EXCHANGE AGREEMENT by and among THE INVESTORS NAMED ON SCHEDULE A HERETO and HIGHBURY FINANCIAL INC. September 14, 2009
EXHIBIT
10.1
by and
among
THE
INVESTORS
NAMED ON
SCHEDULE A HERETO
and
September
14, 2009
TABLE
OF CONTENTS
|
Page
|
|||
|
ARTICLE I
|
DEFINITIONS
|
1
|
|
|
Section
1.01. Definitions
|
1
|
||
|
ARTICLE II
|
EXCHANGE
|
4
|
|
|
Section
2.01. Exchange of Series B Preferred for Common Stock by
Investors
|
4
|
||
|
Section
2.02. Amendment to Investor Rights Agreement
|
4
|
||
|
Section
2.03. Closing
|
5
|
||
|
ARTICLE III
|
RESTRICTIVE
LEGENDS
|
5
|
|
|
Section
3.01. Restrictive Legends
|
5
|
||
|
ARTICLE IV
|
REPRESENTATIONS
AND WARRANTIES OF THE Investors
|
5
|
|
|
Section
4.01. Organization
|
5
|
||
|
Section
4.02. Ownership and Capital Structure
|
6
|
||
|
Section
4.03. Investment Intent
|
6
|
||
|
Section
4.04. Accredited Investor; Knowledge and
Experience
|
6
|
||
|
Section
4.05. Authority
|
6
|
||
|
Section
4.06. No Conflict
|
7
|
||
|
ARTICLE V
|
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
|
7
|
|
|
Section
5.01. Organization
|
7
|
||
|
Section
5.02. Capitalization
|
7
|
||
|
Section
5.03. Valid Issuance of Securities
|
7
|
||
|
Section
5.04. Authority
|
8
|
||
|
Section
5.05. No Conflict
|
8
|
||
|
Section
5.06. SEC Reports and Financial Statements
|
8
|
||
|
ARTICLE VI
|
EXPENSES
|
9
|
|
|
Section
6.01. Expenses
|
9
|
||
|
ARTICLE VII
|
MISCELLANEOUS
|
9
|
|
|
Section
7.01. Notices
|
9
|
||
|
Section
7.02. Further Assurances
|
10
|
||
|
Section
7.03. Survival
|
10
|
||
|
Section
7.04. Amendments, Modifications and Waivers
|
11
|
||
|
Section
7.05. Successors and Assigns
|
11
|
||
|
Section
7.06. Severability
|
11
|
||
|
Section
7.07. Captions
|
11
|
||
|
Section
7.08. Entire Agreement
|
11
|
||
|
Section
7.09. Governing Law
|
11
|
||
|
Section
7.10. Dispute Resolution
|
12
|
||
|
Section
7.11. Indemnification of Investors and Management
Stockholders
|
12
|
||
|
Section
7.12. Remedies
|
13
|
||
i
TABLE
OF CONTENTS
(Cont’d.)
|
Page
|
|||
|
Section
7.13. Counterparts
|
14
|
||
|
Section
7.14. Interpretation
|
14
|
||
ii
THE
SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE AND
ARE BEING OFFERED AND SOLD IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE SECURITIES PURCHASED
HEREUNDER ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND RESALE UNDER AN AMENDED
AND RESTATED INVESTOR RIGHTS AGREEMENT, AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND OTHER APPLICABLE LAWS PURSUANT
TO REGISTRATION OR EXEMPTION FROM REGISTRATION REQUIREMENTS THEREUNDER AND UNDER
SUCH AGREEMENT.
This
Exchange Agreement (the “Agreement”) is made
as of this 14th day
of September, 2009 by and among the persons named as Investors set forth on
Schedule A
hereto (each an “Investor”, and,
collectively, the “Investors”), and
Highbury Financial Inc., a Delaware corporation (the “Company”), with
reference to the following background.
RECITALS
WHEREAS,
the Investors in the aggregate own 1,000 shares of Series B Convertible
Preferred Stock, par value $0.0001 per share, of the Company (“Series B
Preferred”);
WHEREAS,
pursuant to the terms of this Agreement, the Investors wish to exchange up to
360 shares of Series B Preferred (the “Exchange”) for shares
of common stock, par value $0.0001 per share, of the Company (“Common Stock”) upon
the terms and conditions set forth in this Agreement; and
WHEREAS,
pursuant to the terms of this Agreement, the Company wishes to enter into the
Exchange in order to prevent a single stockholder from acquiring ownership
beneficially, either directly or through one or more controlled companies, of
more than 25% of the outstanding Voting Securities (as defined below) of the
Company, thereby triggering a presumptive change of control under Section
2(a)(9) of the Investment Company Act (as defined below) of Aston Asset
Management LLC (“Aston”), the Company’s wholly owned subsidiary and investment
adviser to the Aston Funds.
AGREEMENT
NOW,
THEREFORE, in consideration of the premises and of the mutual agreements
hereinafter contained, the parties hereto hereby agree as follows, with the
obligations of each Investor being several and not joint:
ARTICLE
I
DEFINITIONS
Section
1.01. Definitions. As
used in this Agreement, the following terms have the following
meanings:
“25% Stockholder”
shall mean a Person that would own, either of record or beneficially through a
broker, bank or other nominee measured at the end of any trading day,
twenty-five percent (25%) or more of the Voting Securities of the Company
(calculated in the manner provided pursuant to Section 2(a)(42) under the
Investment Company Act) but for an Exchange under this Agreement.
“Affiliate” shall
mean, with respect to any Person (herein the “first party”), any
other Person that directly or indirectly controls, or is controlled by, or is
under common control with, such first party. The term “control” as used
herein (including the terms “controlled by” and
“under common control
with”) means the possession, directly or indirectly, of the power to (a)
vote twenty-five percent (25%) or more of the outstanding voting securities of
such Person, or (b) otherwise direct the management or policies of such Person
by contract or otherwise (other than solely as a director of a corporation (or
similar entity) that has five (5) or more directors). For the purposes of this
Agreement, the Company shall not be deemed to be an Affiliate of
Aston.
“Agreement” means this
Exchange Agreement, as amended from time to time.
“Amended and Restated
Investor Rights Agreement” shall mean the Amended and Restated Investor
Rights Agreement of even date herewith by and among the Company, the Investors
and the Management Stockholders.
“Asserted Liability”
shall have the meaning set forth in Section 7.11(a).
“Aston” shall have the
meaning set forth in the recitals.
“Board” means the
Board of Directors of the Company.
“Certificate of
Designation” means the Certificate of Designation filed with the
Secretary of State of the State of Delaware with respect to the Series B
Preferred Stock as amended from time to time.
“Claims” shall have
the meaning set forth in Section 7.11.
“Claims Notice” shall
have the meaning set forth in Section 7.11(a).
“Closing” shall have
the meaning set forth in Section 2.03.
“Code” shall have the
meaning set forth in Section 2.01.
“Common Stock” shall
have the meaning set forth in the recitals.
“Company” shall have
the meaning set forth in the preamble.
“Contractual
Obligation” shall have the meaning set forth in Section
4.06.
“Controlled Affiliate”
shall mean, with respect to a Person, any Affiliate of such Person under its
“control,” as
the term “control” is defined
in the definition of Affiliate.
2
“Conversion Number”
shall mean 4,500, subject to adjustment as set forth in the definition of
“Conversion Number” in Section 12 of the Certificate of Designation of the
Series B Preferred filed with the Secretary of State of the State of Delaware on
August 10, 2009, as amended from time to time.
“Exchange” shall have
the meaning set forth in the recitals.
“Exchange Shares”
shall mean the number of shares of Common Stock to be issued by the Company
pursuant to Section 2.01 of the Agreement such that after such issuance the
number of Voting Securities held by the 25% Stockholder that triggered the
Exchange shall be equal to (i) .25 multiplied by the number of Voting Securities
outstanding after the issuance contemplated by Section 2.01 minus (ii) one (1)
share of Common Stock; provided, however in no event shall the number of
Exchange Shares exceed the product of 360 and the Conversion
Number.
“Financial Statements”
shall have the meaning set forth in Section 5.06(b).
“Governmental
Authority” shall have the meaning set forth in Section 4.05.
“Immediate Family”
shall mean, with respect to any natural person, (a) such person’s spouse,
parents, grandparents, children, grandchildren and siblings, (b) such person’s
former spouse(s) and current spouses of such person’s children, grandchildren
and siblings and (c) estates, trusts, partnerships and other entities of which
substantially all of the interests are held directly or indirectly by the
foregoing.
“Investment Company
Act” shall mean the Investment Company Act of 1940, as it may be amended
from time to time, and any successor to such act.
“Investor(s)” shall
have the meaning set forth in the preamble.
“Management
Stockholder(s)” shall mean (a) in the case of any Investor which is a
natural person, such Investor, and (b) in the case of any Investor which is not
a natural person, that certain employee of Aston (or one of its Controlled
Affiliates) who is the owner of the issued and outstanding capital stock of, or
other equity interests in, such Investor and is listed as such on Schedule A hereto
(including any such employee after such employee has transferred any of its, his
or her interest in such Investor to a Permitted Transferee (as such term is
defined in the Investor Rights Agreement)).
“Person” means any
individual, partnership (limited or general), corporation, limited liability
company, limited liability partnership, association, trust, joint venture,
unincorporated organization or other entity.
“Requirement of Law”
shall have the meaning set forth in Section 4.06.
“SEC” shall mean the
Securities and Exchange Commission, and any successor Governmental Authority
thereto.
“SEC Reports” shall
have the meaning set forth in Section 5.06(a).
3
“Securities Act” means
the Securities Act of 1933, as amended from time to time, and the rules and
regulations promulgated thereunder by the SEC from time to time.
“Securities Exchange
Act” means the Securities Exchange Act of 1934, as amended.
“Series B Preferred”
shall have the meaning set forth in the recitals.
“Transaction
Documents” shall mean this Agreement and the Amended and Restated
Investor Rights Agreement.
“Voting Securities”
shall have the same meaning as set forth in Section 2(a)(42) under the
Investment Company Act.
ARTICLE
II
EXCHANGE
Section
2.01. Exchange of Series B
Preferred for Common Stock by Investors. On the terms and
subject to the conditions of this Agreement, each time a Person becomes a 25%
Stockholder, at the Closing (i) the Company hereby agrees to issue to each
Investor its pro rata share (based upon the number of shares of Series B
Preferred held by such Investor at the time of the Closing and the total number
of shares of Series B Preferred held by all Investors at the time of the
Closing) of the Exchange Shares and (ii) each Investor hereby agrees to accept
his, her or its pro rata share of such Exchange Shares in exchange for such
number of shares or fractional shares of Series B Preferred equal to the
quotient of (x) the number of Exchange Shares issued to such Investor divided by
(y) the Conversion Number. At the Closing, each of the Investors
shall deliver to the Company assignments duly executed by such Investor
representing the respective number of Series B Preferred held by such Investor,
in exchange for the number of Exchange Shares as provided in this Section
2.01. Promptly following (but in no event more than five business
days after) any exchange pursuant hereto, the Company shall pay to each Investor
an amount equal to all accrued but unpaid dividends which are in arrears for
more than one quarter on the shares of Series B Preferred which are so
exchanged. Notwithstanding anything in this Section 2.01 to the
contrary, the Investors, in the aggregate, shall not be required to exchange
more than 360 shares of Series B Preferred (as such number may be ratably
adjusted on account of any stock splits, stock dividends, stock combinations or
similar recapitalizations with respect to the Series B
Preferred). The Company and the Investors agree to treat each
Exchange as a recapitalization pursuant to Section 368(a)(1)(E) of the Internal
Revenue Code of 1986, as amended (the “Code”), and to
consistently take the position on all tax returns, before any taxing authority,
and in any judicial proceeding, that each Exchange contemplated by this
Agreement qualifies as a recapitalization under Section 368(a)(1)(E) of the
Code.
Section
2.02. Amendment to Investor Rights
Agreement. The Company and the Investors shall execute and
deliver, and the Investors shall cause the Management Stockholders to execute
and deliver, the Amended and Restated Investor Rights Agreement, which shall
automatically become effective upon the consummation of the
Closing.
4
Section
2.03. Closing. The
closing of each Exchange contemplated by this Agreement shall be effective upon,
and contemporaneous with, a Person becoming a 25% Stockholder of the Company
(the “Closing”). Each
Closing shall take place at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇. As soon as practicable after each
Closing, the Company shall cause its transfer agent to deliver certificates
representing the Exchange Shares to each Investor. No Closing may
occur after the earlier to occur of (x) the first anniversary of the date of
this Agreement and (y) unless otherwise mutually agreed by the parties hereto,
immediately prior to the consummation of an event which would constitute a
Change of Control (as defined in the Certificate of Designation). For
the avoidance of doubt, if a transaction occurs which would constitute a Change
of Control (as defined in the Certificate of Designation), unless otherwise
agreed between the parties, no Closing shall occur with respect to such
transaction. If a Closing does not occur on or before the first
anniversary of the date of this Agreement, this Agreement shall terminate and
have no further force or effect.
ARTICLE
III
RESTRICTIVE
LEGENDS
Section
3.01. Restrictive
Legends. It is understood and agreed that the certificates
evidencing the shares of Common Stock to be delivered to the Investors at the
Closing, and each certificate issued upon transfer thereof, shall bear the
following legends, in addition to any other legends required by Delaware
law:
“THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE OFFERED AND SOLD ONLY IF SO
REGISTERED OR IN A MANNER EXEMPT FROM REGISTRATION UNDER SUCH ACT.
THE
SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS
OF AN AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT WHICH PLACES RESTRICTIONS
ON THE TRANSFERABILITY OF THE SHARES REPRESENTED HEREBY. A COPY OF
THE AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT IS ON FILE AT THE PRINCIPAL
OFFICE OF THE COMPANY.”
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF
THE
INVESTORS
Each
Investor severally represents and warrants (as to itself, himself or herself
only) to the Company, as of the date hereof and as of each Closing, as
follows:
Section
4.01. Organization. Such
Investor is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation.
5
Section
4.02. Ownership and Capital Structure.
(a)
The number of shares of Series B Preferred held by such as of the date
hereof is as set forth on Schedule A
hereto.
(b)
Such Investor is the lawful owner of the Series B Preferred to be
transferred by it hereunder, free and clear of all liens, encumbrances,
restrictions and claims of every kind (other than pursuant to applicable
securities laws and the provisions of the Amended and Restated Investor Rights
Agreement and Certificate of Designation) and has full legal right, power and
authority to enter into this Agreement and to sell, assign, exchange, transfer
and convey its Series B Preferred pursuant to this Agreement.
Section
4.03. Investment
Intent. The shares of Common Stock to be acquired by such
Investor hereunder (i) are being acquired by such Investor for its own account
and (ii) are not being acquired by such Investor with a view to, or for sale in
connection with, any distribution thereof which is not in compliance with
applicable securities laws.
Section
4.04. Accredited Investor;
Knowledge and Experience. Such Investor is an “accredited
investor” as that term is defined in Regulation D under the Securities
Act. Such Investor has carefully considered the potential risks
relating to the Company and the Exchange. Such Investor is familiar
with the business and financial condition, properties, operations and prospects
of the Company and has had access, during the course of the transactions
contemplated hereby and prior to the Exchange, to such information as it has
deemed material to its investment decision and has had the opportunity to ask
questions of, and receive answers from, the Company concerning the terms and
conditions of the investment and to obtain additional information (to the extent
Company possessed such information or could acquire it without unreasonable
effort or expense) necessary to verify the accuracy of any information furnished
to such Investor or to which such Investor has had access; provided, that
neither the foregoing (nor any other knowledge which such Investor has) shall in
any way limit the scope or effect of the representations and warranties of the
Company set forth in Article V. Such Investor made, either alone or
together with its advisors, such independent investigation of the Company as
such Investor deems to be, or its advisors deem to be, necessary or advisable in
connection with this investment. Such Investor understands that no
federal or state agency has passed upon this investment or upon the Company, nor
has any such agency made any finding or determination as to the fairness of this
investment.
Section
4.05. Authority. Such
Investor has full legal right, power and authority to enter into and perform
this Agreement and other Transaction Documents to which it is a party, and the
execution and delivery of this Agreement and the other Transaction Documents by
it, and the consummation of the transactions contemplated hereby and thereby,
have been duly authorized by all necessary requisite action (corporate or
otherwise). Except for compliance with any applicable requirements of
the Securities Act and the Securities Exchange Act, no consent, waiver or
authorization of, or filing with any other Person (including without limitation,
any federal or state governmental authority or other political authority
(collectively, “Governmental
Authority”)) is required in connection with any of the foregoing or with
the validity or enforceability against such Investor of this Agreement and the
other Transaction Documents. Each of this Agreement and the other
Transaction Documents has been duly executed and delivered by such Investor and
constitutes the legal, valid and binding agreement of such Investor, enforceable
against it in accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors’ rights generally
and subject to general principles of equity.
6
Section
4.06. No
Conflict. The execution, delivery and performance of this
Agreement and the other Transaction Documents, and the consummation of the
transactions contemplated hereby and thereby, do not and will not, with or
without the passage of time or the giving of notice or both, (i) conflict
with any provision of such Investor’s Certificate of Incorporation or By-Laws or
other similar organizational documents, (ii) conflict with or violate any
applicable law, statute, treaty, rule, regulation, arbitration award, judgment,
decree, order or other determination of any Governmental Authority
(collectively, “Requirement of Law”)
applicable to such Investor or any mortgage, security, lease, franchise,
agreement, guaranty, instrument or undertaking (collectively, “Contractual
Obligation”) of such Investor or (iii) result in, or require, the
creation or imposition of any lien, charge or other encumbrance on any of the
properties or revenues of such Investor pursuant to any Requirement of Law or
Contractual Obligation.
ARTICLE
V
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY
The
Company represents and warrants to each Investor, as of the date hereof and,
unless such representation speak as to a specified date, as of each Closing, as
follows:
Section
5.01. Organization. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware.
Section
5.02. Capitalization. As
of the date hereof, the Company’s authorized capital stock consists 50,000,000
shares of Common Stock and 1,000,000 shares of Preferred Stock, $0.0001 par
value per share, of which 50,000 shares are designated Series A Junior
Participating Preferred Stock and 1,000 shares are designated Series B
Convertible Preferred Stock. As of the date hereof, the Company’s
issued and outstanding capital stock is as set forth on Schedule B
hereto. As of the date hereof, other than as set forth on Schedule B,
there are no issued or outstanding options, warrants or other rights to acquire,
or any outstanding securities or obligations convertible into or exchangeable
for, any shares of the capital stock of the Company.
Section
5.03. Valid Issuance of
Securities. The Exchange Shares when issued and delivered by
the Company in exchange for the delivery by the Investors of the Series B
Preferred pursuant to the terms of this Agreement, (i) will have been duly
authorized, validly issued, fully paid and nonassessable, (ii) will be free and
clear of all liens, encumbrances, equities and claims (other than securities law
restrictions and those other restrictions set forth in the Amended and Restated
Investor Rights Agreement) and (iii) will be issued without violation of any
preemptive rights.
7
Section
5.04. Authority. The
Company has full legal right, power and authority (i) to enter into and perform
this Agreement and the other Transaction Documents to which it is a party,
including the issuance of the Exchange Shares. The execution,
delivery and performance of this Agreement and the other Transaction Documents
to which the Company is a party by the Company, the issuance of the Exchange
Shares by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby have all been duly authorized by all necessary
corporate action on the part of the Company. No consent, waiver or
authorization of, or filing with any other Person (including without limitation,
any Governmental Authority) is required in connection with any of the foregoing
or with the validity or enforceability against the Company of this Agreement,
the other Transaction Documents to which it is a party, and the Exchange Shares,
except for consents, waivers, authorizations or filings which if not obtained or
made would not have a material adverse effect on the Investors’ rights in the
Exchange Shares, and except for required filings under the Securities Act, the
Securities Exchange Act and the rules and regulations thereunder and applicable
state securities laws. Each of this Agreement and each other
Transaction Document to which the Company is a party has been duly executed and
delivered by the Company and constitutes the legal, valid and binding agreement
of the Company, enforceable against it in accordance with its terms, except as
may be limited by bankruptcy, insolvency, reorganization or similar laws
affecting creditors’ rights generally and subject to general principles of
equity.
Section
5.05. No
Conflict. The execution, delivery and performance of this
Agreement and the other Transaction Documents, and the consummation of the
transactions contemplated hereby and thereby, do not and will not, with or
without the passage of time or the giving of notice or both, (i) conflict with
or violate any provision of the Company’s Amended and Restated Certificate of
Incorporation or Amended and Restated By-laws, (ii) conflict with or violate any
Requirement of Law applicable to the Company or any Contractual Obligation of
the Company, in each case in a manner which would have a material adverse effect
on the Investors’ rights in the Exchange Shares or (iii) result in, or require,
the creation or imposition of any lien, charge or other encumbrance on any of
its properties or revenues pursuant to any Requirement of Law or Contractual
Obligation.
Section
5.06. SEC Reports and Financial
Statements.
(a) Each
of the Annual Report on Form 10-K for the fiscal year ended December 31, 2008,
the Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2009
and June 30, 2009 and all Current Reports on 8-K filed with the SEC since
January 1, 2009 (collectively, the “SEC Reports”), as of
their respective dates (and, if amended or superseded by a filing prior to the
date of this Agreement, then on the date of such filing), complied in all
material respects with the applicable requirements of the Securities Exchange
Act and the rules and regulations thereunder. None of the SEC
Reports, as of their respective dates (and, if amended or superseded by a filing
prior to the date of this Agreement, then on the date of such filing), contained
any untrue statement of fact or omitted a statement of a fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, other than facts that
did not have, or would not, individually or in the aggregate, reasonably be
expected to have, a material adverse effect on the business or operations of the
Company.
(b) The
consolidated financial statements of the Company included in such SEC Reports
(the “Financial
Statements”) comply as to form in all material respects with applicable
accounting requirements and with published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with GAAP (except as may be
indicated in the notes thereto, or in the case of unaudited interim financial
statements, as permitted by Form 10-Q under the Securities Exchange Act) and
fairly present in all material respects, subject, in the case of the unaudited
interim financial statements, to the absence of complete notes and normal,
year-end adjustments, the consolidated financial position of the Company and its
subsidiaries as of the dates thereof.
8
(c) Without
limiting the generality of the foregoing, (i) no executive officer of the
Company has failed in any respect to make the certifications required of him or
her under Section 302 or 906 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 with respect to
any SEC Reports and (ii) no enforcement action has been initiated, or to the
knowledge of the Company threatened, against the Company or any of its directors
or executive officers by the SEC relating to disclosures contained in any SEC
Report.
ARTICLE
VI
EXPENSES
Section
6.01. Expenses. The
Company agrees that the expenses incurred by the Investors and Management
Stockholders in connection with the negotiation, preparation, execution and
delivery of this Agreement and the other Transaction Documents, and the
consummation of the transactions contemplated hereby and thereby, including
without limitation, in connection with the preparation and filing of all
required filings by the Investors and Management Stockholders with the
Securities and Exchange Commission in connection with the transactions
contemplated hereby, including, to the extent required Section 16 reports and
filings on Schedule 13D and/or Schedule 13G, shall be paid by the
Company. Except as set forth in the immediately preceding sentence,
each of the parties hereto agrees to pay the expenses incurred by it in
connection with the negotiation, preparation, execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby and
thereby, including without limitation, fees and expenses of counsel to each
party.
ARTICLE
VII
MISCELLANEOUS
Section
7.01. Notices. All
notices, requests, demands and other communications under this Agreement must be
in writing and will be deemed duly given, unless otherwise expressly indicated
to the contrary in this Agreement, (i) when personally delivered, (ii) upon
receipt of a telephonic facsimile transmission with a confirmed telephonic
transmission answer back, (iii) three (3) business days after having been
deposited in the United States mail, certified or registered, return receipt
requested, postage prepaid, or (iv) one (1) business day after having been
dispatched by a nationally recognized overnight courier service, addressed to
the parties or their permitted assigns at the following
addresses:
9
if to the
Company:
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇
Facsimile: 303-893-2902
with a
copy to:
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
if to the
Investors:
▇▇▇ ▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with a
copy to:
▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇.
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇
Facsimile:
312-876-7934
or at
such other address as a party may furnish in writing to each other
party.
Section
7.02. Further
Assurances. Each of the parties hereto agrees to use its
reasonable best efforts to take, or cause to be taken, all appropriate action,
and to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations (including, without limitation, in connection
with obtaining any requisite approval) and to execute such agreements, powers of
attorney or other documents or instruments to expeditiously consummate and make
effective the transactions contemplated by this Agreement and the other
Transaction Documents. In case at any time after the Closing any
further action is necessary or desirable to carry out the purposes of this
Agreement and the other Transaction Documents, the proper officers and directors
of the Company and the Investors shall take all such necessary
action.
Section
7.03. Survival. All
warranties, representations, and covenants made herein or in any other
instrument delivered by the parties hereto or on their behalf under this
Agreement shall be considered to have been relied upon and shall survive the
delivery of the Exchange Shares and payment therefor, regardless of any
investigation made by any such party or on its behalf.
10
Section
7.04. Amendments, Modifications
and Waivers. Any covenant, agreement, provision or condition
of this Agreement may be amended or modified, or compliance therewith may be
waived (either generally or in any particular instance and either retroactively
or prospectively), by (and only by) an instrument in writing signed by the
Company and the Investors.
Section
7.05. Successors and
Assigns. This Agreement shall be so binding upon and shall
inure to the benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns.
Section
7.06. Severability. Should
any part of this Agreement for any reason be declared invalid, such decision
shall not affect the validity of any remaining portion which remaining portion
shall remain in full force and effect as if this Agreement had been executed
with the invalid portion thereto eliminated and it is hereby declared the
intention of the parties hereto that they would have executed the remaining
portion of this Agreement without included therein any such part or parts which
may, for any reason, be hereafter declared invalid.
Section
7.07. Captions. The
descriptive headings of the various Sections or parts of this Agreement are for
convenience only and shall not affect the meaning or construction of any of the
provisions hereof.
Section
7.08. Entire
Agreement. This Agreement constitutes the entire agreement and
understanding among the parties hereto with respect to the subject matter hereof
and supersedes any and all prior agreements and understandings, written or oral,
relating to the subject matter hereof.
Section
7.09. Governing
Law. This Agreement and the rights of the parties hereunder
shall be interpreted in accordance with the laws of the State of Delaware, and
all rights and remedies shall be governed by such laws without regard to
principles of conflicts of laws. Each of the parties hereby consents
to personal jurisdiction, service of process and venue in the federal or state
courts sitting in the City of Chicago for any claim, suit or proceeding arising
under this Agreement to enforce any arbitration award or obtain equitable relief
and hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such state court or, to the extent
permitted by law, in such federal court (subject to the provisions of Section
7.10 hereof). To the extent permitted by law, each of the parties
hereby irrevocably consents to the service of process in any such action or
proceeding by the mailing by certified mail of copies of any service or copies
of the summons and complaint and any other process to such party at the address
specified in Section 7.01 hereof. The parties agree that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions.
11
Section
7.10. Dispute
Resolution. Except as set forth in Section 7.11, all disputes
arising in connection with this Agreement shall be resolved in binding
arbitration in accordance with the applicable rules of the American Arbitration
Association. The arbitration shall be held in the City of Chicago
before a single arbitrator selected in accordance with Section 11 of the
American Arbitration Association Commercial Arbitration Rules who shall have
substantial experience in the investment advisory industry, and shall otherwise
be conducted in accordance with the American Arbitration Association Commercial
Arbitration Rules. The parties covenant that they will participate in
the arbitration in good faith and that they will share equally its costs except
as otherwise provided herein. The provisions of this Section 7.10
shall be enforceable in any court of competent jurisdiction, and the parties
shall bear their own costs in the event of any proceeding to enforce this
Agreement except as otherwise provided herein. The arbitrator shall
assess costs and expenses (including the reasonable legal fees and expenses of
the prevailing party or parties against the other party or parties to such
proceeding). Any party unsuccessfully refusing to comply with an
order of the arbitrators shall be liable for costs and expenses, including
attorney’s fees, incurred by the other party in enforcing the
award.
Section
7.11. Indemnification of Investors
and Management Stockholders. The Company agrees to indemnify,
defend and hold harmless to the fullest extent permitted by applicable law, the
Investors and Management Stockholders from and against all claims, liabilities,
causes of action, actions, suits, proceedings, investigations, judgments,
decrees, losses, damages, fees, costs and expenses (including attorney fees and
expenses of investigation and of enforcing the rights under this Section 7.11 to
the fullest extent permitted by law), whether incurred with respect to third
parties or otherwise, arising out of, resulting from or in connection with,
based upon or relating to any claim by any stockholders of the Company (other
than the Investors and Management Stockholders), whether brought individually,
as a class or derivatively on behalf of the Company, alleging the breach of
fiduciary or other duties of the parties hereto for entering into, challenging
the authority of the Company to enter into, challenging the propriety of the
Board approval of, or otherwise seeking to invalidate, enjoin or modify, or
characterize as fraudulent or tortious, the transactions contemplated hereby or
any portion thereof (collectively “Claims”).
(a) Promptly
after receipt by any Investor or Management Stockholder from any third party of
written notice of any demand, claim or circumstance that, immediately or with
the lapse of time, would reasonably be expected to give rise to a Claim (an
“Asserted
Liability”) that might be entitled to indemnification from the Company
under this Section 7.11, the Investor or Management Stockholder shall give
written notice thereof (the “Claims Notice”) to
the Company; provided, however, that a failure to give such notice shall not
prejudice the Investor or Management Stockholders right to indemnification
hereunder except to the extent that the Company is actually prejudiced thereby.
The Claims Notice shall describe the Asserted Liability in such reasonable
detail as is practicable under the circumstances, and shall, to the extent
practicable under the circumstances, indicate the amount (estimated, if
necessary) of the loss that has been or may be suffered by the Investor or
Management Stockholder.
12
(b) The
Company may elect to compromise or defend, at its own expense and by its own
counsel, any Asserted Liability; provided, however, that if the named parties to
any action or proceeding include (or could reasonably be expected to include)
both the Company and an Investor or Management Stockholder, or more than one
Investor or Management Stockholder, and the Company is advised by counsel that
representation of both parties by the same counsel would be inappropriate under
applicable standards of professional conduct, the Investor or Management
Stockholder may engage one separate counsel to represent all such Investors and
Management Stockholders at the expense of the Company. If the Company
elects to compromise or defend such Asserted Liability, it shall within twenty
(20) business days (or sooner, if the nature of the Asserted Liability so
requires) notify the Investor or Management Stockholder of its intent to do so,
and the Investor or Management Stockholder shall cooperate, at the expense of
the Company, in the compromise of, or defense against, such Asserted Liability.
Notwithstanding the foregoing, any settlement or compromise shall not include
any terms and conditions applicable to an Investor or Management Stockholder,
other than the payment of cash to be paid by the Company, without the prior
written consent of such Investor or Management Stockholder. If the
Company elects not to compromise or defend the Asserted Liability, fails to
notify the Investor or Management Stockholder of its election as herein
provided, contests its obligation to provide indemnification under this
Agreement, or fails to make or ceases making a good faith and diligent defense,
the Investor or Management Stockholder may pay, compromise or defend such
Asserted Liability all at the expense of the Company (in accordance with the
provisions of Section 7.11(c) below). Except as set forth in the preceding
sentence, the Investor or Management Stockholder may not settle or compromise
any claim over the objection of the Company; provided, however, that consent to
settlement or compromise shall not be unreasonably withheld. In any event, the
Investor or Management Stockholder may participate at its own expense in the
defense of such Asserted Liability. The Investor or Management Stockholder shall
in any event make available to the Company any books, records or other documents
within its control that are necessary or appropriate for such defense, all at
the expense of the Company.
(c) If
the Company elects not to compromise or defend an Asserted Liability, or fails
to notify the Investor or Management Stockholder of its election as above
provided, then, to the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Investor or Management Stockholder in
defending any Asserted Liability, shall, from time to time, be advanced by the
Company prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Company of an undertaking by or on behalf of the
Investor or Management Stockholder to repay such amount if it shall be
determined that the Investor or Management Stockholder is not entitled to be
indemnified as authorized in this Section 7.11, without the provision of any
security.
(d) The
Investors and the Management Stockholders shall be entitled to enforce their
rights to indemnification and advancement of expenses pursuant to this Section
7.11 by bringing an action in the Delaware Court of Chancery in accordance with
Section 145(k) of the Delaware General Corporation law, which court may
summarily determine the Company’s obligation to advance expenses (including
attorneys’ fees).
Section
7.12. Remedies. Each
party to this Agreement acknowledges and agrees that in the event of any breach
of this Agreement by any one of them, any of the parties, as the case may be,
would be irreparably harmed and could not be made whole by monetary
damages. Each party accordingly agrees (a) to waive the defense in
any action for specific performance that a remedy at law would be adequate and
(b) each party, in addition to any other remedy to which they may be entitled at
law or in equity, shall be entitled to compel specific performance of this
Agreement.
13
Section
7.13. Counterparts. This
Agreement may be executed in any number of counterparts and by facsimile, each
of which shall be considered an original, but all of which taken together shall
constitute one instrument.
Section
7.14. Interpretation. No
provisions of this Agreement shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial
authority by reason of such party having or being deemed to have drafted or
dictated such provision.
14
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.
|
COMPANY:
|
||
|
By:
|
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
|
|
|
Name: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇
|
||
|
Title: President
& CEO
|
||
|
INVESTORS:
|
||
|
SDB
ASTON, INC.
|
||
|
By:
|
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
|
|
Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
||
|
Title:
President
|
||
|
KCA
ASTON, INC.
|
||
|
By:
|
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
|
|
|
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
|
||
|
Title: President
|
||
|
GFD
ASTON, INC.
|
||
|
By:
|
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
|
|
|
Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
|
||
|
Title:
President
|
||
|
CRD
ASTON, INC.
|
||
|
By:
|
/s/ ▇▇▇▇▇▇▇▇▇ ▇. Dragon
|
|
|
Name:
▇▇▇▇▇▇▇▇▇ ▇. Dragon
|
||
|
Title:
President
|
||
|
▇▇
▇▇▇▇▇, INC.
|
||
|
By:
|
/s/ ▇▇▇▇▇▇ ▇▇▇▇
|
|
|
Name:
▇▇▇▇▇▇ ▇▇▇▇
|
||
|
Title:
President
|
||
15
|
BCH
ASTON, INC.
|
||
|
By:
|
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
|
|
Name:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
||
|
Title:
President
|
||
|
DAR
ASTON, INC.
|
||
|
By:
|
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
|
|
Name:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
||
|
Title:
President
|
||
|
JPR
ASTON, INC.
|
||
|
By:
|
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
|
|
|
Name:
▇▇▇▇ ▇. ▇▇▇▇▇
|
||
|
Title:
President
|
||
16
SCHEDULE
A
|
Management Stockholders
|
Investors
|
Series B
Preferred Stock
|
|||
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
|
SDB
Aston, Inc.
|
371.44
|
|||
|
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
|
KCA
Aston, Inc.
|
285.72
|
|||
|
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
|
GFD
Aston, Inc.
|
142.86
|
|||
|
▇▇▇▇▇▇▇▇▇
▇. Dragon
|
CRD
Aston, Inc.
|
57.14
|
|||
|
▇▇▇▇▇▇
▇▇▇▇
|
▇▇
▇▇▇▇▇, Inc.
|
35.71
|
|||
|
▇▇▇▇▇
▇▇▇▇▇▇▇
|
BCH
Aston, Inc.
|
35.71
|
|||
|
▇▇▇▇▇
▇▇▇▇▇▇▇
|
DAR
Aston, Inc.
|
35.71
|
|||
|
▇▇▇▇
▇▇▇▇▇
|
JPR
Aston, Inc.
|
35.71
|
|||
|
TOTAL
OUTSTANDING
|
1,000
|
SCHEDULE
B
CAPITALIZATION
Issued
and Outstanding Capital Stock:
0 shares
of Series A Junior Participating Preferred Stock
1,000
shares of Series B Preferred Stock
9,085,035
shares of Common Stock
Rights
to Purchase Capital Stock of the Company:
Warrants
to purchase shares of 10,762,008 shares of Common Stock (subject to certain
anti-dilution adjustments)
Rights
issued pursuant to that certain Rights Agreement, dated August 10, 2009, between
the Company and Continental Stock Transfer & Trust Company to purchase
shares of Series A Junior Participating Preferred Stock that are not immediately
exercisable.
4,500,000
shares issuable upon conversion of shares of Series B Preferred Stock (subject
to certain anti-dilution adjustments)