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EXHIBIT 2.4
EXECUTION COPY
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INTEREST PURCHASE AGREEMENT
BY AND AMONG
AMERITRADE HOLDING CORPORATION.
("PURCHASER"),
FORTRADECAST L PARTNERS, L.P.
AND
FORTRADECAST S PARTNERS, L.P.
(TOGETHER, "SELLERS")
DATED AS OF FEBRUARY 13, 2001
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TABLE OF CONTENTS
(continued)
ARTICLE I DEFINITIONS................................................................................1
1.1 Definitions....................................................................................1
1.2 Interpretation.................................................................................8
ARTICLE II SALE AND PURCHASE OF SHARES................................................................9
2.1 Sale and Purchase..............................................................................9
2.2 Payment of Purchase Price......................................................................9
2.3 Closing Date Balance Sheet....................................................................10
2.4 Earn-Out Statement............................................................................11
2.5 Allocation of Purchase Price..................................................................12
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLERS.................................................13
3.1 Due Incorporation.............................................................................13
3.2 Due Authorization.............................................................................13
3.3 Consents and Approvals; Authority Relative to this Agreement..................................13
3.4 Capitalization................................................................................14
3.5 Litigation....................................................................................14
3.6 Improper and Other Payments...................................................................14
3.7 Brokers.......................................................................................14
3.8 Investment Representations....................................................................14
3.9 Accuracy of Statements........................................................................15
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER...............................................15
4.1 Due Incorporation.............................................................................15
4.2 Due Authorization.............................................................................15
4.3 Consents and Approvals; Authority Relative to this Agreement..................................16
4.4 Litigation....................................................................................16
4.5 Public Reports................................................................................16
4.6 No Adverse Effects or Changes.................................................................16
4.7 Brokers.......................................................................................16
ARTICLE V COVENANTS.................................................................................17
5.1 Implementing Agreement........................................................................17
5.2 Access to Information and Facilities..........................................................17
5.3 Preservation of Business......................................................................17
5.4 Consents and Approvals........................................................................17
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TABLE OF CONTENTS
(continued)
5.5 Supplemental Information......................................................................18
5.6 Confidentiality...............................................................................18
5.7 Exclusivity...................................................................................20
5.8 Tax Matters...................................................................................20
5.9 Preservation of Books and Records; Access.....................................................21
5.10 Indemnification of Officers, Directors, Managers, Partners, Members and Stockholders..........21
ARTICLE VI CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER..........................................22
6.1 Warranties True as of Both Present Date and Closing Date......................................22
6.2 Compliance with Agreements and Covenants......................................................22
6.3 Certificate of Compliance.....................................................................22
6.4 Consents and Approvals........................................................................22
6.5 Xxxx-Xxxxx-Xxxxxx.............................................................................22
6.6 NASD..........................................................................................22
6.7 No Material Adverse Change....................................................................22
6.8 Actions or Proceedings........................................................................22
6.9 Merger........................................................................................23
ARTICLE VII CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS............................................23
7.1 Warranties True as of Both Present Date and Closing Date......................................23
7.2 Compliance with Agreements and Covenants......................................................23
7.3 Certificate of Compliance.....................................................................23
7.4 Consents and Approvals........................................................................23
7.5 Xxxx-Xxxxx-Xxxxxx.............................................................................23
7.6 NASD..........................................................................................23
7.7 No Material Adverse Change....................................................................23
7.8 Actions or Proceedings........................................................................24
7.9 Merger........................................................................................24
ARTICLE VIII CLOSING...................................................................................24
8.1 Closing.......................................................................................24
8.2 Deliveries by Sellers.........................................................................24
8.3 Deliveries by Purchaser.......................................................................25
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TABLE OF CONTENTS
(continued)
ARTICLE IX TERMINATION...............................................................................25
9.1 Termination...................................................................................25
9.2 Effect of Termination.........................................................................26
ARTICLE X INDEMNIFICATION...........................................................................26
10.1 Survival......................................................................................26
10.2 Indemnification by Sellers....................................................................26
10.3 Indemnification by Purchaser..................................................................27
10.4 Limitations on Indemnification................................................................28
10.5 Claims........................................................................................28
10.6 Notice of Third Party Claims; Assumption of Defense...........................................29
10.7 Settlement or Compromise......................................................................29
10.8 Failure of Indemnifying Person to Act.........................................................30
10.9 Recovery from Indemnity Shares and Earn-Out Indemnity Shares..................................30
10.10 Net Indemnity Payments........................................................................30
10.11 Exclusive Remedy..............................................................................30
10.12 Time Limits...................................................................................30
ARTICLE XI MISCELLANEOUS.............................................................................31
11.1 Expenses......................................................................................31
11.2 Amendment.....................................................................................31
11.3 Notices.......................................................................................31
11.4 Waivers.......................................................................................32
11.5 Counterparts..................................................................................32
11.6 Assignment....................................................................................32
11.7 No Third Party Beneficiaries..................................................................32
11.8 Publicity.....................................................................................32
11.9 Further Assurances............................................................................33
11.10 Severability..................................................................................33
11.11 Entire Understanding..........................................................................33
11.12 Sellers Representative........................................................................33
11.13 Applicable Law................................................................................33
11.14 Specific Performance..........................................................................33
11.15 Waiver of Jury Trial..........................................................................34
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TABLE OF CONTENTS
(continued)
11.16 Schedules.....................................................................................34
11.17 Disclosure....................................................................................34
SCHEDULES
Schedule 2.3 Exceptions from GAAP - Closing Date Balance Sheet
Schedule 2.4 Exceptions from GAAP - Earn-Out Statement
Schedule 3.3(a) Consents and Approvals
Schedule 3.3(b) Authority Relative to this Agreement
Schedule 4.3 Consents and Approvals; Authority Relative to this Agreement
EXHIBITS
Exhibit A Form of Employment Agreements
Exhibit B Form of Escrow Agreement
Exhibit C Form of License Agreement
Exhibit D Merger Agreement
Exhibit E Form of Stockholders Agreement
Exhibit F Form of Opinion of Counsel to Sellers
Exhibit G Form of Opinion of Counsel to Purchaser
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INTEREST PURCHASE AGREEMENT
THIS AGREEMENT is made as of the 13th day of February, 2001, by and among
AMERITRADE HOLDING CORPORATION, a Delaware corporation ("Purchaser"), and
FORTRADECAST L PARTNERS, L.P., a Texas limited partnership, and FORTRADECAST S
PARTNERS, L.P., a Texas limited partnership (each a "Seller" and together
"Sellers"). Certain capitalized terms used herein are defined in Article I.
W I T N E S S E T H:
WHEREAS, Purchaser wishes to purchase from Sellers and Sellers wish to sell
to Purchaser all of the Interests.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements herein contained, the
parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. The following terms shall have the following meanings for
the purposes of this Agreement:
"Accounting Firm" shall mean Ernst & Young LLP or another nationally
recognized independent accounting firm mutually agreeable to Purchaser and the
Sellers Representative.
"Accrued Earn-Out Shares" shall mean the sum of (i) Net Revenue Shares,
(ii) Pretax Profits Shares, (iii) B2B Shares and (iv) B2C Shares.
"Affiliate" shall mean, with respect to any specified Person, (i) any other
Person which, directly or indirectly, owns or controls, is under common
ownership or control with, or is owned or controlled by, such specified Person,
(ii) any other Person which is a director, officer, partner or manager, or is,
directly or indirectly, the beneficial owner of ten percent (10%) or more of any
class of equity securities, of the specified Person or a Person described in
clause (i) of this paragraph, (iii) another Person of which the specified Person
is a director, officer, partner or manager or is, directly or indirectly, the
beneficial owner of ten percent (10%) or more of any class of equity securities,
(iv) another Person in which the specified Person has a substantial beneficial
interest or as to which the specified Person serves as trustee or in a similar
capacity or (v) any spouse, parent, child or sibling of the specified Person;
provided, that at any time after the Closing Date, the Company and the
Subsidiaries on the one hand and Sellers and their respective Affiliates (other
than the Company and the Subsidiaries) on the other hand shall not be deemed to
be Affiliates of each other.
"Agreement" shall mean this Interest Purchase Agreement, including all
exhibits and schedules hereto, as it may be amended, modified or supplemented
from time to time in accordance with its terms.
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"Audited 2000 Financials" shall mean the audited consolidated financial
statements of TradeCast Investments and the other Subsidiaries (not including
TradeCast Enterprises) as of December 31, 2000, consisting of the balance sheet
as of such date and the related statement of earnings and retained earnings and
cash flows for the fiscal year then ended
"Bankstream" shall mean Bankstream Ltd, a Texas limited partnership.
"Bankstream Assets" shall mean the partnership interests of Bankstream, the
Sixth Market Note and all other assets, properties and rights set forth on
Schedule 1.1A to the Merger Agreement.
"Business Day" shall mean any day of the year other than (i) any Saturday
or Sunday or (ii) any other day on which banks located in New York, New York
generally are closed for business.
"B2B Shares" shall mean (i) if B2B Trades exceed 10,122,170 and are less
than 14,777,795, the number of Shares equal to the product obtained by
multiplying (A) 187,500 by (B) the quotient obtained by dividing (1) B2B Trades
minus 10,122,170 by (2) 4,655,625 and (ii) if B2B Trades are equal to or exceed
14,777,795, the number of Shares equal to 187,500.
"B2B Trades" shall mean all trades during the twelve-month period ended
December 31, 2001 that are (i) executed on behalf of customers of broker dealers
who are not Affiliates of the Company or any Subsidiary (or their respective
successors) and who have been granted the right to use or practice any rights
under any Intellectual Property in the ordinary course of business and
consistent with past practice and (ii) for which the Company and the
Subsidiaries (or their respective successors) are paid on a per share basis (for
purposes of this definition, each 1,000 shares shall represent one trade) or per
order basis in the ordinary course of business and consistent with past
practices; provided, that if any such broker dealer becomes an Affiliate of
Purchaser, the Company or any Subsidiary after the Closing, "B2B Trades" shall
include all trades executed on behalf of customers of such broker dealers.
"B2C Shares" shall mean (i) if B2C Trades exceed 309,213 and are less than
903,627, the number of Shares equal to the product obtained by multiplying (A)
187,500 by (B) the quotient obtained by dividing (1) B2C Trades minus 309,213 by
(2) 594,414 and (ii) if B2C Trades are equal to or exceed 903,627, the number of
Shares equal to 187,500.
"B2C Trades" shall mean all trades during the twelve-month period ended
December 31, 2001 that are (i) executed on behalf of (A) retail customers of the
Company or the Subsidiaries (or their respective successors) in the ordinary
course of business and consistent with past practice and (B) retail customers of
Purchaser or its Affiliates (other than the Company or the Subsidiaries or their
respective successors) granted the right to use or practice any rights under any
Intellectual Property in the ordinary course of business and consistent with
past practice and (ii) for which the Company or the Subsidiaries (or their
respective successors) or Purchaser or its Affiliates are entitled to be paid a
fee or commission (including free trades that are part of any promotion offered
by Purchaser or its Affiliates) in the ordinary course of business and
consistent with past practice.
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"Closing" shall mean the consummation of the sale of the Interests by
Sellers to Purchaser and all other transactions contemplated herein in
accordance with Article VIII.
"Closing Average Share Price" shall mean the average of the closing prices
of the Shares on all securities exchanges on which the Shares may at the time be
listed, or, if there has been no sales on any such exchange on any day, the
average of the highest bid and lowest asked prices on all such exchanges at the
end of such day, or, if on any day such security is not so listed, the average
of the representative bid and asked prices quoted in the Nasdaq National Market
as of 4:00 P.M., New York time, or, if on any day such security is not quoted in
the Nasdaq National Market, the average of the highest bid and lowest asked
prices on such day in the domestic over-the-counter market as reported by the
National Quotation Bureau, Incorporated, or any similar successor organization,
in each such case on the Closing Date.
"Closing Date" shall mean the date on which the Closing occurs or is to
occur.
"Closing Date Balance Sheet" shall have the meaning set forth in Section
2.3(a).
"Code" shall mean the United States Internal Revenue Code of 1986, as
amended.
"Company" shall mean TradeCast Inc., a Delaware corporation.
"Contract" shall mean any contract, lease, sales order, purchase order,
agreement, indenture, mortgage, note, bond, right, warrant or instrument,
whether written or verbal.
"Deductible Amount" shall mean the product obtained by multiplying (i)
78,750 by (ii) the Closing Average Share Price.
"Dollars" or numbers preceded by the symbol "$" shall mean amounts in
United States Dollars.
"Earn-Out Indemnity Shares" shall mean the product obtained by multiplying
(i) the Accrued Earn-Out Shares by (ii) .05.
"Earn-Out Shares" shall mean 750,000 Shares.
"Earn-Out Statement" shall have the meaning set forth in Section 2.4(a).
"Employment Agreements" shall mean an employment agreement between
Purchaser and each of Xxxxxx X. Xxxxxxxx, Xx., Xxxxx X. Xxxxxx and Xxxxxxx Xxxxx
to be dated the Closing Date and in the form attached hereto as Exhibit A.
"Escrow Agent" shall mean The Chase Manhattan Bank, or its successor
appointed pursuant to the Escrow Agreement.
"Escrow Agreement" shall mean an escrow agreement between Escrow Agent,
Purchaser, the Sellers Representative and the Stockholders Representative, to be
dated the Closing Date and in the form attached hereto as Exhibit B.
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"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Excluded Covenants" shall mean (i) Sections 5.6 (confidentiality), 5.8
(tax matters), 5.9 (preservation of books and records; access), 5.10
(indemnification of officers, directors, managers, partners, members and
stockholders), 11.1 (expenses), 11.12 (sellers representative), 11.14 (specific
performance) and 11.15 (waiver of jury trial) of this Agreement and the
provisions of Article X (indemnification) of this Agreement that expressly
survive the one (1) year limitation contained therein and (ii) Sections 5.7
(confidentiality), 5.10 (tax matters), 5.12 (preservation of books and records;
access), 5.13 (indemnification of officers, directors, managers, partners,
members and stockholders), 11.1 (expenses), 11.12 (stockholders representative),
11.14 (specific performance) and 11.15 (waiver of jury trial) of the Merger
Agreement and the provisions of Article X (indemnification) of the Merger
Agreement that expressly survive the one (1) year limitation contained therein.
"ForTradeCast L" shall mean ForTradeCast L Partners, L.P., a Texas limited
partnership.
"ForTradeCast S" shall mean ForTradeCast S Partners, L.P., a Texas limited
partnership.
"GAAP" shall mean United States generally accepted accounting principles at
the time in effect.
"Governmental Authority" shall mean the government of the United States or
any foreign country or any state or political subdivision thereof and any
entity, body or authority, whether national, international or supra-national,
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, including any quasi-governmental
entity established to perform such functions.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"Indemnification Cap" shall mean the product obtained by multiplying (i)
the sum of (A) the Indemnity Shares and (B) the Earn-Out Indemnity Shares by
(ii) the Closing Average Share Price.
"Indemnified Person" shall mean the Person or Persons entitled to, or
claiming a right to, indemnification under Article X.
"Indemnifying Person" shall mean the Person or Persons claimed by the
Indemnified Person to be obligated to provide indemnification under Article X.
"Indemnity Shares" shall mean 375,000 Shares.
"Interests" shall mean (i) a 20% member interest of Tradecast Enterprises
held by ForTradeCast L, (ii) 19,800,000 Class I units of TradeCast Investments
held by ForTradeCast L, representing a 19.8% limited partner interest, (iii) a
20% member interest in TradeCast Enterprises held by ForTradeCast S, (iv)
19,800,000 Class I units of TradeCast Enterprises held by ForTradeCast S,
representing a 19.8% limited partner interest, and (v) any other interests in
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TradeCast Enterprises and TradeCast Investments issued to any Seller after the
execution of this Agreement and prior to the Closing.
"Law" shall mean any law, statute, regulation, ordinance, rule, order,
directive, decree, judgment, consent decree, settlement agreement or
governmental requirement enacted, promulgated, entered into or imposed by any
Governmental Authority.
"License Agreement" shall mean a license agreement between Purchaser and
Bankstream, to be dated the Closing Date and in the form attached hereto as
Exhibit C.
"Lien" shall mean any lien, mortgage, charge, restriction, pledge, security
interest, option, lease, sublease or encumbrance.
"Loss" or "Losses" shall mean any and all losses, liabilities, costs,
claims, damages, penalties, interest and expenses (including reasonable
attorneys' fees and expenses and reasonable costs of investigation and
litigation, but excluding lost profits and consequential damages). In the event
any of the foregoing are indemnifiable hereunder, the terms "Loss" and "Losses"
shall include any and all reasonable attorneys' fees and expenses and reasonable
costs of investigation and litigation incurred by the Indemnified Person in
enforcing such indemnity.
"Material Adverse Change to the Company" shall mean a change (or
circumstance involving a prospective change) in the business, operations,
assets, liabilities, results of operations, cash flows, condition (financial or
otherwise) or prospects of the Company and the Subsidiaries taken as a whole
which is materially adverse.
"Material Adverse Change to Purchaser" shall mean a change (or circumstance
involving a prospective change) in the business, operations, assets,
liabilities, results of operations, cash flows, condition (financial or
otherwise) or prospects of Purchaser and its subsidiaries taken as a whole which
is materially adverse.
"Material Adverse Effect on the Company" shall mean an effect (or
circumstance involving a prospective effect) on the business, operations,
assets, liabilities, results of operations, cash flows, condition (financial or
otherwise) or prospects of the Company and the Subsidiaries taken as a whole
which is materially adverse.
"Material Adverse Effect on Purchaser" shall mean an effect (or
circumstance involving a prospective effect) on the business, operations,
assets, liabilities, results of operations, cash flows, condition (financial or
otherwise) or prospects of Purchaser and its subsidiaries taken as a whole which
is materially adverse.
"Merger" shall mean the merger of the Company and the Merger Sub in
accordance with the Merger Agreement.
"Merger Agreement" shall mean the merger agreement between Purchaser,
Merger Sub, the Company and Stockholders, dated the date hereof and in the form
attached hereto as Exhibit D.
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"Merger Sub" shall mean TC Merger Sub Inc., a Delaware corporation and a
wholly-owned subsidiary of Purchaser.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Net Revenues" shall mean the total revenues (including customer interest
income) of the Company and the Subsidiaries (and their respective successors)
for the twelve-month period ended December 31, 2001 less customer interest
expense of the Company and the Subsidiaries (and their respective successors)
for the twelve-month period ended December 31, 2001.
"Net Revenues Shares" shall mean (i) if Net Revenues exceed $15,950,000 and
are less than $33,114,000, the number of Shares equal to the product obtained by
multiplying (A) 93,750 by (B) the quotient obtained by dividing (1) Net Revenues
minus $15,950,000 by (2) $17,164,000, (ii) if Net Revenues are equal to or
exceed $33,114,000 and are less than $43,060,000, the number of Shares equal to
the sum of 93,750 and the product obtained by multiplying (A) 93,750 by (B) the
quotient obtained by dividing (1) Net Revenues minus $33,114,000 by (2)
$9,946,000 and (iii) if Net Revenues are equal to or exceed $43,060,000, the
number of Shares equal to 187,500.
"Net Worth" shall mean the amount equal to (i) the total current assets of
the Company and the Subsidiaries (or their respective successors) reflected on
the Closing Date Balance Sheet less (ii) the total current liabilities of the
Company and the Subsidiaries (or their respective successors) reflected on the
Closing Date Balance Sheet.
"Person" shall mean any individual, corporation, proprietorship, firm,
partnership, limited partnership, limited liability company, trust, association
or other entity.
"Pretax Profits" shall mean the net income (loss) before taxes of the
Company and the Subsidiaries (and their respective successors) for the
twelve-month period ended December 31, 2001; provided, that (i) expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall not be included in such calculation, (ii) a corporate overhead
allocation shall not be included in such calculation, (iii) advertising and
marketing expenses directly relating to the Company and the Subsidiaries (and
their respective successors) shall be included in such calculation and (iv)
advertising and marketing expenses indirectly relating to the Company and the
Subsidiaries (and their respective successors) shall not be included in such
calculations.
"Pretax Profits Shares" shall mean (i) if Pretax Profits exceed $1,600,000
and are less than $11,048,000, the number of Shares equal to the product
obtained by multiplying (A) 93,750 by (B) the quotient obtained by dividing (1)
Pretax Profits minus $1,600,000 by (2) $9,448,000, (ii) if Pretax Profits are
equal to or exceed $11,048,000 and are less than $15,690,000, the number of
Shares equal to the sum of 93,750 and the product obtained by multiplying (A)
93,750 by (B) the quotient obtained by dividing (1) Pretax Profits minus
$11,048,000 by (2) $4,642,000 and (iii) if Pretax Profits are equal to or exceed
$15,690,000, the number of Shares equal to 187,500.
"Purchase Price" shall have the meaning set forth in Section 2.2.
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"Purchaser" shall have the meaning set forth in the preamble hereof.
"Purchaser Indemnified Party" or "Purchaser Indemnified Parties" shall mean
Purchaser and each of its Affiliates (including, after the Closing, the Company
and the Subsidiaries), and their respective officers, directors, managers,
stockholders, partners, members, employees, agents and representatives;
provided, that in no event shall any Seller be deemed to be a Purchaser
Indemnified Party.
"Related Agreement" shall mean the Merger Agreement and any other Contract
that is entered into at the Closing or otherwise pursuant to this Agreement. The
Related Agreements executed by a specified Person shall be referred to as "such
Person's Related Agreements," "its Related Agreements" or another similar
expression.
"Remaining Shares" shall mean the remainder obtained by subtracting (i) the
sum of the Indemnity Shares and the Earn-Out Shares from (ii) the Total Shares.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Seller Indemnified Party" or "Seller Indemnified Parties" shall mean
Sellers and each of their respective Affiliates, and their respective officers,
directors, managers, stockholders, partners, members, employees, agents and
representatives; provided, that, after the Closing, in no event shall the
Company or any Subsidiary be deemed to be a Seller Indemnified Party.
"Sellers Representative" shall have the meaning set forth in Section 11.12.
"Share" or "Shares" shall mean the Class A Common Stock, par value $0.01
per share, of Purchaser.
"Sixth Market Note" shall have the meaning ascribed to it in the Merger
Agreement.
"Stockholders" shall mean Xxxxxx X. Xxxxxxxx, Xxxxx X. Xxxxxx and Xxxxxxx
Xxxxx.
"Stockholders Agreement" shall mean a stockholders agreement between
Purchaser, Sellers and Stockholders, to be dated the Closing Date and in the
form attached hereto as Exhibit E.
"Stockholders Representative" shall have the meaning ascribed to it in the
Merger Agreement.
"Subsidiaries" shall mean TradeCast Enterprises, TradeCast Investments,
Bankstream, Quotecast Ltd., TradeCast Ltd., TradeCast Advertising LLC, TradeCast
Management Corp., TradeCast Resources Inc., TradeCast Securities Ltd. and
TradeCast Services Inc.; provided, that as of immediately after the Closing, in
no event shall Bankstream be deemed to be a Subsidiary.
"Taxes" or "Tax" shall mean all taxes, charges, fees, duties (including
customs duties), levies or other assessments, including income, gross receipts,
net proceeds, ad valorem, turnover, real and personal property (tangible and
intangible), sales, use, franchise, excise, value added, stamp, leasing, lease,
user, transfer, fuel, excess profits, occupational, interest equalization,
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windfall profits, severance, license, payroll, environmental, capital stock,
disability, employees' income withholding, other withholding, unemployment and
Social Security taxes, which are imposed by any Governmental Authority, and such
term shall include any interest, penalties or additions to tax attributable
thereto.
"Tax Indemnification Period" shall mean the period (including all prior
taxable years) ending on and including the Closing Date. For any taxable year of
the Company or any Subsidiary that does not end on, and would otherwise extend
beyond, the Closing Date, there shall be a deemed short taxable year ending on
and including the Closing Date and a second deemed short taxable year beginning
on and including the day after the Closing Date. The allocation of income and
deductions between the deemed short taxable years shall be based on a closing of
the books as of the end of the Closing Date.
"Tax Return" shall mean any report, return or other information required to
be supplied to a Governmental Authority in connection with any Taxes.
"Total Shares" shall mean 8,250,000 Shares.
"TradeCast Enterprises" shall mean TradeCast Enterprises LLC, a Texas
limited liability company.
"TradeCast Investments" shall mean TradeCast Investments Ltd., a Texas
limited partnership.
1.2 Interpretation. The headings preceding the text of Articles and
Sections included in this Agreement and the headings to Schedules attached to
this Agreement are for convenience only and shall not be deemed part of this
Agreement or be given any effect in interpreting this Agreement. The use of the
masculine, feminine or neuter gender or the singular or plural form of words
herein shall not limit any provision of this Agreement. The use of the terms
"including" or "include" shall in all cases herein mean "including, without
limitation" or "include, without limitation," respectively. Reference to any
Person includes such Person's successors and assigns to the extent such
successors and assigns are permitted by the terms of any applicable agreement,
and reference to a Person in a particular capacity excludes such Person in any
other capacity or individually. Reference to any agreement (including this
Agreement), document or instrument means such agreement, document or instrument
as amended or modified and in effect from time to time in accordance with the
terms thereof and, if applicable, the terms hereof. Reference to any Law means
such Law as amended, modified, codified, replaced or re-enacted, in whole or in
part, including rules, regulations, enforcement procedures and any
interpretations promulgated thereunder. Underscored references to Articles,
Sections, Subsections or Schedules shall refer to those portions of this
Agreement. The use of the terms "hereunder," "hereof," "hereto" and words of
similar import shall refer to this Agreement as a whole and not to any
particular Article, Section or clause of, or any Exhibit or Schedule to, this
Agreement.
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ARTICLE II
SALE AND PURCHASE OF SHARES
2.1 Sale and Purchase. Subject to the terms and conditions of this
Agreement, on the Closing Date, Sellers hereby agree to sell to Purchaser all of
the Interests, free and clear of all Liens, and Purchaser hereby agrees to
purchase all of the Interests.
2.2 Payment of Purchase Price. The total consideration for the Interests
(collectively, the "Purchase Price") and the total consideration paid to
Stockholders pursuant to the Merger Agreement shall be as follows:
(a) Within five (5) Business Days after the Closing Date, Purchaser shall
issue to Sellers and Stockholders and deliver to the Escrow Agent certificates
representing the Indemnity Shares and the Earn-Out Shares to be held in
accordance with the provisions of the Escrow Agreement, and shall issue and
deliver to Sellers and Stockholders the number of Remaining Shares determined as
follows:
(i) if the Closing Average Share Price multiplied by 8,250,000 is
less than or equal to $60,000,000, then fifty percent (50%) of
the Remaining Shares shall be issued to Stockholders and fifty
percent (50%) of the Remaining Shares shall be issued to
Sellers;
(ii) if the Closing Average Share Price multiplied by 8,250,000 is
greater than $60,000,000 but less than or equal to
$100,000,000, then (A) the first $60,000,000 in value of the
Remaining Shares (computed by multiplying the Closing Average
Share Price by the number of Remaining Shares) shall be issued
fifty percent (50%) to Stockholders and fifty percent (50%) to
Sellers and (B) the balance of the Remaining Shares shall be
issued seventy-five percent (75%) to Stockholders and
twenty-five percent (25%) to Sellers; or
(iii) if the Closing Average Share Price multiplied by 8,250,000 is
greater than $100,000,000, then (A) the first $60,000,000 in
value of the Remaining Shares (computed by multiplying the
Closing Average Share Price by the number of Remaining Shares)
shall be issued fifty percent (50%) to Stockholders and fifty
percent (50%) to Sellers, (B) the next $40,000,000 in value of
the Remaining Shares (computed by multiplying the Closing
Average Share Price by the number of Remaining Shares) shall be
issued seventy-five percent (75%) to Stockholders and
twenty-five percent (25%) to Sellers and (C) the balance of the
Remaining Shares shall be issued sixty percent (60%)
Stockholders and forty percent (40%) to Sellers.
(b) Within five (5) Business Days after the date the Closing Date Balance
Sheet becomes final and binding in accordance with Section 2.3, if Net Worth is
less than $2,000,000, Sellers shall cause Bankstream to pay such deficiency to
Purchaser and, if such deficiency is not so timely paid to Purchaser, Purchaser
and the Sellers Representative shall, at Purchaser's
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request and option, immediately instruct the Escrow Agent to deliver to
Purchaser the number of Indemnity Shares equal to the quotient obtained by
dividing (i) the amount of such deficiency by (ii) the Closing Average Share
Price.
(c) On the first anniversary of the Closing Date, Purchaser and the
Sellers Representative shall instruct the Escrow Agent to deliver to Sellers and
Stockholders certificates representing (i) the Indemnity Shares less (ii) the
sum of (A) the number of Indemnity Shares delivered to Purchaser pursuant to
Section 2.2(b) and (B) the number of Indemnity Shares equal to the quotient
obtained by dividing (1) any amounts necessary to satisfy any claims theretofore
asserted by any Purchaser Indemnified Party pursuant to Article X and resolved
pursuant to the provisions thereof and any amounts deemed by Purchaser and the
Sellers Representative reasonably necessary to satisfy any claims theretofore
asserted by any Purchaser Indemnified Party pursuant to Article X and not yet
resolved pursuant to the provisions thereof by (2) the Closing Average Share
Price.
(d) Within five (5) Business Days after the Earn-Out Statement becomes
final and binding in accordance with Section 2.4, Purchaser and the Sellers
Representative shall instruct the Escrow Agent to (i) deliver to Sellers and
Stockholders certificates representing (A) the Accrued Earn-Out Shares less (B)
the number of Earn-Out Indemnity Shares equal to the quotient obtained by
dividing (y) any amounts deemed by Purchaser and the Sellers Representative
reasonably necessary to satisfy any claims theretofore asserted by any Purchaser
Indemnified Party pursuant to Article X and not yet resolved pursuant to the
provisions thereof by (z) the Closing Average Share Price and (ii) to deliver to
Purchaser the remainder obtained by subtracting (A) the Accrued Earn Out Shares
from (B) the Earn-Out Shares.
(e) All certificates for Shares issued hereunder shall be in such names
and denominations as the Sellers Representative and the Stockholders
Representative shall designate to Purchaser or the Escrow Agent, as the case may
be, no later than two (2) Business Days before such issuance is required
hereunder. Purchaser shall promptly take all actions reasonably requested by the
Sellers Representative to correct any mistake made in the names or denominations
of such certificates.
(f) Any Indemnity Shares delivered to Purchaser under this Section 2.2
shall be treated by Purchaser, Sellers and Stockholders as an adjustment to the
Purchaser Price.
(g) In the event that prior to the Closing Date, there shall have been
declared or effected a reclassification, stock split (including a reverse
split), stock dividend or stock distribution with respect to Shares, the number
of Shares payable as the Purchase Price shall be equitably adjusted to reflect
such event.
2.3 Closing Date Balance Sheet.
(a) Within thirty (30) days after the Closing Date, Purchaser shall
prepare and deliver to the Sellers Representative, at Purchaser's expense, a
consolidated balance sheet for the Company and the Subsidiaries as of the
Closing Date (the "Closing Date Balance Sheet"), including a calculation of Net
Worth, which shall be prepared by Purchaser in accordance with GAAP and the past
practices of the Company and the Subsidiaries, except as set forth on
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Schedule 2.3. Together with the Closing Date Balance Sheet, Purchaser shall make
available to the Sellers Representative the work papers and back-up materials
used by Purchaser in preparing the Closing Date Balance Sheet and shall promptly
make available such other documents as the Sellers Representative may reasonably
request in connection with his review of the Closing Date Balance Sheet. Any
information supplied to the Sellers Representative by Purchaser to enable the
Sellers Representative to prepare the Closing Date Balance Sheet shall be
maintained by the Sellers Representative and Sellers in strict confidence and
shall not be disclosed to any Person (other than their accountants, lawyers and
other representatives who need to know such information) or used by the Sellers
Representative or Sellers for any purpose, except in each case in connection
with the matters specifically covered by this Section 2.3.
(b) Within thirty (30) days after receipt of the Closing Date Balance
Sheet, the Sellers Representative shall deliver to Purchaser a written statement
describing its objections (if any) to the Closing Date Balance Sheet. If the
Sellers Representative does not raise any objections in a written statement
within such thirty-day period, the Closing Date Balance Sheet shall become final
and binding upon all parties. If the Sellers Representative does raise
objections in a written statement within such thirty-day period, and the parties
cannot resolve such objections within ten (10) days after the receipt by
Purchaser of the Sellers Representative's written statement of objections, any
remaining disputes shall be resolved by the Accounting Firm. The Accounting Firm
shall be instructed to resolve such disputes within thirty (30) days after its
appointment. The resolution of disputes by the Accounting Firm shall be set
forth in writing and shall be conclusive and binding upon all parties and the
Closing Date Balance Sheet, as modified by such resolution, shall become final
and binding upon the date of such resolution. The fees and expenses of the
Accounting Firm shall be apportioned by the Accounting Firm based on the degree
to which each party's claims were unsuccessful and shall be paid by Purchaser
and Bankstream in accordance with such determination. For example, if pursuant
to this Section 2.3(b) the Sellers Representative submitted an objection
affecting the Net Worth in the amount of $100,000 and prevailed as to $45,000 of
the amount, then Bankstream would bear 55% of the fees and expenses of the
Accounting Firm. If Bankstream is obligated to pay any fees and expenses of the
Accounting Firm pursuant to this Section 2.3(b), Sellers shall cause Bankstream
to pay such fees and expenses and hereby unconditionally guarantee such
obligations of Bankstream.
2.4 Earn-Out Statement.
(a) Within thirty (30) days after December 31, 2001, Purchaser shall
prepare and deliver to the Sellers Representative, at Purchaser's expense, a
consolidated balance sheet and statement of earnings for the Company and the
Subsidiaries as of and for the twelve-month period ended December 31, 2001
(collectively, the "Earn-Out Statement"), including a calculation of (i) Net
Revenues and Pretax Profits, which shall be prepared in accordance with GAAP and
the past practices of the Company and the Subsidiaries, except as set forth on
Schedule 2.4, and (ii) B2B Trades and B2C Trades, which shall be prepared in
accordance with the past practices of the Company and the Subsidiaries. Together
with the Earn-Out Statement, Purchaser shall make available to the Sellers
Representative the work papers and back-up materials used by Purchaser in
preparing the Earn-Out Statement and shall promptly make available such other
documents as the Sellers Representative may reasonably request in connection
with his review of the Earn-Out Statement. Any information supplied to the
Sellers
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Representative by Purchaser to enable the Sellers Representative to prepare the
Earn-Out Statement shall be maintained by the Sellers Representative and Sellers
in strict confidence and shall not be disclosed to any Person (other than their
accountants, lawyers and other representatives who need to know such
information) or used by the Sellers Representative or Sellers for any purpose,
except in each case in connection with the matters specifically covered by this
Section 2.4.
(b) Within thirty (30) days after receipt of the Earn-Out Statement, the
Stockholders Representative shall deliver to Purchaser a written statement
describing its objections (if any) to the Earn-Out Statement. If the Sellers
Representative does not raise any objections in a written statement within such
thirty-day period, the Earn-Out Statement shall become final and binding upon
all parties. If the Sellers Representative does raise objections in a written
statement within such thirty-day period, and the parties cannot resolve such
objections within ten (10) days after the receipt by Purchaser of the Sellers
Representative's written statement of objections, any remaining disputes shall
be resolved by the Accounting Firm. The Accounting Firm shall be instructed to
resolve such disputes within thirty (30) days after its appointment. The
resolution of disputes by the Accounting Firm shall be set forth in writing and
shall be conclusive and binding upon all parties and the Earn-Out Statement, as
modified by such resolution, shall become final and binding upon the date of
such resolution. The fees and expenses of the Accounting Firm shall be
apportioned by the Accounting Firm based on the degree to which each party's
claims were unsuccessful and shall be paid by Purchaser and Bankstream in
accordance with such determination. For example, if pursuant to this Section
2.4(b) the Sellers Representative submitted an objection affecting the Net
Revenues in the amount of $100,000 and prevailed as to $45,000 of the amount,
then Bankstream would bear 55% of the fees and expenses of the Accounting Firm.
If Bankstream is obligated to pay any fees and expenses of the Accounting Firm
pursuant to this Section 2.4(b), Sellers shall cause Bankstream to pay such fees
and expenses and hereby unconditionally guarantee such obligations of
Bankstream.
2.5 Allocation of Purchase Price.
The Purchase Price shall be allocated among the assets of TradeCast
Investments and its Subsidiaries in the following manner:
(a) first, to accounts receivable, the amount thereof reflected on the
Closing Date Balance Sheet (face amount less reserves);
(b) second, to furniture, fixtures, and equipment, the adjusted federal
income tax basis thereof as of the Closing Date; and
(c) the remaining Purchase Price shall be allocated among goodwill and
other assets of TradeCast Investments and the Subsidiaries existing as of the
Closing Date, in the manner determined under Section 755 of the Code and the
regulations thereunder.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
Each Seller represents and warrants to Purchaser as follows:
3.1 Due Incorporation. Each Seller is duly organized and validly existing
under the laws of its respective jurisdiction of organization, with all
requisite power and authority to own, lease and operate its properties and to
carry on its business as they are now being owned, leased, operated and
conducted.
3.2 Due Authorization.
(a) Each Seller has full power and authority to enter into this Agreement
and its Related Agreements and to consummate the transactions contemplated
hereby and thereby. The execution, delivery and performance by each Seller of
this Agreement and its Related Agreements have been duly and validly approved by
the general partner and the requisite portion of the limited partners of such
Seller, and no other actions or proceedings on the part of such Seller are
necessary to authorize this Agreement, its Related Agreements and the
transactions contemplated hereby and thereby. Each Seller has duly and validly
executed and delivered this Agreement and has duly and validly executed and
delivered (or prior to or at the Closing will duly and validly execute and
deliver) its Related Agreements. Assuming the due authorization, execution and
delivery of this Agreement and its Related Agreements by each other party hereto
or thereto, this Agreement constitutes legal, valid and binding obligations of
each Seller and each Seller's Related Agreements constitute (or upon execution
and delivery by such Seller will constitute) legal, valid and binding
obligations of such Seller, in each case, enforceable in accordance with their
respective terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws in effect
that affect the enforcement of creditors' rights generally and by equitable
limitations on the availability of specific remedies.
3.3 Consents and Approvals; Authority Relative to this Agreement.
(a) Except under the HSR Act and the NASD Rules and as set forth on
Schedule 3.3(a), no consent, authorization or approval of, filing or
registration with, waiver of any option or right of first refusal or first offer
from, or cooperation from, any Governmental Authority or any other Person is
necessary in connection with the execution, delivery and performance by Sellers
of this Agreement or their respective Related Agreements or the consummation of
the transactions contemplated hereby or thereby.
(b) Except as set forth on Schedule 3.3(b), the execution, delivery and
performance by Sellers of this Agreement and their respective Related Agreements
do not and will not (i) violate any Law applicable to or binding on any Seller
or any of its respective assets or properties; (ii) result in or constitute a
circumstance which, without regard to any grace period or notice requirement or
both, would violate or conflict with, result in a breach or termination of,
constitute a default or give any third party any additional right (including a
termination right) under, permit cancellation of, or result in the creation of
any Lien upon any of the assets or
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properties of any Seller under, any material Contract to which any Seller is a
party or by which any Seller or any of its respective assets or properties are
bound; or (iii) violate or conflict with any provision of the partnership
agreement of any Seller.
3.4 Capitalization.
(a) All of the Interests are owned by Sellers, free and clear of any and
all Liens.
(b) The assignments, endorsements, stock powers and other instruments of
transfer delivered by Sellers to Purchaser at the Closing will be sufficient to
transfer Sellers' entire interest, legal and beneficial, in the Interests.
Sellers have full power and authority to convey good and marketable title to all
of the Interests, and upon transfer to Purchaser of the certificates, if any,
representing the Interests, Purchaser will receive good and marketable title to
the Interests, free and clear of all Liens.
3.5 Litigation. There are claims, actions, suits, proceedings,
investigations, charges, prosecutions or other litigation pending or, to the
knowledge of Sellers, threatened by or against any Seller or any Affiliate
thereof with respect to this Agreement or the Related Agreements, or in
connection with the transactions contemplated hereby or thereby, and, to the
knowledge of Sellers, there is no valid basis for any such claim, action, suit,
proceeding, investigation, charge, prosecution or litigation.
3.6 Improper and Other Payments. No Seller nor any director, officer,
manager, stockholder, partner, member, employee, agent or representative of any
Seller, nor any Person acting on behalf of any of them, has made, paid or
received any bribes, kickbacks or other similar payments to or from any Person,
whether lawful or unlawful, or made any improper foreign payment (as defined in
the Foreign Corrupt Practices Act), with respect to the Company or any
Subsidiary. No contributions have been made by any Seller, directly or
indirectly, to a domestic or foreign political party or candidate with respect
to the Company or any Subsidiary.
3.7 Brokers. No Seller has used any broker or finder in connection with
the transactions contemplated hereby, other than XX Xxxxxx H&Q (formerly known
as Chase H&Q), and neither Purchaser nor any Affiliate of Purchaser has or shall
have any liability or otherwise suffer or incur any Loss as a result of or in
connection with any brokerage or finder's fee or other commission of any Person
retained by any Seller or any Affiliate thereof in connection with any of the
transactions contemplated by this Agreement or the Related Agreements.
3.8 Investment Representations.
(a) Each Seller has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of an
investment in Purchaser. Each Seller is an "accredited investor" as such term is
defined in Regulation D under the Securities Act.
(b) Each Seller is acquiring the Shares for its own account with the
present intention of holding such securities for purposes of investment, and it
has no intention of selling such securities in a public distribution in
violation of the federal securities laws or any applicable state securities
laws, without prejudice to such Sellers' rights to sell or otherwise dispose of
such Shares pursuant to registration under the Securities Act or pursuant to an
exemption from
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registration under the Securities Act.
(c) Each Seller has been provided with sufficient information regarding an
investment in Purchaser to enable it to adequately evaluate its investment and
has been provided with all information regarding its investment that it has
requested. Each Seller has had an opportunity to discuss its investment in
Purchaser with management and to ask questions of management regarding the
investment, which questions were answered to its satisfaction.
(d) Each Seller acknowledges that the Shares are being issued without
registration under the Securities Act pursuant to an exemption from the
registration provisions of the Securities Act, the availability of which depends
upon, among other things, the accuracy of such Seller's representations and
warranties contained herein. Each Seller acknowledges that the Shares must be
held until registered under the Securities Act or unless an exemption from such
registration is available.
3.9 Accuracy of Statements. Neither this Agreement nor any schedule or
certificate furnished or to be furnished at the Closing by or on behalf of any
Seller to Purchaser or any representative or Affiliate of Purchaser in
connection with this Agreement, any Related Agreement or any of the transactions
contemplated hereby or thereby contains or will contain any untrue statement of
a material fact or omits or will omit to state a material fact necessary to make
the statements contained herein or therein, in light of the circumstances in
which they are made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Sellers as follows:
4.1 Due Incorporation. Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, with all
requisite power and authority to own, lease and operate its properties and to
carry on its business as they are now being owned, leased, operated and
conducted.
4.2 Due Authorization. Purchaser has full power and authority to enter
into this Agreement and its Related Agreements and to consummate the
transactions contemplated hereby and thereby. The execution, delivery and
performance by Purchaser of this Agreement and its Related Agreements have been
duly and validly approved by the board of directors of Purchaser, and no other
actions or proceedings on the part of Purchaser are necessary to authorize this
Agreement, its Related Agreements and the transactions contemplated hereby and
thereby. Purchaser has duly and validly executed and delivered this Agreement
and has duly and validly executed and delivered (or prior to or at the Closing
will duly and validly execute and deliver) its Related Agreements. Assuming the
due authorization, execution and delivery of this Agreement and its Related
Agreements by each other party hereto or thereto, this Agreement constitutes
legal, valid and binding obligations of Purchaser and Purchaser's Related
Agreements constitute (or upon execution and delivery by Purchaser will
constitute) legal, valid and binding obligations of Purchaser, in each case,
enforceable in accordance with their respective terms, except as such
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enforceability may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws in effect that affect the enforcement of
creditors' rights generally and by equitable limitations on the availability of
specific remedies.
4.3 Consents and Approvals; Authority Relative to this Agreement.
(a) Except under the HSR Act and the NASD Rules and except as set forth on
Schedule 4.3, no consent, authorization or approval of, filing or registration
with, or cooperation from, any Governmental Authority or any other Person is
necessary in connection with the execution, delivery and performance by
Purchaser of this Agreement and its Related Agreements and the consummation of
the transactions contemplated hereby and thereby.
(b) Except as set forth on Schedule 4.3, the execution, delivery and
performance by Purchaser of this Agreement and its Related Agreements do not and
will not (i) violate any Law applicable to or binding on Purchaser or any of its
assets or properties; (ii) result in or constitute a circumstance which, without
regard to any grace period or notice requirement or both, would violate or
conflict with, result in a breach or termination of, constitute a default or
give any third party any additional right (including a termination right) under,
permit cancellation of, or result in the creation of any Lien upon any of the
assets or properties of Purchaser under, any Contract to which Purchaser is a
party or by which Purchaser or any of its assets or properties are bound; (iii)
permit the acceleration of the maturity of any indebtedness of Purchaser or
indebtedness secured by its assets or properties; or (iv) violate or conflict
with any provision of the certificate of incorporation or by-laws of Purchaser.
4.4 Litigation. There are no claims, actions, suits, proceedings,
investigations, charges, prosecutions or other litigation pending or, to the
best knowledge of Purchaser, threatened by or against Purchaser or any of its
Affiliates (a) with respect to this Agreement or the Related Agreements, or in
connection with the transactions contemplated hereby or thereby or (b) which
could reasonably be expected to have a Material Adverse Effect on Purchaser or
the value of the Shares, and Purchaser has no reason to believe that there is a
valid basis for any such claim, action, suit, proceeding, investigation, charge,
prosecution or litigation.
4.5 Public Reports. Purchaser has made or will make available to Sellers
each registration statement, report, proxy statement or information statement
filed by Purchaser since September 25, 1998 with the Securities and Exchange
Commission (the "Public Reports"). As of their respective dates, the Public
Reports complied as to form in all material respects with all applicable
requirements under the Securities Act, the Exchange Act and the rules and
regulations thereunder and did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements made therein, in light of the circumstances in which they
were made, not misleading.
4.6 No Adverse Effects or Changes. Since December 29, 2000, there has been
no Material Adverse Change to Purchaser.
4.7 Brokers. Purchaser has used no broker or finder in connection with the
transactions contemplated hereby, other than Deutsche Banc Alex. Xxxxx, and no
Seller or any Affiliate thereof has or shall have any liability or otherwise
suffer or incur any Loss as a result of
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or in connection with any brokerage or finder's fee or other commission of any
Person retained by Purchaser or any of its Affiliates in connection with any of
the transactions contemplated by this Agreement or the Related Agreements.
ARTICLE V
COVENANTS
5.1 Implementing Agreement. Subject to the terms and conditions hereof,
each party hereto shall use all commercially reasonable efforts to fulfill its
obligations under the terms of this Agreement and otherwise to facilitate the
consummation of the transactions contemplated hereby.
5.2 Access to Information and Facilities. From and after the date of this
Agreement until the Closing Date, Sellers shall (a) give Purchaser and its
representatives reasonable access during normal business hours to all of the
facilities, properties, books, records and Contracts of the Company and the
Subsidiaries, (b) make the officers and employees of the Company and the
Subsidiaries available to Purchaser and its representatives as Purchaser and its
representatives shall from time to time reasonably request, (c) give Purchaser
and its representatives reasonable opportunity to communicate with the
significant customers of the Company and the Subsidiaries, as Purchaser and its
representatives shall from time to time reasonably request, and (d) furnish
Purchaser and its representatives with all information concerning the Company
and the Subsidiaries which Purchaser or its representatives reasonably request.
5.3 Preservation of Business. From the date of this Agreement until the
Closing Date, Sellers shall cause the Company and the Subsidiaries to operate in
the ordinary and usual course of business and consistent with past practice, and
shall utilize their commercially reasonable efforts to (a) preserve intact the
present business organization and personnel of the Company and the Subsidiaries,
(b) preserve the good will and advantageous relationships of the Company and the
Subsidiaries with customers, suppliers, employees, independent contractors of
the Company and the Subsidiaries and other Persons material to the operation of
their business, (c) not permit any action or omission which would cause any of
the representations or warranties of Sellers contained herein to become
inaccurate or any of the covenants of Sellers to be breached.
5.4 Consents and Approvals. From the date of this Agreement until the
Closing Date, Purchaser and Sellers shall use all commercially reasonable
efforts to obtain all consents, approvals, certificates and other documents that
are required in connection with the performance of this Agreement and the
Related Agreements and the consummation of the transactions contemplated hereby
and thereby. Sellers shall, and shall cause the Company and the Subsidiaries to,
promptly make all filings, applications, statements and reports to all
Governmental Authorities and other Persons that are required to be made prior to
the Closing Date by or on behalf of Sellers, the Company, any Subsidiary or any
Affiliate thereof pursuant to any applicable Law in connection with this
Agreement, the Related Agreements and the transactions contemplated hereby and
thereby. Purchaser shall promptly make all filings, applications, statements and
reports to all Governmental Authorities and other Persons that are required to
be made prior to the Closing Date by or on behalf of Purchaser or any of its
Affiliates pursuant to any applicable Law in connection with this Agreement, the
Related Agreements and
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the transactions contemplated hereby and thereby.
5.5 Supplemental Information.
(a) From time to time prior to the Closing Date, Sellers shall promptly
disclose in writing to Purchaser any matter known to Sellers and hereafter
arising which, if existing, occurring or known at the date of this Agreement
would have been required to be disclosed to Purchaser (or any of its
representatives) or which would render inaccurate any of the representations,
warranties or statements set forth in Article III. Any such disclosure shall
supplement or amend the appropriate Schedule hereto. No such supplement or
amendment to any Schedule shall be deemed to cure any breach for purposes of
Section 6.1. In all other respects, any such supplement and amendment will be
effective to cure and correct for all purposes any breach of any representation
or warranty that would have existed if Seller had not made such supplement or
amendment, and all references to any Schedule hereto that is supplemented or
amended as provided in this Section 5.5 shall for all purposes (except as
provided in the immediately preceding sentence) be deemed to be a reference to
such Schedule as so supplemented or amended.
(b) From time to time prior to the Closing Date, Purchaser shall promptly
disclose in writing to Sellers any matter known to Purchaser and hereafter
arising which, if existing, occurring or known at the date of this Agreement
would have been required to be disclosed to Sellers (or any of their
representatives) or which would render inaccurate any of the representations,
warranties or statements set forth in Article IV. Any such disclosure shall
supplement or amend the appropriate Schedule hereto. No such supplement or
amendment to any Schedule shall be deemed to cure any breach for purposes of
Section 7.1. In all other respects, any such supplement and amendment will be
effective to cure and correct for all purposes any breach of any representation
or warranty that would have existed if Purchaser had not made such supplement or
amendment, and all references to any Schedule hereto that is supplemented or
amended as provided in this Section 5.5 shall for all purposes (except as
provided in the immediately preceding sentence) be deemed to be a reference to
such Schedule as so supplemented or amended.
5.6 Confidentiality.
(a) For a period of eighteen (18) months after the Closing Date, Sellers
shall, and shall cause each of their respective Affiliates to, maintain all
non-public or confidential information relating to the Company, any Subsidiary
or their respective operations in strict confidence and not disclose to any
Person or use any such information for any purpose; provided, that such
restrictions shall not apply to (i) any information which becomes publicly
available after the Closing Date through no fault of Sellers or any of their
respective Affiliates, (ii) any information which after the Closing Date is
legitimately received by Sellers or any of their respective Affiliates from a
third party (provided such third party is not known by Sellers or any of their
respective Affiliates to be bound by an obligation of secrecy) and (iii) any
disclosure required by Law or any Governmental Authority, so long as notice of
such disclosure is given to Purchaser prior to making such disclosure and
Sellers cooperate with Purchaser as Purchaser may reasonably request to resist
such disclosure.
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(b) At all times prior to and for a period of eighteen (18) months after
the Closing Date, whether or not the Closing has occurred, Sellers shall, and
shall cause their respective Affiliates to, maintain in strict confidence all
non-public or confidential information relating to Purchaser or any of its
Affiliates obtained by Sellers or any of their respective Affiliates in
connection with this Agreement or the Related Agreements or the transactions
contemplated hereby or thereby and not disclose to any Person (other than their
employees, attorneys, accountants and advisors who need to know such
information) or use any such information for any purpose (except in connection
with the transactions contemplated hereby and by the Related Agreements);
provided, that such restrictions shall not apply to (i) any information which
becomes publicly available after the date of disclosure by Purchaser through no
fault of any Seller or any of their respective Affiliates, (ii) any information
which is legitimately received by Sellers or any of their respective Affiliates
from a third party (provided such third party is not known by any Seller any of
their respective Affiliates to be bound by an obligation of secrecy) or (iii)
any disclosure required by Law or any Governmental Authority, so long as notice
of such disclosure is given to Purchaser prior to making such disclosure and
Sellers cooperate with Purchaser as Purchaser may reasonably request to resist
such disclosure.
(c) If this Agreement is terminated, upon the request of Purchaser,
Sellers shall promptly return any written materials they or any of their
respective Affiliates have received from Purchaser or its Affiliates or their
representatives or employees in connection with this Agreement or the Related
Agreements or the transactions contemplated hereby or thereby, together with any
copies of such materials made by them, and shall deliver to Purchaser such
reports, compilations and other information prepared or obtained by Sellers or
their Affiliates or their representatives or employees related to Purchaser or
any of its Affiliates in connection with this Agreement or the Related
Agreements or the transactions contemplated hereby or thereby.
(d) At all times prior to and for a period of eighteen (18) months after
the Closing Date, whether or not the Closing has occurred, Purchaser shall, and
shall cause its respective Affiliates to, maintain in strict confidence all
non-public or confidential information relating to (i) Sellers (and, if the
Closing does not occur, the Company and the Subsidiaries) or any of their
respective Affiliates and (ii) the Bankstream Assets, in each case obtained by
Purchaser or any of its Affiliates in connection with this Agreement or the
Related Agreements or the transactions contemplated hereby or thereby and not
disclose to any Person (other than their employees, attorneys, accountants and
advisors who need to know such information) or use any such information for any
purpose (except in connection with the transactions contemplated hereby and by
the Related Agreements); provided, that such restrictions shall not apply to (i)
any information which becomes publicly available after the date of disclosure by
Sellers or any of their respective Affiliates through no fault of Purchaser or
any of its Affiliates, (ii) any information which is legitimately received by
Purchaser or any of its Affiliates from a third party (provided such third party
is not known by Purchaser or any of its Affiliates to be bound by an obligation
of secrecy) or (iii) any disclosure required by Law or any Governmental
Authority, so long as notice of such disclosure is given to Sellers prior to
making such disclosure and Purchaser cooperates with Sellers as Sellers may
reasonably request to resist such disclosure.
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(e) If this Agreement is terminated, upon the request of Sellers,
Purchaser shall promptly return any written materials it or any of its
Affiliates has received from Sellers or their respective Affiliates or their
representatives or employees in connection with this Agreement or the Related
Agreements or the transactions contemplated hereby or thereby, together with any
copies of such materials made by them, and shall deliver to Sellers such
reports, compilations and other information prepared or obtained by Purchaser or
its Affiliates or their representatives or employees related to Sellers or any
of their Affiliates in connection with this Agreement or the Related Agreements
or the transactions contemplated hereby or thereby.
5.7 Exclusivity. Prior to the Closing Date, Sellers shall not, and shall
not permit the Company or any Subsidiary or any of their respective directors,
officers, managers, stockholders, partners, members, employees, representatives,
agents or Affiliates to, directly or indirectly, solicit, initiate, encourage,
respond favorably to, permit or condone inquiries or proposals from, or provide
any non-public confidential information to, or participate in any discussions or
negotiations with, any Person (other than Purchaser, its Affiliates and their
respective directors, officers, employees, representatives and agents)
concerning (a) any merger, sale of assets not in the ordinary course of business
(other than the Bankstream Assets), acquisition, business combination, change of
control or other similar transaction involving the Company, any Subsidiary or
any division of the Company or any Subsidiary, (b) any purchase or other
acquisition by any Person of any Interest or (c) any sale or issuance by the
Company or any Subsidiary of any shares of its capital stock or capital
interests. Sellers will promptly advise Purchaser of, and communicate to
Purchaser the terms and conditions of (and the identity of the Person making),
any such inquiry or proposal received.
5.8 Tax Matters.
(a) After the Closing, Sellers shall make available to Purchaser, at
Purchaser's expense, such records related to the Company and the Subsidiaries as
are in the possession of Sellers and as Purchaser may require for the
preparation of any Tax Returns or other similar reports or forms required to be
filed by Purchaser, the Company or any Subsidiary and such records as Purchaser
may require for the defense of any audit, examination, administrative appeal or
litigation of any such Tax Return or other similar report or form. After the
Closing, Purchaser shall make available to Sellers, at Seller's expense, such
records relating to the Company and the Subsidiaries as Sellers may require for
the preparation of any Tax Returns or other similar reports or forms required to
be filed by Sellers and such records as Sellers may require for the defense of
any audit, examination, administrative appeal or litigation or any such Tax
Return or other similar report or form.
(b) The Sellers Representative and the Stockholders Representative shall
have the right to prepare any Tax Returns or other similar reports or forms
required to be filed by the Company or any of the Subsidiaries for tax periods
ending prior to the Closing Date, including making proper "reverse section
704(c) allocations" as defined in Treasury Regulations ss.1.704-3(a)(6)(i). The
Sellers Representative and the Stockholders Representative shall also have the
right to prepare all Tax Returns for Bankstream. The Sellers Representative and
the Stockholders Representative shall not in any Tax Return referred to in this
Section 5.8(b) provide for any allocation that would, artificially or in a
manner inconsistent with past practices, have the
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effect of giving rise to taxable income or gain of the Company or any Subsidiary
in a taxable period ending after the Closing Date without the receipt or
entitlement to a corresponding amount of cash.
(c) Tax Returns for tax periods ending after Closing shall be prepared by
Purchaser. Tax Returns for the taxable year in which the Closing occurs shall be
subject to the following:
(i) allocations of income, gain, loss, and deduction shall be made
on an interim closing of the books method of accounting
effective as of the Closing Date and shall otherwise be
consistent with past practices of TradeCast Investments and the
Subsidiaries;
(ii) "reverse section 704(c) allocations" shall be made consistently
with the partnership returns of TradeCast Investments and the
Subsidiaries for the taxable year ended December 31, 2000; and
(iii) reporting in respect of Sellers' disposition of the Interests
for purposes relevant to Section 469 of the Code shall be
consistent with Sellers' reasonable instructions to Purchaser
given on or before March 1, 2002.
5.9 Preservation of Books and Records; Access.
(a) For a period of seven years after the Closing Date, Purchaser shall
(i) preserve and retain all corporate, accounting, legal, auditing and other
books and records of the Company and the Subsidiaries (including any documents
relating to actions, suits, proceedings or investigations by any Governmental
Authority or any other Person) relating to the Company and the Subsidiaries and
the conduct of their businesses prior to the Closing Date or (ii) offer such
books and records to Sellers. Notwithstanding the forgoing, if Purchaser offers
such books and records to Sellers and Sellers decline to take possession
thereof, Purchaser may dispose of such books and records.
(b) After the Closing Date, Purchaser shall cause the Company and the
Subsidiaries to (i) give Sellers and their representatives reasonable access
during normal business hours to the books and records of the Company and the
Subsidiaries and (ii) make the officers and employees of the Company and the
Subsidiaries available to Sellers and their representatives, in each case in
connection with any claim, action, suit, proceeding, investigation, charge,
prosecution or other litigation involving Sellers and relating to the Company
and the Subsidiaries and the conduct of their business prior to the Closing
Date.
5.10 Indemnification of Officers, Directors, Managers, Partners, Members
and Stockholders. From and after the Closing, each Person who is or was an
officer, director, manager, partner, member, stockholder or other Person serving
in any capacity on behalf of the Company or any Subsidiary shall continue to be
entitled to all indemnities provided to such Person as of immediately prior to
the Closing that are provided by Law or contained in the certificate of
incorporation, by-laws, certificate of formation, limited liability company
agreement, certificate of limited partnership or limited partnership agreement
of the Company or any Subsidiary, as the case may be, in each case as such are
constituted as of immediately prior to the Closing. Purchaser shall not, and
Purchaser shall cause the Company and the Subsidiaries
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not to, take any action to restrict or limit, with respect to any such Person,
the scope of or Persons covered by such indemnities from and after the Closing.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS
OF PURCHASER
The obligations of Purchaser under Article II of this Agreement are subject
to the satisfaction or waiver by Purchaser of the following conditions precedent
on or before the Closing Date:
6.1 Warranties True as of Both Present Date and Closing Date. The
representations and warranties of Sellers contained herein and in the Related
Agreements shall have been accurate, true and correct on and as of the date
hereof or of the Related Agreements, respectively, and, except to the extent
that any such representation or warranty is made solely as of the date hereof or
as of another date earlier than the Closing Date, shall also be accurate, true
and correct in all material respects on and as of the Closing Date with the same
force and effect as though made by Sellers on and as of the Closing Date.
6.2 Compliance with Agreements and Covenants. Sellers shall have performed
and complied in all material respects with all of their respective covenants,
obligations and agreements contained in this Agreement and in their Related
Agreements to be performed and complied with by them on or prior to the Closing
Date.
6.3 Certificate of Compliance. Sellers shall have delivered to Purchaser a
certificate dated as of the Closing Date, signed by Sellers, certifying as to
compliance with Section 6.1 and Section 6.2.
6.4 Consents and Approvals. Purchaser shall have received written evidence
reasonably satisfactory to Purchaser that all consents and approvals set forth
on Schedule 3.3(a) and marked with an asterisk have been obtained.
6.5 Xxxx-Xxxxx-Xxxxxx. The applicable waiting period under the HSR Act
shall have expired or have been earlier terminated without action by the Justice
Department or the Federal Trade Commission to prevent consummation of the
transactions contemplated by this Agreement.
6.6 NASD. The Company or the appropriate Subsidiary shall have received
approval from the NASD for the consummation of the transactions contemplated
hereby under NASD Rule 1017.
6.7 No Material Adverse Change. No Material Adverse Change to the Company
shall have occurred and no event shall have occurred which, in the reasonable
judgment of Purchaser, may have a Material Adverse Effect on the Company.
6.8 Actions or Proceedings. No action or proceeding by any Governmental
Authority or other Person shall have been instituted or threatened which
enjoins, restrains, prohibits or
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results in substantial damages in respect of, or could enjoin, restrain,
prohibit or result in substantial damages in respect of, any provision of this
Agreement or any Related Agreement or the consummation of the transactions
contemplated hereby or thereby.
6.9 Merger. The Merger shall have been consummated (or simultaneously with
the Closing shall be consummated) in accordance with the terms of the Merger
Agreement.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS
The obligations of Sellers under Article II of this Agreement are subject
to the satisfaction or waiver by Sellers of the following conditions precedent
on or before the Closing Date:
7.1 Warranties True as of Both Present Date and Closing Date. The
representations and warranties of Purchaser contained herein and in its Related
Agreements shall have been accurate, true and correct on and as of the date
hereof and of the Related Agreements, respectively, and, except to the extent
that any such representation or warranty is made solely as of the date hereof or
as of another date earlier than the Closing Date, shall also be accurate, true
and correct in all material respects on and as of the Closing Date with the same
force and effect as though made by Purchaser on and as of the Closing Date.
7.2 Compliance with Agreements and Covenants. Purchaser shall have
performed and complied in all material respects with all of its covenants,
obligations and agreements contained in this Agreement and in its Related
Agreements to be performed and complied with by it on or prior to the Closing
Date.
7.3 Certificate of Compliance. Purchaser shall have delivered to Sellers a
certificate dated as of the Closing Date, signed by the President or a Vice
President of Purchaser on behalf of Purchaser, certifying as to compliance with
Section 7.1 and Section 7.2.
7.4 Consents and Approvals. Sellers shall have received all consents and
approvals set forth on Schedule 3.3(a) and marked with an asterisk.
7.5 Xxxx-Xxxxx-Xxxxxx. The applicable waiting period under the HSR Act
shall have expired or have been earlier terminated without action by the Justice
Department or the Federal Trade Commission to prevent consummation of the
transactions contemplated by this Agreement.
7.6 NASD. Purchaser shall have received approval from the NASD for the
consummation of the transactions contemplated hereby under NASD Rule 1017.
7.7 No Material Adverse Change. No Material Adverse Change to Purchaser
shall have occurred and no event shall have occurred which, in the reasonable
judgment of Sellers, may have a Material Adverse Effect on Purchaser.
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7.8 Actions or Proceedings. No action or proceeding by any Governmental
Authority or other Person shall have been instituted or threatened which
enjoins, restrains, prohibits or results in substantial damages in respect of,
or could enjoin, restrain, prohibit or result in substantial damages in respect
of, any provision of this Agreement or any Related Agreement or the consummation
of the transactions contemplated hereby or thereby.
7.9 Merger. The Merger shall have been consummated (or simultaneously with
the Closing shall be consummated) in accordance with the terms of the Merger
Agreement.
ARTICLE VIII
CLOSING
8.1 Closing. Unless the parties otherwise agree, the Closing shall take
place at such location and time of day as Purchaser and the Sellers
Representative shall mutually agree on the date three (3) Business Days after
the satisfaction or waiver of the conditions precedent set forth in Sections
6.4, 6.5, 6.6, 7.4, 7.5 and 7.6 shall have occurred. The Closing, and all
transactions to occur at the Closing, shall be deemed to have taken place at,
and shall be effective as of, the close of business on the Closing Date.
8.2 Deliveries by Sellers. At the Closing, in addition to any other
documents or agreements required under this Agreement, Sellers shall deliver to
Purchaser the following:
(a) certificates, if any, evidencing all of the Interests, which
certificates shall be duly endorsed in blank or accompanied by stock powers
duly executed in blank;
(b) evidence, in form reasonably satisfactory to Purchaser, that all
consents and approvals set forth on Schedule 3.3(a) with respect to Sellers
and marked with an asterisk have been obtained;
(c) a certificate of the secretary of the general partner of the
general partner of each of ForTradeCast L and ForTradeCast S certifying
resolutions of the general partner approving and authorizing the execution,
delivery and performance of this Agreement and its Related Agreements and
the consummation of the transactions contemplated hereby and thereby
(together with an incumbency and signature certificate regarding the
individuals signing on behalf of ForTradeCast L and ForTradeCast S);
(d) an opinion, dated the Closing Date, of Xxxxx, Xxxx & Xxxxxxx,
counsel to Sellers, in form and substance satisfactory to Purchaser and to
the effect set forth in Exhibit F;
(e) the Employment Agreements duly executed by each of Xxxxxx X.
Xxxxxxxx, Xx., Xxxxx X. Xxxxxx and Xxxxxxx Xxxxx;
(f) the Escrow Agreement duly executed by Sellers and Stockholders;
(g) the License Agreement duly executed by Bankstream;
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(h) the Stockholders Agreement duly executed by Sellers and
Stockholders;
(i) the Audited 2000 Financials; and
(j) such other documents and instruments as may be required by any
other provision of this Agreement or any Related Agreement or as may
reasonably be required to consummate the Closing.
8.3 Deliveries by Purchaser. At the Closing, Purchaser shall deliver to
Sellers the following:
(a) a certificate of Purchaser's secretary certifying resolutions of
its board of directors approving this Agreement and its Related Agreements
and the transactions contemplated hereby and thereby (together with an
incumbency and signature certificate regarding the officer(s) signing on
behalf of Purchaser);
(b) an opinion, dated the Closing Date, of Xxxxx, Xxxxx & Xxxxx,
counsel for Purchaser, in form and substance satisfactory to Sellers and to
the effect set forth in Exhibit G;
(c) the Employment Agreements duly executed by Purchaser;
(d) the Escrow Agreement duly executed by Purchaser;
(e) the License Agreement duly executed by Purchaser; and
(f) the Stockholders Agreement duly executed Purchaser.
ARTICLE IX
TERMINATION
9.1 Termination. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time on or prior to the Closing
Date:
(a) with the mutual consent of the Sellers Representative, the
Stockholders Representative and Purchaser;
(b) by the Sellers Representative or Purchaser, if the Closing shall
not have taken place on or before March 30, 2001; provided, that the right
to terminate this Agreement under this Section 9.1(b) shall not be
available to (i) the Sellers Representative if the failure of any Seller to
fulfill any obligation under this Agreement has been the cause of or
resulted in the failure of the Closing to occur on or before such date or
(ii) Purchaser if the failure of Purchaser to fulfill any obligation under
this Agreement has been the cause of or resulted in the failure of the
Closing to occur on or before such date;
(c) by Purchaser, if there shall have been a material breach of any
covenant,
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representation or warranty of Sellers hereunder, and such breach shall not
have been remedied within ten (10) Business Days after receipt by the
Sellers Representative of a notice in writing from Purchaser specifying the
breach and requesting such be remedied;
(d) by the Sellers Representative, if there shall have been a material
breach of any covenant, representation or warranty of Purchaser hereunder,
and such breach shall not have been remedied within ten (10) Business Days
after receipt by Purchaser of notice in writing from the Sellers
Representative specifying the breach and requesting such be remedied; or
(e) by the Sellers Representative or Purchaser if the Merger Agreement
is terminated for any reason.
9.2 Effect of Termination. If this Agreement is terminated pursuant to
Section 9.1, all obligations of the parties hereunder shall terminate, except
for the obligations set forth in Sections 3.7 (brokers), 4.7 (brokers), 5.6
(confidentiality), 11.1 (expenses), 11.8 (publicity) and 11.15 (waiver of jury
trial), which shall survive the termination of this Agreement, and except that
no such termination shall relieve any party from liability for any prior
intentional breach of this Agreement.
ARTICLE X
INDEMNIFICATION
10.1 Survival. The representations and warranties of the parties hereto
contained in this Agreement and the Related Agreements shall only survive the
Closing for a period of one (1) year. The covenants and obligations of the
parties contained in this Agreement and the Related Agreements shall only
survive the Closing for a period of one (1) year, except for the covenants and
obligations of the parties contained in the Excluded Covenants, which shall
survive as provided therein, or if not so provided, indefinitely. For purposes
of this Article X, the term "Related Agreements" shall exclude the Employment
Agreements, the Escrow Agreement, the License Agreement and the Stockholders
Agreement. The parties hereto agree that the provisions of this Article X shall
not apply to the Employment Agreements, the Escrow Agreement, the License
Agreement or the Stockholders Agreement, and that any breach of any provision of
any such agreement shall be the sole responsibility of the breaching party
thereto as provided in such agreement.
10.2 Indemnification by Sellers. Subject to the provisions of this Article
X, each Seller agrees to indemnify each of the Purchaser Indemnified Parties
against, and agrees to hold each of them harmless from, any and all Losses
incurred or suffered by them relating to or arising out of or in connection with
any of the following:
(a) any breach of or any inaccuracy in any representation or warranty
made by any Seller in this Agreement or any Related Agreement or any
certificate delivered by any Seller at the Closing;
(b) any breach of or failure by any Seller or the Sellers
Representative to perform any covenant or obligation of any Seller or the
Sellers Representative contained
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in this Agreement or any Related Agreement or any certificate delivered by
any Seller at the Closing;
(c) any breach of or any inaccuracy in any representation or warranty
made by the Company or any Stockholder in the Merger Agreement or any
Related Agreement or any certificate delivered by the Company or any
Stockholder at the Closing;
(d) any breach of or failure by the Company to perform any covenant or
obligation of the Company required to be performed or complied with on or
prior to the Closing Date contained in the Merger Agreement or any Related
Agreement or any certificate delivered by the Company at the Closing;
(e) any breach of or failure by the any Stockholder or the
Stockholders Representative to perform any covenant or obligation of the
Stockholder or the Stockholders Representative contained in the Merger
Agreement or any Related Agreement or any certificate delivered by any
Stockholder at the Closing; or
(f) all Taxes that have become due and payable during, or which have
accrued with respect to the Company or any Subsidiary for, any period
included in the Tax Indemnification Period and that have not been paid
prior to the Closing Date or reserved on the Closing Date Balance Sheet (it
being understood that any Taxes attributable to the Company or any
Subsidiary payable as a result of an audit of any Tax Return shall be
deemed to have accrued in the period to which such Taxes are attributable);
provided, that no Seller shall have any liability under this Section 10.2 unless
a notice of the Purchaser Indemnified Party's claim shall have been given to the
Sellers Representative and the Stockholders Representative not later than the
close of business on the first anniversary of the Closing Date, except with
respect to claims for breaches of Excluded Covenants.
10.3 Indemnification by Purchaser. Subject to the provisions of this
Article X, Purchaser agrees to indemnify each Seller Indemnified Party against,
and agrees to hold each of them harmless from, any and all Losses incurred or
suffered by them relating to or arising out of or in connection with any of the
following:
(a) any breach of or any inaccuracy in any representation or warranty
made by Purchaser in this Agreement, the Merger Agreement or any Related
Agreement or any document delivered by Purchaser at the Closing;
(b) any breach of or failure by Purchaser to perform any covenant or
obligation of Purchaser contained in this Agreement, the Merger Agreement
or any Related Agreement or any certificate delivered by Purchaser at the
Closing; or
(c) any event, occurrence, act or omission of the Company or any
Subsidiary after the Closing Date, other than an event, occurrence, act or
omission of the Company or any Subsidiary that forms the basis for a right
of any Purchaser Indemnified Party to indemnification pursuant to Section
10.2;
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provided, that Purchaser shall have no liability under Section 10.3(a) or (b)
unless a notice of the Seller Indemnified Party's claim shall have been given to
Purchaser not later than the close of business on the first anniversary of the
Closing Date, except with respect to claims for breaches of Excluded Covenants.
10.4 Limitations on Indemnification.
(a) Sellers and Stockholders shall have no liability pursuant to this
Article X (other than for any breach of or failure by any Seller or the Sellers
Representative to perform any covenant or obligation of any Seller or the
Sellers Representative set forth in Sections 2.2(b)-(e), 2.3 (but only with
respect to the payment of fees and expenses by Bankstream and the Sellers'
guaranty related thereto) or 2.4 (but only with respect to the payment of fees
and expenses by Bankstream and the Sellers' guaranty related thereto) or any
breach of or failure by any Stockholder or the Stockholders Representative to
perform any covenant or obligation of any Stockholder or the Stockholders
Representative set forth in Section 2.2(b)(e), 2.3 (but only with respect to the
payment of fees and expenses by Bankstream and the Stockholders' guaranty
related thereto) or 2.4 (but only with respect to the payment of fees and
expenses by Bankstream and the Stockholders' guaranty related thereto) of the
Merger Agreement) unless and until the aggregate amount of all Losses incurred
or suffered by the Purchaser Indemnified Parties exceeds the Deductible Amount,
after which time the Purchaser Indemnified Parties shall be entitled to recover
only those Losses which exceed the Deductible Amount, and Sellers and
Stockholders shall have no liability pursuant to this Article X for any Losses
incurred or suffered by the Purchaser Indemnified Parties that in the aggregate
are in excess of the Indemnification Cap.
(b) The amount of any Losses incurred or suffered by any Indemnified
Person shall be calculated after giving effect to (i) any insurance proceeds
received by the Indemnified Person (or any of its Affiliates) with respect to
such Losses and (ii) any recoveries obtained by the Indemnified Person (or any
of its Affiliates) from any third parties with respect to such Losses. Each
Indemnified Person shall use all commercially reasonably efforts to obtain such
proceeds and recoveries. If any such proceeds or recoveries are received by an
Indemnified Person (or any of its Affiliates) with respect to any Losses after
an Indemnifying Person has made a payment to the Indemnified Person with respect
thereto, the Indemnified Person (or such Affiliate) shall pay to the
Indemnifying Person the amount of such proceeds or recoveries (up to the amount
of the Indemnifying Person's payment). Upon making any payment to an Indemnified
Person in respect of any Losses, the Indemnifying Person will, to the extent of
such payment, be subrogated to all rights of the Indemnified Person (and its
Affiliates) against any insurance company or other third party in respect of the
Losses to which such payment relates. Such Indemnified Person (and its
Affiliates) and such Indemnifying Person will execute upon request all
instruments reasonably necessary to evidence or further perfect such subrogation
rights.
10.5 Claims. As soon as is reasonably practicable after becoming aware of a
claim for indemnification under this Article X that does not involve a claim, or
the commencement of any suit, action or proceeding, of the type described in
Section 10.6, the Indemnified Person shall promptly give notice to the
Indemnifying Person of such claim. Such notice shall specify (in reasonable
detail in light of the circumstances then existing) the facts alleged to
constitute the
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basis for such claim, the representations, warranties, covenants and obligations
alleged to have been breached and the amount (to the extent then determinable)
that the Indemnified Person seeks to recover hereunder from the Indemnifying
Person, together with such other information as may be reasonably necessary for
the Indemnifying Party to determine that the limitations contained in this
Article X, have been satisfied or do not apply. The Indemnifying Person shall
notify the Indemnified Person in writing within thirty (30) calendar days of
receiving notice thereof if the Indemnifying Person intends to object to such
indemnification claim; provided, that the failure to so notify the Indemnified
Person shall not prejudice the Indemnifying Person's rights hereunder.
10.6 Notice of Third Party Claims; Assumption of Defense. The Indemnified
Person shall give notice as promptly as is reasonably practicable to the
Indemnifying Person of the assertion of any claim, or the commencement of any
suit, action or proceeding, by any Person not a party hereto (and not a
Purchaser Indemnified Party or a Seller Indemnified Party) for which indemnity
may be sought under this Article X. Such notice shall specify (in reasonable
detail in light of the circumstances then existing) the facts alleged to
constitute the basis for such claim, the representations, warranties, covenants
and obligations alleged to have been breached and the amount (to the extent then
determinable) that the Indemnified Person seeks to recover hereunder from the
Indemnifying Person, together with such other information as may be reasonably
necessary for the Indemnifying Party to determine that the limitations contained
in this Article X, have been satisfied or do not apply. The Indemnifying Person
may, at its own expense, (a) participate in the defense of any such claim, suit,
action or proceeding and (b) assume the defense thereof upon notice to the
Indemnified Person and the Indemnifying Person's delivering to the Indemnified
Person a written agreement that (i) the Indemnified Person is entitled to
indemnification pursuant to and subject to the provisions of this Article X for
all Losses arising out of such claim, suit, action or proceeding and (ii) the
Indemnifying Person shall be liable for the entire amount of any such Loss,
subject to the provisions of this Article X. In the event the Indemnifying
Person assumes the defense of any such claim, suit, action or proceeding, (y)
the Indemnifying Person's counsel shall be reasonably satisfactory to the
Indemnified Person and (z) the Indemnifying Person shall thereafter consult with
the Indemnified Person upon the Indemnified Person's reasonable request for such
consultation from time to time with respect to such claim, suit, action or
proceeding If the Indemnifying Person assumes such defense, the Indemnified
Person shall have the right (but not the duty) to participate in the defense
thereof and to employ counsel, at its own expense, separate from the counsel
employed by the Indemnifying Person. If, however, the Indemnified Person
reasonably determines in its judgment that representation by the Indemnifying
Person's counsel of both the Indemnifying Person and the Indemnified Person
would present such counsel with a conflict of interest, then such Indemnified
Person may employ separate counsel to represent or defend it in any such claim,
action, suit or proceeding and the Indemnifying Person shall pay the reasonable
fees and expenses of such separate counsel. Whether or not the Indemnifying
Person chooses to defend or prosecute any such claim, suit, action or
proceeding, all of the parties hereto shall cooperate and reasonably assist in
the defense or prosecution thereof.
10.7 Settlement or Compromise. Without its prior written consent, no
obligation, restriction or Loss shall be imposed on the Indemnified Person as a
result of any settlement or compromise made or caused to be made by the
Indemnifying Person of any claim, suit, action or proceeding of the kind
referred to in Section 10.6. The Indemnified Person shall give the
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Indemnifying Person at least thirty (30) days' notice of any proposed settlement
or compromise of any claim, suit, action or proceeding the Indemnified Person is
defending, during which time the Indemnifying Person may reject such proposed
settlement or compromise; provided, that from and after such rejection, the
Indemnifying Person shall be have full and complete liability and responsibility
for such claim, suit, action or proceeding and for all Losses in connection
therewith as well as any and all unindemnifiable Losses in excess of the amount
of unindemnifiable Losses which the Indemnified Person would have been obligated
to pay under the proposed settlement or compromise.
10.8 Failure of Indemnifying Person to Act. In the event that the
Indemnifying Person does not elect to assume the defense of any claim, suit,
action or proceeding, then any failure of the Indemnified Person to defend or to
participate in the defense of any such claim, suit, action or proceeding or to
cause the same to be done, shall not relieve the Indemnifying Person of its
obligations hereunder.
10.9 Recovery from Indemnity Shares and Earn-Out Indemnity Shares. In the
event a Purchaser Indemnified Party is entitled to receive any amount from any
Sellers under this Article X, Purchaser shall recover such amount only from the
Indemnity Shares and the Earn-Out Indemnity Shares. Purchaser and the Sellers
Representative shall instruct the Escrow Agent to deliver to Purchaser the
number of Indemnity Shares and/or Earn-Out Indemnity Shares equal to the
quotient obtained by dividing (a) the amount of such recovery by (b) the Closing
Average Share Price.
10.10 Net Indemnity Payments. Any amounts payable under Section 10.2 or
Section 10.3 shall be treated by Purchaser and Sellers as an adjustment to the
Purchase Price.
10.11 Exclusive Remedy. Except as set forth in Section 11.14, the
provisions of this Article X shall be the sole and exclusive remedies of the
Purchaser Indemnified Parties and the Seller Indemnified Parties under or in
connection with or pursuant to this Agreement, the Purchase Agreement, the
Related Agreements or the transactions contemplated hereby or thereby (including
for any breach of or inaccuracy in any representation or warranty or any breach
of or failure to perform any covenant set forth in this Agreement, the Purchase
Agreement or any Related Agreement made in connection with any of the
transactions contemplated hereby or thereby). To the extent that any Purchaser
Indemnified Party or Seller Indemnified Party incurs any Losses for which they
may assert any other right to indemnification, contribution or recovery, whether
under this Agreement, the Purchase Agreement, any Related Agreement or under any
Law or otherwise, Purchaser, on behalf of itself and the other Purchaser
Indemnified Parties, hereby waives, releases and agrees not to assert such
right, and agrees to cause all other Purchaser Indemnified Parties to waive,
release and agree not to assert such right, and each Seller, on behalf of itself
and the other Seller Indemnified Parties, hereby waives, releases and agrees not
to assert such right, and agrees to cause all other Seller Indemnified Parties
to waive, release and agree not to assert such right.
10.12 Time Limits. If any claim for indemnification pursuant to this
Article X is timely asserted in accordance with the provisions hereof, the
Indemnified Person shall have the right to bring an action, suit or proceeding
to enforce such claim prior to the third anniversary of the Closing Date, and no
Indemnified Person shall be entitled to bring such an action, suit or proceeding
after such date.
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ARTICLE XI
MISCELLANEOUS
11.1 Expenses. Except as otherwise set forth herein, each party hereto
shall bear its own expenses with respect to the transactions contemplated
hereby. Purchaser shall pay all fees and expenses incurred in connection with
the filing of any pre-merger notification and report forms required by the HSR
Act. Sellers shall pay all sales, use, stamp, transfer, service, recording, real
estate and like taxes or fees, if any, imposed by any Governmental Authority in
connection with the transfer and assignment of the Interests.
11.2 Amendment. This Agreement may be amended, modified or supplemented but
only in a writing signed by Purchaser and each Seller.
11.3 Notices. Any notice, request, instruction or other document to be
given hereunder by a party hereto shall be in writing and shall be deemed to
have been given, (i) when received if given in person or by courier or a courier
service, (ii) on the date of transmission if sent by facsimile or other wire
transmission (receipt confirmed) or (iii) three (3) Business Days after being
deposited in the U.S. mail, certified or registered mail, postage prepaid:
(a) If to Sellers or the Sellers Representative, addressed as follows:
FORTRADECAST L PARTNERS, L.P.
FORTRADECAST S PARTNERS L.P.
000 Xxxx Xxxxxx
Xxxxx 0000
Xx. Xxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Phone No.: 000-000-0000
Facsimile No.: 000-000-0000
with a copy to:
XXXXX, XXXX & XXXXXXX
000 Xxxx Xxxxxx
Xxxxx 0000
Xx. Xxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxx
Phone No.: 000-000-0000
Facsimile No.: 000-000-0000
(b) If to Purchaser, addressed as follows:
AMERITRADE HOLDING CORPORATION
000 Xxxxxxxx Xxxxxxxx Xxxxxxx
Xxxxxxxxx Xxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Phone No.: 000-000-0000
Facsimile No.: 000-000-0000
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with a copy to:
XXXXX, XXXXX & XXXXX
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Phone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
or to such other individual or address as a party hereto may designate for
itself by notice given as herein provided.
11.4 Waivers. The failure of a party hereto at any time or times to require
performance of any provision hereof shall in no manner affect its right at a
later time to enforce the same. No waiver by a party of any condition or of any
breach of any term, covenant, representation or warranty contained in this
Agreement shall be effective unless in writing, and no waiver in any one or more
instances shall be deemed to be a further or continuing waiver of any such
condition or breach in other instances or a waiver of any other condition or
breach of any other term, covenant, representation or warranty; provided, that
the Sellers Representative shall have full power and authority to execute
waivers on behalf of Sellers or any of them.
11.5 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
11.6 Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns. No
assignment of any rights or obligations hereunder shall be made by any Seller
without the written consent of Purchaser and no assignment of any rights or
obligations hereunder shall be made by Purchaser to any Person without the
written consent of the Sellers Representative.
11.7 No Third Party Beneficiaries. This Agreement is solely for the benefit
of the parties hereto and, to the extent provided herein, the Persons described
in Article X, and no provision of this Agreement shall be deemed to confer upon
other third parties any remedy, claim, liability, reimbursement, cause of action
or other right.
11.8 Publicity. At all times prior to the Closing Date, whether or not the
Closing has occurred, no disclosure, public announcement or other publicity
regarding the existence of this Agreement or its contents or the transactions
contemplated hereby shall be made by Purchaser or any Seller or any of their
respective Affiliates, officers, directors, managers, stockholders, partners,
members, employees, representatives or agents, without the prior written
agreement of Purchaser and the Sellers Representative, in any case, as to form,
content, timing and manner of distribution or publication; provided, that
nothing in this Section 11.8 shall prevent any party from (a) making any
disclosure or public announcement required by Law or the rules of any
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stock exchange so long as such party consults the other parties as to the form,
content, timing and manner of distribution or publication, (b) discussing this
Agreement or its contents or the transactions contemplated hereby with those
Persons whose approval, agreement or opinion, as the case may be, is required
for consummation of such particular transaction or transactions or whose
assistance is required to consummate the transactions contemplated hereby or (c)
enforcing its rights hereunder.
11.9 Further Assurances. Upon the reasonable request of Purchaser, Sellers
shall on and after the Closing Date execute and deliver to Purchaser such other
documents, releases, assignments and other instruments as may be required to
effectuate completely the transfer and assignment to Purchaser of, and to vest
fully in Purchaser title to, the Interests, and to otherwise carry out the
purposes of this Agreement. Upon the reasonable request of Sellers, Purchaser
shall on and after the Closing Date execute and deliver to Sellers such other
documents, releases, assignments and other instruments as may be required to
effectuate the terms of this Agreement and to otherwise carry out the purposes
of hereof.
11.10 Severability. If any provision of this Agreement shall be held
invalid, illegal or unenforceable, the validity, legality or enforceability of
the other provisions hereof shall not be affected thereby, and there shall be
deemed substituted for the provision at issue a valid, legal and enforceable
provision as similar as possible to the provision at issue that reflects the
intentions of the parties.
11.11 Entire Understanding. This Agreement, the Merger Agreement and the
Related Agreements set forth the entire agreement and understanding of the
parties hereto with respect to the transactions contemplated hereby and
supersede any and all prior agreements, arrangements and understandings among
the parties relating to the subject matter hereof, including, after the Closing
Date, the term sheet and letter agreement, dated January 3, 2001, between
Purchaser and TradeCast Investments and the Confidentiality Agreement, dated
June 15, 2000, between Purchaser and TradeCast Investments, which shall be
terminated as of the Closing Date.
11.12 Sellers Representative. Each Seller hereby irrevocably authorizes and
appoints Xxxxxxx X. Xxxxxxx as its true and lawful attorney and representative
(the "Sellers Representative") with full power and authority to take any and all
actions and execute any and all documents specified in this Agreement or any
Related Agreement as being within the authority of the Sellers Representative.
Xxxxxxx X. Xxxxxxx hereby accepts his appointment as the Sellers Representative
and agrees to perform all of the duties of the Sellers Representative hereunder.
If the Sellers Representative shall die or become incapacitated, the Sellers
shall promptly appoint a successor Person to act as the Sellers Representative.
11.13 Applicable Law. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of Delaware without
giving effect to the principles of conflicts of law thereof.
11.14 Specific Performance. Each party to this Agreement recognizes and
affirms that in the event of breach by it of Section 5.6 money damages would be
inadequate and the other parties hereto would have no adequate remedy at law.
Accordingly, each party to this Agreement agrees that each of the other parties
hereto shall have the right, in addition to any
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other rights and remedies existing under this Agreement, to enforce its rights
and the obligations of the other parties under Section 5.6 not only by an action
or actions for damages, but also by an action or actions for specific
performance, injunction and/or other equitable relief in order to enforce or
prevent any violations (whether anticipatory, continuing or future) of Section
5.6. If a bond is required to be posted in order for any party to this Agreement
to secure an injunction, the other parties hereto agree that such bond need not
exceed the sum of $1,000.
11.15 Waiver of Jury Trial. EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL
BY JURY IN ANY DISPUTE IN CONNECTION WITH OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY AND AGREES TO TAKE ANY AND ALL ACTION NECESSARY
OR APPROPRIATE TO EFFECT SUCH WAIVER.
11.16 Schedules. Any information disclosed pursuant to any Schedule
attached hereto shall be deemed to be disclosed with respect to any other matter
to which it reasonably relates in all Schedules for all purposes of this
Agreement.
11.17 Disclosure. Purchaser acknowledges that it has conducted a due
diligence investigation of the Company and the Subsidiaries and have had
sufficient opportunity to make whatever investigation and ask whatever questions
of the Company and the Subsidiaries as it has deemed necessary and advisable for
the purposes of determining whether or not to enter into this Agreement and the
Related Agreements. Purchaser acknowledges that Sellers have not made any
representations or warranties other than those expressly included in this
Agreement and the Related Agreements and that no representations or warranties
have been made with regard to any projections, cost estimates or other
information that may have been provided to Purchaser or its representatives
during their due diligence investigation of the Company and the Subsidiaries
unless otherwise expressly covered by the representations and warranties
included in this Agreement and the Related Agreements.
* * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first above written.
AMERITRADE HOLDING CORPORATION
By: /s/ Xxxxx Xxxxxxx
-----------------
Name:
Title:
FORETRADECAST L PARTNERS, L.P.
By: KCE, L.P., its General Partner
By: KCE Genpar, LLC, its General
Partner
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
---------------------------
Name:
Title:
FORETRADECAST S PARTNERS, L.P.
By: Carmel Land & Cattle Co., L.P., its
General Partner
By: Carmel Genpar, LLC, its General
Partner
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
---------------------------
Name:
Title:
