Item 1.01 Entry into a Material Definitive Agreement.
On August 25, 2022, P10 Intermediate Holdings LLC, a Delaware limited liability
company (the "Buyer"), and P10, Inc., a Delaware corporation (the "Parent" or
"P10"), entered into that certain Sale and Purchase Agreement (the "Purchase
Agreement"), by and among the Buyer, the Parent, Westech Investment Advisors
LLC, a California limited liability company (the "WTI"), Westech Investment
Management, Inc., a California corporation, Maurice C. Werdegar, David R. Wanek,
the Bonnie Sue Swenson Survivors Trust and Jay L. Cohan (each a "Seller" and
collectively, the "Sellers"), and David R. Wanek in his capacity as the seller
representative as set forth in the Purchase Agreement (the "Seller
Representative"), pursuant to which the Buyer would acquire all of the issued
and outstanding membership interests of WTI (the "Transaction"). The Purchase
Agreement contains customary representations and warranties, covenants and
closing conditions.
The purchase price payable at the closing of the Transaction, which is subject
to certain customary closing adjustments, consists of $97,000,008 in cash and an
aggregate of 3,916,666 membership units representing limited liability company
interests of the Buyer ("Buyer Units"). Subject to certain conditions, the Buyer
Units will be exchangeable into shares of Class A Common Stock of the Parent on
a one-for-one basis, pursuant to that certain Exchange Agreement entered into on
August 25, 2022, by and among the Buyer, the Parent and the other signatory
parties thereto (the "Exchange Agreement"). The Class A Units of P10 acquired
under the Exchange Agreement are subject to a restricted period in which the
holder cannot offer, pledge, sell, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, lend, or otherwise transfer or dispose of, directly or
indirectly, such Class A Common Stock beneficially owned. The restricted period
terminates as follows: (i) with respect to one-third of the Class A Common Stock
held by such stockholder, on October 21, 2022; (ii) with respect to two-thirds
of the Class A Common Stock held by such stockholder, on October 21, 2023; and
(iii) with respect to all of the Class A Common Stock held by such stockholder,
on October 21, 2024.
In addition, the Seller Recipients (as defined in the Purchase Agreement) are
eligible to receive additional consideration upon the achievement of certain
earn-out milestones during the earn-out period from January 1, 2023 to
December 31, 2027 (as may be extended in certain events) pursuant to the
Purchase Agreement, subject to potential reduction in accordance with the terms
of the Purchase Agreement, and employees of WTI are eligible to receive bonus
compensation for achievement of these earn-out milestones from an employee
retention bonus plan to be established at closing. The earn-out milestones and
aggregate consideration and bonuses payable is as follows: (i) $35,000,000 in
consideration in the aggregate (without interest) based upon the achievement of
$20,000,000 in EBITDA in any such four-quarter period; (ii) $17,500,000 in
consideration in the aggregate (without interest) based upon the achievement of
$22,500,000 in EBITDA in any such four-quarter period; and (iii) $17,500,000 in
consideration in the aggregate (without interest) based upon the achievement of
$25,000,000 in EBITDA in any such four-quarter period. Pursuant to the Purchase
Agreement, any future earn-out payments payable to the Seller Recipients will be
forfeited in the event such Seller Recipient's employment with WTI or one of its
Affiliates is terminated by WTI for Cause (as defined in his Employment
Agreement) or by such Seller Recipient without Good Reason (as defined in his
Employment Agreement) prior to the last day of a quarter in which any applicable
earn-out milestone is achieved. Any earn-out payment will be paid in cash;
provided, that up to 50% of the earn-out payments payable to the Seller
Recipients pursuant to the Purchase Agreement, at a Seller Recipient's option,
will be paid in Units of Buyer which may be converted into shares of Class A
common stock of P10.
P10 also commits to grant options to acquire 1,000,000 shares of P10's common
stock in the aggregate to induce the Seller Recipients to continue their
employment with P10 and its subsidiaries at and following closing and additional
options to acquire 3,000,000 shares of P10's common stock in the aggregate to
continuing employees who are not Sellers, with such options cliff vesting on the
date that is five years following the grant date, with a per share exercise
price equal to the value of a share of P10's common stock on the grant date.
The above descriptions of the Purchase Agreement and the Exchange Agreement do
not purport to be complete and are subject to, and qualified in their entirety
by, the full text of the Purchase Agreement and Exchange Agreement, which are
filed as Exhibit 10.1 and Exhibit 10.2, respectively, to this Current Report on
Form 8-K and are incorporated herein by reference.
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Increase Joinder and First Amendment to Credit Agreement
On August 25, 2022, the Parent entered into an Increase Joinder and First
Amendment ("Increase Joinder and Credit Agreement First Amendment") to its
Credit Agreement, initially dated as of December 22, 2021 (as amended,
supplemented or otherwise modified from time to time) (the "Credit Agreement")
with the guarantors party thereto from time to time, the lenders from time to
time party thereto and JPMorgan Chase Bank, N.A., as administrative agent and
collateral agent. Among other things, the Increase Joinder and Credit Agreement
First Amendment amends the Credit Agreement by:
• Increasing the revolving commitments by an aggregate amount equal to
$37.5 million.
• Increasing commitments in respect of the term loans by an aggregate
amount equal to $87.5 million.
The above description of the Increase Joinder and Credit Agreement First
Amendment does not purport to be complete and is subject to, and qualified in
its entirety by, the full text of the Increase Joinder and Credit Agreement
First Amendment, which is filed as Exhibit 10.3 to this Current Report on Form
8-K and is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On August 26, 2022, P10 issued a press release announcing the execution of the
Purchase and Sale Agreement. A copy of the press release issued by P10 is
furnished as Exhibit 99.1 to this Current Report on Form 8-K.
P10 also posted a presentation containing additional information about WTI to
its website at https://ir.p10alts.com/. A copy of the presentation is furnished
as Exhibit 99.2 to this Current Report on Form 8-K.
The information in this Item 7.01 of this Current Report on Form 8-K, including
Exhibit 99.1 and Exhibit 99.2 attached hereto, is being furnished and shall not
be deemed "filed" for the purposes of Section 18 of the Exchange, or otherwise
subject to the liabilities of that Section, nor shall it be deemed subject to
the requirements of amended Item 10 of Regulation S-K, nor shall it be deemed
incorporated by reference into any filing of P10 under the Securities Act of
1933, as amended, or the Exchange Act, whether made before or after the date
hereof, regardless of any general incorporation language in such filing. The
furnishing of this information hereby shall not be deemed an admission as to the
materiality of any such information.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description
10.1* Sale and Purchase Agreement, dated August 25, 2022, by and among
Westech Investment Advisors LLC, P10, Inc., Westech Investment
Management, Inc., Maurice C. Werdegar, David R. Wanek, the Bonnie Sue
Swenson Survivors Trust and Jay L. Cohan, and David R. Wanek (in his
capacity as the Seller Representative).
10.2* Exchange Agreement, dated August 25, 2022 by and among P10, Inc.,
P10 Holdings Inc., P10 Intermediate Holdings LLC, and the other
signatories thereto.
10.3* Increase Joinder and Credit Agreement First Amendment, dated
August 25, 2022, by and among P10, Inc., the Guarantors party thereto
from time to time, the Lenders party thereto from time to time and
JPMorgan Chase Bank, N.A., as administrative agent and collateral
agent.
99.1 Press Release, dated August 26, 2022.
99.2 Presentation, dated August 26, 2022.
104 Cover Page Interactive Data File (formatted as inline XBRL)
* Schedules and certain exhibits to the Purchase Agreement, Exchange Agreement
and Increase Joinder and Credit Agreement First Amendment have been omitted
pursuant to Item 601(b)(2) of Regulation S-K. P10, Inc. hereby undertakes to
furnish supplemental copies of any of the omitted schedules and exhibits upon
request by the SEC.
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