TRANSACTION AGREEMENT dated as of December 22, 2009 among GREENHILL & CO., INC., GCP CAPITAL PARTNERS HOLDINGS INC., GCP CAPITAL PARTNERS HOLDINGS LLC, GREENHILL CAPITAL PARTNERS II LLC and
Exhibit
2.1
dated as
of December 22, 2009
among
XXXXXXXXX
& CO., INC.,
GCP
CAPITAL PARTNERS HOLDINGS INC.,
GCP
CAPITAL PARTNERS HOLDINGS LLC,
XXXXXXXXX
CAPITAL PARTNERS II LLC
and
EACH
INDIVIDUAL LISTED ON THE
SIGNATURE
PAGES HERETO
(solely
for the purposes specified on the signature pages hereto)
TABLE
OF CONTENTS
PAGE
ARTICLE
1
DEFINITIONS
Section
1.01.
|
Definitions
|
2
|
Section
1.02.
|
Other
Definitional and Interpretative Provisions
|
8
|
ARTICLE
2
EXCHANGE; PRE-CLOSING AND CLOSING ACTIONS
|
||
Section
2.01.
|
Exchange
|
9
|
Section
2.02.
|
Pre-Closing
Actions
|
9
|
Section 2.03. |
Closing
|
10
|
ARTICLE
3
INTERIM PERIOD
|
||
Section
3.01.
|
Office
Space License; Services
|
10
|
Section
3.02.
|
Operations of New
Manager
|
12
|
Section
3.03.
|
Data
Migration
|
13
|
Section
3.04.
|
Website
|
13
|
Section
3.05.
|
18th
Floor Modifications
|
13
|
Section
3.06.
|
New Manager and Newco Group
Costs and Expenses
|
13
|
Section
3.07.
|
Continuing
Application of Policies
|
14
|
|
||
ARTICLE
4
SEPARATION AND MANAGEMENT ARRANGEMENTS
|
||
Section
4.01.
|
Separation
Dates
|
14
|
Section
4.02.
|
Separation Date
Events
|
15
|
Section
4.03.
|
Conditions
to Each Party’s Obligations
|
17
|
Section
4.04.
|
Alternative
Arrangements
|
18
|
Section
4.05.
|
Transfer
of Remaining Common Units of New Manager
|
18
|
ARTICLE
5
OTHER AGREEMENTS WITH RESPECT TO EXISTING FUNDS
|
||
Section 5.01. |
Investment
Committees
|
19
|
Section 5.02. |
Existing Fund
Fees
|
19
|
i
ARTICLE
6
NEW FUNDS
|
||
Section
6.01.
|
Use of Track
Record
|
19
|
Section
6.02.
|
Greenhill
Commitments
|
20
|
Section
6.03.
|
Fees
|
20
|
Section
6.04.
|
Carried
Interest
|
20
|
Section
6.05.
|
Investment
Committees
|
21
|
Section
6.06.
|
Placement
Agent
|
21
|
ARTICLE
7
CERTAIN EMPLOYEE MATTERS
|
||
Section
7.01.
|
Interim
Period
|
21
|
Section
7.02.
|
Restricted Stock
Units
|
22
|
Section
7.03.
|
New
GCP Employees
|
22
|
Section
7.04.
|
Newco
Employee Undertakings
|
22
|
ARTICLE
8
OTHER COVENANTS AND AGREEMENTS
|
||
Section
8.01.
|
Confidentiality
|
22
|
Section
8.02.
|
Non-Competition
|
23
|
Section
8.03.
|
Non-Solicitation;
No-Hire
|
24
|
Section
8.04.
|
Non-Disparagement
|
24
|
Section
8.05.
|
Specific
Performance
|
25
|
Section
8.06.
|
Adoption of Internal
Policies
|
25
|
Section
8.07.
|
Maintenance of Books and
Records
|
25
|
Section
8.08.
|
Assistance
|
26
|
Section
8.09.
|
Information
Rights
|
26
|
Section
8.10.
|
Notice of Changes in Ownership
of Newco
|
26
|
Section
8.11.
|
Notice
of Certain Events
|
26
|
Section
8.12.
|
Certain
Events
|
27
|
Section
8.13.
|
Public
Announcements
|
27
|
Section
8.14.
|
Investor
Communications
|
28
|
Section
8.15.
|
Tax
Matters
|
28
|
ARTICLE
9
REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
|
||
Section
9.01.
|
Representations
and Warranties of Greenhill
|
28
|
Section
9.02.
|
Representations and Warranties
of the Acquirors
|
29
|
Section
9.03.
|
Indemnification
|
30
|
Section
9.04.
|
Actions of New
Manager
|
32
|
ii
ARTICLE
10
MISCELLANEOUS
Section
10.01.
|
Effectiveness
|
32
|
Section
10.02.
|
Amendments and
Waivers
|
33
|
Section
10.03.
|
Expenses
|
33
|
Section
10.04.
|
Further
Assurances
|
33
|
Section
10.05.
|
Notices
|
33
|
Section
10.06.
|
Governing
Law
|
34
|
Section
10.07.
|
Termination
of the Ancillary Agreements
|
35
|
Section
10.08.
|
Third
Party Beneficiaries
|
35
|
Section
10.09.
|
Jurisdiction
|
35
|
Section
10.10.
|
Counterparts;
Binding Effect; Benefit
|
35
|
Section
10.11.
|
Assignment
|
35
|
Section
10.12.
|
Entire
Agreement
|
36
|
Section
10.13.
|
Severability
|
36
|
Section
10.14.
|
Headings
|
36
|
Schedules
Schedule
2.01
|
Share
Deliveries at Closing
|
Schedule
3.01(a)(i)
|
Office
Space License
|
Schedule
3.01(a)(ii)
|
Services
|
Schedule
4.01
|
Investor
Consent Requirements
|
Schedule
5.02
|
Permitted
Liens
|
Schedule
7.01
|
GCP
Employees
|
Schedule
8.09
|
Newco
Reporting Obligations
|
Schedule
8.10
|
Equity
Ownership of Newco
|
Exhibits
|
|
Exhibit
A
|
Form
of Separation Agreement
|
Exhibit
B
|
Form
of Senior Advisor Agreement
|
iii
TRANSACTION
AGREEMENT (this “Agreement”) dated as of
December 22, 2009 among XXXXXXXXX & CO., INC., a Delaware corporation
(“Greenhill”), GCP
CAPITAL PARTNERS HOLDINGS INC., a Delaware corporation (“Newco”), GCP CAPITAL PARTNERS
HOLDINGS LLC, a Delaware limited liability company (“Newco Holdco”), GREENHILL
CAPITAL PARTNERS II LLC, a Delaware limited liability company (“New Manager”), and (solely for
the purposes specified on the signature pages hereto) Xxxxxx X. Xxxxxxx (“Xxxxxxx”) and each of the
other individuals listed on the signature pages hereto (together with Xxxxxxx,
the “Acquirors”).
WHEREAS,
Greenhill, through certain of its direct and indirect subsidiaries, manages,
operates and advises (i) Greenhill Capital Partners, L.P., a Delaware limited
partnership (together with its Related Funds (as defined herein), “GCP I”), (ii) Greenhill
Capital Partners II, L.P., a Delaware limited partnership (together with its
Related Funds, “GCP
II”), (iii) Greenhill SAVP, L.P., a Delaware limited partnership
(together with its Related Funds, “GSAV”), and (iv) Greenhill
Capital Partners Europe L.P., a limited partnership organized under the laws of
the United Kingdom (together with its Related Funds, “GCPE”; and, together with GCP
I, GCP II and GSAV, the “Existing Funds”);
WHEREAS,
(i) Greenhill Capital Partners, LLC (“GCP LLC”), a Delaware limited
liability company and a wholly-owned subsidiary of Greenhill, owns (A) 100% of
the issued and outstanding capital stock of Newco (the “Newco Shares”) and (B) 100% of
the equity interests in New Manager, which consist of 100 Common Units and one
Preferred Unit, (ii) Newco owns 100% of the equity interests in Newco Holdco and
(iii) Newco Holdco owns 74 ordinary shares of GCP Capital Partners Europe
Limited, a private company limited by shares organized under the laws of the
United Kingdom (“Newco
(U.K.)”);
WHEREAS,
upon the terms and subject to the conditions of this Agreement, (i) Greenhill
intends to contribute, or cause its subsidiaries to contribute, certain rights
and assets relating to its merchant banking business, including 24 Common Units
and one Preferred Unit in New Manager, to Newco, and to cause Newco, in turn, to
contribute such rights and assets to Newco Holdco, (ii) the Acquirors intend to
exchange 289,050 shares of Greenhill common stock (the “Greenhill Shares”) for 100% of
the Newco Shares (the “Exchange”) and (iii) Xxxxxxxxx
Capital Partners Europe LLP, a limited liability partnership organized under the
laws of the United Kingdom (“GCPE LLP”) intends to issue a
non-voting interest to Newco (U.K.) (together with (i) and (ii) above, the
“Transactions”);
WHEREAS,
for United States federal, state and local income tax purposes, the parties
intend that the Transactions shall qualify (i) as a “reorganization” under
Section 368 of the Internal Revenue Code of 1986, as
amended
(the “Code”), in which
Greenhill contributes the Section 2.02 Assets (as defined herein) to Newco and
(ii) as a tax-free transaction under Section 355 of the Code, and that this
document constitute a “plan of reorganization” in connection therewith (the
“Intended Tax
Treatment”);
WHEREAS,
upon and after the consummation of the Exchange, the Acquirors intend to cause
Newco (or Affiliates (as defined herein) of Newco) to (i) launch
new private equity and venture capital funds for which Newco or its Affiliates
shall serve as general partner and manager, including (A) a successor fund to
GCP II expected to be named “Greenhill Capital Partners III, L.P.” (together
with its Related Funds, “GCP
III”) and (B) a successor fund to GSAV expected to be named “Greenhill
Venture Partners II, L.P.” (together with its Related Funds, “GVP II”; and together with GCP
III, the “New Funds”),
and (ii) enter
into (subject to the receipt of the requisite Investor Consents (as defined
herein) and to the other conditions set forth in this Agreement) certain
management and other service arrangements with respect to the Existing Funds;
and
WHEREAS,
upon the terms and subject to the conditions of this Agreement, Greenhill,
Newco, Newco Holdco, New Manager and the Acquirors desire to enter into certain
agreements with respect to (i) the separation of the GCP Employees (as defined
herein) from Greenhill, (ii) certain management and other service arrangements
relating to the Existing Funds, (iii) the New Funds and (iv) certain other
matters.
NOW,
THEREFORE, the parties agree as follows:
ARTICLE
1
DEFINITIONS
Section
1.01. Definitions. (a)
The following terms, as used herein, have the following meanings:
“Advisers Act” means the
Investment Advisers Act of 1940, as amended from time to time.
“Affiliate” means, with respect
to any Person, any other Person controlling, controlled by or under common
control with the aforementioned Person; provided that, at and after
the Closing, (x) no member of the Greenhill Group shall be an Affiliate of any
member of the Newco Group, (y) no member of the Newco Group shall be an
Affiliate of any member of the Greenhill Group and (z) no Existing Fund or any
other investment vehicle or any portfolio company thereof shall be an Affiliate
of any Person, in each case, for purposes of this Agreement.
2
“Ancillary Agreements” means
(i) the License Agreement, (ii) the GP Agreement Amendments, (iii) the
Non-Compete Amendments, (iv) the Management Agreements, (v) the Separation
Agreements, (vi) the Sublease, (vii) the Senior Advisor Agreement, (viii) the
Engagement Letter, (ix) the Contribution Agreement and (x) the GCPE Operating
Agreements.
“Applicable Law” means, with
respect to any Person, any federal, state or local law (statutory, common or
otherwise), constitution, treaty, convention, ordinance, code, rule, regulation,
order, injunction, judgment, decree, ruling or other similar requirement
enacted, adopted, promulgated or applied by a Governmental Authority that is
binding upon or applicable to such Person, as amended unless expressly specified
otherwise.
“Berkeley Square” means the
office space located at Xxxxxxxxx Xxxxx, 00 Xxxxxxxx Xxxxxx, Xxxxxx X0X 0XX,
Xxxxxx Xxxxxxx.
“Business Day” means a day,
other than Saturday, Sunday or other day on which commercial banks in New York,
New York are authorized or required by law to close.
“Contribution Agreement” means
the contribution agreement, dated as of the Closing Date, among Greenhill, GCP
LLC, GVP LLC, GCPE LLP, Newco and Newco Holdco.
“Disability” shall have the
meaning assigned to such term in the Greenhill Equity Incentive
Plan.
“Existing Fund Confidential
Information” means any Proprietary Information of the Existing Funds or
any investment vehicle or portfolio company thereof, but excluding the terms of
this Agreement and Ancillary Agreements and the arrangements contemplated hereby
or thereby.
“Existing Fund Fees” means, for
any applicable period, all management, monitoring, transaction, investment and
other fees paid in respect of the Existing Funds during such period (but
excluding, for the avoidance of doubt, carried interest or other incentive
fees).
“Existing U.S. Funds” means,
collectively, GCP I, GCP II and GSAV.
“FSA” means the U.K. Financial
Services Authority.
“Future Funds” means any and
all future (i) private equity funds for which Newco or its Affiliates shall
serve as general partner and manager including, but not limited to, the New
Funds, and (ii) special purpose acquisition companies for which Newco or its
Affiliates shall serve as sponsor or organizer.
3
“GCPE Operating Agreements”
means (i) the Amended and Restated Limited Liability Partnership Agreement of
GCPE LLP, (ii) the Amended and Restated Limited Partnership Agreement of GCP
Europe General Partnership L.P. and (iii) the Amended and Restated Limited
Partnership Agreement of GCP Europe Parallel General Partnership L.P., in each
case, dated as of the Closing Date.
“GHL Acquisition Corp.” means
Iridium Communications Inc. (f/k/a GHL Acquisition Corp.), a Delaware
corporation.
“Governmental Authority” means
any transnational, domestic or foreign federal, state or local, governmental
authority, department, court, agency or official, including any political
subdivision thereof.
“GP Agreement Amendments” means
the amendments to the limited partnership agreements of the general partners of
each Existing Fund, dated as of the Closing Date.
“Greenhill Capital Partners”
means, collectively, GCP LLC, GVP LLC and GCPE LLP.
“Greenhill Employee” means an
employee of any member of the Greenhill Group who is not a GCP
Employee.
“Greenhill Group” means
Greenhill and each of its subsidiaries, including, prior to the last Separation
Date for any Existing U.S. Fund, New Manager and, prior to the Closing, Newco,
Newco Holdco and Newco (U.K.) (but excluding, at and after the Closing, any
member of the Newco Group).
“Greenhill Liens” means any
Liens in respect of indebtedness for borrowed money of or other matters relating
to the Greenhill Group (but excluding any indebtedness for borrowed money or
matters relating to the Existing Funds).
“Greenhill Proprietary
Information” means Proprietary Information of the Greenhill Group
(including Proprietary Information obtained by GCP Employees or Newco while on
Greenhill premises, such as information concerning Xxxxxxxxx’x business,
Xxxxxxxxx’x clients, Xxxxxxxxx’x employees and material non-public information
about publicly traded securities) but excluding (x) Existing Fund Confidential
Information and (y) the terms of this Agreement and the Ancillary Agreements or
the arrangements contemplated hereby or thereby.
“GVP LLC” means Greenhill
Venture Partners, LLC, a Delaware limited liability company.
4
“Interim Period” means the
period beginning on the Closing Date and ending on the last Separation Date with
respect to any Existing Fund.
“Key Person Event” means
Xxxxxxx ceasing to be actively involved in the management of the Existing Funds
or the New Funds for any reason (unless Newco proposes and Greenhill approves,
in its sole discretion, a successor to Xxxxxxx).
“License Agreement” means the
trademark license agreement, dated as of the Closing Date, between Greenhill and
Newco Holdco.
“Lien” means, with respect to
any property or asset, any mortgage, lien, pledge, charge, security interest or
encumbrance in respect of such property or asset.
“Management Agreements” means,
collectively, (i) the Management Agreement between GCP LLC and Newco Holdco with
respect to GCP I, dated as of the Closing Date, (ii) the Management Agreement
between GCP LLC and Newco Holdco with respect to GCP II, dated as of the Closing
Date, and (iii) the Management Agreement between GVP LLC and Newco Holdco with
respect to GSAV, dated as of the Closing Date.
“Newco Advisor” means one or
more Affiliates of Newco that shall act as advisors to the Existing U.S. Funds
following the Separation Date(s) for the Existing U.S. Funds.
“Newco Confidential
Information” means any Proprietary Information of the Newco Group, but
excluding the terms of this Agreement and the Ancillary Agreements and the
arrangements contemplated hereby or thereby.
“Newco Employee” means an
employee of any member of the Newco Group.
“Newco Group” means Newco and
each entity that is an Affiliate of Newco, including the Future Funds, each
Newco Advisor, Newco Holdco, Newco (U.K.), and, at and after the last Separation
Date for any Existing U.S. Fund, New Manager (but excluding, at and after the
Closing, any member of the Greenhill Group).
“New Manager LLC Agreement”
means the Amended and Restated Limited Liability Company Agreement of New
Manager, dated as of the Closing Date, between Greenhill and Newco
Holdco.
“Non-Compete Amendments” means
the amendments to each GCP Employee’s existing non-compete agreement, dated as
of the Closing Date.
5
“Person” means an individual,
corporation, partnership, limited liability company, association, trust or other
entity or organization, including a government or political subdivision or an
agency or instrumentality thereof.
“Pre-Closing Taxes” means each
and every Tax imposed on any member of the Greenhill Group for (i) a taxable
period ending on or before the Closing Date or (ii) a period beginning before
and ending after the Closing Date (a “Straddle Period”), but only to
the extent that the Tax is allocated to portion of the Straddle Period ending on
and including the Closing Date determined as set forth below. The amount of a
Tax that is allocated to the portion of the Straddle Period ending on and
including, and the portion of the Straddle Period beginning after, the Closing
Date shall be determined by assuming that the Straddle Period consisted of two
taxable years or periods, one of which ended at the close of the Closing Date
and the other of which began at the beginning of the day following the Closing
Date, and relevant tax items for the Straddle Period shall be allocated between
such two taxable years or periods on a “closing of the books basis” by assuming
that the relevant books were closed at the close of the Closing Date after the
consummation of all transactions that are required by this Agreement to occur on
the Closing Date; provided, however, that exemptions,
allowances or other attributes that are calculated on an annual basis shall be
apportioned between such two taxable years or periods on a calendar-day daily
basis and Taxes that are computed on a periodic basis, such as property Taxes,
shall also be so apportioned on a daily basis. Sales and use Taxes shall be
deemed to accrue in accordance with the customary accounting methods used by the
Greenhill Group.
“Proprietary Information” means
any non-public information used by the protected party in conducting its
business, including without limitation (i) any formulas, computer programs,
computer access information, algorithms, internal financial or operating
information and client lists, (ii) any written information relating to clients
or customers or to investments, and (iii) personnel records and information;
provided that
“Proprietary Information” does not include any information which is available to
the general public or generally available within the relevant business or
industry, in each case, other than as a result of the action of any Person bound
by confidentiality obligations hereunder.
“Related Funds” means, (i) in
the case of each of GCP III and GVP II, onshore or offshore investment fund or
other pooled investment vehicles (excluding any portfolio or portfolio company
in which any such fund or investment vehicle has an investment) that invest
alongside such New Fund, and (A) for which a member of the Newco Group serves as
investment adviser or in a similar capacity pursuant to a management agreement,
investment advisory agreement or otherwise or (B) in which a member of the Newco
Group has a general partnership or managing member (or equivalent) interest,
together with such investment fund’s subsidiaries (other than portfolio
companies), (ii) in the case of GCP I, Greenhill Capital Partners (Cayman),
L.P., Greenhill Capital
6
Partners
(Executives), L.P., and Greenhill Capital, L.P., (iii) in the case of GCP II,
Greenhill Capital Partners (Cayman) II, L.P., Greenhill Capital Partners
(Executives) II, L.P., Greenhill Capital Partners (Employees) II, L.P., (iv) in
the case of GSAV, GSAV (Associates), L.P. and GSAV New York, L.P. and (v) in the
case of GCPE, Xxxxxxxxx Capital Partners Europe (Employees), L.P., and Parallel
Private Equity L.P.
“SEC” means the Securities and
Exchange Commission (or any successor thereto).
“Section 2.02 Assets” means the
rights and assets to be held by Newco, Newco Holdco or Newco (U.K.) after giving
effect to the events and agreements contemplated by the provisions of Section
2.02 and all related rights and assets to be held by Newco, Newco Holdco or
Newco (U.K.) immediately following the execution of this Agreement.
“Separation Agreement” means a
separation agreement substantially in the form attached hereto as Exhibit
A.
“Sublease” means the sublease
with respect to office space at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, dated as of
the Closing Date, between Greenhill and Newco Holdco.
“Sublease Effective Date” means
the date on which the 18th floor
at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx becomes available for
occupancy.
“Tax” or “Taxes” means all federal,
state, local or foreign taxes, charges, fees, levies or other assessments,
including, but not limited to, all net income, gross income, gross receipts,
sales, use, rental, ad valorem, value added, transfer, franchise, profits,
alternative minimum, license, withholding, employment, payroll, disability,
excise, estimated, severance, stamp, occupation, real or personal property,
environmental, alternative, or add-on minimum taxes or other taxes, customs,
duties, fees, assessments or charges of any kind whatsoever, together with any
interest and any penalties, additions to tax or additional amounts imposed by or
payable to any taxing jurisdiction, including interest and penalties impose with
respect thereto.
(b) Each
of the following terms is defined in the Section set forth opposite such
term:
Term
|
Section
|
Action
|
9.03
|
Acquirors
|
Preamble
|
Agreement
|
Preamble
|
Closing
|
2.01
|
7
Closing
Date
|
2.02
|
Code
|
Recitals
|
Commitments
|
6.02
|
Compliance
Procedures
|
8.06
|
Costs
|
9.03
|
Engagement
Letter
|
6.06
|
Exchange
|
Recitals
|
Existing
Funds
|
Recitals
|
GCP
I
|
Recitals
|
GCP
II
|
Recitals
|
GCP
III
|
Recitals
|
GCPE
|
Recitals
|
GCPE
LLP
|
Recitals
|
GCP
Employee
|
7.01
|
GCP
LLC
|
Recitals
|
Greenhill
|
Preamble
|
Greenhill
Indemnified Party
|
9.03
|
Greenhill
Shares
|
Recitals
|
GSAV
|
Recitals
|
GVP
II
|
Recitals
|
Indemnified
Party
|
9.03
|
Indemnifying
Party
|
9.03
|
Intended
Tax Treatment
|
Recitals
|
Investor
Consent
|
4.01
|
Newco
|
Preamble
|
Newco
Holdco
|
Preamble
|
Newco
Indemnified Party
|
9.03
|
Newco
Shares
|
Recitals
|
Newco
(U.K.)
|
Recitals
|
New
Funds
|
Recitals
|
New
Manager
|
Preamble
|
Xxxxxxx
|
Preamble
|
Non-Public
Information
|
9.02
|
Office
Space License
|
3.01
|
Senior
Advisor Agreement
|
4.02
|
Separation
Date
|
4.01
|
Services
|
3.01
|
Services
Allocation
|
3.01
|
Transactions
|
Recitals
|
Transfer
Taxes
|
8.15
|
Section
1.02. Other Definitional and
Interpretative Provisions. The words “hereof”, “herein”, “hereto” and
“hereunder” and words of like import used in this Agreement shall refer to this
Agreement as a whole and not to any
8
particular
provision of this Agreement. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof. References to Articles, Sections, Exhibits and Schedules are to
Articles, Sections, Exhibits and Schedules of this Agreement unless otherwise
specified. Any singular term in this Agreement shall be deemed to include the
plural, and any plural term the singular. Whenever the words “include”,
“includes” or “including” are used in this Agreement, they shall be deemed to be
followed by the words “without limitation”, whether or not they are in fact
followed by those words or words of like import. “Writing”, “written” and
comparable terms refer to printing, typing and other means of reproducing words
(including electronic media) in a visible form. References to this Agreement or
any other agreement or contract are to that agreement or contract as amended,
modified or supplemented from time to time in accordance with the terms hereof
and thereof. References from or through any date mean, unless otherwise
specified, from and including or through and including,
respectively.
ARTICLE
2
EXCHANGE; PRE-CLOSING AND CLOSING ACTIONS
Section
2.01. Exchange. Upon
the terms and subject to the conditions of this Agreement, at the closing of the
Exchange (the “Closing”), (a) Greenhill
agrees to cause GCP LLC to deliver the Newco Shares to the Acquirors in exchange
for delivery of the Greenhill Shares to Greenhill, and (b) the Acquirors agree
to deliver the Greenhill Shares to Greenhill in exchange for delivery of the
Newco Shares to the Acquirors. The number of Greenhill Shares to be delivered by
each Acquiror and the number of Newco Shares to be delivered to each Acquiror at
the Closing pursuant to Section 2.03 is set forth in Schedule 2.01.
Section
2.02. Pre-Closing
Actions. On or prior to the date hereof (the “Closing Date”), but prior to
the Closing, Greenhill and Newco, as applicable, shall take or cause to be taken
the following actions:
(a) Greenhill
shall cause (i) GCP LLC and New Manager to enter into the Management Agreements
with respect to GCP I and GCP II and (ii) GVP LLC
and New Manager to enter into the Management Agreement with respect to
GSAV.
(b) Greenhill
shall use its commercially reasonable efforts to cause each GCP Employee to be
employed by New Manager.
(c) Greenhill
shall cause GCP LLC and Newco Holdco to enter into the New Manager LLC
Agreement.
9
(d) Greenhill
shall cause the parties thereto to enter into the Contribution Agreement and to
consummate the transactions contemplated thereby.
(e) Greenhill
and Newco Holdco shall enter into the License Agreement.
(f) Greenhill
and Newco shall, or shall cause members of the Greenhill Group or Newco (U.K.),
as applicable, to enter into the GCPE Operating Agreements and shall use
commercially reasonable efforts to cause each GCP Employee or employee of the
Greenhill Group, as applicable, to enter into the GCPE Operating
Agreements.
(g) Newco
Holdco or another member of the Newco Group shall make an offer of employment to
each GCP Employee.
(h) Greenhill
and Newco shall, or shall cause the applicable members of the Greenhill Group
to, enter into the GP Agreement Amendments, the Non-Compete Amendments and the
Sublease.
Section 2.03. Closing. Subject to and
immediately after the completion of the pre-Closing actions
set forth in Section 2.02, at the Closing:
(a) Greenhill
shall cause GCP LLC to transfer, assign and deliver to the Acquirors the Newco
Shares.
(b) The
Acquirors shall transfer, assign and deliver to Greenhill the Greenhill
Shares.
(c) Greenhill
shall deliver or cause to be delivered resignations of each officer and director
of Newco and Newco Holdco.
ARTICLE
3
INTERIM PERIOD
Section
3.01. Office Space License;
Services. (a) During the Interim Period (and thereafter to the extent
provided in Section 3.01(e)), subject to the remaining provisions of this
Section 3.01, Greenhill shall (i) permit the Newco Group and New Manager to
occupy the Greenhill office space described in Schedule 3.01(a)(i) and all
common areas (including conference rooms and gym) to the same extent and in
accordance with the past practices of Xxxxxxxxx Capital Partners, as such office
space may be reasonably modified by Greenhill subject to the approval of Newco,
not to be unreasonably withheld (the “Office Space License”) and (ii) provide the
services listed in Schedule 3.01(a)(ii) (the
10
“Services”) to the Newco Group
and New Manager; provided that Greenhill shall
not be obligated to continue to provide any particular Service if
(x) Greenhill concurrently terminates or modifies the provision of such
Service to all of its businesses and (y) Greenhill offers the Newco Group and
New Manager the opportunity to obtain a replacement service (if and to the
extent that Greenhill obtains or provides a replacement service to some or all
of its businesses) from Greenhill on terms that are consistent with the cost
allocation principles set forth in Schedule 3.01(a)(ii).
(b) Each of
the Newco Group and
New Manager shall bear its allocable share of
the cost of the Services and the Office Space License, as determined in
accordance with the principles set forth in Schedule 3.01(a)(ii) (the “Services Allocation”). The Services
Allocation shall be payable as provided in Section 3.01(g) and shall be
equitably adjusted on an annual basis to reflect (i) the ratio of GCP Employees
to Greenhill Employees, (ii) the termination or modification of any Service as
permitted by this Agreement and (iii) the entry into any Ancillary Agreement
that provides for or replaces any Service or supersedes the Office Space
License. In the event that there is more than one Separation Date, the parties
shall revise the Services Allocation to reflect the factors set out in the
preceding sentence.
(c) Greenhill
may terminate (x) the Office Space License and (y) the provision of any or all
of the Services upon 30 days’ notice to Newco Holdco and New Manager at any time
after Greenhill terminates the License Agreement in accordance with its terms.
In addition, Greenhill may terminate the provision of any or all of the Services
that relate exclusively to the premises at 000 Xxxx Xxxxxx immediately upon the
termination of the Office Space License with respect to the premises at 000 Xxxx
Xxxxxx in accordance with Section 3.01(f)(i).
(d) Each of
Newco Holdco and New Manager may terminate any Service upon 30 days’ notice to
Greenhill; provided
that Services designated as “Office Space License Services” in Schedule
3.01(a)(ii) may not be terminated by Newco Holdco or New Manager except in
connection with the termination of the Office Space License with respect to the
applicable premises in accordance with the terms of this Agreement. Neither the
Newco Group nor New Manager may terminate the Office Space License, except as
set forth in Section 3.01(f) below with respect to the premises at Berkeley
Square.
(e) Unless
earlier terminated pursuant to Section 3.01(c) or Section 3.01(d), all of the
Services in respect of an Existing Fund shall terminate upon the six-month
anniversary of the Separation Date for such Existing Fund, and all remaining
Services (if any) shall terminate upon the six-month anniversary of the end of
the Interim Period; provided that Greenhill shall
continue to provide information technology and telecommunications Services with
respect to the
11
premises
at 000 Xxxx Xxxxxx until the expiration of the Sublease in accordance with the
terms thereof.
(f) The
Office Space License shall terminate automatically (i) with respect to the
premises at 000 Xxxx Xxxxxx, concurrently with the Sublease Effective Date and
(ii) with respect to the premises at Berkeley Square, at the earlier of December
31, 2010 or upon three (3) months’ prior written notice, or such shorter notice
period as is mutually agreed upon by the parties, to Greenhill.
(g) The
Services Allocation shall be payable monthly. Greenhill shall provide invoices
for other amounts payable by New Manager on a monthly basis, which shall be
payable within 30 days.
Section
3.02. Operations of New
Manager. Until the last Separation Date with respect to any Existing U.S.
Fund, except as otherwise provided in the Management Agreements or the New
Manager LLC Agreement:
(a) New
Manager shall bear all of the costs and expenses associated with the operation
of the Existing U.S. Funds.
(b) New
Manager shall reimburse (without duplication) 100% of any expenditures incurred
by the Greenhill Group related to (i) the operation of the Existing U.S. Funds
and not reimbursed by the Existing U.S. Funds or (ii) the operations of New
Manager.
(c) New
Manager shall pay base compensation to the GCP Employees as agreed to by the
parties. New Manager may pay bonuses to the GCP Employees in respect of 2010 and
any subsequent calendar year, as determined by Xxxxxxx in consultation with
Greenhill. For the avoidance of doubt, no member of the Greenhill Group other
than New Manager shall have any obligation in respect of any base, bonus and
other compensation paid to the GCP Employees on and after January 1, 2010, and,
except as set forth in clauses (d) and (e) below, all such compensation shall be
funded solely by New Manager’s Net Income (as defined in the New Manager LLC
Agreement), calculated without taking into account such
compensation.
(d) With
respect to calendar year 2009 only, (i) GCP Employees who are managing directors
of Greenhill shall not receive any bonus in respect of calendar year 2009 and
(ii) GCP Employees who are not managing directors of Greenhill shall be eligible
to receive bonuses for calendar year 2009 determined by Greenhill in its sole
discretion in consultation with Xxxxxxx. All such bonuses in respect of 2009
shall be payable by the member of the Greenhill Group that employed the
applicable GCP Employee prior to the Closing Date.
12
(e)
Greenhill may, in its sole discretion, at the time of any Separation Date, elect
to pay an additional bonus to any GCP Employee based on such employee’s
contribution to a successful transition.
Section
3.03. Data Migration.
During the Interim Period, all data relating to the operations of New Manager,
the Newco Group and the Existing Funds, including all electronic mail, shall be
maintained on servers of the Greenhill Group in accordance with past practices
and Applicable Law. Greenhill and Newco Holdco shall use commercially reasonable
efforts to jointly develop, as soon as practicable after the Closing Date, a
plan providing for (i) the migration of such data relating to the operations of
the Newco Group from servers of the Greenhill Group to servers of the Newco
Group, to the extent necessary and (ii) continued access following each
Separation Date to data on the Greenhill Group servers relating to the Existing
Funds. Such plan shall take into account any adjustments to the Services
Allocation that the parties deem appropriate as a result of the implementation
thereof. Newco shall be responsible for all out-of- pocket costs and expenses
relating to such data migration and access.
Section
3.04. Website. During
the Interim Period, Greenhill shall maintain a section on its website at xxxx://xxx.xxxxxxxxx.xxx
devoted to the Newco Group. For so long as Greenhill maintains such section, any
information contained in such section regarding the Newco Group shall be subject
to the prior written approval of Greenhill (such approval not to be unreasonably
withheld or delayed). Greenhill shall, for as long as the License Agreement is
in effect, maintain the “xxxxxxxxxxxxxxxxxxxxxxxx.xxx” domain name and arrange
for all traffic to that domain name to be redirected to the “xxxxxxxxxx.xxx”
website owned by the Newco Group or such other website as may serve as the home
page of the Newco Group.
Section
3.05. 18th Floor
Modifications. Greenhill shall, as reasonably requested by Newco Holdco,
renovate those portions of the 18th floor
of the premises at 000 Xxxx Xxxxxx that are to be subleased to Newco Holdco
pursuant to the Sublease, as identified in the floor plan attached
thereto.
Section
3.06. New Manager and Newco
Group Costs and Expenses. Without limitation of Section 3.01, Section
3.02 or Section 3.03, after the Closing Date, except as specifically provided in
this Agreement or in the Ancillary Agreements, each of New Manager and the Newco
Group shall bear all costs and expenses associated with its business and
activities, including (in the case of the Newco Group) all costs and expenses
relating to the raising and operating of the Future Funds and all costs and
expenses relating to the Newco Employees (in their capacity as Newco Employees).
If and to the extent that the Greenhill Group (including New Manager) incurs any
cash disbursements on behalf of the Newco Group or related to the operations of
the Newco Group, Newco Holdco shall reimburse 100% of any such expenditures
unless this Agreement or the Ancillary
13
Agreements
expressly provide that such expenditures shall be treated in a different
manner.
Section 3.07. Continuing Application of
Policies. Newco acknowledges that for so long as any
GCP Employees remain employees of New Manager, the policies of the Greenhill
Group, including policies regarding employment, expenses and compliance matters,
will continue to apply to the GCP Employees.
ARTICLE
4
SEPARATION AND MANAGEMENT ARRANGEMENTS
Section
4.01. Separation Dates.
(a) Greenhill, Newco and New Manager agree to consult with one another from time
to time to determine at what date it shall be advisable to effect a separation
of the GCP Employees with respect to each Existing Fund from Greenhill and New
Manager. It is currently anticipated that such date(s) (each, a “Separation Date”) are likely
to occur no later than (i) with respect to GCP I, GCP II and GSAV, March 31,
2011, and (ii) with respect to GCPE, June 30, 2012. The parties acknowledge
that, depending on the timing of receipt of the Investor Consents and any other
required consents and approvals (including, to the extent required, registration
by each Newco Advisor with the SEC and by Newco (U.K.) with the FSA), there may
be a different Separation Date for each Existing Fund.
(b) As
promptly as practicable following the joint determination of a prospective
Separation Date with respect to any Existing Fund, Greenhill, the applicable
member of the Newco Group and New Manager shall, or shall cause the general
partner of such Existing Fund to, send a communication to each limited partner
in such Existing Fund informing such limited partner, to the extent determined
necessary or advisable by Greenhill in consultation with Xxxxxxx, of the
transactions contemplated by this Agreement and the Ancillary Agreements and
requesting the applicable consent of such limited partner, to the extent
determined necessary or advisable by Greenhill in consultation with Xxxxxxx, in
connection with the consummation thereof (each such consent, an “Investor Consent”). The requirements
applicable to the Investor Consent with respect to each Existing Fund are
set forth in Schedule 4.01. Xxxxxxxxx, Xxxxx, Xxxxx Holdco and New Manager shall
use, and cause their respective Affiliates to use, their commercially reasonable
efforts to cooperate to obtain the Investor Consents; provided that in no event
shall any member of the Greenhill Group, any member of the Newco Group or New
Manager be required to pay any amounts (including any “consent fees” or similar
inducements) or agree to any reductions or waivers of, or concessions with
respect to, the Existing Fund Fees or the carried interest or other incentive
fees with respect to any Existing Fund.
14
Section
4.02. Separation Date
Events. Subject to the conditions set forth in Section 4.03:
(a) On the
Separation Date for GCP I:
(i) New
Manager shall assign the GCP I Management Agreement to a Newco Advisor in
accordance with Section 8.06(b) thereof;
(ii) each GCP
Employee identified as a “GCP I/II Employee” on Schedule 7.01 (other than
Xxxxxxx) shall enter into a Separation Agreement (unless such GCP Employee has
already entered into a Separation Agreement);
(iii) the Newco
Group shall make an offer of employment to each GCP I/II Employee (unless such
GCP I/II Employee is already an employee of the Newco Group) on such terms as
may be agreed between the Newco Group and such GCP I/II Employee; provided that such offer of
employment shall be (x) on terms and conditions that are, in the aggregate, no
less favorable to such employee than the terms and conditions of such employee’s
employment with New Manager immediately prior to such offer of employment and
(y) contingent upon the execution and delivery to Greenhill by such GCP I/II
Employee of a Separation Agreement; and
(iv) Greenhill
shall release or cause to be released any and all Greenhill Liens on the
Existing Fund Fees with respect to GCP I.
(b) On the
Separation Date for GCP II:
(i) New
Manager shall assign the GCP II Management Agreement to a Newco Advisor in
accordance with Section 8.06(b) thereof;
(ii) each GCP
Employee identified as a “GCP I/II Employee” or an “Administration Employee” on
Schedule 7.01 (other than Xxxxxxx) shall enter into a Separation Agreement
(unless such employee has already entered into a Separation
Agreement);
(iii) the Newco
Group shall make an offer of employment to each GCP I/II Employee and each
Administration Employee identified in Schedule 7.01 (unless such GCP Employee is
already an employee of the Newco Group), in each case, on such terms as may be
agreed between the Newco Group and such employee; provided that such offer of
employment shall be (x) on terms and conditions that are, in the aggregate, no
less
15
favorable
to such employee than the terms and conditions of such employee’s employment
with New Manager immediately prior to such offer of employment and (y)
contingent upon the execution and delivery to Greenhill by such GCP I/II
Employee of a Separation Agreement; and
(iv) Greenhill
shall release or cause to be released any and all Greenhill Liens on the
Existing Fund Fees with respect to GCP II.
(c) On the
Separation Date for GSAV:
(i) New
Manager shall assign the GSAV Management Agreement to a Newco Advisor in
accordance with Section 8.06(b) thereof;
(ii) each GCP
Employee identified as a “GSAV Employee” on Schedule 7.01 shall enter into a
Separation Agreement (unless such employee has already entered into a Separation
Agreement);
(iii) the Newco
Group shall make an offer of employment to each GSAV Employee (unless such GSAV
Employee is already an employee of the Newco Group) on such terms as may be
agreed between the Newco Group and such GSAV Employee; provided that such offer of
employment shall be (x) on terms and conditions that are, in the aggregate, no
less favorable to such employee than the terms and conditions of such employee’s
employment with New Manager immediately prior to such offer of employment and
(y) contingent upon the execution and delivery to Greenhill by such GSAV
Employee of a Separation Agreement; and
(iv) Greenhill
shall release or cause to be released any and all Greenhill Liens on the
Existing Fund Fees with respect to GSAV.
(d) On the
Separation Date for GCPE:
(i) each GCP
Employee identified as “GCPE Employee” on Schedule 7.01 shall enter into a
Separation Agreement;
(ii) the Newco
Group shall make an offer of employment (or partnership, as applicable) to each
GCPE Employee (unless such GCPE Employee is already an employee of the Newco
Group) on such terms as may be agreed between the Newco Group and such GCPE
Employee; provided that
such offer of employment or partnership shall be (x) on terms and conditions
that are, in the aggregate, no less favorable to such employee than the terms
and conditions of such employee’s employment or partnership with New Manager
immediately prior to such offer of employment or partnership, as applicable, and
(y) contingent upon the
16
execution
and delivery to Greenhill by such GCPE Employee of a Separation
Agreement;
(iii) Greenhill
and Newco shall cause the Amended and Restated Limited Liability Partnership
Agreement of GCPE LLP to be amended to grant voting control of GCPE LLP to the
Newco Group (subject to customary minority protections for the Greenhill Group);
and
(iv) Greenhill
shall release or cause to be released any and all Liens on the Existing Fund
Fees with respect to GCPE.
(e) Without
limitation of the foregoing, on the first Separation Date, Greenhill and Xxxxxxx
shall enter into the Senior Advisor Employment and Non-Competition Agreement
substantially in the form attached hereto as Exhibit B (the “Senior Advisor
Agreement”).
Section
4.03. Conditions to Each
Party’s Obligations. (a) The obligations of Greenhill, New Manager and
Newco Holdco under Section 4.02 and the obligations of Xxxxxxx under Section
4.02(e) shall be subject to the satisfaction or waiver of the following
conditions (as of each Separation Date):
(i) The
requisite Investor Consent shall have been obtained;
(ii) To the
extent required, any consents by any Governmental Authority shall have been
obtained;
(iii) No
provision of any Applicable Law shall prohibit the consummation of the
transactions contemplated to be entered into pursuant to Section 4.02 on such
Separation Date; and
(iv) There
shall not be instituted or pending any action or proceeding by or before any
Governmental Authority which seeks to (A) make the
transactions to be entered into pursuant to Section 4.02 on such Separation Date
illegal or otherwise challenge, restrain or prohibit the consummation of such
transactions or (B) cause such transactions to be rescinded following
consummation.
(b) In
addition to the conditions set forth in Section 4.03(a), Xxxxxxxxx’x and New
Manager’s obligations under Section 4.02 (including with respect to the
Management Agreements) shall be subject to the satisfaction or waiver by
Greenhill of the following conditions (as of each Separation Date):
(i) Greenhill
shall not have terminated the License Agreement in accordance with the terms
thereof;
17
(ii) (A) Prior
to the first Separation Date, no event shall have occurred that (had a
Management Agreement been in effect on the date of the occurrence of such event)
would have permitted Greenhill to terminate any Management Agreement and (B)
after the first Separation Date, Greenhill shall not have terminated any
Management Agreement in accordance with the terms thereof;
(iii) No Key
Person Event shall have occurred;
(iv) With
respect to the Separation Date for each Existing U.S. Fund, the applicable Newco
Advisor, to the extent required, shall have registered as an investment adviser
with the SEC under the Advisers Act and shall have delivered a copy to Greenhill
of its Form ADV (part II) in a form reasonably acceptable to
Greenhill;
(v) With
respect to the Separation Date for GCPE, Newco
(U.K.) shall have registered with the FSA; and
(vi)
Greenhill shall have received copies of the Compliance Procedures in a form
reasonably acceptable to Greenhill, it being understood and agreed that
Compliance Procedures that are substantially similar to those in existence for
Xxxxxxxxx Capital Partners on the date hereof shall be deemed to be acceptable
for these purposes.
Section
4.04. Alternative
Arrangements. In the event that the requisite Investor Consent for any
Existing Fund is not obtained, the agreements and other arrangements
contemplated by Article 3 shall continue, mutatis mutandis, as though
the Interim Period were still in effect, subject to such adjustments as may be
necessary to reflect any changes in the ratio of GCP Employees to Greenhill
Employees or services required.
Section
4.05. Transfer of Remaining
Common Units of New Manager. As soon as reasonably practicable after the
last Separation Date, Greenhill shall cause GCP LLC to transfer, assign and
deliver to Newco Holdco, free and clear of any Liens other than those arising
under the New Manager LLC Agreement, the 76 Common Units in New Manager held by
GCP LLC, for no additional consideration. Effective concurrently with such
transfer, Newco Holdco shall cause the New Manager LLC Agreement to be amended
to remove the word “Greenhill” from the name of New Manager, and shall cause New
Manager to cease using the “Greenhill” xxxx for any purpose
whatsoever.
18
ARTICLE
5
OTHER AGREEMENTS WITH RESPECT TO EXISTING FUNDS
Effective
as of the Closing, and notwithstanding the subsequent occurrence (or
non-occurrence) of any Separation Date, Greenhill and Newco Holdco agree as
follows with respect to the Existing Funds:
Section
5.01. Investment
Committees. The investment committees for the Existing Funds shall remain
unchanged following the Closing Date and each Separation Date until all of the
investments in the applicable Existing Fund have been liquidated. In the event
of a vacancy on the investment committee of any Existing Fund prior to the
liquidation of all of such Existing Fund’s investments, such vacancy shall be
filled in accordance with the terms of the limited partnership agreement of such
Existing Fund or other applicable agreement.
Section
5.02. Existing Fund
Fees. None of Greenhill, Newco Holdco or New Manager shall (i) enter into
any fee waivers or other agreements to reduce, defer, or forego any Existing
Fund Fees or (ii) except as set forth in Schedule 5.02, permit the incurrence
of, or suffer to exist, any Liens on the Existing Fund Fees. Notwithstanding the
foregoing, if and to the extent that New Manager incurs any expense, or loses
any Existing Fund Fees, as a result of the exercise by any party of rights in
respect of any Lien on the Existing Fund Fees relating to the indebtedness of
the Greenhill Group, including any Lien permitted under this Section 5.02,
Greenhill shall promptly reimburse New Manager in full for such expense or lost
Existing Fund Fees.
ARTICLE
6
NEW FUNDS
Section
6.01. Use of Track
Record. (x) Prior to the first Separation Date, subject to Xxxxxxxxx’x
prior written consent (not to be unreasonably withheld) and (y) thereafter,
subject to consultation with Greenhill with respect to any written materials
relating to the New Funds (including any offering memorandum, presentation,
annual report, or similar materials, whether in hard or soft copy), the Newco
Group shall have the exclusive, non-assignable right (subject to Applicable Law)
to use or disclose the investment track record of each Existing Fund; provided that, in each case,
Greenhill may at all times use or disclose the investment track record of such
Existing Fund in connection with the business of such Existing Fund. From the
Closing Date, Newco Group shall have the non- exclusive, non-assignable right
(subject to Applicable Law) to use or disclose the investment track record of
GHL Acquisition Corp. It is understood and agreed that Greenhill makes no
representation or warranty with respect to any legal or regulatory restrictions
on the use of the track record or similar information by the Newco Group or any
Newco Employee.
19
Section
6.02. Greenhill
Commitments. (a) Subject to the conditions set forth in Section 6.02(b),
Greenhill commits to invest, as a limited partner, (i) $5
million in GCP III and (ii) $2.5 million in GVP II (the “Commitments”).
(b) Each
Commitment shall be subject to the satisfaction or waiver by Greenhill of the
following conditions:
(i) (A) In
the case of the Commitment to GCP III, a minimum first closing of $250 million,
and (B) in the case of the Commitment to GVP II, a minimum first closing of $50
million.
(ii) The terms
and conditions of the limited partnership agreement, subscription agreement and
other fund documents for GCP III or GVP II, as applicable (including, without
limitation, (x) the “key person” provisions thereof and (y) the investment
mandate thereof), shall be reasonably satisfactory to Greenhill (it being
understood and agreed that terms and conditions which are substantially similar
to those of GCP II (in the case of GCP III) or GSAV (in the case of GVP II)
shall be deemed to be satisfactory for these purposes).
(c) Prior to
the entry into a definitive subscription agreement or other definitive
documentation for such Commitment, each Commitment shall terminate automatically
and be of no further force or effect upon the earlier to occur of (i) the
termination by Greenhill of the License Agreement or any Management Agreement in
accordance with the terms thereof and (ii) the death or Disability of
Xxxxxxx.
(d) Without
limitation of Section 6.02(c), if a first closing for the applicable New Fund
meeting the requirements set forth in Section 6.02(b)(i)(A) or (B) (as
applicable) has not occurred prior to the date that is two years after the
Closing Date, then Xxxxxxxxx’x Commitment to such New Fund shall automatically
terminate and be of no further force or effect.
Section
6.03. Fees. The Newco
Group shall be entitled to collect all management, monitoring, transaction,
investment and other fees for the New Funds. Xxxxxxxxx’x investments in the New
Funds (including any commitments in excess of the amount of the Commitments)
shall not be subject to any management or similar fees or carried interest or
other incentive fees.
Section
6.04. Carried Interest.
Greenhill shall be entitled to receive, pursuant to the definitive documentation
for the New Funds, (a) 5% of the aggregate carried interest in respect of all
investments made by the New Funds and (b) an additional 5% of the aggregate
carried interest with respect to each investment made by a New Fund in which a
Greenhill Employee, in the
20
reasonable
judgment of Xxxxxxx, plays a material role in originating the investment or, if
requested by Xxxxxxx, in the oversight of the investment.
Section
6.05. Investment
Committees. Greenhill shall have the right to designate one member of the
investment committee for each of GCP III and GVP II. Such investment committees
shall consist of (a) at least five members in the case of GCP III and (b) at
least four members in the case of GVP II. Decisions of the investment committees
shall be made by majority vote.
Section 6.06. Placement Agent. Newco
agrees to cause the Newco Group to engage Xxxxxxxxx’x
fund placement group as the exclusive placement agent for the New Funds for a
placement fee in the amount of 1.5% of the amount of any commitments received
from investors other than those who invested in the respective Existing Fund,
payable in eight quarterly installments following the fund closing date(s) with
respect to such commitments, and otherwise on the terms set forth in an
engagement letter agreed to by the parties (the “Engagement Letter”).
ARTICLE
7
CERTAIN EMPLOYEE MATTERS
Section
7.01. Interim Period.
(a) Each Xxxxxxxxx Capital Partners employee as of the date hereof (each, a
“GCP Employee”) is
listed in Schedule 7.01. Schedule 7.01 shall be amended from time to time during
the Interim Period (without the consent of any party hereto) to reflect (i) the
hiring of new GCP Employees in accordance with Section 7.03 and/or (ii) the
termination of the employment (including pursuant to a Separation Date) or death
of any GCP Employee.
(b) Except as
otherwise contemplated by this Agreement or the Ancillary Agreements, each GCP
Employee shall remain an employee of New Manager and shall retain only his or
her existing rights and responsibilities with regard to the business of the
Existing Funds until the Separation Date upon which such GCP Employee ceases to
be an employee of New Manager. For the avoidance of doubt, (x) subject to
Section 7.01(c), each GCP Employee may also be concurrently employed by the
Newco Group during such period and (y) all GCP Employees shall continue to be
employed at will and New Manager shall retain the right to make any and all
decisions in respect of employment matters (in consultation with
Xxxxxxx).
(c) To the
extent that any GCP Employees are also Newco Employees during the Interim
Period, Newco Holdco covenants that the duties and obligations of such Newco
Employees (in their capacity as such) shall be consistent with the continued
management, operation and advising of the Existing
21
Section
7.02. Restricted Stock
Units. Existing grants of Greenhill restricted stock units shall continue
to vest for each GCP Employee in accordance with their terms for so long as such
GCP Employee is employed by New Manager. GCP Employees (including new GCP
Employees hired in accordance with Section 7.03) shall not receive any
additional Greenhill restricted stock unit grants after the Closing
Date.
Section
7.03. New GCP
Employees. Employees of New Manager who are hired by Xxxxxxx (in
consultation with Greenhill) after the Closing Date and prior to the earlier of
(i) the first closing of GCP III and (ii) the first closing of GVP II shall
become employees of New Manager and shall be compensated as provided in Section
3.02(c). For the avoidance of doubt, any such employees (A) shall be deemed to
be GCP Employees for all purposes under this Agreement and the Ancillary
Agreements and (B) subject to Section 7.01(c), may also be concurrently employed
by the Newco Group.
Section
7.04. Newco Employee
Undertakings. Any Newco Employee who is not a party to this Agreement (as
an Acquiror) or to a Separation Agreement (as a former GCP Employee) shall, as a
condition to his or her employment by the Newco Group, execute and deliver to
Greenhill a written undertaking to be bound by the provisions of Sections 8.01,
8.03, 8.04 and 8.05 as though he or she were a party to this Agreement; provided that no such
undertaking shall be required for any Newco Employee hired on or after the
second anniversary of the Closing Date.
ARTICLE
8
OTHER COVENANTS AND AGREEMENTS
Section
8.01. Confidentiality.
(a) With respect to any Greenhill Proprietary Information or Existing Fund
Confidential Information, each of Newco and the Acquirors agrees that he, she or
it shall, and Newco shall cause the Newco Group and each Newco Employee to: (i)
hold such Greenhill Proprietary Information or Existing Fund Confidential
Information in strict confidence; (ii) undertake measures to protect such
Greenhill Proprietary Information or Existing Fund Confidential Information from
any disclosure or use not expressly authorized under Section 8.01(b); and (iii)
not disclose such Greenhill Proprietary Information or Existing Fund
Confidential Information to any Person (except, in each case, as expressly
provided in Section 8.01(b)).
22
(b) The Newco
Group and its representatives may: (i) disclose Existing Fund Confidential
Information to Newco Employees who are bound by the confidentiality provisions
in Section 8.01(a) and this Section 8.01(b); (ii) disclose or use Existing Fund
Confidential Information in the ordinary and prudent course of the Newco Group’s
investment management business and the management of the business of the
Existing Funds, consistent with the past practices of Xxxxxxxxx Capital Partners
(such as disclosure to third parties involved in executing deals, e.g., lenders and regulatory
agencies) and in accordance with the organizational and offering documents
of the applicable Existing Fund and the provisions of the Management Agreements;
(iii) disclose any information as required by Applicable Law; provided that, in the case of
this clause (iii), Newco shall give reasonable advance notice to Greenhill so
that Greenhill may seek a protective order limiting any such disclosure; and
(iv) disclose or use Existing Fund Confidential Information in connection with
raising funds for the Future Funds. For the avoidance of doubt, nothing in this
Section 8.01(b) is intended to limit or otherwise modify in any respect any
confidentiality obligations under the organizational and offering documents of
the Existing Funds.
(c) With
respect to any Newco Confidential Information acquired by any member of the
Greenhill Group or any of its representatives prior to the Closing Date or
provided to a member of the Greenhill Group or its representatives pursuant to
this Agreement or any Ancillary Agreement, Greenhill shall, and shall cause each
member of the Greenhill Group and each Greenhill Employee to, (i) cause such
Newco Confidential Information to be held in strict confidence; (ii) undertake
measures to protect such Newco Confidential Information from any disclosure or
use not expressly authorized under Section 8.01(d); and (iii) not disclose such
Newco Confidential Information to any Person (except, in each case, as expressly
provided in Section 8.01(d)).
(d) A member
of the Greenhill Group or its representatives may disclose Newco Confidential
Information (i) to Persons who need to know such information and who are bound
by confidentiality obligations with respect to such information; (ii) that is
available to the general public or generally available within the relevant
business or industry, in each case, other than as a result of the action of any
Person bound by confidentiality obligations hereunder; or (iii) as required by
Applicable Law; provided that, in the case of
this clause (iii), Greenhill shall give reasonable advance notice to Newco so
that the Newco may seek a protective order limiting any such
disclosure.
Section
8.02. Non-Competition.
For a period of five years following the Closing Date, Greenhill agrees that
neither Greenhill nor any other member of the Greenhill Group shall sponsor,
either directly or indirectly, any new private equity or venture capital fund
having an investment mandate focused principally on U.S., U.K. or continental
Europe target investments, including by licensing or sublicensing the
“Greenhill” xxxx for use by any such fund (it being understood
23
and
agreed that nothing herein shall be construed to prohibit or restrict in any way
(x) the conduct of Xxxxxxxxx’x financial advisory business, (y) investments by
Xxxxxxxxx’x officers, directors and employees as limited partners in private
equity or venture capital funds that are sponsored by Persons other than the
Greenhill Group or (z) Xxxxxxxxx’x existing commitments as of the date of this
Agreement to (1) the Existing Funds and (2) funds sponsored by Xxxxxx Street
Capital LLC or its Affiliates).
Section
8.03. Non-Solicitation;
No-Hire. For a period of two years following the Closing Date, without
first obtaining the other party’s consent:
(a) Greenhill
shall not, and shall cause the other members of the Greenhill Group and the
Greenhill Employees not to, employ or solicit for employment any Newco Employee
(except to the extent of the services provided by such persons pursuant to the
terms of this Agreement and the Ancillary Agreements).
(b) Newco
shall not, and shall cause the other members of the Newco Group and the
employees of the Newco Group not to, employ or solicit for employment any
employee of the Greenhill Group (other than the GCP Employees).
Section
8.04. Non-Disparagement. (a)
Greenhill shall not, and shall cause the other members of the Greenhill Group
and the employees of the Greenhill Group (other than the GCP Employees) not to,
make, directly or indirectly, any negative, derogatory or disparaging comment,
whether written, oral or in electronic format, to (x) any reporter, author,
producer or similar Person, (y) any general public media in any form (including
books, articles or writings of any other kind, as well as film, videotape, audio
tape, computer/Internet format or any other public medium), or (z) a limited
partner of any Existing Fund or any New Fund, or any Person (including any
investor in an investment fund) known by Greenhill to be a client of any entity
in the Newco Group that, in the case of each of clauses (x), (y) and (z),
concerns directly or indirectly the Newco Group, the Newco Group’s business or
operations, or any of the Newco Group’s employees, officers or
directors.
(b) Each
of Newco and each Acquiror shall not, and Newco shall cause the other members of
the Newco Group and the employees of the Newco Group not to, make, directly or
indirectly, any negative, derogatory or disparaging comment, whether written,
oral or in electronic format, to (x) any reporter, author, producer or similar
Person, (y) any general public media in any form (including, without limitation,
books, articles or writings of any other kind, as well as film, videotape, audio
tape, computer/Internet format or any other public medium), or (z) a limited
partner of any Existing Fund or any New Fund, or any Person (including any
investor in an investment fund) known by the Newco Group or the
24
Acquirors
to be a client of the Greenhill Group that, in the case of each of clauses (x),
(y) and (z), concerns directly or indirectly the Greenhill Group, the Greenhill
Group’s business or operations, or any of the Greenhill Group’s employees,
officers or directors.
Section
8.05. Specific
Performance. The parties agree that money damages would not be an
adequate remedy for any breach of the covenants set forth in Section 8.01 (Confidentiality), Section
8.02 (Non-Competition),
Section 8.03 (Non-Solicitation; No-Hire) or
Section 8.04 (Non-Disparagement).
Therefore, in the event of a breach or threatened breach of Section 8.01, 8.02,
8.03 or 8.04 by Newco or any Acquiror, on the one hand, or by Greenhill, on the
other hand, (x) Newco (in the case of a breach or threatened breach by Greenhill
and (y) Greenhill (in the case of a breach or threatened breach by Newco or any
Acquiror) shall be entitled to seek immediate injunctive relief and to enforce
specifically the performance of such provision in any court of competent
jurisdiction, in addition to any other remedy to which such party or parties are
entitled at law or in equity. For the avoidance of doubt, nothing in this
Section 8.05 is intended to provide any Acquiror with the right to specifically
enforce any provision hereof.
Section
8.06. Adoption of Internal
Policies. The Newco Group shall adopt and implement internal policies and
procedures, at least as extensive as the past practices of Xxxxxxxxx Capital
Partners, for supervision of employees in relation to conflicts of interest and
regulatory matters, and such other policies and procedures as are (i) required
under Applicable Law, including the Advisers Act, the USA Patriot Act, and
privacy laws and regulations, (ii) appropriate for firms registered under the
Advisers Act that are comparable to those of the Newco Group, including with
respect to electronic communications, information security, business continuity
planning and disaster recovery and (iii) necessary or desirable to ensure
compliance with the provisions of Section 8.01 (the items referred to in
(i)—(iii), collectively, the “Compliance Procedures”). Newco
shall provide copies of (x) any new Compliance Procedures and (y) any
amendments, supplements, waivers or other modifications to the Compliance
Procedures to Greenhill within ten (10) Business Days of the adoption
thereof.
Section
8.07. Maintenance of Books and
Records. The Newco Group shall maintain all books and records required to
be maintained by the Advisers Act and other Applicable Law and shall maintain,
in compliance with the Advisers Act and other Applicable Law, any copies of work
product, books and records relating to the Existing Funds in its possession.
Greenhill shall have the right to inspect and copy on reasonable notice during
business hours any and all books and records maintained by the Newco Group with
respect to the Existing Funds or the New Funds.
25
Section
8.08. Assistance. Each
of the Newco Group and the Greenhill Group shall, and shall cause the Newco
Employees (in the case of the Newco Group) and the Greenhill Employees (in the
case of the Greenhill Group) to, provide all information and other assistance
reasonably requested by Greenhill or Newco (as applicable) to prepare reports
relevant to, and shall cooperate with Greenhill or Newco (as applicable) to
assist in, any investigation, regulatory matter (including any routine audit or
other examination), lawsuit or arbitration in which a member of the Greenhill
Group or the Newco Group or any Existing Fund is a subject, target or party
(other than a lawsuit or arbitration between a member of the Greenhill Group, on
the one hand, and a member of the Newco Group, on the other hand). Out-of-pocket
expenses of the assisting party or its employees with respect to the foregoing
shall be reimbursed by the requesting party.
Section
8.09. Information
Rights. Newco shall provide to Greenhill (a) quarterly and annual reports
(consistent with past practices) and any other communications or performance
reports sent to limited partners of the Existing Funds or the New Funds
(including any communications sent to subcategories of such limited partners,
(b) the information set forth in Schedule 8.09 within the time periods set forth
in Schedule 8.09, (c) prompt notice of any claim made against the general
partner of any Existing Fund for which such general partner or manager is
reasonably likely to be responsible and (d) such other information relating to
the Existing Funds or the New Funds as Greenhill may from time to time
reasonably request. Newco shall meet with Greenhill at Xxxxxxxxx’x reasonable
request (and at least quarterly) regarding the affairs of the Existing Funds and
the New Funds.
Section
8.10. Notice of Changes in
Ownership of Newco. The initial direct and indirect equity ownership of
Newco is set forth in Schedule 8.10. Newco shall notify Greenhill promptly in
writing of any direct or indirect change (including the issuance or repurchase
of any interest therein) in the direct or indirect ownership of Newco, other
than a change resulting from a transfer of ownership interests by an individual
to his or her spouse and/or descendants or a trust the sole beneficiaries of
which are such individual, his or her spouse and/or descendants; provided that such individual
does not transfer (and retains sole control over) all voting rights related to
such transferred interest. Newco’s obligations under this Section shall expire
upon the termination of the License Agreement in accordance with its
terms.
Section
8.11. Notice of Certain
Events. Newco shall notify Greenhill promptly in writing of any of the
following:
(a) the
occurrence of (i) any Key Person Event hereunder, (ii) any “key person event”
(or similar concept) under the organizational
26
documents
of any Existing Fund or New Fund or (iii) any event described in Section 8.12(a)
or (b);
(b) the
resignation of any managing director-level employee of the Newco
Group;
(c) any
inquiry or investigation (whether formal or informal) from the SEC or any other
Governmental Authority;
(d) the
receipt of any written complaint from a limited partner in any Existing
Fund;
(e) any
material violation by any member of the Newco Group, or the receipt of any
written allegation of any material violation by any member of the Newco Group,
of the Advisers Act or the rules and regulations promulgated
thereunder;
(f) any
default by a limited partner in any Existing Fund that remains uncured for 10
days; and
(g) the
adoption or implementation by the Newco Group of any health, welfare, retirement
or other benefit plan for the Newco Employees.
Section
8.12. Certain Events.
If, after the Closing Date, (a) Xxxxx Xxxxxxxx ceases to be actively involved in
the management of GCPE for any reason (including as a result of his death or
Disability) or (b) Xxxxx Xxxxxxx and/or Xxxxx Xxxxxx cease to be actively
involved in the management of GSAV for any reason (including as a result of
their death or Disability), then Newco and Greenhill agree to consult with each
other and cooperate in good faith to determine whether any amendments or
modifications to this Agreement or any Ancillary Agreement or any supplemental
agreements or arrangements are necessary or advisable in order to provide for
the continued management of GCPE or GSAV, as applicable. Any such amendments,
modifications, agreements or arrangements shall be, to the extent reasonably
practicable, consistent with the terms and original intent of this Agreement and
the Ancillary Agreements.
Section
8.13. Public
Announcements. Greenhill and Newco agree to consult with each other
before issuing any press release or making any public statement with respect to
this Agreement, any Ancillary Agreement or the transactions contemplated hereby
or thereby (including any press release or public statement in connection with
the Separation Date(s)) and, except for any press releases and public
announcements the making of which may be required by Applicable Law or any
listing agreement with any national securities exchange, will not issue any such
press release or make any such public statement prior to such
consultation.
27
Section
8.14. Investor
Communications. Greenhill and Xxxxxxx shall jointly agree on
communications materials and programs to be provided to existing investors in
the Existing Funds, prospective investors in the New Funds and the GCP Employees
with respect to the transactions contemplated hereby.
Section
8.15. Tax Matters. (a)
Intended Tax
Treatment. The parties agree to, and to cause their direct and indirect
subsidiaries to, file all tax returns, prepare all financial statements, and for
all other purposes treat the Transactions in a manner consistent with the
Intended Tax Treatment.
(b) Pre-Closing Tax
Obligations. Greenhill shall pay or cause to be paid all Pre-Closing
Taxes, other than Transfer Taxes (as defined below), and Newco or Newco Holdco
shall pay or cause to be paid all Taxes of the Newco Group other than
Pre-Closing Taxes.
(c) Transfer Taxes. All
excise, sales, use, value added, registration, stamp, recording, documentary,
conveyancing, property, transfer and similar Taxes (collectively, “Transfer Taxes”) incurred in
connection with the transactions contemplated by this Agreement shall be borne
equally by the Newco Group and Greenhill. The Newco Group and Greenhill shall
cooperate in providing each other with any appropriate resale exemption
certifications and other similar documentation.
(d) Cooperation.
Greenhill shall provide Newco with such information as is
reasonably necessary to determine in a timely manner (i) the adjusted bases (for
Tax purposes) of the properties of the Newco Group as of the Closing Date and
(ii) the earnings and profits (for Tax purposes) of Newco as of the Closing
Date.
ARTICLE
9
REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
Section
9.01. Representations and
Warranties of Greenhill. Greenhill represents and warrants to each
Acquiror that (a) each of Greenhill, Newco, Newco Holdco, Newco (U.K.) and New
Manager is a legal entity, duly organized and validly existing under the laws of
its jurisdiction of organization, (b) the execution, delivery and performance of
this Agreement and each Ancillary Agreement to which any member of the Greenhill
Group is or is to be a party and the consummation of the transactions
contemplated hereby and thereby (i) has been duly authorized by all necessary
action on the part of such member of the Greenhill Group and (ii) shall not
violate or result in a breach of or default under (A) the
organizational documents of such member of the Greenhill Group, (B) except as
would not have a material and adverse effect on its ability to consummate the
transactions contemplated hereby and thereby, any other
28
agreement to which such member of the Greenhill Group is a party or (C) any Applicable Law that would materially limit or affect the performance of such member of the Greenhill Group’s duties under this Agreement or such Ancillary Agreement, as applicable, (c) each of this Agreement and each Ancillary Agreement to which any member of the Greenhill Group is or is to be a party, when executed (and assuming the authorization, execution and delivery thereof by each other party thereto that is not a member of the Greenhill Group), has been or shall be (as applicable) validly executed and delivered on its behalf and is a valid and binding agreement of such member of the Greenhill Group, enforceable in accordance with its terms, (d) Greenhill is the record and beneficial owner of the Newco Shares, free and clear of any Lien, and shall transfer and deliver the Newco Shares to the Acquirors on the Closing Date free and clear of any Lien, (e) upon the consummation of the transactions contemplated by the Contribution Agreement, prior to the Closing, (i) Newco Holdco shall be the record and beneficial owner of 24 Common Units and one Preferred Unit in New Manager, free and clear of any Lien, (ii) GCP LLC shall be the record and beneficial owner of 76 Common Units in New Manager and (iii) the only issued and outstanding equity interests in New Manager shall be as described in the foregoing clauses (i) and (ii) and as otherwise provided in the New Manager LLC Agreement, (f) since their respective dates of formation, none of Newco, Newco Holdco, Newco (U.K.) or New Manager has engaged in any activities other than in connection with or as contemplated by this Agreement and the Ancillary Agreements and (g) as of the Closing Date, none of Newco or any of its subsidiaries have any liabilities to which any of them, or to which any of their respective properties, are subject, other than (i) ordinary course liabilities incurred in connection with the organization of such Persons and (ii) obligations under this Agreement and the other Ancillary Agreements.
Section
9.02. Representations and
Warranties of the Acquirors. (a) Each Acquiror represents and warrants to
Greenhill that (i) he or she has full legal capacity to enter into this
Agreement and any Ancillary Agreement to which he or she is or is to be a party,
(ii) the execution, delivery and performance of this Agreement and each
Ancillary Agreement to which such Acquiror or any member of the Newco Group is
or is to be a party and the consummation of the transactions contemplated hereby
and thereby shall not violate (A) except as would not have a material and
adverse effect on such Acquiror’s or such member of the Newco Group’s ability to
consummate the transactions contemplated hereby and thereby, any agreement to
which such Acquiror or such member of the Newco Group is a party or (B) any
Applicable Law that would materially limit or affect the performance of such
Acquiror’s or such member of the Newco Group’s duties under this Agreement or
such Ancillary Agreement, as applicable, and (iii) each of this Agreement and
each Ancillary Agreement to which such Acquiror or such member of the Newco
Group is or is to be a party, when executed (and assuming the authorization,
execution and delivery thereof by each
29
other
party thereto that is not a member of the Newco Group), has been or shall be (as
applicable) validly executed and delivered on such Acquiror’s or such member of
the Newco Group’s behalf and is a valid and binding agreement of such Acquiror
or such member of the Newco Group, as applicable, enforceable in accordance with
its terms and (iv) such Acquiror is the beneficial owner of the shares of
Greenhill common stock set forth opposite such Acquiror’s name on Schedule 2.01,
free and clear of any Lien, and shall transfer and deliver such shares to
Greenhill on the Closing Date free and clear of any Lien.
(b) Each
Acquiror represents and warrants to Greenhill that he is acquiring the Newco
Shares for investment for his own account and not with a view to, or for sale in
connection with, any distribution thereof. Such Acquiror (either alone or
together with his advisors) has sufficient knowledge and experience in financial
and business matters so as to be capable of evaluating the merits and risks of
its investment in the Newco Shares and is capable of bearing the economic risks
of such investment. Each Acquiror further represents and warrants to Greenhill
that he is a sophisticated investor, and acknowledges that Greenhill is entering
into this Agreement with such Acquiror in reliance on this representation and
warranty and with such Acquiror’s understanding, acknowledgment and agreement
that Greenhill and its Affiliates are privy to material non-public information
with respect to the business, operations, pending transactions, financial
condition, results of operations and prospects of Greenhill (collectively, the
“Non-Public
Information”), which Non-Public Information may be material to a
reasonable investor, such as such Acquiror, when making investment decisions,
including the decision to enter into this Agreement. Such Acquiror’s decision to
enter into this Agreement is being made with full recognition and acknowledgment
that Greenhill and its Affiliates are privy to the Non-Public Information,
irrespective of whether such Non-Public Information has been provided to such
Acquiror. Such Acquiror hereby waives any claim, or potential claim, that he has
or may have against Greenhill, including, but not limited to, its respective
officers, directors, shareholders, partners, successors and assigns, relating to
such Person’s possession of Non-Public Information.
Section
9.03. Indemnification.
(a) After the Closing, Greenhill hereby agrees to indemnify and hold harmless
Newco and its Affiliates, partners, members, directors, officers, employees and
agents (when acting in such capacity) and their respective predecessors,
successors and assigns (the “Newco Indemnified Parties”), against
any costs or expenses (including reasonable attorneys’ fees),
judgments, fines, losses, claims, damages or liabilities (collectively, “Costs”) incurred in connection
with any claim, action, suit, proceeding or investigation, whether civil,
criminal, administrative or investigative (an “Action”), resulting from,
arising out of or pertaining to the breach of any representations, warranties,
covenants or agreements of any member of the Greenhill Group set forth in this
Agreement or in any Ancillary Agreement to which such member of the Greenhill
Group is or is to be a party
30
(other
than the Management Agreements and any other Ancillary Agreement which expressly
provides for indemnification by one or more of the parties
thereto).
(b) After the
Closing, Newco hereby agrees to indemnify and hold harmless Greenhill and its
Affiliates, partners, members, directors, officers, employees and agents (when
acting in such capacity) and their respective predecessors, successors and
assigns (the “Greenhill
Indemnified Parties”), against any Costs incurred in connection with any
Action resulting from, arising out of or pertaining to (i) the breach of any
representations, warranties, covenants or agreements of any Acquiror set forth
in this Agreement or in any Ancillary Agreement to which an Acquiror is or is to
be a party or (ii) the breach of any covenants or agreements to be performed by
any member of the Newco Group at or after the Closing under this Agreement or
any Ancillary Agreement to which such member of the Newco Group is or is to be a
party (other than the Management Agreements and any other Ancillary Agreement
which expressly provides for indemnification by one or more of the parties
thereto).
(c) Upon
receipt by a party seeking indemnification under this Section 9.03 (the
“Indemnified Party”) of
actual notice of any third-party Action against such Indemnified Party with
respect to which indemnity may be sought under this Agreement, such Indemnified
Party shall promptly notify the party against whom indemnity is to be sought
(the “Indemnifying
Party”) in writing; provided, however, that failure to so
notify the Indemnifying Party shall not relieve the Indemnifying Party from
any liability which it may have on account of this indemnity or otherwise,
except to the extent the Indemnifying Party is materially prejudiced by such
failure. The Indemnifying Party shall be entitled to participate at its own
expense in the defense of any such Action and, if the Indemnifying Party so
elects, the Indemnifying Party shall be entitled to assume the defense of such
Action at its expense, including the employment of counsel (in which case the
Indemnifying Party shall not thereafter be responsible for the fees, costs and
expenses of any separate counsel retained by an Indemnified Party); provided, however, that such counsel
shall be satisfactory to the Indemnified Party in the exercise of its
reasonable judgment. Notwithstanding the foregoing, an Indemnified Party shall
have the right to employ separate counsel satisfactory to the Indemnifying Party
in the exercise of its reasonable judgment in the defense of an Action, and the
Indemnifying Party shall bear the reasonable fees, costs and expenses of such
separate counsel, if (i) the use of counsel chosen by the Indemnifying Party to
represent the Indemnified Party would present such counsel with a conflict of
interest; (ii) the representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them; (iii)
the Indemnifying Party shall not have employed counsel satisfactory to the
Indemnified Party in the exercise of the Indemnified Party’s reasonable judgment
to represent the Indemnified Party, within a reasonable time after notice of the
institution of such Action; (iv) the Indemnifying Party
31
authorizes
the Indemnified Party to employ separate counsel at the Indemnifying Party’s
expense; or (v) the Indemnifying Party does not confirm in writing to Newco
within 30 days of receiving such notice that it is assuming the defense of such
Action. In no event shall the Indemnifying Party be responsible hereunder for
the fees and expenses of more than one counsel for any Indemnified Party in
connection with an Action in the same jurisdiction. The Indemnifying Party shall
not, without the Indemnified Party’s prior written consent, settle, compromise,
consent to the entry of any judgment in or otherwise seek to terminate any
Action in respect of which indemnification may be sought hereunder (whether or
not any Indemnified Party is a party thereto) unless such settlement,
compromise, consent, or termination includes a release of each Indemnified Party
from any liabilities arising out of such Action and only involves money damages
but no other remedy or admission of any culpability. No Indemnified Party
seeking indemnification, reimbursement or contribution under this Agreement
shall, without prior written consent, settle, compromise, consent to the entry
of any judgment in or otherwise seek to terminate any Action. Notwithstanding
anything to the contrary, the assumption by the Indemnifying Party of the
defense of any Action shall be without prejudice and shall not be construed as a
waiver of the Indemnifying Party’s right to assert that the applicable
Indemnified Party(ies) is not entitled to indemnification or expense
reimbursement pursuant to the terms hereof.
(d) This
Section 9.03 shall survive the termination of this Agreement and the Ancillary
Agreements.
Section
9.04. Actions of New
Manager. Notwithstanding anything to the contrary in this Agreement or in
any Ancillary Agreement, including Articles 8 and 9 hereof, no member of the
Greenhill Group shall be responsible for, or have any indemnification
obligations with respect to, any action or omission by New Manager (including
any breach of this Agreement or any Ancillary Agreement arising at or after the
Closing) that is not (a) expressly approved by (i) New Manager’s Board of
Managers or (ii) a member of the Greenhill Group or a Greenhill Employee having
the authority to approve such action or omission or (b) otherwise directly
attributable to a member of the Greenhill Group or a Greenhill
Employee.
ARTICLE
10
MISCELLANEOUS
Section 10.01. Effectiveness. The
provisions of Article 1, Article 2, Section 6.01, Article 8
(other than Section 8.02 thereof), Article 9 and this Article 10 shall become
effective when each party hereto shall have received counterparts hereof signed
by all of the other parties hereto. The provisions of Article 3, Article 4,
Article 5, Sections 6.02—6.06, Article 7 and Section 8.02 shall not become
effective until the Closing.
32
Section
10.02. Amendments and
Waivers. (a) Any provision of this Agreement (including the Schedules,
Exhibits and other attachments hereto) may be amended or waived if, but only if,
such amendment or waiver is in writing and is signed, in the case of an
amendment, by Greenhill and Newco or, in the case of a waiver, by each party
against whom the waiver is to be effective (provided that, in the case of
a waiver that is to be effective against Newco, Newco Holdco and/or any
Acquiror, only the consent of Newco (and not the consent of Newco Holdco or such
Acquiror) shall be required). Notwithstanding the foregoing, prior to the
Closing, this Agreement may not be amended, and no provision of this Agreement
may be waived, without the consent of the Acquirors.
(b) No
failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by
law.
Section
10.03. Expenses. Except
as otherwise provided herein, all costs and expenses incurred in connection with
this Agreement shall be paid by the party incurring such cost or expense.
Notwithstanding the foregoing, the Acquirors shall (or shall cause Newco to)
reimburse Greenhill for fees payable to Governmental Authorities, registered
agents and service companies in connection with the formation of Newco, Newco
Holdco and Newco (U.K.).
Section
10.04. Further
Assurances. After the Closing Date, Greenhill, Newco, Newco Holdco and
each Acquiror shall use their reasonable best efforts to do all things, take all
actions and execute all documents reasonably necessary to implement and give
effect to the arrangements contemplated hereby.
Section
10.05. Notices. All
notices, requests and other communications to any party hereunder shall be in
writing (which may be by facsimile transmission or, subject to the limitation
set forth below, e-mail) and shall be given,
if to
Greenhill or (prior to the Closing) Newco or Newco Holdco, to:
Xxxxxxxxx
& Co., Inc.
000 Xxxx
Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxx Xxxxx
Facsimile
No.: (000) 000-0000
E-mail:
xxxxxx@xxxxxxxxx.xxx
33
with a
copy to (which shall not constitute notice):
Xxxxx
Xxxx & Xxxxxxxx LLP
000
Xxxxxxxxx Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attention:
Xxxx Xxxxxxxx
Facsimile
No.: (000) 000-0000
E-mail:
xxxx.xxxxxxxx@xxxxxxxxx.xxx
if to any
Acquiror or (after the Closing) Newco or Newco Holdco, to:
GCP
Capital Partners LLC
000 Xxxx
Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxx X. Xxxxxxx
Facsimile
No.: (000) 000-0000
E-mail:
xxxxxxxx@xxxxxxxxx.xxx
with a
copy to (which shall not constitute notice):
DLA Piper
LLP (US)
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxx Xxxxxxx
Facsimile
No.: (000) 000-0000
E-mail:
xxxxx.xxxxxxx@xxxxxxxx.xxx
or to
such other address or facsimile number or email address as such party may
hereafter specify for the purpose by notice to the other parties hereto. All
notices, requests and other communications to New Manager hereunder shall be
given to each of Newco and Greenhill. All notices, requests and other
communications hereunder shall be deemed received on the date of receipt by the
recipient thereof if received prior to 5:00 p.m. on a Business Day in the place
of receipt (unless, in the case of e-mail, an “Out of Office” reply or other
indication of non-receipt by the recipient is transmitted to the sender, in
which case such notice, request or other communication shall be deemed not to
have been received). Otherwise, any such notice, request or communication (other
than e-mail that is deemed not to have been received) shall be deemed to have
been received on the next succeeding Business Day in the place of
receipt.
Section
10.06. Governing Law.
This Agreement shall be governed by and construed in accordance with the laws of
the State of New York, without regard to the conflicts of law rules of such
state.
34
Section
10.07. Termination of the
Ancillary Agreements. This Agreement shall not terminate upon the
termination or expiration of any Ancillary Agreement.
Section
10.08. Third Party
Beneficiaries. The provisions of this Agreement are solely for the
benefit of Newco, Newco Holdco, New Manager, Greenhill, and the Acquirors, and
are not intended to confer upon any Person except such parties any rights or
remedies hereunder and there are no third party beneficiaries of this Agreement
and this Agreement shall not provide any third Person with any remedy, claim,
liability, reimbursement, claim of action or other right in excess of those
existing without reference to this Agreement. Notwithstanding anything to the
contrary herein, including Sections 2.02(b) and (g), Section 3.02, Section 4.02
and Article 7, the provisions of this Agreement are not intended for the benefit
of any GCP Employee or Newco Employee (in his or her capacity as such), except
to the extent that such individual is also (and only in such individual’s
capacity as) an Acquiror.
Section
10.09. Jurisdiction.
The parties hereto agree that any suit, action or proceeding seeking to enforce
any provision of, or based on any matter arising out of or in connection with,
this Agreement or the transactions contemplated hereby shall be brought in any
federal court located in New York County, New York or any New York state court
in New York County, and each of the parties hereby irrevocably consents to the
jurisdiction of such courts (and of the appropriate appellate courts therefrom)
in any such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by Applicable Law, any objection that it may now or hereafter
have to the laying of the venue of any such suit, action or proceeding in any
such court or that any such suit, action or proceeding brought in any such court
has been brought in an inconvenient forum. Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within or
without the jurisdiction of any such court. Without limiting the foregoing, each
party agrees that service of process on such party to the address of such party
set forth in, or changed pursuant to, Section 10.05 shall be deemed effective
service of process on such party.
Section
10.10. Counterparts; Binding
Effect; Benefit. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. The provisions of
this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and permitted
assigns.
Section
10.11. Assignment. No
party may assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement without the written consent of each other party
hereto, provided that,
to the extent permitted by Applicable Law, Greenhill may, without any other
party’s consent, assign its
35
rights or
obligations under this Agreement to any existing or future subsidiary of
Greenhill.
Section
10.12. Entire
Agreement. This Agreement and the Ancillary Agreements (including all
Schedules and Exhibits hereto and thereto) constitute the entire agreement among
the parties with respect to the subject matter hereof and thereof and supersede
all prior agreements and understandings (including that certain Memorandum of
Agreement, dated October 28, 2009, between Greenhill and Xxxxxxx), both oral and
written, among the parties with respect to the subject matter hereof and
thereof; provided that
nothing in this Agreement or any Ancillary Agreement shall or shall be deemed to
supersede, amend or modify in any way (x) any policies or procedures of the
Greenhill Group (as in effect from time to time) that are or may in the future
be applicable to any GCP Employee or (y) except to the extent expressly amended
pursuant to the GP Agreement Amendments, the limited partnership agreements of
the general partners of the Existing Funds.
Section
10.13. Severability. If
any term, provision, agreement, covenant or restriction of this Agreement is
held by a court of competent jurisdiction or other authority to be invalid, void
or unenforceable, the remainder of the terms, provisions, agreements, covenants
and restrictions of this Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
Section
10.14. Headings.
Section headings and other captions herein are inserted for convenience only and
are not intended to be used to interpret any provision hereof.
[Remainder
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36
XXXXXXXXX
& CO., INC.
|
|||
By: | /s/ Xxxxx X. Xxx | ||
Name: | Xxxxx X. Xxx | ||
Title: | Co-Chief Executive Officer |
GCP
CAPITAL PARTNERS
HOLDINGS
INC.
|
|||
By: | /s/ Xxxxxx Xxxxx | ||
Name: | Xxxxxx Xxxxx | ||
Title: | Director |
GCP
CAPITAL PARTNERS
HOLDINGS
LLC
|
|||
By: |
GCP
Capital Partners Holdings Inc.,
as sole member
|
||
By: | /s/ Xxxxxx Xxxxx | ||
Name: | Xxxxxx Xxxxx | ||
Title: | Director |
GREENHILL
CAPITAL PARTNERS II
LLC
|
|||
By: | /s/ Xxxxxx Xxxxx | ||
Name: | Xxxxxx Xxxxx | ||
Title: | Secretary |
[Signature
pages continue]
Solely
for the purposes specified in Article 2, Sections 4.02(e), 8.01, 8.03,
8.04, 8.05, 8.14, 9.02 and 9.03 and Article 10:
|
|||
/s/ Xxxxxx X. Xxxxxxx | |||
Xxxxxx
X. Xxxxxxx
|
Solely
for the purposes specified in Article 2, Sections 8.01, 8.03, 8.04, 8.05,
9.02 and 9.03 and Article 10:
|
|||
/s/
V. Xxxxx Xxxxxx
|
|||
V.
Xxxxx Xxxxxx
|