ACQUISITION AGREEMENT
AGREEMENT, dated this ___ day of August, 1999, by and between Mill Bridge,
Inc., a Delaware corporation ("Seller"), LaB Investing Co. L.L.C., a New York
limited liability company ("Purchaser"), XxXxxxxxx & Co Inc., a Delaware
corporation ("Newco"), and, for purposes of Section 6 hereof, XxXxxxxxx & Co., a
New York limited partnership ("XxXxxxxxx").
WHEREAS, Purchaser is the general partner of XxXxxxxxx;
WHEREAS, XxXxxxxxx has taken steps to complete an ownership restructuring
(the "Restructuring") involving the organization of Newco, which will hold 100%
of the equity interest in XxXxxxxxx ("Newco"), and an initial public offering of
the shares of stock of Newco (the "IPO") to occur simultaneously with the
Restructuring;
WHEREAS, Seller is a limited partner of XxXxxxxxx and owns an interest in
capital and an approximately 14.2% interest in the profits and losses of
XxXxxxxxx (the "LP Interest"), but does not intend to participate in the IPO and
become a stockholder of Newco;
WHEREAS, Seller has previously agreed to sell, and Purchaser has previously
agreed to acquire, the entire LP Interest (including the balance in Seller's
capital account with XxXxxxxxx, but excluding Seller's share of the
undistributed net profits of XxXxxxxxx for the portion of the 1999 fiscal year
ending on the date of the closing of the transactions contemplated hereby (the
"Closing")); and
WHEREAS, Seller and Purchaser wish to formalize the terms and conditions of
their agreement by hereinafter setting forth such terms and conditions.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto agree as follows (with all capitalized
terms used herein and not otherwise defined herein having the respective
meanings ascribed thereto in the Amended and Restated Articles of Partnership of
XxXxxxxxx, as amended to the date hereof (the "Partnership Agreement")):
1. PURCHASE AND SALE OF THE LP INTEREST.
(a) On the date of, and immediately after, the closing of the IPO (the
"Closing Date") and subject to the terms and conditions hereof, Seller shall
sell, assign, transfer, convey and deliver to Purchaser, and Purchaser will
acquire from Seller, the LP Interest for an aggregate purchase price of
$90,000,000, of which (i) $74,000,000 shall be payable by wire transfer of
immediately available funds to the order of Seller, and (ii) $16,000,000 shall
be payable by Purchaser's delivery to Seller of Newco's $16,000,000 note (the
"Note") substantially in the form attached as EXHIBIT A hereto (collectively,
the "Purchase Price"). The Note shall provide for the payment of interest at a
rate equal to the actual stated interest rate that is payable under, and shall
rank PARI PASSU with, the Senior Notes due 2004 in the aggregate principal
amount of up to $100,000,000 which Newco intends to issue as of the Closing
Date.
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(b) Within a reasonable period of time after the Closing Date,
Purchaser shall cause XxXxxxxxx to determine the amount of XxXxxxxxx'x net
profit or net loss for the portion of its 1999 fiscal year ending on the Closing
Date and, within fifteen (15) days after such determination, shall cause
XxXxxxxxx to pay to Seller an amount equal to Seller's share of any previously
undistributed net profit of XxXxxxxxx for the portion of the 1999 fiscal year
ending on the Closing Date. On the Closing Date, Purchaser also shall cause
XxXxxxxxx to pay to Van der Moolen USA, Inc., an affiliate of Seller ("VDM"), by
wire transfer of immediately available funds, the sum of $5,000,000 plus the
amount of any accrued but unpaid interest in full satisfaction of XxXxxxxxx'x
obligations under that certain Cash Subordination Agreement in the principal
amount of $5,000,000, dated as of December 30, 1996, between XxXxxxxxx and
Seller, which was assigned to VDM by Seller pursuant to an Assignment and
Assumption of Cash Subordination Agreement made as of December 31, 1997 between
Seller and VDM.
2. PRE-CLOSING CONDITIONS. Purchaser's and Seller's mutual obligations to
consummate the transactions contemplated hereby will be subject to the
conditions that (i) the IPO shall have been consummated on or before December
31, 1999, and (ii) no injunction or order shall be in effect prohibiting
consummation of the transactions contemplated hereby or which would make the
consummation of such transactions unlawful, and no action or proceeding shall
have been instituted and remain pending before a court, governmental body or
regulatory authority or shall be threatened to restrain or prohibit such
transactions.
3. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller hereby represents and
warrants to Purchaser as follows:
(a) except as otherwise provided in the Partnership Agreement, upon
the transfer of the LP Interest under this Agreement to Purchaser, Purchaser
will acquire good and marketable title to the LP Interest free and clear of any
pledge, security interest or other encumbrance, or any restriction or claim;
(b) Seller has good and marketable title to the LP Interest, and there
are no options, warrants, calls, commitments or agreements of any type to which
Seller is a party or by which Seller may be bound under which any person or
entity has a right to purchase or acquire, own or maintain any rights in, of or
to any of the LP Interest;
(c) the execution, delivery and performance of this Agreement, the
consummation of the transactions contemplated hereby and the compliance with the
provisions hereof by Seller will not (i) conflict with, result in the breach of,
or constitute a default under the certificate of incorporation, bylaws or other
organizational documents of Seller or any agreement or other instrument to which
Seller is a party or by which the property of Seller is bound or affected, (ii)
result in the creation of any lien, security interest, charge or encumbrance
upon the LP Interest, (iii) require any authorization, consent, approval,
exemption or other action by, or notice to, any third party, court or other
governmental or administrative body, or (iv) violate any laws, statutes,
regulations, orders or judgments applicable to Seller or the LP Interest;
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(d) Seller is a duly organized and validly existing corporation under
the laws of the State of Delaware and has the full, absolute and entire power
and legal right to execute, deliver and perform this Agreement;
(e) the execution, delivery and performance by Seller of this
Agreement have been duly and validly authorized by all necessary corporate
action on behalf of Seller;
(f) this Agreement has been duly executed and delivered by Seller and
constitutes the valid and binding agreement of Seller, enforceable in accordance
with its terms, except as its enforceability may be limited by bankruptcy,
insolvency, moratorium or other laws relating to or affecting creditors' rights
generally and the exercise of judicial discretion in accordance with general
equitable principles; and
(g) Seller has been afforded the opportunity to ask questions of, and
receive answers from, the management of XxXxxxxxx about the business and affairs
of Purchaser, XxXxxxxxx and Newco and the terms of the Restructuring and the IPO
and to obtain any additional information related thereto, to the extent
available and appropriate; Purchaser, XxXxxxxxx and Newco have furnished to
Seller all information which Seller considers necessary to form a decision
concerning the disposition of the LP Interest; and no valid request to
Purchaser, XxXxxxxxx or Newco by Seller for information of any kind about
Purchaser, XxXxxxxxx and Newco and the terms of the Restructuring and the IPO
has been refused or denied or remains unfulfilled as of the date hereof.
4. PURCHASER'S AND NEWCO'S REPRESENTATIONS AND WARRANTIES. Purchaser and
Newco, jointly and severally, hereby represent and warrant to Seller as follows:
(a) Purchaser is a duly organized and validly existing limited
liability company under the laws of the State of New York and Newco is a duly
organized and validly existing corporation under the laws of the State of
Delaware and each has the full, absolute and entire power and legal right to
execute, deliver and perform this Agreement, and Newco has the full, absolute
and entire power and legal right to execute, deliver and perform the Note;
(b) the execution, delivery and performance by Purchaser and Newco of
this Agreement and by Newco of the Note have been duly and validly authorized by
all necessary action on behalf of Purchaser and Newco;
(c) this Agreement has been duly executed and delivered by Purchaser
and Newco and constitutes the valid and binding agreement of Purchaser and
Newco, enforceable in accordance with its terms, except as its enforceability
may be limited by bankruptcy, insolvency, moratorium or other laws relating to
or affecting creditors' rights generally and the exercise of judicial discretion
in accordance with general equitable principles;
(d) upon its execution and delivery, the Note will constitute the
valid and binding agreement of Newco, enforceable in accordance with its terms,
except as its enforceability may be limited by bankruptcy, insolvency,
moratorium or other laws relating to or affecting creditors' rights generally
and the exercise of judicial discretion in accordance with general equitable
principles; and
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(e) the execution, delivery and performance of this Agreement and the
Note, the consummation of the transactions contemplated hereby and the
compliance with the provisions hereof and the Note by Purchaser and Newco, as
the case may be, will not (i) conflict with, result in the breach of, or
constitute a default under the certificate of incorporation, bylaws or other
organizational documents of Purchaser or Newco or any agreement or other
instrument to which Purchaser or Newco is a party or by which the property of
Purchaser or Newco is bound or affected, (ii) require any authorization,
consent, approval, exemption or other action by or notice to any third party,
court or other governmental or administrative body which has not been obtained,
or (iii) violate any laws, statutes, regulations, orders or judgments applicable
to Purchaser or Newco.
5. TERMINATION OF LIMITED PARTNER STATUS. Effective upon the consummation
of the transactions contemplated hereby, Seller shall cease to be a Limited
Partner of XxXxxxxxx.
6. RELEASES. Effective upon the consummation of the transactions
contemplated hereby, (i) Seller hereby releases Purchaser, Newco and XxXxxxxxx,
and any of their respective affiliates, partners, predecessors, administrators,
successors and assigns from any and all causes of action, suits, debts, demands,
covenants, contracts, agreements, damages, liabilities and claims of any nature
whatsoever (collectively, "Claims") that could ever be asserted against
Purchaser, Newco or XxXxxxxxx by Seller, whether presently known or unknown,
accrued or unaccrued, which pertain to XxXxxxxxx or Seller's investment therein,
and (ii) Purchaser, XxXxxxxxx and Newco hereby release Seller and any of its
affiliates, predecessors, administrators, successors and assigns from any and
all Claims that could ever be asserted against Seller by Purchaser, XxXxxxxxx or
Newco, whether presently known or unknown, accrued or unaccrued, which pertain
to XxXxxxxxx or Seller's investment therein. The foregoing releases are not
intended to affect the obligations of the parties under this Agreement or of
Newco under the Note.
7. ENTIRE AGREEMENT. This Agreement, the Note and that certain waiver
letter, dated June 11, 1999, from XxXxxxxxx to Seller state the entire agreement
between the parties with respect to the subject matter hereof (other than the
Partnership Agreement), and the provisions hereof may only be modified, waived
or terminated by a writing signed by the party or parties to be bound thereby.
8. GOVERNING LAW. This Agreement shall be governed by the laws of the State
of New York, without regard to the principles of conflicts of laws thereof.
9. BINDING EFFECT. This Agreement and all the terms and conditions hereof
shall be binding upon and inure to the benefit of the parties and their
respective successors and assigns.
10. FURTHER ASSURANCES. The parties hereto will execute, acknowledge and
deliver such further instruments and do such further acts and things as may be
required to carry out the intent and purpose of this Agreement.
11. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one and the same
instrument.
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12. TERMINATION. This Agreement shall terminate and be of no further force
or effect in the event the Closing has not taken place by 11:59 p.m. on December
31, 1999.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
MILL BRIDGE, INC.
By:
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Name:
Title:
LAB INVESTING CO. L.L.C.
By:
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Name:
Title:
XXXXXXXXX & CO INC.
By:
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Name:
Title:
For purposes of Section 6 hereof:
XXXXXXXXX & CO.
By:
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Name:
Title:
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