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Exhibit 10.1
MERGER AND ACQUISITION AGREEMENT
dated as of November 14, 1997
RELATING TO THE PURCHASE BY
DVI FINANCIAL SERVICES, INC
of
PARTNERSHIP INTERESTS IN
X.X. XXXXXXXXX PARTNERS, L.P.
and
X.X. XXXXXXXXX MORTGAGE FUNDING, L.P.
and
THE MERGERS OF
X.X. XXXXXXXXX SECURITIES, INC.
WITH AND INTO
DVI HEALTHCARE FINANCIAL ADVISORS, INC.
and
X.X. XXXXXXXXX PARTNERS INC.
WITH AND INTO
DVI MORTGAGE FUNDING, INC.
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TABLE OF CONTENTS
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ARTICLE I
SALE OF PARTNER INTERESTS
1.01 Purchase and Sale of Partner Interests......................... 1
1.02 Purchase Price................................................. 1
ARTICLE II
THE MERGERS
2.01 The DVIHA Merger............................................... 2
2.02 The DVIMF Merger............................................... 2
2.03 DVIHA Effective Time........................................... 2
2.04 DVIMF Effective Time........................................... 2
2.05 Certificates of Incorporation and Bylaws of the Surviving
Corporations................................................ 3
2.06 Directors and Officers of the Surviving Corporations........... 3
2.07 Effects of the Mergers......................................... 3
2.08 Further Assurances............................................. 3
ARTICLE III
CONVERSION OF SHARES; EXCHANGE PROCEDURES
3.01 DVIHA Merger Conversion of Capital Stock....................... 4
3.02 DVIMF Merger Conversion of Capital Stock....................... 4
3.03 Dissenting Stockholders........................................ 5
ARTICLE IV
CLOSING; CERTIFICATES
4.01 Closing........................................................ 5
4.02 Legend on Certificates......................................... 5
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
AND THE PARTNERS
5.01 Organization; Authority........................................ 6
5.02 Capital Structure and Ownership................................ 6
5.03 Corporate and Partnership Documents............................ 7
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Page No.
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5.04 Governmental Approvals and Filings............................. 7
5.05 Books and Records.............................................. 7
5.06 Taxes.......................................................... 8
5.07 Legal Proceedings.............................................. 8
5.08 Compliance With Laws and Orders................................ 9
5.09 Tangible Personal Property..................................... 9
5.10 Bank Accounts.................................................. 9
5.11 Brokers........................................................ 9
5.12 Disclosure..................................................... 9
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
OF THE STOCKHOLDERS AND PARTNERS
6.01 Organization; Authority........................................ 10
6.02 No Conflicts................................................... 10
6.03 Title to Shares; Partner Interests............................. 10
6.04 No Government Proceedings...................................... 11
6.05 Investment Representations..................................... 11
6.06 Brokers........................................................ 11
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF JGW & CO.
7.01 Financial Statements........................................... 12
7.02 Absence of Changes; Undisclosed Liabilities.................... 12
7.03 Employee Benefits.............................................. 13
7.04 Subsidiaries................................................... 13
7.05 No Conflicts................................................... 13
7.07 Real Property.................................................. 14
7.08 Employees...................................................... 14
7.09 Organization; Authority........................................ 14
7.10 Material Contracts............................................. 14
7.11 Intellectual Property Rights................................... 15
7.12 Licenses....................................................... 15
7.13 Insurance...................................................... 15
7.14 Broker-Dealer Business......................................... 16
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Page No.
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ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF PURCHASER, DVIHA AND DVIMF
8.01 Organization................................................... 17
8.02 Authority...................................................... 17
8.03 No Conflicts................................................... 17
8.04 Governmental Approvals and Filings............................. 17
8.05 Legal Proceedings.............................................. 18
8.06 Purchase for Investment........................................ 18
8.07 DVI Stock...................................................... 18
8.08 Capital Stock.................................................. 18
8.09 SEC Reports.................................................... 18
8.10 Brokers........................................................ 18
ARTICLE IX
COVENANTS OF THE STOCKHOLDERS AND THE PARTNERS
9.01 Regulatory and Other Approvals................................. 19
9.02 Investigation by Purchaser..................................... 19
9.03 No Solicitations............................................... 19
9.04 Conduct of Business............................................ 20
9.05 Employee Matters............................................... 21
9.06 Certain Restrictions........................................... 21
9.07 Affiliate Transactions......................................... 22
9.08 Books and Records.............................................. 23
9.09 Noncompetition................................................. 23
9.10 Notice and Cure................................................ 25
9.11 Fulfillment of Conditions...................................... 25
9.12 Relocation of Facilities....................................... 25
9.13 Allocation of Profits and Losses............................... 25
9.14 Use of JGW Name................................................ 26
9.15 Licenses....................................................... 26
ARTICLE X
COVENANTS OF PURCHASER, DVIHA AND DVIMF
10.01 Regulatory and Other Approvals........................... 26
10.02 Notice and Cure.......................................... 27
10.03 Fulfillment of Conditions................................ 27
10.04 Certain Payments......................................... 27
10.05 Non-Solicitation......................................... 27
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Page No.
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10.06 Compliance with Section 9.13............................. 28
ARTICLE XI
CONDITIONS TO OBLIGATIONS OF PURCHASER, DVIHA AND DVIMF
11.01 Representations and Warranties........................... 28
11.02 Performance.............................................. 28
11.03 Officers' Certificates................................... 28
11.04 Orders and Laws.......................................... 28
11.05 Third Party Consents..................................... 28
11.06 Opinion of Counsel....................................... 29
11.07 Certificates............................................. 29
11.08 Proceedings.............................................. 29
ARTICLE XII
CONDITIONS TO OBLIGATIONS OF THE
STOCKHOLDERS AND THE PARTNERS
12.01 Representations and Warranties........................... 29
12.02 Performance.............................................. 30
12.03 Officers' Certificates................................... 30
12.04 Orders and Laws.......................................... 30
12.05 Third Party Consents..................................... 30
12.06 Registration Rights Agreement............................ 30
12.07 Good Standing Certificates............................... 30
12.08 Opinion of Counsel....................................... 30
ARTICLE XIII
SURVIVAL OF REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS
13.01 Survival of Representations, Warranties, Covenants and
Agreements............................................. 31
ARTICLE XIV
INDEMNIFICATION
14.01 Indemnification.......................................... 31
14.02 Method of Asserting Claims............................... 33
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Page No.
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ARTICLE XV
TERMINATION
15.01 Termination.............................................. 36
15.02 Effect of Termination.................................... 37
ARTICLE XVI
DEFINITIONS
16.01 Definitions.............................................. 37
ARTICLE XVII
MISCELLANEOUS
17.01 Notices.................................................. 44
17.02 Entire Agreement......................................... 45
17.03 Expenses................................................. 45
17.04 Public Announcements..................................... 46
17.05 Confidentiality.......................................... 46
17.06 Further Assurances; Post-Closing Cooperation............. 46
17.07 Waiver................................................... 47
17.08 Amendment................................................ 47
17.09 No Third Party Beneficiary............................... 47
17.10 No Assignment; Binding Effect............................ 47
17.11 Headings................................................. 48
17.12 Invalid Provisions....................................... 48
17.13 Governing Law............................................ 48
17.14 Counterparts............................................. 48
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EXHIBIT 10.1
This MERGER AND ACQUISITION AGREEMENT dated as of November 14, 1997
is made and entered into by and among DVI Financial Services, Inc., a Delaware
corporation ("Xxxxxxxxx"), XXX Healthcare Financial Advisors, Inc., a Delaware
corporation ("XXXXX"), XXX Mortgage Funding, Inc., a Delaware corporation
("DVIMF"), X.X. Xxxxxxxxx Management Company, Inc., a Pennsylvania corporation
("JGW & Co."), X.X. Xxxxxxxxx Securities, Inc., a Pennsylvania corporation (the
"Company"), X.X. Xxxxxxxxx Partners, Inc., a Pennsylvania corporation (the
"General Partner"), the persons listed on Schedule A (the "JGW Partners"),
Schedule B (the "MF Partners" and, together with the JGW Partners, the
"Partners"), Schedule C (the "JGW Stockholders") and Schedule D (the "JGW
Partners Stockholders" and, together with the JGW Stockholders, the
"Stockholders") and relates to (i) the merger of (A) the Company with and into
DVIHA and (B) the General Partner with and into DVIMF and (ii) the purchase by
Purchaser (A) from the respective JGW Partners of the limited partner interests
(the "JGW Partner Interests") in X.X. Xxxxxxxxx Partners, L.P., a Pennsylvania
limited partnership (the "JGW Partnership"), listed on Schedule A and (B) from
the respective MF Partners of the limited partner interests (the "MF Partner
Interests" and, together with the JGW Partner Interests, the "Partner
Interests") in X.X. Xxxxxxxxx Mortgage Funding, L.P., a Pennsylvania limited
partnership (the "MF Partnership"), listed on Schedule B. The JGW Partnership,
the MF Partnership, the Company and the General Partner are sometimes
hereinafter collectively referred to as the "Purchased Entities." Capitalized
terms used herein and not otherwise defined have the meanings ascribed to such
terms in Article 16.
WHEREAS, the Boards of Directors of DVIHA, DVIMF, the Company and
the General Partner have each determined that it is advisable and in the best
interests of their respective stockholders to consummate, and have approved, the
business combination transaction provided for herein in which the Company would
merge with and into DVIHA (the "DVIHA Merger") and the General Partner would
merge with and into DVIMF (the "DVIMF Merger");
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
SALE OF PARTNER INTERESTS
1.01 Purchase and Sale of Partner Interests. The Partners agree to
sell to Purchaser, and Purchaser agrees to purchase from the Partners, all of
the right, title and interest of the Partners in and to the Partner Interests at
the Closing on the terms and subject to the conditions set forth in this
Agreement.
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1.02 Purchase Price. The aggregate purchase price for the Partner
Interests (the "Purchase Price") shall be 37,940 shares of common stock, par
value $.005 per share (the "DVI Stock"), of DVI, Inc., a Delaware corporation
and the parent of Purchaser ("DVI"), which will be issued to the Partners in the
amounts set forth on Schedules A and B.
ARTICLE II
THE MERGERS
2.01 The DVIHA Merger. At the DVIHA Effective Time (as defined in
Section 2.03), upon the terms and subject to the conditions of this Agreement
and in accordance with the General Corporation Law of the State of Delaware (the
"DGCL") and the Pennsylvania Business Corporation Law of 1988 (the "PBCL"), the
Company shall be merged with and into DVIHA. DVIHA shall be the surviving
corporation in the DVIHA Merger. As a result of the DVIHA Merger, the
outstanding shares of capital stock of DVIHA and the Company shall be converted
or cancelled in the manner provided in Article III.
2.02 The DVIMF Merger. At the DVIMF Effective Time (as defined in
Section 2.04), upon the terms and subject to the conditions of this Agreement
and in accordance with the DGCL and the PBCL, the General Partner shall be
merged with and into DVIMF. DVIMF shall be the surviving corporation in the
DVIMF Merger. As a result of the DVIMF Merger, the outstanding shares of capital
stock of DVIMF and the General Partner shall be converted or cancelled in the
manner provided in Article III.
2.03 DVIHA Effective Time. At the Closing, (a) a certificate of
merger (the "DVIHA Certificate of Merger") shall be duly prepared and executed
by DVIHA as the surviving corporation of the DVIHA Merger and as soon as
practicable thereafter delivered to the Secretary of State of the State of
Delaware (the "Delaware Secretary of State") for filing, as provided in Section
251 of the DGCL and (b) articles of merger (the "DVIHA Articles of Merger")
shall be duly prepared and executed by DVIHA as the surviving corporation of the
DVIHA Merger and, as soon as practicable thereafter, delivered to the Department
of State of the Commonwealth of Pennsylvania (the "Pennsylvania Department of
State") for filing, as provided in Sections 1921 and 1927 of the PBCL, each, on,
or as soon as practicable after, the Closing Date. The DVIHA Merger shall become
effective on the later to occur of (i) the time of the filing of the DVIHA
Certificate of Merger with the Delaware Secretary of State and (ii) the time of
filing of the DVIHA Articles of Merger with the Pennsylvania Department of State
(the date and time of such later filing being referred to herein as the "DVIHA
Effective Time").
2.04 DVIMF Effective Time. At the Closing, (a) a certificate of
merger (the "DVIMF Certificate of Merger") shall be duly prepared and executed
by DVIMF as the surviving corporation of the DVIMF Merger and as soon as
practicable thereafter delivered to the Delaware Secretary of State for filing,
as provided in Section 251 of the DGCL and (b) articles of merger (the "DVIMF
Articles of Merger") shall be duly prepared and executed by DVIMF as the
surviving corporation of the DVIMF Merger and, as soon as practicable
thereafter, delivered to the Pennsylvania Department of State for filing, as
provided in Sections 1921 and 1927 of the PBCL, each, on, or as soon as
practicable after, the Closing Date. The
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DVIMF Merger shall become effective on the later to occur of (i) the time of the
filing of the DVIMF Certificate of Merger with the Delaware Secretary of State
and (ii) the time of filing of the DVIMF Articles of Merger with the
Pennsylvania Department of State (the date and time of such later filing being
referred to herein as the "DVIMF Effective Time").
2.05 Certificates of Incorporation and Bylaws of the Surviving
Corporations.
(a) At the DVIHA Effective Time, (i) the Certificate of
Incorporation of DVIHA as in effect immediately prior to the DVIHA Effective
Time shall be the Certificate of Incorporation of DVIHA, as the surviving
corporation of the DVIHA Merger, until thereafter amended as provided by law and
such Certificate of Incorporation, and (ii) the Bylaws of DVIHA as in effect
immediately prior to the DVIHA Effective Time shall be the Bylaws of DVIHA, as
the surviving corporation of the DVIHA Merger, until thereafter amended as
provided by law, the Certificate of Incorporation of DVIHA and such Bylaws.
(b) At the DVIMF Effective Time, (i) the Certificate of
Incorporation of DVIMF as in effect immediately prior to the DVIMF Effective
Time shall be the Certificate of Incorporation of DVIMF, as the surviving
corporation of the DVIMF Merger, until thereafter amended as provided by law and
such Certificate of Incorporation, and (ii) the Bylaws of DVIMF as in effect
immediately prior to the DVIMF Effective Time shall be the Bylaws of DVIMF, as
the surviving corporation of the DVIMF Merger, until thereafter amended as
provided by law, the Certificate of Incorporation of DVIMF and such Bylaws.
2.06 Directors and Officers of the Surviving Corporations.
(a) The directors and officers of DVIHA immediately prior to the
DVIHA Effective Time shall, from and after the DVIHA Effective Time, be the
directors and officers, respectively, of DVIHA, as the surviving corporation of
the DVIHA Merger, until their successors shall have been duly elected or
appointed and qualified or until their earlier death, resignation or removal in
accordance with the DVIHA's Certificate of Incorporation and Bylaws.
(b) The directors and officers of DVIMF immediately prior to the
DVIMF Effective Time shall, from and after the DVIMF Effective Time, be the
directors and officers, respectively, of DVIMF, as the surviving corporation of
the DVIMF Merger, until their successors shall have been duly elected or
appointed and qualified or until their earlier death, resignation or removal in
accordance with the DVIMF's Certificate of Incorporation and Bylaws.
2.07 Effects of the Mergers. Subject to the foregoing, the effects
of the DVIHA Merger and the DVIMF Merger shall be as provided in the applicable
provisions of the DGCL and the PBCL.
2.08 Further Assurances. Each party hereto will execute such further
documents and instruments and take such further actions as may reasonably be
requested by one or more of the others to consummate the DVIHA Merger and the
DVIMF Merger, to vest the surviving corporations with full title to all assets,
properties, rights, approvals, immunities and
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franchises of the Company or the General Partner, as the case may be, or to
effect the other purposes of this Agreement.
ARTICLE III
CONVERSION OF SHARES; EXCHANGE PROCEDURES
3.01 DVIHA Merger Conversion of Capital Stock. At the DVIHA
Effective Time, by virtue of the DVIHA Merger and without any action on the part
of the holders thereof:
3.011 Capital Stock. Each issued and outstanding share of the common
stock, par value $.01 per share, of DVIHA ("DVIHA Common Stock") shall be
converted into and become one fully paid and nonassessable share of common
stock, par value $.01 per share, of DVIHA, as the surviving corporation ("DVIHA
Surviving Corporation Common Stock"). Each certificate representing outstanding
shares of DVIHA Common Stock shall at the DVIHA Effective Time represent an
equal number of shares of DVIHA Surviving Corporation Common Stock.
3.012 Cancellation of Treasury Stock. All shares of common stock,
par value $.01 per share, of the Company (the "JGW Stock") that are owned by the
Company as treasury stock shall be canceled and retired and shall cease to exist
and no stock of DVIHA or other consideration shall be delivered in exchange
therefor.
3.013 Consideration. All of the shares of JGW Stock held by the JGW
Stockholders shall be cancelled, and shall be converted into the right of the
JGW Stockholders to receive 42,005 shares of DVI Stock, which will be issued to
the JGW Stockholders in the amounts set forth on Schedule C.
3.02 DVIMF Merger Conversion of Capital Stock. At the DVIMF
Effective Time, by virtue of the DVIMF Merger and without any action on the part
of the holders thereof:
3.021 Capital Stock. Each issued and outstanding share of the common
stock, par value $.01 per share, of DVIMF ("DVIMF Common Stock") shall be
converted into and become one fully paid and nonassessable share of common
stock, par value $.01 per share, of DVIMF, as the surviving corporation ("DVIMF
Surviving Corporation Common Stock"). Each certificate representing outstanding
shares of DVIMF Common Stock shall at the DVIMF Effective Time represent an
equal number of shares of DVIMF Surviving Corporation Common Stock.
3.022 Cancellation of Treasury Stock. All shares of common stock,
par value $.01 per share, of the General Partner (the "JGW Partners Stock" and,
together with the JGW Stock, the "Stock") that are owned by the General Partner
as treasury stock shall be canceled and retired and shall cease to exist and no
stock of DVIMF or other consideration shall be delivered in exchange therefor.
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3.023 Consideration. All of the shares of JGW Partners Stock held by
the JGW Stockholders shall be cancelled, and shall be converted into the right
of the JGW Partners Stockholders to receive 4,065 shares of DVI Stock, which
will be issued to the JGW Partners Stockholders in the amounts set forth on
Schedule D.
3.03 Dissenting Stockholders.
3.031 Any shares of Stock the holder of which has, as of the DVIHA
Effective Time or the DVIMF Effective Time, as the case may be, asserted and
preserved, and not effectively withdrawn or otherwise lost, his dissenters'
rights pursuant to the PBCL (all such holders, collectively, the "Dissenting
Stockholders" and all such shares, the "Dissenting Shares") shall not be
converted into the right to receive the consideration described in Section 3.013
or 3.023, as the case may be, and the Dissenting Stockholders shall be entitled
to payment of the value of the Dissenting Shares in accordance with the
provisions of the PBCL; but if, after the DVIHA Effective Time or the DVIMF
Effective Time, as the case may be, any Dissenting Stockholder fails to perfect
or otherwise loses any such dissenters' rights pursuant to the PBCL, any such
Dissenting Stockholder shall forfeit the right to appraisal of such Dissenting
Shares, and to the extent that the PBCL requires such treatment, such Dissenting
Shares shall thereupon be deemed to have been converted as of the DVIHA
Effective Time or the DVIMF Effective Time, as the case may be, into the right
to receive the consideration described in Section 3.013 or 3.023, as the case
may be, without any interest unless otherwise required by law.
3.032 The Company and the General Partner shall give prompt notice
to Purchaser with respect to any preservation or assertion of rights under
subchapter D of chapter 15 of the PBCL by any holder of Stock. Neither the
Company nor the General Partner shall, except with the prior written consent of
Purchaser, voluntarily make any payment with respect to, or settle or offer to
settle, any rights of any Dissenting Stockholder.
ARTICLE IV
CLOSING; CERTIFICATES
4.01 Closing. The Closing will take place at the offices of Xxxxxx &
Xxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other place as
Purchaser and the Stockholders and the Partners mutually agree, at 10:00 A.M.
local time, on the Closing Date. At the Closing, Purchaser will cause the DVI
Stock to be delivered to the Stockholders and the Partners in the amounts set
forth on Schedules A, B, C and D. Simultaneously, (a) the Partners will deliver
to Purchaser a document in form satisfactory to Purchaser and executed by each
Partner by which the Partner assigns and transfers to Purchaser its Partner
Interests and (b) the Stockholders will surrender the certificates representing
all the shares of Stock owned by such Stockholders to Purchaser. At the Closing,
there shall also be delivered to Purchaser, DVIHA, DVIMF, the Stockholders and
the Partners the certificates and other documents and instruments to be
delivered under Articles XI and XII.
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4.02 Legend on Certificates. The certificates representing shares of
DVI Stock issued to the Stockholders and the Partners at the Closing may bear
legends to the effect that the shares represented by them have not been
registered under the Securities Act, and may only be sold or transferred in a
transaction which is registered under that Act or is exempt from the
registration requirements of that Act. The legend specified in the preceding
sentence shall not be placed on the certificates if the issuance or resale of
the shares they represent has been registered under the Securities Act, or shall
be removed upon registration of the resale of the shares.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
AND THE PARTNERS
Each Stockholder and Partner, severally, represents and warrants to
Purchaser, DVIHA and DVIMF as follows:
5.01 Organization; Authority. (a) Each of the Company and the
General Partner is a corporation duly organized and validly existing under the
Laws of the Commonwealth of Pennsylvania. Each of the JGW Partnership and the MF
Partnership is a limited partnership duly organized and validly existing under
the Laws of the Commonwealth of Pennsylvania. Each of the Purchased Entities has
all requisite corporate or partnership power and authority, as the case may be,
to own, lease and operate its properties and to carry on its business as now
being conducted. Each of the Purchased Entities is duly qualified, licensed or
admitted to do business and is in good standing in all jurisdictions in which
the ownership, use or leasing of its Assets and Properties, or the conduct or
nature of its business, makes such qualification, licensing or admission
necessary and in which the failure to be so qualified, licensed or admitted and
in good standing could reasonably be expected to have a material adverse effect
on the Business or Condition of the Company.
(b) Each of the Company and the General Partner has all requisite
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery by
the Company and the General Partner of this Agreement, and the performance of
their respective obligations hereunder, have been duly and validly authorized by
the Board of Directors and shareholders of the Company and the General Partner,
no other action on the part of the Company, the General Partner or their
respective stockholders being necessary. This Agreement has been duly and
validly executed and delivered by the Company and the General Partner and
constitutes their legal, valid and binding obligation enforceable against the
Company and the General Partner in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws relating to or affecting creditors'
rights generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
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5.02 Capital Structure and Ownership. The authorized capital stock
of the Company consists of 1,000 shares of common stock, no par value per share,
100 of which are issued and outstanding and held of record by the JGW
Stockholders. The JGW Stock constitutes all of the issued and outstanding shares
of capital stock of the Company. The authorized capital stock of the General
Partner consists of 1,000 shares of common stock, par value $.01 per share, all
of which are issued and outstanding and held of record by the JGW Partners
Stockholders. The JGW Partners Stock constitutes all of the issued and
outstanding shares of capital stock of the General Partner. All issued and
outstanding shares of capital stock of the Company and the General Partner are
duly authorized, validly issued, fully paid and non-assessable and free from any
restrictions on transfer, except for those imposed by federal or state
securities or "blue sky" laws and except for those pursuant to this Agreement.
Except for this Agreement, there are no outstanding Options with respect to the
Company or the General Partner, or their respective shares of capital stock.
None of the Stockholders are bound by any Contract relating to its shares of
Stock.
The JGW Partner Interests held by the JGW Partners are the only
limited partner interests in the JGW Partnership, have been duly authorized and
validly issued and constitute 100% of the limited partner interests in the JGW
Partnership. The General Partner is the only general partner of the JGW
Partnership and owns 100% of the general partner interests in the JGW
Partnership. All of the partners, limited and general, have been duly admitted
to the JGW Partnership. The MF Partner Interests held by the MF Partners are the
only limited partner interests in the MF Partnership, have been duly authorized
and validly issued and constitute 100% of the limited partner interests in the
MF Partnership. The General Partner is the only general partner of the MF
Partnership. All of the partners, limited and general, have been duly admitted
to the MF Partnership. Neither the JGW Partnership nor the MF Partnership has
issued any Options, nor is either of them a party to any other agreement, which
requires, or upon the passage of time, the payment of money or the occurrence of
any other event, may require, the JGW Partnership or the MF Partnership to sell
or issue or redeem, repurchase or otherwise acquire any limited partner or
general partner interests.
5.03 Corporate and Partnership Documents. The Stockholders have
prior to the execution of this Agreement delivered to Purchaser true and
complete copies of the certificate of incorporation and by-laws of the Company
and the General Partner as in effect on the date hereof. The Partners have prior
to the execution of this Agreement delivered to Purchaser true and complete
copies of the certificate of limited partnership and partnership agreement of
the JGW Partnership and the MF Partnership, each as in effect on the date
hereof. The General Partner, as the general partner of the JGW Partnership and
the MF Partnership, has at all times acted in compliance with such partnership
agreements and has not breached any obligations applicable to it under or in
connection with the partnership agreements, and none of the General Partner, the
JGW Partnership or the MF Partnership has taken any action that is not
authorized by such partnership agreements.
5.04 Governmental Approvals and Filings. Except as disclosed in
Schedule 5.04, no consent, approval, authorization, license, clearance or order
of, declaration or notification to, or filing, registration or compliance with,
any Governmental or Regulatory Authority on the part of any of the Purchased
Entities is required in connection with the
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execution, delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby.
5.05 Books and Records. The minute books and other similar records
of the Purchased Entities as made available to Purchaser prior to the execution
of this Agreement contain a true and complete record, in all material respects,
of all action taken at all meetings and by all written consents in lieu of
meetings of the stockholders, the boards of directors and committees of the
board of directors or similar governing bodies of each of the Purchased
Entities. The stock transfer ledgers and other similar records of the Company
and the General Partner as made available to Purchaser prior to the execution of
this Agreement accurately reflect all record transfers prior to the execution of
this Agreement in the capital stock of the Company and the General Partner.
5.06 Taxes. (a) The General Partner has validly elected to be an "S
corporation" (within the meaning of Section 1361(a)(1) of the Code), for federal
income tax purposes as of January 1, 1986, and has maintained its status as an
"S corporation" at all times thereafter. The General Partner has validly elected
to be an "S corporation" in all state and local jurisdictions where it would,
absent such an election, be subject to corporate income or franchise tax, and
has maintained its status as an "S corporation" in such jurisdictions at all
times thereafter. No state of facts exists or existed which presents or
presented any risk that the General Partner's status as an "S corporation" is or
was subject to termination or revocation. The General Partner has no "Subchapter
C" earnings and profits (within the meaning of Code Section 1362(d)(3)(B)).
(b) Each of the Purchased Entities has filed all Tax Returns
(including statements of estimated taxes owed) required to be filed within the
applicable periods for such filings and has paid all Taxes required to be paid,
and has established adequate reserves (net of estimated Tax payments already
made) for the payment of all taxes payable in respect to the period subsequent
to the last periods covered by such returns. All such Tax Returns are true,
correct and complete in all material respects. Proper and adequate amounts have
been withheld by each of the Purchased Entities from its employees for all
periods in compliance with the tax, social security and unemployment withholding
provisions of all federal, state, local and foreign laws. No deficiencies for
any Tax are currently assessed against any of the Purchased Entities, and no Tax
Returns of the Purchased Entities have been audited, and to the knowledge of the
Stockholders and the Partners, there is no such audit pending or contemplated.
There is no Tax lien, whether imposed by any federal, state or local taxing
authority, outstanding against the assets, properties or business of any of the
Purchased Entities, other than any lien for Taxes not yet due and payable. There
are no agreements, waivers or other arrangements providing for an extension of
time with respect to the assessment of any Tax or deficiency against any of the
Purchased Entities.
(c) Within a reasonable period of time after the date of this
Agreement, the Stockholders and the Partners (i) shall cause to be prepared and
filed with the Internal Revenue Service and the applicable state taxing
authorities short period returns for the JGW Partnership and the MF Partnership
for the period ended October 31, 1997 and (ii) shall cause to be prepared Forms
K-1 for the General Partner.
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5.07 Legal Proceedings. (a) There are no Actions or Proceedings
pending or, to the knowledge of the Stockholder and the Partners, threatened
against, relating to or affecting any of the Purchased Entities or any of their
respective Assets and Properties; and
(b) there are no Orders outstanding against any of the Purchased
Entities.
Prior to the execution of this Agreement, the Stockholders and the Partners have
made available to Purchaser or Purchaser's representatives all responses of
counsel for each of the Purchased Entities to auditors' requests for information
delivered in connection with the financial statements (together with any updates
provided by such counsel) regarding Actions or Proceedings pending or threatened
against, relating to or affecting any of the Purchased Entities.
5.08 Compliance With Laws and Orders. None of the Purchased Entities
is nor has at any time within the last five years been, or has received any
notice that it is or has at any time within the last five years been, in
violation of or in default under, in any material respect, any Law or Order
applicable to any of the Purchased Entities (including those relating to
employment of labor), or any of their respective Assets and Properties.
5.09 Tangible Personal Property. The Purchased Entities are in
possession of and have good title to, or have valid leasehold interests in or
valid rights under Contract to use, all tangible personal property which is used
in and individually or in the aggregate with other such property is material to
the Business or Condition of the Company. All such tangible personal property is
free and clear of all Liens, other than Permitted Liens, and is in all material
respects in good working order and condition, ordinary wear and tear excepted.
5.10 Bank Accounts. Set forth on Schedule 5.10 is a true and
complete list of all bank accounts, lock boxes, safety deposit boxes and other
such accounts and boxes maintained by the Purchased Entities and the signatories
thereunder.
5.11 Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by the Stockholders and
the Partners directly with Purchaser, DVIHA and DVIMF, without the intervention
of any Person on behalf of the Stockholders or the Partners in such manner as to
give rise to any valid claim by any Person against Purchaser, DVIHA and DVIMF or
any Purchased Entity for a finder's fee, brokerage commission or similar
payment.
5.12 Disclosure. The representations or warranties of the
Stockholders and the Partners contained in this Agreement, and the statements
contained in the Schedules hereto or any certificate or other writing furnished
to Purchaser, DVIHA and DVIMF by the Stockholders or the Partners pursuant to
any provision of this Agreement, do not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements herein or therein, not misleading.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES
OF THE STOCKHOLDERS AND PARTNERS
Each Stockholder and Partner, severally and not jointly, hereby
represents and warrants as to such Stockholder or Partner (and not as to any
other Stockholder or Partner) to Purchaser, DVIHA and DVIMF as follows:
6.01 Organization; Authority. If such Stockholder or Partner is a
partnership or a corporation, such Stockholder or Partner is duly organized and
validly existing under the laws of its jurisdiction of organization. Such
Stockholder or Partner has all requisite power and legal capacity to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery by such Stockholder or Partner of this Agreement, and
the performance of its respective obligations hereunder, have been duly and
validly authorized and no other action on the part of such Stockholder or
Partner is necessary. This Agreement has been duly and validly executed and
delivered by such Stockholder or Partner and constitutes the legal, valid and
binding obligation of such Stockholder or Partner enforceable against such
Stockholder or Partner in accordance with its terms, except as enforcement may
be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws relating to or affecting creditors' rights
generally and except as enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a proceeding in
equity or at law).
6.02 No Conflicts. The execution and delivery by such Stockholder or
Partner of this Agreement do not and the performance by such Stockholder or
Partner of its obligations under this Agreement and the consummation of the
transactions contemplated hereby will not:
(a) conflict with or result in a violation or breach of any of the
organizational documents if applicable of such Stockholder or Partner;
(b) subject to obtaining the consents, approvals and actions, making
the filings and giving the notices described herein, conflict with or result in
a violation or breach of any Law or Order applicable to such Stockholder or
Partner or any of its Assets and Properties (other than such conflicts,
violations or breaches which could not in the aggregate reasonably be expected
to materially adversely affect the validity or enforceability of this
Agreement); or
(c) except as disclosed in Schedule 6.02, (i) conflict with or
result in a violation or breach of or give rise to a right of termination,
cancellation or acceleration of any right or obligation of such Stockholder or
Partner under, (ii) constitute (with or without notice or lapse of time or both)
a default by such Stockholder or Partner under, (iii) require such Stockholder
or Partner to obtain any consent, approval or action of, make any filing with or
give any notice to any Person as a result or under the terms of, or (iv) result
in the creation or imposition of any Lien upon such Stockholder or Partner or
any of its Assets and Properties under, any Contract or License to which such
Stockholder or Partner is a party or by which any
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of its Assets and Properties is bound and which, individually or in the
aggregate with other such Contracts and Licenses, is material to the validity or
enforceability of this Agreement.
6.03 Title to Shares; Partner Interests. (a) Such Stockholder owns
the shares of Stock opposite its name on Schedule C and Schedule D, if any,
beneficially and of record, free and clear of all Liens and such Stockholder has
the full authority to sell its shares of Stock as contemplated by this
Agreement. Except for this Agreement and as disclosed in Schedule 6.03, there
are no outstanding Options with respect to such Stockholder's shares of Stock.
Except as set forth on Schedule 6.03, such Stockholder is not bound by any
Contract relating to its shares of Stock.
(b) Such Partner owns the Partner Interests opposite its name on
Schedule A and Schedule B, if any, beneficially and of record, free and clear of
all Liens and such Partner has the full authority and unrestricted right to sell
its Partner Interests as contemplated by this Agreement. Except for this
Agreement and as disclosed in Schedule 6.03, there are no outstanding Options
with respect to such Partner's Partner Interests. Except as set forth on
Schedule 6.03, such Partner is not bound by any Contract relating to its Partner
Interests.
6.04 No Government Proceedings. Such Stockholder or Partner has not,
during the past ten years, been the subject of any governmental proceeding,
investigation or inquiry, including, without limitation, any proceeding,
investigation or inquiry involving the United States Securities and Exchange
Commission or any other federal or state regulatory authority having
jurisdiction over the business activities of such Stockholder or Partner or any
of the Purchased Entities.
6.05 Investment Representations. Such Stockholder or Partner
understands and acknowledges that the shares of DVI Stock being acquired
pursuant to this Agreement are not registered under the Securities Act or any
applicable state securities law, and that such DVI Stock may not be transferred
or sold except pursuant to the registration provisions of the Securities Act or
pursuant to an applicable exemption therefrom and pursuant to applicable state
securities laws and regulations, and that the shares of DVI Stock will bear
appropriate legends to that effect pursuant to Section 4.02. The DVI Stock is
being acquired for such Stockholder's or Partner's own account, for investment
and not with a view to, or for resale in connection with, any distribution
thereof within the meaning of the Securities Act or the securities laws of any
other state applicable to such Stockholder or Partner. Such Stockholder or
Partner is able to bear the economic risk of the purchase of the DVI Stock
pursuant to the terms of this Agreement, including a complete loss of such
Stockholder's or Partner's investment in the DVI Stock. Such Stockholder or
Partner, either alone or with such Stockholder's or Partner's professional
financial advisers who are unaffiliated with and are not compensated by
Purchaser, is knowledgeable in and experienced with respect to investments in
general, and experienced with respect to investments in general, and experienced
in evaluating and investing in businesses such as Purchaser. Such Stockholder or
Partner has received all information he or she has requested with respect to
DVI, Purchaser, this Agreement and the transactions contemplated hereby, and has
been given the opportunity to ask questions of and receive answers from officers
of the DVI and Purchaser concerning the transactions contemplated by this
Agreement and to obtain such additional information which DVI or Purchaser
possess or can acquire without
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unreasonable effort or expense that is necessary to verify the information that
was otherwise provided. By reason of such knowledge and experience and the
receipt of such information, such Stockholder or Partner is capable of
evaluating the merits and risks of, and making an informed business decision
with regard to, investment in DVI.
6.06 Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by such Stockholder or
Partner directly with Purchaser, DVIHA and DVIMF without the intervention of any
Person on behalf of such Stockholder or Partner in such manner as to give rise
to any valid claim by any Person against Purchaser, DVIHA and DVIMF or any
Purchased Entity for a finder's fee, brokerage commission or similar payment.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF JGW & CO.
JGW & Co. hereby represents and warrants to Purchaser, DVIHA and
DVIMF as follows:
7.01 Financial Statements. Prior to the execution of this Agreement,
JGW & Co. has delivered to Purchaser complete copies of the following financial
statements:
(a) the audited balance sheet of the Company as of December 31, 1996
and the related audited statements of income, retained earnings and cash flows
for the fiscal year then ended, together with a true and correct copy of the
report on such audited information by BDO Xxxxxxx;
(b) the unaudited balance sheet of the JGW Partnership and the MF
Partnership as of December 31, 1996 and the related unaudited statements of
income, partners equity and cash flows for the fiscal year then ended; and
(c) the unaudited balance sheets of the Company, the JGW Partnership
and the MF Partnership as of October 31, 1997 and the related unaudited
statements of income, retained earnings or partners equity, as the case may be,
for the portion of the fiscal year then ended.
Except as set forth in the notes thereto, all such financial statements were
prepared in accordance with GAAP and fairly present, in all material respects,
the financial condition and results of operations of the Company, the JGW
Partnership and the MF Partnership as of the respective dates thereof and for
the respective periods covered thereby subject, with respect to the unaudited
financial statements, to normal year-end adjustments and lack of footnotes.
7.02 Absence of Changes; Undisclosed Liabilities. Except for the
execution and delivery of this Agreement and the transactions to take place
pursuant hereto on the Closing Date, since December 31, 1996 there has not been
any material adverse change, or any event
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or development which, individually or together with other such events, could
reasonably be expected to result in a material adverse change in the Business or
Condition of the Company other than any change arising out of any general
business, economic or political conditions.
Except as reflected in the balance sheets of the Company, the JGW
Partnership and the MF Partnership and the notes thereto furnished to Purchaser,
none of the Purchased Entities has Liabilities of any nature, known or unknown,
fixed or contingent, except (i) Liabilities not required under GAAP to be
presented in the balance sheets or the corresponding notes thereto and (ii)
Liabilities incurred in the ordinary course of business since December 31, 1996.
None of the Purchased Entities has (i) incurred any liability for money borrowed
since December 31, 1996, other than borrowings in the ordinary course of
business consistent with past practice to fund operations or (ii) incurred any
liability or made any payment not in the ordinary course of business consistent
with past practice since December 31, 1996.
7.03 Employee Benefits. (a) Each of the Purchased Entities has
complied with all applicable laws, rules and regulations relating to employment
and labor management relations, including those relating to wages and the
payment thereof, conditions of employment, hours, collective bargaining and the
payment and withholding of taxes. Each of the Purchased Entities has withheld
all amounts required by law to be withheld from the wages or salaries of its
employees, if any, and none of the Purchased Entities is liable for any arrears
of wages or other taxes or penalties for failure to comply with any of the
foregoing. No union has been certified or recognized by any of the Purchased
Entities.
(b) There are no pending or threatened labor disputes, arbitration
proceedings, complaints, charges, cases or controversies pending or threatened
between any of the Purchased Entities, on the one hand, and any employee or any
governmental authority, on the other hand.
(c) None of the Purchased Entities maintains or contributed to and
does not currently contribute to or sponsor or maintain any Welfare Benefit
Plan, Pension Benefit Plan or fringe benefit plan and does not have any
outstanding present obligations to contribute or make payments, whether
voluntary, contingent or otherwise under any such plans.
(d) None of the Purchased Entities has any liability (accrued,
contingent or otherwise) with respect to any Welfare Benefit Plan, Pension
Benefit Plan or fringe benefit plan.
7.04 Subsidiaries. None of the Purchased Entities have any
Subsidiaries or other equity investments in any other Person.
7.05 No Conflicts. The consummation of the transactions contemplated
hereby will not:
(a) conflict with or result in a violation or breach of any of the
terms, conditions or provisions of the certificate of incorporation or by-laws
of the Company or the General Partner or the certificate of limited partnership
or partnership agreement of the JGW Partnership or the MF Partnership;
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(b) conflict with or result in a violation or breach of any term or
provision of any Law or Order applicable to any of the Purchased Entities or any
of their respective Assets and Properties; or
(c) except as disclosed in Schedule 7.05, (i) conflict with or
result in a violation or breach of, (ii) constitute (with or without notice or
lapse of time or both) a default by any of the Purchased Entities under, (iii)
require any Purchased Entity to obtain any consent, approval or action of, make
any filing with or give any notice to any Person as a result or under the terms
of, (iv) result in or give to any Person any right of termination, cancellation,
acceleration or modification in or with respect to, (v) result in or give to any
Person any additional rights or entitlement to increased, additional,
accelerated or guaranteed payments under, or (vi) result in the creation or
imposition of any Lien (other than Permitted Liens) upon any of the Purchased
Entities or any of their respective Assets and Properties under, any Contract or
License to which any of the Purchased Entities is a party or by which any of
their respective Assets and Properties is bound.
7.06 Environmental Matters. None of the Purchased Entities has any
material liability under any federal, state or local environmental laws.
7.07 Real Property. (a) Schedule 7.07 contains a true, correct and
complete list of the leases to which any of the Purchased Entities is a party as
lessee (the "Leases");
(b) None of the Purchased Entities owns any real property;
(c) The Leases are in full force and effect and have not been
amended in any material respect except as set forth in Schedule 7.07. None of
the Purchased Entities has given nor has any Purchased Entity received, any
written notice of a material default under any of the Leases which remains
uncured (the foregoing does not apply to delinquencies in the payment of monthly
rent that have existed for less than thirty (30) days), except as set forth in
Schedule 7.06; and
(d) Prior to the execution of this Agreement, the Stockholders and
the Partners have delivered to Purchaser true, correct and complete copies of
the Leases.
7.08 Employees. Schedule 7.08 contains a list of the name of each
officer and full-time employee of each of the Purchased Entities at the date
hereof, together with each such person's position or function, annual base
salary or wages and any incentive or bonus arrangement with respect to such
person in effect on such date. None of the Purchased Entities has received any
information that would lead it to believe that a material number of such persons
will or may cease to be employees, or will refuse offers of employment from
Purchaser, because of the consummation of the transactions contemplated by this
Agreement.
7.09 Organization; Authority. JGW & Co. is a corporation, duly
organized and validly existing under the laws of the Commonwealth of
Pennsylvania. JGW & Co. has all requisite corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery by JGW & Co.
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of this Agreement, and the performance of its obligations hereunder, have been
duly and validly authorized and no other action on the part of JGW & Co. is
necessary. This Agreement has been duly and validly executed and delivered by
JGW & Co. and constitutes its legal, valid and binding obligation, enforceable
against JGW & Co. in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws relating to or affecting creditors' rights
generally and except as enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a proceeding in
equity or at law).
7.10 Material Contracts. (a) Schedule 7.10 lists all Material
Contracts (other than Leases) to which any of the Purchased Entities is a party.
True, correct and complete copies of each such Material Contract previously have
been furnished or made available to Purchaser. Each such Material Contract is in
full force and effect and contains the complete understanding between the
parties thereto with respect to the subject matter thereof, and with respect to
such Material Contract, (i) to the knowledge of the Stockholders and the
Partners, there exists no material default or claim thereof by any party to any
Material Contract, (ii) none of the Purchased Entities has received any notice
that any person intends to cancel, modify or terminate any Material Contract or
to exercise or not to exercise any options thereunder and (iii) none of the
Purchased Entities has given any notice of cancellation, modification or
termination of any Material Contract or to exercise or not to exercise any
options thereunder.
(b) Each Material Contract is valid and binding, and enforceable
against each party thereto in accordance with its terms, except as
enforceability or the availability of particular remedies may be limited by
bankruptcy, insolvency, moratorium and other similar creditors rights laws, by
general equitable principles and by considerations of public policy.
(c) None of the Purchased Entities has an outstanding power of
attorney to any person, firm or corporation for any purpose whatsoever. None of
the Purchased Entities is restricted by written agreement from carrying on its
business anywhere in the world.
7.11 Intellectual Property Rights. Schedule 7.11 discloses all
Intellectual Property which is material to the Business or Condition of the
Company. The Company, the General Partner, the JGW Partnership or the MF
Partnership, as the case may be, either has all right, title and interest in or
a license to use such Intellectual Property. Except as disclosed in Schedule
7.11, (i) none of the Purchased Entities is in default (nor with the giving of
notice or lapse of time or both, would be in default) in any material respect
under any license to use the Intellectual Property disclosed in Schedule 7.11,
and (ii) to the knowledge of the Stockholders and the Partners, the Intellectual
Property disclosed in Schedule 7.11 is not being infringed by any other Person.
None of the Purchased Entities has received notice alleging infringement of any
Intellectual Property of any other Person. There are no infringement claims
pending or unresolved and, to the knowledge of the Stockholders and the
Partners, it is not infringing any Intellectual Property rights of any other
Person, the effect of which could reasonably be expected to materially adversely
affect to the Business or Condition of the Company.
7.12 Licenses. Schedule 7.12 contains a true, correct and complete
list of all Licenses which are used in and individually or in the aggregate with
other such Licenses
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material to the Business or Condition of the Company. Prior to the execution of
this Agreement, the Stockholders and the Partners have delivered to Purchaser
true and complete copies of all such Licenses. Except as disclosed in Schedule
7.12, each such License is in full force and effect.
7.13 Insurance. Schedule 7.13 contains a true and complete list of
all material insurance policies currently in effect that insure the business,
operations or employees of the Purchased Entities or affect or relate to the
ownership, use or operation of any of their respective Assets and Properties and
that (i) have been issued to a Purchased Entity or (ii) have been issued to any
Person (other than a Purchased Entity) for the benefit of a Purchased Entity.
Each policy referred to in clause (i) above is valid and binding and in full
force and effect, no premiums due thereunder have not been paid, none of the
Purchased Entities has received any notice of cancellation or termination in
respect of any such policy and none of the Purchased Entities is in default
thereunder in any material respect.
7.14 Broker-Dealer Business. The Company is duly registered as a
broker-dealer under the Exchange Act, with the National Association of
Securities Dealers, Inc. (the "NASD") and in each state where the character of
its business requires such registration and is in substantial compliance with
all state and federal laws requiring registration, licensing or qualification as
a broker-dealer. Each such registration is in full force and effect. The JGW
Stockholders have made available to the Purchaser a true and complete copy of
the Company's Form BD and all amendments thereto as filed with all applicable
regulatory authorities, its NASD restriction agreement (the "Restriction
Agreement"), if any, and copies of all current reports required to be filed
pursuant to the Exchange Act, and the rules and regulations promulgated
thereunder, the rules and regulations of the NASD and all applicable state
statutes and regulations. The information contained in the Company's current
Form BD and such reports was true and complete in all material respects at the
time of filing. The Company has at all times operated in substantial compliance
with the Restriction Agreement. The Company has filed all amendments to its Form
BD and its state registrations as required to be filed. The Company has filed
all reports required to be filed by it under the Exchange Act, and the rules and
regulations promulgated thereunder, the rules and regulations of the NASD and
all applicable state statutes and regulations, and all such reports conform in
all material respects with the requirements of the respective act or state law
and the rules and regulations thereunder. Copies of all inspection reports or
similar documents and correspondence relating thereto dated since January 13,
1993 have been provided to Purchaser. Schedule 7.14 contains (i) an accurate
description of the broker-dealer business of the Company and (ii) a list of each
state or other jurisdiction in which the Company is duly registered or licensed
as a broker-dealer. The Company has operated and is currently operating its
broker-dealer business in compliance in all material respects with all laws,
rules, regulations and orders applicable to it, including, without limitation,
the Exchange Act and the rules and regulations of the NASD.
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7.15 Disclosure. The representations or warranties of JGW & Co.
contained in this Agreement, and the statements contained in the Schedules
hereto or any certificate or other writing furnished to Purchaser, DVIHA and
DVIMF by JGW & Co. pursuant to any provision of this Agreement (including
without limitation the financial statements of the Purchased Entities), do not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements herein or therein, not misleading.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF PURCHASER, DVIHA AND DVIMF
Each of Purchaser, DVIHA and DVIMF, jointly and severally,
represents and warrants to the Stockholders and the Partners as follows:
8.01 Organization. Each of Purchaser, DVIHA and DVIMF is a
corporation duly organized, validly existing and in good standing under the Laws
of the State of Delaware. Each of Purchaser, DVIHA and DVIMF has full corporate
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
Each of Purchaser, DVIHA and DVIMF is duly qualified, licensed or admitted to do
business and is in good standing in all jurisdictions in which the ownership,
use or leasing of its Assets and Properties, or the conduct or nature of its
business, makes such qualification, licensing or admission necessary and in
which the failure to be so qualified, licensed or admitted and in good standing
could reasonably be expected to have an adverse effect on the validity or
enforceability of this Agreement or on the ability of Purchaser, DVIHA and DVIMF
to perform its obligations hereunder.
8.02 Authority. The execution and delivery by Purchaser, DVIHA and
DVIMF of this Agreement, and the performance by Purchaser, DVIHA and DVIMF of
their respective obligations hereunder, have been duly and validly authorized by
their respective Board of Directors, no other corporate action being necessary.
This Agreement has been duly and validly executed and delivered by Purchaser,
DVIHA and DVIMF and constitutes the legal, valid and binding obligation of
Purchaser, DVIHA and DVIMF, enforceable against each of them in accordance with
its terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws relating
to or affecting creditors' rights generally and except as enforcement thereof is
subject to general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).
8.03 No Conflicts. The execution and delivery by Purchaser, DVIHA
and DVIMF of this Agreement do not, and the performance by Purchaser, DVIHA and
DVIMF of its respective obligations under this Agreement and the consummation of
the transactions contemplated hereby will not:
(a) conflict with or result in a violation or breach of any of the
terms, conditions or provisions of the certificate of incorporation or by-laws
of Purchaser, DVIHA or DVIMF;
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(b) conflict with or result in a violation or breach of any term or
provision of any Law or Order applicable to Purchaser, DVIHA or DVIMF or any of
their respective Assets and Properties; or
(c) (i) conflict with or result in a violation or breach of, (ii)
constitute (with or without notice or lapse of time or both) a default by
Purchaser, DVIHA or DVIMF under, (iii) require Purchaser, DVIHA or DVIMF to
obtain any consent, approval or action of, make any filing with or give any
notice to any Person as a result or under the terms of, or (iv) result in the
creation or imposition of any Lien upon Purchaser, DVIHA or DVIMF or any of
their respective Assets or Properties under, any Contract or License to which
Purchaser, DVIHA or DVIMF is a party or by which any of their respective Assets
and Properties is bound.
8.04 Governmental Approvals and Filings. No consent, approval or
action of, filing with or notice to any Governmental or Regulatory Authority on
the part of Purchaser, DVIHA or DVIMF is required in connection with the
execution, delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby.
8.05 Legal Proceedings. There are no Actions or Proceedings pending
or, to the knowledge of Purchaser, DVIHA or DVIMF, threatened against, relating
to or affecting Purchaser, DVIHA or DVIMF or any of their respective Assets and
Properties which could reasonably be expected to result in the issuance of an
Order restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement.
8.06 Purchase for Investment. The Partner Interests will be acquired
by Purchaser for its own account for the purpose of investment, it being
understood that the right to dispose of such Partner Interests shall be entirely
within the discretion of Purchaser. Purchaser will refrain from transferring or
otherwise disposing of any of the Partner Interests, or any interest therein, in
such manner as to cause the Partners to be in violation of the registration
requirements of the Securities Act or applicable state securities or blue sky
laws.
8.07 DVI Stock. The issuance of the DVI Stock has been authorized by
DVI, and when issued to the Stockholders and the Partners as contemplated in
this Agreement the DVI Stock will be duly authorized, validly issued, fully paid
and non-assessable.
8.08 Capital Stock. The authorized capital stock of DVI consists of
(i) 25,000,000 shares of common stock, $.005 par value per share and (ii)
100,000 shares of preferred stock, $10.00 per share. As of the date hereof, DVI
has issued and outstanding 10,868,748 shares of common stock and no shares of
preferred stock.
8.09 SEC Reports. The annual report of DVI on Form 10-K for the
fiscal year ended June 30, 1997 (as amended, the "1997 Form 10-K") and the
quarterly report of DVI on Form 10-Q for the quarterly period ended September
30, 1997 (the "DVI Form 10-Q") as each of them was filed with the Securities and
Exchange Commission each complied in all material respects with the requirements
for a report on Form 10-K or Form 10-Q, as the case may be, and did not contain
an untrue statement of a material fact or omit to state a material fact which
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was necessary to make the statements which were made not misleading. Except as
described in the 1997 Form 10-K or the DVI Form 10-Q there has not been any
adverse event, occurrence or circumstance since September 30, 1997 that would be
material and required to be disclosed in a Form 10-K for a year ended on the
date of this Agreement or the Closing Date, as applicable, or any Form 8-K filed
with the Securities and Exchange Commission under the Securities Act.
8.10 Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by Purchaser, DVIHA and
DVIMF directly with JGW & Co., the Stockholders and the Partners without the
intervention of any Person on behalf of Purchaser, DVIHA or DVIMF in such manner
as to give rise to any valid claim by any Person against the Stockholders, the
Partners or any Purchased Entity for a finder's fee, brokerage commission or
similar payment.
ARTICLE IX
COVENANTS OF THE STOCKHOLDERS AND THE PARTNERS
The Stockholders and the Partners covenant and agree with Purchaser,
DVIHA and DVIMF that, at all times from and after the date hereof until the
Closing and, with respect to any covenant or agreement by its terms to be
performed in whole or in part after the Closing, for the period specified herein
or, if no period is specified herein, indefinitely, the Stockholders and the
Partners, as the case may be, will comply with all covenants and provisions of
this Article IX, except to the extent Purchaser may otherwise consent in
writing.
9.01 Regulatory and Other Approvals. Prior to the Closing Date, the
Stockholders and the Partners will and will cause each of the Purchased Entities
to (a) take all commercially reasonable steps necessary or desirable, and
proceed diligently and in good faith and use all commercially reasonable
efforts, as promptly as practicable to obtain all consents, approvals or actions
of, to make all filings with and to give all notices to Governmental or
Regulatory Authorities or any other Person required of the Stockholders or the
Partners or any of the Purchased Entities to consummate the transactions
contemplated hereby, (b) provide such other information and communications to
such Governmental or Regulatory Authorities or other Persons as Purchaser, DVIHA
and DVIMF or such Governmental or Regulatory Authorities or other Persons may
reasonably request in order to consummate the transactions contemplated hereby
and (c) cooperate with Purchaser, DVIHA and DVIMF as promptly as practicable in
obtaining all consents, approvals or actions of, making all filings with and
giving all notices to Governmental or Regulatory Authorities or other Persons
required of Purchaser, DVIHA and DVIMF to consummate the transactions
contemplated hereby. The Stockholders and the Partners will and will cause each
of the Purchased Entities to provide prompt notification to Purchaser when any
such consent, approval, action, filing or notice referred to in clause (a) above
is obtained, taken, made or given, as applicable, and will advise Purchaser of
any communications (and, unless precluded by Law, provide copies of any such
communications that are in writing) with any Governmental or Regulatory
Authority or other Person regarding any of the transactions contemplated by this
Agreement.
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9.02 Investigation by Purchaser. The Stockholders and the Partners
will and will cause each of the Purchased Entities to, (a) provide Purchaser,
DVIHA and DVIMF and their respective officers, directors, employees, agents,
counsel, accountants, financial advisors, consultants and other representatives
(together "Representatives") with reasonable access, upon reasonable prior
notice and during normal business hours, to all officers, employees, agents and
accountants of each of the Purchased Entities and their respective Assets and
Properties and Books and Records, and (b) furnish Purchaser, DVIHA and DVIMF and
such other Persons with all such information and data (including without
limitation copies of Contracts, and other Books and Records) concerning the
business and operations of the Purchased Entities as Purchaser, DVIHA and DVIMF
or any of such other Persons reasonably may request in connection with such
investigation.
9.03 No Solicitations. Neither the Stockholders nor the Partners
will take, nor will the Stockholders or the Partners permit any of the Purchased
Entities or any Affiliate of the Stockholders or Partners (or authorize or
permit any investment banker, financial advisor, attorney, accountant or other
Person retained by or acting for or on behalf of the Stockholders, the Partners,
the Purchased Entities or any such Affiliate) to take, directly or indirectly,
any action to initiate, assist, solicit, receive, negotiate, encourage or accept
any offer or inquiry from any Person (a) to engage in any Business Combination
with any Purchased Entity, (b) to reach any agreement or understanding (whether
or not such agreement or understanding is absolute, revocable, contingent or
conditional) for, or otherwise attempt to consummate, any Business Combination
with any Purchased Entity or (c) to furnish or cause to be furnished any
information with respect to a Purchased Entity to any Person (other than as
contemplated by Section 9.02) who the Stockholders, the Partners, any Purchased
Entity or such Affiliate (or any such Person acting for or on their behalf)
knows or has reason to believe is in the process of considering any Business
Combination with any Purchased Entity. If the Stockholders or the Partners, or
any such Affiliate (or any such Person acting for or on their behalf) receives
from any Person (other than Purchaser or any other Person referred to in Section
9.02) any offer, inquiry or informational request referred to above, the
Stockholders or the Partners will promptly advise such Person, by written
notice, of the terms of this Section 9.03 and will promptly, orally and in
writing, advise Purchaser of such offer, inquiry or request and deliver a copy
of such notice to Purchaser.
9.04 Conduct of Business. Prior to the Closing Date, the Company and
the General Partner will and the Stockholders and the Partners will cause each
of the Purchased Entities to conduct business only in the ordinary course
consistent with past practice except to the extent affected by this Agreement.
Without limiting the generality of the foregoing, the Stockholders and the
Partners will cause each of the Purchased Entities to:
(a) use commercially reasonable efforts to (i) preserve intact the
present business organization and reputation of each Purchased Entity, (ii) keep
available (subject to dismissals and retirements in the ordinary course of
business consistent with past practice) the services of the present officers,
employees and consultants of each Purchased Entity, (iii) maintain the Assets
and Properties of each Purchased Entity in good working order and condition,
ordinary wear and tear excepted, (iv) maintain the good will of customers,
suppliers, lenders and other Persons to whom such Purchased Entity sells goods
or provides services or
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with whom such Purchased Entity otherwise has significant business relationships
and (v) continue all current sales, marketing and promotional activities
relating to the business and operations of each Purchased Entity;
(b) except to the extent required by applicable Law, (i) cause the
Books and Records to be maintained in the usual, regular and ordinary manner and
(ii) not permit any material change in (A) any pricing, investment, accounting,
financial reporting, inventory, credit, allowance or Tax practice or policy of
any Purchased Entity, (B) any method of calculating any bad debt, contingency or
other reserve of any Purchased Entity for accounting, financial reporting or Tax
purposes or (C) the fiscal year of any Purchased Entity;
(c) use commercially reasonable efforts (i) to maintain in full
force and effect until the Closing substantially the same levels of coverage as
the insurance afforded under the Contracts listed in Schedule 7.13, and (ii)
cause any and all benefits under such Contracts paid or payable (whether before
or after the date of this Agreement) with respect to the business, operations,
employees or Assets and Properties of such Purchased Entity to be paid to such
Purchased Entity; and
(d) comply, in all material respects, with all Laws and Orders
applicable to the business and operations of each Purchased Entities, and
promptly following receipt thereof to give Purchaser copies of any notice
received from any Governmental or Regulatory Authority or other Person alleging
any violation of any such Law or Order.
9.05 Employee Matters. Prior to the Closing Date, except as may be
required by Law, the Company, the General Partner, the Stockholders and the
Partners will and the Stockholders and the Partners will cause each Purchased
Entity to refrain, from directly or indirectly:
(a) making any increase in the salary, wages or other compensation
of any officer, employee or consultant of such Purchased Entity whose annual
salary is or, after giving effect to such change, would be $50,000 or more;
(b) establishing or modifying any (i) targets, goals, pools or
similar provisions in respect of any fiscal year under any employment Contract
or other employee compensation arrangement or (ii) salary ranges, increase
guidelines or similar provisions in respect of any employment Contract or other
employee compensation arrangement; or
(c) entering into, amending, modifying or terminating (partially or
completely), any Contract that is, or had it been in existence on the date of
this Agreement would have been required to be, disclosed in Schedule 7.10.
9.06 Certain Restrictions. Prior to the Closing Date, the Company
and the General Partner will, and the Stockholders and the Partners will cause
each Purchased Entity to, refrain from:
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(a) amending its certificates of incorporation or by-laws or
certificate of limited partnership or partnership agreement (as applicable) or
taking any action with respect to any such amendment or any reorganization,
liquidation or dissolution of any such corporation or partnership;
(b) authorizing, issuing, selling or otherwise disposing of any
shares of capital stock of or any Option with respect to the Company or the
General Partner, or modifying or amending any right of any holder of outstanding
shares of capital stock of or Option with respect to the Company or the General
Partner;
(c) authorizing, issuing, selling or otherwise disposing of any
limited or general partner interest of or any option with respect to the JGW
Partnership or the MF Partnership or modifying or amending any right of any
limited or general partner of or Option with respect to the JGW Partnership or
the MF Partnership;
(d) declaring, setting aside or paying any dividend or other
distribution in respect of the capital stock of the Company or the General
Partner, or directly or indirectly redeeming, purchasing or otherwise acquiring
any capital stock of or any Option with respect to the Company or the General
Partner;
(e) acquiring or disposing of, or incurring any Lien (other than a
Permitted Lien) on, any Assets and Properties, other than in the ordinary course
of business consistent with past practice;
(f) (i) entering into, amending, modifying, terminating (partially
or completely), granting any waiver under or giving any consent with respect to
(A) any Contract that would, if in existence on the date of this Agreement, be
required to be disclosed in Schedule 7.10, or (B) any material License or (ii)
granting any irrevocable powers of attorney;
(g) violating, breaching or defaulting under in any material
respect, or taking or failing to take any action that (with or without notice or
lapse of time or both) would constitute a material violation or breach of, or
default under, any term or provision of any License or any Material Contract is
a party or by;
(h) (i) incurring Indebtedness in an aggregate principal amount
exceeding $25,000 (net of any amounts of Indebtedness discharged during such
period), or (ii) voluntarily purchasing, cancelling, prepaying or otherwise
providing for a complete or partial discharge in advance of a scheduled payment
date with respect to, or waiving any right of any Purchased Entity under, any
Indebtedness of or owing to any Purchased Entity;
(i) engaging with any Person in any Business Combination;
(j) making capital expenditures or commitments for additions to
property, plant or equipment constituting capital assets in an aggregate amount
exceeding $10,000;
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(k) making any change in the lines of business in which they
participate or are engaged;
(l) writing off or writing down any of their Assets and Properties
outside the ordinary course of business consistent with past practice; or
(m) entering into any agreement to do or engage in any of the
foregoing.
9.07 Affiliate Transactions. Except as set forth in Schedule 9.07,
immediately prior to the Closing, all Indebtedness and other amounts owing under
Contracts between the Stockholders, the Partners, any Affiliate or Associate of
the Stockholders or the Partners or any Associate of any such Affiliate (other
than any of the Purchased Entities), on the one hand, and any of the Purchased
Entities on the other, will be paid in full, and the Stockholders or the
Partners, as the case may be, will terminate and will cause any such Affiliate
or Associate to terminate each Contract with any of the Purchased Entities.
Prior to the Closing, none of the Purchased Entities will enter into any
Contract with the Stockholders or the Partners or any such Affiliate or
Associate or amend or modify any existing Contract with the Stockholders or the
Partners or any such Affiliate or Associate, and will not engage in any
transaction outside the ordinary course of business consistent with past
practice or not on an arm's-length basis, with the Stockholders or the Partners
or any such Affiliate or Associate.
9.08 Books and Records. On the Closing Date, the Stockholders will
cause each of the Purchased Entities to, deliver or make available to Purchaser
at the offices of the Company all of the Books and Records, and if at any time
after the Closing the Stockholders or the Partners, as the case may be, discover
in their possession or under their control any other Books and Records, they
will forthwith deliver such Books and Records to Purchaser.
9.09 Noncompetition. (a) Covenants Against Competition. Each
Stockholder and Partner hereby acknowledges that (i) such Stockholder or
Partner, as the case may be, is one of a limited number of Persons who have
developed the Business; (ii) the Business is, in part, national in scope; (iii)
such Stockholder's or Partner's ownership of shares of Stock or Partner
Interests, as the case may be, has brought such Stockholder or Partner in close
contact with certain confidential affairs of the Company, the General Partner,
the JGW Partnership and the MF Partnership not readily available to the public;
and (iv) Purchaser would not purchase the Stock or the Partner Interests but for
the agreements and covenants of each Stockholder contained in this Section 9.09.
Accordingly, each Stockholder and Partner covenants and agrees that:
(i) Each Stockholder and Partner (other than Xxxx X. Xxxxxxx
III) and their respective Affiliates shall not in the United States of
America, directly or indirectly, for a period commencing on the Closing
Date and terminating on the date three (3) years following the Closing
Date (the "Restricted Period"); (A) engage in the Business for such
Stockholder's or Partner's own account; (B) render any services (other
than ancillary services which are not related to conduct of the Business,
such as accounting, data processing and other similar unrelated activities
as an independent third party service provider and not as an employee) to
any Person (other than Purchaser or its Affiliates)
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engaged in the Business; or (C) become interested in any such Person
(other than Purchaser or its Affiliates) as a partner, shareholder,
principal, agent, consultant or in any other relationship or capacity
provided, however, that notwithstanding the above each Stockholder and
Partner may own, directly or indirectly, solely as an investment,
securities of any Person which are traded on any national securities
exchange or NASDAQ if such Stockholder or Partner (x) is not a controlling
Person, or a member of a group which controls such Person and (y) does
not, directly or indirectly, own in the aggregate 4.99% or more of any
class of securities of such Person.
(ii) During and after the Restricted Period, each Stockholder and
Partner and their respective Affiliates shall keep secret and retain in
strictest confidence, and shall not use for the benefit of itself or
others except in connection with the business and affairs of Purchaser and
its Affiliates, all specifications, drawings, sketches, models, samples,
reports, plans, forecasts, current or historical data, computer programs
or documentation, customers, clients, suppliers, sources of supply and
customer lists and all other technical, financial and business data, trade
secrets, know how and proprietary information with respect to the Business
or the Assets and Properties of any Purchased Entity ("Confidential Seller
Information") and shall not disclose such Confidential Seller Information
to anyone outside of Purchaser and its Affiliates except with Purchaser's
express written consent and except for Confidential Seller Information
which (A) is at the time of receipt or thereafter becomes publicly known
through no wrongful act of the Stockholders or the Partners, (B) is
received from a third party not under an obligation to keep such
information confidential and without breach of this Agreement, or (C) is
required to be disclosed by any Law or Order.
(iii) During the Restricted Period, each Stockholder and Partner
and their respective Affiliates shall not, directly or indirectly,
knowingly solicit or encourage to leave the employment of Purchaser or any
of its Affiliates, any employee of Purchaser or any of its Affiliates or
hire any employee who has left the employment of Purchaser or any of its
Affiliates after the date of this Agreement within two (2) years of the
termination of such employee's employment with Purchaser or any of its
Affiliates.
(b) Rights and Remedies Upon Breach. If any Stockholder or Partner
or any of their respective Affiliates breaches, or threatens to commit a breach
of, any of the provisions of this Section 9.09 (the "Restrictive Covenants"),
Purchaser shall have the following rights and remedies (upon compliance with any
necessary prerequisites imposed by law upon the availability of such remedies),
each of which rights and remedies shall be independent of the other and
severally enforceable and all of which rights and remedies shall be in addition
to, and not in lieu of, any other rights and remedies available to Purchaser and
its Affiliates under law or in equity: the right and remedy to have the
Restrictive Covenants specifically enforced (without posting any bond) by any
court having equity jurisdiction, including, without limitation, the right to an
entry against the Stockholder or Partner or its Affiliates of restraining orders
and injunctions (preliminary, mandatory, temporary and permanent) against
violations, threatened or actual, and whether or not then continuing, of such
covenants, it being acknowledged and agreed that any such breach or threatened
breach will cause irreparable injury to Purchaser and
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its Affiliates and that money damages will not provide adequate remedy to
Purchaser and its Affiliates.
(c) Severability of Covenants. If any court determines that any of
the Restrictive Covenants, or any part thereof, is invalid or unenforceable, the
remainder of the Restrictive Covenants shall not thereby be affected and shall
be given full effect, without regard to the invalid portions.
(d) Blue-Pencilling. If any court determines that any of the
Restrictive Covenants, or any part thereof, is unenforceable because of the
duration of such provision or the area covered thereby, such court shall have
the power to reduce the duration or area of such provisions and, in its reduced
form, such provision shall then be enforceable and shall be enforced.
(e) Enforceability in Jurisdictions. Purchaser and each Stockholder
and Partner intend to and hereby confer jurisdiction to enforce the Restrictive
Covenants upon the courts of any jurisdiction within the geographical scope of
the Restrictive Covenants. If the courts of any one or more of such
jurisdictions hold the Restrictive Covenants wholly unenforceable by reason of
the breadth of such scope or otherwise, it is the intention of Purchaser and
each Stockholder and Partner that such determination not bar or in any way
affect Purchaser's right to the relief provided above in the courts of any other
jurisdiction within the geographical scope of the Restrictive Covenants, as to
breaches of such Restrictive Covenants in such other respective jurisdictions,
such Restrictive Covenants as they relate to each jurisdiction being, for this
purpose, severable into diverse and independent covenants, subject, where
appropriate, to the doctrine of res judicata.
9.10 Notice and Cure. Each Stockholder and Partner, as the case may
be, will notify Purchaser promptly in writing of, and contemporaneously will
provide Purchaser with true and complete copies of any and all information or
documents relating to, and will use all commercially reasonable efforts to cure
before the Closing, any event, transaction or circumstance occurring after the
date of this Agreement that causes or will cause any covenant or agreement of
such Stockholder or Partner under this Agreement to be breached or that renders
or will render untrue any representation or warranty of such Stockholder or
Partner contained in this Agreement as if the same were made on or as of the
date of such event, transaction or circumstance. Each Stockholder or Partner, as
the case may be, also will notify Purchaser promptly in writing of, and will use
all commercially reasonable efforts to cure, before the Closing, any violation
or breach of any representation, warranty, covenant or agreement made by such
Stockholder or Partner in this Agreement, whether occurring or arising before,
on or after the date of this Agreement. No notice given pursuant to this Section
shall have any effect on the representations, warranties, covenants or
agreements contained in this Agreement for purposes of determining satisfaction
of any condition contained herein or shall in any way limit Purchaser's right to
seek indemnity under Article XIV.
9.11 Fulfillment of Conditions. The Stockholders and the Partners
will take all commercially reasonable steps necessary or desirable and proceed
diligently and in good faith to satisfy each condition to the obligations of
Purchaser, DVIHA and DVIMF contained in this
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Agreement and will not, and the Stockholders and the Partners will not permit
any Purchased Entity to, take or fail to take any action that could reasonably
be expected to result in the nonfulfillment of any such condition.
9.12 Relocation of Facilities. Within 30 days following the Closing
Date the Stockholders and the Partners will cooperate with Purchaser, DVIHA and
DVIMF to cause the operations of the Purchased Entities located in Philadelphia,
Pennsylvania to be re-located to Purchaser's facilities in Doylestown,
Pennsylvania but in no event shall the Stockholders or the Partners be required
to expend any funds or incur any Liabilities in connection therewith.
9.13 Allocation of Profits and Losses. (a) The Stockholders and the
Partners shall ensure that throughout the period (the "Interim Period") from
November 1, 1997 through and including the Closing Date all monies received by
or remitted to any of the Purchased Entities, from any source whatsoever, from
the operation of the Business shall be for the benefit of and shall be promptly
paid over to Purchaser.
(b) During the Interim Period, the Stockholders and the Partners
shall conduct the Business at an expense level consistent with past practice and
not in violation of any of the covenants and agreements contained in this
Agreement. During such Interim Period, all costs and expenses incurred by the
Purchased Entities in the conduct of the Business consistent with past practice
shall be the responsibility of and shall be promptly paid by Purchaser,
provided, however, that any expense in excess of $15,000 shall be submitted to
Purchaser for its approval which shall not be unreasonably withheld.
(c) If this Agreement is terminated prior to the Closing Date, then
within five (5) Business Days following such termination, (i) Purchaser shall
remit to the Purchased Entities all monies received by Purchaser from the
conduct of the Business during the Interim Period and (ii) the Stockholders and
the Partners shall cause the Purchased Entities to reimburse Purchaser for all
costs and expenses incurred by Purchaser from the conduct of the Business during
the Interim Period.
9.14 Use of JGW Name. For a period of 15 months following the
Closing Date, Purchaser and any of its Affiliates will be permitted to use the
name "X.X. Xxxxxxxxx" in the conduct of the Business as follows: "formerly known
as X.X. Xxxxxxxxx Merchant Banking." In connection therewith, JGW & Co., the
Stockholders and the Partners hereby grant to Purchaser and its Affiliates a
non-exclusive, fully-paid license to use the name "X.X. Xxxxxxxxx" in such
manner in the conduct of the Business for such 15-month period.
9.15 Licenses. The Stockholders and the Partners shall do or cause
to be done all things reasonably requested by Purchaser to assist Purchaser in
the transfer or reissuance in the name of Purchaser, DVIHA or DVIMF, as the case
may be, each License listed on Schedule 7.12, provided that the Stockholders and
the Partners will in no event be required to expend any funds or incur any
Liabilities in connection therewith.
ARTICLE X
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COVENANTS OF PURCHASER, DVIHA AND DVIMF
Purchaser, DVIHA and DVIMF covenant and agree with each of JGW &
Co., the Stockholders and the Partners that, at all times from and after the
date hereof until the Closing and, with respect to any covenant or agreement by
its terms to be performed in whole or in part after the Closing, for the period
specified herein or, if no period is specified herein, indefinitely, Purchaser,
DVIHA and DVIMF will comply with all covenants and provisions of this Article X,
except to the extent a majority of the Stockholders and the Partners may
otherwise consent in writing.
10.01 Regulatory and Other Approvals. Purchaser will (a) take all
commercially reasonable steps necessary or desirable, and proceed diligently and
in good faith and use all commercially reasonable efforts, as promptly as
practicable to obtain all consents, approvals or actions of, to make all filings
with and to give all notices to Governmental or Regulatory Authorities or any
other Person required of Purchaser, DVIHA and DVIMF to consummate the
transactions contemplated hereby, (b) provide such other information and
communications to such Governmental or Regulatory Authorities or other Persons
as JGW & Co., the Stockholders or the Partners or such Governmental or
Regulatory Authorities or other Persons may reasonably request and (c) cooperate
with JGW & Co., the Stockholders and the Partners as promptly as practicable in
obtaining all consents, approvals or actions of, making all filings with and
giving all notices to Governmental or Regulatory Authorities or other Persons
required of JGW & Co., the Stockholders or the Partners to consummate the
transactions contemplated hereby. Purchaser will provide prompt notification to
the Stockholders and the Partners when any such consent, approval, action,
filing or notice referred to in clause (a) above is obtained, taken, made or
given, as applicable, and will advise the Stockholders and the Partners of any
communications (and, unless precluded by Law, provide copies of any such
communications that are in writing) with any Governmental or Regulatory
Authority or other Person regarding any of the transactions contemplated by this
Agreement.
10.02 Notice and Cure. Purchaser will notify the Stockholders and
the Partners promptly in writing of, and contemporaneously will provide the
Stockholders and the Partners with true and complete copies of any and all
information or documents relating to, and will use all commercially reasonable
efforts to cure before the Closing, any event, transaction or circumstance
occurring after the date of this Agreement that causes or will cause any
covenant or agreement of Purchaser, DVIHA or DVIMF under this Agreement to be
breached or that renders or will render untrue any representation or warranty of
DVIHA, DVIMF or Purchaser contained in this Agreement as if the same were made
on or as of the date of such event, transaction or circumstance. Purchaser also
will notify the Stockholders and the Partners promptly in writing of, and will
use all commercially reasonable efforts to cure, before the Closing, any
violation or breach of any representation, warranty, covenant or agreement made
by Purchaser, DVIHA or DVIMF in this Agreement, whether occurring or arising
before, on or after the date of this Agreement. No notice given pursuant to this
Section shall have any effect on the representations, warranties, covenants or
agreements contained in this Agreement for purposes of determining satisfaction
of any condition contained herein or shall in any way limit the Stockholders' or
the Partners' right to seek indemnity under Article XIV.
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10.03 Fulfillment of Conditions. Purchaser will take all
commercially reasonable steps necessary or desirable and proceed diligently and
in good faith to satisfy each condition to the obligations of the Stockholders
and the Partners contained in this Agreement and will not take or fail to take
any action that could reasonably be expected to result in the nonfulfillment of
any such condition.
10.04 Certain Payments. Purchaser will assume the Purchased
Entities' obligations to Xxxx Xxxxxxx and Xxxxx Xxxxxxx in the aggregate amount
of $361,422.90 and shall pay such amounts on the Closing Date.
10.05 Non-Solicitation. Purchaser shall cause DVI not to, and none
of Purchaser, DVIHA or DVIMF or any Affiliate thereof shall, directly or
indirectly, during the Restricted Period, knowingly solicit or encourage to
leave the employment of JGW & Co., or any of its Affiliates, any employee or JGW
& Co. or any of its Affiliates or hire any employee who has left the employment
of JGW & Co. or any of its Affiliates after the date of this Agreement within
two (2) years of the termination of such employee's employment with JGW & Co. or
any of its Affiliates.
10.06 Compliance with Section 9.13. Purchaser, DVIHA and DVIMF shall
comply in all respects with the provisions of Section 9.13 hereof.
ARTICLE XI
CONDITIONS TO OBLIGATIONS OF PURCHASER, DVIHA AND DVIMF
The obligations of Purchaser, DVIHA and DVIMF hereunder are subject
to the fulfillment, at or before the Closing, of each of the following
conditions (all or any of which may be waived in whole or in part by Purchaser
in its sole discretion):
11.01 Representations and Warranties. Each of the representations
and warranties made by JGW & Co., the Stockholders and the Partners in this
Agreement (other than those made as of a specified date earlier than the Closing
Date) shall be true and correct in all material respects on and as of the
Closing Date as though such representation or warranty was made on and as of the
Closing Date, and any representation or warranty made as of a specified date
earlier than the Closing Date shall have been true and correct in all material
respects on and as of such earlier date.
11.02 Performance. Each of JGW & Co., the Stockholders and the
Partners shall have performed and complied with, in all material respects, each
agreement, covenant and obligation required by this Agreement to be so performed
or complied with by JGW & Co. or such Stockholder or Partner at or before the
Closing.
11.03 Officers' Certificates. [Intentionally Omitted].
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11.04 Orders and Laws. There shall not be in effect on the Closing
Date any Order or Law restraining, enjoining or otherwise prohibiting or making
illegal the consummation of any of the transactions contemplated by this
Agreement or which could reasonably be expected to otherwise result in a
material diminution of the benefits of the transactions contemplated by this
Agreement to Purchaser, and there shall not be pending on the Closing Date any
Action or Proceeding or any other action in, before or by any Governmental or
Regulatory Authority which could reasonably be expected to result in the
issuance of any such Order or the enactment, promulgation or deemed
applicability to Purchaser, DVIHA and DVIMF, JGW & Co., the Stockholders, the
Partners, any Purchased Entity or the transactions contemplated by this
Agreement of any such Law.
11.05 Third Party Consents. The consents (or in lieu thereof
waivers) listed in Schedule 7.05 hereto, and all other consents (or in lieu
thereof waivers) to the performance by JGW & Co., the Stockholders and the
Partners of their obligations under this Agreement or to the consummation of the
transactions contemplated hereby as are required under any Contract to which
Purchaser, DVIHA, DVIMF, a Purchased Entity, a Stockholder or a Partner is a
party or by which any of their respective Assets and Properties are bound and
where the failure to obtain any such consent (or in lieu thereof waiver) could
reasonably be expected, individually or in the aggregate with other such
failures, to materially adversely affect Purchaser, DVIHA, DVIMF or the Business
or Condition of the Company or otherwise result in a material diminution of the
benefits of the transactions contemplated by this Agreement to Purchaser (a)
shall have been obtained, (b) shall be in form and substance reasonably
satisfactory to Purchaser, (c) shall not be subject to the satisfaction of any
condition that has not been satisfied or waived and (d) shall be in full force
and effect.
11.06 Opinion of Counsel. Purchaser, DVIHA and DVIMF shall have
received the opinion of Wolf, Block, Xxxxxx and Xxxxx-Xxxxx LLP, counsel to JGW
& Co., the Purchased Entities, the Stockholders and the Partners, dated the
Closing Date, in form and substance reasonably satisfactory to Purchaser.
11.07 Certificates. JGW & Co., the Stockholders and the Partners
shall have delivered to Purchaser (a) copies of the articles of incorporation,
including all amendments thereto, of JGW & Co., the Company and the General
Partner, certified by the Secretary of State of the jurisdiction of
organization, (b) copies of the certificates of limited partnership, including
all amendments thereto, of the JGW Partnership and the MF Partnership, certified
by the Secretary of State of the jurisdiction of organization, (c) certificates
from the Secretary of State or other appropriate official of the jurisdiction of
incorporation to the effect that each Purchased Entity is subsisting in such
jurisdiction and (d) a certificate from the Secretary of State or other
appropriate official in each jurisdiction in which each Purchased Entity is
qualified or admitted to do business to the effect that each Purchased Entity is
duly qualified or admitted in such jurisdiction.
11.08 Proceedings. All proceedings to be taken on the part of JGW &
Co., the Stockholders, the Partners and the Purchased Entities in connection
with the transactions contemplated by this Agreement and all documents incident
thereto shall be reasonably satisfactory in form and substance to Purchaser, and
Purchaser shall have received copies of all
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such documents and other evidences as Purchaser may reasonably request in order
to establish the consummation of such transactions and the taking of all
proceedings in connection therewith.
ARTICLE XII
CONDITIONS TO OBLIGATIONS OF THE
STOCKHOLDERS AND THE PARTNERS
The obligations of the Stockholders and the Partners hereunder are
subject to the fulfillment, at or before the Closing, of each of the following
conditions (all or any of which may be waived in whole or in part by a majority
of the Stockholders and the Partners in their sole discretion):
12.01 Representations and Warranties. Each of the representations
and warranties made by Purchaser, DVIHA and DVIMF in this Agreement shall be
true and correct in all material respects on and as of the Closing Date as
though such representation or warranty was made on and as of the Closing Date.
12.02 Performance. Purchaser, DVIHA and DVIMF shall have performed
and complied with, in all material respects, each agreement, covenant and
obligation required by this Agreement to be so performed or complied with by
Purchaser, DVIHA and DVIMF at or before the Closing.
12.03 Officers' Certificates. [Intentionally Omitted].
12.04 Orders and Laws. There shall not be in effect on the Closing
Date any Order or Law that became effective after the date of this Agreement
restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement or which
could reasonably be expected to otherwise result in a material diminution of the
benefits of the transactions contemplated by this Agreement to the Stockholder
and the Partners, and there shall not be pending on the Closing Date any Action
or Proceeding or any other action in, before or by any Governmental or
Regulatory Authority which could reasonably be expected to result in the
issuance of any such Order or the enactment, promulgation or deemed
applicability to Purchaser, DVIHA, DVIMF, JGW & Co., the Stockholders, the
Partners, any Purchased Entity or the transactions contemplated by this
Agreement of any such Law.
12.05 Third Party Consents. All consents (or in lieu thereof
waivers) to the performance by Purchaser, DVIHA and DVIMF of their obligations
hereunder and to the consummation of the transactions contemplated hereby (a)
shall have been obtained, (b) shall be in full form and substance reasonably
satisfactory to the Stockholders and the Partners, (c) shall not be subject to
the satisfaction of any condition that has not been satisfied or waived and (d)
shall be in full force and effect.
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12.06 Registration Rights Agreement. DVI, the Stockholders and the
Partners shall have entered into a registration rights agreement provided by DVI
and in form and substance reasonably satisfactory to the Stockholders and the
Partners.
12.07 Good Standing Certificates. Purchaser shall have delivered to
the Stockholders and the Partners (a) copies of the certificates of
incorporation, including all amendments thereto, of DVI, Purchaser, DVIHA and
DVIMF, certified by the Secretary of State of the State of Delaware and (b)
certificates from the Secretary of State of the State of Delaware to the effect
that each of DVI, Purchaser, DVIHA and DVIMF is in good standing in such
jurisdiction.
12.08 Opinion of Counsel. The Purchased Entities, the Stockholders
and the Partners shall have received the opinion of Xxxxxx & Xxxxx, counsel to
Purchaser, DVIMF and DVIHA, dated the Closing Date, in form and substance
reasonably satisfactory to Purchaser.
ARTICLE XIII
SURVIVAL OF REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS
13.01 Survival of Representations, Warranties, Covenants and
Agreements. Notwithstanding any right of Purchaser (whether or not exercised) to
investigate the affairs of the Purchased Entities or any right of any party
(whether or not exercised) to investigate the accuracy of the representations
and warranties of the other party contained in this Agreement, JGW & Co., the
Stockholders, the Partners, DVIHA and DVIMF and Purchaser have the right to rely
fully upon the representations, warranties, covenants and agreements of the
other contained in this Agreement. The representations, warranties, covenants
and agreements of JGW & Co., the Stockholders, the Partners, DVIHA and DVIMF and
Purchaser contained in this Agreement will survive the Closing (a) until four
(4) years following the Closing Date with respect to the representations and
warranties contained in Sections 5.01, 5.02, 5.03, 5.11, 6.01, 6.03, 6.06, 7.09,
8.01, 8.02 and 8.10, (b) until sixty (60) calendar days after the expiration of
all applicable statutes of limitation (including all periods of extension,
whether automatic or permissive) with respect to matters covered by Section 5.06
and Section 7.03, (c) until twelve (12) months following the Closing Date in the
case of all other representations and warranties and any covenant or agreement
to be performed in whole or in part on or prior to the Closing or (d) with
respect to each other covenant or agreement contained in this Agreement, for a
period of twelve (12) months following the last date on which such covenant or
agreement is to be performed or, if no such date is specified, indefinitely,
except that any representation, warranty, covenant or agreement that would
otherwise terminate in accordance with clause (a), (b) or (c) above will
continue to survive if a Claim Notice or Indemnity Notice (as applicable) shall
have been timely given under Article XIV on or prior to such termination date,
until the related claim for indemnification has been satisfied or otherwise
resolved as provided in Article XIV.
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ARTICLE XIV
INDEMNIFICATION
14.01 Indemnification. (a) Each Stockholder and Partner, severally
to the extent of their respective Indemnification Percentage, shall indemnify
Purchaser, DVIHA and DVIMF and their respective officers, directors, employees,
agents and Affiliates in respect of, and hold each of them harmless from and
against, any and all Losses suffered, incurred or sustained by any of them or to
which any of them becomes subject, resulting from, arising out of or relating to
(i) any misrepresentation, breach of warranty or nonfulfillment of or failure to
perform any covenant or agreement on the part of such Stockholder or Partner
contained in this Agreement and (ii) any Liability for Indebtedness for borrowed
money or trade payables to the extent attributable to or based upon the
operations or activities of any of the Purchased Entities prior to Closing.
(b) JGW & Co. shall indemnify Purchaser, DVIHA and DVIMF and their
respective officers, directors, employees, agents and Affiliates in respect of,
and hold each of them harmless from and against, any and all Losses suffered,
incurred or sustained by any of them or to which any of them becomes subject,
resulting from, arising out of or relating to (i) any misrepresentation or
breach of warranty on the part of JGW & Co. contained in this Agreement and (ii)
any Liability for Indebtedness for borrowed money or trade payables to the
extent attributable to or based upon the operations or activities of any of the
Purchased Entities prior to Closing.
(c) Purchaser agrees to indemnify JGW & Co., each Stockholder and
Partner and each of their respective officers, directors, employees, agents and
Affiliates, if any, in respect of, and hold JGW & Co., each Stockholder and
Partner harmless from and against, any and all Losses suffered, incurred or
sustained by any of them or to which any of them becomes subject, resulting
from, arising out of or relating to any misrepresentation, breach of warranty or
nonfulfillment of or failure to perform any covenant or agreement on the part of
Purchaser, DVIHA or DVIMF, contained in this Agreement.
(d) No amounts of indemnity shall be payable as a result of any
claim arising under Section 14.01(a) or 14.01(b) in respect of a
misrepresentation or breach of warranty by a Partner, a Stockholder or JGW & Co.
unless and until the Indemnified Parties thereunder have suffered, incurred,
sustained or become subject to Losses referred to in such Sections in excess of
$25,000 in the aggregate, in which event the Indemnified Party shall be entitled
to seek indemnity for the full amount of such Losses, provided that this
paragraph (d) shall not apply to a misrepresentation or breach of warranty by
(i) a Partner or a Stockholder contained in Section 5.01, 5.02, 5.03, 5.12,
6.01, 6.03, 6.06 or (ii) JGW & Co. contained in Section 7.09. For the purposes
of this Section 14.01, in computing such individual or aggregate amounts of
Losses, the amount of each Loss shall be deemed to be an amount net of any
insurance proceeds and any indemnity, contribution or other similar payment
payable by any third party with respect thereto.
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(e) Notwithstanding the foregoing, in no event shall (i) the
Stockholders or the Partners be liable to make aggregate indemnification
payments hereunder in excess of their respective Pro Rata Share, provided that
such Pro Rata Share shall be reduced by the Stockholder's or Partner's
applicable Indemnification Percentage of the amount of all indemnification
payments received by Purchaser from JGW & Co., or (ii) JGW & Co. be liable to
make indemnification payments hereunder in excess of $2,161,423 less the amount
of all indemnification payments received by Purchaser from the Partners and the
Stockholders; provided that the following items shall not be included in
computing such cap: (i) fees and expenses of attorney's and accountant's
retained by JGW & Co., the Partners and the Stockholders in connection with any
disputed claim for indemnification and (ii) any additional out-of-pocket costs
incurred by JGW & Co., the Stockholders or the Partners in connection with the
matters referred to in the preceding clauses (i). Notwithstanding the foregoing,
the limitations set forth in this Section 14.01(e) shall not apply with respect
to any indemnification claim made by Purchaser, DVIHA or DVIMF pursuant to
Section 14.01(a) or 14.01(b) with respect to (i) a misrepresentation or breach
of warranty by a Stockholder or a Partner contained in Section 6.03 with respect
to its title or ownership of Stock or Partner Interests, as the case may be;
(ii) any Liability of Purchaser, DVIHA or DVIMF for Indebtedness for money
borrowed or trade payables to the extent attributable to or based upon the
operation or activities of the Purchased Entities prior to the Closing Date and
not otherwise reflected on the October 31, 1997 balance sheet of the Purchased
Entities previously delivered to Purchaser, a copy of which is attached hereto
as Schedule F; or (iii) any actual or intentional fraudulent act or omission of
JGW & Co., a Stockholder or a Partner made in connection with the transactions
contemplated by this Agreement. It being understood that each Stockholder and
Partner will only be liable for its own actual or intentional fraudulent acts or
omissions and not for any other Partner's or Stockholder's act or omission.
14.02 Method of Asserting Claims. All claims for indemnification by
any Indemnified Party under Section 14.01 will be asserted and resolved as
follows:
(a) In the event any claim or demand in respect of which an
Indemnifying Party might seek indemnity under Section 14.01 is asserted against
or sought to be collected from such Indemnified Party by a Person other than the
Stockholders, the Partners, Purchaser or any Affiliate of the Stockholders, the
Partners or Purchaser (a "Third Party Claim"), the Indemnified Party shall
deliver a Claim Notice with reasonable promptness to the Indemnifying Party. If
the Indemnified Party fails to provide the Claim Notice with reasonable
promptness after the Indemnified Party receives notice of such Third Party
Claim, the Indemnifying Party will not be obligated to indemnify the Indemnified
Party with respect to such Third Party Claim to the extent that the Indemnifying
Party's ability to defend has been materially prejudiced by such failure of the
Indemnified Party. The Indemnifying Party will notify the Indemnified Party as
soon as practicable within the Dispute Period whether the Indemnifying Party
disputes its liability to the Indemnified Party under Section 14.01 and whether
the Indemnifying Party desires, at its sole cost and expense, to defend the
Indemnified Party against such Third Party Claim.
(i) If the Indemnifying Party notifies the Indemnified Party
within the Dispute Period that the Indemnifying Party desires to defend
the Indemnified Party with
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respect to the Third Party Claim pursuant to this Section 14.02(a), then
the Indemnifying Party will have the right to defend, with counsel
reasonably satisfactory to the Indemnified Party, at the sole cost and
expense of the Indemnifying Party, such Third Party Claim by all
appropriate proceedings, which proceedings will be actively and diligently
prosecuted by the Indemnifying Party to a final conclusion or will be
settled at the discretion of the Indemnifying Party (but only with the
consent of the Indemnified Party, which consent shall not be unreasonably
withheld or delayed, in the case of any settlement that provides for any
relief other than the payment of monetary damages or that provides for the
payment of monetary damages as to which the Indemnified Party will not be
indemnified in full pursuant to Section 14.01). The Indemnifying Party
will have full control of such defense and proceedings, including any
compromise or settlement thereof; provided, however, that the Indemnified
Party may, at the sole cost and expense of the Indemnified Party, at any
time prior to the Indemnifying Party's delivery of the notice referred to
in the first sentence of this clause (i), file any motion, answer or other
pleadings or take any other action that the Indemnified Party reasonably
believes to be necessary or appropriate to protect its interests; and
provided further, that if requested by the Indemnifying Party, the
Indemnified Party will, at the sole cost and expense of the Indemnifying
Party, provide reasonable cooperation to the Indemnifying Party in
contesting any Third Party Claim that the Indemnifying Party elects to
contest. The Indemnified Party may participate in, but not control, any
defense or settlement of any Third Party Claim controlled by the
Indemnifying Party pursuant to this clause (i), and except as provided in
the preceding sentence, the Indemnified Party will bear its own costs and
expenses with respect to such participation. Notwithstanding the
foregoing, the Indemnified Party may take over the control of the defense
or settlement of a Third Party Claim at any time if it irrevocably waives
its right to indemnity under Section 14.01 with respect to such Third
Party Claim.
(ii) If the Indemnifying Party fails to notify the Indemnified
Party within the Dispute Period that the Indemnifying Party desires to
defend the Third Party Claim pursuant to Section 14.02(a), or if the
Indemnifying Party gives such notice but fails to prosecute actively and
diligently or settle the Third Party Claim, or if the Indemnifying Party
fails to give any notice whatsoever within the Dispute Period, then the
Indemnified Party will have the right to defend, at the sole cost and
expense of the Indemnifying Party, the Third Party Claim by all
appropriate proceedings, which proceedings will be prosecuted by the
Indemnified Party in a reasonable manner and in good faith or will be
settled at the discretion of the Indemnified Party (with the consent of
the Indemnifying Party, which consent will not be unreasonably withheld).
The Indemnified Party will have full control of such defense and
proceedings, including any compromise or settlement thereof; provided,
however, that if requested by the Indemnified Party, the Indemnifying
Party will, at the sole cost and expense of the Indemnifying Party,
provide reasonable cooperation to the Indemnified Party and its counsel in
contesting any Third Party Claim which the Indemnified Party is
contesting. Notwithstanding the foregoing provisions of this clause (ii),
if the Indemnifying Party has notified the Indemnified Party within the
Dispute Period that the Indemnifying Party disputes its liability
hereunder to the Indemnified Party with respect to such Third Party Claim
and if such dispute is resolved in favor of the Indemnifying Party in the
manner
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provided in clause (iii) below, the Indemnifying Party will not be
required to bear the costs and expenses of the Indemnified Party's defense
pursuant to this clause (ii) or of the Indemnifying Party's participation
therein at the Indemnified Party's request, and the Indemnified Party will
reimburse the Indemnifying Party in full for all reasonable costs and
expenses incurred by the Indemnifying Party in connection with such
litigation. The Indemnifying Party may participate in, but not control,
any defense or settlement controlled by the Indemnified Party pursuant to
this clause (ii), and the Indemnifying Party will bear its own costs and
expenses with respect to such participation.
(iii) If the Indemnifying Party notifies the Indemnified Party
that it does not dispute its liability to the Indemnified Party with
respect to the Third Party Claim under Section 14.01, the Loss in the
amount specified in the Claim Notice will be conclusively deemed a
liability of the Indemnifying Party under Section 10.01 and the
Indemnifying Party shall pay the amount of such Loss to the Indemnified
Party within 30 days of demand. If the Indemnifying Party has timely
disputed its liability with respect to such claim, the Indemnifying Party
and the Indemnified Party will proceed in good faith to negotiate a
resolution of such dispute, and if not resolved through negotiations
within the Resolution Period, such dispute shall be resolved by
arbitration in accordance with paragraph (d) of this Section 14.02.
(b) In the event any Indemnified Party should have a claim under
Section 14.01 against any Indemnifying Party that does not involve a Third Party
Claim, the Indemnified Party shall deliver an Indemnity Notice with reasonable
promptness to the Indemnifying Party. The failure by any Indemnified Party to
give the Indemnity Notice shall not impair such party's rights hereunder except
to the extent that an Indemnifying Party demonstrates that it has been
materially prejudiced thereby. If the Indemnifying Party notifies the
Indemnified Party that it does not dispute the claim described in such Indemnity
Notice, the Loss in the amount specified in the Indemnity Notice will be
conclusively deemed a liability of the Indemnifying Party under Section 10.01
and the Indemnifying Party shall pay the amount of such Loss to the Indemnified
Party within 30 days of demand. If the Indemnifying Party has timely disputed
its liability with respect to such claim, the Indemnifying Party and the
Indemnified Party will proceed in good faith to negotiate a resolution of such
dispute, and if not resolved through negotiations within the Resolution Period,
such dispute shall be resolved by arbitration in accordance with paragraph (d)
of this Section 14.02.
(c) In the event of any Loss resulting from a misrepresentation,
breach of warranty or nonfulfillment or failure to be performed of any covenant
or agreement contained in this Agreement as to which an Indemnified Party would
be entitled to claim indemnity under Section 14.01 but for the provisions of
paragraph (d) thereof, such Indemnified Party may nevertheless deliver a written
notice to the Indemnifying Party containing the information that would be
required in a Claim Notice or an Indemnity Notice, as applicable, with respect
to such Loss. If the Indemnifying Party notifies the Indemnified Party that it
does not dispute the claim described therein the Loss specified in the notice
will be conclusively deemed to have been incurred by the Indemnified Party for
purposes of making the determination set forth in paragraph (d) of Section
14.01. If the Indemnifying Party has timely disputed the claim described in such
Claim Notice or Indemnity Notice, as the case may be, the Indemnifying Party
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and the Indemnified Party will proceed in good faith to negotiate a resolution
of such dispute, and if not resolved through negotiations within the Resolution
Period, such dispute shall be resolved by arbitration in accordance with
paragraph (d) of this Section 14.02.
(d) Any dispute submitted to arbitration pursuant to this Section
14.02 shall be finally and conclusively determined by the decision of a board of
arbitration consisting of three (3) members (hereinafter sometimes called the
"Board of Arbitration") selected as hereinafter provided. Each of the
Indemnified Party and the Indemnifying Party shall select one (1) member (who
must be an independent commercial attorney experienced in the matters in
dispute) and the third member (who must be an independent commercial attorney
experienced in the matters in dispute) shall be selected by mutual agreement of
the other members, or if the other members fail to reach agreement on a third
member within twenty (20) days after their selection, such third member (who
must ben an independent commercial attorney experienced in the matters in
dispute) shall thereafter be selected by the American Arbitration Association
upon application made to it for such purpose by the Indemnified Party. The Board
of Arbitration shall meet in New York, New York or such other place as a
majority of the members of the Board of Arbitration determines more appropriate,
and shall reach and render a decision in writing (concurred in by a majority of
the members of the Board of Arbitration) with respect to the amount, if any,
which the Indemnifying Party is required to pay to the Indemnified Party in
respect of a claim filed by the Indemnified Party. In connection with rendering
its decisions, the Board of Arbitration shall adopt and follow such rules and
procedures reasonably proposed by the Indemnifying Party and approved by a
majority of the members of the Board of Arbitration. To the extent practical,
decisions of the Board of Arbitration shall be rendered no more than thirty (30)
calendar days following commencement of proceedings with respect thereto. The
Board of Arbitration shall cause its written decision to be delivered to the
Indemnified Party and the Indemnifying Party. Any decision made by the Board of
Arbitration (either prior to or after the expiration of such thirty (30)
calendar day period) shall be final, binding and conclusive on the Indemnified
Party and the Indemnifying Party and entitled to be enforced to the fullest
extent permitted by law and entered in any court of competent jurisdiction. The
Board of Arbitration shall not be entitled to render punitive damages with
respect to any such dispute. The prevailing party in any arbitration shall be
entitled to be reimbursed by the other party for the prevailing party's costs
and expenses incurred in connection with that arbitration and the underlying
dispute, including reasonable attorneys' fees and expenses, and to interest on
any amount of money determined by the Board of Arbitration to be due, at a rate
of 9% per annum, from the date or dates the Board of Arbitration determines
payment should have been made. The expenses and fees of the Board of Arbitration
shall be paid by the losing party.
ARTICLE XV
TERMINATION
15.01 Termination. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned:
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(a) at any time before the Closing, by mutual written agreement of
the Stockholders, the Partners and Purchaser;
(b) at any time before the Closing, by the Stockholders and the
Partners or by Purchaser, in the event (i) of a material breach hereof by the
non-terminating party if such non-terminating party fails to cure such breach as
soon as commercially reasonable and, in any event, at least five (5) Business
Days prior to the Closing Date or (ii) upon notification of the non-terminating
party by the terminating party that the satisfaction of any condition to the
terminating party's obligations under this Agreement becomes impossible or
impracticable with the use of commercially reasonable efforts if the failure of
such condition to be satisfied is not caused by a breach hereof by the
terminating party; or
(c) at any time after November 30, 1997 by the Stockholders and the
Partners or by Purchaser upon notification of the non-terminating party by the
terminating party if the Closing shall not have occurred on or before such date
and such failure to consummate is not caused by a breach of this Agreement by
the terminating party.
15.02 Effect of Termination. If this Agreement is validly terminated
pursuant to Section 14.01, this Agreement will forthwith become null and void,
and there will be no liability or obligation on the part of the Stockholders,
the Partners or Purchaser (or any of their respective officers, directors,
employees, agents or other representatives or Affiliates), except as provided in
the next succeeding sentence and except that the provisions with respect to
expenses in Section 17.03 and confidentiality in Section 17.05 will continue to
apply following any such termination. Notwithstanding any other provision in
this Agreement to the contrary, upon termination of this Agreement pursuant to
Section 15.01(b) or (c), the Stockholders and the Partners will remain liable to
Purchaser for any breach of this Agreement by the Stockholder or the Partner
existing at the time of such termination, and Purchaser will remain liable to
the Stockholders and the Partners for any breach of this Agreement by Purchaser
existing at the time of such termination, and the Stockholders and the Partners
or Purchaser may seek such remedies, including damages and fees of attorneys,
against the other with respect to any such breach as are provided in this
Agreement or as are otherwise available at Law or in equity.
ARTICLE XVI
DEFINITIONS
16.01 Definitions. (a) As used in this Agreement, the following
defined terms shall have the meanings indicated below:
"Actions or Proceedings" means any action, suit, proceeding,
arbitration or Governmental or Regulatory Authority investigation or audit.
"Affiliate" means any Person that directly, or indirectly through
one of more intermediaries, controls or is controlled by or is under common
control with the Person specified. For purposes of this definition, control of a
Person means the power, direct or indirect,
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to direct or cause the direction of the management and policies of such Person
whether by Contract or otherwise and, in any event and without limitation of the
previous sentence, any Person owning ten percent (10%) or more of the voting
securities of a second Person shall be deemed to control that second Person.
"Agreement" means this Purchase Agreement and the Exhibits and the
Schedules hereto and the certificates delivered in accordance with Sections 7.03
and 8.03, as the same shall be amended from time to time.
"Assets and Properties" of any Person means all assets and
properties of every kind, nature, character and description (whether real,
personal or mixed, whether tangible or intangible, whether absolute, accrued,
contingent, fixed or otherwise and wherever situated), including the goodwill
related thereto, operated, owned or leased by such Person, including without
limitation cash, cash equivalents, Investment Assets, accounts and notes
receivable, chattel paper, documents, instruments, general intangibles, real
estate, equipment, inventory, goods and Intellectual Property.
"Associate" means, with respect to any Person, any corporation or
other business organization of which such Person is an officer or partner or is
the beneficial owner, directly or indirectly, of ten percent (10%) or more of
any class of equity securities, any trust or estate in which such Person has a
substantial beneficial interest or as to which such Person serves as a trustee
or in a similar capacity and any relative or spouse of such Person, or any
relative of such spouse, who has the same home as such Person.
"Board of Arbitration" has the meaning ascribed to it in Section
10.02(c).
"Books and Records" means all files, documents, instruments, papers,
books and records relating to the Business or Condition of the Company,
including without limitation financial statements, Tax Returns and related work
papers and letters from accountants, budgets, pricing guidelines, ledgers,
journals, deeds, title policies, minute books, stock certificates and books,
stock transfer ledgers, Contracts, Licenses, customer lists, computer files and
programs, retrieval programs, operating data and plans and environmental studies
and plans.
"Business" means healthcare investment banking marketed to entities
involved in the long-term healthcare sector of the healthcare market.
"Business Combination" means with respect to any Person any merger,
consolidation or combination to which such Person is a party, any sale,
dividend, split or other disposition of capital stock or other equity interests
of such Person or any sale, dividend or other disposition of all or
substantially all of the Assets and Properties of such Person.
"Business Day" means a day other than Saturday, Sunday or any day on
which banks located in the State of New York or the State of Pennsylvania are
authorized or obligated to close.
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"Business or Condition of the Company" means the business, condition
(financial or otherwise), results of operations, Assets and Properties of the
Purchased Entities taken as a whole.
"Claim Notice" means written notification pursuant to Section
14.02(a) of a Third Party Claim as to which indemnity under Section 14.01 is
sought by an Indemnified Party, enclosing a copy of all papers served, if any,
and specifying the nature of and basis for such Third Party Claim and for the
Indemnified Party's claim against the Indemnifying Party under Section 14.01,
together with the amount or, if not then reasonably ascertainable, the estimated
amount, determined in good faith, of such Third Party Claim.
"Closing" means the closing of the DVIHA Merger, the DVIMF Merger
and the transactions contemplated by Section 1.01.
"Closing Date" means (a) the fifth Business Day after the day on
which the last of the consents, approvals, actions, filings, notices or waiting
periods described in or related to the filings described in Sections 11.05 and
12.05 has been obtained, made or given or has expired, as applicable, or (b)
such other date as Purchaser and the Stockholders and the Partners mutually
agree upon in writing.
"Code" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
"Company" has the meaning ascribed to it in the forepart of this
Agreement.
"Contract" means any agreement, lease, evidence of Indebtedness,
mortgage, indenture, security agreement or other contract (whether written or
oral).
"Delaware Secretary of State" has the meaning ascribed to it in
Section 2.03.
"DGCL" has the meaning ascribed to it in Section 2.01.
"DVI" has the meaning ascribed to it in Section 1.02.
"DVIHA" has the meaning ascribed to it in forepart of this
Agreement.
"DVIHA Articles of Merger" has the meaning ascribed to it in Section
2.03.
"DVIHA Certificate of Merger" has the meaning ascribed to it in
Section 2.03.
"DVIHA Effective Time" has the meaning ascribed to it in Section
2.03.
"DVIHA Common Stock" has the meaning ascribed to it in Section
3.011.
"DVIHA Surviving Corporation Common Stock" has the meaning ascribed
to it in Section 3.011.
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46
"DVIMF" has the meaning ascribed to it in the forepart of this
Agreement.
"DVIMF Articles of Merger" has the meaning ascribed to it in Section
2.04.
"DVIMF Certificate of Merger" has the meaning ascribed to it in
Section 2.04.
"DVIMF Common Stock" has the meaning ascribed to it in Section
3.021.
"DVIMF Effective Time" has the meaning ascribed to it in Section
2.04.
"DVIMF Surviving Corporation Common Stock" has the meaning ascribed
to it in Section 3.021.
"DVI Stock" has the meaning ascribed to it in Section 1.02.
"Dispute Period" means the period ending forty-five (45) calendar
days following receipt by an Indemnifying Party of either a Claim Notice or an
Indemnity Notice.
"Dissenting Shares" has the meaning set forth in Section 3.031.
"Dissenting Stockholders" has the meaning set forth in Section
3.031.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and the rules and regulations promulgated thereunder.
"GAAP" means generally accepted accounting principles, consistently
applied throughout the specified period and in the immediately prior comparable
period.
"General Partner" has the meaning ascribed to it in the forepart of
this Agreement.
"Governmental or Regulatory Authority" means any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of
the United States, any foreign country or any domestic or foreign state, county,
city or other political subdivision.
"Indebtedness" of any Person means all obligations of such Person
(i) for borrowed money, (ii) evidenced by notes, bonds, debentures or similar
instruments, (iii) for the deferred purchase price of goods or services (other
than trade payables or accruals incurred in the ordinary course of business),
(iv) under capital leases and (v) in the nature of guarantees of the obligations
described in clauses (i) through (iv) above of any other Person.
"Indemnification Percentage" means 40.5% with respect to Xxxx
Xxxxxxx, 40.5% with respect to Xxxx Xxxxxxx and 19% with respect to Xxxx X.
Xxxxxxx III.
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47
"Indemnified Party" means any Person claiming indemnification under
any provision of Article XIV.
"Indemnifying Party" means any Person against whom a claim for
indemnification are being asserted under any provision of Article XIV.
"Indemnity Notice" means written notification pursuant to Section
14.02(b) of a claim for indemnity under Article XIV by an Indemnified Party,
specifying the nature of and basis for such claim, together with the amount or,
if not then reasonably ascertainable, the estimated amount, determined in good
faith, of such claim.
"Intellectual Property" means all patents and patent rights,
trademarks and trademark rights, trade names and trade name rights, service
marks and service xxxx rights, service names and service name rights, brand
names, inventions, processes, formulae, copyrights and copyright rights, trade
dress, business and product names, logos, slogans, trade secrets, industrial
models, processes, designs, methodologies, computer programs (including all
source codes) and related documentation, technical information, manufacturing,
engineering and technical drawings, know-how and all pending applications for
and registrations of patents, trademarks, service marks and copyrights.
"Interim Period" has the meaning set forth in Section 9.13.
"IRS" means the United States Internal Revenue Service.
"JGW & Co." has the meaning ascribed to it in the forepart of this
Agreement.
"JGW Partners" has the meaning ascribed to it in the forepart of
this Agreement.
"JGW Partner Interests" has the meaning ascribed to it in the
forepart of this Agreement.
"JGW Partnership" has the meaning ascribed to it in the forepart of
this Agreement.
"JGW Partners Stock" has the meaning ascribed to it in Section
3.022.
"JGW Partners Stockholders" has the meaning ascribed to it in the
forepart of this Agreement.
"JGW Stock" has the meaning ascribed to it in Section 3.012.
"JGW Stockholders" has the meaning ascribed to it in the forepart of
this Agreement.
"knowledge" means, all matters actually known to such party and all
matters which should have been known by such party after reasonable inquiry.
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48
"Laws" means all laws, statutes, rules, regulations, ordinances and
other pronouncements having the effect of law of the United States, any foreign
country or any domestic or foreign state, county, city or other political
subdivision or of any Governmental or Regulatory Authority.
"Liabilities" means all Indebtedness, obligations and other
liabilities of a Person (whether absolute, accrued, contingent, fixed or
otherwise, or whether due or to become due).
"Licenses" means all licenses, permits, orders, certificates of
authority, authorizations, approvals, registrations, franchises and similar
consents granted or issued by any Governmental or Regulatory Authority.
"Liens" means any mortgage, pledge, assessment, security interest,
lease, lien, adverse claim, levy, charge or other encumbrance of any kind, or
any conditional sale Contract, title retention Contract or other Contract to
give any of the foregoing.
"Loss" means any and all damages, fines, fees, penalties,
deficiencies, losses (including loss of value) and expenses (including without
limitation interest, court costs, fees of attorneys, accountants and other
experts or other expenses of litigation or other proceedings or of any claim,
default or assessment).
"Material Contract" means any of the Contracts and Other Agreements,
if (a) it involves, relates to or affects the business or assets of any
Purchased Entity and (b) one or more of the following applies: (i) it involves,
or may reasonably be expected to involve, the payment or receipt of $10,000 or
more (whether in cash or in goods or services of an equivalent value) over its
initial term (not including renewal options); (ii) it imposes material and
substantial restrictions on the conduct of the business of any Purchased Entity;
or (iii) it is not cancelable on notice of 60 days or less without liability,
penalty or premium.
"MF Partners" has the meaning ascribed to it in the forepart of this
Agreement.
"MF Partnership" has the meaning ascribed to it in the forepart of
this Agreement.
"MF Partners Interests" has the meaning ascribed to it in the
forepart of this Agreement.
"NASD" has the meaning ascribed to it in Section 7.14.
"Option" with respect to any Person means any security, right,
subscription, warrant, option, "phantom" stock right or other Contract that
gives the right to (i) purchase or otherwise receive or be issued any shares of
capital stock of such Person or any security of any kind convertible into or
exchangeable or exercisable for any shares of capital stock of such Person or
(ii) receive any benefits or rights similar to any rights enjoyed by or accruing
to the holder of shares of capital stock of such Person, including any rights to
participate in the equity, income or election of directors or officers of such
Person.
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49
"Order" means any writ, judgment, decree, injunction or similar
order of any Governmental or Regulatory Authority (in each such case whether
preliminary or final).
"Partner Interests" has the meaning ascribed to it in the forepart
of this Agreement.
"Partners" has the meaning ascribed to it in the forepart of this
Agreement.
"PBCL" has the meaning ascribed to it in Section 2.01.
"Pennsylvania Department of State" has the meaning ascribed to it in
Section 2.03.
"Pension Benefit Plan" means an employee pension benefit plan, as
defined in Section 3(2) of ERISA.
"Permitted Lien" means (i) any Lien for Taxes not yet due or
delinquent or being contested in good faith by appropriate proceedings for which
adequate reserves have been established in accordance with GAAP, (ii) any
statutory Lien arising in the ordinary course of business by operation of Law
with respect to a Liability that is not yet due or delinquent, (iii) any
xxxxxxx, repairman, warehouseman and carrier Liens arising in the ordinary
course of business and which are being contested in good faith by appropriate
proceedings, and (iv) any minor imperfection of title or similar Lien which
individually or in the aggregate with other such Liens does not materially
impair the value of the property subject to such Lien or the use of such
property in the conduct of the business of the Purchased Entity.
"Person" means any natural person, corporation, general partnership,
limited partnership, proprietorship, other business organization, trust, union,
association or Governmental or Regulatory Authority.
"Plan" means an "employee benefit plan" within the meaning of
Section 3(3) of ERISA and each insurance, severance, pension, retirement, profit
sharing, medical, dental, health, sick leave, vacation, fringe benefit, equity
(or equity-based), bonus, incentive, employment, consulting, deferred
compensation or other employee or independent contractor benefit or otherwise
compensatory plan, agreement (including without limitation any collective
bargaining agreement), understanding, contract, policy, fund, commitment or
arrangement, whether oral or written and whether or not subject to ERISA, which
provides benefits to any employee, former employee, independent contractor,
former independent contractor, or any of their dependents or beneficiaries.
"Pro Rata Share" means, with respect to each individual Stockholder
and/or Partner, as the case may be, that amount set forth next to his name on
Schedule E.
"Purchase Price" has the meaning ascribed to it in the forepart of
this Agreement.
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50
"Purchased Entities" has the meaning ascribed to it in the forepart
of this Agreement.
"Purchaser" has the meaning ascribed to it in the forepart of this
Agreement.
"Representatives" has the meaning ascribed to it in Section 9.02.
"Resolution Period" means the period ending thirty (30) calendar
days following receipt by an Indemnified Party of a Dispute Notice.
"Securities Act" means the Securities Act of 1933, as amended.
"Stock" has the meaning ascribed to it in Section 3.022.
"Stockholders" has the meaning ascribed to it in the forepart of
this Agreement.
"Subsidiary" means any Person in which the Company, directly or
indirectly through Subsidiaries or otherwise, beneficially owns more than fifty
percent (50%) of either the equity interests in, or the voting control of, such
Person.
"Taxes" means any federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental, customs, duties, capital stock,
franchise, profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer, gains,
registration, value added, alternative or add-on minimum, estimated, or other
tax of any kind whatsoever, including any interest, penalty or addition thereto,
whether disputed or not.
"Tax Returns" means all returns, declarations, reports, claims for
refund, information returns or statements relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"Third Party Claim" has the meaning ascribed to it in Section
14.02(a).
"Welfare Benefit Plan" means an employee welfare benefit plan, as
defined in Section 3(1) of ERISA.
(b) Unless the context of this Agreement otherwise requires, (i)
words of any gender include each other gender; (ii) words using the singular or
plural number also include the plural or singular number, respectively; (iii)
the terms "hereof," "herein," "hereby" and derivative or similar words refer to
this entire Agreement; (iv) the terms "Article" or "Section" refer to the
specified Article or Section of this Agreement; and (v) the phrases "ordinary
course of business" and "ordinary course of business consistent with past
practice" refer to the business and practice of the Company. All accounting
terms used herein and not expressly defined herein shall have the meanings given
to them under GAAP.
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51
ARTICLE XVII
MISCELLANEOUS
17.01 Notices. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given only if
delivered personally or by facsimile transmission or mailed (first class postage
prepaid) to the parties at the following addresses or facsimile numbers:
If to Purchaser, DVIHA or DVIMF to:
c/o DVI, Inc.
000 Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxxxx
with a copy to:
Xxxxxx & Xxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxx X. Xxxxx
If to JGW & Co, the Stockholders or the Partners:
c/o X.X Xxxxxxxxx & Co., Inc.
The Xxxxxx Building
15th and Xxxxxxxx Xxxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xx. Xxxx Xxxxxxx
With a copy to:
Wolf, Block, Xxxxxx and Xxxxx-Xxxxx LLP
Xxxxxxx Xxxxx Xxxxxxx Xxxxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxx X. Xxxxxx
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section and confirmed by overnight courier, be deemed given
upon receipt, and (iii) if delivered by mail in the manner described
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52
above to the address as provided in this Section, be deemed given upon receipt
(in each case regardless of whether such notice, request or other communication
is received by any other Person to whom a copy of such notice is to be delivered
pursuant to this Section). Any party from time to time may change its address,
facsimile number or other information for the purpose of notices to that party
by giving notice specifying such change to the other party hereto.
17.02 Entire Agreement. This Agreement supersedes all prior
discussions and agreements between the parties with respect to the subject
matter hereof, including without limitation any letter of intent between the
parties, and contains the sole and entire agreement between the parties hereto
with respect to the subject matter hereof.
17.03 Expenses. Except as otherwise expressly provided in this
Agreement (including without limitation as provided in Section 15.02), whether
or not the transactions contemplated hereby are consummated, each party will pay
its own costs and expenses, incurred in connection with the negotiation,
execution and closing of this Agreement and the transactions contemplated
hereby.
17.04 Public Announcements. At all times at or before the Closing,
the Stockholders, the Partners and Purchaser will not issue or make any reports,
statements or releases to the public or generally to the employees, customers,
suppliers or other Persons with respect to this Agreement or the transactions
contemplated hereby without the consent of the other, which consent shall not be
unreasonably withheld. If either party is unable to obtain the approval of its
public report, statement or release from the other party and such report,
statement or release is, in the opinion of legal counsel to such party, required
by Law in order to discharge such party's disclosure obligations, then such
party may make or issue the legally required report, statement or release and
promptly furnish the other party with a copy thereof. The Stockholders, the
Partners and Purchaser will also obtain the other party's prior approval of any
press release to be issued immediately following the Closing announcing the
consummation of the transactions contemplated by this Agreement.
17.05 Confidentiality. Each party hereto will hold, and will use its
best efforts to cause its Affiliates and their respective Representatives to
hold, in strict confidence from any Person (other than any such Affiliate or
Representative), unless (i) compelled to disclose by judicial or administrative
process (including without limitation in connection with obtaining the necessary
approvals of this Agreement and the transactions contemplated hereby of
Governmental or Regulatory Authorities) or by other requirements of Law or (ii)
disclosed in an Action or Proceeding brought by a party hereto in pursuit of its
rights or in the exercise of its remedies hereunder, all documents and
information concerning the other party or any of its Affiliates furnished to it
by the other party or such other party's Representatives in connection with this
Agreement or the transactions contemplated hereby, except to the extent that
such documents or information can be shown to have been (a) previously known by
the party receiving such documents or information or (b) in the public domain
(either prior to or after the furnishing of such documents or information
hereunder) through no fault of such receiving party.
17.06 Further Assurances; Post-Closing Cooperation. (a) At any time
or from time to time after the Closing, JGW & Co., the Stockholders and the
Partners shall execute and
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deliver to Purchaser such other documents and instruments, provide such
materials and information and take such other actions as Purchaser may
reasonably request more effectively to vest title to the shares of Stock and
Partner Interests in Purchaser.
(b) Following the Closing, each party will afford the other party,
its counsel and its accountants, during normal business hours, reasonable access
to the books, records and other data relating to the Business or Condition of
the Company in its possession with respect to periods prior to the Closing and
the right to make copies and extracts therefrom, to the extent that such access
may be reasonably required by the requesting party in connection with (i) the
preparation of Tax Returns, (ii) the determination or enforcement of rights and
obligations under this Agreement, (iii) compliance with the requirements of any
Governmental or Regulatory Authority, (iv) the determination or enforcement of
the rights and obligations of any Indemnified Party or (v) in connection with
any actual or threatened Action or Proceeding. Further, each party agrees for a
period extending six (6) years after the Closing Date not to destroy or
otherwise dispose of any such books, records and other data unless such party
shall first offer in writing to surrender such books, records and other data to
the other party and such other party shall not agree in writing to take
possession thereof during the ten (10) day period after such offer is made.
(c) If, in order properly to prepare its Tax Returns, other
documents or reports required to be filed with Governmental or Regulatory
Authorities or its financial statements or to fulfill its obligations hereunder,
it is necessary that a party be furnished with additional information, documents
or records relating to the Business or Condition of the Company not referred to
in paragraph (b) above, and such information, documents or records are in the
possession or control of the other party, such other party shall use its
commercially reasonable efforts to furnish or make available such information,
documents or records (or copies thereof) at the recipient's request, cost and
expense. Any information obtained by the Stockholders or the Partners in
accordance with this paragraph shall be held confidential by the Stockholders
and the Partners in accordance with Section 17.05.
(d) Notwithstanding anything to the contrary contained in this
Section, if the parties are in an adversarial relationship in litigation or
arbitration, the furnishing of information, documents or records in accordance
with any provision of this Section shall be subject to applicable rules relating
to discovery.
17.07 Waiver. Any term or condition of this Agreement may be waived
at any time by the party that is entitled to the benefit thereof, but no such
waiver shall be effective unless set forth in a written instrument duly executed
by or on behalf of the party waiving such term or condition. No waiver by any
party of any term or condition of this Agreement, in any one or more instances,
shall be deemed to be or construed as a waiver of the same or any other term or
condition of this Agreement on any future occasion. All remedies, either under
this Agreement or by Law or otherwise afforded, will be cumulative and not
alternative.
17.08 Amendment. This Agreement may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of each
party hereto.
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17.09 No Third Party Beneficiary. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and their
respective successors or permitted assigns, and it is not the intention of the
parties to confer third-party beneficiary rights upon any other Person other
than any Person entitled to indemnity under Article XIV.
17.10 No Assignment; Binding Effect. Neither this Agreement nor any
right, interest or obligation hereunder may be assigned by any party hereto
without the prior written consent of the other parties hereto and any attempt to
do so will be void, except (a) for assignments and transfers by operation of Law
and (b) that Purchaser may assign any or all of its rights, interests and
obligations hereunder (including without limitation its rights under Article
XIV) to (i) a wholly-owned subsidiary, provided that any such subsidiary agrees
in writing to be bound by all of the terms, conditions and provisions contained
herein, (ii) any post-Closing purchaser of all of the issued and outstanding
stock of Purchaser, or all or a substantial part of its assets or (iii) any
financial institution providing purchase money or other financing to Purchaser
or the Company, the General Partner, the JGW Partnership or the MF Partnership
from time to time as collateral security for such financing, but no such
assignment referred to in clause (i), (ii) or (iii) shall relieve Purchaser of
its obligations hereunder. Subject to the preceding sentence, this Agreement is
binding upon, inures to the benefit of and is enforceable by the parties hereto
and their respective successors and assigns.
17.11 Headings. The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.
17.12 Invalid Provisions. If any provision of this Agreement is held
to be illegal, invalid or unenforceable under any present or future Law, and if
the rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof, (c) the
remaining provisions of this Agreement will remain in full force and effect and
will not be affected by the illegal, invalid or unenforceable provision or by
its severance herefrom and (d) in lieu of such illegal, invalid or unenforceable
provision, there will be added automatically as a part of this Agreement a
legal, valid and enforceable provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible.
17.13 Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the Commonwealth of Pennsylvania
applicable to a Contract executed and performed in such State without giving
effect to the conflicts of laws principles thereof.
17.14 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
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IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officer of each party hereto as of the date
first above written.
DVI FINANCIAL SERVICES INC.
By:/s/ Xxxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President and C.F.O.
DVI HEALTHCARE FINANCIAL ADVISORS,INC.
By:/s/ Xxxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title:
DVI MORTGAGE FUNDING, INC.
By:/s/ Xxxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title:
X.X. XXXXXXXXX MANAGEMENT
COMPANY, INC.
By:/s/ Xxxx Xxxxxxx
----------------------------------------
Name: Xxxx Xxxxxxx
Title: President
X.X XXXXXXXXX SECURITIES, INC.
/s/ Xxxx Xxxxxxx
-------------------------------------------
Name: Xxxx Xxxxxxx
Title: President
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STOCKHOLDERS:
/s/ Xxxx Xxxxxxx
-------------------------------------------
Xxxx Xxxxxxx
/s/ Xxxx X. Xxxxxxx III
-------------------------------------------
Xxxx X. Xxxxxxx III
/s/ Xxxx Xxxxxxx
-------------------------------------------
Xxxx Xxxxxxx
PARTNERS:
/s/ Xxxx Xxxxxxx
-------------------------------------------
Xxxx Xxxxxxx
/s/ Xxxx X. Xxxxxxx III
-------------------------------------------
Xxxx X. Xxxxxxx III
/s/ Xxxx Xxxxxxx
-------------------------------------------
Xxxx Xxxxxxx
X.X XXXXXXXXX PARTNERS, INC.
/s/ Xxxx Xxxxxxx
-------------------------------------------
Name: Xxxx Xxxxxxx
Title: Chairman of the Board
X.X XXXXXXXXX SECURITIES, INC.
/s/ Xxxx Xxxxxxx
-------------------------------------------
Name: Xxxx Xxxxxxx
Title: President
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SCHEDULE A
X.X. XXXXXXXXX PARTNERS, L.P.
Name Partner Interest Owner Consideration To Be Received
---- ---------------------- ----------------------------
X. Xxxxxxx 39.6% 4,293 shares of DVI Stock
X. Xxxxxxx 39.6% 4,293 shares of DVI Stock
X. Xxxxxxx 19.8% 2,146 shares of DVI Stock
X.X. Xxxxxxxxx Partners, Inc. 1.0% 108 shares of DVI Stock
A-1
58
SCHEDULE B
X.X. XXXXXXXXX MORTGAGE FUNDING, L.P.
Name Partner Interest Owner Consideration To Be Received
---- ---------------------- ----------------------------
X. Xxxxxxx 39.6% 10,732 shares of DVI Stock
X. Xxxxxxx 39.6% 10,372 shares of DVI Stock
X. Xxxxxxx 19.8% 5,366 shares of DVI Stock
X.X. Xxxxxxxxx Partners, Inc. 1.0% 271 shares of DVI Stock
B-1
59
SCHEDULE C
X.X. XXXXXXXXX SECURITIES, INC.
Name Stock Owned Consideration To Be Received
---- ----------- ----------------------------
X. Xxxxxxx 50 shares (50.0%) 21,003 shares of DVI Stock
X. Xxxxxxx 50 shares (50.0%) 21,003 shares of DVI Stock
C-1
60
SCHEDULE D
X.X. XXXXXXXXX PARTNERS, INC.
Name Stock Owned Consideration To Be Received
---- ----------- ----------------------------
X. Xxxxxxx 400 shares (40.0%) 1,626 shares of DVI Stock
X. Xxxxxxx 400 shares (40.0%) 1,626 shares of DVI Stock
X. Xxxxxxx 200 shares (20.0%) 813 shares of DVI Stock
D-1
61
SCHEDULE E
PRO RATA SHARE AMOUNTS
Name Amount
---- ------
X. Xxxxxxx $878,211.45
X. Xxxxxxx $878,211.45
X. Xxxxxxx $405,000.00
X-0
00
XXXXXXXX F
OCTOBER 31, 1997 BALANCE SHEET
Annexed hereto.
D-3
