MERGER AGREEMENT AMONG XXXXXXXXX HOLDINGS, INC., XXXXXX X. XXXXXXXXX,
B. XXXXXXX XXXXXXX, XXXXXXX X. XXXXX, XXXXXX X. XXXXXX, XX., XXXX X. XXXXXX,
XXXXXX X. FRENCH, XXXXXXX X. XXXX, THE 1999 XXXXXXXXX FAMILY TRUST, THE
XXXXXX X. XXXXXXXXX INSURANCE TRUST, WTC MERGER SUBSIDIARY, INC.,
WT INVESTMENTS, INC. AND WILMINGTON TRUST CORPORATION
EXHIBIT 10.51
MERGER AGREEMENT
AMONG
XXXXXXXXX HOLDINGS, INC.,
XXXXXX X. XXXXXXXXX,
B. XXXXXXX XXXXXXX,
XXXXXXX X. XXXXX,
XXXXXX X. XXXXXX, XX.,
XXXX X. XXXXXX,
XXXXXX X. FRENCH,
XXXXXXX X. XXXX,
THE 1999 XXXXXXXXX FAMILY TRUST,
THE XXXXXX X. XXXXXXXXX INSURANCE TRUST,
WTC MERGER SUBSIDIARY, INC.,
WT INVESTMENTS, INC.
AND
WILMINGTON TRUST CORPORATION
Dated as of October 23, 2001
TABLE OF CONTENTS
Page
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BACKGROUND..................................................................................................... 1
ARTICLE 1 DEFINITIONS......................................................................................... 2
ARTICLE 2 THE MERGER.......................................................................................... 9
Section 2.1 The Merger......................................................................... 9
Section 2.2 Effective Time..................................................................... 9
Section 2.3 Closing............................................................................ 9
Section 2.4 Contribution....................................................................... 9
Section 2.5 Execution of LLC Agreement......................................................... 9
Section 2.6 Final Closing Balance Sheet........................................................ 9
ARTICLE 3 CONSIDERATION; EXCHANGE............................................................................. 10
Section 3.1 Merger Consideration............................................................... 10
Section 3.2 Rights as Stockholders; Stock Transfers............................................ 12
Section 3.3 Fractional Shares.................................................................. 12
Section 3.4 Exchange Procedure................................................................. 12
Section 3.5 Adjustments........................................................................ 13
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF XXXXXXXXX AND THE PRINCIPALS TO MERGER SUBSIDIARY, WTI AND WTC.... 13
PRINCIPALS TO MERGER SUBSIDIARY, WTI AND WTC................................................................... 13
Section 4.1 Organization....................................................................... 13
Section 4.2 Authority.......................................................................... 13
Section 4.3 Governmental Filings; Non-Contravention............................................ 14
Section 4.4 Capitalization..................................................................... 14
Section 4.5 Subsidiaries and Other Relationships............................................... 15
Section 4.6 Business........................................................................... 15
Section 4.7 Assets............................................................................. 15
Section 4.8 Managed Assets..................................................................... 16
Section 4.9 Receivables........................................................................ 16
Section 4.10 Contracts.......................................................................... 16
Section 4.11 Employment Arrangements............................................................ 17
Section 4.12 Financial Statements............................................................... 17
Section 4.13 Material Adverse Change............................................................ 17
Section 4.14 Ordinary Course of Business........................................................ 18
i
Section 4.15 Litigation and Compliance with Laws................................................ 18
Section 4.16 Environmental Matters.............................................................. 19
Section 4.17 Broker Dealer...................................................................... 20
Section 4.18 Insurance Policies................................................................. 20
Section 4.19 Tax Matters........................................................................ 20
Section 4.20 Certain Transactions............................................................... 20
Section 4.21 Employee Benefit Plans............................................................. 21
Section 4.22 Brokerage.......................................................................... 22
Section 4.23 Investment Representations......................................................... 22
Section 4.24 Privacy............................................................................ 23
Section 4.25 Investment Limitation.............................................................. 23
Section 4.26 No Known Regulatory Delays......................................................... 23
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF MERGER SUBSIDIARY, WTI AND WTC TO XXXXXXXXX AND THE PRINCIPALS.... 23
Section 5.1 Organization....................................................................... 24
Section 5.2 Authority.......................................................................... 24
Section 5.3 Governmental Filings; Non-Contravention............................................ 24
Section 5.4 Litigation and Compliance with Laws................................................ 25
Section 5.5 Investment Representations......................................................... 25
Section 5.6 Common Stock....................................................................... 26
Section 5.7 SEC Documents...................................................................... 26
Section 5.8 No Known Regulatory Delays......................................................... 27
Section 5.9 Brokerage.......................................................................... 27
ARTICLE 6 COVENANTS OF XXXXXXXXX AND THE PRINCIPALS........................................................... 27
Section 6.1 Client Consent..................................................................... 27
Section 6.2 Conduct of Business................................................................ 27
Section 6.3 Preservation of Business and Assets................................................ 28
Section 6.4 Standstill......................................................................... 29
Section 6.5 Investment Limitation.............................................................. 29
ARTICLE 7 COVENANTS OF WTC.................................................................................... 29
Section 7.1 Securities Filings; NYSE Listing................................................... 29
Section 7.2 Indemnification.................................................................... 29
Section 7.3 WTC Business Benefits.............................................................. 30
ARTICLE 8 COVENANTS OF THE PARTIES............................................................................ 31
Section 8.1 Regulatory Authorizations.......................................................... 31
Section 8.2 Confidentiality.................................................................... 32
Section 8.3 Expenses Incident to this Agreement................................................ 32
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Section 8.4 Access; Information................................................................ 32
Section 8.5 Press Releases..................................................................... 33
ARTICLE 9 CONDITIONS PRECEDENT TO MERGER SUBSIDIARY'S, WTI'S AND WTC'S OBLIGATIONS............................ 33
Section 9.1 No Litigation; No Opposition....................................................... 33
Section 9.2 Representations, Warranties and Covenants of Xxxxxxxxx and the Principals.......... 33
Section 9.3 Consents........................................................................... 34
Section 9.4 Shareholder Approval............................................................... 35
Section 9.5 Other Approvals.................................................................... 35
Section 9.6 Capitalization..................................................................... 35
Section 9.7 Deliveries......................................................................... 35
Section 9.8 Material Adverse Change............................................................ 36
Section 9.9 Liens.............................................................................. 36
Section 9.10 Stockholder Notes.................................................................. 36
Section 9.11 Shareholder Agreement.............................................................. 36
Section 9.12 Investment Adviser Registration.................................................... 37
Section 9.13 Stockholder Note of Xxxxxxxx X. Xxxxxxx............................................ 37
Section 9.14 Non-Competition Agreements of Principals........................................... 37
ARTICLE 10 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE XXXXXXXXX ENTITIES AND THE PRINCIPALS............... 37
Section 10.1 No Litigation; No Opposition....................................................... 37
Section 10.2 Representations, Warranties and Covenants.......................................... 37
Section 10.3 Deliveries......................................................................... 38
Section 10.4 Consents........................................................................... 38
Section 10.5 Material Adverse Change............................................................ 39
ARTICLE 11 INDEMNIFICATION.................................................................................... 39
Section 11.1 Indemnification by the Principals.................................................. 39
Section 11.2 Indemnification by WTI and WTC..................................................... 39
Section 11.3 Limitation......................................................................... 39
Section 11.4 Defense of Claims.................................................................. 39
Section 11.5 Prompt Payment..................................................................... 41
Section 11.6 Sole Remedy........................................................................ 41
Section 11.7 Certain Reductions; Subrogation.................................................... 41
ARTICLE 12 TERMINATION........................................................................................ 41
Section 12.1 Termination........................................................................ 41
Section 12.2 Effect of Termination.............................................................. 42
ARTICLE 13 MISCELLANEOUS...................................................................................... 42
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Section 13.1 Survival of Representations, Warranties and Covenants.............................. 42
Section 13.2 Waivers............................................................................ 42
Section 13.3 Modifications...................................................................... 43
Section 13.4 Further Assurances................................................................. 43
Section 13.5 Governing Law; Consent to Jurisdiction............................................. 43
Section 13.6 Notices............................................................................ 43
Section 13.7 Assignability...................................................................... 44
Section 13.8 Captions........................................................................... 45
Section 13.9 Number and Gender.................................................................. 45
Section 13.10 Severability....................................................................... 45
Section 13.11 Counterparts....................................................................... 45
Section 13.12 No Third-Party Beneficiaries....................................................... 45
Section 13.13 Remedies for Section 8.2........................................................... 45
Section 13.14 Integration........................................................................ 45
Section 13.15 Principals' Representative......................................................... 46
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THIS MERGER AGREEMENT (the "Agreement") is dated as of October 23,
2001, among Xxxxxxxxx Holdings, Inc., a Georgia corporation ("Xxxxxxxxx"),
Xxxxxx X. Xxxxxxxxx, B. Xxxxxxx Xxxxxxx, Xxxxxxx X. Xxxxx, Xxxxxx X. Xxxxxx,
Xx., Xxxx X. Xxxxxx, Xxxxxx X. French, Xxxxxxx X. Xxxx, The 1999 Xxxxxxxxx
Family Trust, The Xxxxxx X. Xxxxxxxxx Insurance Trust (those individuals and
trusts are sometimes collectively referred to herein as the "Principals"), WTC
Merger Subsidiary, Inc., a Delaware corporation ("Merger Subsidiary"), WT
Investments, Inc., a Delaware corporation ("WTI"), and Wilmington Trust
Corporation, a Delaware corporation ("WTC").
BACKGROUND
X. Xxxxxxxxx owns all of the issued and outstanding shares of capital
stock of Xxxxxxxxx & Company, a Georgia corporation ("BC"), all of the limited
liability company interests of Xxxxxxxxx General Partner, LLC, a Georgia limited
liability company ("GP"), and 47.2% of the limited liability company interests
in Xxxxxxxxx & Company of Tennessee, L.L.C. ("BCT") (Xxxxxxxxx, XX, GP and BCT
are sometimes collectively referred to herein as the "Xxxxxxxxx Entities").
X. Xxxxxxxxx Delaware Holding Company, LLC, a Delaware limited
liability company (the "LLC"), has heretofore been formed as a limited liability
company under the Delaware Limited Liability Company Act, 6 Del. C.[sec][sec]
18-101 et seq., as amended from time to time, by filing a Certificate of
Formation of the LLC with the Office of the Secretary of State of Delaware on
October 18, 2001 (the "LLC Certificate").
C. Immediately before the events described in Recital D below, BC
shall be converted into a Georgia limited liability company with an operating
agreement in the form of Exhibit (c) hereto.
D. Pursuant to a Contribution Agreement in the form of Exhibit (d)(1)
Xxxxxxxxx will, immediately before the Merger, contribute all of its assets to
the LLC (which will assume all of Xxxxxxxxx'x liabilities) (the value of such
assets net of such liabilities being $[*] plus five times the appraised value of
the 20% profits interest) (the "Initial Capital Contribution"), in exchange for
which the LLC will issue a 100% capital interest and 100% profits interest to
Xxxxxxxxx, and execute an operating agreement of the LLC in the form of Exhibit
(d)(2) hereto ("Original LLC Agreement"). Immediately after the foregoing
contribution and before the Merger, Xxxxxxxxx will distribute to the Principals,
as its shareholders, an aggregate 20% profits interest in the LLC and partially
subordinated capital interest ("Principals' Interest") (collectively valued at
the appraised value of the 20% profits interest), retaining the remaining
capital interest and an 80% profits interest therein (the "Distribution"), and
the Principals and the LLC will execute joinder agreements in the form of
Exhibit (d)(3) hereto (the Original LLC Agreement as amended by such joinder
agreements being collectively referred to as the "Second LLC Agreement").
E. Merger Subsidiary, a wholly owned subsidiary of WTC, has
heretofore been formed as a corporation under the Delaware General Corporation
Law, 8 Del. C.[sec][sec]101 et seq., by filing a Certificate of Incorporation of
Merger Subsidiary with the Office of the Secretary of State of Delaware on
October 17, 2001 (the "Certificate").
* CONFIDENTIAL TREATMENT REQUESTED
F. WTI and WTC seek to add a quality "manager of managers" product
that can be offered through their existing distribution and client networks.
G. WTI and WTC believe they can further their goals by entering into
this Agreement and the other agreements referred to herein.
H. Subject to the terms and conditions hereof, the parties desire to
effect the Merger (as defined below) of Merger Subsidiary with and into
Xxxxxxxxx, with Xxxxxxxxx surviving the Merger.
I. Immediately following the Merger, WTC will contribute all of the
outstanding shares of capital stock of Xxxxxxxxx to WTI.
J. The parties intend, and shall each use their respective reasonable
best efforts to assure, that, for federal income tax purposes, the Merger will
qualify as a reorganization as described in Section 368(a)(2)(E) of the Code (as
hereinafter defined) and that each of WTC, Merger Subsidiary and Xxxxxxxxx will
be a "party" to that reorganization within the meaning of Section 368(b) of the
Code.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, the parties hereto agree as
follows:
ARTICLE 1
DEFINITIONS
Capitalized terms used in this Agreement and not otherwise defined
herein shall have the meanings set forth below.
a. "Accelerated Run Rate" has the meaning assigned to such term in
Section 3.1(c).
b. "Accelerated Valuation" has the meaning assigned to such term in
Section 3.1(c).
c. "Advisers Act" means the Investment Advisers Act of 1940, as
amended from time to time.
d. "Affiliate" of a Person means a Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by or is
under common control with the first Person. As used in this definition, the term
"control" (including the terms "controlled by" and "under common control with")
means the possession, directly or indirectly, of the power to (1) vote 25% or
more of the outstanding voting securities of a Person or (2) otherwise direct
the management policies of a Person by contract or otherwise.
e. "Average Closing Price" means the average closing sale prices of
the Common Stock, as quoted on the New York Stock Exchange, for the 10 trading
day period preceding (i) the Closing in the case of Section 3.1(a)(1), (ii)
March 31 of the year specified in Section 3.1(a)(2), (3),
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(4) or (5), as the case may be, or (iii) the closing of the Change of Control
in the case of Section 3.1(c).
f. "Bankruptcy Code" means the U.S. Bankruptcy Code, as amended from
time to time, and any successor to that code.
g. "Base Run Rate" mean[*].
h. "Base Valuation" means the Base Run Rate multiplied by [*] or [*].
i. "BCT Agreement" is the agreement between WTC and the non-Xxxxxxxxx
members of BCT ("Non-Xxxxxxxxx Members") with respect to their right to put
their limited liability company interests in BCT to WTC in the form of Exhibit
1(i) hereto.
j. "Berkshire" has the meaning assigned to such term in Section 4.22.
k. "Business Day" means a day Wilmington Trust Company is open for
business.
l. "Change of Control" means (1) the acquisition by any Person or
group of Persons of beneficial ownership (as that term is defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly, of 25% or more of
the outstanding capital stock of WTI or its parent, WTC, entitled to vote for
the election of directors ("WTC Voting Shares"); (2) the acquisition by any
Person or any group of Persons (other than WTC, WTI or any of their Affiliates)
of 50% or more of the Membership Points in the LLC owned by WTC, WTI or any of
their Affiliates immediately prior to such acquisition; (3) the merger or
consolidation of WTI or WTC with one or more other Persons as a result of which
the holders of the outstanding WTC Voting Shares of WTI or WTC, as the case may
be, immediately before the merger or consolidation hold less than 50% of the WTC
Voting Shares of the surviving or resulting Person; (4) the merger or
consolidation of the LLC with one or more other Persons (other than WTI, WTC or
one of more of their Affiliates) as a result of which the holders of the
outstanding Membership Points immediately before the merger or consolidation
hold less than 50% of the total outstanding Membership Points (or equivalent) of
the surviving or resulting Person; (5) the transfer of all or substantially all
of WTI's, WTC's or the LLC's assets, other than to an Affiliate of WTI or WTC;
or (6) a proxy contest for the election of directors of WTC that results in
Persons constituting the Board of Directors of WTC immediately before the
initiation of that proxy contest ceasing to be a majority of the Board of
Directors of WTC upon the conclusion of that proxy contest; provided that
neither (x) any transfer of the capital stock or assets of WTI or WTC to, or the
merger or consolidation of WTI or WTC with or into, (A) an entity that both
prior to and also after that transfer, merger or consolidation had been and will
be consolidated with WTI or WTC for federal income tax purposes or (B) any
newly-formed, wholly owned subsidiary of WTI or WTC that will be consolidated
with WTI or WTC for federal income tax purposes, nor (y) a transfer of LLC
Interests by one or more Principals to one or more Permitted Transferees (as
defined in the LLC Agreement) shall be deemed to be a Change of Control for
purposes hereof. For the avoidance of doubt, the acquisition of 50% of the
voting equity of any Affiliate of WTC (other than by WTC, WTI or any of their
Affiliates) that has any direct or indirect ownership of the LLC shall be deemed
to be an indirect acquisition of the Membership Points (or equivalent) of the
LLC.
* CONFIDENTIAL TREATMENT REQUESTED
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m. "Closing" and "Closing Date" have the meanings assigned to such
terms in Section 2.3.
n. "Code" means the Internal Revenue Code of 1986, as amended from
time to time, or any corresponding federal tax statute enacted hereafter. A
reference to a specific section of the Code refers to that section as well as
any corresponding provision of any federal tax statute enacted hereafter, as
that section is in effect on the date of application of the provisions hereof
containing that reference.
o. "Common Stock" means WTC's common stock, par value $1 per share.
p. "Consent" has the meaning assigned to such term in Section 9.3(a).
q. "Contract Value" has the meaning assigned to such term in Section
9.3(b).
r. "Effective Time" means the time at which the Merger (as defined in
Section 2.1) becomes effective in accordance with Section 2.2.
s. "Employee Plan" or "Plan" has the meaning assigned to such term in
Section 4.21(d).
t. "Employment Agreements" means the employment agreements between
the LLC and each Principal (other than The 1999 Xxxxxxxxx Family Trust and The
Xxxxxx X. Xxxxxxxxx Insurance Trust) substantially in the form of Exhibit 1(t)
attached hereto.
u. "ERISA" has the meaning assigned to such term in Section 4.21(b).
v. "Environmental Laws" has the meaning assigned to such term in
Section 4.16(b).
w. "Estimated Shares" has the meaning assigned to such term in
Section 7.1(b).
x. "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
y. "Existing Debt" means the existing indebtedness of the Principals
to Colonial Bank in the current principal amount of $[*] with the final
scheduled installment due April 2008. Such debt was incurred to obtain funds,
which were contributed to Xxxxxxxxx for its use to pay for leasehold
improvements.
z. "Existing Fund" means each of Xxxxxxxxx U.S. Small Cap Equity
Fund, L.P., Xxxxxxxxx U.S. Small Cap Equity Fund Select, L.P., Xxxxxxxxx U.S.
Mid Cap Equity Fund, L.P., Xxxxxxxxx U.S. Mid Cap Equity Fund Select, L.P.,
Xxxxxxxxx U.S. Large Cap Equity Fund, L.P., Xxxxxxxxx U.S. Large Cap Equity
Fund Select, L.P., Xxxxxxxxx International Equity Fund, L.P., Xxxxxxxxx
International Equity Fund Select, L.P., Xxxxxxxxx Hedge Fund, L.P., Xxxxxxxxx
Hedge Fund Select, L.P. and Xxxxxxx Arbitrage, L.P.; and "Existing Funds" means
all of such funds collectively.
* CONFIDENTIAL TREATMENT REQUESTED
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aa. "Final Closing Balance Sheet" has the meaning assigned to such
term in Section 2.6.
bb. "Financial Statements" has the meaning assigned to such term in
Section 4.12(a).
cc. "GAAP" means United States generally accepted accounting
principles consistently applied with prior periods.
dd. "Governmental Authority" means any United States or foreign
government, any state or other political subdivision thereof, any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, including, without limitation, the SEC
or any other government authority, agency, department, board, commission or
instrumentality of the United States or any foreign government or any state or
other political subdivision thereof or any state insurance or banking authority,
the Board of Governors of the Federal Reserve System, a Federal Reserve Bank,
the Federal Deposit Insurance Corporation, the NASD, the NYSE, and any other
similar self-regulatory organization, and any court or tribunal of competent
jurisdiction.
ee. "Immediate Family" means, with respect to any natural person, that
person's spouse, parents, grandparents, children, grandchildren and siblings.
ff. "HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended, and the rules and regulations thereunder.
gg. "Indemnified Party" means a Person entitled to be indemnified
under Article 11 hereof.
hh. "Indemnifying Party" means a Person obligated to indemnify another
Person under Article 11 hereof.
ii. "Knowledge" means that which a Person actually knows or should
know. "Knowledge of Xxxxxxxxx" shall be the Knowledge of the individual
Principals only.
jj. "Leased Real Property" has the meaning assigned to such term in
Section 4.16.
kk. "Licenses" means licenses, franchises, permits and regulatory
approvals.
ll. "Lien" means a charge, mortgage, pledge, security interest,
restriction (other than a restriction on transfer arising under federal or state
securities laws (or rules and regulations thereunder) or laws relating to the
regulation of brokers, dealers, investment advisers, investment companies,
banks, insurance companies and other regulated businesses), lien, or encumbrance
of any nature whatsoever.
mm. "LLC Agreement" means the Amended and Restated Limited Liability
Company Agreement of the LLC in the form of Exhibit 1(mm) attached hereto, which
agreement shall amend and restate the Original LLC Agreement and the Second LLC
Agreement in their entirety.
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nn. "LLC Interest" has the meaning assigned to such term in the LLC
Agreement.
oo. "LLC Value" means the value of the LLC as determined under the LLC
Agreement.
pp. "Losses" has the meaning assigned to such term in Section 11.1.
qq. "Material Adverse Effect" with respect to a Person or Persons
means a material adverse effect on the business, assets, or condition
(financial or otherwise) of that Person or Persons determined on a consolidated
basis with respect to all Subsidiaries of such Person, as the case may be. A
Material Adverse Effect with respect to a Person shall include, without
limitation, any of the following: (1) impairment of the Person's ability to
conduct business in any material respect as it was conducted before the
occurrence of the Material Adverse Effect; or (2) a decrease of 10% or more of
the Person's annual net revenues or potential net revenues as a result of the
occurrence of the Material Adverse Effect. Notwithstanding any of the foregoing
provisions, a Material Adverse Effect shall not include the effect of any
event, change or occurrence arising out of or attributable to (A) economic
conditions in the United States or developed economies or national securities
markets in general, (B) regulatory and legal conditions in the United States
asset management industry generally, (C) changes in accounting principles
applicable to the Person to the extent required by law or GAAP, or (D) with
respect to Xxxxxxxxx as the Person, Xxxxxxxxx'x obtaining 90% (or more than 90%
but less than 100%) of the consents from clients as required by Section 9.3
hereof; provided, however, that a Material Adverse Effect shall include an
event, change or occurrence described in clause (A), (B), (C) or (D) only if it
adversely affects such Person or Persons to a materially greater extent than
other Persons in similar financial and business circumstances.
rr. "Member" has the meaning ascribed thereto in the LLC Agreement.
ss. "Membership Points" has the meaning assigned to such term in the
LLC Agreement.
tt. "Merger" has the meaning assigned to such term in Section 2.1.
uu. "NASD" means the National Association of Securities Dealers, Inc.
and any successor thereto.
vv. "New Business Opportunity" has the meaning assigned to such term
in the LLC Agreement.
ww. "Non-Voting Shares" has the meaning assigned to such term in
Section 4.4(a).
xx. "NYSE" means The New York Stock Exchange, Inc. and any successor
thereto.
yy. "Old Certificates" has the meaning assigned to such term in
Section 3.4(a).
zz. "Party" means Xxxxxxxxx, any Principal, Merger Subsidiary, WTI or
WTC and "parties" means all Persons that qualify as a Party.
aaa. "PBGC" has the meaning assigned to such term in Section
4.21(e).
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bbb. "Person" means any individual, partnership, corporation, limited
liability company, limited liability partnership, association, trust, joint
venture, unincorporated organization and any government, governmental department
or agency or political subdivision thereof.
ccc. "Principals' Representative" and "Principals' Representative
Agreement" have the meanings assigned to such terms in Section 13.15.
ddd. "Registration Rights Agreement" means the agreement among WTC and
each Principal in the form of Exhibit 1(ddd) hereto.
eee. "Registration Statement" has the meaning assigned to such term in
Section 7.1(b).
fff. "Rights" has the meaning assigned to such term in Section 4.4(a).
ggg. "Run Rate" means the LLC's consolidated annual net earnings before
interest, taxes, depreciation and amortization, determined for each calendar
year in accordance with GAAP and the accounting principles and practices
historically used by Xxxxxxxxx in preparing the Financial Statements, provided
that (1) in every event only costs directly attributable to the LLC's operations
will be included in calculating the Run Rate, (2) expenses of a New Business
Opportunity (as approved pursuant to the LLC Agreement) will not be included in
calculating the Run Rate until 24 months after expenses are first incurred for
that New Business Opportunity, (3) in preparing the LLC's consolidated annual
net earnings before interest, taxes, depreciation and amortization for a
calendar year, the LLC will be deemed to own its proportionate share of BCT's
annual net earnings before interest, taxes, depreciation and amortization for
that year based on the LLC's proportionate ownership of BCT during that year
calculated as though any outstanding unexercised options or rights to purchase
securities of BCT have not been exercised, (4) the LLC's revenues shall exclude
any rent (but not expense reimbursements) received pursuant to the second
sentence of Section 7.3(c) and (5) extraordinary, non-recurring items of revenue
and expense will be excluded. The Run Rate will be calculated by reference to
the LLC's financial statements prepared in accordance with GAAP and separately
audited by an independent accounting firm selected by the Principals and
acceptable to WTI, which acceptance will not be unreasonably withheld, and such
other books and records as are sufficient to identify the items in clauses (1)
through (5). Such direct costs referred to above do not include the costs of
support services generally available from WTC but do include the cost of the
benefits described in Section 7.3(b). The costs associated with opening and
operating the trust and/or banking office described in Section 7.3(c) will not
be included in computing the Run Rate.
hhh. "SEC" means the U.S. Securities and Exchange Commission.
iii. "SEC Documents" has the meaning assigned to such term in Section
5.7(a).
jjj. "Securities Act" means the Securities Act of 1933, as amended from
time to time.
kkk. "Stockholder Notes" has the meaning assigned to such term in
Section 9.10.
lll. "Subsidiary" or "Subsidiaries" means any corporation, partnership
or other organization, whether incorporated or unincorporated, of which more
than twenty-five percent
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(25%) of either the equity interests in, or the voting control of, that
corporation or other organization is beneficially owned by a Person, directly
or indirectly, through Subsidiaries or otherwise, or of which a Person serves
as the general partner or managing member.
mmm. "Surviving Entity" has the meaning assigned to such term in
Section 2.1.
nnn. "Taxes" has the meaning assigned to such term in Section 4.19.
ooo. "Transaction Documents" means this Agreement, the LLC Agreement,
the Employment Agreements, the Contribution Agreement, the Registration Rights
Agreement, the Original LLC Agreement, the Second LLC Agreement, the Principals'
Representative Agreement, the BCT Agreement, and all other agreements,
documents, instruments and certificates entered into in connection herewith or
therewith and any and all exhibits and schedules appertaining thereto.
ppp. "Valuation" means, for determinations for events occurring in
calendar years 2001 and 2002, the Base Valuation and, for determinations for
events occurring in each calendar year thereafter, the LLC's Run Rate in the
last full calendar year preceding the year in which the valuation is used
multiplied by a factor determined by reference to the annual compound growth in
the Run Rate to the end of the calendar year used to compute the Run Rate
calculated from January 1, 2003 and thereafter in accordance with the following
schedule:
Annual Compound Growth Multiple
---------------------- --------
Below [*]% [*] times
[*]% [*] times
[*]% [*] times
[*]% [*] times
[*]% [*] times
Over [*]% [*] times;
provided, however, that the product of (1) any amount excluded pursuant to
clause (5) of Section 1(ggg) for a calendar year and (2) a fraction, the
numerator of which is the number of Membership Points held by Xxxxxxxxx at the
end of such year and the denominator of which is the total number of Membership
Points outstanding at the end of such year, shall be subtracted from the
Valuation for that year.
Annual compound growth in the Run Rate between [*]% and [*]% shall be
interpolated proportionately. The initial value used for the calculation of the
compound growth rate that will determine the earn out payment multiple will be
the Base Run Rate. The initial computation of the annual compound growth rate
for 2002 shall be determined by dividing the Base Run Rate into the Run Rate for
calendar year 2002, subtracting one from the result and converting that result
into a percentage. For example, if the Base Run Rate were 2000 and the Run Rate
for 2002 were 2400, the annual compound growth for 2002 would be 20% and the
multiple for 2002 would be [*]. The annual compound growth rate for subsequent
years would be determined on a compound basis beginning with calendar year 2003.
Attached as Schedule l(ppp) are further examples of computations related to
Valuation.
* CONFIDENTIAL TREATMENT REQUESTED
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qqq. "Voting Shares" has the meaning assigned to such term in Section
4.4(a).
ARTICLE 2
THE MERGER
Section 2.1 The Merger. At the Effective Time, Merger Subsidiary
shall merge with and into Xxxxxxxxx in accordance with the terms hereof (the
"Merger"), and the separate corporate existence of Merger Subsidiary shall
cease. Xxxxxxxxx shall be the surviving entity in the Merger (sometimes
referred to hereinafter as the "Surviving Entity") and continue to be governed
by Georgia law, and the separate corporate existence of Xxxxxxxxx, with all of
its rights, privileges, immunities, powers and franchises, shall continue
unaffected by the Merger. The articles of incorporation and the bylaws of
Xxxxxxxxx immediately before the Merger shall be the articles of incorporation
and the bylaws of the Surviving Entity
Section 2.2 Effective Time. The Merger shall become effective
upon the later to occur of the filing, in the offices of the respective
Secretaries of State of Delaware and of Georgia, of a certificate or articles of
merger in accordance with Delaware and Georgia law, or at such later date and
time as may be set forth in those certificates.
Section 2.3 Closing. The closing of the Merger (the "Closing")
shall take place at the offices of Xxxxxx & Bird LLP, One Atlantic Center, 0000
Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000-0000, at 10:30 a.m., local time,
and be effective at the close of business on the closing date, which shall be
five Business Days after the fulfillment or waiver of each condition set forth
in Articles 9 and 10 hereof (other than the conditions that are fulfilled or
waived as a part of the Closing); provided that, if the Closing would occur on
or prior to December 31, 2001, the Closing may be delayed by Xxxxxxxxx to
January 2, 2002 or such other date or place as Xxxxxxxxx may mutually agree
upon, that date being herein referred to as the "Closing Date." The parties
shall use their reasonable best efforts to cause the conditions to Closing set
forth in Articles 9 and 10 hereof to be satisfied as soon as practicable, and
shall cause to be executed at Closing the Transaction Documents by the
respective parties to each of such documents.
Section 2.4 Contribution. Immediately following the Merger, WTC
shall contribute all of the outstanding capital stock of Xxxxxxxxx to WTI.
Section 2.5 Execution of LLC Agreement. On the Closing Date and
immediately following the contribution and distribution described in Recital C,
the LLC Agreement shall be executed and a copy of the LLC Agreement shall be
delivered to WTI, Xxxxxxxxx and the Principals.
Section 2.6 Final Closing Balance Sheet. Promptly after the
Closing, WTI and WTC (in consultation with, and with such assistance as WTI and
WTC shall reasonably request of, the Xxxxxxxxx Entities and the Principals)
shall prepare an audited consolidated balance sheet and related notes of the
Xxxxxxxxx Entities as of the close of business on the Closing Date (the "Final
Closing Balance Sheet"), prepared in accordance with GAAP on a basis consistent
with the preparation of the Financial Statements under Section 4.12, except that
(a) no item shall fail to be
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included therein or excluded therefrom on the basis of materiality,
individually or collectively and (b) at WTI's and WTC's option, the effect of
any breaches of the representations and warranties of Xxxxxxxxx and the
Principals made herein and discovered by WTI or WTC on or before the date of
the Final Closing Balance Sheet shall be fully reserved therein. As soon as
practicable following the Closing, the Final Closing Balance Sheet shall be
delivered by WTI and WTC to the Principals, accompanied by the report of the
auditors thereon.
ARTICLE 3
CONSIDERATION; EXCHANGE
Section 3.1 Merger Consideration.
a. Subject to the terms and conditions hereof and as a
part of the Merger, WTC shall issue Common Stock and cash to the Principals, in
the manner contemplated by Section 3.1(e), equal to the following amounts in
proportion to their respective ownership interests in common stock of Xxxxxxxxx
immediately prior to Closing as set forth on Schedule 3.1(a) hereto:
(1) At Closing, [*]% times the Base Valuation
for 2000;
(2) By March 31, 2004, [*]% times the Valuation
for 2003;
(3) By March 31, 2005, [*]% times the Valuation
for 2004;
(4) By March 31, 2006, (A) [*]% times the
Valuation for 2005 (provided that, and to be
paid only if, the Run Rate for 2005 is at
least equal to the Base Run Rate), plus (B)
[*]% of an amount determined by multiplying
(a) the Run Rate multiple used for this
payment minus ten and (b) the Base Run Rate;
and
(5) By March 31, 2007, [*]% of the Base
Valuation.
b. In addition:
(1) At Closing and as a further part of the
Merger, WTC shall pay to Colonial Bank on behalf of and for
the benefit of the Principals 80% of the principal amount of
the Existing Debt, in proportion to their respective
ownership of common stock of Xxxxxxxxx immediately prior to
Closing as set forth on Schedule 3.1(a) hereto; and
(2) Notwithstanding Section 3.1(a) above, the
total amount issued, in the manner contemplated by Section
3.1(e), to each of the Principals pursuant to Section
3.1(a)(2) through (5) shall be reduced (A) by the amounts and
in the manner set forth in Schedule 3.1(b)(2) attached
hereto, and (B) by any amounts that are due and unpaid from
such Principal pursuant to the terms of a Stockholder Note.
c. In the event of a Change of Control of WTC or the
LLC, and provided that some or all of the Principals so elect (which election
may be made prior to the effective date of the
* CONFIDENTIAL TREATMENT REQUESTED
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Change of Control), any amounts due and unissued, in the manner contemplated by
Section 3.1(e), under Sections 3.1(a)(2), 3.1(a)(3), and 3.1(a)(4)(A) and (B)
shall be calculated on the basis of the greater of (i) the Valuation (the
"Accelerated Valuation") based on the Run Rate for the full calendar year
preceding such Change of Control (the "Accelerated Run Rate") or (ii) the Base
Valuation, and such amounts, along with any amount under Section 3.1(a)(5),
shall be issued in Common Stock and cash, in the manner contemplated by Section
3.1(e), to the Principals within a period of the later of (A) 30 days following
the receipt of such Principals' election or (B) the closing of the transactions
giving rise to the Change of Control in the proportions set forth in Schedule
3.1(a) hereto. For example, if a Change of Control of WTC shall occur prior to
the issue of Common Stock due under Section 3.1(a)(2), some or all Principals
shall, if they so elect, receive in the aggregate an amount equal to the sum of:
(1) [*]% times the Accelerated Valuation; (2) [*]% times the Accelerated
Valuation; (3) [*]% times the Accelerated Valuation (the amount in this clause
(3) to be paid only if the Accelerated Run Rate is at least equal to the Base
Run Rate); (4) the amount due under Section 3.1(a)(4)(B), if the Accelerated Run
Rate multiple exceeds [*]; and (5) the amount due under Section 3.1(a)(5).
If some, but not all, of the Principals make the election contemplated
by this Section 3.1(c) and Section 3.1(f) does not apply, then (1) the amounts
payable to the Principals who have made such election shall be determined by
multiplying (A) the sum of the amount determined in accordance with the
preceding paragraph and Section 3.1(d) by (B) a percentage equal to the sum of
their respective ownership percentages of Xxxxxxxxx immediately prior to Closing
as set forth in Schedule 3.1(a) hereto, and shall be distributed among them in
accordance with such respective ownership percentages, and (2) the amounts
payable to the Principals who have not made such election shall remain payable
at the times they would otherwise be payable and shall be determined by
multiplying the amount they would otherwise have received under Section 3.1 by a
percentage equal to the sum of their respective ownership percentages of
Xxxxxxxxx immediately prior to Closing as set forth on Schedule 3.1(a) hereto,
and shall be allocated among them in accordance with such respective ownership
percentages.
d. Notwithstanding Section 3.1(c) above, the amount to
be issued in Common Stock and cash, in the manner contemplated by Section
3.1(e), pursuant to Section 3.1(c) to each of the Principals shall be reduced by
(1) the present value of 80% of the interest payments on the Existing Debt in
the manner described in Schedule 3.1(b)(2) to the extent such amounts have not
already been deducted pursuant to Section 3.1(b)(2) of this Agreement, and (2)
by any amounts that are due from such Principal pursuant to the terms of a
Stockholder Note that are then unpaid. The present value of the remaining
payments will be computed using the interest rate on the Existing Debt.
e. 100% (or as close to such amount as is possible and
still issue to each Person in whole shares of Common Stock) of each amount
contemplated by Sections 3.1(a) and (c) (as adjusted by Section 3.1(d)) shall be
made in Common Stock based on the Average Closing Price, and the balance shall
be made in cash. The payment contemplated by Section 3.1(b)(1) shall be paid in
cash.
f. To the extent that any Principals and/or their
Permitted Transferees have exercised their right to purchase LLC Interests
pursuant to Section 7.5(b) of the LLC Agreement,
* CONFIDENTIAL TREATMENT REQUESTED
-11-
(1) such Principals shall not be entitled to receive any future payments under
this Section 3.1, and (2) the amounts otherwise payable to the other Principals
under this Section 3.1 shall be determined as though they had elected to
receive the accelerated payments pursuant to Section 3.1(c), reduced by the
amount in Section 3.1(d), and shall be multiplied by a percentage equal to the
sum of their respective ownership percentages of Xxxxxxxxx immediately prior to
Closing as set forth in Schedule 3.1(a) hereto, and shall be allocated among
them in accordance with such relative ownership percentages. If this Section
3.1(f) applies, then none of the Principals shall have any rights to receive
Common Stock and cash under Section 3.1, if any, other than through this
Section 3.1(f).
g. Notwithstanding anything to the contrary in this
Section 3.1, to the extent that some or all of the Principals and/or their
Permitted Transferees have exercised their right to put some or all their LLC
Interests to Xxxxxxxxx under Section 7.5(a) of the LLC Agreement, (1) the
amounts otherwise payable to those Principals under this Section 3.1 shall be
determined as though they had elected to receive the accelerated payments
pursuant to Section 3.1(c), reduced by the amount in Section 3.1(d) and shall
be multiplied by a percentage equal to the sum of their respective ownership
percentages of Xxxxxxxxx immediately prior to Closing as set forth in Schedule
3.1(a) hereto, and shall be distributed among them in accordance with such
relative ownership percentages, and (2) unless Section 3.1(f) applies, the
amounts otherwise payable under this Section 3.1 to those Principals who have
not exercised their right to put their LLC Interests to Xxxxxxxxx under Section
7.5(a) of the LLC Agreement shall remain payable at the times they would
otherwise be payable and shall be equal to the amount they would have otherwise
received under this Section 3.1 multiplied by the sum of their respective
ownership percentages of Xxxxxxxxx immediately prior to Closing as set forth in
Schedule 3.1(a) hereto, and shall be allocated among them in accordance with
such relative ownership percentages.
Section 3.2 Rights as Stockholders; Stock Transfers. At the
Effective Time, holders of Xxxxxxxxx'x stock shall cease to be, and shall have
no rights as, stockholders of Xxxxxxxxx, other than the right to receive the
consideration provided for in this Article 3, and WTC will own all of
Xxxxxxxxx'x outstanding shares of capital stock. After the Effective Time, there
shall be no transfers on the stock transfer books of Xxxxxxxxx of shares of
Xxxxxxxxx'x capital stock.
Section 3.3 Fractional Shares. Notwithstanding any other
provision hereof, no fractional shares of Common Stock and no certificates or
scrip therefor, or other evidence of ownership thereof, will be issued in the
Merger. Instead, WTC shall pay each Principal who otherwise would be entitled to
a fractional share an amount in cash, without interest, determined by
multiplying that fraction by the Average Closing Price.
Section 3.4 Exchange Procedure.
a. At Closing, each Principal shall tender all
certificates representing shares of Xxxxxxxxx stock he or it owns (the "Old
Certificates") marked "cancelled" or provide such Principal's affidavit as to
the status of the Old Certificates and such Principal's personal indemnity to
WTC if any of those Old Certificates are lost, stolen or destroyed relative to
any damages as a result of such lost, stolen or destroyed Old Certificates.
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b. At Closing, WTC shall issue and deliver to the
Principals certificates of Common Stock in the amounts required by Section
3.1(a)(1) and 3.1(e) in exchange for the Old Certificates and/or the affidavit
and indemnity for missing Old Certificates.
c. Subsequent to Closing and without further action by
the Principals, WTC shall issue and deliver to the Principals the shares of
Common Stock in the amounts and at the times indicated in Section 3.1 hereof. It
is contemplated that the procedure will be completed before March 31 of each
year in which an issue of Common Stock is required hereunder and, except as
contemplated in Section 3.1(c), the issue and distribution of Common Stock will
occur on March 31.
d. No dividend or other distribution on Common Stock
with a record date occurring after the date of this Agreement shall be paid to
any Principal until he is entitled to receive new certificates in accordance
with this Article 3, and no such shares shall be eligible to be voted at any
meeting of holders of Common Stock until the Principal is entitled to receive
those new certificates in accordance with this Article 3.
Section 3.5 Adjustments. The shares of Common Stock to be issued
to the Principals hereunder shall be adjusted appropriately to reflect any stock
split, stock dividend, combination, merger, recapitalization, exchange of shares
or similar transaction with a record date prior to the Effective Date or any
other date an issue of Common Stock is due hereunder.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF XXXXXXXXX AND THE
PRINCIPALS TO MERGER SUBSIDIARY, WTI AND WTC
Xxxxxxxxx and each Principal, jointly and severally, make each of the
following representations, warranties and agreements to Merger Subsidiary, WTI
and WTC:
Section 4.1 Organization. Each Xxxxxxxxx Entity and the LLC is
duly organized, validly existing and in good standing under Georgia law in the
case of Xxxxxxxxx, XX and GP; Tennessee law in the case of BCT; and Delaware law
in the case of the LLC; and each is duly qualified to do business in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties requires that qualification. Xxxxxxxxx has had in effect a valid
and effective election under Section 1362(a)(2) of the Code to be an S
corporation for each taxable year since its incorporation. Neither Xxxxxxxxx nor
the Principals have taken or will take any action prior to the Effective Time to
terminate Xxxxxxxxx'x S corporation election. For each taxable year that
Xxxxxxxxx has had a nonresident shareholder (as defined in O.C.G.A. [sec]
48-7-100(6.2)), Xxxxxxxxx has filed with its Georgia corporate tax return an
executed consent agreement required by O.C.G.A. [sec] 48-7-27(d)(2).
Section 4.2 Authority. Each of Xxxxxxxxx and BC has all requisite
corporate power and authority and each of GP, BCT and the LLC has all requisite
power and authority to (a) own its assets and conduct its business as presently
carried on and as contemplated by Xxxxxxxxx to be carried on after Closing and
(b) execute, deliver and perform this Agreement and each other
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Transaction Document to which any such Person is a party. This Agreement and
each other Transaction Document to be executed, delivered and performed by any
of the Xxxxxxxxx Entities, the LLC and the Principals in connection with the
transactions contemplated hereby or thereby with respect to that Person has
been duly and validly approved by all necessary action of that Person. This
Agreement and each other Transaction Document to which any of the Xxxxxxxxx
Entities, the LLC or any of the Principals is a party represents or, when
executed, will represent, the valid and legally binding obligation of that
Person, enforceable against it or him in accordance with its terms, except as
may be limited by (x) bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, fraudulent transfer or similar laws now or hereafter
relating to creditors' rights generally or (y) general principles of equity,
whether asserted in a proceeding in equity or at law.
Section 4.3 Governmental Filings; Non-Contravention. Other than
the filings and/or notices set forth in Schedule 4.3 (including those (i) under
the HSR Act (if WTC notifies Xxxxxxxxx that a filing under such act is
required), the Exchange Act and the Securities Act, (ii) required to be made
with the NASD, and (iii) required to be made pursuant to state securities laws
and regulations), no notices, reports, applications or other filings are
required to be made by any of the Xxxxxxxxx Entities, the LLC or the Principals
with, nor are any consents, registrations, approvals, permits or authorizations
required to be obtained by any of them from, any Governmental Authority in
connection with the execution and delivery of this Agreement and the other
Transaction Documents, and the consummation by each such Person of the Merger
and the other transactions contemplated hereby and thereby. Subject to the
making or obtaining of all filings, notices, applications, consents,
registrations, approvals, permits or authorizations with or of any relevant
Government Authority with respect to the Merger, the Transaction Documents and
the other transactions contemplated hereby and thereby as set forth on Schedule
4.3, the execution, delivery and performance of this Agreement and each other
Transaction Document to be executed, delivered and performed by any of the
Xxxxxxxxx Entities, the LLC or any of the Principals in connection with the
transactions contemplated hereby and thereby does not and will not: (a) violate
any provision of the articles of incorporation or bylaws of Xxxxxxxxx or BC or
the limited liability company certificate or limited liability company
agreement of GP or BCT; (b) violate, conflict with or result in a default under
any material contract or material obligation to which any of the Xxxxxxxxx
Entities or any Principal is a party or by which any of that Person's assets
are bound; (c) violate or result in a violation of, or constitute a default, in
any material respect, under any law, regulation or rule, or any order of or
restriction imposed by any court or other Governmental Authority on, any of the
Xxxxxxxxx Entities, the LLC and/or any Principal or any of that Person's
properties; (d) require any of the Xxxxxxxxx Entities, the LLC and/or any
Principal to obtain any approval, consent or waiver of, or make any filing
with, any person or entity that has not been obtained or made, except as
contemplated or excused by Sections 8.1, 9.3 and 9.4, which approvals,
consents, waivers or filings, as applicable, will have been received prior to
Closing or at any earlier time required hereunder or under applicable laws,
rules and regulations; or (e) result in creation or imposition of any Lien on
any of the assets of any of the Xxxxxxxxx Entities or the LLC.
Section 4.4 Capitalization.
a. The authorized capital stock of Xxxxxxxxx consists of
100,000 shares of voting common stock, no par value per share (the "Voting
Shares"), and 1,000,000 shares of non-voting common stock, no par value per
share (the "Non-Voting Shares"). As at the date hereof, 10,437 Voting Shares are
outstanding, 93,932 Non-Voting Shares are outstanding and all such
-14-
outstanding shares were and are validly issued, fully paid and nonassessable.
Schedule 4.4(a) lists by name, address and number of shares each holder of
Voting Shares and Non-Voting Shares. Except as set forth in Schedule 4.4(a)(1)
attached hereto, there are no (1) outstanding shares of capital stock or other
securities of Xxxxxxxxx, (2) outstanding options, warrants, puts, calls,
commitments, agreements, contracts or preemptive or other rights (such items
being referred to hereafter as "Rights") to purchase, issue or otherwise
acquire any capital stock or other securities of Xxxxxxxxx or (3) obligations
or securities convertible into or exchangeable for capital stock or other
securities of Xxxxxxxxx. None of such Voting Shares and/or Non-Voting Shares
are subject to any Lien.
b. After giving effect to the Merger, the LLC Agreement
and the contribution contemplated in Section 2.4, the Members and their
respective capital account balances and Membership Points in the LLC shall be as
set forth in Schedule 4.4(b) hereto. Except as set forth in the Transaction
Documents, there are no existing rights, agreements or commitments obligating or
that might obligate the LLC or any of its members to issue, transfer, sell or
redeem any securities.
Section 4.5 Subsidiaries and Other Relationships. Except as set
forth in Schedule 4.5, none of any of the Xxxxxxxxx Entities or the LLC: (a)
owns, directly or indirectly, any capital stock of or other equity or
proprietary interest in any Subsidiary or any other corporation, any such
interest in any association, trust, partnership, limited liability company,
joint venture or similar entity or in any other entity or enterprise; (b) is an
Affiliate of any other entity that is not a Principal; or (c) is a party to any
joint venture, profit-sharing or similar agreement regarding the profitability
or financial results of any of the Xxxxxxxxx Entities, the LLC or any Principal
or the division of revenues or profits of any Xxxxxxxxx Entity, the LLC or any
Principal. Except as set forth in Schedule 4.5 or Schedule 4.7, none of any of
the Xxxxxxxxx Entities or the LLC has any off-balance-sheet financial
obligation, guaranty or promissory note to any Person in an amount in excess of
$100,000. Except as set forth in Schedule 4.4(a) or Schedule 4.5, there are no
(1) outstanding shares of capital stock or other securities of any of the
Xxxxxxxxx Entities, (2) outstanding options, warrants, puts, calls, commitments,
agreements, contracts or preemptive or other rights to purchase, issue or
otherwise acquire any capital stock or other securities of any of the Xxxxxxxxx
Entities or (3) obligations or securities convertible into or exchangeable for
capital stock or other securities of any of the Xxxxxxxxx Entities.
Section 4.6 Business. Since their inception, each of the
Xxxxxxxxx Entities and the LLC has been engaged solely in the business of
providing investment management, investment advisory services, and/or
broker-dealer services. Each of the Xxxxxxxxx Entities, the LLC and the Existing
Funds is in material compliance with all federal and state laws, including those
requiring registration, licensing or qualification as an investment adviser or a
broker-dealer, as applicable. Each of the Xxxxxxxxx Entities, the LLC and the
Existing Funds has delivered to WTI true and complete copies of its
organizational (and, in the case of the Existing Funds, offering) documents, as
amended to date. Each of the Xxxxxxxxx Entities, the LLC and the Existing Funds
has all Licenses necessary to own its properties and conduct its business as it
is presently conducted.
Section 4.7 Assets. None of the assets contributed by Xxxxxxxxx
to the LLC is subject to any Lien in favor of any Person, except as listed in
Schedule 4.7. None of the Xxxxxxxxx Entities is obligated to perform any
obligation or pay any amount in connection with the Existing Debt, and
-15-
the holder of the Existing Debt does not have a Lien on any of the assets or
properties of any Xxxxxxxxx Entity, except as listed in Schedule 4.7. None of
the Xxxxxxxxx Entities or the LLC owns any real property; and no personal
property owned by any of the Xxxxxxxxx Entities or the LLC is or, to the
Knowledge of Xxxxxxxxx, will be subject to any Lien except for minor
imperfections of title or insignificant Liens that do not, in the aggregate,
materially detract from the value of the Xxxxxxxxx Entities and the lien
associated with the Existing Debt. Schedule 4.7 hereto lists:
a. All real property leased by any of the Xxxxxxxxx
Entities or the LLC, together with the location of that property, monthly lease
payments and lease termination dates;
b. All personal property leases in which any of the
Xxxxxxxxx Entities or the LLC is obligated to make annual lease payments to any
Person in excess of $10,000; and
c. All personal property owned by any of the Xxxxxxxxx
Entities or the LLC, together with the book value thereof that is reflected on
the books of the Xxxxxxxxx Entities or the LLC (with any personal property owned
by a Principal indicated on Schedule 4.7).
All leases for real or personal property are valid and
effective in accordance with their terms, and there is no existing breach or
event under any lease which, which with the giving of notice, the lapse of time
or both would become a breach, on the part of the Xxxxxxxxx Entities or the LLC
or, to the Knowledge of Xxxxxxxxx, on the part of any other party thereto.
Section 4.8 Managed Assets. The aggregate assets under management
by each of the Xxxxxxxxx Entities, the assets of entities for which any of the
Xxxxxxxxx Entities serves as general partner or managing member and the
aggregate amount of assets of entities from which any of the Xxxxxxxxx Entities
earns any fees as of September 30, 2001 (or as of the most recent practicable
date with respect to the aggregate amount of assets under management) are
accurately set forth in Schedule 4.8 hereto. In addition, Schedule 4.8 lists, as
of September 30, 2001 (or as of the most recent practicable date with respect to
the aggregate amount of assets under management), all investment management,
advisory or sub-advisory contracts, if any, setting forth the name of the client
under contract, the aggregate amount of assets under management with respect to
that contract and the fee schedule with respect to that contract.
Section 4.9 Receivables. All accounts receivable set forth on the
books and records of each of the Xxxxxxxxx Entities are (a) accurately reflected
in the books and records of that Person, (b) valid receivables owned by that
Person, free and clear of any Lien, and (c) to the Knowledge of Xxxxxxxxx, not
subject to setoffs or counterclaims.
Section 4.10 Contracts. All contracts to which any of the
Xxxxxxxxx Entities or the LLC is a party or by which any of them is bound are
enforceable against that Person and, to the Knowledge of Xxxxxxxxx, the other
parties thereto in accordance with their respective terms. There is not under
any such contract an existing material breach or event that, with the giving of
notice or the lapse of time or both, would become a material breach or event, on
the part of the Xxxxxxxxx Entities or the LLC, or, to the Knowledge of
Xxxxxxxxx, on the part of any other party thereto. Schedule 4.10 lists all
material contracts to which any of the Xxxxxxxxx Entities or the LLC is a party
or by which any of them is bound together with a list of any material contract
to which any of the Xxxxxxxxx Entities or
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the LLC is a party or by which any of them is bound where the consent or
approval of the other party(ies) to that contract is required for the
consummation of the transactions contemplated hereby.
Section 4.11 Employment Arrangements. Except as set forth in
Schedule 4.11 hereto, none of the Xxxxxxxxx Entities or the LLC has any
obligation, contingent or otherwise, under (a) any written or oral employment,
collective bargaining or other labor agreement, (b) any written or oral
agreement containing severance or termination pay arrangements, (c) any written
or oral deferred compensation agreement, retainer or consulting arrangement, (d)
any pension or retirement plan, bonus or profit-sharing plan or stock option or
stock purchase plan (except any Employee Plan described in Section 4.21(a)
hereto) or (e) any other written or oral employee contract or non-terminable
employment arrangement (each, an "Employment Arrangement"). None of the
Xxxxxxxxx Entities or the LLC is in default with respect to any term or
condition of any Employment Arrangement.
Section 4.12 Financial Statements.
x. Xxxxxxxxx has delivered to WTI the audited
consolidated and consolidating balance sheets, income statements and statements
of cash flows of Xxxxxxxxx as of December 31, 2000 and the unaudited
consolidated and consolidating balance sheets and income statements as of
September 30, 2001 (collectively, the "Financial Statements"), as set forth in
Schedule 4.12(a) hereto.
b. The Financial Statements, subject to the
qualifications and exceptions noted thereon or in the notes thereto, (i) are
accurate and complete in accordance with the books of account and records of
each such Person; (ii) have been prepared in accordance with GAAP throughout the
indicated periods, except that the interim financial statements contain no notes
or year-end adjustments; and (iii) fairly present in all material respects the
financial condition, assets and liabilities, and results of operation of each
such Person and its results of operations, respectively, as of the dates thereof
or for the periods then ended.
c. None of the Xxxxxxxxx Entities or the LLC has any
debt, obligation or liability, absolute, fixed, contingent or otherwise, of any
nature whatsoever, whether due or to become due, including any unasserted claim,
whether incurred directly or by any predecessor thereto, and whether arising out
of any act, omission, transaction, circumstance, sale of goods or services,
state of facts or other condition, except: (1) those reflected or reserved
against on the Financial Statements in the amounts shown therein; (2) those not
required under GAAP to be reflected or reserved against in the Financial
Statements that are expressly quantified and set forth in the Transaction
Documents; (3) those incurred in the ordinary course of business since the date
of the Financial Statements, and (4) those disclosed on Schedule 4.12(c).
Section 4.13 Material Adverse Change. Since September 30, 2001, no
event or condition, individually or in the aggregate, has had a Material Adverse
Effect on the Xxxxxxxxx Entities and the LLC, taken as a whole, and, to the
Knowledge of Xxxxxxxxx, there is no impending event or condition that would have
a Material Adverse Effect on the Xxxxxxxxx Entities and the LLC, taken as a
whole.
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Section 4.14 Ordinary Course of Business. Since the date of the
Financial Statements, each of the Xxxxxxxxx Entities has operated its business
in the normal, usual and customary manner in the ordinary and regular course of
business, consistent in all material respects with prior practice.
Section 4.15 Litigation and Compliance with Laws.
a. There are no order, writs, injunctions, decrees or
unsatisfied judgments, and no actions, suits, claims or proceedings or
investigations pending or, to the Knowledge of Xxxxxxxxx, threatened against any
of the Xxxxxxxxx Entities, the LLC or any Principal for any of their past or
current business activities.
b. (1) Each of the Xxxxxxxxx Entities, the LLC and the
Principals are currently and, during the past five years (or, with respect to
any of the Xxxxxxxxx Entities and the LLC, such shorter time, if any, that it
has been in existence), have been, operating in compliance in all material
respects with all laws, rules, regulations and orders applicable to that
Person's business, including all federal and state securities laws, and
(A) None of the Xxxxxxxxx Entities, the LLC or
any Principal nor, to the Knowledge of Xxxxxxxxx, any Person "associated" (as
that term is defined under the Advisers Act) with any of the Xxxxxxxxx Entities,
the LLC or any Principal has, within five years prior to the date hereof, been
convicted of any crime or is or has been subject to any disqualification in
each case that would be the basis for denial, suspension or revocation of
registration of an investment adviser under Section 203(e) or 206(4) of the
Advisers Act or Rule 206(4)-4(b) thereunder or for disqualification as an
investment adviser for any investment company pursuant to Section 9 of the
Investment Company Act of 1940, as amended; and
(B) None of any of the Xxxxxxxxx Entities, the
LLC or any Principal, nor to the Knowledge of Xxxxxxxxx, any Affiliate of the
Xxxxxxxxx Entities, the LLC or any Principal, is subject to a "statutory
disqualification" as defined in Section 3(a)(39) of the Exchange Act or is
subject to a disqualification that would be a basis for censure, limitations on
the activities, functions or operations of, or suspension or revocation of the
registration of BC as a broker-dealer, municipal securities dealer, government
securities broker or government securities dealer under Section 15, Section 15B
or Section 15C of the Exchange Act, and, to the Knowledge of Xxxxxxxxx, there is
no reasonable basis for, or proceeding or investigation, whether formal or
informal or whether preliminary or otherwise, that is reasonably likely to
result in, any such censure, limitations, suspension or revocation
(2) Without limiting the generality of the
foregoing:
(A) The Form ADV and/or Form BD of each
Xxxxxxxxx Entity when filed with the SEC and on each date any amendment to such
form was filed (and, with respect to Part II of Form ADV, on each date when
distributed by such Xxxxxxxxx Entity) complied in all material respects with the
rules and regulations of the SEC and did not contain an untrue statement of
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
in which they were made, not misleading; and
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(B) The offering documents for the Existing
Funds when distributed or used did not contain an untrue statement of material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances in which
they were made, not misleading and no oral or written representation, warranty
or statement made by any of the Xxxxxxxxx Entities, the LLC or any Principal in
connection with the offer or sale of an interest in an Existing Fund contradicts
such offering documents.
c. None of the Xxxxxxxxx Entities, the LLC or any
Principal is in default with respect to any judgment, order, writ, injunction,
decree, demand or assessment issued by any court or any federal, state,
municipal or other governmental agency, board, commission, bureau,
instrumentality or department, domestic or foreign, relating to any aspect of
the business, affairs, properties or assets of that Person, provided that the
foregoing representation and warranty does not apply to misdemeanors or traffic
violations and with respect to each Principal is made only by that Principal.
d. None of any of the Xxxxxxxxx Entities, the LLC or any
Principal is charged or, to the Knowledge of Xxxxxxxxx, threatened with or under
investigation with respect to any violation of any federal, state, municipal or
other law or any administrative rule or regulation, domestic or foreign,
applicable to the business, affairs, properties or assets of that Person;
provided, however, that the foregoing representation and warranty does not apply
to misdemeanors or traffic violations and, with respect to each Principal, is
made only by that Principal.
e. Each participant in Xxxxxxx Arbitrage, L.P.,
Xxxxxxxxx Hedge Fund, L.P. and Xxxxxxxxx Hedge Fund Select, L.P. is a "qualified
client" within the meaning of Rule 205-3 under the Advisers Act, and no
participant in any other Existing Fund pays a performance fee within the meaning
of such Rule 205-3.
Section 4.16 Environmental Matters.
a. Each of the Xxxxxxxxx Entities and the LLC has
operated its business in the properties identified in Schedule 4.7 ("Leased Real
Property") in material compliance with all applicable federal, state and local
laws relating to public health and safety, employee health and safety and
protection of the environment (collectively, "Environmental Laws").
b. None of Xxxxxxxxx Entities or the LLC is subject to
any liability, penalty or expense (including legal fees) by virtue of:
(1) Any violation of any Environmental Law;
(2) Any activity conducted on or with respect to any
property owned or leased by that Person;
(3) Any environmental condition existing on or with
respect to any property owned or leased by that Person, in
each case whether or not that Person permitted or
participated in that act or omission;
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(4) Any off-site transportation, storage, treatment
or disposal of any hazardous substance or waste; and
(5) The presence of polychlorinated biphenyls,
asbestos-containing material, urea formaldehyde insulation or
storage tanks at any Leased Real Property.
c. To the Knowledge of Xxxxxxxxx, none of the Leased
Real Property is listed or proposed for listing on the National Priorities List
Pursuant to the Comprehensive Environmental Response Compensation and Liability
Act of 1980, as amended, or any state or local list of sites requiring
investigation or cleanup.
d. Each of the Xxxxxxxxx Entities and the LLC has
furnished WTI copies of all environmental reports, studies or audits in its
possession conducted on its behalf relating to the Leased Real Property.
Section 4.17 Broker Dealer. Except for BC, none of any of the
Xxxxxxxxx Entities, the LLC and the Principals is a "broker" or "dealer" that is
registered or required to be registered with the SEC pursuant to the Exchange
Act, with the NASD pursuant to the NASD's Membership and Registration Rules, or
with any state pursuant to any applicable state securities law.
Section 4.18 Insurance Policies. Each of the Xxxxxxxxx Entities
and the LLC has in full force and effect insurance which management has
reasonably determined to be prudent with respect to its business, properties and
assets (including, without limitation, errors and omissions liability
insurance) as listed in Schedule 4.18 hereto. None of the Xxxxxxxxx Entities or
the LLC is in material default under any such policy, and each will use
commercially reasonable efforts to continue those policies in full force and
effect. As of Closing, the LLC shall become an insured under the policies
listed in Schedule 4.18.
Section 4.19 Tax Matters. Each of the Xxxxxxxxx Entities and the
LLC has (a) paid or caused to be paid all federal, state, county, local, foreign
and other taxes (including, without limitation, income, excise, property,
withholding, sales, use and franchise taxes, unemployment insurance, social
security, gross receipt taxes, occupation taxes and other similar obligations)
and all deficiencies or additions to tax, interest, fines and penalties
(collectively, "Taxes") required to be paid by it (other than current taxes the
liability for which is adequately provided for in the Financial Statements) and
(b) in accordance with applicable law, filed all federal, state, county, local
and foreign tax returns required to be filed by it. All such returns correctly
and accurately set forth the amount of any Taxes relating to the applicable
period. No taxing authority is now asserting or, to the Knowledge of Xxxxxxxxx,
threatening to assert against any of them any deficiency or claim for additional
taxes.
Section 4.20 Certain Transactions. Except as set forth in Schedule
4.20 or other than as contemplated by this Agreement, the Transaction Documents
or any schedule or exhibit hereto, no officer, director, stockholder, partner or
member of any of the Xxxxxxxxx Entities, the LLC and/or any Principal is
presently a party to any material transaction with any of the Xxxxxxxxx
Entities, the LLC and/or any Principal (including, without limitation, any
material contract, agreement or other
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material arrangement providing for the furnishing of services to or by or
otherwise requiring payments to or from any such Person, any member of the
Immediate Family of any such Person or any corporation, partnership, trust,
limited liability company or other entity in which any such Person or any
member of the Immediate Family of any such Person has an interest or is an
officer, director, stockholder, trustee, member or partner).
Section 4.21 Employee Benefit Plans.
a. Each Employee Plan (as that term is defined in
Section 4.21(d) below) that any of the Xxxxxxxxx Entities or the LLC maintains
and that is intended to be qualified under Section 401(a) of the Code is, in its
current form, covered by a favorable determination from the Internal Revenue
Service with respect to its tax-qualified status. To the Knowledge of Xxxxxxxxx,
no event or omission has occurred which could cause any such Employee Plan not
to be so qualified or for any trust thereunder not to be tax-exempt under
Section 501(a) of the Code.
b. None of the Xxxxxxxxx Entities or the LLC now has, or
within the past ten years had, an obligation to contribute to a Multiemployer
Plan (as defined in Section 4001(a)(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or any other Plan subject to Title
IV of ERISA. None of the Xxxxxxxxx Entities or the LLC has, within the past ten
years, ever promised or provided health care or other non-pension benefits to
its former employees (other than "Continuation Coverage" under the Consolidated
Omnibus Reconciliation Act of 1985 required to be provided by Part 6 of Subtitle
B of Title I of ERISA), nor are any such benefits provided for in any Employee
Plan.
c. With respect to each Employee Plan, there has been no
transaction prohibited by Section 406 of ERISA or Section 4975 of the Code that
could result in any material tax, penalty or liability of any of the Xxxxxxxxx
Entities. All of the Employee Plans have complied in all material respects with
the requirements prescribed by any and all applicable statutes, orders or
governmental rules or regulations now or heretofore in effect with respect
thereto. There are no material actions, suits or claims pending or threatened
with respect to any Plan.
d. For the purposes of this Section 4.21, the term
"Employee Plan" or "Plan" includes any "employee benefit plan" as defined in
Section 3(3) of ERISA and any bonus, stock option or other compensation or
benefit plan or arrangement, whether or not subject to ERISA, but does not
include any such Plan or arrangement that is, or is similar to, a payroll
practice as defined in 29 C.F.R. [sec] 2510.3-1(b). Schedule 4.21(d) hereto is a
list of each Employee Plan that any of the Xxxxxxxxx Entities or the LLC now
maintains, contributes to or provides benefits under or has, within the past ten
years, established, maintained, contributed to or provided benefits under.
e. There is no matter pending with respect to any Plan
before the Internal Revenue Service, the Pension Benefit Guaranty Corporation
(the "PBGC"), the Department of Labor or any other Governmental Authority.
f. Each of the Xxxxxxxxx Entities and the LLC has made
full and timely payment of all amounts that are required under the terms of each
Plan and any related trust or collective bargaining agreement or that are
otherwise required by law to be paid as a contribution to
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each such Plan with respect to all periods through the Closing. No accumulated
funding deficiency (as defined in Section 302 of ERISA and Section 412 of the
Code) exists nor has any funding waiver from the IRS been received or requested
with respect to any Plan and no excise tax or other taxes are due or owing
because of any failure to comply with the minimum funding standards of the Code
and ERISA with respect to any of such Plans.
g. Neither Xxxxxxxxx, nor any entity required to be
aggregated with Xxxxxxxxx under Sections 414(b), (c), (m) or (o) of the Code,
sponsors, contributes to, has an obligation to contribute to or maintains a
defined benefit plan within the meaning of Section 3(35) of ERISA, nor has
Xxxxxxxxx or any such entity sponsored, contributed to, had an obligation to
contribute to or maintained any such plan during the six-year period ending on
the Closing Date.
Section 4.22 Brokerage. None of any of the Xxxxxxxxx Entities, the
LLC or any Principal has incurred any obligation for a brokerage commission or
finders' fee in connection with the transactions contemplated hereby other than
to Berkshire Capital Corporation ("Berkshire"). The Xxxxxxxxx Entities shall
indemnify Merger Subsidiary, WTI and WTC for any liability to Berkshire.
Section 4.23 Investment Representations.
a. Each Principal will acquire his or its LLC Interest
and will acquire the share of Common Stock issuable to him or it under the terms
of this Agreement for his or its own account for investment and not with a view
to or for sale in connection with any distribution thereof or with any present
intention of selling or distributing all or any part thereof. Each Principal
acknowledges that the LLC Interests and those shares of Common Stock have not
been registered under the Securities Act or the securities laws of any state or
other jurisdiction, and cannot be disposed of unless registered under the
Securities Act and any applicable state laws or an exemption from that
registration is available.
b. Each of the Principals is sufficiently knowledgeable
and experienced in making investments of this type as to be able to evaluate the
risks and merits of its or his investment in LLC Interests and in those shares
of Common Stock and is able to bear the economic risk of its or his investment
in the LLC and in those shares of Common Stock. Each of the Principals
acknowledges that the LLC Interests are illiquid, that no market for LLC
Interests exists and that none is contemplated to be created.
c. Each Principal is an "accredited investor" within the
meaning of Rule 501(a) under the Securities Act.
d. Each Principal acknowledges that he or it has
received (1) WTC's 2000 annual report prepared in accordance with Rule 14a-3
under the Exchange Act; (2) WTC's Form 10-K for the year ended December 31,
2000; (3) WTC's Form 10-Qs for the three months ended March 31, 2001 and June
30, 2001; (4) WTC's definitive proxy statement for its 2001 annual meeting of
shareholders; (5) all other reports and statements filed by WTC with the SEC
under Sections 13(a), 14(a), 14(c) or 15(d) of the Exchange Act since December
31, 2000; (6) the description of the Common Stock contained in pages 27 through
29 of the proxy statement of Wilmington Trust Company dated May 2, 1991; and (7)
the description of WTC's preferred stock
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purchase rights contained in WTC's Registration Statement on Form 8-A filed on
January 28, 1995. Each Principal acknowledges that he or it has been provided
with an opportunity to review each exhibit to each of the documents described
in this Section 4.23(d) a reasonable time prior to the date of this Agreement.
e. Each Principal acknowledges that WTC has not provided
such Principal with information regarding the Xxxxxxxxx Entities because such
Principal, as a result his or its position with Xxxxxxxxx, has access to all
information, financial or other, regarding the Xxxxxxxxx Entities necessary for
such Principal to determine whether to execute this Agreement and otherwise
participate in the transactions contemplated hereby.
f. Each Principal acknowledges that he or it has been
provided with an opportunity to ask questions of and receive answers concerning
the terms and conditions of the offering of Common Stock in connection with the
Merger and to obtain any additional information that WTC possesses or can
acquire without unreasonable effort or expense that is necessary to verify the
information furnished pursuant to Section 4.23(d).
g. Each Principal acknowledges that his residence or its
principal business address is set forth under his or its name on the signature
pages to this Agreement.
h. The representations and warranties made in this
Section 4.23 are made only by each Principal as to such Principal and no other
Person is making the representations and warranties in this Section 4.23 with
respect to such Principal.
Section 4.24 Privacy. Each of the Xxxxxxxxx Entities and the LLC
complies in all material respects with all applicable U.S. federal and state
privacy laws in effect prior to the date of this Agreement, including, without
limitation, Title V of the Xxxxx-Xxxxx-Xxxxxx Act, the Fair Credit Reporting
Act and any and all applicable regulations implementing either Act.
Section 4.25 Investment Limitation. The Existing Funds do not, in
the aggregate, own or otherwise control more than 5% of any class of voting
securities of any Person.
Section 4.26 No Known Regulatory Delays. To the Knowledge of
Xxxxxxxxx, there is no reason to believe that the Xxxxxxxxx Entities and the
Principals will be unable to obtain all consents and permits from all
Governmental Authorities and other Persons necessary to complete the
transactions contemplated by this Agreement promptly and without undue delay,
expense or restriction.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF MERGER SUBSIDIARY, WTI AND WTC TO XXXXXXXXX
AND THE PRINCIPALS
Each of WTC, WTI and Merger Subsidiary represents and warrants to
Xxxxxxxxx and each of the Principals that:
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Section 5.1 Organization. Each of Merger Subsidiary, WTI and WTC
is a corporation duly organized, validly existing and in good standing under
Delaware law.
Section 5.2 Authority. Each of Merger Subsidiary, WTI and WTC has
all requisite power and authority to (a) own its assets and conduct its business
and (b) execute, deliver and perform this Agreement and the other Transaction
Documents to be executed, delivered and performed by it in connection with this
Agreement and the transactions contemplated hereby and thereby. This Agreement
and each other Transaction Document to be executed, delivered and performed by
Merger Subsidiary, WTI and WTC in connection with the transactions contemplated
hereby have been duly and validly approved by all necessary action of that
Person. This Agreement and each other Transaction Document to which it is a
party represents, or when executed will represent, its valid and legally binding
obligation, enforceable against it in accordance with its terms, except as may
be limited by (x) bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, fraudulent transfer or similar laws now or hereafter in effect
affecting creditors; rights generally or (y) general principles of equity,
whether asserted in a proceeding in equity or at law.
Section 5.3 Governmental Filings; Non-Contravention. Other than
the filings and/or notices set forth in Schedule 5.3 (including those (i) under
the HSR Act (if WTC determines that a filing under such act is required), the
Exchange Act and the Securities Act, and with the NYSE and (ii) required to be
made with the Federal Reserve Bank of Philadelphia), no notices, reports,
applications or other filings are required to be made by WTI, WTC or the Merger
Subsidiary with, nor are any consents, registrations, approvals, permits or
authorizations required to be obtained by any of them from, any Governmental
Authority in connection with the execution and delivery of this Agreement and
the other Transaction Documents, and the consummation by each such Person of the
Merger and the other transactions contemplated hereby and thereby. Subject to
the making or obtaining of all filings, notices, applications, consents,
registrations, approvals, permits or authorizations with or of any relevant
Government Authority with respect to the Merger, the Transaction Documents and
the other transactions contemplated hereby and thereby as set forth in Schedule
5.3, the execution, delivery and performance of this Agreement and each other
Transaction Document to be executed, delivered and performed by Merger
Subsidiary, WTI and WTC in connection with the transactions contemplated hereby
does not and will not: (a) violate any provision of the charter or bylaws of
Merger Subsidiary, WTI or WTC; (b) violate, conflict with or result in a
default under any contract or obligation to which Merger Subsidiary, WTI or WTC
is a party or by which it or its assets are bound; (c) violate or result in a
violation of, or constitute a default under, any law, regulation or rule, or
any order of or restriction imposed by any court or other Governmental Agency
on Merger Subsidiary, WTI or WTC or its properties; and (d) except with respect
to a post-Effective Time notice to be filed by WTC with the Federal Reserve
Bank of Philadelphia and as contemplated by Section 8.1 hereof, require Merger
Subsidiary, WTI or WTC to obtain any approval, consent or waiver of, or make
any filing with, any Governmental Authority that has not been obtained or made,
except for approvals, consents, waivers or filings, as applicable, that are set
forth in Schedule 5.3 and that will have been received prior to Closing or at
any earlier time required hereunder or under applicable laws, rules and
regulations.
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Section 5.4 Litigation and Compliance with Laws.
a. Except as set forth on Schedule 5.4, there are no
orders, writs, injunctions, decrees or unsatisfied judgments, and no actions,
claims, suits, proceedings or investigations pending or, to Merger Subsidiary's,
WTI's or WTC's Knowledge, threatened against Merger Subsidiary, WTI or WTC that,
if adversely determined, might call into question the validity or hinder or
delay the enforceability or performance of this Agreement or the other
Transaction Documents or have a Material Adverse Effect on Merger Subsidiary,
WTI or WTC or their assets or properties, taken as a whole. Except as set forth
on Schedule 5.4, each of Merger Subsidiary, WTI or WTC is and, during the past
five years has been, operating in material compliance with all laws and
governmental rules and regulations, domestic or foreign (including, without
limitation, all federal and state securities laws), applicable to the business,
affairs, properties and assets of Merger Subsidiary, WTI and WTC. Except as set
forth in Schedule 5.4, none of Merger Subsidiary, WTI or WTC is in default with
respect to any judgment, order, writ, injunction, decree, demand or assessment
issued by any court or any federal, state, municipal other governmental agency,
board, commission, bureau, instrumentality or department, domestic or foreign,
relating to any aspect of its business, affairs, properties or assets. Except as
set forth in Schedule 5.4, none of Merger Subsidiary, WTI or WTC has been
charged or, to that Person's Knowledge, threatened with or is under
investigation with respect to any violation of any federal, state, municipal or
other law or any administrative rule or regulation, domestic or foreign,
affecting Merger Subsidiary, WTI or WTC or the transactions contemplated hereby.
b. To Merger Subsidiary's, WTI's or WTC's Knowledge,
none of Merger Subsidiary, WTI or WTC nor any Person "associated" (as that term
is defined under the Advisers Act) with any of Merger Subsidiary, WTI or WTC
has, within five years prior to the date hereof, been convicted of any crime or
is or has been subject to any disqualification in each case that would be the
basis for denial, suspension or revocation of registration of an investment
adviser under Section 203(e) or 206(4) of the Advisers Act or Rule 206(4)-4(b)
thereunder or for disqualification as an investment adviser for any investment
company pursuant to Section 9 of the Investment Company Act of 1940, as amended.
c. To Merger Subsidiary's, WTI's or WTC's Knowledge,
none of any of Merger Subsidiary, WTI or WTC nor any Affiliate of Merger
Subsidiary, WTI or WTC is subject to a "statutory disqualification" as defined
in Section 3(a)(39) of the Exchange Act or is subject to a disqualification that
would be a basis for censure, limitations on the activities, functions or
operations of, or suspension or revocation of the registration of any Affiliate
of Merger Subsidiary, WTI or WTC as a broker-dealer, municipal securities
dealer, government securities broker or government securities dealer under
Section 15, Section 15B or Section 15C of the Exchange Act, and, to Merger
Subsidiary's, WTI's or WTC's Knowledge, there is no reasonable basis for, or
proceeding or investigation, whether formal or informal or whether preliminary
or otherwise, that is reasonably likely to result in, any such censure,
limitations, suspension or revocation.
Section 5.5 Investment Representations.
a. Merger Subsidiary will acquire its LLC Interest and
the Xxxxxxxxx stock in the Merger under the terms of this Agreement for its own
account for investment and not with a
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view to or for sale in connection with any distribution thereof or with any
present intention of selling or distributing all or any part thereof. Merger
Subsidiary acknowledges that the LLC Interests and the Xxxxxxxxx stock have not
been registered under the Securities Act or the securities laws of any state or
other jurisdiction, and cannot be disposed of unless registered under the
Securities Act and any applicable state laws or an exemption from that
registration is available.
b. Merger Subsidiary is sufficiently knowledgeable and
experienced in making investments of this type as to be able to evaluate the
risks and merits of its investment in LLC Interests and Xxxxxxxxx stock and is
able to bear the economic risk of its investment in the LLC and Xxxxxxxxx.
Merger Subsidiary acknowledges that the Xxxxxxxxx stock and the LLC Interests
are illiquid, that no market for the Xxxxxxxxx stock or the LLC Interests exists
and that none is contemplated to be created.
Section 5.6 Common Stock.
a. As of the date hereof, the authorized capital stock
of WTC consists solely of 150,000,000 shares of Common Stock, of which
32,660,627 shares were issued and outstanding as of September 30, 2001 and
1,000,000 shares of preferred stock, of which no shares were outstanding as of
the date hereof. As of the date hereof, WTC has outstanding Rights with respect
to 2,082,915 aggregate shares of Common Stock.
b. Each of the shares of Common Stock delivered by WTC
as part of the Merger consideration shall be duly authorized, validly issued,
fully paid and nonassessable, will be issued free and clear of any Liens or
preemptive rights, and will be listed, subject to official notice of issuance,
on the NYSE.
Section 5.7 SEC Documents.
a. WTC's Annual Report on Form 10-K for the fiscal year
ended December 31, 2000, and all other reports, registration statements,
definitive proxy statements or information statements filed or to be filed by
it or any of its Subsidiaries since January 1, 1998 under the Securities Act,
or under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, in the form
filed or to be filed with the SEC (collectively, WTC's "SEC Documents"), as of
the date filed, (A) complied or will comply in all material respects as to form
with the applicable requirements under the Securities Act or the Exchange Act,
as the case may be, and (B) did not and will not, as the case may be, 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;
and each of the balance sheets contained in or incorporated by reference into
any such SEC Document (including the related notes and schedules thereto)
fairly presents, or will fairly present, as the case may be, the financial
position of WTC and its Subsidiaries as of its date, and each of the statements
of income and changes in shareholders' equity and cash flows or equivalent
statements in such SEC Documents (including any related notes and schedules
thereto) fairly presents, or will fairly present, as the case may be, the
results of operations, changes in shareholders' equity and changes in cash
flows, as the case may be, of WTC and its Subsidiaries for the periods to which
they relate, in each case in accordance with GAAP during the periods involved,
except in each
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case as may be noted therein and subject to normal, recurring year-end audit
adjustments in the case of unaudited statements.
b. Since September 30, 2001, WTC has not suffered any
change that has had a Material Adverse Effect on WTC, and to the Knowledge of
WTC there is no impending event or condition that would have a Material Adverse
Effect on WTC.
Section 5.8 No Known Regulatory Delays. WTC has no Knowledge or
reason to believe that it will be unable to obtain all consents and permits from
all Governmental Authorities and other Persons necessary to complete the
transactions contemplated by this Agreement promptly and without undue delay,
expense or restriction.
Section 5.9 Brokerage. None of Merger Subsidiary, WTI or WTC has
incurred any obligation for a brokerage commission or finders' fee in connection
with the transactions contemplated hereby.
ARTICLE 6
COVENANTS OF XXXXXXXXX AND THE PRINCIPALS
Xxxxxxxxx and each Principal covenants as follows:
Section 6.1 Client Consent.
a. As soon as practicable after the date hereof, each of
the Xxxxxxxxx Entities shall notify each of its clients (including the
participants in each Existing Fund) of the transactions contemplated hereby and
by the other Transaction Documents. That notice shall be in the form of Exhibit
6.1(a) hereto.
b. As soon as practicable after the notice in Section
6.1(a), each of the Xxxxxxxxx Entities shall send to each client who has not
returned the notice in substantially the form of Exhibit 6.1(a) hereto,
countersigned indicating approval of the transactions contemplated hereby, a
second notice and consent in substantially the form of Exhibit 6.1(a) hereto
and acceptable to WTI, which acceptance will not be unreasonably withheld,
delayed or conditioned.
Section 6.2 Conduct of Business. Until Closing, except as
specifically contemplated by this Agreement, without WTI's prior written
consent:
a. The business of each of the Xxxxxxxxx Entities shall
be conducted only in the ordinary course, in a manner consistent in all material
respects with past practices and in compliance in all material respects with all
applicable laws, rules and regulations;
b. None of any of the Xxxxxxxxx Entities or any
Principal shall in any capacity make or assist in making any change in the
charter documents or bylaws of Xxxxxxxxx or BC or organizational documents of GP
or BCT;
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c. None of any of the Xxxxxxxxx Entities or any
Principal shall acquire any asset or make any capital expenditure, or sell,
lease or dispose of any asset other than (1) in the ordinary course of business
and (2) in an amount not to exceed $100,000;
d. None of any of the Xxxxxxxxx Entities or any
Principal shall permit any Person to mortgage, pledge or subject to or permit to
exist any Lien on any property or asset of any of the Xxxxxxxxx Entities except
for minor imperfections of title or insignificant liens that do not, in the
aggregate, materially detract from the value of the Xxxxxxxxx Entities (and none
of any of the Xxxxxxxxx Entities shall, nor shall any Principal permit any such
Person to, mortgage, pledge or subject to or permit to exist any Lien on, any
properties, assets or contracts that are to be acquired by the LLC pursuant to
the Transaction Documents);
e. Except as provided in Schedule 6.2(e), none of the
Xxxxxxxxx Entities shall issue any (i) shares of its capital stock or other
securities, (ii) options, warrants, puts, calls, commitments, agreements,
contracts or preemptive or other rights to purchase, issue or otherwise acquire
any capital stock or other securities of such entity, or (iii) obligations or
securities convertible into or exchangeable for capital stock or other
securities of such entity;
f. None of the Xxxxxxxxx Entities shall declare or pay
any dividend or distribution on its capital stock or other securities, whether
in the form of cash, capital stock or other securities, except that Xxxxxxxxx
will distribute to the Principals amounts consistent with past practices,
including distributing all excess cash held on or before Closing, which
distribution amount should be approximately equal to all net income,
depreciation and amortization of Xxxxxxxxx, and principal payments on the
Stockholder Notes received by Xxxxxxxxx or BC, on or before Closing. In
addition, Xxxxxxxxx will take into income all remaining prepaid amounts that
were prepaid as of the end of 2000 and are being taken into income each quarter
in 2001 and will distribute such amount to the Principals; and
g. The LLC shall not conduct any business or take any
actions, other than as specifically contemplated in Recital C to this Agreement.
Section 6.3 Preservation of Business and Assets.
a. Until Closing, except as contemplated hereby, each of
the Xxxxxxxxx Entities and the Principals shall use his or its reasonable best
efforts to: (1) preserve the current business of the Xxxxxxxxx Entities; (2)
maintain the present clients of the Xxxxxxxxx Entities, in each case on terms
substantially equivalent to the terms of the existing agreements between those
clients and those Persons in effect on the date hereof; (3) preserve the
goodwill of the Xxxxxxxxx Entities; and (4) preserve the Licenses required in
connection with the businesses of any of the Xxxxxxxxx Entities and the
Principals.
b. Except for the transactions contemplated by the
Transaction Documents prior to Closing, none of the Xxxxxxxxx Entities shall
materially change the fundamental nature or characteristics of its business from
the business conducted as of the date hereof without WTI's prior written
consent.
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Section 6.4 Standstill. Except as provided in Schedule 6.2(e),
the relative interest of the Principals in the Xxxxxxxxx Entities as of the date
hereof may not be altered without the prior written consent of WTI, which
consent will not be unreasonably withheld, delayed or conditioned.
Section 6.5 Investment Limitation. Each of the Xxxxxxxxx Entities
and each Principal covenants, from the date hereof until Closing, that the
Existing Funds and all other private investment funds, if any, for which any
Xxxxxxxxx Entity or any Principal serves as a general partner or managing member
shall not at any time own or otherwise control in the aggregate more than 5% of
any class of voting securities of any Person.
ARTICLE 7
COVENANTS OF WTC
Section 7.1 Securities Filings; NYSE Listing.
a. WTC shall make all necessary filings with respect to
the issuance of Common Stock in the Merger under the United States federal
securities laws.
b. As soon as possible after the Closing (and in any
event not later than twenty (20) days thereafter), WTC shall prepare and file
with the SEC a Registration Statement on Form S-3 covering the resale by the
Principals of the shares of Common Stock received by them at Closing pursuant to
the Merger (the "Registration Statement"). WTC shall use its reasonable best
efforts to cause such Registration Statement to cover the resale by the
Principals of a reasonable estimate of the number of shares of Common Stock
issuable to the Principals after the Closing pursuant to Section 3.1 hereof
("Estimated Shares"). If WTC is unable to register the resale of such Estimated
Shares in the original Registration Statement, WTC shall file with the SEC
subsequent registration statement(s) on Form S-3 covering the resale of the
shares of Common Stock issued following the Closing under Section 3.1 promptly
following each issuance of such shares. WTC shall use its reasonable best
efforts to cause the Registration Statement(s) to become effective under the
Securities Act and take any action required to be taken under the applicable
United States state "blue sky" or securities laws in connection with the
issuance of the shares of Common Stock as a result of the Merger. Xxxxxxxxx and
the Principals shall cooperate in the preparation and filing of the
Registration Statement(s) and shall furnish all information concerning
Xxxxxxxxx and the Principals as WTC may reasonably request in connection with
such action. WTC shall bear all expenses associated with the preparation and
filing of such Registration Statement(s); however, each Principal shall be
responsible for his or its commissions and other selling expenses in connection
with the sale of any Common Stock and for the cost of any counsel employed by
him or it.
c. WTC shall use its reasonable best efforts to list,
prior to the Effective Time, on the NYSE, subject to official notice of
issuance, the shares of Common Stock to be issued to the Principals pursuant to
the Merger, and WTC shall give all notices and make all filings with the NYSE
required in connection with the transactions contemplated hereby.
Section 7.2 Indemnification.
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a. From and after the Effective Time, WTC shall add the
directors, officers, managers, and members of the LLC to the WTC's directors'
and officers' insurance or similar liability insurance coverage that serves to
reimburse such Persons (determined as of the Effective Time) with respect to
claims against such Persons arising in connection with their actions as a
director, officer, manager, or member of the LLC, which insurance shall be in an
amount commercially reasonable and which may be the directors' and officers'
insurance currently maintained by WTC; provided, however, that such Persons so
covered shall cooperate in making applications to, and providing customary
representations and warranties to, WTC's insurance carrier for the purpose of
obtaining such insurance or coverage.
b. If WTC or any of its successors or assigns shall
consolidate with or merge into any other entity and shall not be the continuing
or surviving entity in such consolidation or merger or shall transfer all or
substantially all of its assets to any entity, then and in each case, proper
provision shall be made so that the successors and assigns of WTC shall assume
the obligations set forth in this Section 7.2.
Section 7.3 WTC Business Benefits.
a. WTC will provide to the LLC and its Subsidiaries New
Business Opportunities as provided in the LLC Agreement and will provide its
share of the capital required to fund such New Business Opportunities also as
provided in the LLC Agreement.
b. The LLC shall have the right to elect, on or prior to
six months after the Closing Date, to have the officers and employees of the LLC
and its Subsidiaries participate in some or all WTC's then-existing employee
benefit plans (other than the Wilmington Trust profit sharing plan or bonus or
incentive plans) at the LLC's cost; provided, however, that (i) once the
election to participate or not participate in a particular plan is made it
cannot be changed without WTC's written consent, which shall not be unreasonably
withheld, (ii) such officers and employees are otherwise eligible to participate
in such plans in accordance with their terms, (iii) nothing herein shall entitle
such an officer or employee to participate in a plan where participation is not
based solely on eligibility criteria set forth in the plan and (iv) WTC
acknowledges that there will be no cost to the LLC for WTC stock options granted
to officers and employees of the LLC or its Subsidiaries. With respect to the
WTC employee benefit plans, for all purposes, except for the computation of the
benefits under defined benefit plans, WTC agrees that years of service with any
Xxxxxxxxx Entities shall be deemed to be years of service with WTC. The LLC
shall have a reasonable opportunity to participate in any new employee benefit
plans made available to employees generally.
c. WTC will use its reasonable best efforts to cause
Wilmington Trust FSB to open a trust and/or banking office in Atlanta and to
place the office in the same space as is presently used by Xxxxxxxxx if
commercially feasible. If such office is in the space presently used by
Xxxxxxxxx, Wilmington Trust FSB will be responsible for its pro rata share of
rent and related expenses based on the percent of square footage occupied by
Wilmington Trust FSB. WTC will cause the Chief Executive Officer of the LLC to
be appointed an officer of Wilmington Trust FSB and cause the other Wilmington
Trust FSB staff in such office to report to such officer. The
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Wilmington Trust FSB officers and employees and the LLC officers and employees
will use reasonable best efforts to coordinate marketing and client development
programs and services.
d. WTC will make available on a nationwide basis in the
United States the LLC's Subsidiaries' expertise in their manager of managers
program, including in connection therewith asset allocation modeling, asset
rebalancing strategies and manager evaluation and selection. WTC may access this
expertise through client investment in the LLC's Subsidiaries' investment funds,
proprietary WTC investment funds managed by those Subsidiaries, client
customized investment funds managed by those Subsidiaries and/or
non-discretionary advisory services of those Subsidiaries. Accordingly, WTC will
work cooperatively with those Subsidiaries to use their know how and the
services of their officers and employees to provide advice and assistance
relating to the manager of managers program and will pay to the appropriate
Subsidiary a fee for such services and know how as may be agreed by WTC and the
LLC from time to time. The Principals agree to cause those Subsidiaries to use
their reasonable best efforts to meet the reasonable needs of WTC in connection
with the use of the expertise and a condition of WTC's continued use of the
Subsidiaries will depend on those Subsidiaries' meeting commercially reasonable
service levels and performance standards. It is intended that the service levels
and performance standards will be discussed by WTC and the LLC from time to time
and will be adjusted from time to time on a mutual basis.
e. WTC will provide to the LLC's Subsidiaries client
related services that are available for the use of WTC's other asset management
affiliates, including external asset management, custom-built insurance
products, and marketing materials on a reasonable and fair basis and cost. WTC
will also make available the full array of support services on the same basis as
are made available to its other affiliated asset managers, including internal
asset management, human resources, marketing, financial reporting, tax and
estate planning, compliance and information technology, as the LLC may request
from time to time.
ARTICLE 8
COVENANTS OF THE PARTIES
Section 8.1 Regulatory Authorizations.
(a) Except as provided in Section 7.1, Merger
Subsidiary, WTI and WTC shall at their sole expense timely and promptly make
all filings required to be made by any of them with any Governmental Authority
with respect to the consummation of the transactions contemplated hereby
(including, but not limited to, the listing of the Common Stock on the NYSE,
the filings under the HSR Act (if WTC determines such filings are required)
and/or the filings with the Federal Reserve Bank of Philadelphia). Merger
Subsidiary, WTI and WTC shall furnish to any of the Xxxxxxxxx Entities such
information and assistance any of them may reasonably request in connection
with the preparation by any of them of necessary filings or submissions to any
Governmental Authority. Merger Subsidiary, WTI and WTC shall promptly supply
Xxxxxxxxx with copies of all non-confidential correspondence, filings or
communications (or memoranda summarizing the substance thereof) between Merger
Subsidiary, WTI, WTC or
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their counsel and any Governmental Authority with respect to this Agreement and
the transactions contemplated hereby.
(b) Except as provided in Section 7.1, each of Xxxxxxxxx
and the Principals shall at his or its sole expense timely and promptly make all
filings required to be made by it, him, the Xxxxxxxxx Entities or the LLC with
any Governmental Authority with respect to the consummation of the transactions
contemplated hereby (including, but not limited to, the filings under the HSR
Act (if WTC determines such filings are required), the filings with the SEC of
amendments to the Form ADV or Form BD of any Xxxxxxxxx Entity; any required
requests for approval of the transactions from the NASD, the NYSE, and/or other
self-regulatory organization; and/or the filings in any state of any amendments
relating to the investment adviser or broker-dealer registration of any
Xxxxxxxxx Entity in such state). Each of Xxxxxxxxx and the Principals shall
furnish to each of Merger Subsidiary, WTI and WTC such information and
assistance as that Person may reasonably request in connection with its
preparation of necessary filings or submissions to any Governmental Authority.
Xxxxxxxxx shall promptly supply WTI with copies of all non-confidential
correspondence, filings or communications (or memoranda summarizing the
substance thereof) between any of the Principals, the Xxxxxxxxx Entities or the
LLC, his or its counsel and any Governmental Authority with respect to this
Agreement and the transactions contemplated hereby.
Section 8.2 Confidentiality. Each party (each a "Receiving
Party") shall, on behalf of himself or itself and his or its representatives and
agents, keep confidential any and all information and data of a proprietary or
confidential nature with respect to any other party (a "Disclosing Party") in
the Receiving Party's possession or that he or it receives as a result of any
investigation made in connection with this Agreement, other than information
that is or becomes generally available to the public other than as a result of
disclosure by the Receiving Party in violation of this Agreement.
Notwithstanding the preceding sentence, each party shall be free to disclose any
such information or data (a) to the extent required by applicable law, order,
rule or regulation and (b) during the course of or in connection with any
litigation, arbitration or other proceeding based upon or in connection with the
subject matter of this Agreement; provided that, prior to disclosing any such
information in connection with any such litigation, arbitration or proceeding,
the Receiving Party shall, to the extent permitted by law, give prior notice to
the Disclosing Party and use reasonable efforts to obtain confidential
treatment therefor.
Section 8.3 Expenses Incident to this Agreement. Except as
otherwise expressly provided herein, each party shall pay his or its own
expenses incident to the negotiation and consummation of the transactions
contemplated by this Agreement and the other Transaction Documents and the
preparation and carrying out of this Agreement and the transactions contemplated
hereby or thereby.
Section 8.4 Access; Information. The Xxxxxxxxx Entities and the
Principals hereby agree that, upon reasonable notice and subject to applicable
laws relating to the exchange of information, the Xxxxxxxxx Entities shall
afford WTC and its officers, employees and representatives, such access during
normal business hours throughout the period prior to Closing to the books,
records, properties, personnel and to such other information of the Xxxxxxxxx
Entities as WTC may reasonably request. WTC shall make available from time to
time and on reasonable notice its
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personnel to respond to appropriate questions relating to the transactions
contemplated by this Agreement from participants in Existing Funds and other
clients of the Xxxxxxxxx Entities.
Section 8.5 Press Releases. The Parties shall coordinate and
approve, to the extent permitted by law, any public announcement, press release
or response to media inquiries regarding this Agreement and the transactions
contemplated hereby.
ARTICLE 9
CONDITIONS PRECEDENT TO MERGER SUBSIDIARY'S, WTI'S AND WTC'S OBLIGATIONS
The obligations of Merger Subsidiary to merge with and into Xxxxxxxxx and of
Merger Subsidiary, WTI and WTC to consummate the transactions contemplated
hereby are subject to the satisfaction on or, where appropriate, before the
Closing Date of the following conditions, except to the extent Merger
Subsidiary, WTI or WTC waives any such condition in writing on or before the
Closing Date:
Section 9.1 No Litigation; No Opposition. No judgment,
injunction, order or decree enjoining or prohibiting any of Merger Subsidiary,
WTI, WTC, the LLC, any of the Xxxxxxxxx Entities or any Principal or other party
to any Transaction Document from consummating the transactions contemplated by
this Agreement or by any other Transaction Document or from engaging in any
advisory or broker-dealer activity shall have been entered except such actions
as, individually or in the aggregate, would not be reasonably likely to result
in a Material Adverse Effect on the Xxxxxxxxx Entities and the LLC, taken as a
whole. No suit, action, claim, proceeding or investigation shall be pending or
threatened at any time prior to or on the Closing Date before or by any court or
Governmental Authority seeking to materially restrain or prohibit, or seeking
material damages or other significant relief in connection with, the execution
and delivery of this Agreement or any other Transaction Document or the
consummation of the transactions contemplated hereby.
Section 9.2 Representations, Warranties and Covenants of
Xxxxxxxxx and the Principals. The representations and warranties of each of
Xxxxxxxxx and the Principals contained in this Agreement, any schedule or
exhibit hereto and in each other Transaction Document shall be true and correct
in all material respects at and as of Closing as though newly made at that time;
provided that no breaches of representations and warranties shall be deemed to
excuse WTC's obligations to consummate the transactions contemplated hereby
unless, individually or in the aggregate, such breaches could reasonably be
likely to result in a Material Adverse Effect on the Xxxxxxxxx Entities and the
LLC, taken as a whole (ignoring, for this purpose, any materiality
qualifications to such representations and warranties). Each and all of the
agreements and conditions to be performed or satisfied by each of the Xxxxxxxxx
Entities, the LLC and/or the Principals hereunder and under the other
Transaction Documents at or prior to Closing shall have been duly performed or
satisfied in all material respects. Each of the Xxxxxxxxx Entities and the
Principals shall have furnished Merger Subsidiary, WTI and WTC with a
certificate or certificates dated as of the Closing Date with respect to each of
the foregoing.
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Section 9.3 Consents. Each Xxxxxxxxx Entity shall have obtained
the Consent to the transactions contemplated by the Transaction Documents in the
manner set forth in Section 6.1 from each participant in each Existing Fund and
from its other clients whose advisory agreements provide for the payment (based
on the Contract Value of each such agreement) of fees constituting at least
ninety percent (90%) of Xxxxxxxxx'x investment advisory revenues for its fiscal
quarter ending December 31, 2001; provided, however, that, with respect to the
Xxxxxxxxx consulting clients listed on Schedule 9.3(a), advisory fees for the
third quarter of 2001 shall be used. Compliance with this condition shall be
measured five Business Days prior to the Closing Date.
a. "Consent" shall mean (1) with respect to a client
whose contract by its terms terminates upon the consummation of the transactions
contemplated by the Transaction Documents, that the LLC or the appropriate
Xxxxxxxxx Entity shall have entered into a new contract on substantially
equivalent terms, which contract is effective after giving effect to the
Closing, and (2) with respect to a client, including each Existing Fund, whose
contract or partnership agreement requires written consent from a party or
parties thereto or partners therein for it to survive the transactions
contemplated by the Transaction Documents, that Xxxxxxxxx or the appropriate
Xxxxxxxxx Entity shall have obtained all such written consents as may be
required.
b. "Contract Value" shall mean, with respect to an
advisory contract or limited partnership agreement of an Existing Fund, the
advisory fees for the fourth quarter of 2001 based on the fee schedule and
assets under management set forth in the relevant agreement as of September 30,
2001 (adjusted for any additions and/or withdrawals since September 30, 2001 in
the manner provided below); provided, however, that, with respect to the
Xxxxxxxxx consulting clients listed on Schedule 9.3(a), advisory fees for the
third quarter of 2001 shall be used. Without limiting the generality of the
foregoing, for purposes of the definition of "Contract Value," each limited
partnership agreement of an Existing Fund and each wrap-fee program shall be
considered an advisory contract, and the addition and withdrawal of participants
in each such program shall be treated as an addition or withdrawal of funds.
Contract Value for a new client added after September 30, 2001
or a client that adds additional assets to its assets under management shall be
added by computing the Contract Value for the fourth quarter of 2001 with
respect to the value of the client's assets under management on the date the
management of those assets commences (using the fee rate for such client when
it first becomes a client) for the entire quarter. A client that withdraws all
of its assets under management after September 30, 2001 (or gives notice that
it intends to do so) shall be treated as though Consent was not obtained.
Contract Value for a client that withdraws more than $1 million in the
aggregate from assets under management after September 30, 2001 (or gives
notice that it intends to do so) shall be reduced by a percentage calculated by
dividing (1) the amount of the assets withdrawn (or notified to be withdrawn)
valued as of the date of such withdrawal or notice, by (2) the amount of assets
under management immediately prior to the first withdrawal or notice by such
client after September 30, 2001.
Advisory fees associated with new clients, with existing
clients adding additional assets under management and with clients who have
withdrawn either all of their assets from management or more than $1 million of
such assets shall be included in the numerator but not the denominator for
purposes of computing such 90%.
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At Closing, Xxxxxxxxx shall deliver to Merger Subsidiary, WTI
and WTC a certificate certifying to compliance with this Section 9.3.
Section 9.4 Shareholder Approval. Xxxxxxxxx'x Board of Directors
shall have approved the transactions contemplated by the Transaction Documents,
Xxxxxxxxx'x shareholders shall have approved the transactions contemplated by
the Transaction Documents, and, at Closing, Xxxxxxxxx shall deliver to Merger
Subsidiary, WTI and WTC a certificate certifying that such Board and shareholder
approval has been obtained.
Section 9.5 Other Approvals. All actions and approvals by or in
respect of, or filings with, any Governmental Authority required to permit the
consummation of the transactions contemplated hereby so that the LLC and the
Xxxxxxxxx Entities shall be able to continue to carry on after the Closing Date
the business conducted by the Xxxxxxxxx Entities immediately prior to Closing
shall have been taken, made or obtained. All other material permits, approvals,
consents or other actions commercially necessary to consummate the transactions
hereunder shall have been received or taken, except where the failure to obtain
such permit, approval, consent or other action would not have a Material Adverse
Effect on the Xxxxxxxxx Entities and the LLC, taken as a whole.
Section 9.6 Capitalization. The Members of the LLC, and the
capital account balances and Membership Points of each Member in the LLC, shall
be as set forth on Schedule 4.4(b) hereto.
Section 9.7 Deliveries. Each of the Xxxxxxxxx Entities, the LLC
and the Principals shall have executed, where applicable, and delivered to
Merger Subsidiary, WTI and WTC (or shall have caused to be executed and
delivered to Merger Subsidiary, WTI and WTC by the appropriate person) the
following:
a. A certificate of the Secretary of each of the
Xxxxxxxxx Entities and the LLC that it has completed all required actions
contemplated by the Transaction Documents;
b. The LLC Agreement;
c. The Registration Rights Agreement;
d. Certified copies of resolutions of the respective
board of directors or board of managers (and, if necessary, the members or
shareholders) authorizing the execution of each Transaction Document to which
any of the Xxxxxxxxx Entities or the LLC is a party;
e. Evidence that BC has converted into a Georgia limited
liability company, and copies of the Original LLC Agreement, the Second LLC
Agreement, the Georgia limited liability company operating agreement of BC
referred to in Recital C, the articles of incorporation and bylaws of Xxxxxxxxx
and BC and the certificate of formation or organization of GP, BCT and the LLC,
each of which in the case of the evidence of conversion and the articles of
incorporation and other formation documents filed with the Secretary of State is
certified as of a recent date by the Secretary of State of the relevant state of
organization;
f. A certificate of the Secretary of each of the
Xxxxxxxxx Entities certifying that the resolutions, articles of incorporation,
certificates and bylaws in paragraphs (d) and (e) above are
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in full force and effect and have not been amended or modified, and that the
officers of each of the Xxxxxxxxx Entities are those persons named in the
certificate;
g. A certificate issued by the appropriate Secretary of
State certifying that each of the Xxxxxxxxx Entities is validly existing in that
state as of the most recent practicable date;
h. The Employment Agreements;
i. True and correct copies of each of the other
Transaction Documents;
j. An opinion from counsel to each of Xxxxxxxxx, XX, GP
and the LLC in the form of Exhibit 9.7(j); provided, however, that any specific
exceptions taken in such opinion that are not included in the form of such
opinion attached hereto as Exhibit 9.7(j) shall not excuse WTC's obligations to
consummate the transactions contemplated hereby unless, individually or in the
aggregate, such exceptions would also constitute a breach of a representation or
warranty by Xxxxxxxxx or a Principal that could reasonably be likely to result
in a Material Adverse Effect on the Xxxxxxxxx Entities and the LLC, taken as a
whole (ignoring, for this purpose, any materiality qualification to such
representations and warranties).
k. A copy of the Form D to be filed with the SEC with
respect to the issuance of the LLC Interests and of any similar filing or
notification of filing that will be filed with any applicable state securities
department; and
l. A copy of an appraisal of the fair market value of
the Principals' Interest performed by Valuation Econometrics, LLC, or another
appraisal firm reasonably acceptable to WTC, as of a date within 10 days prior
to the Closing Date.
Section 9.8 Material Adverse Change. No event or condition,
individually or in the aggregate, shall have had a Material Adverse Effect on
the Xxxxxxxxx Entities and the LLC, taken as a whole.
Section 9.9 Liens. Any and all Liens on the Voting Shares and the
Non-Voting Shares shall be released in full, and any and all Liens on the assets
of Xxxxxxxxx and its Subsidiaries shall be released in full and to WTI's
reasonable satisfaction.
Section 9.10 Stockholder Notes. The stockholder notes listed on
Schedule 9.10 attached hereto ("Stockholder Notes") shall, to the extent owned
by Xxxxxxxxx, have been transferred to the LLC at or immediately prior to
Closing and shall, to the extent owned by BC, remain with BC, and all of such
Stockholder Notes shall continue to be paid in accordance with their terms;
provided, however, that Xxxxxxxx Xxxxxxx'x Stockholder Note shall be repaid or
otherwise satisfied in full prior to Closing.
Section 9.11 Shareholder Agreement. The Amended and Restated
Shareholder Agreement dated April 4, 1995 between BC and its shareholders, as
supplemented by Joinder Agreements dated January 1, 1996, December 31, 1998,
January 1, 1999, December 31, 1999 and January 1, 2001, shall have been
terminated to WTI's reasonable satisfaction.
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Section 9.12 Investment Adviser Registration. GP shall have either
registered effectively as an investment adviser under the Advisers Act or merged
into BC, with BC being the surviving entity in such merger.
Section 9.13 Stockholder Note of Xxxxxxxx X. Xxxxxxx. The
Stockholder Note of Xxxxxxxx X. Xxxxxxx shall have been paid or satisfied in
full at or prior to Closing, and Xxxx X. Xxxxxx and Xxxxxx X. French shall have
issued promissory notes to Xxxxxxxxx in the aggregate principal amount, and on
substantially similar terms, as the promissory note issued by Xxxxxxxxx to
Xxxxxxxx X. Xxxxxxx under Section 3 of the Xxxxxxx/Xxxxxxxxx Exit Agreement
dated October 20, 2001 among BC, Xxxxxxxxx and Xxxxxxxx X. Xxxxxxx.
Section 9.14 Non-Competition Agreements of Principals. Each
non-competition agreement (a) between BC and Xxxxxx X. Xxxxxxxxx dated February
6, 2000, (b) between BC and B. Xxxxxxx Xxxxxxx dated February 15, 2000, (c)
between BC and Xxxxxxx X. Xxxxx dated Xxxxxxxx 0, 0000, (x) between BC and
Xxxxxx X. Xxxxxx, Xx. dated February 14, 2000, and (e) between BC and Xxxxxxx X.
Xxxx dated January 1, 2001, shall have been terminated.
ARTICLE 10
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE
XXXXXXXXX ENTITIES AND THE PRINCIPALS
The obligations of Xxxxxxxxx and the Principals to consummate the
transactions contemplated hereby are subject to the satisfaction at or prior to
the Closing Date of the following conditions, except to the extent that any of
the Xxxxxxxxx Entities or the Principals, as the case may be, has waived any
such condition in writing on or prior to the Closing Date:
Section 10.1 No Litigation; No Opposition. No judgment,
injunction, order or decree enjoining or prohibiting any of Merger Subsidiary,
WTI, WTC, the LLC, any of the Xxxxxxxxx Entities or any Principal from
consummating the transactions contemplated hereby or thereby shall have been
entered. No suit, action, claim, proceeding or investigation shall be pending or
threatened on the Closing Date before or by any court or Governmental Authority
seeking to restrain or prohibit the execution and delivery of this Agreement or
any other Transaction Document or the consummation of the transactions
contemplated hereby or thereby.
Section 10.2 Representations, Warranties and Covenants. Each
representation and warranty of Merger Subsidiary, WTI and WTC contained in this
Agreement and in any schedule or exhibit hereto and in each other Transaction
Document shall be true and correct in all material respects at and as of Closing
as though newly made at that time; provided that no breaches of representations
and warranties shall be deemed to excuse the Xxxxxxxxx Entities' or the
Principals' obligations to consummate the transactions contemplated hereby
unless, individually or in the aggregate, such breaches could reasonably be
likely to result in a Material Adverse Effect on Merger Subsidiary, WTI and WTC,
taken as a whole (ignoring, for this purpose, any materiality or material
adverse effect qualifications to such representations and warranties). Each and
all of the agreements and conditions to be performed or satisfied by Merger
Subsidiary, WTI or WTC
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hereunder and under the other Transaction Documents at or prior to Closing
shall have been duly performed or satisfied in all material respects. Merger
Subsidiary, WTI and WTC shall have furnished each Principal with a certificate
dated as of the Closing Date to that effect.
Section 10.3 Deliveries. Merger Subsidiary, WTI or WTC, as
appropriate, shall have executed and delivered to Xxxxxxxxx or the Principals:
a. Certified copies of resolutions of each of Merger
Subsidiary's, WTI's and WTC's board of directors authorizing the execution of
this Agreement and each other Transaction Document to which Merger Subsidiary,
WTI or WTC is a party and, in the case of WTC, the issuance of the shares of
Common Stock in the Merger;
b. A copy of the charter and current bylaws of Merger
Subsidiary, WTI and WTC, which, in the case of the charters and certificates,
are certified as of a recent date by the Secretary of State of Delaware;
c. A certificate of the Secretary of each of Merger
Subsidiary, WTI and WTC certifying that the resolutions, charters and bylaws in
paragraphs (a) and (b) above are in full force and effect and have not been
amended or modified, and that the officers of Merger Subsidiary, WTI and WTC are
those persons named in the certificate;
d. A certificate issued by the Secretary of State of
Delaware certifying that Merger Subsidiary, WTI and WTC are validly existing in
Delaware as of the most recent practicable date;
e. True and correct copies of each other Transaction
Document to which Merger Subsidiary, WTI or WTC is a party;
f. An opinion from counsel to Merger Subsidiary, WTI and
WTC in the form of Exhibit 10.3(f);
g. A copy of the Form D to be filed with the SEC with
respect to the issuance of the shares of Common Stock and of any similar filing
or notification of filing that will be filed with any applicable state
securities department;
h. WTI shall execute the BCT Agreement in favor of the
Non-Xxxxxxxxx Members; provided, however, that it shall not be a condition
precedent to Closing that the Non-Xxxxxxxxx Members shall have executed such
agreement; and
i. A copy of an appraisal of the fair market value of
the Principals' Interest performed by Valuation Econometrics, LLC, or another
appraisal firm reasonably acceptable to WTC, as of a date within 10 days prior
to the Closing Date.
In addition, WTC shall have delivered the merger consideration to be
paid at Closing.
Section 10.4 Consents. Xxxxxxxxx shall have obtained all Consents
contemplated by Section 9.3.
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Section 10.5 Material Adverse Change. No event or condition,
individually or in the aggregate, shall have had a Material Adverse Effect on
Merger Subsidiary, WTI and WTC, taken as a whole.
ARTICLE 11
INDEMNIFICATION
Section 11.1 Indemnification by the Principals. Subject to the
provisions of this Article 11, each of the Principals shall defend, indemnify,
save and hold harmless Merger Subsidiary, WTI and WTC, their respective
Affiliates and the shareholders, directors, officers, employees and agents of
each of the foregoing, from and against any and all actions, suits, claims,
proceedings, demands, assessments, judgments, costs, losses, liabilities,
damages, deficiencies and expenses (including, without limitation, interest,
penalties, reasonable attorneys' and accountants' fees and all reasonable
amounts paid in the investigation, defense or settlement of any of the
foregoing) (collectively, "Losses") incurred in connection with, arising out of,
or resulting from (a) any misrepresentation or breach of any representation or
warranty by any of Xxxxxxxxx or the Principals herein, (b) any breach of any
covenant or agreement to be performed pursuant to this agreement by any of
Xxxxxxxxx, the LLC or the Principals herein, (c) the Existing Debt and (d) any
failure of GP to be registered as an investment adviser under the Georgia
Securities Act of 1973, as amended; provided that each Principal shall be
obligated to pay only such Principal's pro rata share of any such Losses other
than Losses relating to Sections 4.15(c), 4.15(d) or 4.23. The pro rata share
shall be such Principal's percentage of the outstanding stock of Xxxxxxxxx
immediately prior to the Merger, determined by dividing such Principal's number
of shares of Xxxxxxxxx stock immediately prior to the Merger by the number of
all such Xxxxxxxxx stock then outstanding. With respect to Sections 4.15(c),
4.15(d) and 4.23, each Principal shall be obligated to pay only such Losses
relating to the breach of such representations by such Principal.
Section 11.2 Indemnification by WTI and WTC. Subject to the
provisions of this Article 11, Merger Subsidiary, WTI and WTC shall each defend,
indemnify, save and hold harmless the Principals from and against any and all
Losses incurred in connection with, arising out of, or resulting from any
misrepresentation or breach of any warranty, covenant or agreement by Merger
Subsidiary, WTI or WTC herein or in any Transaction Documents.
Section 11.3 Limitation. No amount shall be recoverable under this
Article 11 by Merger Subsidiary, WTI or WTC, on the one hand, or the Principals,
on the other hand, until the total amount of Losses suffered to date exceeds
$10,000. Further, the indemnification provided by Section 11.1(a) shall
terminate one year following the Closing and shall be limited to an amount not
exceeding the amount of the payment made under Section 3.1(a)(1). The
indemnification provided by each of the Principals relating to breaches of the
representations contained in Sections 4.15(c) and (d) and 4.23 shall be limited
to an amount not exceeding the amount of the payment made under Section
3.1(a)(1) to such Principal.
Section 11.4 Defense of Claims. If any action, suit, claim, tax
audit, proceeding, demand, assessment or enforcement action is filed or
initiated against an Indemnified Party with
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respect to a matter subject to an indemnification claim by such Indemnified
Party, the Indemnified Party shall give written notice thereof to the
Indemnifying Party or Parties as promptly as practicable, and in any event
within 20 days after service of the citation or summons, but the failure of an
Indemnified Party to give timely notice shall not affect the rights of that
party to indemnification hereunder to the extent such failure does not
prejudice the Indemnifying Party. After such notice and a reasonable period of
time to allow for analysis of the claim, if the Indemnifying Party acknowledges
in writing to the Indemnified Party that the Indemnifying Party is obligated
under the terms of its indemnity hereunder for all liabilities of the
Indemnified Party in connection with that action, suit, claim, tax audit,
proceeding, demand, assessment or enforcement action, the Indemnifying Party
shall be entitled, if it so elects and with counsel reasonably satisfactory to
the Indemnified Party, to take control of the defense and investigation of that
action, suit, claim, tax audit, proceeding, demand, assessment or enforcement
action and to employ and engage attorneys to handle and defend the same, at the
Indemnifying Party's cost, risk and expense, except that, if the Indemnifying
Party elects not to assume such defense or counsel for the Indemnified Party
determines in good faith and advises the Indemnifying Party in writing that
there are issues that raise conflicts of interest between the Indemnifying
Party and the Indemnified Party, the Indemnified Party may retain counsel
satisfactory to him or it, and the Indemnifying Party shall pay all reasonable
fees and expenses of such counsel for the Indemnified Party promptly as
statements therefore are received; provided, however, that (i) the Indemnifying
Party shall be obligated pursuant to this Section 11.4 to pay for only one firm
of counsel (unless the use of one counsel for such Indemnified Party would
present such counsel with a conflict of interest) for all Indemnified Parties
in any jurisdiction, and (ii) the Indemnified Party will cooperate in the
defense of any such matter. If the Indemnifying Party assumes the control of
such defense, the Indemnified Party shall cooperate in all reasonable respects,
at the Indemnifying Party's request and cost, risk and expense, with the
Indemnifying Party and its attorneys in the investigation, trial and defense of
that action, suit, claim, tax audit, proceeding, demand, assessment or
enforcement action and any appeal arising therefrom; provided that the
Indemnified Party may, at its own cost, participate in the investigation, trial
and defense of that action, suit, claim, tax audit, proceeding, demand,
assessment or enforcement action and any appeal arising therefrom. The
Indemnifying Party shall keep the Indemnified Party apprised of the status of
the action, suit, claim, tax audit, proceeding, demand, assessment or
enforcement action, furnish the Indemnified Party with all documents and
information the Indemnified Party reasonably requests in connection therewith,
and consult with the Indemnified Party prior to acting on major matters
involved in that action, suit, claim, tax audit, proceeding, demand, assessment
or enforcement action, including settlement discussions. Unless the Indemnified
Party receives a complete release from all matters involved in the dispute, no
settlement of any action for which indemnification may be payable hereunder
shall be made without the prior written consent of the Indemnified Party, which
consent shall not be unreasonably withheld, delayed or conditioned. The
Indemnified Party shall be entitled to defend, settle or proceed in such other
manner as it deems fit, in its sole discretion, in connection with any action,
suit, claim, proceeding, demand, assessment or enforcement action with respect
to which the Indemnifying Party has not acknowledged its obligations in writing
in accordance with the foregoing; and no reasonable action taken by the
Indemnified Party in connection therewith shall affect or limit the obligations
of the Indemnifying Party pursuant to this Section 11.4.
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If the Indemnifying Party assumes the control of such defense as
provided above but subsequently, in the course of defending the matter, comes to
believe that the matter is not properly an obligation of such Indemnifying
Party, the Indemnifying Party may with reasonable promptness advise the
Indemnified Party of such new information. In such case, (a) if the Indemnified
Party then agrees with the Indemnifying Party, the Indemnifying Party and the
Indemnified Party shall make mutually satisfactory arrangements for the
Indemnified Party to assume the defense of such matter and to repay the
Indemnifying Party for any amounts reasonably expended by it pursuant to this
Article 11 with respect to such matter, and (b) if the Indemnified Party does
not then agree with the Indemnifying Party, the Indemnifying Party shall have
the right to commence legal proceedings to determine whether the matter is
subject to indemnification by the Indemnifying Party; provided that, in the case
of clause (b), the Indemnifying Party shall continue to be obligated to defend
the Indemnified Party with respect to such matter and to otherwise make the
payments required by this Article 11 until such dispute is finally adjudicated
by a court of competent jurisdiction and all rights to appeal with respect
thereto have expired.
Section 11.5 Prompt Payment. Any indemnity payable pursuant to
this Article 11 shall be paid within the later of ten days of the Indemnified
Party's request therefor or five days prior to the date on which the liability
upon which the indemnity is based is required to be paid by the Indemnified
Party; provided, however, that, if it is finally determined by a court of
competent jurisdiction, and all rights to appeal have expired, that the
Indemnifying Party is not liable under this Article 11 with respect to a Loss,
nothing in this Section 11.5 shall give the Indemnified Party any independent
right to xxx for a breach of this Agreement.
Section 11.6 Sole Remedy. After the Closing, each party's sole and
exclusive remedy for any breach of this Agreement by any other party shall be
the provisions in Article 11; provided, however, that nothing set forth in this
Article 11 shall be deemed to prohibit or limit any party's right at any time on
or after the Closing Date, to seek injunctive or equitable relief for the
failure of any other party to perform any covenant or agreement contained herein
or to seek any other relief based upon fraud or intentional misrepresentation.
Section 11.7 Certain Reductions; Subrogation. All indemnification
payments payable hereunder shall be reduced by the amount of insurance proceeds
received by the Indemnified Party as a result of the Losses for which the
Indemnified Party is seeking indemnification. In the event that the
Indemnifying Party shall be obligated to indemnify the Indemnified Party
pursuant to this Article 11, the Indemnifying Party shall, upon payment of such
indemnity in full, be subrogated to all rights of the Indemnified Party with
respect to the Losses to which such indemnification relates; provided, however,
that the Indemnifying Party shall only be subrogated to the extent of any
amount paid by it pursuant to this Article 11 in connection with such Loss.
ARTICLE 12
TERMINATION
Section 12.1 Termination. This Agreement may be terminated (a) by
the mutual consent of WTI and Xxxxxxxxx; (b) by WTI or Xxxxxxxxx at any time
after March 31, 2002 if for any reason
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the transactions contemplated by this Agreement have not been consummated by
that date and the failure to consummate the transactions is not caused by a
breach of this Agreement by the Merger Subsidiary, WTI or WTC, if WTI seeks to
terminate this Agreement pursuant to this Section 12.1(b), or Xxxxxxxxx and the
Principals, if Xxxxxxxxx seeks to terminate this Agreement pursuant to this
Section 12.1(b); (c) by WTI if there has been a misrepresentation or breach on
the part of any of Xxxxxxxxx, the LLC or the Principals in the representations,
warranties or covenants of any of Xxxxxxxxx, the LLC or the Principals set
forth herein that, if curable, has not been cured within 10 days after notice
thereof by WTI and which breach, if not cured, would cause a failure of the
conditions set forth in Article 9; (d) by Xxxxxxxxx if there has been a
misrepresentation or breach on the part of Merger Subsidiary, WTI or WTC in the
representations, warranties or covenants of Merger Subsidiary, WTI or WTC set
forth herein that, if curable, has not been cured within 10 days after notice
thereof by Xxxxxxxxx and which breach, if not cured, would cause a failure of
the conditions set forth in Article 10; (e) by WTI or Xxxxxxxxx if any court of
competent jurisdiction or other competent governmental or regulatory authority
(1) has issued an order making illegal or otherwise materially restricting,
preventing or prohibiting any of the transactions contemplated hereby and that
order has become final and nonappealable or (2) whose approval is necessary to
the consummation of the transactions contemplated hereby and whose approval has
not been obtained after all appeals have been taken; (f) by WTI if an event or
condition or events or conditions occur that, either individually or the
aggregate, have a Material Adverse Effect on the LLC and the Xxxxxxxxx
Entities, taken as a whole; and (g) by Xxxxxxxxx if an event or condition or
events or conditions occur, which, either individually or in the aggregate,
have a Material Adverse Effect on Merger Subsidiary, WTI and WTC, taken as a
whole.
Section 12.2 Effect of Termination. If this Agreement is validly
terminated pursuant to Section 12.1, it will become null and void immediately
and there will be no liability or obligation on the part of any party hereto (or
any of their respective representatives or Affiliates), except that (a) the
provisions of Sections 8.2 and 8.3 and Article 11 will continue to apply
following that termination and (b) nothing contained herein shall relieve any
party hereto from liability for breach of its representations, warranties,
covenants or agreements contained in this Agreement.
ARTICLE 13
MISCELLANEOUS
Section 13.1 Survival of Representations, Warranties and
Covenants. The representations and warranties contained herein and in any
certificate or other writing delivered pursuant hereto shall survive the Closing
Date and the consummation of the transactions contemplated hereby. All covenants
herein not fully performed shall survive the Closing Date and continue
thereafter until fully performed.
Section 13.2 Waivers. Any waiver of any term or condition or of
the breach of any covenant, representation or warranty in this Agreement in any
one instance shall not operate as or be deemed to be a further or continuing
waiver of any other breach of that term, condition, covenant, representation or
warranty or any other term, condition, covenant, representation or warranty. No
failure or delay at any time to enforce or require performance of any provision
hereof
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shall operate as a waiver of or affect in any manner that party's right at a
later time to enforce or require performance of that provision or any other
provision hereof. No such waiver, unless by its own terms it explicitly
provides to the contrary, shall be construed to effect a continuing waiver of
the provision being waived, and no such waiver in any instance shall constitute
a waiver in any other instance or for any other purpose or impair the right of
the party against whom that waiver is claimed in all other instances or for all
other purposes to require full compliance.
Section 13.3 Modifications. Except as otherwise expressly provided
in this Agreement, neither this Agreement (including the exhibits and schedules
hereto) nor any term hereof or thereof may be changed, amended, modified,
waived, discharged or terminated except to the extent the same is evidenced by
the written consent of the party against whom enforcement of that change or
modification is sought.
Section 13.4 Further Assurances. Each party agrees to execute all
further instruments and documents and to take all additional actions as any
other party may reasonably require in order to effectuate the terms and purposes
of this Agreement and the transactions contemplated hereby.
Section 13.5 Governing Law; Consent to Jurisdiction. This
Agreement shall be construed under and governed by Georgia law, without giving
effect to the choice or conflicts of law provisions thereof. Each of WTC, WTI
and Xxxxxxxxx hereby agrees to submit to the jurisdiction of the courts of the
State of Georgia and the courts of the United States of America located in the
Northern District in the State of Georgia in any action or proceeding arising
out of or relating to this Agreement. Each of the Principals and Xxxxxxxxx
hereby agrees to submit to the jurisdiction of the courts of the State of
Delaware and to the courts of the United States of America located in Delaware
in any action or proceeding arising out of or relating to this Agreement.
Section 13.6 Notices.
a. All notices, requests, demands and other
communications required or permitted under this Agreement shall be in writing
and sent as provided in Section 13.6(b) hereof:
(1) If to Merger Subsidiary, WTI or WTC to:
WT Investments, Inc.
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx,
Senior Vice President
with a copy to:
WT Investments, Inc.
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
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Attention: Xxxxxx X. Xxxxxxxxxxx, Esq.
Vice President
(2) If to Xxxxxxxxx, to:
Balentine Holdings, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx
with a copy to:
Xxxxxx & Bird LLP
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: B. Xxxxxx Xxxx, Xx.
(3) If to the Principals, to
c/x Xxxxxxxxx Holdings, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, XX 00000
with a copy to:
Xxxxxx & Bird LLP
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: B. Xxxxxx Xxxx, Xx.
b. All Notices and other communications required or
permitted hereunder that are addressed as provided in this Section 13.6, (1) if
delivered personally against proper receipt shall be effective upon delivery and
(2) if sent (A) by certified or registered mail with postage prepaid or (B) by
Federal Express or similar courier service with courier fees paid by the sender,
shall be effective upon receipt. A party may change its address for the purpose
of notices to that party from time to time by a similar notice specifying a new
address, but no such change shall be deemed to have been given unless it is sent
and received in accordance with this Section 13.6.
Section 13.7 Assignability. Neither this Agreement nor any rights
or obligations hereunder shall be assignable by any party to any other Person
without the prior written consent of the other parties, except that each of WTI
and/or WTC may, with notice to the other parties, assign
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any or all of its interests in this Agreement and its rights and obligations
hereunder to WTC or any Person directly or indirectly wholly owned by WTC,
provided in every instance WTC shall remain fully liable for all of the
obligations of WTC, WTI or Merger Subsidiary hereunder and under the
Transactions Documents following any such assignment and shall in no way be
released from this Agreement and the other Transaction Documents. This
Agreement shall be binding upon, enforceable by and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
Section 13.8 Captions. The captions in this Agreement are for
convenience only and shall not affect the construction or interpretation of any
term or provision hereof.
Section 13.9 Number and Gender. Whenever used herein, the singular
number shall include the plural, the plural shall include the singular unless
the context otherwise requires and the use of any gender shall include all
genders.
Section 13.10 Severability. The invalidity or unenforceability of
any nonmaterial provision of this Agreement shall not affect the other
provisions hereof, and this Agreement shall be construed in all respects by
interpreting that invalid or unenforceable provision as nearly to the original
meaning as possible so as to make it valid and enforceable or, if that is not
possible or permitted by applicable law, by omitting that invalid or
unenforceable provision.
Section 13.11 Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
Section 13.12 No Third-Party Beneficiaries. Except as otherwise
provided in Article 11, no Person who is not a party to this Agreement shall be
entitled to any rights or benefits hereunder.
Section 13.13 Remedies for Section 8.2. Each Receiving Party
acknowledges that any breach or attempted breach by such party of the provisions
of Section 8.2 will cause irreparable harm to the Disclosing Party, for which
monetary damages will not be an adequate remedy. Accordingly, each Disclosing
Party shall be entitled to apply for and obtain injunctive relief (temporary,
preliminary and permanent) to restrain the breach or threatened breach by a
Receiving Party of, or otherwise to specifically enforce, any provision of
Section 8.2, without the requirement to post a bond or provide other security.
Nothing herein shall be construed as a limitation or waiver of any other right
or remedy that may be available to the Disclosing Party for that breach or
threatened breach. For emergency relief (including temporary and preliminary
injunctive relief), an application may be made in any court of competent
jurisdiction. Each Receiving Party further agrees that the subject matter and
duration of the restrictions covered in Section 8.2 are reasonable in light of
the facts as they exist today.
Section 13.14 Integration. This Agreement (as it may be amended
from time to time) and the exhibits and schedule hereto constitute the entire
agreement among the parties hereto with respect to the subject matter hereof,
and supersede all prior agreements and understandings, oral or written, express
or implied, with respect thereto.
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Section 13.15 Principals' Representative. Each Principal has
appointed Xxxxxx X. Xxxxxxxxx as his or its representative, agent, and
attorney-in-fact ("Principals' Representative") pursuant to an agreement in the
form of Exhibit 13.15 ("Principals' Representative Agreement") and has provided
to the Principals' Representative the full legal authority, capacity, and power
to act on behalf of such Principal with respect to any matters arising under
this Agreement or in connection therewith. Merger Subsidiary, WTI and WTC shall
be entitled to rely, and shall in no way be liable for relying, on the full
legal authority, capacity, and power of Xxxxxx X. Xxxxxxxxx to act on behalf of
each Principal with respect to any matters arising under this Agreement or in
connection therewith without further inquiry, and each Principal shall hold each
of Merger Subsidiary, WTI and WTC harmless from any liability or loss arising
out of the reliance by any of them on that power-of-attorney. If the Principals,
by Majority Vote, provide WTI, WTC and their Permitted Transferees and
Affiliates with 30 days' notice that Xxxxxx has been terminated as Principals'
Representative, WTI, WTC and their Permitted Transferees and Affiliates shall
cease to rely on Xxxxxx as Principals' Representative and shall rely on any
successor Principals' Representative who such Principals so designate as the new
"Principals' Representative." The term "Majority Vote" has the meaning assigned
to such term in the LLC Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
XXXXXXXXX HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx, Xx.
-----------------------------------------
Name: Xxxxxx X. Xxxxxxxxx, Xx.
Title: Chief Executive Officer
Address: 0000 Xxxxxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Xxxxxx X. Xxxxxxxxx,Xx. (SEAL)
---------------------------------------
XXXXXX X. XXXXXXXXX
Address: 0000 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
/s/ B. Xxxxxxx Xxxxxxx (SEAL)
---------------------------------------
B. XXXXXXX XXXXXXX
Address: 0000 Xxxxxxxxx Xxxx
Xxxxxxx, XX 00000
/s/ Xxxxxxx X. Xxxxx (SEAL)
---------------------------------------
XXXXXXX X. XXXXX
Address: 000 Xxxxxx Xxxxx
Xxxxxxx, XX 00000
/s/ Xxxxxx X. Xxxxxx, Xx. (SEAL)
---------------------------------------
XXXXXX X. XXXXXX, XX.
Address: 000 Xxx Xxxxx
Xxxxxxx, XX 00000
/s/ Xxxx X. Xxxxxx (SEAL)
---------------------------------------
XXXX X. XXXXXX
Address: 000 Xxxxxxxxx Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
/s/ Xxxxxx X. French (SEAL)
---------------------------------------
XXXXXX X. FRENCH
Address: 0000 Xxxx Xxxxxx Xxxx
Xxxxxxx, XX 00000
/s/ Xxxxxxx X. Xxxx (SEAL)
---------------------------------------
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XXXXXXX X. XXXX
Address: 0000 Xxxxxxxxx Xxxxx Xxxxx
Xxxxxx, XX 00000
THE 1999 XXXXXXXXX FAMILY TRUST
/s/ Xxxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Trustee
Address: 0000 Xxxxxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, XX 00000
THE XXXXXX X. XXXXXXXXX INSURANCE TRUST
By: /s/ Xxxxxxx X. Xxxxxxxxx Law
---------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx Law
Title: Trustee
Address: c/o Xxxxxxx X. Xxxxxxxxx Law
00 00xx Xxxxxx, XX
Xxxxxxx, XX 00000
WTC MERGER SUBSIDIARY, INC.
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx,
Title: Senior Vice President
Address: Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
WT INVESTMENTS, INC.
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx,
Title: Senior Vice President
Address: Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
WILMINGTON TRUST CORPORATION
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx,
Title: Senior Vice President
Address: Xxxxxx Xxxxxx Xxxxx
-00-
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
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