WARRANT REPURCHASE AGREEMENT
THIS WARRANT REPURCHASE AGREEMENT
(the “Agreement”)
is made as of the 1st day of
July, 2009, by and among Highbury Financial Inc., a
Delaware corporation (the “Company”), and the undersigned
authorized representative of certain warrantholders of the
Company (the “Warrantholder”).
WHEREAS, the Warrantholder
currently owns or has investment discretion over 2,804,200 warrants (the “Warrants”) to purchase an
aggregate of 2,804,200 common shares of the Company (“Common Shares”);
WHEREAS, the Warrantholder
desires the Company to repurchase all of the Warrants upon the terms and
conditions set forth herein; and
WHEREAS, the Company wishes to
repurchase all of the Warrants upon the terms and conditions set forth
herein.
NOW, THEREFORE, in
consideration of the mutual covenants herein contained and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto covenant and agree as follows:
1. Repurchase of the
Warrants. Upon the terms and subject to the conditions set
forth herein and in reliance upon the representations and warranties set forth
below, the Company agrees to repurchase the Warrants from the Warrantholder, and
the Warrantholder agrees to sell and transfer to the Company the Warrants for a
price per Warrant equal to $0.50, or an aggregate payment price of $1,402,100.00
for all the Warrants (the “Repurchase Price”).
2. Closing. The (the “Closing”) of the repurchase and
sale of the Warrants shall take place upon execution of
this Agreement. To consummate the repurchase and sale, at the
Closing: (a) the Warrantholder shall transmit to Continental Stock &
Transfer Trust Company (“Continental”), the Company’s transfer agent, the
Warrants through the Depository Trust Company’s Deposit/Withdrawal at Custodian
(DWAC) system, and
(b) immediately upon the receipt of the Warrants by Continental, the Company
shall deliver to the Warrantholder the payment of the Repurchase Price in
accordance with the Warrantholder’s wire transfer
instructions.
3. Representations and
Warranties of the Warrantholder. The Warrantholder represents
and warrants to the Company as follows:
(a) Organization and Standing of
Warrantholder. The Warrantholder is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization and has full corporate power and authority to
conduct its business as presently conducted and to own and/or control the
disposition of the Warrants.
(b) Ownership of
Warrants. The Warrantholder is, or is the duly authorized
representative of, the record and beneficial owner of the Warrants, which
ownership is free and clear of any liens, encumbrances, security interests, or
restrictions on transfer and the Warrantholder or the client for whom it is the
duly authorized representative has good, marketable, and unencumbered title to
the Warrants, and the Warrantholder has full legal right, power, and authority
to enter into this Agreement and to sell, transfer, convey, assign, and deliver
the Warrants pursuant to this Agreement.
(c) Authority for
Agreement. The execution of this Agreement, and the
consummation of the transactions contemplated hereby, have been duly authorized
by all necessary corporate action on the part of the
Warrantholder. This Agreement has been duly executed and delivered by
the Warrantholder, and constitutes a valid and binding obligation of the
Warrantholder, enforceable against the Warrantholder in accordance with its
terms, except that such enforcement may be subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors’ rights.
(d) Conflicts. The
execution of this Agreement, the consummation of the transactions contemplated
hereby, and the compliance with the provisions hereof by the Warrantholder, do
not and will not conflict with or result in any breach of any terms, conditions,
or provisions of, or constitute a default under, or require a consent or waiver
under, the Certificate of Incorporation or By-laws (each as amended to date), or
similar organizational documents, of the Warrantholder, or any agreement to
which the Warrantholder is a party or by which the Warrantholder or any of its
properties are subject or bound, or violate any judgment, order, statute, rule,
regulation or other provision of law applicable to the
Warrantholder.
(e) Litigation. There
is no action, proceeding, or investigation pending or, to the knowledge of the
Warrantholder, threatened against the Warrantholder, or any basis therefor known
to the Warrantholder, which questions the validity or legality, or otherwise
relates to, this Agreement or any of the transactions contemplated
hereby.
(f) Consents. No
consent, approval, order, or authorization of, or registration, qualification,
designation, declaration or filing (other than the filing of a Form 4 and an
amendment to Schedule 13D) with, any person, entity or governmental authority is
required on the part of the Warrantholder in connection with the execution and
delivery of this Agreement, or the repurchase of the Warrantholder’s Warrants,
or the other transactions as contemplated by this Agreement.
(g) Experience and
Knowledge.
(i) The
Warrantholder acknowledges and agrees that it has sufficient knowledge and
experience in financial and business matters, and that it has had full
opportunity to ask questions and receive sufficient and satisfactory answers
from the representatives of the Company to evaluate the merits and risks of the
transactions contemplated by this Agreement.
(ii) The
Warrantholder has had full opportunity to obtain additional information,
documents, records and books related to the Company and its financial condition
and prospects, and based thereon, has formed an independent judgment concerning
the operations of the Company and its business.
(iii) The
Warrantholder has read this Agreement carefully, has been afforded sufficient
time to understand the terms and effects of this Agreement, and is voluntarily
entering into and executing this Agreement. Neither the Warrantholder
nor its agents or representatives have made any representations inconsistent
with the terms and effects of this Agreement.
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(iv) The
Warrantholder represents that the Company may have possession of material,
non-public information concerning the Warrants, Common Shares and/or the Company
that the Warrantholder does not possess or have access to (the “Excluded
Information”), and as a consequence, there may exist a disparity of information
between the Company and the Warrantholder with respect to the Warrants, Common
Shares and/or the Company. The Warrantholder acknowledges that the Excluded
Information could be indicative of a value of the Warrants that is higher than
the Repurchase Price or could otherwise be adverse to the Warrantholder and such
Excluded Information may be material to Warrantholder’s decision to sell the
Warrants.
(v) The
Warrantholder represents that it has not requested the Excluded Information and
agrees that the Company shall not be obligated to disclose any Excluded
Information to the Warrantholder or have any liability with respect to any such
non-disclosure.
4. Representations and
Warranties of the Company. The Company represents and warrants
to the Warrantholder as follows:
(a) Organization and Standing of
the Company; Authority. The Company is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and has full corporate power and authority to conduct its business
as presently conducted and to repurchase the Warrants. The Company
has full legal right, power, and authority to enter into this Agreement and to
purchase the Warrants pursuant to this Agreement.
(b) Authority for
Agreement. The execution of this Agreement, and the
consummation of the transactions contemplated hereby, have been duly authorized
by all necessary corporate action on the part of the Company. This
Agreement has been duly executed and delivered by the Company, and constitutes a
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except that such enforcement may be subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors’ rights.
(c) Conflicts. The
execution of this Agreement, the consummation of the transactions contemplated
hereby, and the compliance with the provisions hereof by the Company, do not and
will not conflict with or result in any breach of any terms, conditions, or
provisions of, or constitute a default under, or require a consent or waiver
under, the Certificate of Incorporation or By-laws (each as amended to date) of
the Company, or any agreement to which the Company is a party or by which the
Company or any of its properties are subject or bound, or violate any judgment,
order, statute, rule, regulation or other provision of law applicable to the
Company.
(d) Litigation. There
is no action, proceeding, or investigation pending or, to the knowledge of the
Company, threatened against the Company, or any basis therefor known to the
Company, which questions the validity or legality, or otherwise relates to, this
Agreement or any of the transactions contemplated hereby.
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(e) Consents. No
consent, approval, order, or authorization of, or registration, qualification,
designation, declaration or filing with, any person, entity or governmental
authority is required on the part of the Company in connection with the
execution and delivery of this Agreement, or the repurchase of the Warrants, or
the other transactions as contemplated by this Agreement.
5. Cooperation. The
Warrantholder and the Company each hereby covenants and agrees with the other to
take such action and execute and deliver such documents as may be reasonably
requested by the other in order to consummate the transactions contemplated by
this Agreement.
6. Survival of Representations,
Warranties and Covenants. All representations, warranties and
covenants contained herein shall survive the execution and delivery of this
Agreement and the consummation of the transactions contemplated
hereby.
7. Indemnification. Each
of the Warrantholder and the Company (the “Indemnifying Party”) shall
indemnify and hold harmless the other, its successors and assigns, and the
respective officers, directors, employees and agents of each of the foregoing,
from and against any and all losses, claims, damages, liabilities, payments,
obligations and expenses (including reasonable attorneys’ and accountants’ fees)
sustained, suffered or incurred by any such person or entity arising out of
or resulting from the breach of any representation, warranty or covenant of the
Indemnifying Party contained in this Agreement.
8. Miscellaneous.
(a) Entire
Agreement. This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and undertakings, both written and
oral. WITHOUT LIMITING THE GENERALITY OF THIS SECTION 9(a) AND
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, NO PARTY IS MAKING
ANY REPRESENTATION OR WARRANTY WHATSOEVER, ORAL OR WRITTEN, EXPRESS OR IMPLIED,
IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OTHER THAN
THOSE SET FORTH IN SECTIONS 3 AND 4 OF THIS AGREEMENT AND NO PARTY IS RELYING ON
ANY STATEMENT, REPRESENTATION OR WARRANTY, ORAL OR WRITTEN, EXPRESS OR IMPLIED,
MADE BY ANY OTHER PARTY EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH
IN SECTIONS 3 AND 4 OF THIS AGREEMENT.
(b) Severability. In
the event that any court having jurisdiction shall determine that any provision
contained in this Agreement shall be unreasonable or unenforceable in any
respect, then such covenant or other provision shall be deemed limited to the
extent that such court deems it reasonable and enforceable, and as so limited
shall remain in full force and effect. In the event that such court
shall deem any such covenant or other provision wholly unenforceable, the
remaining covenants and other provisions of this Agreement shall nevertheless
remain in full force and effect.
(c) Assignment. This
Agreement shall be binding upon the successors, permitted assigns, heirs,
legatees and devisees, executors, administrators and legal representatives of
the Warrantholder and upon the successors and assigns of the
Company. Neither the Warrantholder nor the Company may assign its
rights or delegate its obligations under this Agreement without the prior
written consent of the other.
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(d) Amendment;
Waiver. This Agreement may not be amended, modified or waived
except by an instrument in writing signed by the Company and the
Warrantholder.
(e) Governing
Law. This Agreement shall be governed by, and construed in
accordance with, the laws of Delaware, without giving effect to the conflict of
law principles thereof.
(f) Expenses. The
Company and the Warrantholder shall each pay its fees and expenses (including
legal fees) in connection with this Agreement and the transactions contemplated
hereby whether or not the transactions contemplated hereby are
consummated. All transfer or similar taxes required to be paid in
respect of the transfer by the Warrantholder of the Warrants shall be paid by
the Warrantholder.
(g) Counterparts. This
Agreement may be executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when executed shall be
deemed to be an original but all of which taken together shall constitute one
and the same agreement.
(h) Notices.
(i) All
notices, waivers and other communications under this Agreement shall be in
writing and shall be delivered by hand or facsimile or mailed by an
internationally recognized overnight international courier:
(A) if
to the Warrantholder, at the address or facsimile number of the Warrantholder
set forth on the signature page hereto; and
(B) if
to the Company, at:
000
Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx XX
00000
Attention: Xxxxxxx
Forth, Chief Financial Officer
(ii) Any
notice so addressed shall be deemed to be given: if delivered by hand or
facsimile, on the date of such delivery if delivered prior to 5:00 p.m. on a
Business Day or, if delivered after 5:00 p.m. or on a day other than a Business
Day, on the next Business Day; if mailed by overnight courier, on the first
Business Day following the date of such mailing; and if mailed by registered or
certified mail, on the third Business Day after the date of such
mailing. For purposes of this Agreement, the term “Business Day” means any day
other than a Saturday, Sunday or other day that is a statutory holiday under the
federal laws of the United States or the laws of Bermuda.
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(i) Further
Assurances. The Warrantholder shall, from time to time after
the Closing at the request of the Company, without further consideration,
execute and deliver further instruments of transfer and assignment and other
documents and take such other action as the Company may reasonably request to
more effectively transfer and assign to, and vest in, the Company the Warrants
and all rights thereto, and to otherwise fully implement the provisions of this
Agreement.
(j) Specific
Performance. The rights and remedies of the parties hereto
shall be cumulative. The transactions contemplated by this Agreement
are unique transactions and any failure on the part of any party to complete the
transactions contemplated by this Agreement on the terms of this Agreement will
not be fully compensable in damages and the breach or threatened breach of the
provisions of this Agreement would cause the other parties hereto irreparable
harm. Accordingly, in addition to and not in limitation of any other
remedies available to the parties hereto for a breach or threatened breach of
this Agreement, the parties shall be entitled to seek specific performance of
this Agreement and seek an injunction restraining any such party from such
breach or threatened breach.
(k) Waiver of
Jury Trial. EACH PARTY
ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT
IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUR OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
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IN WITNESS WHEREOF, the
Company and the Warrantholder have executed this Warrant Repurchase Agreement as
of the date first written above.
COMPANY:
By:
/s/ X. Xxxxxxx
Forth
Name:
X. Xxxxxxx Forth
Title:
Executive Vice President and Chief Financial Officer
WARRANTHOLDER:
SHERLEIGH
ASSOCIATES INC. PROFIT SHARING PLAN
By:
/s/ Xxxx Xxxxxx
Name: Xxxx
Xxxxxx
Title: Trustee
Address: 00
Xxxxxxxx Xxxxxx, XX 00X
Xxx Xxxx, XX 00000
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