Exhibit 10.1
PURCHASE AGREEMENT
This PURCHASE AGREEMENT (the "Agreement") is made this 29th day of July,
2005 by and among Opinion Research Corporation, a Delaware corporation (the
"Company"), LLR Equity Partners, L.P., a Delaware limited partnership ("LLR
Partners") and LLR Equity Partners Parallel, L.P., a Delaware limited
partnership ("LLR Parallel" and, together with LLR Partners, the "Sellers").
BACKGROUND
WHEREAS, pursuant to a Purchase Agreement dated September 1, 2000 (the
"LLR Purchase Agreement"), the Sellers purchased from the Company, and the
Company issued and sold to the Sellers, the following securities: (a) 1,176,458
shares (the "Common Shares") of the Common Stock, $.01 par value per share, of
the Company (the "Common Stock"), (b) ten shares (the "Series B Preferred
Shares") of the Series B Preferred Stock, par value $.01 per share, of the
Company (the "Series B Preferred Stock"); (c) warrants to purchase 740,500
shares of the Common Stock at a price of $12.00 per share (the "Warrants"); and
(d) anti-dilution warrants to purchase shares of the Common Stock at a price of
$.01 per share (the "Anti-Dilution Warrants");
WHEREAS, the LLR Purchase Agreement grants to the Sellers, at any time on
or after September 1, 2005 or earlier upon certain events, the right to exchange
the Common Shares for shares of the Series C Preferred Stock, par value $.01 per
share, of the Company (the "Series C Preferred Stock") on a two-for-one basis
(the "Exchange Rights");
WHEREAS, pursuant to the LLR Purchase Agreement, the Company filed with
the Secretary of State of the State of Delaware a Certificate of Designation for
the Series B Preferred Stock (the "Series B Designation") and a Certificate of
Designation for the Series C Preferred Stock (the "Series C Designation")
setting forth the preferences, rights and restrictions applicable to the Series
B Preferred Stock and Series C Preferred Stock, respectively;
WHEREAS, each of the LLR Purchase Agreement, the certificates representing
the Warrants (the "Warrant Certificates"), the certificates representing the
Anti-Dilution Warrants (the "Anti-Dilution Warrant Certificates"), the Series B
Designation, the Series C Designation, and the other Transaction Agreements (as
such term is defined in the LLR Purchase Agreement) grant various rights to the
Sellers, including, but not limited to, preemptive, registration and
anti-dilution rights, all of which rights are referred to collectively in this
Agreement as the "LLR Rights";
WHEREAS, the Company wishes to purchase from the Sellers, on the terms and
subject to the conditions set forth in this Agreement, (a) the Common Shares,
(b) the Series B Preferred Shares, (c) the Warrants, (d) the Anti-Dilution
Warrants, (e) the Exchange Rights, and (f) the LLR Rights (all of which are
collectively referred to herein as the "LLR Interests");
WHEREAS, the Sellers wish to sell to the Company the LLR Interests on the
terms and subject to the conditions set forth in this Agreement;
WHEREAS, the Company anticipates that it will effect an issuance of
subordinated debt with aggregate proceeds of at least $20 million (the
"Subordinated Debt Transaction") and that it will use the proceeds of the
Subordinated Debt Transaction to pay the purchase price for the LLR Interests.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained in this Agreement, and intending to be legally bound
hereby, the parties agree as follows:
ARTICLE I
SALE AND PURCHASE OF SHARES AND WARRANTS; CLOSING
1.1 Sale and Purchase of LLR Interests.
(a) Upon the terms and subject to the conditions of this Agreement,
on the Closing Date (as hereinafter defined), the Sellers shall sell and deliver
to the Company and the Company shall purchase and take from the Sellers, the
following: (i) the Common Shares; (ii) the Series B Preferred Shares; (iii) the
Warrants; (iv) the Anti-Dilution Warrants; (v) the Exchange Rights; and (vi) the
LLR Rights.
(b) The aggregate purchase price for the LLR Interests shall consist
of $20,000,000 in cash (the "Purchase Price").
1.2 Closing.
(a) The closing of the purchase and sale of the LLR Interests (the
"Closing") pursuant to this Agreement shall take place on the same business day
as the closing of the Subordinated Debt Transaction at the offices of Wolf,
Block, Xxxxxx and Xxxxx-Xxxxx LLP, 0000 Xxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx,
commencing immediately after the consummation of the closing of the Subordinated
Debt Transaction (the "Closing Date").
(b) At the Closing, the Sellers shall deliver to the Company (a)
stock certificates representing the Common Shares, duly endorsed for transfer or
accompanied with duly executed stock transfer powers, (b) stock certificates
representing the Series B Preferred Shares, duly endorsed for transfer or
accompanied with duly executed stock transfer powers, (c) the Warrants, duly
endorsed for transfer or accompanied with duly executed stock transfer powers,
(d) the Anti-Dilution Warrants, duly endorsed for transfer or accompanied with
duly executed stock transfer powers, and (e) a xxxx of sale in the form of
Exhibit A attached hereto. Notwithstanding anything to the contrary provided
herein, if any of the Warrants, the Anti-Dilution Warrants, or the certificates
representing the Common Shares or the Series B Preferred Shares shall be lost,
stolen or destroyed, the Sellers shall deliver to the Company an affidavit of
that fact and an undertaking of indemnity by the Sellers claiming such Warrants,
Anti-Dilution Warrants, or certificates representing the Common Shares or the
Series B Preferred Shares to be lost, stolen or destroyed.
(c) At the Closing, the Company will deliver to the Sellers the
Purchase Price, by wire transfer of immediately available funds in U.S. dollars,
to a bank in the United States specified by the Sellers for the account of the
Sellers.
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(d) At the Closing, the Company shall have received the resignations
of each of Xxxx X. Xxxx and Xxxx X. Xxxxx from their positions as members of the
Company's Board of Directors.
(e) At the Closing or as soon as practicable following the Closing,
the Company will deliver to Xxxx and Gavin the Xxxx Purchase Plan Shares and the
Gavin Purchase Plan Shares (as defined below).
1.3 Transaction Agreements. The obligations of the Sellers pursuant to
the Transaction Agreements shall terminate and be of no further force or effect
as of the Closing.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers jointly and severally represent and warrant to the Company as
follows:
2.1 Organization and Good Standing. LLR Partners is a limited
partnership duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite power and authority, and all
necessary licenses and permits, to own and lease its properties and assets and
to conduct its business as now conducted. LLR Parallel is a limited partnership
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite power and authority, and all necessary
licenses and permits, to own and lease its properties and assets and to conduct
its business as now conducted.
2.2 Authorization. Each of the Sellers has all requisite power and
authority to execute and deliver this Agreement and to carry out the
transactions contemplated hereby. The execution, delivery and performance by the
Sellers of this Agreement have been duly authorized by all requisite partnership
action, and this Agreement has been duly executed and delivered by the Sellers
and constitutes the valid and binding obligation of the Sellers, enforceable
against the Sellers in accordance with its terms, except as such enforcement may
be limited by bankruptcy, insolvency, moratorium, reorganization and other
similar laws relating to or affecting the enforcement of creditors' rights
generally, and except that the availability of specific performance, injunctive
relief or other equitable remedies is subject to the discretion of the court
before which any such proceeding may be brought.
2.3 Title; Liens and Encumbrances. The Sellers are the lawful owners,
both beneficially and of record, of the Common Shares, the Series B Shares, the
Warrants and the Anti-Dilution Warrants, free and clear of all liens,
encumbrances and restrictions of every kind, and such securities represent all
of the securities of the Company owned by the Sellers. Specifically, (a) LLR
Partners owns 1,068,065 shares of the Common Stock (excluding 39,600 shares of
the Common Stock purchased in the open market that do not constitute any part of
the Common Shares), nine shares of the Series B Preferred Stock, and Warrants to
purchase up to 672,274 shares of Common Stock, and (b) LLR Parallel owns 108,393
shares of the Common Stock, one share of the Series B Preferred Stock, and
Warrants to purchase up to 68,226 shares of the Common Stock.
2.4 Broker or Finder. No Person acting on behalf of the Sellers or under
the authority of any of the foregoing is or will be entitled to any brokers' or
finders' fee or any other
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commission or similar fee, directly or indirectly, from any of such parties in
connection with any of the transactions contemplated by this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Sellers as follows:
3.1 Organization and Good Standing; No Conflict. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite power and authority, and all
necessary licenses and permits, to own and lease its properties and assets and
to conduct its business as now conducted. The execution and delivery of this
Agreement by the Company and the consummation by Company of the transactions
contemplated hereby do not and will not violate or result in a breach of any
provision of, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in the termination
of, or accelerate the performance required by, or result in a right of
termination or acceleration under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the property or assets of
the Company under, any of the terms, conditions or provisions of (i) the charter
or bylaws of the Company, (ii) any statute, law, ordinance, rule, regulation,
judgment, decree, order, injunction, writ, permit or license of any court or
governmental authority applicable to the Company or any of its property or
assets, or (iii) any material note, bond, mortgage, indenture, deed of trust,
license, franchise, permit, concession, contract, lease or other instrument,
obligation or agreement of any kind to which the Company is now a party or by
which the Company or any of its property or assets may be bound or affected.
3.2 Authorization. The Company has all requisite power and authority to
execute and deliver this Agreement and to carry out the transactions
contemplated hereby. The execution, delivery and performance by the Company of
this Agreement have been duly authorized by all requisite corporate action, and
this Agreement has been duly executed and delivered by the Company and
constitutes the valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, moratorium, reorganization and other similar
laws relating to or affecting the enforcement of creditors' rights generally,
and except that the availability of specific performance, injunctive relief or
other equitable remedies is subject to the discretion of the court before which
any such proceeding may be brought.
3.3 Broker or Finder. No Person acting on behalf of the Company or under
the authority of the Company is or will be entitled to any brokers' or finders'
fee or any other commission or similar fee, directly or indirectly, from any of
such parties in connection with any of the transactions contemplated by this
Agreement.
3.4 Series B Preferred Stock and Series C Preferred Stock Ownership. No
shares of Series B Preferred Stock, other than the Series B Preferred Shares,
are issued or outstanding. No shares of Series C Preferred Stock are issued or
outstanding.
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3.5 Exempt Transactions. All necessary corporate action will be properly
taken by the Company to cause the sale of the LLR Interests, to the extent of
any pecuniary interest therein of Xxxx X. Xxxx, to be an exempt transaction for
purposes of Section 16 of the Securities Exchange Act of 1934, as amended.
ARTICLE IV
COVENANTS OF THE SELLERS AND THE COMPANY
4.1 Payment of Sellers' Legal Fees. The Company shall pay legal fees and
expenses actually incurred by Sellers in connection with the preparation of the
Prior Agreement (as defined below) and this Agreement and the consummation of
the transactions contemplated hereby and thereby, whether or not such
transactions are or were consummated, provided that the Company's liability for
such fees and expenses shall not exceed $67,000 in the aggregate and that the
Sellers shall provide to the Company invoices with respect to such legal fees
and expenses, which invoices shall include billing details to the extent the
disclosure of such billing details would not waive the attorney-client privilege
between the Sellers and their counsel. The payment provided for in this Section
4.1 shall be made in the ordinary course of the Company's business after review
of such invoices. Also, the payment provided for in this Section 4.1 shall be in
addition to amounts payable pursuant to the indemnification agreements and
obligations provided for or referenced in Section 5.2 hereof or Section 7.2 of
the Prior Agreement.
4.2 Waiver of Transfer Restrictions. In connection with the transactions
contemplated by this Agreement, the Company hereby agrees to waive compliance by
the Sellers with the restrictions imposed by the LLR Purchase Agreement on the
transferability of the Common Shares, the Series B Preferred Shares, the
Warrants and the Anti-Dilution Warrants.
4.3 Acceleration of Vesting of Certain Options to Purchase Common Stock.
Prior to the date hereof, (i) Xxxx X. Xxxx ("Xxxx"), a director of the Company
and an affiliate of the Sellers, received options to purchase an aggregate of
25,000 shares of Common Stock (the "Xxxx Options") under the Company's 1997
Stock Incentive Plan (the "Incentive Plan") and purchased 5,407 shares of Common
Stock from the Company (the "Xxxx Purchase Plan Shares" and together with the
Xxxx Options, the "Xxxx Securities") under the Opinion Research Corporation
Stock Purchase Plan for Non-Employee Directors and Designated Employees and
Consultants (the "Purchase Plan"); and (ii) Xxxx X. Xxxxx ("Gavin"), a director
of the Company, received options to purchase an aggregate of 25,000 shares of
Common Stock (the "Gavin Options") under the Incentive Plan and purchased 15,543
shares of Common Stock from the Company under the Purchase Plan (the "Gavin
Purchase Plan Shares" and together with the Gavin Options, the "Gavin
Securities"). The Company hereby acknowledges and agrees that the Xxxx
Securities and the Gavin Securities and any additional options granted to or
common Stock purchased by Xxxx or Xxxxx under the Incentive Plan or the Purchase
Plan on or prior to the Closing Date are not among the LLR Interests to be sold
by the Sellers and purchased by the Company pursuant to this Agreement. The
Company hereby further agrees that effective upon the resignation of Xxxx and
Gavin from the Company's board of directors, the Xxxx Options and the Gavin
Options, and any additional options granted to them under the Incentive Plan on
or prior to the Closing Date shall become fully vested and immediately
exercisable and may be exercised at any time prior to the one-year anniversary
of the Closing Date pursuant to the terms of the such Options.
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ARTICLE V
SURVIVAL OF COVENANTS, AGREEMENTS,
REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
5.1 Survival. All covenants, agreements, representations and warranties
made herein shall survive the Closing notwithstanding any due diligence or
investigation conducted on behalf of any party and shall not merge in the
performance of any obligation by any party hereto.
5.2 Indemnification. To the maximum extent permitted by law, the Company
shall indemnify and hold harmless the Sellers and their respective partners,
agents, representatives, employees, director designees and affiliates solely
from and against any and all loss, liability, cost and expense (including,
without limitation, reasonable attorneys' fees, expenses and disbursements,
which shall be reimbursed as incurred) incurred by such indemnified persons,
directly or indirectly, in connection with the Pending Litigation and in
connection with claims by third parties, whether asserted or brought on, before
or after the date of this Agreement (including derivative claims on behalf of
the Company) under federal or state securities laws or under the Delaware
General Corporation Law in connection with the Subordinated Debt Transaction (to
the extent it relates to the transactions contemplated hereby) or the
transactions contemplated by this Agreement; provided, however, that in no event
shall the Sellers be entitled to indemnification hereunder if and to the extent
that: (i) such indemnification is barred by final order of a court of competent
jurisdiction or determined by final order of a court of competent jurisdiction
to be unlawful; or (ii) the claims for which indemnification is sought arise
from or are related to events or circumstances that (A) constitute a breach by
the Sellers of their agreements, representations or warranties in this
Agreement; or (B) are determined by final order of a court of competent
jurisdiction to constitute fraud or willful misconduct perpetrated against the
Company by the Sellers, provided that for purposes of this Section 5.2(ii)(B),
the execution of this Agreement and performance of the obligations under this
Agreement by Sellers shall not, without more, be deemed to constitute a fraud or
willful misconduct perpetrated against the Company by Sellers. The foregoing
indemnification obligation shall be in addition to and not in lieu of any
indemnification obligation that the Company has to Xxxx X. Xxxx and Xxxx X.
Xxxxx as a result of being or having been members of the Board of Directors of
the Company.
ARTICLE VI
MISCELLANEOUS
6.1 Specific Enforcement. The parties hereto acknowledge and agree that
each would be irreparably damaged if any of the provisions of this Agreement are
not performed by the other in accordance with their specific terms or are
otherwise breached. It is accordingly agreed that each party shall be entitled
to seek an injunction or injunctions to prevent breaches of this Agreement by
the other and to enforce this Agreement and the terms and provisions thereof
specifically against the other, in addition to any other remedy to which such
aggrieved party may be entitled at law or in equity.
6.2 Severability. If any term or provision of this Agreement is held by
a court of competent jurisdiction or other authority to be invalid, void,
unenforceable or against its regulatory policy, the remainder of the terms,
provisions, covenants and restrictions of this
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Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
6.3 Binding Agreement. This Agreement shall be binding upon and shall
inure to the benefit of the parties and their respective successors and assigns.
6.4 Amendments. This Agreement may not be modified, amended, altered or
supplemented except by a written agreement signed by the Company and the
Sellers, which shall be authorized by all necessary corporate or partnership
action, as applicable, of each party. Any party may waive any condition to its
obligations hereunder.
6.5 Notices. Every notice or other communication required or
contemplated by this Agreement to be given by a party shall be delivered either
by (a) personal delivery, (b) courier mail, or (c) facsimile addressed to the
party for whom intended at the following address:
To the Company:
Opinion Research Corporation
000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxx X. Short, Chairman, President and CEO
Facsimile No.: (000) 000-0000
With a copy (which shall not constitute notice) to:
Wolf, Block, Xxxxxx and Xxxxx-Xxxxx LLP
0000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
To the Sellers:
LLR Equity Partners, L.P.
LLR Equity Partners Parallel, L.P.
Two Greenville Crossing
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxx
Facsimile No.: (000) 000-0000
With a copy (which shall not constitute notice) to:
Xxxxxx Xxxxxxxx LLP
3000 Two Xxxxx Square
00xx & Xxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000-0000
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Attention: Xxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
or at such other address as the intended recipient previously shall have
designated by written notice to the other parties. Notice by courier mail shall
be effective on the date it is officially recorded as delivered to the intended
recipient by return receipt or equivalent. All notices and other communications
required or contemplated by this Agreement delivered in person or sent by
facsimile shall be deemed to have been delivered to and received by the
addressee and shall be effective on the date of personal delivery or at the time
of confirmation, respectively. Notice not given in writing shall be effective
only if acknowledged in writing by a duly authorized representative of the party
to whom it was given.
6.6 Integration. This Agreement (including any Exhibits hereto) and
other documents delivered pursuant hereto constitute the entire understanding of
the parties with respect to the subjects hereof and thereof; provided, however,
that the parties hereto acknowledge that the provisions of Section 6.1 (related
to fees) and the provisions of Section 7.2 (related to indemnification) of the
agreement dated March 25, 2005 by and among the parties hereto (the "Prior
Agreement") survived the termination of such agreement and the execution of this
agreement and remain in full force and effect. There are no restrictions,
agreements, promises, warranties, covenants or undertakings other than those
expressly set forth herein or therein with respect to any matter.
6.7 Waivers. No failure or delay on the part of either party in the
exercise of any power, right or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other right,
power or privilege. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
6.8 Governing Law. This Agreement shall be exclusively governed by,
construed in accordance with, and interpreted according to the substantive law
of the State of Delaware without giving effect to the principles of conflict of
laws.
6.9 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument. A facsimile transmission
of an original signature shall be deemed to be an original signature.
6.10 Cooperation. The parties hereto shall each perform such acts,
execute and deliver such instruments and documents and do all such other things
as may be reasonably necessary to accomplish the transactions contemplated in
this Agreement.
6.11 Section Headings and Captions. Section headings and captions used in
this Agreement are provided for convenience only and shall not affect this
Agreement's meaning or interpretation.
6.12 Delivery by Facsimile. This Agreement, the agreements and
instruments referred to herein, and each other agreement or instrument entered
into in connection herewith or therewith or contemplated hereby or thereby, and
any amendments hereto or thereto, to the
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extent signed and delivered by means of a facsimile machine, shall be treated in
all manner and respects as an original agreement or instrument and shall be
considered to have the same binding legal effect as if it were the original
signed version thereof delivered in person. At the request of any party hereto
or to any such agreement or instrument, each other party hereto or thereto shall
reexecute original forms thereof and deliver them to all other parties. No party
hereto or to any such agreement or instrument shall raise the use of a facsimile
machine to deliver a signature or the fact that any signature or agreement or
instrument was transmitted or communicated through the use of a facsimile
machine as a defense to the formation or enforceability of a contract and each
such party forever waives any such defense.
6.13 Interpretation of Agreement. The parties hereto acknowledge and
agree that this Agreement has been negotiated at arm's-length and among parties
equally sophisticated and knowledgeable in the matters dealt with in this
Agreement. Accordingly, any rule of law or legal decision that would require
interpretation of any ambiguities in this Agreement against the party that has
drafted it is not applicable and is waived. The provisions of this Agreement
shall be interpreted in a reasonable manner to effect the intent of the parties
as set forth in this Agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, each of the parties hereto has duly executed this
Agreement on the date first set forth above.
OPINION RESEARCH CORPORATION
By: /s/ Xxxx X. Short
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Name: Xxxx X. Short
Title: Chairman and CEO
LLR EQUITY PARTNERS, L.P.
By: LLR CAPITAL, L.P.,
Its General Partner
By: LLR CAPITAL, L.L.C.,
Its General Partner
By: /s/ Xxxxxx Xxxx
-----------------------
Name: Xxxxxx Xxxx
Title: Partner
LLR EQUITY PARTNERS PARALLEL, L.P.
By: LLR CAPITAL, L.P.,
Its General Partner
By: LLR CAPITAL, L.L.C.,
Its General Partner
By: /s/ Xxxxxx Xxxx
------------------------
Name: Xxxxxx Xxxx
Title: Partner
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