which to have good title to, or valid
and subsisting leasehold interests in, would not, individually or in the
aggregate, have a Material Adverse Effect. None of such property and other
assets is subject to any Encumbrance, except for Encumbrances set forth on
Schedule 4.18 or reflected in the financial statements of the Company as of
December 31, 1998. Except as set forth on Schedule 4.18 and as would not,
individually or in the aggregate, have a Material Adverse Effect, the Company
and the Subsidiaries have the right to quiet enjoyment of all property leased by
any of them for the full term of each such lease or sublease or similar
agreement (or any renewal option) relating thereto and such leased property is
not subject to any failure to have the right to quiet enjoyment.
Section 4.19 Transactions with Certain Persons. Except as set
forth on Schedule 4.19, neither any officer, director or employee of Seller, the
Company or any Subsidiary, nor any member of any such Person's immediate family,
is now a party to any material transaction with the Company or any Subsidiary,
including any contract or other binding arrangement (i) providing for the
furnishing of material services by such
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Person (except in such Person's capacity as an officer, director, employee or
consultant), (ii) providing for the rental of material real or personal property
from such Person, or (iii) otherwise requiring material payments (whether
pursuant to indebtedness or otherwise) to such Person (other than for services
as an officer, director, employee or consultant of Seller, the Company or any
Subsidiary).
Section 4.20 Reinsurance and Retrocessions. Schedule 4.20 sets
forth a true and complete list of all reinsurance and retrocession treaties and
agreements in force as of the date of this Agreement to which any Life Insurance
Subsidiary is a ceding party, any terminated or expired treaty or agreement
under which there remains any outstanding liability from one reinsurer in excess
of $15,000,000 and any treaty or agreement with any Affiliate of the Company or
any Life Insurance Subsidiary, the effective date of each such treaty or
agreement, and the termination date of any treaty or agreement which has a
definite termination date. Except as set forth on Schedule 4.20, (i) no Life
Insurance Subsidiary is in default in any respect as to any provision of any
reinsurance or retrocession treaty or agreement or has failed to meet the
underwriting standards required for any business reinsurance thereunder and (ii)
no reinsurer or retrocessionaire is in default to any Life Insurance Subsidiary
pursuant to any reinsurance or retrocession treaty or agreement, except for
defaults which would not, individually or in the aggregate, have a Material
Adverse Effect.
Section 4.21 Environmental Laws. (a) To the knowledge of
Seller, except as set forth on Schedule 4.21 and as would not, individually or
in the aggregate, have a Material Adverse Effect: (i) the Company and each
Subsidiary have been and are in compliance with all applicable Environmental
Laws, and have possessed, possess, have been, and are in compliance with all
Environmental Permits required under such laws for the conduct of its business
operations and ownership of its Owned Real Property, (ii) there are no past,
present or future events (including, without limitation, the sale of any Owned
Real Property), conditions or legal requirements that would prevent, or
substantially increase the cost to the Company or any Subsidiary of complying
with Environmental Laws or of their obtaining, renewing or complying with all
Environmental Permits required under such laws for the conduct of its business
and operations and ownership of its Owned Real Property or that would give rise
to any liability arising under any Environmental Law, and (iii) there are no
liabilities or obligations of the Company or any of its Subsidiaries of any kind
whatsoever, whether accrued, contingent, absolute, direct or indirect,
determined, determinable or otherwise, arising under or relating to any
Environmental Law, (iv) there are and have been no conditions relating to the
release or threatened release of Hazardous Materials at any property owned,
operated or otherwise used by the Company or any Subsidiary now or in the past
that would give rise to liability of the Company or any Subsidiary under any
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Environmental Law and (v) no written notice, notification, demand, request for
information, citation, summons, complaint, order, or notice of investigation has
been received by the Company or any of its Subsidiaries from, and no action,
claim, suit, proceeding or review is pending or threatened by, any Governmental
Authority or Person against, the Company or any of its Subsidiaries, with
respect to any Environmental Law.
(b) Notwithstanding anything herein to the contrary, the
representations and warranties contained in this Section 4.21 do not address any
liability or obligation of the Company or any Subsidiary arising specifically
from any obligation the Company or any Subsidiary may have to defend or
indemnify an insured, pursuant to a contract of insurance or reinsurance, with
respect to any claim relating to Hazardous Materials or under any Environmental
Law.
Section 4.22 Insurance Coverage. The Company has furnished to
Buyer a true and correct list, as of the date hereof, of all policies of
insurance maintained by the Company or any Subsidiary relating to the assets,
properties, business, operations, employees, officers or directors of the
Company or any Subsidiary. The Company maintains insurance relating to such
assets, properties, business, operations, employees, officers and directors
which is reasonable for a company of its size engaged in the life and health
insurance business.
Section 4.23 Year 2000. Except as set forth on Schedule 4.23
and except as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, each hardware, software and firmware
product (including embedded microcontrollers in computer equipment which are
owned or licensed and used by the Company or any Subsidiary and which are
involved in electronic data interchange and integration with third parties)
owned or licensed and used by the Company or any of its Subsidiaries (including
without limitation all software sold or licensed by NaviSys Incorporated and its
subsidiaries) will, when required to do so, correctly differentiate between the
years in different centuries and will accurately process date/time data
(including, but not limited to, calculating, comparing, and sequencing) from,
into, and between the twentieth and twenty-first centuries, including leap year
calculations.
Section 4.24 RGA and Conning. Each of RGA and Conning has
filed all reports, schedules, forms, statements and other documents required to
be filed by it with the SEC since January 1, 1996 (collectively, the "SEC
Documents"). Except as set forth on Schedule 4.24, each of the SEC Documents has
been duly and timely filed, and when filed was in material compliance with the
requirements (including accounting requirements) of any applicable federal
securities law and the applicable rules and regulations of the SEC thereunder,
and no event has occurred requiring the filing of any amendment of any of the
SEC Documents which amendment has not been duly and timely filed. Each of such
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SEC Documents was complete and correct in all material respects as of its date
and, as of its date, did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading. Complete and correct copies of such SEC Documents have
been made available by the Company to the Buyer prior to the date of this
Agreement or, in the case of those not yet due and filed, will be so made
available promptly after filing.
Section 4.25 State Takeover Statutes and Shareholder Rights
Plans. Except for the provisions of Article III of RGA's Articles of
Incorporation, Seller has caused to be taken all actions necessary such that no
"fair price," "moratorium," "control share acquisition," "business combination"
or other form of antitakeover statute, regulation or provision of the Articles
of Incorporation of RGA or Conning is applicable to any of the transactions
contemplated hereby or by the Ancillary Agreements, including without limitation
Sections 351.407 and 351.459 of the Missouri Revised Statutes. Seller has caused
to be taken all actions necessary such that, for all purposes under the Rights
Agreement, neither Buyer nor any of its Affiliates shall be deemed an Acquiring
Person (as defined in the Rights Agreement), the Distribution Date (as defined
in the Rights Agreement) shall not be deemed to occur, and the Rights will not
separate from the common stock of RGA, in each case as a result of Buyer's
entering into this Agreement and the Ancillary Agreements or consummating the
transactions contemplated hereby or thereby, and the Rights Agreement and the
Rights are inapplicable to such transactions. There is no rights agreement,
rights plan or other similar agreement, plan or arrangement with respect to
Conning applicable to the transactions contemplated hereby or by the Ancillary
Agreements.
Section 4.26 Insurance Issued. Except as set forth on Schedule
4.26 or as disclosed to Buyer in a letter from Seller to Buyer dated August 26,
1999 and except as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, with respect to all insurance issued
by any Life Insurance Subsidiary:
(i) All insurance policy and annuity contract benefits payable
by any Life Insurance Subsidiary and, to the knowledge of the Seller,
by any other Person that is a party to or bound by any reinsurance,
coinsurance or other similar agreement with any Life Insurance
Subsidiary, have been paid in accordance with the terms of the
insurance policies, annuity contracts and other contracts under which
they arose, except for such benefits for which there is a reasonable
basis to contest payment.
(ii) Except as set forth on Schedule 4.26, all advertising,
promotional and sales materials and other
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marketing practices used by any Life Insurance Subsidiary or any agent
of any Life Insurance Subsidiary have complied and are currently in
compliance with Applicable Laws.
(iii) Each insurance agent, at the time such agent wrote, sold
or produced business for any Life Insurance Subsidiary since January 1,
1994, was duly licensed as an insurance agent (for the type of business
written, sold or produced by such insurance agent) in the particular
jurisdiction in which such agent wrote, sold or produced such business.
(iv) The Tax treatment under the Code of all insurance or
annuity policies, plans or contracts; all financial products, employee
benefit plans, individual retirement accounts or annuities; or any
similar or related policy, contract, plan, or product, whether
individual, group, or otherwise, if any, issued or sold by any Life
Insurance Subsidiary is and at all times has been the same or not less
favorable to the purchaser, policyholder or intended beneficiaries
thereof as the Tax treatment under the Code for which such contracts
qualified or purported to qualify at the time of their issuance or
purchase, except for changes resulting from changes to the Code which
do not apply to such issuance or purchase due to their effective date.
For purposes of this Section 4.26, the provisions of the Code relating
to the Tax treatment of such contracts shall include, but not be
limited to, Sections 72, 79, 101, 104, 105, 106, 125, 130, 401, 402,
403, 404, 408, 412, 415, 419, 419A, 457, 501, 505, 817, 818, 7702 and
7702A. In addition, except as disclosed to Buyer in a letter from
Seller to Buyer dated August 26, 1999, each annuity contract issued by
any Life Insurance Subsidiary qualified as an annuity contract under
Section 72 of the Code. Each life insurance policy issued by any Life
Insurance Subsidiary qualified as a life insurance contract for federal
income tax purposes when issued and any such policy which is a modified
endowment contract under Section 7702A of the Code, (each, a "MEC") has
been marketed as such at all relevant times or the policyholder
otherwise has consented to such MEC status. Each of the employee
benefit plans issued or sold by the Company qualifies under Section
401(a), 403(b) or 457, as applicable, of the Code.
(v) The underwriting standards utilized and ratings applied by
each Life Insurance Subsidiary with respect to insurance policies,
annuity contracts or guaranteed investment contracts outstanding as of
the date hereof have been provided to Buyer and, with respect to any
such policy or contract reinsured in whole or in part, conform in all
material respects to the standards and ratings required pursuant to the
terms of the related reinsurance, coinsurance or other similar
contracts and Seller has
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provided Buyer with copies of all underwriting policies and procedures
for each Life Insurance Subsidiary.
(vi) No insurance agent or broker at the time such agent or
broker wrote, sold or produced business for any Life Insurance
Subsidiary, violated (or with notice or lapse of time or both would
have violated) any term or provision of any law or order applicable to
any aspect (including, but not limited to, the writing, sale or
production) of the business of any Life Insurance Subsidiary.
Section 4.27 Real Property. (a) Schedule 4.27 lists all Owned
Real Property.
(b) Schedule 4.27 lists all leases with respect to Leased Real
Property requiring the payment of more than $1,000,000 per annum.
(c) The Seller has, or has caused to be, delivered to the
Buyer true and complete copies of all leases listed on Schedule 4.27. Each such
lease is legal, valid, binding, enforceable and in full force and effect with
respect to the Company or the Subsidiary, as applicable, and, to the knowledge
of Seller, each such lease is legal, valid, binding, enforceable and in full
force and effect with respect to the lessor thereof, except when the failure to
be legal, valid, binding, enforceable and in full force and effect would not
have a Material Adverse Effect.
(d) To the knowledge of Seller, there are no condemnation
proceedings or eminent domain proceedings of any kind pending or threatened
against the Owned Real Property or Leased Real Property.
(e) Except as set forth on Schedule 4.27, the rental set forth
in each lease of the Leased Real Property is the actual rental being paid, and
there are no separate agreements or understandings with respect to the same,
except as would not, individually or in the aggregate, be a Material Adverse
Effect.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows:
Section 5.1 Organization and Related Matters. Buyer is a
mutual life insurance company duly organized, validly existing and in good
standing under the laws of the State of New York.
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Section 5.2 Authority; No Violation. (a) Buyer has full power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly approved by all requisite action on the part of Buyer, and no other
proceedings on the part of Buyer are necessary to approve this Agreement and to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by Buyer and (assuming the due authorization,
execution and delivery of this Agreement by Seller) constitutes the valid and
binding obligation of Buyer, enforceable against Buyer in accordance with its
terms.
(b) Neither the execution and delivery of this Agreement by Buyer,
nor the consummation by Buyer of the transactions contemplated hereby to be
performed by it, nor compliance by Buyer with any of the terms or provisions
hereof, will (i) violate any provision of the Charter or Bylaws of Buyer, or
(ii) assuming that the consents and approvals referred to in Section 5.3 are
duly obtained, (A) violate in any material respect any Applicable Law with
respect to Buyer, or any of its properties or assets or (B) violate, conflict
with, result in a breach of any provision of, or constitute a default under any
note, bond, mortgage, indenture, deed of trust, license, lease, agreement or
other instrument or obligation to which Buyer is a party, or by which Buyer or
any of its properties or assets may be bound or affected, except for such
violations, conflicts, breaches or defaults which would not, individually or in
the aggregate, prevent or materially delay the performance by Buyer of any of
its obligations hereunder.
Section 5.3 Consents and Approvals. Except for (i) the approval of
the Director required by the Supervision Order, (ii) any approvals or orders
required in connection with the Reorganization Proceeding (iii) approvals or
consents of Governmental Authorities under the insurance holding company laws of
Missouri, California, New York, Illinois, and Texas, (iv) applicable filings
under the HSR Act, (v) the matters set forth on Schedule 5.3, and (vi) such
other filings, authorizations, consents or approvals the failure to make or
obtain which would not, individually or in the aggregate, prevent or materially
delay the performance by Buyer of any of its obligations pursuant to this
Agreement, no consents or approvals of or filings or registrations with any
Governmental Authority or any third party are necessary in connection with the
execution and delivery by Buyer of this Agreement and the consummation by Buyer
of the transactions contemplated hereby. Buyer is not aware of any consents
specified in the preceding sentence which it believes it is not reasonably
likely to obtain.
Section 5.4 Legal Proceedings. Buyer is not a party to any, and
there are no pending or, to Buyer's knowledge, threatened, Actions against or
otherwise affecting Buyer or its
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properties or assets or challenging the validity or propriety of the
transactions contemplated by this Agreement which, if adversely determined,
would, individually or in the aggregate, prevent or materially delay the
performance by Buyer of any of its obligations pursuant to this Agreement, and
there is no injunction, order, judgment, decree or regulatory restriction
imposed upon Buyer or its properties or assets which would, individually or in
the aggregate, prevent or materially delay the performance by Buyer of any of
its obligations pursuant to this Agreement.
Section 5.5 Investment Intent of Buyer. The Shares to be acquired
under this Agreement will be acquired by Buyer for its own account and not for
the purpose of a distribution. Buyer will refrain from transferring or otherwise
disposing of any of the Shares acquired by it, or any interest therein, in such
manner as to violate any registration provision of the Securities Act of 1933,
as amended, or any applicable state securities law regulating the disposition
thereof. Buyer agrees that the certificates representing the Shares may bear
legends to the effect that the Shares have not been registered under the
Securities Act of 1933, as amended, or such other state securities laws, and
that no interest therein may be transferred or otherwise disposed of in
violation of the provisions thereof.
Section 5.6 No Other Broker. Other than Credit Suisse First Boston
Corporation, the fees and expenses of which will be paid by Buyer, no broker,
finder or similar intermediary has acted for or on behalf of Buyer or any
Affiliate of Buyer, or is entitled to any broker's, finder's or similar fee or
other commission from Buyer, or any Affiliate of Buyer, in connection with this
Agreement or the transactions contemplated hereby.
Section 5.7 Financing. Buyer has, and at the Closing will have,
sufficient cash to consummate the transactions contemplated hereby and to pay
all related fees and expenses.
ARTICLE VI
COVENANTS
Section 6.1 Conduct of Business. Prior to the Closing Date or the
termination of this Agreement pursuant to the terms hereof,(a) except the events
described in clauses (ii), (iii) and (iv) of Section 4.11, or any order of the
Director of the Department or from the Reorganization Proceeding, Seller shall
cause each of the Company, the Subsidiaries, RGA, the RGA Subsidiaries, Conning
and the Conning Subsidiaries to use commercially reasonable efforts to (i)
preserve intact its present organization, business and franchise; (ii) maintain
in effect all material licenses, approvals, qualifications, registrations and
authorizations necessary to carry on its business as currently conducted; (iii)
preserve material existing
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relationships with its employees and agents, other distribution sources,
customers, lenders, suppliers, regulators, rating agencies and others having
material business relationships with it (referred to herein as "Contacts"); (iv)
continue its advertising and promotional activities, pricing and purchasing
policies, operations and business plan implementation consistent with past
practice; (v) continue in full force and effect without material modification
all existing policies or binders of insurance currently maintained in respect of
its assets, properties, business, operations, employees, officers or directors
except as required by applicable law; (vi) in the case only of the Company and
the Subsidiaries, not undertake any material new business initiatives; and (vii)
cooperate with Buyer to present the change of ownership contemplated by this
Agreement in a positive manner to its Contacts, including without limitation
furnishing such introductions and facilitating such continuing access to such
Contacts as Buyer may reasonably request; and
(b) without the prior written consent of Buyer, which consent shall
not be unreasonably withheld, Seller will not, and will not permit the Company
or the Subsidiaries to, except as required pursuant to any order of the Director
or the Department or issued pursuant to the Reorganization Proceeding, (i) take
or omit to take any action that would be reasonably likely to cause any of the
representations and warranties made by Seller in this Agreement to become
untrue; (ii) take any action that would prevent or materially impair the ability
of Seller to consummate the transactions contemplated by this Agreement,
including without limitation actions that would be reasonably likely to prevent
or materially impair the receipt of any consent, registration, approval, permit
or authorization, that is necessary in connection with the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby; or (iii) sell or otherwise transfer or dispose of the shares of the
capital stock of RGA or Conning held by the Company.
Section 6.2 Public Announcements. Buyer and Seller shall consult
with each other and the Department before issuing, and provide each other the
opportunity to review and comment upon, any press release or other public
statements with respect to the transactions contemplated by this Agreement, and
shall not issue any such press release or make any such public statement prior
to such consultation, except as may be required by the Department, by Applicable
Law or court process or by obligations pursuant to any listing agreement with
any national securities exchange.
Section 6.3 Expenses. Regardless of whether any or all of the
transactions contemplated by this Agreement are consummated, and except as
otherwise expressly provided herein, Buyer and Seller shall each bear their
respective direct and indirect expenses incurred in connection with the
negotiation and
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preparation of this Agreement, the Ancillary Agreements and the consummation of
the transactions contemplated hereby or thereby.
Section 6.4 Access; Certain Communications. Between the date of this
Agreement and the Closing Date, subject to Applicable Laws relating to the
exchange of information and to any order of the Director of the Department or
issued pursuant to the Reorganization Proceeding:
(a) Seller shall (and shall cause the Company and each Subsidiary
to) afford to Buyer and its authorized agents and representatives access, upon
reasonable notice and during normal business hours, to all contracts and other
documents and other information (except immaterial contracts, documents and
information subject to confidentiality agreements) of or relating to the assets,
liabilities, business, operations and other aspects of the business of the
Company and the Subsidiaries and shall use commercially reasonable efforts to
cause RGA, the RGA Subsidiaries, Conning and the Conning Subsidiaries to afford
such access to Buyer and its authorized agents and representatives. Seller shall
cause the Company Employees and the employees of any Subsidiary and each of the
Company's and their respective attorneys, financial advisors, auditors,
actuarial advisors and other representatives to provide reasonable assistance to
Buyer in Buyer's investigation of matters relating to the purchase of the
Shares; provided, however, that Buyer's investigation shall be conducted in a
manner which does not materially interfere with the normal operations, customers
and employee relations of the Company, its Subsidiaries, RGA, the RGA
Subsidiaries, Conning or the Conning Subsidiaries. Without limiting any of the
terms thereof, the terms of the Confidentiality Agreement shall govern Buyer's
and its agents' and representatives' obligations with respect to all
confidential information with respect to the Company, the Subsidiaries, RGA, the
RGA Subsidiaries, Conning and the Conning Subsidiaries, which has been provided
or made available to them at any time, including during the period between the
date of this Agreement and the Closing Date;
(b) except as required pursuant to any order of the Director of the
Department or issued pursuant to the Reorganization Proceeding, Seller shall
give prompt notice to Buyer of (i) any material communication received from or
given to any Governmental Authority in connection with any of the transactions
contemplated hereby, (ii) any notice or other communication from or on behalf of
any Person alleging that the consent of such Person is or may be required in
connection with the transactions contemplated by this Agreement; and (iii) any
actions, suits, claims or investigations commenced or to Seller's knowledge
threatened against Seller, the Company and the Subsidiaries, and, if known, RGA,
the RGA Subsidiaries, Conning and the Conning Subsidiaries, that, if pending on
the date of this Agreement, would have been required to have been disclosed, or
relate to the consummation of the transactions contemplated by this Agreement;
provided, however, that the delivery of any
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notice pursuant to this Section 6.4(b) shall not limit or otherwise affect the
remedies available hereunder to Buyer; and
(c) Seller shall, and shall cause any other Person receiving access
thereto to, keep strictly confidential any and all non-public information it or
they may receive from or concerning Buyer and its Affiliates, including, without
limitation, any information received pursuant to Section 6.6.
Section 6.5 Reorganization Plan. As soon as practicable after
execution of this Agreement, Seller shall make reasonable efforts to cause the
Department to commence a Reorganization Proceeding and to submit the
Reorganization Plan incorporating the material terms of this Agreement.
Section 6.6 Regulatory Matters; Third Party Consents. (a) Buyer and
Seller shall cooperate with each other and (i) shall use their commercially
reasonable efforts promptly to prepare and to file all necessary documentation,
and to effect all applications, notices, petitions and filings, with each
Governmental Authority which are necessary or advisable to consummate the
transactions contemplated by this Agreement, and (ii) shall use their
commercially reasonable efforts to obtain as promptly as practicable any permit,
consent, approval, waiver or authorization of such Governmental Authority which
is necessary or advisable to consummate the transactions contemplated by this
Agreement.
(b) Buyer and Seller shall cooperate with each other and (i) shall
use their commercially reasonable efforts promptly to prepare and to file all
necessary documentation, and to effect all applications, notices, petitions and
filings, with each third party (other than a Governmental Authority) which are
necessary or advisable to consummate the transactions contemplated by this
Agreement, and (ii) shall use their commercially reasonable efforts to obtain as
promptly as practicable any permit, consent, approval, waiver or authorization
of such third party which is necessary or advisable to consummate the
transactions contemplated by this Agreement.
(c) Buyer and Seller shall have the right to review in advance, and
shall consult with the other party on, in each case subject to Applicable Laws
relating to the exchange of information, all the information relating to Seller,
the Company and the Subsidiaries or Buyer, as the case may be, and any of their
respective Affiliates, which appear in any filing made with, or written
materials submitted to, any Governmental Authority or any other third party in
connection with the transactions contemplated by this Agreement. The parties
hereto agree that they will consult with each other with respect to the
obtaining of any permit, consent, approval or authorization of a Governmental
Authority or other third party necessary or advisable to consummate the
transactions contemplated by this Agreement and each party shall keep the other
apprised of the
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status of obtaining any such permit, consent, approval or authorization. The
party responsible for any such filing shall promptly deliver to the other party
evidence of the filing of all applications, filings, registrations and
notifications relating thereto, and any supplement, amendment or item of
additional information in connection therewith. The party responsible for a
filing shall also promptly deliver to the other party a copy of each notice,
order, opinion and other item of correspondence received from or sent to any
Governmental Authority by such filing party in respect of any such application.
In exercising the foregoing rights and obligations, Buyer and Seller shall act
reasonably and promptly.
(d) Without limiting the generality of the foregoing, as promptly as
practical and, in any event within 21 calendar days after the date hereof, Buyer
shall make Form A filings, which shall include all required exhibits thereto,
with the insurance departments of the States of Missouri, California, New York,
Illinois and Texas with respect to the transactions contemplated hereby and, as
promptly as practical, Buyer shall make all required foreign filings with
respect to the transactions contemplated hereby. Buyer shall as promptly as
practicable make any and all other filings and submissions of information with
such insurance departments which are required or requested by such insurance
departments in order to obtain the approvals required by such insurance
departments to consummate the transactions contemplated hereby. If any such
insurance department, including without limitation the insurance department of
the States of Missouri, California, New York, Illinois and Texas, requires that
a hearing be held in connection with any such approval, Buyer shall use its
commercially reasonable efforts to arrange for such hearing to be held as
promptly as practicable after the notice that such hearing is required has been
received by Buyer. Seller agrees to furnish Buyer with such necessary
information and reasonable assistance as Buyer may reasonably request in
connection with its preparation of such Form A filings and other filings or
submissions. Buyer shall keep Seller fully apprised of its actions with respect
to all such filings, submissions and scheduled hearings and shall provide Seller
with copies of such Form A filings and other filings or submissions (except to
the extent that such information would be, or relates to information that would
be, filed under a claim of confidentiality).
(e) Buyer and Seller shall, upon request, furnish each other with
all information concerning themselves, their subsidiaries, directors, officers
and stockholders and such other matters as may be reasonably necessary in
connection with any statement, filing, notice or application made by or on
behalf of Buyer, the Company or any of their respective Affiliates to any
Governmental Authority in connection with the transactions contemplated by this
Agreement or the Ancillary Agreements (except to the extent that such
information would be, or relates
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to information that would be, filed under a claim of confidentiality).
(f) Buyer and Seller shall promptly advise each other upon receiving
any communication from any Governmental Authority whose consent or approval is
required for consummation of the transactions contemplated by this Agreement
which causes such party to believe that there is a reasonable likelihood that
any requisite regulatory approval will not be obtained or that the receipt of
any such approval will be materially delayed.
Section 6.7 Further Assurances. (a) Each of the parties hereto shall
execute such documents and other papers and perform such further acts as may be
reasonably required to carry out the provisions hereof and the transactions
contemplated hereby. Each such party shall, on or prior to the Closing Date, use
its commercially reasonable efforts to fulfill or obtain the fulfillment of the
conditions precedent to the consummation of the transactions contemplated
hereby, including the execution and delivery of any documents, certificates,
instruments or other papers that are reasonably required for the consummation of
the transactions contemplated hereby.
(b) Seller shall, and shall cause the Subsidiaries, and shall use
reasonable best efforts to cause RGA and the RGA Subsidiaries, Conning and the
Conning Subsidiaries, and their respective officers, directors, employees and
agents (including attorneys, auditors and financial advisors) to provide such
information (including, without limitation, financial information) and
assistance as Buyer shall reasonably request in connection with the preparation
of Buyer's Registration Statement on Form S-1 and policyholder information
booklet and with respect to the Buyer's planned demutualization and initial
public offering, including, without limitation, participating in due diligence
discussions and meetings during normal business hours with Buyer's underwriters
and providing such financial statements and audit reports thereon and consents
with respect thereto as are reasonably necessary.
Section 6.8 Notification of Certain Matters. (a) Each party shall
give prompt notice to the other party of (i) the occurrence, or failure to
occur, of any event or the existence of any condition that has caused or could
reasonably be expected to cause any of its representations or warranties
contained in this Agreement to be breached at any time after the date of this
Agreement, up to and including the Closing Date (except to the extent such
representations and warranties are given as of a particular date or period and
relate solely to such particular date or period) and (ii) any failure on its
part to comply with or satisfy, in any material respect, any covenant, condition
or agreement to be complied with or satisfied by it under this Agreement.
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(b) Within twenty-eight days following the date of the execution of
this Agreement and in any event no less than twenty-eight days prior to the
Closing, Seller may provide to Buyer schedules permitted to be delivered in
accordance with this Agreement on or prior to the date hereof which were not so
delivered (such schedules being the "Supplemental Schedules"). Each of such
Supplemental Schedules when delivered shall be certified to be a complete
schedule being delivered in satisfaction of this covenant. Within fourteen days
following the delivery of the last Supplemental Schedule to be delivered in
accordance with this Section 6.8, Buyer may elect to terminate this Agreement by
notice, as provided in Section 11.1 hereof, if any items disclosed in one or
more of the Supplemental Schedules, either individually or in the aggregate,
could reasonably be expected to constitute a Material Adverse Effect. Regardless
of whether any such items individually or in the aggregate could reasonably be
expected to constitute a Material Adverse Effect, if the Closing occurs, Seller
shall indemnify Purchaser for any Losses arising from any item disclosed in such
Supplemental Schedules in accordance with Article X hereof, as if such items
were not disclosed and, for the purposes of such Article X hereof, such items do
not constitute exceptions to the representations, warranties and covenants
contained in this Agreement.
Section 6.9 Maintenance of Records. Through the Closing Date, the
Company shall maintain the Records in all material respects in the same manner
and with the same care that the Records have been maintained prior to the
execution of this Agreement. From and after the Closing Date, each of the
parties shall permit the other party reasonable access to any applicable Records
in its possession, and the right to duplicate such Records, to the extent that
the requesting party has a reasonable business purpose for requesting such
access or duplication. Notwithstanding any other provision of this Section 6.9,
access to any Records may be denied to the requesting party if the other party
is required under Applicable Law to deny such access.
Section 6.10 Service Under Employee Plans.(a) Service by the Company
Employees with the Company, Seller or any of their Affiliates prior to the
Closing Date shall be recognized under each benefit plan, program or arrangement
established, maintained or contributed to by Buyer, the Company or any of their
Affiliates after the Closing Date for the benefit of any Company Employee to the
same extent recognized for comparable purposes under the Seller Plans providing
comparable benefits, except that in no event shall Buyer be required to take
such service prior to the Closing Date into account in determining the accrual
of benefits under any retirement benefit plan; provided, however, that this
provision shall have no effect on any service credit that existed under any
Seller Plan on the Closing Date. Neither Buyer nor any Affiliate shall amend, in
any manner adverse to any participant whose employment is terminated within 12
months after the Closing Date so that such person is no longer employed by
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Buyer or any entity that is then an Affiliate thereof, the provisions of any of
the plans or programs listed in Schedule 6.10 hereto dealing specifically with
additional benefits or rights of participants in the event of termination of
employment on account of job elimination or divestiture.
(b) Buyer shall, or shall cause the applicable entity to, (i) waive
all limitations as to preexisting conditions, exclusions and waiting periods
with respect to participation and coverage requirements applicable to the
Company Employees under any welfare benefit plan in which such Company Employees
may be eligible to participate after the Closing Date, other than limitations or
waiting periods that are already in effect with respect to such Company
Employees and that have not been satisfied as of the Closing Date under any
welfare plan maintained for the Company Employees immediately prior to the
Closing Date, and (ii) provide each Company Employee with credit for any
co-payments and deductibles paid prior to the Closing Date in satisfying any
applicable deductible or out-of-pocket requirements under any welfare plans that
such Company Employees are eligible to participate in after the Closing Date.
Section 6.11 Benefits Under Employee Plans. All benefits accrued
and/or incurred by Company Employees and their qualified beneficiaries prior to
the Closing Date under the Seller Plans shall be a liability of the Seller Plans
to the extent payable under the terms of the Seller Plans. After the Closing
Date, Buyer may amend the Seller Plans in accordance with their respective
terms; provided, however, that Buyer will not take any action to use the assets
of the trust under the General American Life Insurance Company and Affiliated
Companies Executive Deferred Compensation Plans (the "Rabbi Trust") for any
purposes other than those permitted under the Rabbi Trust agreement as in effect
on the date hereof.
Section 6.12 Company Confidentiality Agreements. Buyer and Seller
acknowledge and agree that on or prior to the Closing, Seller will assign to
Buyer its rights under the Company Confidentiality Agreements, except to the
extent that any such assignment is directly or indirectly prohibited or impaired
by the terms of any of such Company Confidentiality Agreements or applicable
law, in which case the parties hereto shall cooperate to provide Buyer, to the
fullest extent practicable, the benefits thereof.
Section 6.13 No Solicitations. (a) From and after the date hereof,
Seller shall not, and shall direct and use commercially reasonable efforts to
cause the Subsidiaries, Conning, the Conning Subsidiaries, RGA and the RGA
Subsidiaries, and each of their respective officers, directors, employees,
agents, advisors or other representatives (each, a "Representative") not to,
directly or indirectly, (i) solicit, initiate or knowingly encourage the
submission of any Proposal (as defined below), (ii) participate in any
discussions or
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negotiations regarding, or furnish to any Person any non-public information with
respect to, any Proposal or Alternative Transaction (as defined below), other
than with Buyer; provided, however, that to the extent required by the fiduciary
obligations of Seller's Board of Directors, as determined in good faith by
Seller's Board of Directors following consultation with outside counsel, or at
the direction of the Department or the Reorganization Proceeding, if Seller
receives an unsolicited proposal with respect to a Control Transaction (as
defined below), Seller may participate in such discussions or negotiations or
furnish (pursuant to a confidentiality agreement in customary form) such
information in response to such Proposal or, subject to Section 11.3, authorize,
engage in or enter into any agreement with respect to such Control Transaction.
Seller will advise Buyer of, and communicate to Buyer the terms of, any Proposal
that Seller, the Company, any of the Subsidiaries or any of their respective
Representatives, or, if known by the Company, RGA, any of the RGA Subsidiaries,
Conning or any of the Conning Subsidiaries, may receive unless the terms of such
Proposal prohibit such disclosure, or otherwise directed by the Director.
(b) For purposes of this Agreement: (i) "Proposal" means any written
proposal or offer from any Person relating to an Alternative Transaction; (ii)
"Alternative Transaction" means any (A) direct or indirect acquisition or
purchase of any equity securities of, or other equity interest in, the Company
or any of the Subsidiaries that if consummated would result in any Person
beneficially owning (or having the right to acquire) 10% or more of any class of
equity securities of, or the equity interest in the Company or any of the
Subsidiaries or which would require approval under any federal, state or local
law, rule, regulation or order governing or relating to the current or
contemplated operations of the Company or any of the Subsidiaries, (B) merger,
consolidation, business combination, sale of a material portion of the assets
(including, without limitation, by means of any reinsurance or renewal rights
transaction), liquidation, dissolution or similar transaction involving the
Company or any of the Subsidiaries or (C) other transaction the consummation of
which would reasonably be expected to impede, interfere with, prevent or
materially delay the transactions with Buyer contemplated by this Agreement or
which would reasonably be expected to dilute the benefits of such transactions
to Buyer; and (iii) "Control Transaction" means any transaction that involves a
(A) merger or consolidation or similar business combination involving the
Company or a significant Subsidiary of the Company, (B) sale of all or
substantially all of the assets of the Company or (C) sale or issuance of the
Shares or other equity securities of the Company to a Person which, following
the completion of such sale or issuance, will beneficially own the Shares or
other equity securities of the Company representing a majority of the voting
power with respect to the election of the directors of the Company.
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Section 6.14 Policy Credits and Dividends in Respect of
Tax-Qualified Retirement Contracts. Subject to the applicable requirements of
ERISA and the Code, Buyer agrees to cause the Life Insurance Subsidiaries or
their successors to accept at any time after the Closing Date any distribution
by Seller in respect of any Tax-Qualified Retirement Contract and to post a
policy credit or dividend to such contract with respect to such distribution as
soon as practicable. Buyer and Seller shall cooperate in all matters with
respect to any such distribution to best assure the ongoing qualification of any
related tax-qualified retirement plan.
Section 6.15 Alternative Structure. In the event that the Closing
fails to occur because Buyer has not made the determination referred to in
Section 9.1(f)(ii), the termination date referred to in Section 11.1(a)(v) shall
be October 26, 2000 and Buyer and Seller shall use their best efforts to
negotiate and implement an alternative structure that will permit the Closing to
occur as promptly as practicable; provided, however, that nothing contained in
this Section 6.15 will require Buyer or Seller to agree to alter the Purchase
Price or any of the other fundamental economic terms of the purchase of Shares
pursuant to this Agreement.
Section 6.16 Employment. For a period of one year after the Closing
Date, Buyer shall maintain the number of employees employed by the Company, its
Subsidiaries, RGA, the RGA Subsidiaries, Conning and the Conning Subsidiaries at
no less than 90% of the aggregate number of such employees employed by such
entities as of the Closing Date; provided, however, that when calculating such
percentage the number of employees employed as of the date hereof may be
adjusted to reflect businesses divested by the Company after the date hereof. No
provision contained in this Section 6.16 shall be deemed to constitute an
employment contract between Buyer and any individual, or a waiver of Buyer's
right to discharge any employee at any time, with or without cause.
Section 6.17 Headquarters; Local Activities. For the reasonably
foreseeable future after the Closing, the corporate headquarters and principal
executive offices of the Company, Conning and RGA shall be located in
metropolitan St. Louis, Missouri. For the reasonably foreseeable future after
the Closing, Buyer shall cause the Company, and the Company shall provide,
charitable contributions and community support within the St. Louis, Missouri
area substantially comparable to the historical levels of charitable
contributions and community support provided by the Company prior to the
Closing.
Section 6.18 Dividends. Holders of participating policies of the
Life Insurance Subsidiaries and GALIC in effect on the Closing Date shall
continue to have the right to receive dividends as provided in the participating
policies, if any.
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Section 6.19 Investment Advisory Agreements. Seller agrees to use
commercially reasonable efforts to obtain all required shareholder, board and
customer consents as required in connection with any investment advisory
agreements as a result of the transactions contemplated by this Agreement so as
to assure that such agreements are not terminated.
Section 6.20 Capital Contribution. In the event that Buyer and
Seller implement the exchange program contemplated by Section 7.1(c)(i) hereof,
following the Closing upon termination of the exchange contracts, Buyer will
make a capital contribution of $120,000,000 to GALIC.
Section 6.21 Change of Control Agreements. Buyer and, prior to the
Closing Date, Seller shall use their respective commercially reasonable efforts
to prevent to the greatest extent possible the occurrence of a "change of
control" or similar triggering event under a Seller Plan or other contract or
arrangement for the benefit of any Company Employee (or any non-employee
director or independent contractor of Seller, the Company, any Subsidiary, RGA,
any RGA Subsidiary, Conning or any Conning Subsidiary).
ARTICLE VII
INTERIM ARRANGEMENT
Section 7.1 Interim Agreements. (a) Buyer will develop with Seller
as soon as practicable a program of coinsurance support for the period from the
date of this Agreement through the Closing Date for new and existing business to
be issued by GALIC, and similar arrangements as may be required by COVA and RGA.
(b) Buyer will develop with Seller as soon as practicable a program
of policy conversion to support GALIC's in force business for the period from
the date of this Agreement through the Closing Date.
(c) (i) To address the funding agreement business, Buyer and Seller
will as soon as practicable implement a stabilization program. Such program will
consist of an exchange or other program agreed to by Buyer and Seller and
approved by the Department. Under an exchange program Buyer will offer to each
holder of a funding agreement contract an exchange contract in consideration for
the transfer by GALIC to Buyer of assets as determined below with market value
(at the business day prior to the date of transfer) equal to the market value of
the liabilities under the funding agreement contracts at the business day prior
to the date of transfer (determined using Buyer's credit rating) plus a risk
premium of $120 million. The $120 million would be payable by Wire Transfer in
three $40 million installments; at inception of the exchange, ninety days
following
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such inception and one-hundred eighty days following such inception.
(ii) Under an exchange program, five business days prior to
the date of asset transfer, Buyer will submit to a mutually agreed upon
third party (to be selected from Merrill Lynch, Bear Stearns, Lehman
Brothers or Salomon Smith Barney (the "third party") a schedule of
fixed-income assets from the GALIC portfolio (the "105% Portfolio") having
(in Buyer's reasonable opinion) a market value of 105% of the market value
of the funding agreement contract liabilities being exchanged. On the
business day prior to the transfer, the third party will determine the
market value of each asset in the 105% Portfolio. Assets having a market
value equal to 100% of the market value of the funding agreement contract
liabilities will be selected by Buyer, in its sole discretion, from such
105% Portfolio and transferred to, and accepted by, Buyer as payment for
its exchange of the funding agreement contract liabilities. For purposes
of this provision, the term "market value of the funding agreement
contract liabilities" shall mean the amount mutually agreed to by Buyer
and GALIC on the business day prior to the date of transfer. In selecting
the 105% Portfolio, Buyer's primary concern is liquidity, but it will also
take into account the following:
(a) GALIC's capital and surplus;
(b) the tax effect on GALIC of the asset transfer;
(c) the effect of the asset transfer upon the investment
yield, asset quality and maturity structure of the
assets remaining at GALIC after such transfer; and
(d) the relationship between the book yield on the
transferred portfolio and the interest crediting rate of
the funding agreement contract liabilities.
ARTICLE VIII
TAX MATTERS
Section 8.1 Indemnity. (a) Subject to the terms of Section 8.1(c)
excluding payments to Seller pursuant to Section 8.2, Seller agrees to indemnify
and hold harmless Buyer, the Company and each Subsidiary against the following
Taxes (except to the extent of the reserve for Taxes (not including any deferred
Tax amounts) on the June 30, 1999 Interim Financial Statement and except to the
extent that any such Tax is attributable to an audit adjustment that results in
an increase
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in the taxable income of the Company or its Subsidiaries for any such period and
a correlative decrease in such taxable income in a later taxable period
beginning on or after the Closing Date, in which case the amount of the
indemnity shall be reduced by the discounted present value of the resulting
reasonably estimated future benefit), and, except as otherwise provided in
Section 8.9, against any loss, damage, liability or expense, including
reasonable fees for attorneys and other outside consultants, incurred in
contesting or otherwise in connection with any such Taxes: (i) Taxes imposed on
the Company or any Subsidiary with respect to taxable periods ending on or
before the Closing Date; (ii) Taxes imposed on any member of any consolidated,
combined or unitary group with which any of the Company and the Subsidiaries
file or have filed a Tax Return on a consolidated, combined or unitary basis for
a taxable period ending on or before the Closing date; and (iii) with respect to
taxable periods beginning before the Closing Date and ending after the Closing
Date, Taxes imposed on the Company or any Subsidiary which are allocable,
pursuant to Section 8.1(b), to the portion of such Tax period ending on the
Closing Date.
(b) In the case of Taxes that are payable with respect to a taxable
period that begins before the Closing Date and ends after the Closing Date the
portion of any such Tax that is allocable to the portion of the period ending on
the Closing Date shall be:
(i) in the case of Taxes that are either (A) based upon or related
to income or receipts, or (B) imposed in connection with any sale or other
transfer or assignment of property (real or personal, tangible or
intangible) (other than conveyances pursuant to this Agreement, as
provided under Section 8.9), deemed equal to the amount which would be
payable if the taxable period ended with the Closing Date;
(ii) in the case of Taxes imposed on a periodic basis with respect
to the assets of the Company or any Subsidiary, or otherwise measured by
the level of any item, deemed to be the amount of such Taxes for the
entire period (or, in the case of such Taxes determined on an arrears
basis, the amount of such Taxes for the immediately preceding period),
multiplied by a fraction the numerator of which is the number of calendar
days in the period ending on the Closing Date and the denominator of which
is the number of calendar days in the entire period; and
(iii) in the case of any premium tax, the amount which would be
payable with respect to the direct premiums written during the period that
ends on the Closing Date (taking into account the rates and credits
allocable to the pre-Closing period that would be available if such period
were treated as a separate year for premium tax purposes).
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(c) Notwithstanding any provision in this Agreement to the contrary,
Seller shall only be obligated to Buyer pursuant to the provisions of Section
8.1(a) for Taxes for which (i) Buyer, the Company or any Subsidiary, as the case
may be, has received a notice of proposed adjustment in writing from a Taxing
Authority (e.g., receipt of Form 5701 "Notice of Proposed Adjustments" for U.S.
federal tax purposes), and (ii) Buyer has thereafter made a valid claim with
respect thereto against the Escrow Account pursuant to the terms of the Escrow
Agreement on or prior to the third anniversary of the Closing Date.
(d) Buyer hereby agrees to indemnify and hold harmless Seller for
all Taxes and associated expenses not allocated to Seller pursuant to the
provisions of this Section 8.1(a).
(e) Neither Buyer, the Company, nor any Subsidiaries shall take or
allow to be taken any action the effect of which would be to accelerate the
making of any claim, the commencement or completion of any audit or other
inquiry by a Taxing Authority or the payment of (or increase in the amount of)
any Tax liability for which Seller has an obligation to indemnify Buyer pursuant
to the terms of Section 8.1. If Buyer, the Company, any Subsidiary, or any
employee or agent of any of them takes or causes to be taken any such action,
the indemnity provided in Section 8.1 hereof shall be void to the extent of any
associated payment or increase in Tax liability. Seller shall not take or permit
to be taken any action the effect of which would be to delay the making of any
claim, the commencement or completion of any audit or other inquiry by a Taxing
Authority or the payment of (or increase in the amount of) the payment or
increase the amount of any Tax liability for which Seller has an obligation to
indemnify Buyer pursuant to the terms of Section 8.1.
(f) Seller's obligations pursuant to this Section 8.1 shall be
satisfied solely with payments made by the Escrow Agent from the Escrow Account,
and Buyer shall have no other recourse against Seller with respect to any such
obligations.
Section 8.2 Tax Allocation Agreement Payments. After the Closing
Date, in accordance with the Tax Allocation Agreements and past intercompany
accounting practices of the Company and the Subsidiaries, the Company and the
Subsidiaries shall make further payments of Tax to the Seller or an appropriate
Taxing Authority to the extent that their share of current Taxes attributable to
taxable periods or portions thereof ending on or before the Closing Date exceeds
their previously paid share of estimated Taxes; provided, however, that no
payment shall be due for any period covered on the June 30, 1999 Interim
Financial Statement, except to the extent that provision for such Tax has been
made therein; and, provided, further, that no such payment shall include any
amount of Tax attributable directly or indirectly to the sale of the Shares
pursuant to this Agreement except as set forth in Section 8.6. Any payment under
this Section 8.2 which is to be made to the Seller shall be due not
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earlier than five (5) Business Days before the due date of the corresponding
payment to the appropriate Taxing Authority. Except as otherwise provided in
this Section 8.2, this Agreement terminates, as of the Closing Date, the Tax
Allocation Agreements and any and all other similar agreements with respect to
Taxes between or among Seller and Company and the Subsidiaries.
Section 8.3 Returns and Payments. (a) Seller shall prepare and file
or otherwise furnish in proper form to the appropriate Taxing Authority (or
cause to be prepared and filed or so furnished) in a timely manner all (i)
consolidated, combined and unitary Tax Returns (each a "Consolidated Return")
that include Seller and (ii) Tax Returns relating to the Company and the
Subsidiaries that are attributable to periods ending on or before the Closing
Date (and Buyer shall do the same with respect to any non-Consolidated Return
for the Company or the Subsidiaries attributable to periods ending after the
Closing Date). Tax Returns of the Company and the Subsidiaries not yet filed for
any taxable period that begins before the Closing Date shall be prepared in a
manner consistent with past practices employed with respect to the Company and
the Subsidiaries (except to the extent counsel for Seller or the Company renders
a legal opinion that it is less likely than not that such practices would be
sustained by the courts if challenged or determines that a Tax Return cannot be
so prepared and filed without being subject to penalties). With respect to any
non-Consolidated Return required to be filed by Buyer or Seller with respect to
the Company and the Subsidiaries and as to which an amount of Tax is allocable
to the other party under Section 8.1(b), the filing party shall provide the
other party and its authorized representatives with a copy of such completed Tax
Return and a statement certifying the amount of Tax shown on such Tax Return
that is allocable to such other party pursuant to Section 8.1(b), together with
appropriate supporting information and schedules at least forty-five (45) days
prior to the due date (including any extension thereof) for the filing of such
Tax Return, and such other party and its authorized representatives shall have
the right to review and comment on such Tax Return and statement prior to the
filing of such Tax Return.
(b) After the Closing Date, Seller shall pay when due and payable
all Taxes with respect to the Company and the Subsidiaries that are unpaid as of
the Closing Date and are allocable to Seller pursuant to Sections 8.1(a) and
8.1(b) (either directly to the appropriate Taxing Authority or as appropriate to
Buyer, the Company or any Subsidiary as the case may be).
(c) Buyer shall or shall cause the Company or the Subsidiaries to
pay all Taxes that are allocable to Buyer pursuant to Section 8.1(d)(either
directly to the appropriate Taxing Authority or to Seller).
Section 8.4 Refunds. Any Tax refund (including any interest with
respect thereto) relating to the Company or any
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Subsidiary for Taxes paid for any taxable period or portion thereof ending on or
prior to the Closing Date shall be the property of Seller, and if received by
Buyer or the Company or any Subsidiary shall be paid over promptly to Seller.
Section 8.5 Contests. (a) After the Closing, Buyer shall promptly
notify Seller in writing of any written notice of a proposed assessment, audit
or claim with respect to any inquiry, assessment, contest, proceeding or
litigation (a "Contest") of Buyer or Seller or of any of the Company and the
Subsidiaries which, if determined adversely to the taxpayer, would be grounds
for indemnification under this Article VIII.
(b) For all Contests for which the Seller alone has an
indemnification obligation under Section 8.1, Seller shall control all such
Contests in connection therewith. Prior to the Closing Date, Seller shall
control all Contests relating to the Company and the Subsidiaries. After the
Closing Date, in the case of a Contest that relates to a non-Consolidated Return
(or any item relating thereto or reported thereon) for a taxable period ending
on or before, or that includes, the Closing Date, Seller shall have the right at
its expense to participate in and control the conduct of such Contest, and for
all taxable periods thereafter, Buyer shall control such Contests. If Seller
does not assume the defense of any such Contest for a taxable period ending on
or before the Closing Date, Buyer may defend the same in such manner as it may
deem appropriate, including, but not limited to, settling such Contest after
giving 30 days' prior written notice to Seller setting forth the terms and
conditions of settlement. In the event of a Contest covered by the second
sentence of this paragraph, that involves issues relating to a potential
adjustment for which Seller has liability that are required to be dealt with in
a proceeding that also involves separate issues relating to a potential
adjustment for which Buyer would be liable, Buyer shall have the right, at its
expense, to control the Contest but only with respect to the latter issues.
(c) Buyer and Seller agree to cooperate, and Buyer agrees to cause
the Company and the Subsidiaries to cooperate, in the defense against or
compromise of any claim in any Contest.
Section 8.6 Section 338(h)(10) Election. (a) At Buyer's written
request, which shall be given to Seller not later than 60 days before the last
date an election under Section 338(h)(10) of the Code ("Election") with respect
to the purchase of the Shares hereunder would be permitted to be filed, Buyer
and Seller shall (i) cooperate in the preparation for the Election and (ii)
unless Buyer thereafter shall notify Seller in writing prior to the date that
the Election would be required to be filed that such Election shall not be made,
jointly file such Election with the appropriate Taxing Authority on a timely
basis and comply with the rules and regulations applicable to such Election. In
the event an Election is made hereunder, unless
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directed otherwise by Buyer, Seller and Buyer shall, when possible, omit or
elect out of any such Election under applicable state or local law.
(b) For purposes of making such Election and determining the Tax
Election Amount under Section 8.6(c), Buyer shall determine the value of the
tangible and intangible assets of the affected entities and shall timely provide
Seller with an allocation of Buyer's "adjusted grossed-up basis" in the Shares
(within the meaning of the Treasury Regulations under Section 338 of the Code)
to such assets (the "Allocation"). The Allocation shall be binding upon Buyer
and Seller for purposes of allocating the "deemed selling price" (within the
meaning of the Treasury Regulations) among the assets of the affected entities;
provided, however, that if Seller believes that all or a portion of the
Allocation is materially incorrect, an independent accounting firm of national
reputation (the "Independent Accounting Firm") shall be selected by Seller's and
Buyer's accounting firms, subject to the approval of both the Seller and Buyer,
to determine whether the Allocation is materially incorrect and the
determination of such Independent Accounting Firm shall be final. If the
Independent Accounting Firm determines that the Allocation is not materially
incorrect, Seller and Buyer shall be bound by the Allocation. If the Independent
Accounting Firm determines that the Allocation (or any portion thereof) is
materially incorrect, Seller and Buyer shall be bound by the Allocation as
adjusted by such Independent Accounting Firm.
(c) If Buyer decides to make the Election, Buyer shall pay to Seller
as additional Purchase Price an amount (the "Tax Election Amount") net of tax at
an assumed rate of 40%, equal to the excess of (i) the amount of federal, state
and local income and franchise Taxes due as a result of the deemed sale of the
assets of the affected entities pursuant to the Election, taking into account
any available federal, state or local losses, credits and loss or credit
carryovers, and any available election out of, omission of an election under, or
unavailability of an election under Section 338(h)(10) (or any analogous
provision) for state or local tax purposes, and disregarding any additional
amount of Purchase Price that may be payable by Buyer under this subsection (the
"Actual Section 338(h)(10) Tax Liability"), over (ii) the amount of federal,
state and local income and franchise taxes that would have been incurred by
Seller solely as a result of a transaction in which all the Shares were sold
without making an election under Section 338(h)(10) of the Code (the
"Hypothetical Stock Sale Tax Liability"). Notwithstanding any other provision of
this Agreement, Buyer shall not be entitled to an indemnity for any Tax that is
imposed with respect to a Tax period ending on or before, or that includes, the
Closing Date and that relates to the adjustment by a Taxing Authority of any
federal, state or local losses, credits and loss or credit carryovers that have
been taken into account in computing the Actual Section 338(h)(10) Tax
Liability.)
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(d) The Tax Election Amount shall be determined by Seller and its
accounting firm with the full cooperation of Buyer and its accounting firm;
provided, however, that the Tax Election Amount shall be subject to the right of
review by Buyer and Buyer's accountants. Seller shall provide to Buyer the
calculation of the Tax Election Amount no later than the twenty-fifth day
following the effective date of Buyer's initial request. In the event Buyer or
Buyer's accountants disagree with such calculation, Buyer shall give Seller
written notice thereof within 15 days of the date Seller furnishes such
calculation. Buyer shall pay to Seller the portion of the Tax Election Amount
that Buyer does not dispute (the "Undisputed Amount") at least three Business
Days prior to the due date of Seller's Return for the Tax period that includes
the Closing Date. If Seller and Buyer are unable to settle or compromise such
dispute within 15 Business Days after Buyer's notice, the Independent Accounting
Firm shall determine the Tax Election Amount and such determination shall be
final. In the event it is determined that Buyer owes Seller any portion of the
disputed amount, Buyer shall bear the portion of the costs of the Independent
Accounting Firm determined by multiplying such costs by a fraction, the
numerator of which is the additional amount that the Independent Accounting Firm
determines Buyer owes Seller and the denominator of which is the disputed
amount, and Buyer shall pay to Seller such additional amount plus interest
thereon at the "overpayment rate" as defined in Section 6621(a) of the Code from
the due date of Seller's Return to the date of payment. Seller shall bear all
costs of the Independent Accounting Firm which are not paid by Buyer pursuant to
the immediately preceding sentence.
Section 8.7 Time of Payment. Except as provided in Section 8.2
hereof, payment of any amounts due under this Article VIII in respect of Taxes
shall be made (i) at least three Business Days before the due date of the
applicable Tax Return required to be filed by either Buyer or Seller, as the
case may be, that shows Taxes due for which the other party is responsible under
Sections 8.1(a) and 8.1(b), or (ii) within three Business Days following an
agreement between Seller and Buyer that an indemnity amount is payable, an
assessment of a Tax by a Taxing Authority, or a "determination" having been made
as such term is defined in Section 1313(a) of the Code. If liability under this
Article VIII is in respect of costs or expenses other than Taxes, payment of any
amounts due under this Article VIII shall be made within five Business Days
after the date when the relevant entity has been notified that such entity has a
liability for a determinable amount under this Article VIII and is provided with
calculations or other materials supporting such liability.
Section 8.8 Cooperation and Exchange of Information. Upon the terms
set forth in Section 6.4 of this Agreement, Seller and Buyer will provide each
other with such cooperation and information as either of them reasonably may
request of the other in filing any Tax Return, amended Tax Return or claim for
refund, determining a liability for Taxes or a right to a refund of
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Taxes, participating in or conducting any Contest in respect of Taxes or making
representations to or furnishing information to parties subsequently desiring to
purchase any of the Company or the Subsidiaries or any part of the business from
Buyer. Such cooperation and information shall include providing copies of
relevant Tax Returns or portions thereof, together with accompanying schedules,
related work papers and documents relating to rulings or other determinations by
Taxing Authorities. Seller shall make its employees available on a basis
mutually convenient to both parties to provide explanations of any documents or
information provided hereunder as is reasonably practicable. Each of Seller and
Buyer shall retain all Tax Returns, schedules and work papers, records and other
documents in its possession relating to Tax matters of the Company and the
Subsidiaries for each taxable period first ending after the Closing Date and for
all prior taxable periods until the later of (i) the expiration of the statute
of limitations of the taxable periods to which such Tax Returns, schedules and
work papers, records and other documents relate, without regard to extensions
except to the extent notified in writing of such extensions for the respective
Tax periods, or (ii) three years following the due date (without extension) for
such Tax Returns, provided, however, that the Seller may satisfy its obligations
hereunder by delivering all such Tax Returns, schedules and work papers, records
and other documents to the Buyer. Any information obtained under this Section
8.8 shall be kept confidential in accordance with Section 6.4 except as may be
otherwise necessary in connection with the filing of Tax Returns or claims for
refund or in conducting a Contest.
Section 8.9 Conveyance Taxes. Buyer shall be liable for and shall
hold Seller harmless against any real property transfer or gains, sales, use,
transfer, value added, stock transfer, and stamp taxes, any transfer, recording,
registration, and other fees, and any similar Taxes which become payable in
connection with the transactions contemplated by this Agreement, and shall file
such applications and documents as shall permit any such Tax to be assessed and
paid on or prior to the Closing Date in accordance with any available pre-sale
filing procedure. Buyer or Seller, as appropriate, shall execute and deliver all
instruments and certificates necessary to enable the other to comply with any
filing requirements relating to any such Taxes.
Section 8.10 Miscellaneous. (a) Seller and Buyer agree to treat all
payments made by either of them to or for the benefit of the other (including
any payments to the Company or any Subsidiary) under this Article VIII, under
other indemnity provisions of this Agreement as adjustments to the Purchase
Price.
(b) Notwithstanding any other provision in this Agreement to the
contrary, Seller's obligation to indemnify Buyer, the Company, and its
Subsidiaries with respect to Taxes
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shall not extend to any Taxes attributable to the deduction for the risk premium
payment made pursuant to Article VII hereof.
(c) Seller will use its best efforts before the Closing Date to
pursue the submission to the Internal Revenue Service as disclosed to Buyer in a
letter from Seller to Buyer dated August 26, 1999.
(d) The representations and warranties contained in Sections 4.14
and 4.26(a)(iv) shall terminate as of the Closing Date.
ARTICLE IX
CONDITIONS TO CLOSING
Section 9.1 Conditions to Buyer's Obligations. In addition to the
conditions set forth in Section 9.3, the obligations of Buyer to effect the
Closing shall be subject to the following conditions, any one or more of which
may be waived in writing by Buyer:
(a) The representations and warranties of Seller set forth in this
Agreement shall be true and correct in all material respects as of the
date of this Agreement and as of the Closing Date as though made on and as
of the Closing Date (except that any such representation and warranty that
is given as of a particular date or period and relates solely to such
particular date or period shall be true and correct only as of such date
or period); provided, however, that with respect to any representation or
warranty or portion thereof that is qualified by Material Adverse Effect,
materiality or similar qualifier, such representation or warranty or
portion thereof shall be true and correct in all respects;
(b) Seller shall have performed and complied with in all material
respects all agreements, covenants, obligations and conditions required by
this Agreement to be performed or complied with by Seller on or prior to
the Closing Date;
(c) Seller shall have caused to be delivered to Buyer a certificate
executed by a duly authorized officer of Seller certifying that the
conditions set forth in this Section 9.1 have all been satisfied;
(d) The Company shall not have commenced a voluntary case or
proceeding under any bankruptcy law and, if an involuntary case shall have
been commenced against the Company under any bankruptcy law, such case
shall have been dismissed within 60 days after its commencement;
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(e) The transactions contemplated by the proxy statement of
RGA dated July 23, 1999 shall have been consummated in all material
respects on the terms set forth in such proxy statement, including,
without limitation, the reclassification of RGA's Non-Voting Common
Stock into Common Stock at the exchange rate set forth in such proxy
statement;
(f) Any approvals or orders required in connection with the
Reorganization Proceeding in order to permit the consummation of the
transactions contemplated by this Agreement shall have been obtained,
and (i) such approvals or orders shall have become final and
nonappealable, or (ii) the period for appealing any such approvals or
orders shall have passed, one or more appeals of such approvals or
orders shall have been timely taken and not withdrawn, any such
approvals or orders shall not have been stayed or reversed prior to the
Closing, and Buyer shall have determined, in its sole discretion,
exercised in good faith, that any such appeals are unlikely to
invalidate Buyer's title to the Shares; and
(g) GALIC shall not be subject to a then pending
rehabilitation proceeding under Section 375.1165 of the Missouri
Insurance Code.
Section 9.2 Conditions to Seller's Obligations. In addition to
the conditions set forth in Section 9.3, the obligations of Seller to effect the
Closing shall be subject to the following conditions, any one or more of which
may be waived in writing by Seller:
(a) The representations and warranties of Buyer set forth in
this Agreement shall be true and correct in all material respects as of
the date of this Agreement and as of the Closing Date as though made on
and as of the Closing Date (except that any such representation and
warranty that is given as of a particular date or period and relates
solely to such particular date or period shall be true and correct only
as of such date or period); provided, however, that with respect to any
representation or warranty or portion thereof that is qualified by
Material Adverse Effect, materiality or similar qualifier, such
representation or warranty or portion thereof shall be true and correct
in all respects;
(b) Buyer shall have performed and complied with in all
material respects all agreements, covenants, obligations and conditions
required by this Agreement to be performed or complied with by Buyer on
or prior to the Closing Date;
(c) Buyer shall have caused to be delivered to Seller a
certificate executed by a duly authorized officer of Buyer
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certifying that the conditions set forth in this Section 9.2 have all
been satisfied; and
(d) Any approvals or orders required in connection with the
Reorganization Proceeding in order to permit the transactions
contemplated by this Agreement shall have been obtained, and such
approvals or orders shall not have been stayed or reversed prior to the
Closing.
Section 9.3 Mutual Conditions. The obligations of each of
Buyer and Seller to effect the Closing shall be subject to the following
conditions, any one or more of which may be waived in writing, as to itself, by
either party:
(a) No temporary restraining order, preliminary or permanent
injunction or other order issued by a court of competent jurisdiction
or other legal restraint or prohibition preventing the consummation of
the transactions contemplated by this Agreement shall be in effect;
(b) All approvals of Governmental Authorities required to
consummate the transactions contemplated hereby shall have been
obtained and shall remain in full force and effect and all statutory
waiting periods in respect thereof shall have expired;
(c) In respect of the notifications of Buyer and Seller
pursuant to the HSR Act, the applicable waiting period and any
extensions thereof shall have expired or been terminated;
(d) Buyer, Seller and Escrow Agent shall have duly executed
and delivered the Escrow Agreement;
(e) The Reorganization Plan as approved in the Reorganization
Proceeding shall contain substantially the terms specified in Exhibit A
and such other terms as are reasonably acceptable to Buyer and Seller.
ARTICLE X
SURVIVAL OF REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS; INDEMNIFICATION
Section 10.1 Survival. (a) The representations and warranties
of the parties set forth in this Agreement shall terminate on the date that is
two years after the Closing Date. Notice with respect to any claim in respect of
any inaccuracy in or breach of any representation or warranty shall be in
writing and shall be given to the party against which such claim is asserted on
or before the date on which such representation or warranty terminates.
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(b) All covenants and agreements made by the parties to this
Agreement which contemplate performance following the Closing Date shall survive
the Closing Date. All other covenants and agreements shall not survive the
Closing Date and shall terminate as of the Closing; provided, however, that if
any such covenant or agreement is breached on or prior to the Closing Date, the
non-breaching party shall retain all rights and remedies with respect to such
breach following the Closing Date.
Section 10.2 Obligation of Seller to Indemnify. Subject to the
limitations set forth in Sections 10.1, 10.5, 10.6 and 10.7, Seller shall
indemnify, reimburse, defend and hold harmless Buyer and its directors,
officers, employees, Affiliates, and their respective successors and assigns
from and against any Loss incurred by any of them based upon, arising out of or
otherwise in respect of (i) any inaccuracy in or any breach of any
representation or warranty of Seller without taking into account, in determining
whether any such inaccuracy or breach exists or has occurred, any qualifier in
any representation or warranty or portion thereof as to Material Adverse Effect,
materiality or similar qualifier;(ii) the nonfulfillment on the part of Seller
of any unwaived covenant or agreement set forth in this Agreement; (iii) any
direct or derivative Action brought or threatened within three years after the
Closing Date by any Person of any kind or nature whatsoever and based on any
legal theory whatsoever (a) (other than non-derivative claims of Seller) seeking
relief as a result of Buyer's acquisition of the Shares, (b) resulting from
alleged breaches occurring on or after July 15, 1999 of contracts relating to
the Stable Value Business or (c) arising out of the financial distress of GALIC
relating to the Stable Value Business (the "Indemnified Litigation"); (iv) any
and all indemnification claims by officers, directors or employees of Seller,
the Company, GALIC, any Subsidiary, RGA, any RGA Subsidiary, Conning or any
Conning Subsidiary or payments made by the Company, any Subsidiary, RGA, any RGA
Subsidiary, Conning or any Conning Subsidiary with respect to the items set
forth in clause (iii) above, including without limitation, any indemnification
of any employee, officer or director (other than a director of RGA or Conning
who is not, and has never been, an officer or employee of Seller, the Company,
GALIC, any subsidiary, RGA, any RGA Subsidiary, Conning or any Conning
Subsidiary) of any such Persons; (v) all liabilities relating to any Seller Plan
not listed in Schedule 4.13 (other than a Seller Plan that does not have an
aggregate lifetime present value liability in excess of $500,000); and (vi) all
liabilities relating to any additional or accelerated compensation, benefits or
other rights under a Seller Plan or other contract or arrangement for the
benefit of any Company Employee (or any non-employee director or independent
contractor of the Company, any Subsidiary, RGA, any RGA Subsidiary, Conning or
any Conning Subsidiary) resulting from the transactions contemplated by this
Agreement being considered to constitute a "change in control" or similar
triggering event.
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Section 10.3 Obligation of Buyer to Indemnify. Subject to the
limitations set forth in Sections 10.1, 10.5 and 10.7, Buyer shall indemnify,
defend and hold harmless Seller and its directors, officers, employees,
Affiliates, and their respective successors and assigns from and against any
Loss incurred by any of them based upon, arising out of or otherwise in respect
of (i) any inaccuracy in or breach of any representation or warranty of Buyer
(after taking into account the exceptions to such representations and warranties
which are set forth on the Schedules related to such representations and
warranties), and (ii) the nonfulfillment on the part of Buyer of any unwaived
covenant or agreement set forth in this Agreement which survives the Closing
Date in accordance with Section 10.1.
Section 10.4 Notice and Opportunity to Defend Against Third
Party Claims. (a) Promptly after receipt from any third party by either party
hereto (the "Indemnitee") of a notice of any demand, claim or circumstance that,
immediately or with the lapse of time, would give rise to a claim or the
commencement (or threatened commencement) of any action, proceeding or
investigation (an "Asserted Liability") that may result in a Loss for which
indemnification may be sought hereunder, the Indemnitee shall give written
notice thereof (the "Claims Notice") to the party obligated to provide
indemnification pursuant to Section 10.2 or 10.3 (the "Indemnifying Party");
provided, however, that a failure to give such notice shall not prejudice the
Indemnitee's right to indemnification hereunder except to the extent that the
Indemnifying Party is actually prejudiced thereby. The Claims Notice shall
describe the Asserted Liability in reasonable detail, and shall indicate the
amount (estimated, if necessary) of the Loss that has been or may be suffered by
the Indemnitee.
(b) The Indemnifying Party may elect to compromise or defend,
at its own expense and by its own counsel, any Asserted Liability. If the
Indemnifying Party elects to compromise or defend such Asserted Liability, it
shall, within 20 Business Days following its receipt of the Claims Notice (or
sooner, if the nature of the Asserted Liability so requires) notify the
Indemnitee of its intent to do so, and the Indemnitee shall cooperate, at the
expense of the Indemnifying Party, in the compromise of, or defense against,
such Asserted Liability. If the Indemnifying Party elects not to compromise or
defend the Asserted Liability, fails to notify the Indemnitee of its election as
herein provided or contests its obligation to provide indemnification under this
Agreement, the Indemnitee may pay, compromise or defend such Asserted Liability.
Notwithstanding the foregoing, neither the Indemnifying Party nor the Indemnitee
may settle or compromise any Asserted Liability without the consent of the other
party; provided, however, that such consent to settlement or compromise shall
not be unreasonably withheld. In any event, the Indemnitee and the Indemnifying
Party may participate, at their own expense, in the defense of such Asserted
Liability. If the Indemnifying Party chooses to defend
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any Asserted Liability, the Indemnitee shall make available to the Indemnifying
Party any books, records or other documents within its control that are
necessary or appropriate for such defense.
Section 10.5 Net Indemnity. The amount of any Loss from and
against which either party is liable to indemnify, reimburse, defend and hold
harmless the other party or any other Person pursuant to Section 10.2 or Section
10.3 shall be reduced by any insurance or other recoveries or any Tax benefit
that such Indemnitee actually realizes as a result of or in connection with such
Loss and increased by any Taxes such Indemnitee actually realizes in respect of
indemnification for such Loss.
Section 10.6 Tax Indemnification. Notwithstanding any
provision of this Article X or any other provision of this Agreement, any issue
or matter relating to Taxes (including all representations and warranties
contained in Section 4.14 and 4.26(iv)) shall be governed solely by Article
VIII.
Section 10.7 Limits on Indemnification. (a) No party shall
have any right to seek indemnification under this Agreement (i) as to any
individual item or series of related items of Loss, to the extent such Loss is
less than $25,000, (ii) with respect to Losses contemplated by Section 10.2(i)
which would otherwise be indemnifiable hereunder incurred by such party
(including Losses incurred by all other Indemnitees affiliated with or related
to such party) until such Losses exceed $15 million in the aggregate, after
insurance or other recoveries and on an after-tax basis, as provided in Section
10.5, and such party (including such affiliated or related Persons) shall only
be entitled to be indemnified for Losses in excess of such aggregate amount,
(iii) for punitive, special or consequential damages (other than in connection
with Indemnified Litigation or litigation not disclosed to Buyer in breach of
Section 4.8), or (iv) in respect of Losses to the extent such Losses result from
or arise out of actions taken by such party or an Affiliate, employee,
representative or agent thereof after the Closing not contemplated by this
Agreement and not required by Applicable Law. After the Closing, the remedies
provided by this Article X shall be the sole and exclusive remedy for the
parties to this Agreement with respect to any dispute arising from, or related
to, this Agreement, except in the case of fraud and except that specific
performance shall continue to be available.
(b) Notwithstanding any provision of this Article X, the
liability of Seller under this Article X shall be limited to the Purchase Price
paid to the Escrow Agent pursuant to the terms of this Agreement and Buyer
agrees that its sole recourse shall be limited to the funds paid by Seller to
the Escrow Agent.
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ARTICLE XI
TERMINATION
Section 11.1 Termination. (a) This Agreement may be
terminated on or prior to the Closing Date only as follows:
(i) by mutual written consent of Buyer and Seller;
(ii) by either Buyer or Seller if a condition to its
obligation to perform becomes incapable of fulfillment, provided,
however, that the right to terminate this Agreement pursuant to this
Section 11.1(a)(ii) shall not be available to any party if its
condition to perform became incapable of fulfillment due to its failure
to fulfill any obligation under this Agreement;
(iii) by Buyer if Seller (A) breaches or fails in any
material respect to perform or comply with any of its material
covenants or agreements contained herein, or (B) breaches any
representation or warranty that is qualified as to Material Adverse
Effect, or breaches any other representation or warranty which breach
would have a Material Adverse Effect, and such breach is not cured to
the reasonable satisfaction of Buyer within 30 Business Days after
Buyer has provided written notice thereof to Seller;
(iv) by Seller if Buyer (A) breaches or fails in any material
respect to perform or comply with any of its material covenants or
agreements contained herein, or (B) breaches any representation or
warranty in any material respect and such breach is not cured to the
reasonable satisfaction of Seller within 30 Business Days after Seller
has provided written notice thereof to Buyer;
(v) subject to Section 6.15, by either Buyer or Seller upon
written notice to the other if the Closing Date shall not have occurred
by August 26, 2000; provided, however, that the right to terminate this
Agreement pursuant to this clause (v) shall not be available to any
party whose failure to fulfill any of its obligations under this
Agreement resulted in the Closing not occurring by such date;
(vi) Subject to Section 11.3, by Seller, upon five days' prior
notice to Buyer, if, as a result of a Proposal with respect to a
Control Transaction by a party other than Buyer or any of its
affiliates, (A) the Board of Directors of Seller determines in good
faith following consultation with outside counsel and financial
advisors that acceptance of such Proposal is necessary for the Board of
Directors to act consistent with its fiduciary duties under applicable
law or (B) the Director of the Department directs that Seller terminate
this Agreement;
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(vii) by Buyer if GALIC or any material Life Insurance
Subsidiary is placed in delinquency proceedings or reorganization
proceedings unless agreed to by Buyer; provided, however, that Buyer
shall not have the right to terminate this Agreement under this clause
(vii) as a result of a rehabilitation proceeding with respect to GALIC
which is instituted in order to effectuate the transactions
contemplated by this Agreement and such proceeding is completed within
21 days or such longer period determined by Buyer in its sole
discretion as will not result in a material diminution of the value of
GALIC;
(viii) by Buyer if an order approving the Reorganization
Proceeding or this Agreement shall have been appealed and stayed and
such stay shall not have been lifted within 15 days after it was
issued; and
(ix) by Buyer if, after the date hereof, there shall have
occurred a change that fundamentally impairs in a manner that cannot be
remedied within a reasonable period of time the core business
operations of the Company and its Subsidiaries, taken as a whole and is
not attributable to (1) general conditions applicable to the economy of
the United States or elsewhere, including changes in interest rates and
in the stock or other financial markets, (2) conditions generally
affecting the life insurance, life reinsurance or securities industries
or (3) conditions or effects resulting from or relating to the
announcement or the existence or terms of this Agreement or the
consummation of the transactions contemplated hereby.
(b) The termination of this Agreement shall be effectuated by
the delivery of a written notice of such termination from the party terminating
this Agreement to the other party.
Section 11.2 Obligations upon Termination. In the event that
this Agreement shall be terminated pursuant to Section 11.1, all obligations of
the parties hereto under this Agreement shall terminate and there shall be no
liability of any party hereto to any other party except (i) as set forth in
Section 6.2, Section 6.3, Section 6.4(c), Section 7.1(c) and Section 11.3 and
(ii) that nothing herein will relieve any party from liability for any breach of
this Agreement.
Section 11.3 Termination Fee. Seller shall pay Buyer a fee of
$50,000,000, which amount shall be payable by Wire Transfer, within one business
day following any termination of this Agreement by Seller pursuant to Section
11.1(a)(vi). The Company acknowledges that the agreements contained in this
Section 11.3 are an integral part of the transactions contemplated in this
Agreement, and that, without these agreements, Buyer would not enter into this
Agreement; accordingly, if Seller fails to promptly pay the amount due
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pursuant to this Section 11.3, and, in order to obtain such payment, Buyer
commences a suit which results in a judgment against Seller for the full amount
of the fee set forth in this Section 11.3, Seller shall pay to Buyer its costs
and expenses (including attorneys' fees) in connection with such suit, together
with interest on the amount of the fee at the rate of 12% per annum from the
date such fee was required to be paid. No termination of this Agreement by
Seller pursuant to Section 11.1(a)(vi) shall be effective until receipt by Buyer
of the amounts contemplated by the first sentence of this Section 11.3.
ARTICLE XII
MISCELLANEOUS
Section 12.1 Amendments. This Agreement may not be amended,
altered or modified except by written instrument executed by Buyer and Seller
and approved by the Department.
Section 12.2 Entire Agreement. (a) This Agreement, the
Ancillary Agreements and the Confidentiality Agreement constitute the entire
understanding of the parties hereto with respect to the transactions
contemplated hereby, and supersede all prior agreements and understandings,
written and oral, among the parties with respect to the subject matter hereof.
(b) Buyer acknowledges that neither Seller or any of its
Affiliates, nor any representative or advisor of any of them, has made any
representation or warranty to Buyer except as specifically made in this
Agreement. In particular, no such Person has made any representation or warranty
to Buyer with respect to: (i) any information or materials distributed by Morgan
Stanley & Co. Incorporated or Goldman, Sachs & Co. in connection with the
proposed sale of the Company and the Subsidiaries, or (ii) any financial
projection or forecast relating to the Company or the Subsidiaries. With respect
to any such projection or forecast delivered by or on behalf of Seller to Buyer,
Buyer acknowledges that: (A) there are uncertainties inherent in attempting to
make such projections and forecasts, (B) it is familiar with such uncertainties,
(C) it is taking full responsibility for making its own evaluation of the
adequacy and accuracy of all such projections and forecasts so furnished to it
and (D) it shall have no claim against any such Person with respect to any such
projection or forecast.
Section 12.3 Interpretation. When reference is made in this
Agreement to any Section, Exhibit or Schedule, such reference is to a Section,
Exhibit or Schedule of this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to
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be followed by the words "without limitation." The phrases "the date of this
Agreement," "the date hereof" and terms of similar import, unless the context
otherwise requires, shall be deemed to refer to the date set forth in the first
paragraph of this Agreement. The words "hereof", "herein", "hereby" and other
words of similar import refer to this Agreement as a whole unless otherwise
indicated. The phrase "to the knowledge of Seller" or any similar phrase shall
be deemed to refer to the actual knowledge of any of the executive officers of
the Company, GALIC, RGA and Conning after due inquiry. Whenever the singular is
used herein, the same shall include the plural, and whenever the plural is used
herein, the same shall include the singular, where appropriate.
Section 12.4 Severability. Any term or provision of this
Agreement which is invalid or unenforceable in any jurisdiction shall, as to
that jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, that
provision shall be interpreted to be only so broad as is enforceable.
Section 12.5 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given and delivered if they
are: (a) delivered in person, (b) transmitted by facsimile (with confirmation),
(c) delivered certified or registered mail (return receipt requested), or (d)
delivered by an express courier (with confirmation) to a party at its address
listed below (or at such other address as such party shall deliver to the other
party by like notice):
To Seller: General American Mutual
Holding Company
700 Market Street
St. Louis, MO 63101-1887
Facsimile: (314) 444-0510
Attention: Robert Banstetter
With a concurrent
copy to: LeBoeuf, Lamb, Greene & MacRae,
L.L.P.
125 West 55th Street
New York, NY 10019-4513
Facsimile: (212) 424-8500
Attention: Alexander M. Dye
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To Buyer: Metropolitan Life Insurance Company
One Madison Avenue
New York, New York 10011-3690
Facsimile: (212) 679-4523
Attention: General Counsel
With a concurrent
copy to: Dewey Ballantine LLP
1301 Avenue of the Americas
New York, NY 10019-6092
Facsimile: (212) 259-6333
Attention: Jonathan L. Freedman
Jeff S. Liebmann
Section 12.6 Binding Effect; Persons Benefitting; No
Assignment. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and the respective successors and permitted assigns of the
parties and such Persons. Nothing in this Agreement is intended or shall be
construed to confer upon any entity or person other than the parties hereto and
their respective successors and permitted assigns any right, remedy or claim
under or by reason of this Agreement or any part hereof. This Agreement may not
be assigned by either party hereto without the prior written consent of the
other party, except that the Buyer may assign its rights hereunder to a wholly
owned subsidiary with the prior written consent of the Department, which consent
shall not be unreasonably withheld.
Section 12.7 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same agreement, it being
understood that all of the parties need not sign the same counterpart.
Section 12.8 No Prejudice. This Agreement has been jointly
prepared by the parties hereto and the terms hereof shall not be construed in
favor of or against any party on account of its participation in such
preparation.
Section 12.9 Governing Law. THIS AGREEMENT, THE LEGAL
RELATIONS BETWEEN THE PARTIES AND THE ADJUDICATION AND THE ENFORCEMENT THEREOF
SHALL BE GOVERNED BY AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE
SUBSTANTIVE LAWS OF THE STATE OF MISSOURI.
Section 12.10 Specific Performance. Each party hereto
acknowledges and agrees that the other party hereto would be irreparably damaged
in the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. Accordingly,
each party hereto agrees that it shall be entitled to an injunction or
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injunctions to prevent breaches of the provisions of this Agreement by the other
party and to enforce specifically this Agreement and the terms and provisions
hereof in any action instituted in any court of the United States or any state
thereof having subject matter jurisdiction, in addition to any other remedy to
which either party may be entitled, at law or in equity.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first set forth above.
GENERAL AMERICAN MUTUAL
HOLDING COMPANY
By: /s/ Richard A. Liddy
-------------------------------
Name: Richard A. Liddy
Title: Chairman, President
and Chief Executive Officer
METROPOLITAN LIFE INSURANCE COMPANY
By: /s/ Robert H. Benmosche
-----------------------
Name: Robert H. Benmosche
Title: Chairman and Chief
Executive Officer
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Exhibit 3
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of November
23, 1999, by and between REINSURANCE GROUP OF AMERICA, INCORPORATED, a Missouri
corporation (the "Company"), and METROPOLITAN LIFE INSURANCE COMPANY, a New York
mutual life insurance company ("Buyer").
W I T N E S S E T H :
WHEREAS, the Company and Buyer have entered into a Stock Purchase
Agreement (the "Stock Purchase Agreement"), dated as of November 23, 1999,
pursuant to which Buyer shall purchase from the Company shares of the Company's
common stock, par value $0.01 per share (the "Company Common Stock"); and
WHEREAS, the Company wishes to execute and deliver this Agreement in
order to induce Buyer to purchase shares of Company Common Stock under the Stock
Purchase Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement and the Stock Purchase Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound hereby, the parties hereto
hereby agree as follows:
Article I
DEFINITIONS
As used in this Agreement, the following terms have the following
respective meanings:
"Affiliate" shall mean, with respect to any person, any other person
who directly or indirectly controls, is controlled by or is under common control
with such first person. The term "control", for the purposes of this definition,
means the power to direct or cause the direction of the management or policies
of the controlled person, whether through stock ownership, contract or
otherwise.
"Business Day" shall mean any day other than (i) a Saturday, (ii) a
Sunday or (iii) any other day on which banks are authorized or required to close
in New York, New York.
"Buyer" shall have the meaning set forth in the first paragraph hereof
and, with respect to any Registrable Securities transferred on or after the date
hereof in accordance with Section 9.7, shall also have the meaning set forth in
Section 9.7.
"Company" shall have the meaning set forth in the first paragraph
hereof.
"Company Common Stock" shall have the meaning set forth in the recitals
hereto.
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"Confidential Information" shall have the meaning set forth in Section
9.12.
"Controlling persons" shall have the meaning set forth in Section 7.1.
"Counterpart" means a counterpart to this Agreement in the form of
Exhibit A, pursuant to the execution of which a person shall become bound by all
of the terms and conditions of this Agreement.
"Damages" shall have the meaning set forth in Section 7.1.
"Demand Notice" shall have the meaning set forth in Section 2.1.
"Demand Registration" shall have the meaning set forth in Section 2.1.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder.
"Filing Date" shall mean the date that is thirty (30) days after the
date of the Demand Notice.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"person" shall mean an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
business trust, a joint venture, an unincorporated organization or a government
entity or any department, agency or political subdivision thereof.
"Piggyback Registration" shall have the meaning set forth in Section
3.1.
"prospectus" means the prospectus included in a registration statement
(including, without limitation, any prospectus subject to completion and a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any
prospectus supplement, and all other amendments and supplements to such
prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such prospectus.
The terms "register, "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and the declaration or ordering of
effectiveness of such registration statement by the SEC.
"Registrable Securities" shall mean any shares of Company Common Stock
acquired by Buyer pursuant to the Stock Purchase Agreement or its permitted
transferees; provided, that a Registrable Security ceases to be a Registrable
Security when (i) it is registered under the Securities Act and disposed of in
accordance with the registration statement covering it, (ii) it is sold or
transferred in accordance with the requirements of Rule 144 (or similar
provisions then in effect) promulgated by the SEC under the Securities Act
("Rule 144"), or (iii) it is eligible to be
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sold or transferred under Rule 144 without being subject to any holding period
or volume limitations thereunder.
"Registration Expenses" shall have the meaning set forth in Section
6.1.
"SEC" shall mean the United States Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations thereunder.
"Shelf Registration Statement" means a registration statement of the
Company on Form S-3 or any other appropriate form under the Securities Act
including any prospectus included therein, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits, and
all materials incorporated by reference or deemed to be incorporated by
reference in such registration statement, for an offering to be made on a
delayed or continuous basis pursuant to Rule 415 promulgated under the
Securities Act (or similar provisions then in effect) that (i) covers all of the
Registrable Securities pursuant to the provisions of this Agreement, and (ii)
sets forth a plan of distribution as determined by Buyer in accordance with
Section 2.2.
"Stock Purchase Agreement" shall have the meaning set forth in the
recitals hereto.
"Subsidiary" shall mean with respect to any person, any other person,
of which such first person, directly or indirectly, owns or controls 50% or more
of the securities or other interests entitled to vote under ordinary
circumstances in the election of directors or others performing similar
functions with respect to such other person, or to otherwise control such other
person.
"Termination Date" shall have the meaning set forth in Section 2.1.
ARTICLE II
DEMAND REGISTRATION
Section 2.1. Request for Shelf Registration. Buyer may make one (1)
written request to the Company (a "Demand Notice") that the Company register the
offer and sale of all or any part of Buyer's Registrable Securities under the
Securities Act (a "Demand Registration"). Upon receipt of the Demand Notice, the
Company shall: (i) prepare and file with the SEC on or prior to the Filing Date
a Shelf Registration Statement, (ii) use its reasonable best efforts to cause
such Shelf Registration Statement to become effective and (iii) use its
reasonable best efforts to keep such Shelf Registration Statement continuously
effective until the earlier of (A) the date when all Registrable Securities
covered by the Shelf Registration Statement have been sold, (B) the date on
which the Registrable Securities covered by the Shelf Registration Statement are
eligible to be sold or transferred under Rule 144 without being subject to any
holding period or volume limitations thereunder (provided that Buyer has
received an opinion of counsel to the Company who is reasonably acceptable to
Buyer covering the matters referred to in this clause (B) and
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such opinion is reasonably satisfactory to Buyer) and (C) the second (2nd)
anniversary of the date hereof (the "Termination Date").
Section 2.2. Selection of Plan of Distribution; Underwriters. The
offering of such Registrable Securities pursuant to the Shelf Registration
Statement shall be in the form of either (x) an underwritten offering or (y)
through the use of brokers or in privately negotiated transactions, in either
case as selected by Buyer within no more than five (5) Business Days following
the date of the Demand Notice. In the event that Buyer elects that the offering
be an underwritten offering, Buyer shall also select one or more nationally
recognized firms of investment bankers that is or are reasonably acceptable to
the Company, to act as the lead managing underwriter or underwriters in
connection with such offering and shall select any additional investment bankers
or managers to be used in connection with such offering. The Company and Buyer
shall enter into a customary underwriting agreement with such underwriter(s)
(and Buyer may at its option require that the representations, warranties and
covenants of the Company to or for the benefit of the underwriter(s) also be
made for the benefit of Buyer).
Section 2.3. Permitted Delay in Filing and Suspensions of Sales.
Notwithstanding the foregoing, if the Company determines in good faith that such
registration, or further sales under an effective Shelf Registration Statement,
will (1) have a material detrimental effect, as reasonably determined in good
faith by the Board of Directors of the Company, on the completion of a
transaction currently being negotiated or a plan currently being considered by
the Board of Directors of the Company that would, if completed, be material to
the Company and its Subsidiaries taken as a whole at the time the right to delay
or withhold efforts or suspend sales is exercised (whether or not a final
decision has been made to undertake such transaction or plan), or (2) involve
initial or continuing disclosure obligations that are not in the best interests
of the Company's stockholders, as reasonably determined in good faith by the
Board of Directors of the Company, then upon advance written notice to Buyer (a)
the Company may delay in filing the Shelf Registration Statement and may
withhold efforts to cause the Shelf Registration Statement to become effective,
but not more than once and for not more than thirty (30) days, or (b) the
Company may request Buyer to, and Buyer shall, suspend any further sales under
the Shelf Registration Statement (or under a registration statement of the
Company which includes Registrable Securities pursuant to Section 3.1), but not
more than twice in any two-year period and for not more than thirty (30) days
each. Notwithstanding anything to the contrary that may be contained in this
Agreement, if the Company exercises its right to delay or to withhold efforts or
suspend sales, the Company shall use its reasonable best efforts to have the
Shelf Registration Statement or such other registration statement filed or
declared effective, or amended (or otherwise bringing the Shelf Registration
Statement or such other registration statement current with appropriate Exchange
Act filings), as the case may be, at the earliest reasonably practicable date
after the Company's reasons for delaying or withholding efforts or suspending
sales are no longer applicable (but subject to the time limitations in the
immediately preceding sentence).
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ARTICLE III
PIGGYBACK REGISTRATIONS
Section 3.1. Right to Piggyback. Whenever the Company proposes to
register (including on behalf of a selling stockholder) any shares of Company
Common Stock under the Securities Act (except for the registration of shares of
Company Common Stock to be offered pursuant to an employee benefit plan on Form
S-8 or pursuant to a registration made on Form S-4, or any successor forms or
any form that does not include substantially the same information, other than
information relating to selling shareholders or their plan of distribution, that
would be required to be included in a registration statement covering the sale
of the Registrable Securities) at any time other than pursuant to a Demand
Registration and the registration form to be used may be used for the
registration of the Registrable Securities (a "Piggyback Registration"), it will
so notify Buyer in writing no later than the earlier to occur of (i) the tenth
(10th) day following the Company's receipt of notice of exercise of other demand
registration rights, or (ii) thirty (30) days prior to the anticipated date of
filing. Subject to the provisions of Section 3.2, the Company will include in
the Piggyback Registration all Registrable Securities with respect to which the
Company has received written requests for inclusion from Buyer within ten (10)
Business Days after Buyer's receipt of the Company's notice. Buyer may withdraw
all or any part of the Registrable Securities from a Piggyback Registration at
any time before five (5) Business Days prior to the effective date of the
Piggyback Registration. The Company, Buyer and any person who hereafter become
entitled to register its securities in a registration initiated by the Company
shall sell their securities on the same terms and conditions.
Section 3.2. Priority on Piggyback Registrations. If the managing
underwriter advises the Company in writing (a copy of which shall be provided to
Buyer) that a limitation on the total number of securities to be included in the
Piggyback Registration is advisable in order to avoid a likely material and
adverse effect on the success of the offering, the Company will so advise Buyer
and will include the securities in the registration in the following order of
priority: (i) first, all securities the Company or the holder for whom the
Company is effecting the registration, as the case may be, proposes to sell; and
(ii) second, any other securities requested to be included in the registration
(including Registrable Securities), allocated among the holders of such
securities in proportion (as nearly as practicable) to the number of securities
which each holder requested to be included in the Piggyback Registration.
Section 3.3. Underwriters. If any Piggyback Registration is an
underwritten offering, the Company and Buyer shall enter into a customary
underwriting agreement with the underwriter(s) administering the offering. Buyer
may not participate in any Piggyback Registration without (a) agreeing to sell
securities on the basis provided in the underwriting arrangements approved by
the Company, and (b) promptly completing, executing and delivering all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required by the underwriting arrangements.
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ARTICLE IV
RESTRICTIONS ON PUBLIC SALES
Section 4.1. Restrictions on Public Sales. The Company agrees not to
make any public sale or distribution of its equity securities, or any securities
convertible into or exchangeable or exercisable for its equity securities,
including a sale under Regulation D under the Securities Act or under any other
exemption of the Securities Act (except pursuant to registrations on Forms S-8
or S-4 or any successor form), during the two (2) days prior to and the 180 days
after the effective date of any underwritten Demand Registration or any
underwritten Piggyback Registration unless the managing underwriter(s) agrees
otherwise.
ARTICLE V
REGISTRATION PROCEDURES
Section 5.1. Obligations of the Company. Whenever the Company is
required to effect or cause the registration of the offer and sale of
Registrable Securities pursuant to Article II or Article III, the Company will
use its reasonable best efforts to effect or cause the registration of the offer
and sale of such Registrable Securities in accordance with the intended
method(s) of disposition thereof as quickly as reasonably practicable, and in
connection with any such request the Company shall:
(a) prepare and file with the SEC a registration statement on the
appropriate form and use its reasonable best efforts to cause the registration
statement to become effective. A reasonable time before filing a registration
statement or prospectus or before filing any amendments or supplements thereto,
the Company will furnish to Buyer and Buyer's counsel copies of all documents
proposed to be filed for their review, comment and approval, which comment or
approval shall be delivered within a reasonable time after receipt;
(b) immediately notify Buyer of any stop order threatened or issued by
the SEC and use its reasonable best efforts to prevent the entry of a stop order
or, if entered, to have it rescinded or otherwise removed;
(c) subject to Section 2.3, prepare and file with the SEC such
amendments, supplements and post-effective amendments to the registration
statement and the corresponding prospectus necessary to keep the registration
statement continuously effective until (x) the Termination Date in the case of a
Shelf Registration Statement or (y) otherwise for 180 days or such shorter
period as may be required to sell all Registrable Securities covered by the
registration statement; and comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by the registration
statement during each period in accordance with Buyer's intended method of
disposition as set forth in the registration statement;
(d) furnish to Buyer a sufficient number of copies of the registration
statement, each amendment and supplement thereto (in each case including all
exhibits), the corresponding
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<PAGE> 7
prospectus (including each preliminary prospectus), and such other documents as
Buyer may reasonably request to facilitate the disposition of Buyer's
Registrable Securities;
(e) register or qualify the Registrable Securities under securities or
blue sky laws of jurisdictions in the United States as Buyer requests and do any
and all other reasonable acts and things that may be necessary or advisable to
enable Buyer to consummate the disposition of its Registrable Securities in such
jurisdiction, provided that the Company shall not be required to subject itself
to service of process or taxation in such jurisdictions;
(f) notify Buyer of any event as a result of which the prospectus or
any document incorporated therein by reference contains an untrue statement of a
material fact or omits to state any material fact necessary to make the
statements therein not misleading in light of the circumstances under which such
statements were made, and, subject to Section 2.3, prepare a supplement or
amendment to the prospectus or any such document incorporated therein so that
thereafter the prospectus will not contain an untrue statement of a material
fact or omit to state any material fact necessary to make the statements therein
not misleading in light of the circumstances under which such statements were
made;
(g) cause all registered Registrable Securities to be listed on each
securities exchange, if any, on which similar securities issued by the Company
are then listed;
(h) provide an institutional transfer agent and registrar and a CUSIP
number for all Registrable Securities on or before the effective date of the
registration statement;
(i) enter into such reasonably customary agreements (including an
underwriting agreement in reasonably customary form) and take all other actions
in connection with those agreements as Buyer or the underwriter(s), if any,
reasonably request to expedite or facilitate the disposition of the Registrable
Securities (and Buyer may at its option require that the representations,
warranties and covenants of the Company to or for the benefit of the
underwriter(s) also be made for the benefit of Buyer);
(j) make reasonably available for inspection by Buyer, any underwriter
participating in any disposition pursuant to the registration statement, and any
attorney, accountant or other agent of Buyer or such underwriter, all financial
and other records, pertinent corporate documents, and properties of the Company,
and cause the Company's officers, directors and employees to supply all
information reasonably requested by Buyer or such underwriter, attorney,
accountant or other agent in connection with the registration statement;
provided that an appropriate confidentiality agreement reasonably satisfactory
to the Company is executed by Buyer and such underwriter, attorney, accountant
or other agent;
(k) in connection with any underwritten offering, obtain a "cold
comfort" letter from the Company's independent public accountants in customary
form and covering those matters customarily covered by "cold comfort" letters as
Buyer or the managing underwriter reasonably requests, addressed to Buyer, the
Company and the underwriter(s);
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<PAGE> 8
(l) in connection with any underwritten offering, furnish, at the
request of Buyer or any underwriter(s) of the offering, an opinion of counsel
representing the Company for the purposes of the registration, in the form and
substance customarily given to underwriters in an underwritten public offering
and reasonably satisfactory to counsel representing Buyer and the underwriter(s)
of the offering, addressed to Buyer and the underwriter(s);
(m) comply with all applicable rules and regulations of the SEC, and,
if applicable, make available to its security holders, no later than 90 days
after the end of the 12-month period beginning with the first day of the
Company's first quarter commencing after the effective date of a registration
statement, an earnings statement complying with the provisions of Section 11(a)
and Rule 158 of the Securities Act and covering the period of at least twelve
(12) months, but not more than eighteen (18) months, beginning with the first
month after the effective date of the registration statement;
(n) cooperate with Buyer and each underwriter participating in the
disposition of such Registrable Securities and their respective counsel in
connection with any filings required to be made with the NASD;
(o) in connection with any underwritten offering, participate, to the
extent reasonably requested by Buyer or the managing underwriter or underwriters
for the offering, in customary efforts to sell the securities under the
offering, including, without limitation, participating in "road shows," unless
the Company demonstrates to Buyer's reasonable satisfaction that such
participation will materially interfere with the management of the Company's
business; and
(p) take all other steps reasonably necessary to effect the
registration of the Registrable Securities contemplated hereby.
Section 5.2. Buyer Information. In the event of any registration by
the Company, the Company may request from time to time that Buyer furnish to the
Company information regarding Buyer and its affiliates and associates and the
distribution of the securities subject to the registration, and Buyer shall
furnish all such information reasonably requested by the Company.
Section 5.3. Notice by Buyer. Whenever Buyer has requested that any
Registrable Securities be registered pursuant to this Agreement, Buyer shall
notify the Company, at any time when a prospectus relating thereto is required
to be delivered under the Securities Act, of the happening of any event which to
its knowledge relates to matters concerning Buyer or its Affiliates or
associates, as a result of which the prospectus included in the registration
statement contains an untrue statement of a material fact or omits to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Section 5.4. "Market Stand-Off" Agreement. Buyer, if reasonably
requested in writing by the managing underwriter(s) of an underwritten public
offering of the Company's securities, agrees not to sell, make any short sale
of, loan, grant any option for the purchase of, or otherwise transfer or dispose
of any Registrable Securities owned by Buyer (other than (y) to a Subsidiary
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or Affiliate of Buyer, or (z) Registrable Securities included in such public
offering) without the prior written consent of such managing underwriter(s)
during a period of up to two (2) days prior to and 180 days following the
effective date of such underwritten registration of the Company's securities,
but only to the extent that Registrable Securities owned by Buyer have not been
requested to be included in such underwritten registration following the
Company's compliance with Article III. Such agreement shall be in writing in
form reasonably satisfactory to such managing underwriter(s), and may be
included in the underwriting agreement. The Company may impose stop-transfer
instructions with respect to the securities subject to the foregoing restriction
until the end of the required stand-off period and shall lift such stop-transfer
restrictions immediately upon the end of such period.
ARTICLE VI
REGISTRATION EXPENSES
Section 6.1. Generally. All Registration Expenses incident to the
Company's performance of or compliance with this Agreement shall be paid by the
Company. The term "Registration Expenses" includes, without limitation, all
registration filing fees, professional fees and other expenses of the Company's
compliance with federal and state securities laws (including fees and
disbursements of counsel for the underwriter(s) in connection with state
securities law qualifications and registrations), printing expenses, messenger,
telephone and delivery expenses; fees and disbursements of counsel for the
Company and reasonable fees and disbursements of one counsel for Buyer; fees and
disbursements of all independent certified public accountants (including the
expenses relating to any audit or "cold comfort" letters required by or incident
to the performance of the obligations contemplated by this Agreement); fees and
expenses of the underwriter(s) (excluding discounts and commissions); fees and
expenses of any special experts retained by the Company at the reasonable
request of the managing underwriter(s) in connection with the registration and
as shall be customary in transactions of that kind; and applicable stock
exchange and NASD registration and filing fees. The term "Registration Expenses"
does not include Buyer's internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), any fees or disbursements of any other counsel for Buyer, or
the underwriting discounts or commissions or transfer taxes applicable to the
Registrable Securities, all of which shall be paid by Buyer.
ARTICLE VII
INDEMNIFICATION
Section 7.1. Indemnification by the Company. In the event of any
registration of Registrable Securities under the Securities Act pursuant to this
Agreement, to the fullest extent permitted by law, the Company agrees to
indemnify Buyer, its officers, directors, trustees, partners, employees,
advisors and agents, and each person who controls Buyer (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act), together
with all officers, directors, trustees, partners, employees, advisors and agents
of such controlling person
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(collectively, "Controlling persons"), against all losses, claims, damages,
liabilities, attorneys' fees, costs and expenses and expenses of investigating
and defending any claims (collectively, "Damages") that arise out of, or are
based upon, any untrue or allegedly untrue statement of a material fact
contained in any registration statement under which such Registrable Securities
were registered under the Securities Act or any prospectus or preliminary
prospectus contained therein or any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
contained therein not misleading in light of the circumstances under which such
statements were made, except to the extent the untrue statement or omission
resulted from information that Buyer furnished in writing to the Company
expressly for use therein and except to the extent that the Company advised
Buyer not to dispose of any Registrable Securities pursuant to Section 2.3
hereof and Buyer disregarded such advice. In connection with a firm or best
efforts underwritten offering, to the extent customarily required by the
managing underwriter, the Company will indemnify the underwriters, their
officers, directors, trustees, partners, employees, advisors and agents, and
each person who controls the underwriters (within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act), and each of the
Underwriter's Controlling persons, to the extent customary in such agreements.
Section 7.2. Indemnification by Buyer. In the event of any
registration of Registrable Securities under the Securities Act pursuant to this
Agreement, to the fullest extent permitted by law, Buyer agrees to indemnify the
Company, its officers, directors, trustees, partners, employees, advisors and
agents, and each person who controls the Company (within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act), and each of the
Company's Controlling persons, against any Damages that arise out of, or are
based upon any untrue or allegedly untrue statement of a material fact contained
in any registration statement under which such Registrable Securities were
registered under the Securities Act or any prospectus or preliminary prospectus
contained therein or any omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements contained
therein not misleading in light of the circumstances under which such statements
were made, but only to the extent that the untrue statement or omission is
contained in or omitted from any information Buyer furnished in writing to the
Company expressly for use therein and only in an amount not exceeding the net
proceeds received by Buyer with respect to securities sold pursuant to such
registration statement and except to the extent that the Company advised Buyer
not to dispose of any Registrable Securities pursuant to Section 2.3 hereof and
Buyer disregarded such advice. In connection with a firm or best efforts
underwritten offering, to the extent customarily required by the managing
underwriter, Buyer will indemnify the underwriters, their officers, directors,
trustees, partners, employees, advisors and agents, and each person who controls
the underwriters (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act), and each of the underwriters' Controlling
persons, to the extent customary in such agreements.
Section 7.3. Indemnification Proceedings. Any person entitled to
indemnification under this Agreement will (i) give prompt (but in no event more
than thirty (30) days') notice to the indemnifying party of any claim with
respect to which it seeks indemnification (provided, however, that failure to so
promptly notify the indemnifying party shall not relieve the indemnifying party
from liability except to the extent the indemnifying party is prejudiced
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thereby) and (ii) unless in the indemnified party's reasonable judgment a
conflict of interest may exist between the indemnified and indemnifying parties
with respect to the claim, permit the indemnifying party, at its expense, to
assume the defense of the claim with counsel reasonably satisfactory to the
indemnified party. If the indemnifying party does not assume the defense, the
indemnifying party will not be liable for any compromise or settlement made
without its consent or judgment consented to without its consent, but any such
consent shall not be unreasonably withheld. An indemnifying party who is not
entitled to or elects not to assume the defense of a claim will not be under an
obligation to pay the reasonable fees and expenses of more than one counsel for
all parties indemnified by the indemnifying party with respect to the claim,
unless in the reasonable judgment of any indemnified party a conflict of
interest may exist between the indemnified party and any other indemnified party
with respect to the claim, in which event the indemnifying party shall be
obligated to pay the reasonable fees and expenses of no more than one additional
counsel for the indemnified parties. Notwithstanding anything to the contrary
that may be contained in this Section 7.3, the indemnifying party shall not,
without the indemnified party's prior written consent, which consent shall not
be unreasonably withheld, settle or compromise any claim or consent to the entry
of any judgment in respect thereof which imposes any future obligation on the
indemnified party or which does not include, as an unconditional term thereof,
the giving by the claimant or plaintiff to the indemnified party, a release from
all liability in respect of such claim.
Section 7.4. Contribution. If the indemnification provided for in
Sections 7.1 or 7.2 is unavailable to an indemnified party in respect of any
Damages referred to therein, then each indemnifying party thereunder shall
contribute to the amount paid or payable by such indemnified party as a result
of such Damages in such proportion as is appropriate to reflect the relative
fault of and relative benefit to the Company and Buyer in connection with the
statements or omissions that resulted in such Damages, as well as any other
relevant equitable considerations. The relative fault of the Company and Buyer
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or by
Buyer and the parties' relative intent and knowledge. The parties hereto agree
that it would not be just and equitable if contribution pursuant to this Section
7.4 were determined by pro rata allocation or by any other method of allocation
that does not take account of the equitable considerations referred to in the
immediately preceding sentence. Notwithstanding anything herein to the contrary,
Buyer shall not be required to contribute any amount in excess of the amount by
which the net proceeds of the offering (before deducting expenses, if any)
received by Buyer exceeds the amount of any Damages that Buyer has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
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ARTICLE VIII
SECURITIES ACT AND EXCHANGE ACT FILINGS
Section 8.1. Securities Act and Exchange Act Filings. The Company
covenants that it will promptly file all documents required to be filed by it
under the Securities Act and the Exchange Act and the rules and regulations
promulgated by the SEC thereunder, including, without limitation, pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, and it will take such
further action as Buyer reasonably may request, all to the extent required from
time to time, so that the Company will qualify for registration on Form S-3 and
to enable Buyer to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by (i) Rule 144
under the Securities Act, or (ii) any similar rule or regulation hereafter
promulgated by the SEC. Upon the request of Buyer, the Company will deliver to
Buyer a written statement as to whether it has complied with Rule 144's or any
successor rule's requirements.
ARTICLE IX
MISCELLANEOUS
Section 9.1. Recapitalizations, Exchanges, etc. Notwithstanding
anything to the contrary that may be contained in this Agreement, the provisions
of this Agreement shall apply to the full extent set forth herein with respect
to (i) the shares of Company Common Stock, (ii) any and all shares of voting
common stock of the Company, into which the shares of Company Common Stock are
converted, exchanged or substituted in any recapitalization or other capital
reorganization by the Company and (iii) any and all equity securities of the
Company or any successor or assign of the Company (whether by merger,
consolidation, sale of assets or otherwise) which may be issued in respect of,
in conversion of, in exchange for or in substitution of, the shares of Company
Common Stock, and shall be appropriately adjusted for any stock dividends,
splits, reverse splits, combinations, recapitalizations and the like occurring
after the date hereof.
Section 9.2. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more counterparts have been signed by
each party hereto and delivered to the other party. Copies of executed
counterparts transmitted by telecopy, telefax or other electronic transmission
service shall be considered original executed counterparts for purposes of this
Section, provided receipt of copies of such counterparts is confirmed.
Section 9.3. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Missouri without reference
to the choice of law principles thereof, except for the validity of corporate
action by the parties hereto, which shall be governed by and construed in
accordance with the laws of the jurisdiction of incorporation or organization of
such party.
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Section 9.4. Entire Agreement. This Agreement, and the certificates,
instruments and other documents delivered pursuant hereto, contain the entire
agreement between the parties hereto with respect to the subject matter hereof
and there are no agreements, understandings, representations or warranties
between the parties hereto other than those set forth or referred to herein.
This Agreement is not intended to confer upon any person not a party hereto any
rights or remedies hereunder.
Section 9.5. Notices. All notices and other communications hereunder
shall be sufficiently given for all purposes hereunder if in writing and
delivered personally, sent by documented overnight delivery service or, to the
extent receipt is confirmed, telecopy, telefax or other electronic transmission
service to the appropriate address or number as set forth below. If sent via
overnight delivery service, notice is deemed to have been received on the next
succeeding Business Day. Notices to the Company shall be addressed to:
Reinsurance Group of America, Incorporated
1370 Timberlake Manor Parkway
Chesterfield, Missouri 63107-6039
Attention: Jack B. Lay, Executive Vice President
and Chief Financial Officer
Telecopy: 636-736-7839
with copies to:
Reinsurance Group of America Incorporated
c/o General American Life Insurance Company
700 Market Street
St. Louis, Missouri 63101
Attention: James E. Sherman, Esq.
Telecopy: 314-444-0510
Bryan Cave LLP
One Metropolitan Square
211 North Broadway
St. Louis, Missouri 63102-2750
Attention: R. Randall Wang, Esq.
Telecopy: 314-259-2020
Notices to Buyer shall be addressed to:
Metropolitan Life Insurance Company
One Madison Avenue
New York, New York 10010
Attention: William J. Wheeler, Treasurer
Telecopy: 212-578-0266
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<PAGE> 14
with a copy to:
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, New York 10019
Attention: Linda E. Ransom, Esq.
Telecopy: 212-259-6333
Either party may change the person, address and number to which notices are to
be sent by giving written notice of any such change in the manner provided
herein.
Section 9.6. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. This Agreement may not be assigned by either
party hereto without the prior written consent of the other party, except that
Buyer may assign its rights hereunder to a Subsidiary or Affiliate of Buyer (and
such Subsidiary or Affiliate shall execute a Counterpart and deliver same to the
Company prior to or at the time of assignment) or in accordance with Section 9.7
without the consent of the Company.
Section 9.7. Transfer of Registration Rights. Provided that the Company
is given written notice by Buyer prior to or at the time of such transfer
stating the name and address of the transferee and identifying the securities
with respect to which the rights under this Agreement are being assigned, the
registration rights under this Agreement may be transferred with the transfer of
Registrable Securities. Notwithstanding the foregoing, if such transfer is
subject to covenants, agreements or other undertakings restricting
transferability thereof, the registration rights under this Agreement shall not
be transferred in connection with such transfer unless such transfer complies
with all such covenants, agreements and other undertakings. In all cases, such
registration rights shall not be transferred unless the transferee thereof
executes a Counterpart and delivers same to the Company. Upon a transfer in
compliance with this Section 9.7, all references in this Agreement to "Buyer"
shall be deemed to refer in addition to any transferee hereunder with respect to
such transferred Registrable Securities. Notwithstanding anything to the
contrary that may be contained in this Agreement, in the event that Buyer does
not transfer all of the Registrable Securities or transfers the Registrable
Securities to more than one transferee, the holders of the Registrable
Securities thereafter shall be entitled to take any action hereunder by majority
vote of all Registrable Securities or by majority vote of the Registrable
Securities which are the subject of such registration, as appropriate.
Section 9.8. Headings. The headings contained in this Agreement are
inserted for convenience of reference only and will not affect the meaning or
interpretation of this Agreement. All references in this Agreement to Sections,
Articles or Exhibits mean Sections or Articles of or Exhibits to this Agreement
unless otherwise stated.
Section 9.9. Amendments and Waivers. This Agreement may not be modified
or amended except by an instrument or instruments in writing signed by the party
against whom enforcement of any such modification or amendment is sought. Either
party hereto may waive compliance by the other
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<PAGE> 15
party hereto with any term or provision hereof on the part of such other party
hereto to be performed or complied with only by an instrument in writing. The
waiver by any party hereto of a breach of any term or provision hereof shall not
be construed as a waiver of any subsequent breach.
Section 9.10. Severability. Any provision hereof which is invalid or
unenforceable shall be ineffective to the extent of such invalidity or
unenforceability, without affecting in any way the remaining provisions hereof.
Section 9.11. No Inconsistent Agreements. The Company represents and
warrants that it has not granted to any person the right to request or require
the Company to register any securities issued by the Company other than pursuant
to this Agreement and that certain Registration Rights Agreement dated as of
April 15, 1993 between the Company and General American Life Insurance Company.
Except with the prior written consent of Buyer, the Company will not enter into
any agreement with respect to its securities that shall grant to any person
registration rights that in any way conflict with or are prior in right to the
rights provided under this Agreement.
Section 9.12. Confidentiality. Notwithstanding anything to the contrary
in this Agreement, Buyer may not use any Confidential Information received by it
from the Company pursuant to this Agreement in violation of the Exchange Act or
reproduce, disclose or disseminate such information to any person (other than
its directors, officers, employees, financial advisors, legal advisors,
accountants, consultants and other persons having a reasonable reason for
knowing the contents of such information and who agree for the benefit of the
Company (in writing, with respect to financial advisors, legal advisors,
accountants and consultants) to be bound hereby), unless such information is (i)
available to the public generally (other than by the recipient in violation of
any confidentiality agreement or obligation with the Company), (ii) available to
Buyer or such recipient on a non-confidential basis from a third party that is
not, to Buyer's or such recipient's knowledge, bound by any other
confidentiality agreement or obligation with the Company or (iii) required to be
disclosed by Buyer or such recipient by a governmental body or regulatory agency
or by law. "Confidential Information" shall mean only the following information:
(i) confidential or proprietary information of the Company supplied by or on
behalf of the Company which Buyer requested in writing to the Company pursuant
to this Agreement or the Stock Purchase Agreement and (ii) the fact that the
Company requested that Buyer suspend further sales pursuant to Section 2.3.
Notwithstanding anything to the contrary in this Agreement or the Stock Purchase
Agreement, Buyer and the Company agree that the Company shall not furnish to
Buyer any of its confidential or proprietary information, including without
limitation, in advance of the filing of any registration statement (including
the Shelf Registration Statement) or prospectus or any amendment or supplement
thereof, except upon receipt of a written request from Buyer.
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<PAGE> 16
IN WITNESS WHEREOF, this Agreement has been duly executed by or on
behalf of each of the parties hereto as of the date first above written.
REINSURANCE GROUP OF AMERICA, INCORPORATED
By: /s/ Jack B. Lay
----------------------
Name: Jack B. Lay
Title: Executive Vice President and
Chief Financial Officer
METROPOLITAN LIFE INSURANCE COMPANY
By: /s/ William J. Wheeler
----------------------------
Name: William J. Wheeler
Title: Senior Vice-President & Treasurer
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<PAGE> 17
EXHIBIT A TO REGISTRATION RIGHTS AGREEMENT
COUNTERPART
THIS INSTRUMENT forms part of the Registration Rights Agreement (the
"Agreement"), dated as of November 23, 1999, by and between REINSURANCE GROUP OF
AMERICA, INCORPORATED, a Missouri corporation (the "Company"), and METROPOLITAN
LIFE INSURANCE COMPANY, a New York mutual life insurance company, which
Agreement permits execution (including by facsimile) by counterpart. The
undersigned hereby acknowledges having received a copy of the Agreement (which
is annexed hereto as Schedule I) and having read the Agreement in its entirety,
and for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, and intending to be legally bound, hereby agrees that the
terms and conditions of the Agreement binding upon and inuring to the benefit of
Buyer shall be binding upon and inure to the benefit of the undersigned and its
successors and permitted assigns as if it were the original Buyer thereunder.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
____ day of ______________, ____.
------------------------
(Signature of Transferee)
----------------------
(Name in Block Letters)
<PAGE> 1
Exhibit 4
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT (this "Agreement"), dated as of November 23,
1999, by and among METROPOLITAN LIFE INSURANCE COMPANY, a New York mutual life
insurance company ("Buyer"), GENAMERICA CORPORATION, a Missouri corporation
("GenAmerica"), GENERAL AMERICAN LIFE INSURANCE COMPANY, a Missouri insurance
company and wholly-owned subsidiary of GenAmerica ("GALIC"), EQUITY INTERMEDIARY
COMPANY, a Missouri corporation and a wholly-owned subsidiary of GALIC ("EIM"),
and REINSURANCE GROUP OF AMERICA, INCORPORATED, a Missouri corporation 53.5% of
the outstanding common stock of which is owned by EIM (the "Company").
W I T N E S S E T H:
WHEREAS, the Company and Buyer have entered into a Stock Purchase
Agreement (the "Stock Purchase Agreement"), dated as of November 23, 1999,
pursuant to which the Company shall sell to Buyer, and Buyer shall purchase from
the Company, shares of the Company's common stock, par value $0.01 per share
(the "Company Common Stock");
WHEREAS, GenAmerica, GALIC, EIM and the Company wish to execute and
deliver this Agreement in order to induce Buyer to purchase shares of Company
Common Stock under the Stock Purchase Agreement;
NOW, THEREFORE, in consideration of the representations, warranties,
agreements and covenants set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms have the following
respective meanings:
"Affiliate" shall mean, with respect to any person, any other person
who directly or indirectly controls, is controlled by or is under common control
with such person. The term "control", for the purposes of this definition, means
the power to direct or cause the direction of the management or policies of the
controlled person.
"Affiliated Stockholder" shall mean any Affiliate of GenAmerica,
GALIC or EIM who at such time is the record or beneficial owner of any Company
Common Stock.
"Board" shall have the meaning set forth in Section 4.1(a).
"Business Day" shall mean any day other than (i) a Saturday, (ii) a
Sunday or (iii) any other day on which banks are authorized or required to close
in New York, New York.
<PAGE> 2
"Buyer" shall have the meaning set forth in the first paragraph
hereof and, with respect to any successor or assign of Buyer that becomes such
in accordance with Section 6.7 hereof, such successor or assign.
"Buyer Affiliates" shall have the meaning set forth in Section
4.1(a).
"Company" shall have the meaning set forth in the first paragraph
hereof.
"Company Common Stock" shall have the meaning set forth in the
recitals hereto.
"Company Plans" shall have the meaning set forth in Section 3.11(b)
of the Stock Purchase Agreement.
"Company Preferred Stock" shall have the meaning set forth in
Section 3.3(a) of the Stock Purchase Agreement.
"EIM" shall have the meaning set forth in the first paragraph
hereof.
"Exempt Transfers" means (a) any transfers of Company Common Stock
made (i) in connection with a Public Offering or a public offering pursuant to a
registration statement on Form S-4 or any successor form or a tender offer on
Schedule 14D-1, 13E-3 or 13E-4 or any successor form, or (ii) pursuant to Rule
144 under the Securities Act, or (b) any bona fide pledges of Company Common
Stock to any financial institution.
"GALIC" shall have the meaning set forth in the first paragraph
hereof.
"GenAmerica" shall have the meaning set forth in the first
paragraph hereof.
"General American" shall mean General American Mutual Holding
Company, a Missouri mutual insurance holding company.
"General American Agreement" shall mean the Stock Purchase
Agreement, dated as of August 26, 1999, by and between General American and
Buyer, as amended from time to time.
"Offer" shall have the meaning set forth in Section 4.1(a).
"Offered Shares" shall have the meaning set forth in Section
4.1(a).
"person" shall mean an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
business trust, a joint venture, an unincorporated organization or a government
entity or any department, agency or political subdivision thereof.
"Prohibited Transfer" shall have the meaning set forth in Section
3.1.
"Proposed Transferee" shall have the meaning set forth in Section
4.1(a).
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<PAGE> 3
"Public Offering" means an offering of Company Common Stock to the
general public pursuant to a registration statement (other than a registration
statement on Form S-4 or S-8 or any similar or successor form or forms) filed
with and declared effective by the SEC under the Securities Act.
"Remaining Offered Shares" shall have the meaning set forth in
Section 4.1(c).
"Rights Agreement" shall mean the Rights Agreement, dated as of May
4, 1993, between the Company and Chase Mellon Shareholder Services, L.L.C. (as
successor to Boatman's Trust Company), as amended.
"SEC" shall mean the United States Securities and Exchange
Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations thereunder.
"Selling Stockholder" shall have the meaning set forth in Section
4.1(a).
"Stock Purchase Agreement" shall have the meaning set forth in
the recitals hereto.
"Subsidiary" shall mean with respect to any person, any other person
of which such first person, directly or indirectly, owns or controls 50% or more
of the securities or other interests entitled to vote under ordinary
circumstances in the election of directors or others performing similar
functions with respect to such other person or to otherwise control such other
person.
"Tag-Along Notice" shall have the meaning set forth in Section
4.1(d).
"Tag-Along Right" shall have the meaning set forth in Section
4.1(b).
"Tag-Along Shares" shall have the meaning set forth in Section
4.1(b).
"Tag-Along Stockholder" shall have the meaning set forth in
Section 4.1(b).
"transfer" means and includes any direct or indirect offer for sale,
sale, assignment, transfer, pledge, encumbrance, or other disposition of, or the
subjecting to a security interest of, any Company Common Stock or any
disposition of any Company Common Stock or of any interest therein which would
constitute a sale thereof within the meaning of the Securities Act.
Article II
REPRESENTATIONS AND WARRANTIES
Section 2.1 By the Company. The Company hereby represents and
warrants to Buyer that (i) Schedule 1 correctly and completely sets forth the
Company's capitalization as of the date hereof, indicating the authorized,
issued and outstanding capital stock of the Company and any securities which are
convertible into or exercisable or exchangeable for any capital stock
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<PAGE> 4
of the Company, and (ii) as of the date hereof, the Company is not a party to
any agreement with respect to the holding, voting, acquisition or disposition of
any securities described in the immediately preceding clause (i) except that
2,007,282 shares of Company Common Stock are reserved for issuance pursuant to
the Company Plans and 500,000 shares of Company Preferred Stock are reserved for
issuance pursuant to the Rights Agreement.
Section 2.2 By GenAmerica, GALIC and EIM. GenAmerica, GALIC and EIM hereby
represent and warrant to Buyer that (i) EIM is the sole record and beneficial
owner of 24,131,250 shares of Company Common Stock, (ii) except for the General
American Agreement (as such term is defined in the Stock Purchase Agreement),
such shares of Company Common Stock are not subject to any agreement or
understanding relating to or restricting voting or transfer thereof and (iii)
neither EIM nor any of its Affiliates is a record or beneficial owner of any
capital stock of the Company (or any securities which are convertible into or
exercisable or exchangeable for any capital stock of the Company) other than as
set forth in this Section 2.2.
ARTICLE III
RESTRICTIONS ON TRANSFERS
Section 3.1 Transferees Subject to Agreement. In the event of any transfer of
shares of Company Common Stock or rights to acquire shares of Company Common
Stock by EIM or any Affiliated Stockholder (other than pursuant to the General
American Agreement), the transferee shall hold such shares of Company Common
Stock or rights so acquired with all the rights conferred by, and subject to all
of the restrictions imposed by, this Agreement applicable to the transferor of
such shares of Company Common Stock or rights. In addition, any transferee of
any shares of Company Common Stock or rights shall, as a condition of the
consummation of such transfer, agree to be subject to this Agreement. Any
purported transfer of shares of Company Common Stock or rights in violation of
this Agreement (a "Prohibited Transfer") shall be null and void. The Company
shall not record any Prohibited Transfer on its books and shall not recognize
any equitable or other claim to, or any interest in, shares of Company Common
Stock or rights that are the subject of a Prohibited Transfer on the part of any
person other than the stockholder that attempted to transfer the shares of
Company Common Stock or rights in violation of this Agreement. The Company shall
refuse to record on its books any purported transfer of shares of Company Common
Stock by EIM or any Affiliated Stockholder unless Buyer's written consent to
such transfer has been obtained, which consent shall not be unreasonably
withheld.
Section 3.2 Exceptions to Transfer Restrictions. The prohibitions of
Section 3.1 shall not apply to any Exempt Transfers.
Section 3.3 Restrictive Legends. Each certificate representing shares of Company
Common Stock now or hereafter owned (whether beneficially or of record) by EIM
or any Affiliated Stockholder shall bear a legend substantially in the following
form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO, AND
ARE TRANSFERABLE ONLY UPON COMPLIANCE WITH, THE PROVISIONS OF THE
STOCKHOLDERS AGREEMENT DATED AS OF NOVEMBER 23, 1999 AMONG
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<PAGE> 5
REINSURANCE GROUP OF AMERICA, INCORPORATED AND CERTAIN OF ITS
STOCKHOLDERS. A COPY OF THE ABOVE-REFERENCED AGREEMENT IS ON FILE AT
THE OFFICE OF REINSURANCE GROUP OF AMERICA, INCORPORATED.
Whenever any such shares cease to be subject to this Agreement, the holder
thereof shall be entitled to receive from the Company, without expense, upon
surrender to the Company of the certificates representing such shares, a new
certificate in such holder's name representing such shares of like tenor but
without a legend of the character set forth above.
ARTICLE IV
TAG-ALONG RIGHT
Section 4.1 Tag-Along Right.
(a) Except for Exempt Transfers and without limiting anything contained in
Article III, if at any time and from time to time EIM and/or any Affiliated
Stockholder (collectively, the "Selling Stockholder") proposes to transfer, in
any transaction or series of related transactions, a number of shares of Company
Common Stock and/or rights to acquire (pursuant to conversion, exchange or other
exercise) a number of shares of Company Common Stock (collectively, the "Offered
Shares") equal to no less than five percent (5%) of the shares then collectively
owned (whether beneficially or of record) by such Selling Stockholder and its
Affiliates (counting the Offered Shares issuable upon the exercise of any right
to acquire same as outstanding for purposes of this Article IV) pursuant to a
bona fide, arm's-length offer from a bona fide third party (the "Proposed
Transferee"), the Selling Stockholder shall submit a notice (an "Offer") to
Buyer and its Affiliates who own (whether beneficially or of record) any shares
of Company Common Stock ("Buyer Affiliates"). The Offer shall disclose (i) the
identity of the Selling Stockholder and the Proposed Transferee, (ii) the total
number of Offered Shares proposed to be transferred, (iii) the total number of
shares of Company Common Stock owned by such Selling Stockholder, (iv) the terms
and conditions of the proposed transfer of the Offered Shares to the Proposed
Transferee, including the price per share to be paid, (v) the terms and
conditions of payment offered by the Proposed Transferee and, in the case of
consideration in whole or in part other than cash, the fair market value thereof
as determined promptly and in good faith by the Selling Stockholder as of the
date of the Offer, (vi) the address of the Selling Stockholder, (vii) that the
Proposed Transferee has been informed of the Tag-Along Right provided for in
this Article IV, and (viii) any other material facts relating to the proposed
sale of the Offered Shares to the Proposed Transferee.
(b) Buyer and the Buyer Affiliates (collectively, the "Tag-Along Stockholder")
shall have the irrevocable right (the "Tag-Along Right") to require the Selling
Stockholder to cause the Proposed Transferee to purchase from such Tag-Along
Stockholder that number of shares of Company Common Stock held by such Tag-Along
Stockholder as is equal to the product of the Offered Shares multiplied by a
fraction, the numerator of which is the number of shares of Company Common Stock
owned (whether beneficially or of record) by such Tag-Along Stockholder and the
denominator of which is the sum of the number of shares of Company Common Stock
owned (whether beneficially or of record) by the Selling Stockholder
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<PAGE> 6
and all Tag-Along Stockholders who are exercising their Tag-Along Rights (the
"Tag-Along Shares").
(c) The transfer of the Offered Shares (as reduced by the Tag-Along Shares, the
"Remaining Offered Shares") and the Tag-Along Shares shall be for the same
consideration (except as may be determined pursuant to Section 4.1(e) below) and
otherwise on the same terms and conditions (including, without limitation,
seller representations (except any representations specific to a particular
seller), provided that the aggregate liability of the Tag-Along Stockholder for
breaches of representations, warranties and covenants and agreements contained
in the definitive documents relating to such transfer shall not exceed the sales
proceeds received by the Tag-Along Stockholder in such transfer) for all holders
as set forth in the Offer (counting as part of such consideration any price
associated with the exercise of any rights to acquire Remaining Offered Shares).
(d) The Tag-Along Right shall be exercised by a Tag-Along Stockholder by
notifying the Selling Stockholder and the Company in writing (the "Tag-Along
Notice") within twenty (20) days of its receipt of the Offer of its intention to
sell its Tag-Along Shares. The Tag-Along Notice shall state the number of shares
of Company Common Stock that such Tag-Along Stockholder proposes to include in
such transfer to the Proposed Transferee, which number shall not exceed the
maximum number of shares of Company Common Stock which such Tag-Along
Stockholder would be entitled to include if all Tag-Along Stockholders elected
to participate in the transfer to the fullest extent possible, determined in
accordance with Section 4.1(b). Failure by any Tag-Along Stockholder to deliver
a Tag-Along Notice by the end of such twenty (20) day period shall be deemed to
constitute the election of such Tag-Along Stockholder not to exercise its
Tag-Along Rights.
(e) In the event that the consideration proposed to be paid for the Offered
Shares by the Proposed Transferee shall include any consideration other than
cash, and the Offer includes a fair market value of such non-cash consideration
that the Tag-Along Stockholder objects to, the Tag-Along Notice shall set forth
such objection. If the Selling Stockholder and holders representing a
majority-in-interest of the Tag-Along Stockholders cannot agree on a valuation
within five (5) Business Days following the twenty (20) day period following the
date the Offer was made, then the dispute shall be referred to a
nationally-recognized investment banking firm selected jointly by the Selling
Stockholder and holders representing a majority-in-interest of the Tag-Along
Stockholders. If the Selling Stockholder and holders representing a
majority-in-interest of the Tag-Along Stockholders cannot agree on the selection
of an investment banking firm, then the Selling Stockholder and holders
representing a majority-in-interest of the Tag-Along Stockholders shall each
select one such firm and such firms shall designate a mutually acceptable
investment banking firm with a nationwide reputation to determine the aggregate
value of all consideration proposed to be paid by the Proposed Transferee for
the Offered Shares. The expenses of such investment banking firms shall be paid
one-half by each of the Selling Stockholder and the Tag-Along Stockholders (each
of whom shall pay their pro rata portion of such expenses based upon the number
of Tag-Along Shares that such Tag-Along Stockholder requested to sell). All
determinations made pursuant to this Section 4.1(e) shall be final, conclusive
and binding on the Selling Stockholder and the Tag-Along Stockholders.
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<PAGE> 7
(f) Within forty-five (45) days of the delivery of the Offer to the Tag-Along
Stockholders, the Selling Stockholder shall deliver to each Tag-Along
Stockholder who validly exercises its Tag-Along Right, a notice setting forth
the number of shares of Company Common Stock that such Tag-Along Stockholder
will be entitled to sell to the Proposed Transferee pursuant to this Section
4.1, and the delivery instructions and procedures required to effectuate the
transfer. In the event that any Tag-Along Stockholders do not choose to
participate in the transfer to the fullest extent possible, the Selling
Stockholder shall have the right to include shares of Company Common Stock that
Tag-Along Stockholders would have been entitled to include but did not elect to
include, to the extent that the Selling Stockholder owns the number of such
shares of Company Common Stock.
(g) If the Proposed Transferee does not purchase shares of Company Common Stock
from the Tag-Along Stockholders who exercise their respective Tag-Along Rights
at the same price and on the same terms and conditions as the Proposed
Transferee purchases from the Selling Stockholder, then the Selling Stockholder
shall not be permitted to transfer any shares of Company Common Stock to the
Proposed Transferee in the proposed transfer. The Selling Stockholder and the
Tag-Along Stockholders who validly exercise their respective Tag-Along Rights
shall have the right, for a one hundred twenty (120) day period following the
delivery of the Offer, to transfer to the Proposed Transferee the shares of
Company Common Stock proposed to be transferred on terms and conditions no more
favorable to the Selling Stockholder and such Tag-Along Stockholders than those
stated in the Offer. Any shares of Company Common Stock that continue to be held
by the Selling Stockholder or any such Tag-Along Stockholders after the earlier
of the consummation of the proposed transfer or the expiration of such one
hundred twenty (120) day period shall again be subject to the provisions of this
Section 4.1.
Section 4.2 Costs. All reasonable costs and expenses incurred by any seller in
connection with a transfer under Section 4.1, including, without limitation, all
reasonable attorneys' fees, costs and disbursements and any reasonable finders'
fees or brokerage commissions, shall be allocated pro rata among the
stockholders transferring shares of Company Common Stock in such transfer, with
each bearing that portion of such costs and expenses equal to the aggregate of
such costs and expenses multiplied by a fraction, the numerator of which is the
amount of the gross proceeds received by such stockholder from such transfer,
and the denominator of which is the total amount of the gross proceeds received
by all stockholders from such transfer. Such costs and expenses shall include
the fees of no more than one counsel for Buyer, and no more than one counsel for
GenAmerica, GALIC and EIM collectively.
ARTICLE V
CERTAIN COVENANTS
Section 5.1 Actions Requiring Consent of Buyer. For so long as Buyer and its
Affiliates collectively continue to own (whether beneficially or of record)
shares of Company Common Stock representing at least 5% of the shares of Company
Common Stock outstanding as of the date hereof, the Company shall not undertake
the following actions without the prior written consent of Buyer which shall not
be unreasonably withheld or delayed: (i) enter into, or waive or materially
modify any provision of, any registration rights agreement except for such of
the foregoing as which would not be reasonably likely to materially adversely
affect the rights of
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<PAGE> 8
Buyer or its Affiliates hereunder, in Buyer's reasonable determination, or (ii)
directly or indirectly redeem or repurchase any shares of Company Common Stock
owned by EIM or any Affiliated Stockholder unless such redemption or repurchase
is available to all shareholders of the Company for the same consideration and
on the same terms and conditions, including without limitation any open market
repurchase program, or, in the case of an Affiliated Stockholder who is an
individual, unless such redemption or repurchase is in connection with an
employee or director benefit plan in the ordinary course of business.
Section 5.2 Further Assurances. Each party hereto shall do and perform or cause
to be done and performed all such further acts and things and shall execute and
deliver all such other agreements, certificates, instruments and documents as
any other party hereto reasonably may request in order to carry out the intent
and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
Section 5.3 Additional Remedies. In case any one or more of the covenants and/or
agreements set forth in this Agreement shall have been breached by any party
hereto, the party or parties entitled to the benefit of such covenants or
agreements may proceed to protect and enforce their rights either by proceeding
in equity and/or by action at law, including, but not limited to, an action for
damages as a result of any breach; and/or an action for specific performance of
any such covenant or agreement contained in this Agreement, and/or a temporary
or permanent injunction, in any case without showing any actual damage and
without establishing, in the case of an equitable proceeding, that the remedy at
law is inadequate and without the need to post any bond or other undertaking as
a condition to obtaining preliminary injunctive relief. The rights, powers and
remedies of the parties under this Agreement are cumulative and not exclusive of
any other right, power or remedy which such parties may have under any other
agreement or law. No single or partial assertion or exercise of any right, power
or remedy of a party hereunder shall preclude any other or further assertion or
exercise thereof.
ARTICLE VI
MISCELLANEOUS
Section 6.1 Termination. This Agreement shall terminate upon the earlier to
occur of (i) the sale of all of Buyer's shares of Company Common Stock pursuant
to a Public Offering effectuated pursuant to the Registration Rights Agreement
or pursuant to Rule 144 under the Securities Act, (ii) at the time when Buyer,
its Affiliates and any person who purchases shares of Company Common Stock from
Buyer in accordance with Section 6.7(ii) hereof own in the aggregate fewer than
478,469 shares of Company Common Stock purchased pursuant to the Stock Purchase
Agreement (and Buyer, its Affiliates or such persons agree to deliver to the
Company, within 30 days after receipt of a written request from the Company, a
written certification of its respective ownership of such shares of Company
Common Stock, but the Company shall not make such request (a) earlier than June
30, 2000 or (b) within 180 days after the date of any other such request), or
(iii) the completion of Buyer's purchase of all of the outstanding shares of
capital stock of GenAmerica from General American pursuant to the General
American Agreement.
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Section 6.2 Share Calculations. Unless otherwise specified, all share
calculations made pursuant to this Agreement shall be determined on a primary
(i.e., undiluted) basis.
Section 6.3 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each
party hereto and delivered to the other parties. Copies of executed counterparts
transmitted by telecopy, telefax or other electronic transmission service shall
be considered original executed counterparts for purposes of this Section,
provided receipt of copies of such counterparts is confirmed.
Section 6.4 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Missouri without reference to the
choice of law principles thereof, except for the validity of corporate action of
the parties hereto, which shall be governed by and construed in accordance with
the laws of the jurisdiction of incorporation or organization of such party.
Section 6.5 Entire Agreement; Amendment; Waiver. This Agreement, and the
certificates, instruments and other documents delivered pursuant hereto, contain
the entire agreement among the parties hereto with respect to the subject matter
hereof and there are no agreements, understandings, representations or
warranties among the parties hereto other than those set forth or referred to
herein. This Agreement is not intended to confer upon any person not a party
hereto any rights or remedies hereunder.
Section 6.6 Notices. All notices and other communications hereunder shall be
sufficiently given for all purposes hereunder if in writing and delivered
personally, sent by documented overnight delivery service or, to the extent
receipt is confirmed, telecopy, telefax or other electronic transmission service
to the appropriate address or number as set forth below. Notices to the Company
shall be addressed to:
Reinsurance Group of America, Incorporated
1370 Timberlake Manor Parkway
Chesterfield, Missouri 63107-6039
Attention: Jack B. Lay, Executive Vice President and
Chief Financial Officer
Telecopy: 636-736-7839
with copies to:
Reinsurance Group of America, Incorporated
c/o General American Life Insurance Company
700 Market Street
St. Louis, Missouri 63101
Attention: James E. Sherman
Telecopy: 314-444-0510
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Bryan Cave LLP
One Metropolitan Square
211 North Broadway
St. Louis, Missouri 63102-2750
Attention: R. Randall Wang, Esq.
Telecopy: 314-259-2020
Notices to Buyer or any of its Affiliates shall be addressed to:
Metropolitan Life Insurance Company
One Madison Avenue
New York, New York 10010
Attention: William Wheeler, Treasurer
Telecopy: 212-578-0266
with a copy to:
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, New York 10019
Attention: Linda E. Ransom, Esq.
Telecopy: 212-259-6333
Notices to GenAmerica, GALIC and EIM shall be addressed to:
General American Life Insurance Company
700 Market Street
St. Louis, Missouri 63101-1887
Attention: Robert Banstetter
Telecopy: 314-444-0510
with a copy to:
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
125 West 55th Street
New York, New York 10019-4513
Attention: Alexander M. Dye, Esq.
Telecopy: 212-424-8500
Each party may change the person, address and number to which
notices are to be sent by giving written notice of any such change in the manner
provided herein.
Section 6.7 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. This Agreement may not be assigned by any party hereto
without the prior written consent of the other parties, except that Buyer may
assign its rights hereunder without the consent of the other parties hereto to
(i) a Subsidiary or Affiliate of Buyer or (ii) a person who purchases shares of
Company Common Stock from Buyer other than in a Public Offering or
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other than pursuant to Rule 144 under the Securities Act, and who assumes the
obligations of Buyer hereunder pursuant to an agreement delivered to the Company
in form and substance reasonably satisfactory to the Company.
Section 6.8 Headings. The headings contained in this Agreement are inserted for
convenience of reference only and will not affect the meaning or interpretation
of this Agreement. All references to Sections, Articles or Schedules contained
herein mean Sections or Articles of or Schedules to this Agreement unless
otherwise stated.
Section 6.9 Amendments and Waivers. This Agreement may not be modified or
amended except by an instrument or instruments in writing signed by the party
against whom enforcement of any such modification or amendment is sought. Each
party hereto may waive compliance by any other party hereto with any term or
provision hereof on the part of such other party hereto to be performed or
complied with only by an instrument in writing. The waiver by any party hereto
of a breach of any term or provision hereof shall not be construed as a waiver
of any subsequent breach.
Section 6.10 Severability. Any provision hereof which is invalid or
unenforceable shall be ineffective to the extent of such invalidity or
unenforceability, without affecting in any way the remaining provisions hereof.
Section 6.11 Registration Rights Agreement. GALIC acknowledges that it is the
Holder of a majority of the outstanding Registrable Securities (as "Holder" and
"Registrable Securities" are defined in the Registration Rights Agreement dated
as of April 15, 1993 between the Company and GALIC (the "GALIC Registration
Rights Agreement")), and GALIC hereby (i) consents to the Company's execution
and delivery of and performance under the Registration Rights Agreement dated as
of November 23, 1999 between the Company and Buyer (the "Buyer Registration
Rights Agreement") and (ii) waives any breaches at any time under the GALIC
Registration Rights Agreement resulting from the Company's execution and
delivery of or performance under the Buyer Registration Rights Agreement.
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IN WITNESS WHEREOF, this Agreement has been duly executed by or on
behalf of each of the parties hereto as of the date first above written.
METROPOLITAN LIFE INSURANCE COMPANY
By: /s/ William J. Wheeler
------------------------------------------
Name: William J. Wheeler
Title:Senior Vice-President and Treasurer
GENAMERICA CORPORATION
By: /s/ Robert J. Banstetter
------------------------------------------
Name: Robert J. Banstetter
Title: Vice President, General Counsel
and Secretary
GENERAL AMERICAN LIFE INSURANCE COMPANY
By: /s/ Robert J. Banstetter
------------------------------------------
Name: Robert J. Banstetter
Title: Vice President, General Counsel
and Secretary
EQUITY INTERMEDIARY COMPANY
By: /s/ Matthew P. McCauley
------------------------------------------
Name: Matthew P. McCauley
Title: Vice President, General Counsel
and Secretary
REINSURANCE GROUP OF AMERICA, INCORPORATED
By: /s/ Jack B. Lay
------------------------------------------
Name: Jack B. Lay
Title:Executive Vice President and
Chief Financial Officer
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SCHEDULE 1
CAPITALIZATION OF THE COMPANY
75,000,000 shares of Company Common Stock authorized, with 45,151,264 shares of
Company Common Stock issued and outstanding and 1,117,320 shares of Company
Common Stock held by the Company in its treasury.
10,000,000 shares of Preferred Stock, par value $0.01 per share, authorized,
with no shares of Preferred Stock of the Company issued and outstanding.
Options to purchase 1,704,922 shares of Company Common Stock.
