Amendment No. 1 to Stock Purchase Agreement
Exhibit
2.2
Amendment
No. 1 to Stock Purchase Agreement
Amendment
No. 1, dated as of December 24, 2008
(“Amendment No.
1”), to the Stock Purchase Agreement, dated as of March 18, 2005 (the
“Purchase
Agreement”), by and between Washington Trust Bancorp,
Inc., a Rhode Island corporation (the “Buyer”), Weston
Financial Group, Inc., a Massachusetts corporation (the “Company”), I. Xxxxxxx
Xxxxxxxx, Xxxxxx Xxxxxx, Xx., Xxxxxxx X. Xxxxxx, Xxxxx X. Xxxxxxx, Xxxxxx X.
Stock and Xxxxxx X. Xxxxxxxx (those individuals, collectively, the “Principals”), and the
Persons listed on the signature page to the Purchase Agreement under the heading
“Other Shareholders” (the Principals and the Other Shareholders are referred to
herein collectively as the “Shareholders”).
WHEREAS, Section 12.2(a) of
the Purchase Agreement provides that any provision of the Purchase
Agreement may be amended if the amendment is in writing and is signed by each
party to the Purchase Agreement.
WHEREAS, pursuant to Section
2.6(c) of the Purchase Agreement, the Buyer shall pay to the Shareholders
an aggregate amount in cash equal to the Third Contingent Payment on or before
the earlier of (i) 15 Business Days after the date the Buyer files with the SEC
its annual report on Form 10-K for the fiscal year ending December 31, 2008, and
(ii) April 15, 2009.
WHEREAS, the
Buyer and the Shareholders desire that the Buyer pay to the Shareholders an
aggregate amount in cash equal to 99% of the Third Contingent Payment (as
defined below) on or before December 31, 2008.
WHEREAS, the Buyer and the
Shareholders desire that the Buyer pay to the Shareholders an aggregate
amount in cash equal to the Fourth Contingent Payment (as
defined below) on or before the earlier of (i) 15 Business Days after the
date the Buyer files with the SEC its annual report on Form 10-K for the fiscal
year ending December 31, 2008, and (ii) April 15, 2009.
WHEREAS, the
parties desire to amend the Purchase Agreement as provided herein.
NOW,
THEREFORE, in consideration of the mutual agreements contained herein and in the
Purchase Agreement and in consideration of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Capitalized
terms not defined herein shall have the meanings given to them in the Purchase
Agreement.
2. Section
1.1(a) of the Purchase Agreement is amended by deleting the definition of
“Contingent Payment” in its entirety and substituting therefore the
following:
““Contingent Payment”
means any of the First Contingent Payment, the Second Contingent Payment, the
Third Contingent Payment and the Fourth Contingent Payment.”
3. Section
2.6(c) of the Purchase Agreement is amended by deleting Section 2.6(c) in its
entirety and substituting therefore the following:
“On
December or before 31, 2008, the Buyer shall pay to the Shareholders an
aggregate amount in cash equal to 99% of the Third Contingent
Payment. The Shareholders hereby agree and acknowledge that the
payment of 99% of the Third Contingent Payment by the Buyer is in full
satisfaction of any payment owed to the Shareholders for the period between
January 1, 2008 and October 31, 2008 and that the Shareholders are not entitled
to any additional payment for the period between January 1, 2008 and October 31,
2008.”
4. Section
2.6(d) of the Purchase Agreement is amended by deleting Section 2.6(d) in its
entirety and substituting therefore the following:
“On
or before the earlier of (A) 15 Business Days after the date the Buyer files
with the SEC its annual report on Form 10-K for the fiscal year ending December
31, 2008, and (B) April 15, 2009, the Buyer shall pay to the Shareholders an
aggregate amount in cash equal to the Fourth Contingent Payment.”
5. Section
2.6(e) of the Purchase Agreement is amended by deleting Section 2.6(e) in its
entirety and substituting therefore the following:
“For
purposes of Sections 2.6, 2.7 and 2.8, the following terms have the following
meanings:
(i) “First Contingent
Payment” means an amount based on 2006 EBITDA determined according to the
table and principles set forth in Schedule 2.6;
provided that in no event will the First Contingent payment be less than
$2,000,000.
(ii) “Second Contingent
Payment” means an amount based on 2007 EBITDA determined according to the
table and principles set forth in Schedule 2.6;
provided that in no event will the Second Contingent Payment be less than
$2,000,000.
(iii) “Third Contingent
Payment” means an amount based on 10-Month 2008 EBITDA determined
according to the table and principles set forth in Schedule
2.6.
(iv) “Fourth Contingent
Payment” means an amount based on November and December 2008 EBITDA
determined according to the table and principles set forth in Schedule
2.6.
(v) “2006 EBITDA” means
EBITDA for the fiscal year ending December 31, 2006.
(vi) “2007 EBITDA” means
EBITDA for the fiscal year ending December 31, 2007.
(vii)
“10-Month 2008
EBITDA” means EBITDA for the period from January 1, 2008 through October
31, 2008.
(viii)
“November and December
2008 EBITDA” means EBITDA for the period from November 1, 2008 through
December 31, 2008.
(ix) “EBITDA” means, with
respect to a specific time period, the excess of Qualifying Revenues over
Expenses.
(x) “Qualifying Revenues”
means, with respect to a specified time period, that portion of the consolidated
revenues of the Acquired Business (as determined in accordance with GAAP applied
on a consistent basis) that are generated by the Acquired Business during that
period from Investment Management Services, Insurance Services and Brokerage
Services (regardless of where in the Combined Buyer Group they are
generated).
(xi) “Expenses” means, with
respect to a specific time period, all consolidated expenses, costs and charges
of any nature (as determined on an accrual basis in accordance with GAAP applied
on a consistent basis) of the Acquired Business (regardless of where in the
Combined Buyer Group they are incurred) including (A) any incentive
compensation, profit sharing or bonus expense payable to persons employed by a
member of the Combined Buyer Group in connection with the Acquired Business
(including, to the extent required by GAAP, expenses relating to the granting of
stock options or other equity instruments), but excluding (B) (1) the payment of
interest expense on indebtedness for borrowed money, (2) the payment of federal,
state, local and foreign taxes based on or measured by gross or net income, (3)
the effect of any depreciation or amortization with respect to any property or
assets of the Acquired Business and (4) any amount paid to any Principal as
severance and any amount paid for the continuation of that Principal’s health
and dental benefits following the termination of that Principal’s employment
with the Company by the Company without cause or by the Principal for good
reason under his employment agreement with the Company that is then in effect;
provided further that
Expenses shall not include any allocation to the Acquired Business of general
corporate or administrative costs or other similar overhead costs of the Buyer
and its Affiliates, except to the extent they represent costs actually incurred
by the Buyer and its Affiliates in connection with services or expenses
requested by, or undertaken for the benefit of, the Acquired Business, including
services or expenses that are jointly requested by, or undertaken for the joint
benefit of, the Acquired Business and other businesses of the Buyer and its
Affiliates, in which case there shall be allocated to the Acquired Business its
proportionate share of those costs.”
6. Section
2.6 of the Purchase Agreement is amended by adding a new Section 2.6(f) as
follows:
“During
the period commencing on the Closing Date and ending at the close of business on
December 31, 2008 (the “Earnout Period”),
without the mutual written consent of the Parent and the Shareholders’
Representative, no member of the Combined Buyer Group may effect (i) any
transfer or partial transfer to or from any other member of the Combined Buyer
Group of, or (ii) any internal reorganization or partial reorganization of the
Combined Buyer Group relating to, any client or customer account (or any assets
therein or services with respect thereto) or business division, product or
service of the Acquired Business or of the Buyer and its Affiliates, as the case
may be, in each case that existed prior to the Closing (any such transfer or
reorganization, an “Existing-Business
Transfer”).”
7. Section
2.7(c) of the Purchase Agreement is amended by deleting Section 2.7(c) in its
entirety and substituting therefore the following:
“At
the time of the payment of the Second Contingent Payment, the Buyer shall
deliver to the Shareholders’ Representative a statement setting forth the
Buyer’s calculations of 2007 EBITDA (the “Second Preliminary
Statement”). At the time of the payment of the Third
Contingent Payment, the Buyer shall deliver to the Shareholders’ Representative
a statement setting forth the Buyer’s calculations of 10-Month 2008 EBITDA (the
“Third Preliminary
Statement”). At the time of the payment of the Fourth
Contingent Payment, the Buyer shall deliver to the Shareholders’ Representative
a statement setting forth the Buyer’s calculations of November and December 2008
EBITDA (the “Fourth
Preliminary Statement”). If the Shareholders’ Representative
disagrees with any item or amount contained in the Second Preliminary Statement,
the Third Preliminary Statement or the Fourth Preliminary Statement or with the
Buyer’s calculation of 2007 EBITDA, 10-Month 2008 EBITDA or November and
December 2008 EBITDA, then, in each case, the Shareholders’ Representative may,
within 15 days after delivery of the Secondary Preliminary Statement, the Third
Preliminary Statement, or the Fourth Preliminary Statement, as applicable,
deliver a notice to the Buyer disagreeing with the applicable calculation and
setting forth the Shareholders’ Representative’s calculation of 2007 EBITDA,
10-Month 2008 EBITDA, or November and December 2008 EBITDA, as
applicable. Upon delivery of such a notice, all matters in dispute
shall be resolved in a manner consistent with the process described in Sections
2.7(a) and 2.7(b) with respect to 2006 EBITDA and the Preliminary
Statement.”
8. The
following amendments are made to the following references that appear throughout
the Purchase Agreement:
(a) Any
reference to “Section 2.6(d)” shall be deleted and replaced with “Section
2.6(e);”
(b) Any
reference to “Section 2.6(d)(i)” shall be deleted and replaced with “Section
2.6(e)(i);”
(c) Any
reference to “Section 2.6(d)(ii)” shall be deleted and replaced with “Section
2.6(e)(ii);”
(d) Any
reference to “Section 2.6(d)(iii)” shall be deleted and replaced with “Section
2.6(e)(iii);”
(e) Any
reference to “Section 2.6(d)(iv)” shall be deleted and replaced with “Section
2.6(e)(v);”
(f) Any
reference to “Section 2.6(d)(v)” shall be deleted and replaced with “Section
2.6(e)(vi);”
(g) Any
reference to “Section 2.6(d)(vi)” shall be deleted and replaced with “Section
2.6(e)(vii);”
(h) Any
reference to “Section 2.6(d)(vii)” shall be deleted and replaced with “Section
2.6(e)(ix);”
(i) Any
reference to “Section 2.6(d)(viii)” shall be deleted and replaced with “Section
2.6(e)(x);”
(j) Any
reference to “Section 2.6(d)(ix)” shall be deleted and replaced with “Section
2.6(e)(xi);” and
(k) Any
reference to “Section 2.6(e)” shall be deleted and replaced with “Section
2.6(f).”
9. Schedule 2.6 of the
Purchase Agreement is amended and restated in its entirety as shown in Exhibit A attached
hereto.
10. Except
as expressly set forth herein, no other amendments, consents, changes or
modifications to the Purchase Agreement are intended or implied, and in all
other respects the Purchase Agreement as amended is hereby specifically
ratified, restated and confirmed by the parties hereto as of the effective date
hereof. To the extent of any conflict between the terms of this
Amendment No. 1 and the Purchase Agreement, the terms of this Amendment No. 1
shall control. The Purchase Agreement and this Amendment No. 1 shall
be read and construed as one agreement.
11. This
Amendment No. 1 may be executed in one or more counterparts all of which shall
be considered one and the same amendment and each of which shall be deemed to be
an original.
[Remainder
of page has intentionally been left blank]
IN
WITNESS WHEREOF, the parties are signing this Amendment No. 1 as of the date
first above written.
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WASHINGTON
TRUST BANCORP, INC.
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By:
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/s/
Xxxx X. Xxxxxx
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Name:
Xxxx X. Xxxxxx
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Title:
Chairman and Chief Executive Officer
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WESTON
FINANCIAL GROUP, INC.
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By:
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/s/ Xxxxx X. Xxxxxxx |
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Name:
Xxxxx X. Xxxxxxx
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Title:
President
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/s/
I. Xxxxxxx Xxxxxxxx
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I.
Xxxxxxx Xxxxxxxx
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/s/
Xxxxxx Xxxxxx, Xx.
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Xxxxxx
Xxxxxx, Xx.
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/s/
Xxxxxxx X. Xxxxxx
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Xxxxxxx
X. Xxxxxx
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/s/
Xxxxx X. Xxxxxxx
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Xxxxx
X. Xxxxxxx
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/s/
Xxxxxx X. Stock
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Xxxxxx
X. Stock
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/s/
Xxxxxx X. Xxxxxxxx
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Xxxxxx
X. Xxxxxxxx
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Other
Shareholders:
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/s/
Xxxxx X. Xxxxx
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Xxxxx
X. Xxxxx
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/s/
Xxxxxxx X’Xxxxx
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Xxxxxxx
X’Xxxxx, as Joint Tenant with Xxxxx X’Xxxxx
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/s/
Xxxxx X’Xxxxx
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Xxxxx
X’Xxxxx, as Joint Tenant with Xxxxxxx X’Xxxxx
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/s/
Xxx X. Xxxxxxxxx
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Xxx
X. Xxxxxxxxx
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/s/
Xxxxxxxxx X. Xxxx
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Xxxxxxxxx
X. Xxxx
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XXX
FBO Xxxxxxx Xxxxxxxxxx
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/s/ Xxxxxxx Xxxxxxxxxx |
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Name:
Xxxxxxx Xxxxxxxxxx, its beneficiary
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XXX
FBO Xxxxxx X. Xxxxx
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/s/ Xxxxxx X. Xxxxx |
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Name:
Xxxxxx X. Xxxxx, its
beneficiary
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/s/
Xxxxxx Xxxxxx
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Xxxxxx
Xxxxxx
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/s/
Dr. Xxxxx Xxxxxxx
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Dr.
Xxxxx Xxxxxxx
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By:
Xxxx Xxxxxxx pursuant to a Power of Attorney dated August 20,
1997
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/s/
Xxxx Xxxxxxx
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Xxxx
Xxxxxxx
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/s/
Xxxxx Xxxxxx, III
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Xxxxx
Xxxxxx, III
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/s/
Xxxxxxx X. Xxxxxx
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Xxxxxxx
X. Xxxxxx
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/s/
Xxxxxxx X. Xxxxxx
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Xxxxxxx
X. Xxxxxx
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/s/
Xxxxx X. Xxxxxx
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Xxxxx
X. Xxxxxx
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USB Financial
Services
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| FBO Xxxxx X. Xxxxx Rollover XXX | |
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/s/ Xxxxx X. Xxxxx |
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Name:
Xxxxx X. Xxxxx, its
beneficiary
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