SHARE REPURCHASE AGREEMENT
SHARE
REPURCHASE AGREEMENT
THIS SHARE
REPURCHASE AGREEMENT (the
“Agreement”)
is
made as of the 28th
day of
January, 2008, by and among Highbury
Financial Inc.,
a
Delaware corporation (the “Company”),
and
the undersigned authorized representative of certain shareholders of the Company
(the “Shareholder”).
WHEREAS,
the
Shareholder currently owns or has investment discretion over 300,372 common
shares of the Company (“Common
Shares”);
WHEREAS,
the
Shareholder desires the Company to repurchase all of the Common Shares upon
the
terms and conditions set forth herein; and
WHEREAS,
the
Company wishes to repurchase all of the Common Shares upon the terms and
conditions set forth herein.
NOW,
THEREFORE,
in
consideration of the mutual covenants herein contained and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto covenant and agree as follows:
1. Repurchase
of the Common Shares.
Upon
the terms and subject to the conditions set forth herein and in reliance upon
the representations and warranties set forth below, the Company agrees to
repurchase the Common Shares from the Shareholder, and the Shareholder agrees
to
sell and transfer to the Company the Common Shares for a price per Common Share
equal to $4.33, or an aggregate payment price of $1,300,610.76 for all the
Common Shares (the “Repurchase
Price”).
2. Closing.
The
repurchase and sale of the Common Shares shall
take place upon
execution of this Agreement. To consummate the repurchase and sale, as soon
as
practical after the date of this Agreement: (a) the Shareholder shall deliver
to
the Company (or to the Company’s designee) the
certificate(s) representing the Common Shares duly endorsed in blank or
accompanied by transfer powers duly endorsed in blank in proper form for
transfer, and wire transfer instructions for payment of the Repurchase Price,
and (b) the Company shall deliver to the Shareholder the payment of the
Repurchase Price in accordance with the Shareholder’s wire transfer
instructions, and the name and address of the transfer agent for the Common
Shares or other designee (if any) to whom the Shareholder should send the Common
Shares.
3. Representations
and Warranties of the Shareholder.
The
Shareholder represents and warrants to the Company as follows:
(a)
Organization
and Standing of Shareholder.
The
Shareholder is duly organized, validly existing and in good standing under
the
laws of its jurisdiction of incorporation or organization and has full corporate
power and authority to conduct its business as presently conducted and to own
and/or control the disposition of the Common Shares.
(b)
Ownership
of Common Shares.
The
Shareholder is, or is the duly authorized representative of, the record and
beneficial owner of the Common Shares, which ownership is free and clear of
any
liens, encumbrances, security interests, or restrictions on transfer and the
Shareholder or the client for whom it is the duly authorized representative
has
good, marketable, and unencumbered title to the Common Shares, and the
Shareholder has full legal right, power, and authority to enter into this
Agreement and to sell, transfer, convey, assign, and deliver the Common Shares
pursuant to this Agreement.
(c)
Authority
for Agreement.
The
execution of this Agreement, and the consummation of the transactions
contemplated hereby, have been duly authorized by all necessary corporate action
on the part of the Shareholder. This Agreement has been duly executed and
delivered by the Shareholder, and constitutes a valid and binding obligation
of
the Shareholder, enforceable against the Shareholder in accordance with its
terms, except that such enforcement may be subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors’ rights.
(d)
Conflicts.
The
execution of this Agreement, the consummation of the transactions contemplated
hereby, and the compliance with the provisions hereof by the Shareholder, do
not
and will not conflict with or result in any breach of any terms, conditions,
or
provisions of, or constitute a default under, or require a consent or waiver
under, the Certificate of Incorporation or By-laws (each as amended to date),
or
similar organizational documents, of the Shareholder, or any agreement to which
the Shareholder is a party or by which the Shareholder or any of its properties
are subject or bound, or violate any judgment, order, statute, rule, regulation
or other provision of law applicable to the Shareholder.
(e)
Litigation.
There
is no action, proceeding, or investigation pending or, to the knowledge of
the
Shareholder, threatened against the Shareholder, or any basis therefor known
to
the Shareholder, which questions the validity or legality, or otherwise relates
to, this Agreement or any of the transactions contemplated hereby.
(f)
Consents.
No
consent, approval, order, or authorization of, or registration, qualification,
designation, declaration or filing with, any person, entity or governmental
authority is required on the part of the Shareholder in connection with the
execution and delivery of this Agreement, or the repurchase of the Shareholder’s
Common Shares, or the other transactions as contemplated by this
Agreement.
(g)
Experience
and Knowledge.
(i)
The
Shareholder acknowledges and agrees that it has sufficient knowledge and
experience in financial and business matters, and that it has had full
opportunity to ask questions and receive sufficient and satisfactory answers
from the representatives of the Company to evaluate the merits and risks of
the
transactions contemplated by this Agreement.
(ii)
The
Shareholder has had full opportunity to obtain additional information,
documents, records and books related to the Company and its financial condition
and prospects, and based thereon, has formed an independent judgment concerning
the operations of the Company and its business.
(iii) The
Shareholder has read this Agreement carefully, has been afforded sufficient
time
to understand the terms and effects of this Agreement, and is voluntarily
entering into and executing this Agreement. Neither the Shareholder nor its
agents or representatives have made any representations inconsistent with the
terms and effects of this Agreement.
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(iv) The
Shareholder represents that the Company may have possession of material,
non-public information concerning the Common Shares and/or the Company that
the
Shareholder does not possess or have access to (the “Excluded Information”), and
as a consequence, there may exist a disparity of information between the Company
and the Shareholder with respect to the Common Shares and/or the Company. The
Shareholder acknowledges that the Excluded Information could be indicative
of a
value of the Common Shares that is higher than the Repurchase Price or could
otherwise be adverse to the Shareholder and such Excluded Information may be
material to Shareholder’s decision to sell the Common Shares.
(v) The
Shareholder represents that it has not requested the Excluded Information and
agrees that the Company shall not be obligated to disclose any Excluded
Information to the Shareholder or have any liability with respect to any such
non-disclosure.
4. Representations
and Warranties of the Company.
The
Company represents and warrants to the Shareholder as follows:
(a) Organization
and Standing of the Company; Authority.
The
Company is duly organized, validly existing and in good standing under the
laws
of its jurisdiction of incorporation and has full corporate power and authority
to conduct its business as presently conducted and to repurchase the Common
Shares. The Company has full legal right, power, and authority to enter into
this Agreement and to purchase the Common Shares pursuant to this
Agreement.
(b) Authority
for Agreement.
The
execution of this Agreement, and the consummation of the transactions
contemplated hereby, have been duly authorized by all necessary corporate action
on the part of the Company. This Agreement has been duly executed and delivered
by the Company, and constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except that such
enforcement may be subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting creditors’
rights.
(c) Conflicts.
The
execution of this Agreement, the consummation of the transactions contemplated
hereby, and the compliance with the provisions hereof by the Company, do not
and
will not conflict with or result in any breach of any terms, conditions, or
provisions of, or constitute a default under, or require a consent or waiver
under, the Certificate of Incorporation or By-laws (each as amended to date)
of
the Company, or any agreement to which the Company is a party or by which the
Company or any of its properties are subject or bound, or violate any judgment,
order, statute, rule, regulation or other provision of law applicable to the
Company.
(d) Litigation.
There
is no action, proceeding, or investigation pending or, to the knowledge of
the
Company, threatened against the Company, or any basis therefor known to the
Company, which questions the validity or legality, or otherwise relates to,
this
Agreement or any of the transactions contemplated hereby.
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(e) Consents.
No
consent, approval, order, or authorization of, or registration, qualification,
designation, declaration or filing with, any person, entity or governmental
authority is required on the part of the Company in connection with the
execution and delivery of this Agreement, or the repurchase of the Common
Shares, or the other transactions as contemplated by this
Agreement.
5. Cooperation.
The
Shareholder and the Company each hereby covenants and agrees with the other
to
take such action and execute and deliver such documents as may be reasonably
requested by the other in order to consummate the transactions contemplated
by
this Agreement.
6. Survival
of Representations, Warranties and Covenants.
All
representations, warranties and covenants contained herein shall survive the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby.
7. Indemnification.
Each of
the Shareholder and the Company (the “Indemnifying
Party”)
shall
indemnify and hold harmless the other, its successors and assigns, and the
respective officers, directors, employees and agents of each of the foregoing,
from and against any and all losses, claims, damages, liabilities, payments,
obligations and expenses (including reasonable attorneys’ and accountants’ fees)
sustained, suffered or incurred by any such person or entity arising
out of or resulting from the breach of any representation, warranty or covenant
of the Indemnifying Party contained in this Agreement.
8. Miscellaneous.
(a) Entire
Agreement.
This
Agreement constitutes the entire agreement of the parties hereto with respect
to
the subject
matter
hereof and supersedes all prior agreements and undertakings, both written and
oral. WITHOUT
LIMITING THE GENERALITY OF THIS SECTION 9(a)
AND
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, NO PARTY IS MAKING
ANY REPRESENTATION OR WARRANTY WHATSOEVER, ORAL OR WRITTEN, EXPRESS OR IMPLIED,
IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OTHER THAN
THOSE SET FORTH IN SECTIONS 3 AND 4 OF THIS AGREEMENT AND NO PARTY IS RELYING
ON
ANY STATEMENT, REPRESENTATION OR WARRANTY, ORAL OR WRITTEN, EXPRESS OR IMPLIED,
MADE BY ANY OTHER PARTY EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH
IN SECTIONS 3 AND 4 OF THIS AGREEMENT.
(b) Severability.
In the
event that any court having jurisdiction shall determine that any provision
contained in this Agreement shall be unreasonable or unenforceable in any
respect, then such covenant or other provision shall be deemed limited to the
extent that such court deems it reasonable and enforceable, and as so limited
shall remain in full force and effect. In the event that such court shall deem
any such covenant or other provision wholly unenforceable, the remaining
covenants and other provisions of this Agreement shall nevertheless remain
in
full force and effect.
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(c) Assignment.
This
Agreement shall be binding upon the successors, permitted assigns, heirs,
legatees and devisees, executors, administrators and legal representatives
of
the Shareholder and upon the successors and assigns of the Company. Neither
the
Shareholder nor the Company may assign its rights or delegate its obligations
under this Agreement without the prior written consent of the
other.
(d) Amendment;
Waiver.
This
Agreement may not be amended, modified or waived except by an instrument in
writing signed by the Company and the Shareholder.
(e) Governing
Law.
This
Agreement shall be governed by, and construed in accordance with, the laws
of
Delaware, without giving effect to the conflict of law principles
thereof.
(f) Expenses.
The
Company and the Shareholder shall each pay its fees and expenses (including
legal fees) in connection with this Agreement and the transactions contemplated
hereby whether or not the transactions contemplated hereby are consummated.
All
transfer or similar taxes required to be paid in respect of the transfer by
the
Shareholder of the Common Shares shall be paid by the Shareholder.
(g) Counterparts.
This
Agreement may be executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when executed shall
be
deemed to be an original but all of which taken together shall constitute one
and the same agreement.
(h) Notices.
(i) All
notices, waivers and other communications under this Agreement shall be in
writing and shall be delivered by hand or facsimile or mailed by an
internationally recognized overnight international courier:
(A) if
to the
Shareholder, at the address or facsimile number of the Shareholder set forth
on
the signature page hereto; and
(B) if
to the
Company, at:
000
Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx
XX
00000
Attention:
Xxxxxxx Forth, Chief Financial Officer
(ii) Any
notice so addressed shall be deemed to be given: if delivered by hand or
facsimile, on the date of such delivery if delivered prior to 5:00 p.m. on
a
Business Day or, if delivered after 5:00 p.m. or on a day other than a Business
Day, on the next Business Day; if mailed by courier, on the first Business
Day
following the date of such mailing; and if mailed by registered or certified
mail, on the third Business Day after the date of such mailing. For purposes
of
this Agreement, the term “Business
Day”
means
any day other than a Saturday, Sunday or other day that is a statutory holiday
under the federal laws of the United States or the laws of
Bermuda.
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(i) Further
Assurances.
The
Shareholder shall, from time to time after the Closing at the request of the
Company, without further consideration, execute and deliver further instruments
of transfer and assignment and other documents and take such other action as
the
Company may reasonably request to more effectively transfer and assign to,
and
vest in, the Company the Common Shares and all rights thereto, and to otherwise
fully implement the provisions of this Agreement.
(j) Specific
Performance.
The
rights and remedies of the parties hereto shall be cumulative. The transactions
contemplated by this Agreement are unique transactions and any failure on the
part of any party to complete the transactions contemplated by this Agreement
on
the terms of this Agreement will not be fully compensable in damages and the
breach or threatened breach of the provisions of this Agreement would cause
the
other parties hereto irreparable harm. Accordingly, in addition to and not
in
limitation of any other remedies available to the parties hereto for a breach
or
threatened breach of this Agreement, the parties shall be entitled to seek
specific performance of this Agreement and seek an injunction restraining any
such party from such breach or threatened breach.
(k) Waiver
of Jury Trial.
EACH
PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS
AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE
IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUR
OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
[The
remainder of this page is intentionally left blank.]
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IN
WITNESS WHEREOF,
the
Company and the Shareholder have executed this Share Repurchase Agreement as
of
the date first written above.
COMPANY:
|
By:
|
/s/
Xxxxxxx X. Xxxxx
|
|
Name:
|
Xxxxxxx
X. Xxxxx
|
|
Title:
|
President
and Chief Executive Officer
|
SHAREHOLDER:
POTOMAC
CAPITAL MANAGEMENT LLC
|
/s/
Xxxx X. Xxxxx
|
|
|
Name:
|
Xxxx
X. Xxxxx
|
|
Title:
|
President
|
|
000
Xxxxx Xxxxxx, 00xx Xxxxx
|
|
|
Xxx
Xxxx, XX 00000
|
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