1
Exhibit 10.2
SHARE EXCHANGE AGREEMENT
SHARE EXCHANGE AGREEMENT, dated March ____,1999 (the "Agreement"),
by and among X.X. Xxxxxxx & Co. Ltd., a Bermuda company ("WPS Ltd."), and First
Long Island Holdings, LLC, a limited liability company organized under the laws
of Delaware ("Holdings LLC").
RECITALS
1. Holdings LLC owns all the issued and outstanding common stock,
par value $. 10 per share ("FLI Inc. Common Stock"), of First Long Island
Investors, Inc., a New York corporation ("FLI Inc.").
2. Prior to the Closing (as defined below), FLI Inc. will transfer
to First Long Island Investors, LLC, a limited liability company organized under
the laws of Delaware ("Investors LLC"), all assets of FLI Inc., other than the
Xxxxxxx-related Assets (as defined below), and Investors LLC will assume all
liabilities of FLI Inc., pursuant to the terms of the Transfer Agreement (as
defined below).
3. Holdings LLC and WPS Ltd. desire to effect the exchange of
1,200,000 shares of WPS Ltd. Capital Stock (as defined below) for all the issued
and outstanding FLI Inc. Common Stock.
NOW THEREFORE, in consideration of the premises and other covenants
and conditions contained herein, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms below shall
have the following meanings:
"Adverse Effect" with respect to any Person shall mean a materially
adverse effect on any of the business, the Share Exchange, the capital stock,
the assets, or the liabilities, working capital, earnings, condition (financial
or otherwise), operating results, prospects, or employee, client, customer or
supplier relations of such Person, or the ability
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of such Person to perform its obligations under the Transaction Documents or to
conduct its business as presently conducted or as proposed to be conducted.
"Affiliate" as applied to any Person, means any other Person
directly or indirectly controlling, controlled by or under direct or indirect
common control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with"), as applied to any Person, shall mean (a) the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of voting
securities, by contract or otherwise, or (b) ownership, directly or indirectly,
of 10% or more of the Equity Interests of such Person.
"Agreement" shall mean this Share Exchange Agreement, as such
Agreement may be amended from time to time.
"Closing Date" shall mean the close of business on April 30, 1999,
or such other date as may be mutually agreed upon in writing by the parties
hereto.
"Consenting Party" shall mean any Person whose consent or waiver is
or may be required under any Contract in connection with the Transaction
Documents or the consummation by either party of any of the transactions
contemplated thereby.
"Contracts" shall mean any and all of the agreements, contracts or
commitments of FLI Inc. described in the Holdings LLC Disclosure Schedules.
"Effective Date" shall mean January 1, 1999.
"Encumbrances" shall mean any claim, mortgage, deed of trust,
restrictive covenant, reservation, lien, pledge, option, charge, easement,
security interest, right-of-way, encumbrance of any kind or other rights of
third parties (including, without limitation, preemptive rights), whether or not
filed, recorded or otherwise perfected under applicable law, as well as the
interest of any vendor, vendee or lessor or lessee under any conditional sales
agreement, capital lease or other title retention agreement.
"Environmental, Health, and Safety Liabilities" shall mean any cost,
damages, expense, liability, obligation, or other responsibility arising from or
under Environmental Law or Occupational Safety and Health Law and consisting of
or relating to:
(a) any environmental, health, or safety matters or conditions
(including on-site or off-site contamination, occupational safety and health,
and regulation of chemical substances or products);
(b) fines, penalties, judgments, awards, settlements, legal or
administrative proceedings, damages, losses, claims, demands and response,
investigative, remedial, or
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inspection costs and expenses arising under Environmental Law or Occupational
Safety and Health Law;
(c) financial responsibility under Environmental Law or Occupational
Safety and Health Law for cleanup costs or corrective action, including any
investigation, cleanup, removal, containment, or other remediation or response
actions ("Cleanup") required by applicable Environmental Law or Occupational
Safety and Health Law (whether or not such Cleanup has been required or
requested by any Governmental Body or any other Person) and for any natural
resource damages; or
(d) any other compliance, corrective, investigative, or remedial
measures required under Environmental Law or Occupational Safety and Health Law.
The terms "removal," "remedial," and "response action," include the
types of activities covered by the federal Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA").
"Environmental Law" means any federal, state or local law or
regulation, including permits, orders, judgments, consent decrees issued or
entered into, pursuant thereto, and all common law relating to or concerning
pollution or protection, protection of the environment or public health and
safety.
"Equity Interests" shall mean the capital stock, or other equity
interests (including the FLI Inc. Common Stock) or options, warrants, rights to
subscribe to, scrip calls, contracts, undertakings, arrangements, commitments to
issue or other rights of any kind to acquire capital stock, or other equity
interests of any Person.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"FLI Inc. Financial Statements" shall mean collectively the audited
balance sheet of FLI Inc. as of December 31, 1998, together with the notes
thereon as prepared by KPMG LLP, (the "FLI Inc. Balance Sheet") and the related
statements of income and statements of stockholders' equity, retained earnings
and changes in financial position or cash flows for FLI Inc. for the twelve
month period ended as of December 31, 1998, together with the notes thereon, as
prepared by KPMG LLP, as previously delivered to WPS Ltd. and attached hereto
as Schedule 1.1(A).
"FLI Inc. Outstanding Shares" shall mean the 10,000 shares of FLI
Inc. Common Stock issued and outstanding and owned of record by Holdings LLC to
be delivered by Holdings LLC to WPS Ltd. in accordance with Section 2.1 hereof.
"Hazardous Materials" shall mean any contaminants; pollutants;
toxic, radioactive or hazardous substances, wastes, chemicals, materials and
constituents;
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insecticides; pesticides; special wastes; infectious waste; or any material or
constituent of any of the foregoing, including, without limitation, asbestos,
petroleum (including crude oil or any fraction thereof, natural gas, natural gas
liquids, liquified natural gas, or synthetic gas usable for fuel, or any mixture
thereof), polychlorinated biphenyls, urea formaldehyde, radon gas, radioactive
matter, paint containing lead or mercury, and chemicals which are regulated as
potentially causing cancer or reproductive toxicity, including, but not limited
to any regulated chemical substance under any applicable Environmental Law.
"Holdings LLC Disclosure Schedules" shall mean the schedules to this
Agreement delivered to WPS Ltd. on or prior to the date hereof, which set forth
exceptions to the representations and warranties contained in Article 4 hereof
and certain other information called for by Article 4 hereof and other
provisions of this Agreement and which are hereby made a part of this Agreement
and incorporated herein by reference.
"Holdings LLC Expenses" shall mean all costs and expenses incurred
by Holdings LLC, Investors LLC or any of the Representatives or Affiliates of
either in connection with the negotiation, preparation, execution and delivery
of the Transaction Documents and the consummation of the transactions
contemplated thereby.
"Indebtedness" shall mean, with respect to any Person, (a)
indebtedness for borrowed money or for the deferred purchase price of property
or services in respect of which such Person is liable, contingently or
otherwise, as obligor or otherwise and any commitment by which such Person
insures a creditor against loss, including contingent reimbursement obligations
with respect to letters of credit, (b) indebtedness guaranteed in any manner by
such Person, including a guarantee in the form of an agreement to repurchase or
reimburse, (c) obligations under capitalized leases in respect of which such
Person is liable, contingently or otherwise, as obligor, guarantor or otherwise,
or in respect of which obligations such Person insures a creditor against loss,
and (d) any unsatisfied obligation of such Person to any Benefit Plan.
"Investment" shall mean, with respect to any Person, (a) any direct
or indirect purchase or other acquisition by such Person of any notes,
obligations, instruments, stock, securities or other ownership or beneficial
interest (including partnership interests and joint venture interests) of any
other Person, and (b) any capital contribution by such Person to any other
Person.
"Legal Requirement" shall mean any action, law, statute, treaty,
rule, regulation, order, ordinance, judgment, injunction, decree, award,
determination or direction of an arbitrator, court or government entity,
including without limitation, any zoning, environmental and safety requirement,
motor vehicle safety requirements or standards or any requirements arising
thereunder.
"Occupational Safety and Health Law" shall mean any Legal
Requirement designed to provide safe and healthful working conditions and to
reduce occupational safety
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and health hazards, and any program, whether governmental or private (including
those promulgated or sponsored by industry associations and insurance
companies), designed to provide safe and healthful working conditions.
"Permits" shall mean any and all of the licenses, permits and other
regulatory or governmental authorizations, accreditations, approvals, waivers,
consents, declarations or filings necessary or required to conduct the business
of FLI Inc. as presently conducted or as proposed to be conducted or to enter
into the Transaction Documents and to consummate the transactions contemplated
thereby.
"Permitted Holdings LLC Assignee" shall mean any Person who at such
time is a member of Holdings LLC.
"Permitted WPS Ltd. Assignee" shall mean any Affiliate of WPS Ltd.
"Person" shall mean an individual, partnership, sole proprietorship,
corporation, association, joint stock company, limited liability company, trust,
joint venture, unincorporated organization, governmental or regulatory authority
or any other entity or organization of any kind whatsoever.
"Representative" shall mean, with respect to any Person, any
officer, director, partner, shareholder, principal, attorney, accountant,
consultant, financial advisor, agent, employee or other representative of such
Person.
"Servicing Agreement" shall mean an agreement between FLI LLC and
WPS Ltd., in substantially the form of Exhibit A hereto.
"Share Exchange" shall mean the exchange of the WPS Exchange Shares
for the FLI Inc. Outstanding Shares provided for in Article 2 hereof.
"Xxxxxxx-related Assets" shall mean all rights and entitlements of
FLI Inc. relating to the investment advisory accounts set forth on Schedule A
attached hereto managed by WPS Ltd or its affiliates, including the letter
agreement dated January 11,1989 between FLI Inc. and X.X. Xxxxxxx & Co., Inc.,
as amended December 31, 1998 (the "Xxxxxxx Agreement"), amounts due to or
accrued for FLI Inc. for any period subsequent to the date of this Agreement
under the Xxxxxxx Agreement and other arrangements and the good will related to
the Xxxxxxx Agreement and other arrangements.
"Stock Restriction Agreement" shall mean an agreement between WPS
Ltd. and FLI LLC, substantially in the form of Exhibit B hereto, providing for
certain restrictions on the transfer of the WPS Exchange Shares and certain
circumstances in which the WPS Exchange Shares will be subject to forfeiture.
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"Tax Return" shall mean any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof, whether
arising out of the transactions contemplated by the Transaction Documents or
otherwise.
"Taxes" shall mean any federal, state, provincial, local, foreign or
other income, alternative, minimum, accumulated earnings, personal holding
company, franchise, capital stock, net worth, capital, profits, windfall
profits, gross receipts, value added, sales, use, goods and services, excise,
customs duties, transfer, conveyance, mortgage, registration, stamp,
documentary, recording, premium, severance, environmental (including taxes under
Section 59A of the CLRC), real property, personal property, ad valorem,
intangibles, rent, occupancy, license, occupational, employment, unemployment
insurance, social security, disability, workers' compensation, payroll, health
care, withholding, estimated or other similar taxes, duty or other governmental
charge or assessment or deficiencies thereof (including all interest and
penalties thereon and additions thereto whether disputed or not).
"Transaction Documents" shall mean this Agreement, the Servicing
Agreement, the Stock Restriction Agreement, the Transfer Agreement, and all
exhibits, statements, schedules, instruments, certificates and other documents
and agreements to be entered into or delivered by any Person in connection with
the transactions contemplated to be consummated pursuant to any of the
foregoing.
"Transfer Agreement" shall mean the agreement, effective as of
August 1, 1998, between Investors LLC and FLI Inc. pursuant to which all of the
assets of FLI Inc., except Xxxxxxx-related Assets, were transferred to Investors
LLC, and all of the liabilities of FLI Inc. were assumed by Investors LLC.
"Transfer Taxes" shall mean any and all sales, use, transfer, real
property transfer, recording, gains, stock transfer and other similar Taxes and
fees, including without limitation any interest, penalty or addition thereto,
whether disputed or not.
"WPS Ltd. Capital Stock" shall mean the issued and outstanding
shares of common stock of WPS Ltd., par value $BD.001 per share.
"WPS Ltd. Exchange Shares" shall mean the 1,200,000 shares of WPS
Ltd. voting Capital Stock to be issued by WPS Ltd. to Holdings LLC in accordance
with Section 2.2 hereof.
"WPS Ltd. Expenses" shall mean all costs and expenses incurred by
WPS Ltd. or any of its Representatives and Affiliates in connection with the
negotiation, preparation, execution and delivery of the Transaction Documents
and the consummation of the transactions contemplated hereby and thereby.
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"WPS Ltd. Financial Statements" shall mean, collectively, the
balance sheet of WPS Ltd. as of December 31, 1998, together with the notes
thereon, as audited by PriceWaterhouseCoopers LLP, the certified public
accountants for WPS Ltd. (the "WPS Balance Sheet"), and the related statement of
income and statement of stockholders' equity, retained earnings and changes in
financial position or cash flows for WPS Ltd. for the twelve-month period ended
December 31, 1998, together with the notes thereon, as audited by
PricewaterhouseCoopers LLP, each as previously delivered to FLI LLC and
attached hereto as Schedule 1.1(B).
1.2 Other Defined Terms. The following terms shall have the meanings
assigned to such terms in the corresponding Sections of this Agreement set forth
below:
Term Section
---- -------
Benefit Plans 6.2
Closing 3.1
Damages 9.2
FLI Inc. Preamble
FLI Inc. Common Stock Preamble
Holding LLC Preamble
Holding LLC Indemnitees 9.2
Indemnification Claim Notice 9.3
Indemnified Party 9.3
Indemnifying Party 9.3
Personnel 4.8
Proceedings 9.3
WPS Ltd. Preamble
WPS Ltd. Indemnitees 9.2
ARTICLE 2
EXCHANGE OF SHARES
2.1 Holdings LLC Exchange of Shares. Upon the terms and subject to
the conditions contained herein, and in reliance upon the representations,
warranties, covenants and indemnifications contained herein, Holdings LLC
hereby agrees to convey, transfer, assign and deliver to WPS Ltd., and WPS Ltd.
hereby agrees to acquire from Holdings LLC, on the Closing Date and as of the
Effective Date, all Holdings LLC's rights, title and interest in and to the FLI
Inc. Outstanding Shares.
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2.2 WPS Ltd. Exchange of Shares. Upon the terms and subject to the
conditions contained herein, and in reliance upon the representations,
warranties, covenants and indemnifications contained herein, WPS Ltd. hereby
agrees to issue to Holdings LLC, on the Closing Date and as of the Effective
Date, and Holdings LLC hereby agrees to acquire from WPS Ltd., the WPS Ltd.
Exchange Shares.
ARTICLE 3
CLOSING
3.1 Closing. The closing of the transactions contemplated herein
(the "Closing") shall be held at 10:00 a.m Eastern time on the Closing Date at
the offices of Xxxxxxxx Kill & Olick, P.C., 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, unless the parties otherwise agree.
3.2 Deliveries. To effect the transfers referred to in Section 2.1
and 2.2 hereof, the following deliveries shall be made on the Closing Date:
(i) Holdings LLC shall deliver to WPS Ltd. (or a Permitted WPS Ltd.
Assignee) certificate(s) representing the FLI Inc. Outstanding Shares to
be conveyed by Holdings LLC (duly endorsed in blank for transfer or
accompanied by stock powers duly executed in blank), free and clear of any
and all Encumbrances.
(ii) Holdings LLC shall deliver to WPS Ltd. all documents,
agreements and certificates required to be delivered by it pursuant to
this Agreement.
(iii) WPS Ltd. shall issue to Holdings LLC (or a Permitted FLI
Assignee) certificate(s) representing the WPS Ltd. Exchange Shares,
evidencing the record ownership of such shares by Holdings LLC.
(iv) WPS Ltd. shall deliver to Holdings LLC all documents,
agreements and certificates required to be delivered by WPS Ltd.
pursuant to this Agreement.
(v) All instruments and documents to be executed by or on behalf of
Holdings LLC and delivered to WPS Ltd. pursuant hereto shall be in form
and substance, and shall be executed in a manner, reasonably satisfactory
to WPS Ltd. All instruments and documents to be executed by or on behalf
of WPS Ltd. and delivered to Holdings LLC pursuant hereto shall be in
form and substance, and shall be executed in a manner, reasonably
satisfactory to Holdings LLC.
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ARTICLE 4
REPRESENTATIONS AND
WARRANTIES OF HOLDINGS LLC
4. Holdings LLC hereby represents and warrants to WPS Ltd. as follows:
4.1 Authority; Ownership of Stock; No Conflict or Violation.
Holdings LLC has all necessary power and authority to own the FLI Inc.
Outstanding Shares and to enter into, deliver and carry out its obligations
under the Transaction Documents. Holdings LLC has taken all action necessary to
consummate the transactions contemplated thereby and to perform its obligations
thereunder. Each of the Transaction Documents to which Holdings LLC is a party
has been duly executed and delivered by or on behalf of Holdings LLC. Each
Transaction Document to which Holdings LLC is a party is the legal, valid and
binding obligation of Holdings LLC, enforceable against such Holdings LLC in
accordance with its terms except as such enforcement may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting the enforceability of contractual obligations and
creditor's rights generally and by the application of equitable principles by
courts of competent jurisdiction sitting at law or in equity. Holdings LLC owns
of record and beneficially all of the FLI Ltd. Outstanding Shares, free and
clear of all Encumbrances. Holdings LLC does not own, of record or beneficially,
any Equity Interests of FLI Inc. other than the FLI Inc. Outstanding Shares.
Upon the transfer on the Closing Date by Holdings LLC to WPS Ltd. of the FLI
Inc. Outstanding Shares in accordance with Section 2.1 of this Agreement, WPS
Ltd. will receive good title to such shares, free and clear of all
Encumbrances. Neither the execution and delivery of the Transaction Documents
nor the consummation of the transactions contemplated thereby will result in
the violation by Holdings LLC of any Legal Requirement.
4.2 No Brokers; No Agreements to Sell. Neither FLI Inc. nor Holdings
LLC, nor any Representative or Affiliate of either, has any written or oral
agreement, arrangement or understanding with any Person which could result in
the obligation of WPS Ltd. or FLI Inc. to pay any finder's fee, brokerage
commission or similar payment in connection with any of the transactions
contemplated by the Transaction Documents. Except in connection with this
Agreement and the other Transaction Documents, neither FLI Inc. nor Holdings LLC
has any obligation, absolute or contingent, to any other Person to sell any FLI
Inc. Outstanding Shares or to enter into any agreement with respect thereto.
4.3 Organization of Holdings LLC; No Conflict or Violation. Holdings
LLC is duly formed and validly existing as a limited liability company under the
laws of Delaware. All actions necessary to authorize Holdings LLC to enter into,
deliver and carry out its obligations under the Transaction Documents have been
taken. Neither the execution and delivery of the Transaction Documents nor the
consummation of the transactions contemplated thereby will result in a violation
of or a conflict with the certificate of formation, operating agreement or other
organizational document of Holdings LLC.
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4.4 Organization of FLI Inc.; Authority; No Conflict or Violation.
FLI Inc. is duly incorporated, validly existing and in good standing under the
laws of New York and has full corporate power and authority to own its assets
and properties and to enter into, deliver and carry out its obligations under
the Transaction Documents to which it is a party. Each of the Transaction
Documents to which FLI Inc. is a party has been duly authorized, executed and
delivered by or on behalf of FLI Inc. Each Transaction Document to which FLI
Inc. is a party is the legal, valid and binding obligation of FLI Inc.,
enforceable against FLI Inc. in accordance with its terms except as such
enforcement may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting the enforceability of
contractual obligations and creditor's rights generally and by the application
of equitable principles by courts of competent jurisdiction sitting at law or in
equity. Neither the execution and delivery of the Transaction Documents nor the
consummation of the transactions contemplated thereby will conflict with the
articles of incorporation or by-laws of FLI Inc. or any contract to which FLI
Inc. is a party or by which any of the assets of FLI Inc. are bound, or will
result in the violation by FLI Inc. of any Legal Requirements. FLI Inc. has
obtained all qualifications to do business necessary or required under any
applicable Legal Requirement as a result of the conduct of its business or the
ownership of its assets or properties. The corporate minute books, registers and
other corporate books and records of FLI Inc. are each correct, current, and
complete in all material respects, nothing has been removed from such books and
records, and the signatures appearing on all documents contained therein are the
true signatures of the Persons purporting to have signed the same. All actions
reflected in such books and records were duly and validly taken in compliance
with all applicable Legal Requirements. Except as disclosed on Schedule 4.4
hereto, FLI Inc. does not own any Equity Interests of, nor is it in any manner
affiliated (whether through an Investment or other participation of any kind)
with any Person.
4.5 Capitalization of FLI Inc. The authorized capital of FLI Inc.
consists solely of 100,000 shares of FLI Inc. Common Stock, 10,000 of which are
issued and outstanding. All of the issued and outstanding shares of FLI Inc.
Common Stock have been duly authorized and are validly issued, fully paid and
non-assessable. There are no subscriptions, options, warrants, calls,
commitments or other rights of any kind outstanding for the purchase of, nor
any securities convertible or exchangeable for shares of FLI Inc. Common Stock
or other Equity Interests of FLI Inc.
4.6 Authorization; Binding Effect. FLI Inc. has all necessary
corporate power and authority to own, lease and operate the assets owned by it
and to conduct the business presently conducted by it.
4.7 Absence of Certain Changes or Events. Since December 31, 1998,
except as otherwise expressly permitted pursuant to this Agreement and the
Transfer Agreement, there has not been any:
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(a) material adverse change in the condition (financial or
otherwise), assets, liabilities, working capital, reserves, earnings,
business, prospects, or operating results of FLI Inc.;
(b) declaration, setting aside or payment by FLI Inc. of dividends
or distributions in respect of any FLI Inc. Common Stock or other Equity
Interests of FLI Inc. or any redemption, purchase or other acquisition of
any such FLI Inc. Common Stock or other Equity Interests of FLI Inc.;
(c) loan or advance of any funds or any of the assets or other
property of FLI Inc. to, or guarantee by FLI Inc. for the benefit of, or
any Investment by FLI Inc. of any funds or other property in, any other
Person;
(d) other event or condition of any character which, in any one case
or in the aggregate, has resulted in an Adverse Effect with respect to FLI
Inc. or any event or condition which could, in any one case or in the
aggregate, result in an Adverse Effect with respect to FLI Inc.; or
(e) agreement by FLI Inc. to do any of the foregoing, as applicable.
4.8 No Tangible Assets. Except as set forth on Schedule 4.8, FLI
Inc. does not own any real estate, fixtures, furniture, equipment or other
tangible assets.
4.9 Contracts and Commitments. Except as set forth on Schedule 4.9,
FLI Inc. is not a party to any written or oral agreement or commitment of any
kind.
4.10 FLI Inc. Financial Statements. The FLI Inc. Financial
Statements have heretofore been delivered to WPS Ltd. The FLI Inc. Financial
Statements are complete in all material respects, have been prepared in
accordance with generally accepted accounting principles consistently applied
and in accordance with the books and records of FLI Inc., accurately reflect the
assets, liabilities and financial condition and results of operations of FLI
Inc. and contain and reflect all necessary adjustments for a fair representation
of the FLI Inc. Financial Statements as of the dates and for the periods covered
thereby. All of the assets reflected in such financial statements other than the
Xxxxxxx-related Assets have been transferred to Investors LLC pursuant to the
Transfer Agreement, and all liabilities reflected in such financial statements
have been assumed by Investors LLC pursuant to the Transfer Agreement.
4.11 Liabilities. FLI Inc. does not have any liabilities or
obligations of any nature (whether known or unknown and whether absolute,
accrued, contingent, or otherwise) except for such contingent liabilities that
are to be assumed by Investors LLC pursuant to the Transfer Agreement.
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4.12 Taxes
(a) FLI Inc. has filed or caused to be filed on a timely basis all
Tax Returns that are or were required to be filed by them or their subsidiaries
(taking into account all extensions heretofore granted), either separately or as
a member of an affiliated group, pursuant to applicable Legal Requirements.
(b) Timely S corporation elections were filed by FLI Inc. with the
IRS and applicable state authorities, and prior to the date hereof, no event has
occurred that would result in a loss of FLI Inc.'s S corporation status. FLI
Inc. has timely paid all Taxes due with respect to its operations.
(c) All Tax Returns filed by FLI Inc. are true, correct, and
complete. There is no tax sharing agreement that will require any payment by FLI
Inc. after the date of this Agreement.
4.13 Compliance with Law. FLI Inc. has complied in all respects with
all applicable Legal Requirements. FLI Inc. has not received any notice to the
effect that, or otherwise been advised that, it is not in compliance with any of
such applicable Legal Requirements, and has no reason to anticipate that any
presently existing circumstances are likely to result in violations of any
applicable Legal Requirements. The items described on Schedule 4.13 constitute
all of the consents, filings, notices, Permits, and the like with any
governmental or regulatory entity which are required to be given, obtained or
made by FLI Inc. or Holdings LLC to permit the consummation of the transaction
contemplated by the Transaction Documents.
4.14 Legal Proceedings; Orders.
(a) Except as set forth in Schedule 4.14, there is no pending
proceeding:
(i) that has been commenced by or against FLI Inc. or that
otherwise relates to or may affect the business of, or any of the assets owned
or used by, FLI Inc.; or
(ii) that challenges, or that may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
transactions contemplated hereby.
(b) Except as set forth in Schedule 4.14:
(i) there is no judgment, writ, decree, injunction or order to
which FLI Inc., or any of the assets owned or used by FLI Inc., is subject;
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(ii) neither FLI Inc. nor Holdings LLC is subject to any
judgment, writ, decree, injunction or order that relates to the business of, or
any of the assets owned or used by, FLI Inc.; and
(iii) no officer, director, agent, or employee of FLI Inc. is
subject to any judgment, writ, decree. injunction or order that prohibits such
officer, director, agent, or employee from engaging in or continuing any
conduct, activity, or practice relating to the business of FLI Inc.
(c) FLI Inc. is not in default with respect to any judgment, order,
writ, injunction or decree of any court or governmental agency, and there are no
unsatisfied judgments against FLI Inc.
4.15 Environmental Matters.
(a) FLI Inc. has been operated in material compliance with each
Environmental Law applicable to FLI Inc. and the conduct or operation of FLI
Inc.'s business.
(b) FLI Inc. has not received (or has any reason to believe that it
will receive) any written notice of any citation, directive, order, summons or
warning alleging liability of FLI Inc. under any Environmental Law or relating
to any Hazardous Materials or any notice that any environmental Permit cannot be
renewed in the ordinary course of business.
(c) Neither FLI Inc., nor any other Person for whose conduct it may
be held responsible, has any Environmental, Health and Safety Liabilities.
(d) There are no Hazardous Materials in material quantity present on
or in the environment at any property owned or under the control of FLI Inc. or
for which FLI Inc. is responsible, or at any geologically or hydrologically
adjoining property, including any Hazardous Materials contained in barrels,
above or underground storage tanks, landfills, land deposits, dumps, equipment
(whether moveable or fixed) or other containers, either temporary or permanent,
and deposited or located in land, water, sumps, or any other part of such
properties, or incorporated into any structure therein or thereon except in
material compliance with all applicable Environmental Laws.
(e) Neither FLI Inc. nor any other Person for whose conduct it is or
may be held responsible, or any other Person, has permitted or conducted, or is
aware of, any activity conducted with respect to any properties or assets
(whether real, personal, or mixed) of FLI Inc., except in full compliance with
all applicable Environmental Laws.
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4.16 Investment Intent. Holdings LLC will acquire the WPS Ltd
Exchange Shares for its own account and not with or view to their distribution
within the meaning of Section 2(11) of the Securities Act.
4.17 Misstatements or Omissions. No representations or warranties by
Holdings LLC in any of the Transaction Documents contains or will contain any
untrue statement of material fact, or omits or will omit to state any material
fact necessary to make the statements or facts contained therein not misleading.
FLI LLC has disclosed to WPS Ltd. all material events, conditions and facts
affecting the assets, the earnings, the business and the condition (financial or
otherwise) of FLI Inc., and a Representative of FLI Inc. has made himself
available to WPS Ltd for the purpose of answering any questions that may have
arisen as a result of such disclosures.
ARTICLE 5
REPRESENTATIONS AND
WARRANTIES OF WPS LTD.
WPS Ltd. hereby represents and warrants to Holdings LLC as follows:
5.1 Organization. WPS Ltd. is a corporation duly organized, validly
existing and in good standing under the laws of Bermuda and has full corporate
power and authority to conduct its business as is presently being conducted and
to own and lease its properties and assets and to enter into, deliver and carry
out its obligations under the Transaction Documents.
5.2 Authorization. WPS Ltd. had taken all necessary corporate action
to consummate the transactions contemplated by the Transaction Documents and to
perform its obligations thereunder. Each of the Transaction Documents to which
WPS Ltd. is a party has been duly executed and delivered by WPS Ltd. and is a
valid and binding obligation of WPS Ltd. enforceable against WPS Ltd. in
accordance with its terms except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting the enforceability of contractual obligations and
creditor's rights generally and by the application of equitable principles by
courts of competent jurisdiction sitting at law or in equity.
5.3 Issuance and Ownership of WPS Ltd. Exchange Shares. Upon the
issuance by WPS Ltd. on the Closing Date to Holdings LLC of the WPS Ltd.
Exchange Shares, Holdings LLC will receive good title to such WPS Ltd. Exchange
Shares. Such WPS Ltd. Exchange Shares have been duly authorized and are validly
issued, fully paid and non-assessable.
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15
5.4 Certain Consents and Approvals. Except as set forth on Schedule
5.4, no consents, filings, notices, or Permits are required to be given, made or
obtained by WPS Ltd. in connection with the execution, delivery and performance
of the Transaction Documents or the consummation of the transactions
contemplated thereby.
5.5 No Brokers. Neither WPS Ltd. nor any of its Representatives or
Affiliates has any written or oral agreement, arrangement or understanding with
any Person which will result in the obligation of FLI Inc. or Holdings LLC to
pay any finder's fee, brokerage commission or similar payment in connection with
the transactions contemplated by the Transaction Documents.
5.6 No Conflict or Violation. Neither the execution and delivery of
the Transaction Documents nor the consummation of the transactions contemplated
thereby will result in (a) a violation of or a conflict with any provision of
the articles of organization or bye-laws of WPS Ltd., (b) a breach of, or a
default under, any term or provision of any contract, agreement, Indebtedness,
lease, commitment, franchise, Permit, authorization or concession to which WPS
Ltd. is a party or (c) a violation by WPS Ltd. of any applicable Legal
Requirement.
5.7 WPS Ltd. Financial Statements. The WPS Ltd. Financial Statements
have heretofore been delivered to Holdings LLC. The WPS Ltd. Financial
Statements are complete in all material respects, have been prepared in
accordance with generally accepted accounting principles consistently applied
and in accordance with the books and records of WPS Ltd., accurately reflect the
assets, liabilities and financial condition and results of operations indicated
thereby and contain and reflect all necessary adjustments for a fair
representation of the WPS Ltd. Financial Statements as of the dates and for the
periods covered thereby.
5.8 Absence of Certain Changes or Events. Since December 31, 1998,
except as otherwise expressly permitted pursuant to this Agreement, there has
not been any:
(a) material adverse change in the condition (financial or
otherwise), assets, liabilities, working capital, reserves, earnings,
business, prospects, or operating results of WPS Ltd.;
(b) failure to operate its business in the ordinary course and
consistent with past practices and to preserve its business intact;
(c) change in accounting methods or practices by WPS Ltd. affecting
its assets, earnings, reserves, working capital, prospects, liabilities or
business;
(d) revaluation by WPS Ltd. of any of its assets or properties,
including without limitation, writing off of notes or accounts receivable,
other than in the ordinary course of business and consistent with past
practices;
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16
(e) material damage, destruction or loss of or to any of the assets,
properties, condition (financial or otherwise) or prospects of WPS Ltd.;
or
(f) liabilities incurred by WPS Ltd. not in the ordinary course of
business and consistent with past practices or any increase or change by
WPS Ltd. in any assumptions underlying or methods of calculating any bad
debt, contingency or other reserves.
5.9 Litigation. There is no material action pending or, to the best
knowledge of WPS Ltd., threatened or anticipated against (i) WPS Ltd. or (ii)
the transactions contemplated by the Transaction Documents.
5.10 Liabilities. WPS Ltd. has no material liabilities or
obligations (absolute, accrued, contingent or otherwise), except (i) liabilities
which are reflected and adequately reserved against on the WPS Ltd. Balance
Sheet, and (ii) liabilities incurred in the ordinary course of business and
consistent with past practices since December 31, 1998.
5.11 Misstatements or Omissions. No representations or warranties by
WPS Ltd. in any of the Transaction Documents contains or will contain any untrue
statement of material fact, or omits or will omit to state any material fact
necessary to make the statements or facts contained therein not misleading.
ARTICLE 6
COVENANTS OF HOLDINGS LLC
6.1 Access and Investigation. Between the date of this Agreement and
the Closing Date, FLI Inc. will: (a) afford WPS Ltd and its Representatives full
and free access to, at reasonable times and upon prior notice, FLI Inc.'s
personnel, properties, contracts, books and records, and other documents and
data during normal business hours, (b) permit WPS Ltd and its Representatives to
make copies of all such contracts, books and records, and other existing
documents and data as WPS Ltd may reasonably require, and (c) furnish WPS Ltd
and its Representatives with such additional financial, operating, and other
data and information as WPS Ltd may reasonably request.
6.2 Benefit Plans. Investors LLC, has expressly assumed, and has
caused FLI Inc. to be relieved of, sponsorship of and all obligations and
responsibilities under all pension, retirement, profit-sharing, deferred
compensation, stock option, employee stock ownership, severance pay, vacation,
sick leave, leave without compensation, bonus and other incentive plans, all
medical, vision, dental and other health plans, all life insurance, death
benefit, disability and cafeteria plans, all other employee benefit plans and
other fringe benefit plans, and all other written or unwritten employee plans,
programs, arrangements, agreements or understandings or commitments (whether
arrived at through collective
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17
bargaining or otherwise), whether formal or informal, whether funded or
unfunded, and whether legally binding or not, including, without limitation, all
"employee benefit plans," as that term is defined in Section 3(3) of ERISA,
which are maintained, sponsored in whole or in part, or contributed to or
required to be contributed to by FLI Inc., for the benefit of, providing any
remuneration or benefits to, or covering any current or former employee,
retiree, director, independent contractor, shareholder, officer, consultant, or
other beneficiary, or dependent, spouse or other family member of any of the
above (such plans, programs, arrangements, understandings and commitments shall
be collectively referred to herein as "Benefit Plans").
6.3 Notification. Between the date of this Agreement and the Closing
Date, Holdings LLC will promptly notify WPS Ltd. in writing if Holdings LLC or
FLI Inc. becomes aware of any fact or condition that causes or constitutes a
material breach of any of Holdings LLC's representations and warranties as of
the date of this Agreement, or if Holdings LLC or FLI Inc. becomes aware of the
occurrence after the date of this Agreement of any fact or condition that would
(except as expressly contemplated by this Agreement) cause or constitute a
material breach of any such representation or warranty had such representation
or warranty been made as of the time of occurrence or discovery of such fact or
condition. Should any fact or condition require any change in the FLI LLC
Disclosure Schedules, if the Holdings LLC Disclosure Schedules were dated the
date of the occurrence or discovery of any such fact or condition, Holdings LLC
will promptly deliver to WPS Ltd. a supplement to the Holdings LLC Disclosure
Schedules specifying such change. During the same period, Holdings LLC will
promptly notify WPS Ltd. of the occurrence of any breach of any covenant of
Holdings LLC in this Article 6 or of the occurrence of any event that may make
the satisfaction of the conditions in Article 8 impossible or unlikely.
ARTICLE 7
COVENANTS OF WPS LTD.
7.1 Access and Investigation. Between the date of this Agreement and
the Closing Date, WPS Ltd. will afford Holdings LLC and its Representatives full
and free access to, at reasonable times and upon prior notice, WPS Ltd.'s
personnel, properties, contracts, books and records, and other documents and
data during normal business hours.
7.2 Notification. Between the date of this Agreement and the Closing
Date, WPS Ltd. will promptly notify Holdings LLC in writing if WPS Ltd. becomes
aware of any fact or condition that causes or constitutes a material breach of
any of WPS Ltd.'s representations and warranties as of the date of this
Agreement, or if WPS Ltd. becomes aware of the occurrence after the date of this
Agreement of any fact or condition that would (except as expressly contemplated
by this Agreement) cause or constitute a material breach of any such
representation or warranty had such representation or warranty been made as of
the time of occurrence or discovery of such fact or condition. Should any fact
or condition
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require any change in the WPS Ltd. Disclosure Schedules, if the WPS Ltd
Disclosure Schedules were dated the date of the occurrence or discovery of any
such fact or condition, WPS Ltd. will promptly deliver to Holdings LLC a
supplement to the WPS Ltd. Disclosure Schedules specifying such change. During
the same period, WPS Ltd. will promptly notify Holdings LLC of the occurrence of
any breach of any covenant of WPS Ltd in this Article 7 or of the occurrence of
any event that may make the satisfaction of the conditions in Article 8
impossible or unlikely.
7.3 Continued Operations. During the period commencing on the date
hereof and ending on the second anniversary of the Closing Date, WPS Ltd will
(a) continue its active trade or business outside the United States and (b) take
no action which would increase the likelihood that it will (i) substantially
dispose of or discontinue such trade or business or the trade or business of FLI
Inc., or (ii) begin to wind up operations of WPS Ltd or FLI Inc. in anticipation
of dissolution or liquidation.
ARTICLE 8
CONDITIONS TO THE
OBLIGATIONS OF HOLDINGS LLC
The obligations of Holdings LLC to transfer the FLI Inc. Outstanding
Shares to WPS Ltd. on the Closing Date are subject to the satisfaction or
waiver, on or prior to the Closing Date, of each of the following conditions:
8.1 Representations, Warranties and Covenants. All representations
and warranties of WPS Ltd. contained in this Agreement shall be true and correct
in all material respects at and as of the Closing Date, and WPS Ltd. shall have
performed in all material respects all agreements and covenants required hereby
to be performed by it prior to the Closing Date. There shall be delivered to
Holdings LLC a certificate signed by the President, the Chief Financial Officer
or a Vice President of WPS Ltd. to the foregoing effect.
8.2 Permits and Consents. All Permits, consents of Consenting
Parties and all notices or filings necessary or required to permit the
transactions contemplated by the Transaction Documents shall have been made or
obtained.
8.3 No Governmental Proceeding or Litigation. No suit, action,
investigation, inquiry or other proceeding by any governmental authority or
other Person shall have been instituted which questions the validity or legality
of the transactions contemplated by the Transaction Documents.
8.4 Certificates. WPS Ltd. shall have delivered to Holdings LLC (a)
such certificates of its officers, directors and others to evidence compliance
with the conditions set
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forth in this Article 7 as may be reasonably requested by Holdings LLC, (b) a
certificate of good standing of WPS Ltd and (c) a certificate of incumbency with
respect to each officer of WPS Ltd. who has executed any of the Transaction
Documents on behalf of WPS Ltd.
8.5 Corporate Documents. Holdings LLC shall have received from WPS
Ltd resolutions adopted by the board of directors of WPS Ltd. approving the
Transaction Documents to which WPS Ltd. is a party and the transactions
contemplated thereby, and copies of the articles of organization and bye-laws of
WPS Ltd. as in effect on the Closing Date, in each case certified to be true and
complete by the corporate secretary of WPS Ltd.
8.6 Compliance with Legal Requirements. The consummation of the
transactions contemplated by the Transaction Documents will not be prohibited by
any applicable Legal Requirement or subject FLI Inc. or Holdings LLC to any
penalty, liability or other onerous condition arising out of any such Legal
Requirement.
8.7 Servicing Agreement. Holdings LLC shall have received evidence
satisfactory to it that the Servicing Agreement has been fully executed by or on
behalf of WPS Ltd.
8.8 Legal Opinion. Holdings LLC shall have received from WPS Ltd an
opinion from Appelby, Xxxxxxxx & Xxxxx, Bermuda counsel for WPS Ltd, reasonably
satisfactory to Holding LLC as to the matters set forth in Section 5.3 above.
8.9 Seilern Acquisition. WPS Ltd shall have acquired Seilern
Investment Management Limited and Seilern Investment Management (Ireland) Ltd.
ARTICLE 9
CONDITIONS TO THE OBLIGATIONS OF WPS LTD.
The obligations of WPS Ltd. to issue the WPS Ltd. Exchange Shares to
Holdings LLC on the Closing Date are subject to the satisfaction or waiver, on
or prior to the Closing Date, of each of the following conditions:
9.1 Representations, Warranties and Covenants. All representations
and warranties of Holdings LLC contained in this Agreement shall be true and
correct at and as of the Closing Date, and Holdings LLC shall have performed all
agreements and covenants required hereby to be performed by it prior to or at
the Closing Date. There shall be delivered to WPS Ltd. certificates, signed by
the Managing Member, the President, the Chief Financial Officer or a Vice
President of Holdings LLC to the foregoing effect.
9.2 Permits and Consents. All Permits, consents of Consenting
Parties and all notices or filings necessary or required to permit the
transactions contemplated by the Transaction Documents shall have been made or
obtained.
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9.3 No Governmental Proceeding or Litigation. No action shall have
been instituted or threatened by any governmental or regulatory authority or
other Person which questions the validity or legality of the transactions
contemplated by the Transaction Documents.
9.4 Compliance with Legal Requirements. The consummation of the
transactions contemplated by the Transaction Documents will not be prohibited by
any Legal Requirement or subject WPS Ltd. or FLI Inc. to any penalty, liability
or other onerous condition arising out of any such Legal Requirement.
9.5 Stock Restriction Agreement. WPS Ltd. shall have entered into
the Stock Restriction Agreement, with Holdings LLC providing for certain
restrictions on the transfer of the WPS Ltd. Exchange Shares and certain
circumstances under which ownership of WPS Ltd. Exchange Shares by Holdings LLC
will be subject to forfeiture.
9.6 Transfer Agreement. Holdings LLC and FLI Inc. shall have entered
into the Transfer Agreement in such form as is reasonably satisfactory to WPS
Ltd. and WPS Ltd. shall have received a fully-executed copy of the Transfer
Agreement.
9.7 Certificates and Documents. Holdings LLC shall have delivered to
WPS Ltd. such documents and certificates of Holdings LLC and its Managing Member
to evidence compliance with the conditions set forth in this Article 8 as may be
reasonably requested by WPS Ltd., including without limitation:
(a) a certificate of Holdings LLC dated the Closing Date, certifying
that the conditions specified in this Article 9 have been fully satisfied;
(b) copies of resolutions, certified by the appropriate officers,
duly adopted by FLI Inc. and copies of consents executed by the Managing
Member of Holdings LLC, authorizing their respective execution, delivery
and performance of the Transaction Documents to which they are a party and
the consummation of all transactions contemplated by the Transaction
Documents;
(c) certificates as to the good standing (or other certificates
relating to the right to do business) of FLI Inc. and Holdings LLC, from
New York, Delaware and every other jurisdiction in which the failure of
FLI Inc. and/or Holdings LLC to be qualified to do business would result
in a material adverse effect on either of them;
(d) such instruments of conveyance of the FLI Inc. Outstanding
Shares reasonably requested by WPS Ltd. in order to effect the transfer to
WPS Ltd. of the FLI Inc. Outstanding Shares;
(e) articles of incorporation and by-laws of FLI Inc. and the
certificate of formation and operating agreement of Holdings LLC, each
certified to be true and
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complete as of the Closing Date by their corporate secretary or Managing
Member, as the case may be;
(f) a certificate of incumbency with respect to each officer of FLI
Inc. and Holdings LLC who has executed any of the Transaction Documents on
behalf of such Person; and
(g) such other documents relating to the transactions contemplated
by the Transaction Documents as WPS Ltd. reasonably requests.
9.8 Due Diligence. WPS Ltd, shall have obtained from FLI Inc. and
Holdings LLC copies of any and all corporate documents, audit reports, financial
statements, Permits, applications for Permits and all other information or
documents requested WPS Ltd., and WPS Ltd. shall, upon the review thereof, deem
that such items and information fully meet WPS Ltd.'s satisfaction in its sole
and absolute discretion.
ARTICLE 10
INDEMNIFICATION
10.1 Survival of Representations, etc. All statements contained in
the Holdings LLC Disclosure Schedules or in any other schedule, certificate or
instrument or conveyance delivered by or on behalf of the parties pursuant to
this Agreement or in connection with the transactions contemplated hereby shall
be deemed to be representations and warranties by the parties hereunder. The
representations and warranties of WPS Ltd. and Holdings LLC contained herein or
in any instrument delivered pursuant to this Agreement shall, without regard to
any investigation made by any of the parties hereto, survive the Closing Date
for the period of any applicable statute of limitations (after giving effect to
any extensions or waivers thereof). Anything to the contrary contained in this
Agreement notwithstanding, the termination or expiration of any representation
or warranty or indemnification obligation under this Article 10 shall not affect
any claims made, with reasonable specificity, in writing by any Indemnified
Party (as defined below) hereunder prior to such expiration or termination. All
covenants and agreements of the parties contained in this Agreement shall
survive the Closing Date.
10.2 Indemnification.
(a) In addition to any other right or remedy available to WPS Ltd.
at law or in equity, Holdings LLC shall indemnify WPS Ltd. and its
Affiliates, Representatives and permitted successors and assigns
(collectively, the "WPS Ltd. Indemnitees") against, and hold each WPS Ltd.
Indemnitee harmless from, any diminution in value, demand, damage, claim,
action, cause of action, deficiency, fine, liability, Tax or other loss or
expense including, without limitation, interest, penalties
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22
and attorneys' fees and expenses (collectively, "Damages") arising out of
or resulting from any inaccuracy, misrepresentation or breach of any
representations or warranties made by Holdings LLC contained in any of the
Transaction Documents or the nonfulfillment of any covenant or agreement
of Holdings LLC contained in any of the Transaction Documents, including
any Damages arising out of transactions entered into or events occurring
prior to the Closing.
(b) In addition to any other right or remedy available to Holdings
LLC, at law or in equity, WPS Ltd. shall indemnify Holdings LLC and its
Representatives and permitted assigns (collectively, the "Holdings LLC
Indemnitees") against, and hold each Holdings LLC Indemnitee harmless from
any Damages arising out of or resulting from any inaccuracy,
misrepresentation or breach of any representations or warranties of WPS
Ltd. contained in any of the Transaction Documents or the nonfulfillment
of any covenant or agreement of WPS Ltd. contained in any of the
Transaction Documents, including any Damages arising out of transactions
entered into prior to the Closing.
The term "Damages" as used in this Section 10.2 is not limited to
matters asserted by any Persons against WPS Ltd. or Holdings LLC, but includes
Damages incurred or sustained by WPS Ltd or Holdings LLC in the absence of
claims by other Persons.
10.3 Indemnification Procedures.
(a) Notice of Claim. Any Person making a claim for indemnification
pursuant to Section 10.2 (an "Indemnified Party") must give any party
hereto from whom indemnification is sought (an "Indemnifying Party")
written notice of such claim (an "Indemnification Claim Notice") promptly
after the Indemnified Party receives any written notice of any action,
lawsuit, proceeding, investigation or other claim or potential claim (a
"Proceeding") against or involving the Indemnified Party by any government
entity or other Person or otherwise discovers or becomes aware of the
liability, obligation or facts giving rise to such claim for
indemnification; provided that the failure to notify or delay in notifying
an Indemnifying Party will not relieve any Indemnifying Party of its
obligations pursuant to Section 10.2.
(b) Control of Defense. With respect to the defense of any
Proceeding against or involving an Indemnified Party in which a
governmental entity or other Person in question seeks only the recovery of
a sum of money for which indemnification is provided, at its option an
Indemnifying Party may appoint as lead counsel of such defense any legal
counsel selected by the Indemnifying Party; provided that before the
Indemnifying Party assumes control of such defense it must first:
(i) enter into an agreement with the Indemnified Party (in
form and substance satisfactory to the Indemnified Party) pursuant to
which the Indemnifying
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Party agrees to be fully responsible (with no reservation of any rights
other than the right to be subrogated to the rights of the Indemnified
Party) for all Damages relating to such Proceeding and unconditionally
guarantees the payment and performance of any liability or obligation
which may arise with respect to such Proceeding or the facts giving rise
to such claim for indemnification; and
(ii) furnish the Indemnified Party with reasonable assurance
that the Indemnifying Party has the financial capacity to defend such
Proceeding and to satisfy any such liability.
(c) Control of Defense; Exceptions, etc. The Indemnified Party will
be entitled to participate in the defense of such claim and to employ
counsel of its choice for such purpose at its own expense (provided that
the Indemnifying Party will bear the reasonable fees and expenses of such
separate counsel incurred prior to the date upon which the Indemnifying
Party effectively assumes control of such defense). The Indemnifying Party
will not be entitled to assume control of the defense of such claim, and
will pay the fees and expenses of legal counsel retained by the
Indemnified Party, if:
(i) the Indemnified Party reasonably believes that an adverse
determination of such Proceeding could be detrimental to or injure the
Indemnified Party's reputation or future business prospects,
(ii) the Indemnified Party reasonably believes that there
exists or could arise a conflict of interest which, under applicable
principles of legal ethics, could prohibit a single legal counsel from
representing both the Indemnifying Party and the Indemnifying Party in
such Proceeding, or
(iii) the Indemnifying Party has failed or is failing to
prosecute or defend vigorously such claim; and
(iv) the Indemnifying Party must obtain the prior written
consent of the Indemnified Party (which the Indemnified Party will not
unreasonably withhold) prior to entering into any settlement of such
Proceeding or ceasing to defend such Proceeding.
10.4 No Right of Contribution. After the Closing, FLI Inc. shall not
have any liability to indemnify Holdings LLC on account of a misrepresentation
or the breach of any representation or warranty or the nonfulfillment of any
covenant or agreement of Holdings LLC; and FLI LLC shall not have any right to
seek contribution against FLI Inc.
10.5 Limitation on Indemnification. Notwithstanding anything to the
contrary in the previous provisions of this Article 10, Holdings LLC shall not
be liable to WPS Ltd. for any Damages until the cumulative aggregate amount of
such Damages exceeds
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$200,000 (the "Minimum Amount"), after which Holdings LLC shall be liable with
respect to all Damages (and not merely the Damages in excess of the Minimum
Amount), and the cumulative aggregate indemnity obligation of Holdings LLC
pursuant to this Agreement shall in no event exceed the fair market value of the
WPS Ltd Exchange Shares; provided, however, that for purposes of this Section
10.5 only, the term "WPS Ltd Exchange Shares" shall not include any such shares
that have been reacquired by WPS Ltd pursuant to the Stock Restriction Agreement
on or prior to the date on which the indemnity obligation of Holdings LLC is
determined.
ARTICLE 11
MISCELLANEOUS
11.1 Termination. This Agreement may be terminated at any time prior
to the Closing:
(a) by written agreement of WPS Ltd. and Holdings LLC;
(b) by WPS Ltd., if either Holdings LLC or FLI Inc. is in breach of
any of its respective obligations pursuant to the Transaction Documents or
if any representation or warranty of either Holdings LLC or FLI Inc.
contained therein is false or misleading in any material respect (provided
that such condition is not the result of any breach of any covenant,
representation or warranty of WPS Ltd. set forth in any Transaction
Document); or
(c) by Holdings LLC, if WPS Ltd. is in breach of its obligations
pursuant to the Transaction Documents or if any representation or warranty
of WPS Ltd. contained therein is false or misleading in any material
respect (provided that such condition is not the result of any breach of
any covenant, representation or warranty of Holdings LLC set forth in this
Agreement or in any of the other Transaction Documents).
Any termination of this Agreement pursuant to clause (b) or (c) will
be effected by written notice from the terminating party to the other party. Any
termination of this Agreement pursuant to clause (b) or (c) will not terminate
the liability of any party hereto for any willful failure of any party to have
performed any of its obligations hereunder or for any knowing misrepresentation
made by any party of any matter set forth in this Agreement or any other
Transaction Document which exists at the time of such termination.
11.2 Assignment. Neither this Agreement nor any of the rights or
obligations hereunder may be assigned by any party without the prior written
consent of the other party; provided, however, that Holdings LLC may assign its
right to receive WPS Ltd. Exchange Shares hereunder to any Permitted Holdings
LLC Assignee if such Permitted
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Holdings LLC Assignee has executed and delivered to WPS Ltd. a written
undertaking by which it agrees to be bound by the terms of the Stock Restriction
Agreement relating to such shares and provided further that WPS Ltd. may assign
its right to receive FLI Inc. Outstanding Shares hereunder to any Permitted WPS
Ltd. Assignee. Subject to the foregoing, this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns, and no other Person shall have any right, benefit or obligation
hereunder.
11.3 Notices. Unless otherwise provided herein, any notice, request,
instruction or other document to be given hereunder by any party to the others
shall be in writing and delivered in person or by courier or by facsimile
transmission or mailed by certified mail, postage prepaid, return receipt
requested (such mailed notice to be effective on the date of such receipt is
acknowledged), as follows:
If to Holdings LLC: First Long Island Holdings, LLC
0 Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Attention: Xxxxx. X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Xxxxxxx Breed Xxxxxx & Xxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to WPS Ltd.: X.X. Xxxxxxx & Co., Ltd.
000 Xxxxx Xxxxxx, 0xx Xxxxx
P.O. Box HM 2905
Xxxxxxxx XX LX
Bermuda
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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With a copy to: Xxxxxxxx Kill & Olick, P.C.
1251 Avenue of the Americas
New York, N.Y. 10020-1182
Attention: Xxxxxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to such other place and with such other copies as either party may designate
as to itself by written notice to the others.
All such notices, requests, instructions, documents and other
communications will (i) if delivered personally to the address as provided in
this Section 11.3, be deemed given upon delivery, (ii) if delivered by facsimile
transmission to the facsimile number as provided in this Section 11.3, be deemed
given upon receipt, and (iii) if delivered by mail in the manner described above
to the address as provided in this Section 11.3, be deemed given upon receipt
(in each case regardless of whether such notice is received by any other Person
to whom a copy of such communication is to be delivered pursuant to this
Section 11.3).
11.4 Choice of Law. This Agreement shall be construed and
interpreted and the rights of the parties hereto shall be determined in
accordance with the laws of Bermuda, without giving effect to any choice of law
or conflict provision or rule (whether of Bermuda or any other jurisdiction)
that would cause the laws of any jurisdiction other than Bermuda to be applied.
In furtherance of the foregoing, the internal law of Bermuda will control the
interpretation and construction of this Agreement, even if under such
jurisdiction's choice of law or conflict of law analysis, the substantive law of
some other jurisdiction would ordinarily apply.
11.5 Entire Agreement; Amendments and Waivers. This Agreement,
together with all exhibits and schedules hereto (which form a part of this
Agreement and are incorporated into this Agreement for all purposes),
constitutes the entire agreement among the parties hereto pertaining to the
subject matter hereof and supersedes all prior agreements, understandings,
negotiations and discussions, whether oral or written, of the parties. No
supplement, modification or waiver of this Agreement shall be binding unless
executed in writing by the party to be bound thereby. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of any
other provision hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.
11.6 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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11.7 Invalidity. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision of this Agreement or any other such instrument.
11.8 Headings. The headings of the Articles and Sections herein are
inserted for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.
11.9 Singulars and Plurals. All references to the plural herein
shall also mean the singular and to the singular shall also mean the plural, in
each case, as applicable.
11.10 Expenses. Holdings LLC shall be responsible for Holdings LLC
Expenses, and WPS Ltd. shall be responsible for WPS Ltd. Expenses.
11.11 Publicity. Unless required to do so by applicable law or legal
process, prior to the Closing Date, no party hereto shall issue any press
release or make any public statement regarding the Transaction Documents or the
transactions contemplated thereby without the prior written approval of the
other parties (which approval may not be unreasonably withheld or delayed). If
any party hereto is required by law or legal process to make any public
statement regarding the Transaction Documents or the transactions contemplated
thereby, such party must first provide to the other parties the content of the
proposed public statement, the reasons that such disclosure is required by law
or legal process, and the time and place that the public statement will be made,
in each case to the extent permitted by law or legal process and to the extent
reasonably practicable.
11.12 Remedies. No failure to exercise, and no delay in exercising,
any right, remedy, power or privilege under this Agreement by any party hereto
will operate as a waiver of such right, remedy, power or privilege, nor will any
single or partial exercise of any right, remedy, power or privilege under this
Agreement preclude any other or further exercise of such right, remedy, power or
privilege or the exercise of any other right, remedy, power or privilege. The
rights, remedies, powers and privileges provided pursuant to this Agreement are
cumulative and not exhaustive of any other rights, remedies, powers and
privileges which may be provided by law.
11.13 Confidential Information. The parties hereto acknowledge that
the transactions contemplated by this Agreement are of a confidential nature.
Each party hereto further acknowledges that, in connection with the negotiation
of the Transaction Documents and the preparation for the consummation of the
transactions contemplated thereby, it will have access to confidential
information relating to the other parties. The parties hereto agree that they
will treat as confidential, will not duplicate (except to their respective
Representatives in connection with the transactions contemplated by the
Transaction Documents) or use, and will maintain the confidentiality of (and
will use their respective best
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efforts to cause and be responsible for the Representatives of such party to
maintain the confidentiality of), any written, oral, or other information
obtained from the other parties in connection with the Transaction Documents or
the transactions contemplated thereby, unless (a) such information is already
known to such party or to others not bound by a duty of confidentiality or such
information becomes publicly available through no fault of such party, (b) the
use of such information is necessary or appropriate in making any filing or
obtaining any consent or approval required for the consummation of the
transactions contemplated by the Transaction Documents, or (c) the furnishing or
use of such information is required by applicable law or legal process. In the
event of the termination of this Agreement for any reason whatsoever, each party
hereto shall destroy or return to the other all parties documents, work papers
and other material (including all copies thereof) obtained in connection with
the transactions contemplated by the Transaction Documents and will keep
confidential (and will so instruct and be responsible for its Representatives
and others who have had access to confidential information) and will not use any
such information, unless such information is now, or is hereafter, disclosed
through no act or omission of such party, in any manner making it available to
the general public.
11.14 Effective Date. The parties agree that notwithstanding the
actual Closing Date, the transactions contemplated by the Transaction Documents
shall be deemed to have been consummated at the Effective Date.
11.15 Further Assurances. On and after the Closing Date, each party
will take all appropriate action and execute all documents, instruments or
conveyances of any kind which may be reasonably necessary or advisable to carry
out any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
or have caused this Agreement to be duly executed on their behalf by their
respective officers thereunto duly authorized, as of the day and year first
above written.
X.X. XXXXXXX & CO. LTD.
By: /s/ Xxxx X. Xxxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxxx
Title: MANAGING DIRECTOR
FIRST LONG ISLAND HOLDINGS, LLC
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Manager
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EXHIBIT A
ACCOUNT SERVICING AGREEMENT
This Account Servicing Agreement dated as of January 1, 1999 is between
X.X. Xxxxxxx Asset Management (NA), Inc., a Delaware corporation ("WPS-NA",
formerly known as First Long Island Investors, Inc.) and First Long Island
Investors, LLC, a Delaware limited liability company ("FLII-LLC").
RECITALS
WPS-NA wishes to retain FLII-LLC to perform the services described herein
with respect to the Serviced Accounts (as defined below).
----------------
In consideration of the mutual promises herein contained and other good
and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, and intending to be legally bound, WPS-NA and FLII-LLC agree as
follows:
1. Definitions. The following terms shall have the following meanings
when used herein:
"Eligible Additional Contribution" shall mean an additional
contribution made after January 1, 1999 to either an Original Account or an
Eligible New FLI Account, subject in each case to the following conditions:
(i) each new contribution shall be eligible to be included in the accounts
with respect to which fees are payable to WPS-NA under the WPS-NA Fee
Agreement and (ii) FLI-LLC shall have confirmed that no split of
investment advisory, management or performance fees with respect to such
additional contribution is payable to FLI-LLC or its affiliates under any
other fee sharing agreement.
"Eligible New FLI Account" shall mean each new client account that at
any time subsequent to January 1, 1999 becomes an account that (i) is
eligible to be included in the accounts with respect to which fees are
payable to WPS-NA under the WPS-NA Fee Agreement and (ii) FLII-LLC has
confirmed is not an account with respect to which FLII-LLC or any of its
affiliates is entitled to a split of investment advisory, management or
performance fees under any other fee sharing agreement.
"Original Account" shall mean each of the money management accounts
listed on the schedule attached hereto.
"Serviced Account" shall mean each Original Account and Eligible New
FLI Account, including any Eligible Additional Contributions to either.
"WPS-NA Fee Agreement" shall mean the letter agreement dated January
11, 1989 between WPS-NA (then known as First Long Island Investors, Inc.)
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and WPS Ltd (as successor by merger to WPS, Inc.), as amended December
31, 1998.
"WPS Ltd" shall mean X.X. Xxxxxxx & Co. Ltd., a Bermuda company.
"WPS Inc." shall mean X.X. Xxxxxxx & Co., Inc., a Delaware corporation
that merged with and into WPS Ltd effective as of July 1, 1998.
2. Services. FLII-LLC shall perform the following services with respect
to the Serviced Accounts:
(a) receive and review duplicates of all transactions and
correspondence relating to Serviced Accounts sent to owners of such accounts by
(i) WPS Ltd or any of its affiliates or (ii) Xxxxxxxxx Xxxxxx LLC, as custodian,
or any other custodian appointed with respect to any Serviced Account;
(b) review on a weekly basis the performance of Serviced Accounts;
(c) meet on a regular periodic basis with the owners of Serviced
Accounts to review the performance of those accounts and to explain the
investment philosophy utilized in the management of such accounts;
(d) answer clients' questions regarding Serviced Accounts; and
(e) where applicable, coordinate any tax considerations applicable to
a Serviced Account.
3. Compensation. As compensation for its services hereunder. WPS-NA shall
pay to FLII-LLC a quarterly fee computed by multiplying (i) the total value of
the Serviced Accounts as of the close of business on the first business day of a
calendar quarter by (ii) .00025% (2.5 basis points). The fee with respect to any
quarter shall be payable not later than the day forty-five (45) days after the
first day of such quarter.
4. Termination. This Agreement may be terminated by either party (i) at
any time that there are no Serviced Accounts or (ii) by the delivery of written
notice of termination in the event of a material breach by the other party of
its obligations hereunder.
5. Certain Regulatory Matters. FLII-LLC shall perform its obligations
hereunder in accordance with all laws and rules applicable to it and shall not
engage in any activities for itself or on behalf of WPS-NA or any affiliate of
WPS-NA in any state or jurisdiction in which such activities would be unlawful.
6. No Advertising. FLII-LLC acknowledges that WPS-NA does not permit any
advertising or sales literature relating to it or its affiliates, or its or
their business, and agrees to abide by such prohibition.
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7. Notices. Any notice or communication given by either party in
connection with this Agreement shall be in writing and delivered to the other
party by registered or certified mail, postage prepaid, as follows:
(a) If to WPS-NA, to:
X.X. Xxxxxxx Asset Management (NA), Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxx
(b) IF to FLII-LLC, to:
First Long Island Investors, LLC
0 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
or to such other address as either party shall furnish by written notice sent
to the other in accordance with the provisions of this Section.
8. Assignment. The obligations of each party hereto are personal and
neither they, nor this Agreement, may be assigned or transferred in any manner
whatsoever, in whole or in part, nor are such obligations or such Agreement
subject to involuntary alienation, assignment or transfer; provided, however,
that WPS-NA may assign this Agreement and its obligations hereunder to any
affiliate that has the right to receive fees under the WPS-NA Fee Agreement.
9. Further Assurances. Each of the parties hereto shall cooperate to
implement and effectuate the provisions of this Agreement and shall execute and
deliver all additional documents and instruments, and shall do any and all acts
and things reasonably requested in connection with the performance of the
obligations undertaken in this Agreement and otherwise to effectuate in good
faith the intent of the parties under this Agreement.
10. Governing Law; Jurisdiction. This Agreement shall be governed by and
construed under and in accordance with the laws of New York without referenced
to choice of law provisions thereof.
11. Legal Costs. In the event either party brings any legal action or
proceeding, including arbitration, to enforce the obligations of the other
party pursuant to this Agreement, the losing party in any such action shall
reimburse the prevailing party for the costs, including without limitation fees
and disbursements of counsel, incurred by the prevailing party in connection
with such action or proceeding.
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12. Amendment. This Agreement contains the entire agreement of the
parties with respect to the subject matter hereof and supersedes any written or
oral agreement between WPS-NA and Solicitor relating thereto. This Agreement may
be changed only by a written instrument signed by both of the parties.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which
together shall constitute one and the same instrument.
14. Severability. If any one or more provisions of this Agreement shall
be declared illegal or unenforceable under any law, rule or regulation of any
federal, state or local government, or any agency of bureau thereof, having
jurisdiction over either of the parties hereto, such illegality or
unenforceability shall not affect the validity and enforceability of the other
provisions hereof, and the parties shall use reasonable efforts to modify this
Agreement, to the extent possible, so as to eliminate such invalidity.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
X.X. XXXXXXX ASSET FIRST LONG ISLAND INVESTORS LLC
MANAGEMENT (NA), INC.
By: /s/ Xxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------ --------------------------
Name: Xxxx X. Xxxxxxx Name: Xxxxxx X. Xxxxxxxxx
---------------------- ------------------------
Title: Title: Manager
---------------------- ------------------------
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EXHIBIT B
STOCK RESTRICTION AGREEMENT
STOCK RESTRICTION AGREEMENT, dated as of , 1999 (the
"Agreement") between X.X. Xxxxxxx & Co. Ltd., a Bermuda company ("WPS Ltd") and
First Long Island Holdings, LLC, a limited liability company organized under
the laws of Delaware ("Holdings LLC")
Recitals
In accordance with the terms of the Share Exchange Agreement, dated as
of March , 1999, between WPS Ltd and Holdings LLC (the "Share Exchange
Agreement"), WPS Ltd has issued to Holdings LLC the WPS Ltd Exchange Shares (as
defined in the Share Exchange Agreement) as consideration for the acquisition
by WPS Ltd of all the outstanding common stock of First Long Island Investors,
Inc., a New York corporation ("FLI Inc."); and
In order to induce WPS Ltd to issue the WPS Ltd Exchange Shares and to
satisfy a condition to the consummation of the transactions contemplated by the
Share Exchange Agreement, Holdings LLC is willing to agree to certain
restrictions on the transfer of the WPS Ltd Exchange Shares and to provide for
certain circumstances under which of the WPS Ltd Exchange Shares will be
subject to automatic repurchase by WPS Ltd, on the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, in consideration of the covenants and conditions
contained herein and in the Share Exchange Agreement, the parties hereto agree
as follows:
ARTICLE 1
DEFINITIONS
1.1. Share Exchange Agreement Defined Terms. Terms defined in the Share
Exchange Agreement shall, when used herein, have the meanings ascribed to them
in the Share Exchange Agreement.
1.2. Other Defined Terms. When used in this Agreement, the following
terms shall have the following meanings:
"2000 Lapse Date" shall mean January 1, 2000.
"2001 Lapse Date" shall mean January 1, 2001.
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"2002 Lapse Date" shall mean January 1, 2002.
"2003 Lapse Date" shall mean January 1, 2003.
"Anniversary Shortfall" shall mean the amount, if any, by which (i)
the sum of the Market Adjusted Value of the FLI Retained Accounts as of such
date (including the Market Adjusted Value of any additional contributions to
all Original FLI Accounts and Eligible New FLI Accounts included in the FLI
Retained Accounts as of such date) is less than (ii) the value of the Original
FLI Accounts as of the Effective Date (as set forth on Schedule A attached
hereto).
"Annual Installment" shall mean a number of WPS Ltd Exchange Shares
equal to twenty (20%) percent of the total number of WPS Ltd Exchange Shares.
"Eligible Additional Contribution" shall mean an additional
contribution made after the Effective Date to either an Original FLI Account or
an Eligible New FLI Account, subject in each case to the following conditions:
(i) each such contribution shall be eligible to be included in the accounts
with respect to which fees are payable to FLI under the FLI Inc. Fee Agreement
and (ii) Holdings LLC and its affiliates shall have confirmed that no split of
investment advisory, management or performance fees with respect to such
additional contribution is payable to Holdings LLC or its affiliates under any
other fee sharing agreement.
"Eligible New FLI Account" shall mean each new client account that at
any time subsequent to the Effective Date becomes an account that (i) is
eligible to be included in the accounts with respect to which fees are payable
to FLI Inc. under the FLI Fee Agreement and (ii) Holdings LLC and its
affiliates have confirmed is not an account with respect to which Holdings LLC
or any of its affiliates is entitled to a split of investment advisory,
management or performance fees under any other fee sharing agreement.
"FLI Fee Agreement" shall mean the letter agreement dated January 11,
1989, between FLI Inc. and X.X. Xxxxxxx & Co., Inc., as amended December 31,
1998.
"FLI Retained Account" shall mean any Original FLI Account or
Eligible New FLI Account which, as of any Lapse Date, continues to be an
account subject to the FLI Fee Agreement.
"Market Adjusted Value" when used with respect to an Original FLI
Account or an Eligible New FLI Account (and including any Eligible Additional
Contribution to either) shall mean, as of any date of determination, the value
of such account adjusted to eliminate any change in such value due to increases
or decreases in the market value of such account since the Effective Date (in
the case of an Original FLI Account), the date of the establishment of such
account (in the case of a New FLI Account) or the date of such additional
contribution (in the case of any Eligible Additional Contribution to such
account made after the Effective Date or the date of establishment of the
account).
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"Original FLI Account" shall mean each client account that was as of
the Effective Date subject to the FLI Fee Agreement (as set forth on Schedule B
attached hereto).
"Permitted Holdings LLC Assignee" shall mean any Person who at such
time is a member of Holdings LLC.
"Released Share" shall mean any WPS Ltd Exchange Share for which the
applicable Lapse Date has occurred and on such date the automatic repurchase
condition applicable to such Share was not triggered.
"Lapse Date" shall refer, collectively or individually to each of the
2000 Lapse Date, the 2001 Lapse Date, the 2002 Lapse Date and the 2003 Lapse
Date.
ARTICLE 2
AUTOMATIC REPURCHASE PROVISIONS
2.1. Lapse of Repurchase Rights With Respect to WPS Ltd Exchange Shares.
The automatic repurchase provisions of this Agreement shall lapse with respect
to twenty (20%) percent of the WPS Ltd Exchange Shares on the Effective Date.
The automatic repurchase provisions of this Agreement shall lapse with respect
to the remaining WPS Ltd Exchange Shares in the following amounts as of
midnight on the following dates:
(i) twenty (20%) percent of the WPS Ltd Exchange Shares on the
2000 Lapse Date;
(ii) twenty (20%) percent of the WPS Ltd Exchange Shares on the
2001 Lapse Date;
(iii) twenty (20%) percent of the WPS Ltd Exchange Shares on the
2002 Lapse Date; and
(iv) twenty (20%) percent of the WPS Ltd Exchange Shares on the
2003 Lapse Date.
2.2. Effects of Lapse. Upon the lapse of the automatic repurchase
provisions of this Agreement with respect to any WPS Ltd Exchange Share in
accordance with Section 2.1 above on the Lapse Date applicable to such Share,
such Share shall cease to be subject to the repurchase provisions set forth in
Section 2.3 below and the transfer restrictions set forth in Article 3 below.
2.3. Automatic Repurchase Provision.
(a) Automatic Repurchase Condition. On each Lapse Date, the
Annual Installment eligible for repurchase on such date shall be automatically
repurchased by WPS
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Ltd, to the extent provided in subsection (b) of this Section 2.3, if as of
such Lapse Date there exists an Anniversary Shortfall.
(b) Calculation of Repurchased Shares. On any Lapse Date on which the
repurchase condition set forth in subsection (a) of this Section 2.3 has been
triggered, WPS Ltd Exchange Shares included in the Annual Installment eligible
for repurchase on such date shall be automatically repurchased by WPS Ltd for
consideration of $BD .001 per share (payable in accordance with Section 2.3(c)
below) in an amount determined by multiplying (i) the total number of WPS Ltd
Exchange Shares included in such Annual Installment by (ii) a fraction the
numerator of which shall be the Anniversary Shortfall applicable to such Lapse
Date and the denominator of which shall be the value of the Original FLI
Accounts as of the Effective Date. Any shares automatically repurchased by WPS
Ltd on any Lapse Date in accordance with this Agreement will be deemed
repurchased as of such Lapse Date without the requirement, as between the
parties hereto, of any action by WPS Ltd, Holdings LLC or any other Person.
(c) Prepayment of Repurchase Consideration. WPS Ltd has paid to Holdings
LLC on the date hereof, and by executing this Agreement Holdings LLC
acknowledges receipt of, an amount equal to $BD 1,200 as prepayment by WPS Ltd
in full of the consideration for the repurchase of all WPS Ltd Exchange Shares
in accordance with this Agreement. Holdings LLC agrees that it will, upon the
written request of WPS Ltd delivered after the 2003 Lapse Date, remit to WPS Ltd
any portion of such amount that has not been applied to the repurchase of WPS
Ltd Exchange Shares hereunder.
ARTICLE 3
TRANSFER RESTRICTIONS AND LEGENDS
3.1 Transfer Restrictions. Except as permitted by Section 3.3 below, no
WPS Ltd Exchange Share may be sold, assigned, transferred, pledged or
hypothecated until such Share has become a Released Share.
3.2 Legends.
(a) Legend Regarding Repurchase. Each certificate representing WPS
Ltd Exchange Shares shall bear the following legend at all times prior to the
date on which such Share becomes a Released Share:
"The shares represented by this certificate are subject to a
Stock Restriction Agreement dated as of ____________, 1999 which
provides for certain restrictions on transfer and sets forth
certain circumstances in which these shares will be subject to
repurchase by the Company. A copy of such Stock Restriction
Agreement may be obtained by the Holder hereof at the Company's
principal place of business without charge. The
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Lapse Date (as defined in such Agreement) applicable to the
shares represented by this certificate is
_______________________."
Upon the written request of Holdings LLC, the Agent or any Permitted FLI
Assignee certifying that WPS Ltd Exchange Shares have become Released Shares,
Holdings LLC will cause a certificate representing such shares to be issued
without the foregoing legend in exchange for a certificate bearing such legend.
(b) Securities Act Legend. Each certificate representing WPS
Ltd Exchange Shares shall bear a legend in substantially the following form:
"The securities represented by this certificate have not
been registered under the United States Securities Act of
1993, as amended (the "Act") and may not be sold or
transferred in the absence of an effective registration
statement under the Act or an exemption from registration
thereunder."
3.3. Permitted Transfers. Notwithstanding any provision to the
contrary herein, Holdings LLC shall be permitted to transfer WPS Ltd Exchange
Shares to any Permitted Holdings LLC Assignee, and any Permitted Holdings LLC
Assignee may in turn transfer WPS Ltd Exchange Shares owned by it to another
Permitted Holdings LLC Assignee, if, but only if, each of the following
conditions precedent have been satisfied with respect to each such transfer:
(i) the transferee in the proposed transfer shall have executed
a written undertaking acknowledging notice of, and agreeing to be bound by, the
terms of this Agreement applicable to Holdings LLC;
(ii) the transferee in the proposed transfer shall have executed
a written guaranty pursuant to which such transferee will agree to guaranty (on
a basis in which recourse is strictly limited to the WPS Ltd Exchange Shares
received by such transferee and any other securities issued with respect
thereto or in exchange therefor) any liability that Holdings LLC may have to
WPS Ltd under the indemnification provisions set forth in Article 10 of the
Share Exchange Agreement; and
(iii) the transferee in the proposed transfer will authorize the
Agent (as defined below) to retain physical possession of the certificate
representing the WPS Ltd Exchange Shares owned by such transferee in accordance
with the provisions of Article 4 of this Agreement until such shares become
Released Shares.
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ARTICLE 4
APPOINTMENT OF AGENT WITH RESPECT TO SHARES
OWNED BY PERMITTED HOLDINGS LLC ASSIGNEES
4.1. Appointment of Agent. Holdings LLC hereby agrees to act as agent (the
"Agent") to retain physical possession of all certificates representing WPS Ltd
Exchange Shares that have been transferred to a Permitted Holdings LLC Assignee
until such shares become Released Shares in accordance with the terms of this
Agreement.
4.2. Rights Relating to Shares Prior to Applicable Lapse Date.
Notwithstanding the physical possession by the Agent of any WPS Ltd Exchange
Shares owned by a Permitted Assignee (i) such Permitted Holdings LLC Assignee
shall be the registered, record owner of all WPS Ltd Exchange Shares owned by
it, (ii) all voting or consensual rights relating to such WPS Ltd Exchange
Shares may be exercised by such Permitted Holdings LLC Assignee and (iii) such
Permitted Holdings LLC Assignee shall have the right to receive all dividends or
other distributions made in respect of the WPS Ltd Exchange Shares owned by it.
ARTICLE 5
MISCELLANEOUS
5.1. Notices. Any notice hereunder to a party shall be deemed to be
properly served if in writing and delivered or mailed to, in the case of WPS Ltd
(with a contemporaneous copy by telex or facsimile transmission):
in the case of:
X.X. Xxxxxxx & Co., Ltd.
Trinity Hall
43 Cedar Avenue
P.O. Box HM LX
Bermuda
Attention: Xxxx X. Xxxxxxx
in the case of Holdings LLC:
First Long Island Holdings, LLC
0 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
or to such other address as may have been furnished in writing by such party to
the other parties to this Agreement, and shall be deemed to have been given as
of the time delivered or
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mailed registered or certified mail, postage paid, except that notice of
termination pursuant hereto shall be effective only upon receipt.
5.2. Prior Agreements; Modifications; Waivers. This Agreement shall
supersede all other prior agreements, documents or other instruments with
respect to the matters covered hereby. This Agreement may be amended or
modified at any time by written agreement of the parties hereto, at any time
before or after approval thereof by the stockholders of either or both
constituent corporations.
5.3. Captions. The captions in this Agreement are for convenience only
and shall not be considered a part of or affect the construction or
interpretation of any provision of this Agreement.
5.4. Governing Law. The terms of this Agreement shall be governed by,
and interpreted and construed in accordance with the provisions of, the laws of
the Island of Bermuda.
5.5. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall constitute an original copy
hereof.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be signed by its duly authorized officers as of the date first above written.
X.X. XXXXXXX & CO., LTD.
By: /s/ Xxxx X. Xxxxxxx
----------------------------------
Title: Xxxx X. Xxxxxxx
MANAGING DIRECTOR
FIRST LONG ISLAND INVESTORS, LLC
By: /s/ Xxxxxx X. Xxxxxxxxx
----------------------------------
Title: Manager
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