Exhibit 2.1
ASSET PURCHASE AGREEMENT
AGREEMENT dated as of June 28 1999, 9:00 a.m., by and between
SOUTHEAST RESEARCH PARTNERS, INC., a Delaware corporation ("Seller"), RESEARCH
PARTNERS INTERNATIONAL, INC., a Delaware corporation and the parent of Seller
("RPII"), and XXXX, XXXX & CO., INC., a New Jersey corporation ("Purchaser").
W I T N E S S E T H:
WHEREAS, Seller is engaged in the securities research and
institutional brokerage business (the foregoing is referred to hereinafter as
the "Business");
WHEREAS, Purchaser is engaged in the securities business;
WHEREAS, subject to the terms and conditions of this
Agreement, Purchaser desires to purchase from Seller, and Seller desires to sell
to Purchaser, certain of the assets of Seller related to the Business;
NOW, THEREFORE, in consideration of the mutual
representations, warranties, agreements and covenants hereinafter set forth, and
other valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE
1.01 Transferred Assets. Subject to the terms and conditions of this
Agreement, Seller hereby sells, transfers, assigns and conveys to Purchaser, and
Purchaser hereby purchases from Seller, on the date hereof (the "Closing Date"),
the assets and contract rights of Seller listed on Schedule 1.01 attached hereto
(the "Transferred Assets"). All assets and contract rights of Seller which are
not part of the Transferred Assets shall be deemed "Excluded Assets." Seller
acknowledges that certain of its employees shall become employed by Purchaser on
the Closing Date and shall be taking with them their know how and knowledge
regarding their business.
1.02 Assumed Obligations. Purchaser hereby assumes all of the
obligations and liabilities related to the Transferred Assets which arise out of
and accrue from the use or possession of the Transferred Assets from and after
the Closing Date ("Assumed Liabilities"). Purchaser shall assume no other
liabilities of Seller, all of which liabilities shall remain the responsibility
of Seller ("Unassumed Liabilities"). Seller and RPII acknowledge that the
Unassumed Liabilities include all of the obligations and liabilities arising out
of or accruing from the use or possession of the Transferred Assets prior to the
Closing Date.
1.03 Purchase Price. The purchase price ("Purchase Price") to be paid
by Purchaser to Seller for the Transferred Assets is $1,914,200, payable on the
Closing Date as follows:
(a) $875,000, by certified or official bank check or by wire
transfer to the order of Southeast Research Partners, Inc.; and
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(b) $1,039,200 by the delivery of stock certificates
("Preferred Stock Certificates") representing 1,039,200 shares of Series A
Preferred Stock ("Preferred Stock") of RPII, each duly endorsed in blank for
transfer or with an executed stock power.
The Parties agree that the Purchase Price be allocated in the manner set forth
below:
(i) Leases - $ -0-
(ii) Furniture, fixtures, equipment
and leasehold improvements - 160,000
(iii) Name and Goodwill - $ 1,754,200
-------------
$ 1,914,200
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1.04 Apportionments. The Parties shall apportion as of the Closing Date
any liability for rent, utility charges, fuel and other costs and expenses
incurred with respect to the Transferred Assets which are customarily
apportioned. In addition, all deposits, prepaid expenses, prepaid premiums and
the like with respect to the Transferred Assets shall be apportioned on the
Closing Date and the net amount thereof shall be returned to Seller; provided,
however, that Purchaser shall not be required to reimburse Seller for any
deposits, prepaid expenses, prepaid premiums or the like unless the items to
which such benefits relate constitute part of the Transferred Assets. Purchaser
shall also not be responsible or liable for any compensation, bonuses or other
employee benefits due to any employee of Seller listed on Schedule 1.04 hereto
("Key Employees") for services prior to the Closing Date, all of which shall
constitute Unassumed Liabilities.
1.05 Research Agreement; Cessation Agreement and Agreement for Exchange
of Stock and Group Employment Conditions. Simultaneously with the execution of
this Agreement, (a) RPII and Purchaser have executed a Research Agreement, which
provides for the payment of compensation by RPII to Purchaser for certain
research which Purchaser agrees to provide to RPII (which together with this
Agreement shall be referred to as the "Seller's Agreements"); (b) RPII and the
Key Employees, including certain owners of RPII's Series A Preferred Stock
("Former Shareholders" and together with the Key Employees, "Former Affiliates")
have executed a Cessation Agreement, which, among other things, addresses and
settles matters between such persons and the Seller and RPII ("Cessation
Agreement"); (c) Purchaser and the Former Shareholders have executed an
Agreement for Exchange of Stock and Group Employment Conditions, which, among
other things, provides for the Purchaser to acquire the Preferred Stock; and (d)
Purchaser and the Key Employees have executed an Employment Letter, which sets
forth, the terms and conditions of the Key Employees' employment with Purchaser
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and, the Key Employees' agreement to become employed by Purchaser upon such
terms and conditions, on the Closing Date. This Agreement, the Research
Agreement and the Agreement for Exchange of Stock and Group Employment
Conditions are hereinafter collectively referred to as the "Purchaser's
Agreements."
ARTICLE II
CLOSING
2.01 Sellers' Deliveries; Instruments of Conveyance and Transfer.
Seller and RPII are hereby delivering to Purchaser such bills of sale,
endorsements, assignments to the leases and service marks, and all other
instruments of transfer, reasonably satisfactory in form and substance to
Purchaser and its counsel, as shall be effective and necessary to vest in
Purchaser good and marketable title to the Transferred Assets, free and clear of
any Encumbrances (as defined in Section 7.01), together with the certificates
and other agreements, instruments and documents contemplated by Article VI
hereof.
2.02 Purchaser's Deliveries. Purchaser is hereby delivering to Seller
the Purchase Price as specified by Section 1.03 and the certificates and other
agreements, instruments and documents contemplated by Article VI hereof.
2.03 Closing. The deliveries referenced in Sections 2.01 and 2.02 above
shall take place at the closing, on the date hereof ("Closing Date").
2.04 Further Assurances Regarding the Transaction.
(a) Seller and RPII shall, from time to time after the Closing
Date, do all such further acts and things as may be reasonably requested by
Purchaser for the effective transfer and delivery of the Transferred Assets to
Purchaser, or for aiding and assisting Purchaser to put Purchaser in possession
and operating control of the Transferred Assets.
(b) Purchaser shall, from time to time after the Closing Date,
execute such documents and other papers and take such further actions as may be
reasonably requested by Seller to carry out the provisions hereof and the
transactions contemplated hereby, including, without limitation to help secure
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all consents and approvals required to permit the transfer of the Transferred
Assets, and to ensure that Excluded Assets remain the property of Seller as it
will then be known, notwithstanding the fact that the asset may still bear the
name "Southeast Research Partners" (e.g., bank accounts, purchase options,
warrants, other securities or convertible securities and other items imprinted
with the name "Southeast Research Partners"). Purchaser shall use its best
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all other things necessary, proper or advisable to consummate and make
effective as promptly as practicable the transactions contemplated by this
Agreement.
(c) (i) Seller and RPII shall execute such documents and other
papers and take such actions as may be reasonably requested by Purchaser to
insure that Purchaser assumes no liabilities other than the Assumed Liabilities
and that all third parties look solely to Seller or RPII with respect to any
Unassumed Liabilities.
(ii) Purchaser shall execute such documents and other
papers and take such actions as may be reasonably requested by Seller or RPII to
insure that Seller or RPII are no longer liable for the Assumed Liabilities
after the Closing and that all third parties look solely to Purchaser with
respect to any Assumed Liabilities.
(d) Purchaser shall transfer and deliver to Seller any cash or
other property that Purchaser may receive after the Closing Date in respect of
or arising out of any business or assets of Seller not being transferred to
Purchaser pursuant to this Agreement. If Purchaser receives after the Closing
any mail or other communications addressed to Seller, or any current executive
officer thereof, Purchaser may open such mail or other communications and (i) if
the contents thereof are cash or a check payable to Seller for services it has
performed or pursuant to an arrangement regarding Seller then Purchaser shall
promptly deliver or cause to be delivered to RPII such cash or checks, otherwise
(ii) if such material is correspondence, then Purchaser shall deal with the
contents thereof in its reasonable discretion; provided, however, that to the
extent that the mail or other communications relates to the Seller or the
Transferred Assets as of the Closing Date, Purchaser agrees to deliver promptly
or cause to be delivered to RPII all such mail or other communications.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER AND RPII
Seller and RPII represent and warrant to Purchaser as follows and
acknowledges that Purchaser is relying upon such representations and warranties
in connection with the purchase by Purchaser of the Transferred Assets and the
other matters contained in this Agreement:
3.01 Corporate Existence. Seller and RPII are corporations duly
organized and validly existing, in good standing, under the law of the State of
Delaware and are qualified to transact business as foreign corporations in each
other jurisdiction in which the conduct of its business or the ownership of its
properties or assets requires such qualification or authorization, except where
failure to so qualify would not result in, any material diminution in the value
of the Transferred Assets, a material increase in the obligations of Purchaser
pursuant to the Transferred Assets or the Assumed Liabilities or materially
interfere with the present and continued use of the Transferred Assets
("Material Adverse Effect").
3.02 Due Authorization; Enforceability; No Conflicts.
(a) Seller has full power and authority to enter into the
Seller's Agreements and to carry out the transactions contemplated thereby and
hereby. RPII has full power and authority to enter into the Seller's Agreements
and to carry out the transactions contemplated thereby. The execution, delivery
and performance of the Seller's Agreements by either Seller or RPII have been
duly authorized by all necessary corporate action by Seller and RPII, as the
case may be. The Seller's Agreements have been duly executed by Seller or RPII,
as the case may be, and constitute valid and legally binding obligations of
Seller or RPII, as the case may be, enforceable against such signatory in
accordance with their terms, except as the same may be limited by bankruptcy,
insolvency or other laws generally affecting creditors' rights or as may be
modified by a court of equity.
(b) The performance of the Seller's Agreements by Seller or
RPII, as the case may be, in accordance with their respective terms will not,
with or without the giving of notice or the passage of time, or both, conflict
with, result in a default, right to accelerate or loss of rights under, or
result in the creation of any encumbrance pursuant to, (i) any provision of the
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certificate of incorporation or by-laws of Seller or RPII, or (ii) any mortgage,
indenture or deed of trust or any material lease, license, franchise or other
agreement to which Seller or RPII is a party or by which it (or any of its
assets, properties, operations or business) may be bound or affected.
3.03 Title to Transferred Assets; No Encumbrances. (i) Seller has good
and marketable title to the Transferred Assets; (ii) none of the furniture,
equipment and fixtures which form a part of the Transferred Assets are subject
to any liens and none of the leases which form a part of the Transferred Assets
are subject to any material liens; and (iii) Schedule 3.03 contains a true and
complete list of the software licenses which constitute a part of the
Transferred Assets.
3.04 Agreements Valid; No Default. All the contracts, agreements,
leases, licenses and commitments listed on Schedule 1.01 are valid and binding,
enforceable in accordance with their respective terms, and are in full force and
effect. There is not under any such contract, agreement, lease, license or
commitment, any existing default by Seller, or any event which, after notice or
lapse of time, or both, would constitute a default by Seller or result in a
right to accelerate by any other person or a loss of any rights of Seller,
except for such defaults that would not, singly or in the aggregate, result in a
Material Adverse Effect. True and complete copies of all contracts, agreements,
leases, licenses, commitments and other documents listed on Schedule 1.01
(together with any and all amendments thereto) have been delivered to Purchaser.
3.05 Litigation. Except as set forth on Schedule 3.05, there is no
legal action, arbitration, governmental investigation or other legal or
administrative proceeding, nor any order, decree or judgment in progress,
pending or in effect, or to the knowledge of Seller threatened, against or
relating to the Transferred Assets.
3.06 No Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Seller.
3.07. Name. Other than as contemplated by Section 1.2 of the Research
Agreement, (i) to the best knowledge of Seller and RPII, Seller's use of the
name Southeast Research Partners, Inc. ("Name") does not conflict with any other
person's rights to use the Name; (ii) Seller has the sole and exclusive right to
use the Name within RPII and its affiliates and there is no agreement or
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limitation on RPII or Seller giving Purchaser the right to use the Name; and
(iii) neither Seller or RPII has granted, except as provided herein, or will
grant any other person the right to use the Name or acquiesced in the use of the
Name by any other person. Since March 7, 1997, the date RPII acquired Seller, no
person has brought any action or made any claim against Seller or RPII for the
use of the Name.
3.08 Year 2000 Compliance. The Year 2000 Compliance analyses provided
by Seller to Purchaser is a true and correct copy of the BDY2K compliance
disclosure filed with the NASD.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller and RPII as follows
and acknowledges that Seller and RPII are relying upon such representations and
warranties in connection with the sale by Seller of the Transferred Assets:
4.01 Corporate Existence. Purchaser is a corporation duly organized,
validly existing and in good standing under the law of the State of New Jersey
and is qualified to transact business as a foreign corporation in each other
jurisdiction in which the conduct of its business or the ownership of its
properties or assets requires such qualification or authorization, except where
failure to so qualify would not materially hinder Purchaser's ability to
consummate the transactions contemplated hereby.
4.02 Due Authorization; Enforceability; No Conflicts.
(a) Purchaser has full corporate power and authority to enter
into the Purchaser's Agreements and to carry out the transactions contemplated
hereby and thereby. The execution, delivery and performance of the Purchaser's
Agreements by Purchaser have been duly authorized by all necessary corporate
action by Purchaser. The Purchaser's Agreements have been duly executed by
Purchaser and constitute a valid and legally binding obligation of Purchaser
enforceable against Purchaser in accordance with its terms, except as the same
may be limited by bankruptcy, insolvency, or other laws generally affecting
creditors' rights or as may be modified by a court of equity.
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(b) The performance of the Purchaser's Agreements by Purchaser
in accordance with their respective terms will not, with or without the giving
of notice or the passage of time, or both, conflict with, result in a default,
right to accelerate or loss of rights under, or result in the creation of any
encumbrance pursuant to, (i) any provision of the certificate of incorporation
or by-laws of Purchaser or (ii) any mortgage, indenture or deed of trust or any
material lease, license, franchise or other agreement to which Purchaser is a
party or by which it (or any of its assets, properties, operations or business)
may be bound or affected.
4.03 Preferred Stock. Purchaser is the sole record and beneficial owner
of, and has good and marketable title to, the Preferred Stock, free and clear of
any Encumbrances.
4.04 Condition of Transferred Assets. Purchaser acknowledges that the
physical assets which form a part of the Transferred Assets transferred to
Purchaser hereunder, are being transferred "as is" with respect to the physical
nature of such assets.
4.05 No Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Purchaser.
4.06 Year 2000 Compliance. Purchaser acknowledges receipt and review of
Seller's Year 2000 Compliance material referenced in Section 3.08. Purchaser
acknowledges that it has been advised that the computer software and/or
equipment which form a part of the Transferred Assets must be replaced to
satisfy applicable Year 2000 compliance standards and that Seller's Year 2000
compliance plan set forth in the material referenced in Section 3.08 hereof has
not been fully implemented.
ARTICLE X
XXXXXXXXX
0X. Covenants of Seller and RPII.
5A.01 Change of Corporate Name; Covenant Not to Use Name. Seller is
hereby delivering to Purchaser a duly executed and acknowledged certificate of
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amendment to Seller's restated certificate of incorporation required to change
Seller's corporate name to a new name which does not contain the word
"Southeast" or any other name confusingly similar to "Southeast." Seller shall
file the certificate of amendment with the Secretary of State of Delaware and
such other documents in such other states where it is qualified to do business
as a foreign corporation, in order to effect its name change as soon as
practicable following the Closing Date. RPII and Seller agree that from and
after the Closing Date, the name Southeast Research Partners may only be used by
them (i) as contemplated by Section 1.2 of the Research Agreement and (ii) to
reference or describe Seller in a historical manner (e.g., XxxxxxxxxXxxxxxx.xxx
Inc., previously known as "Southeast Research Partners, Inc.") and not for the
purpose of advertising Seller or its affiliates by using the name Southeast
Research Partners, Inc.
5A.02 Assignment of Agreements. The cost and expenses of obtaining
consents to any leases, contracts or licenses which form a part of the
Transferred Assets ("Lease Consents") and any payments due or payable to the
landlord, lessor or other party as a result of the assignment of any Transferred
Asset shall be borne by the Seller and RPII and shall constitute an Unassumed
Liability. This Agreement shall not constitute an agreement to assign any
contract, license, lease or other agreement, or any claim, right or benefit
thereunder, if the assignment thereof requires the consent or approval of any
third party and such consent or approval is not obtained. If any such consent or
approval is not obtained, Seller, if requested by Purchaser, shall use its
reasonable best efforts to cooperate with Purchaser from and after the Closing
Date in any legal arrangement to provide for Purchaser all of the benefits
Seller was entitled to receive under any of the Transferred Assets. Seller and
RPII shall indemnify Purchaser for any claims, losses, damages and expenses
(including reasonable legal fees) incurred by Purchaser by reason of Seller not
obtaining the Lease Consents. Purchaser shall indemnify Seller and RPII for any
claims, losses, damages and expenses (including reasonable legal fees) incurred
by Seller and/or RPII by reason of either Seller or RPII continuing as an
obligor or guarantor with respect to any leases, contracts and/or licenses that
form a part of the Transferred Assets with respect to obligations relating to
periods on and after the Closing Date (but not periods before the Closing Date).
5A.03 Non-Assumed Liabilities. Seller agrees to pay and perform all
Unassumed Liabilities and Seller and RPII jointly and severally shall indemnify
Purchaser for any claims, losses, damages and expenses (including reasonable
legal fees) it may incur as a result of Seller's and RPII's non-compliance with
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this Section 5A.03 or third party claims against Purchaser or its affiliates
with respect to any Unassumed Liabilities.
(a) Non-Solicitation. For a period of two years after the
Closing Date, neither Seller nor RPII shall, directly or indirectly, solicit for
hire or hire any of the Key Employees, not including those listed on Schedule
5A.03 hereto ("Excluded Key Employees"), or allow or permit any of the Key
Employees (not including the Excluded Key Employees) to become an independent
contractor or consultant for Seller or RPII.
(b) Customer Accounts. Seller and RPII agree that they shall
not object to or hinder Purchaser's access to the names and addresses of the Key
Employees' customers and the Purchaser's solicitation of such customers after
the Closing Date or object to or hinder the processing of any properly signed
transfer agreements (ACAT Forms). Seller and RPII shall not solicit any of the
retail customers of the Key Employees (not including the Excluded Key Employees)
for a period of 90 days after the Closing Date.
5A.04 Insurance. RPII agrees to continue to maintain the Key Employees
on all health and medical insurance plans for employees and to pay for the
insurance of the Key Employees through the end of the month of the Closing, in
accordance with Seller's customary practice and procedures for employees.
5A.05 Licenses. RPII and Seller, jointly and severally, agree to pay or
reimburse Purchaser an amount not to exceed $50,000 for the cost of purchasing
software and licenses for software currently used by Seller in its business and
constituting part of the Transferred Assets if such purchases are required in
order for Purchaser to upgrade such software (but RPII and Seller need not pay
the incremental costs of the upgrades) or Purchaser must otherwise purchase such
software and the license thereto in order to use the software).
5A.06 Sales and Transfer Taxes. Seller hereby assumes full liability
for and shall pay the sales, transfer and similar taxes incurred as a result of
the sale of the Transferred Assets to Purchaser.
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5B. Covenants of Purchaser.
5B.01 Books and Records; Government Filings.
(a) Purchaser shall preserve and keep all books and records
with respect to the Transferred Assets for a period of at least seven years from
the Closing Date. After such seven-year period, before Purchaser shall dispose
of any such books and records, at least 90 days' prior written notice to such
effect shall be given by Purchaser to Seller and Seller shall be given an
opportunity, at its cost and expense, to remove and retain all or any part of
such books or records as it may select.
(b) If, in order to properly prepare documents required to be
filed with or appropriately respond to inquiries by governmental authorities,
regulatory authorities or in order to file any type of financial statement, it
is necessary that Seller or RPII be furnished with additional information
relating to the Transferred Assets or the Key Employees and such information is
in the possession of Purchaser, Purchaser shall furnish such information in a
timely manner to Seller or RPII. If, in order to properly prepare documents
required to be filed with or appropriately respond to inquiries by governmental
authorities, regulatory authorities or in order to file its financial
statements, it is necessary that Purchaser be furnished with additional
information relating to the Transferred Assets or the Key Employees and such
information is in the possession of Seller or RPII, Seller or RPII shall furnish
such information in a timely manner to Purchaser.
5B.02 Assumed Liabilities. Purchaser agrees to pay and perform all
Assumed Liabilities as they become due after the Closing Date and shall
indemnify Seller for any claims, losses, damages and expenses (including
reasonable legal fees) it may incur as a result of Purchaser's non-compliance
with this Section 5B.02 or third party claims against Seller or RPII with
respect to any Assumed Liabilities.
5B.03 Customer Accounts. Purchaser acknowledges and agrees that RPII
and Seller shall not be prohibited or restricted from soliciting any of the Key
Employee's customers (including the Excluded Key Employees) referenced in
Section 5A.03(b) hereof commencing 91 days after the Closing.
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5B.04 Severance. Purchaser agrees to pay to RPII within 30 days of the
Closing Date one-half of the amount of severance paid by RPII to Xxxx Xxxx up to
$15,000.
5C. Covenants of Both Parties.
5C.01 Non-Solicitation, No-Hire. For a period of one year from the
Closing Date, neither RPII or Seller on the one hand or Purchaser on the other
hand will solicit for hire or hire any research, corporate finance or management
personnel from the other party other than the Excluded Key Employees.
5C.02 Press Release; Public Announcements. The parties hereto shall not
make any public announcements in respect of this Agreement or the transactions
contemplated herein without prior consultation and approval as to the form and
content thereof from the other party. Notwithstanding the foregoing, Purchaser
(including its parent) or RPII may make disclosure which its counsel advises is
required by applicable law or regulation, in which case such reasonable advance
notice as is practicable in the circumstances shall be given to the other party
and the parties hereto shall use their best efforts to cause a mutually
agreeable release or announcement to be issued. Each of Seller and Purchaser may
also make appropriate disclosure of the transactions contemplated by this
Agreement to their respective executive officers, directors and professional
advisors.
5C.03 Allocation. Seller and Purchaser covenant and agree that each
shall prepare its Federal, state and local income tax returns employing the
allocation of the Purchase Price set forth in Section 1.03 hereof and will not
take a contrary position with respect to such allocation in any tax proceeding
or audit.
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ARTICLE VI
DELIVERIES AT CLOSING
6.01 Delivery by Seller and RPII on the Closing Date. Seller and RPII
are hereby delivering to Purchaser:
(a) Instruments of Transfer; Assignments. The xxxx of sale and
assignments of Seller's right, title and interest in and to all of the
Transferred Assets, duly executed by Seller and any other instruments of
transfer and conveyance required pursuant to Section 2.01.
(b) Certified Copies of Resolutions. Certified copies of the
duly adopted resolutions of the directors of Seller and RPII authorizing the
execution, delivery and performance of this Agreement and the other Seller's
Agreements by Seller and RPII and the consummation of the transactions
contemplated hereby and thereby.
(c) Consents. The Lease Consents.
(d) Certificate of Amendment. The certificate of amendment
referred to in Section 5A.01.
(e) Cessation Agreement. Copies of each of the Cessation
Agreements executed by RPII and all of the Key Employees.
(f) Other Documents. All other documents required to be
delivered by Seller or RPII or both hereunder or under any Seller's Agreement on
or prior to the Closing Date.
6.02 Delivery by Purchaser on the Closing Date. Purchaser is hereby
delivering to Seller:
(a) Payment. The cash payment required to be made by Purchaser
in accordance with Section 1.03(a).
(b) Preferred Stock Certificates. All of the Preferred Stock
Certificates duly endorsed in blank or with fully executed stock powers in favor
of RPII.
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(c) Certified Copy of Resolutions. A certified copy of
resolutions duly adopted by the Board of Directors of Purchaser authorizing the
execution, delivery and performance of this Agreement and the Purchaser's
Agreements by Purchaser.
(d) Employment Letters. Copies of each of the Employment
Letters executed by RBC and all of the Key Employees.
(e) Other Documents. All other documents required to be
delivered by Purchaser hereunder or under the Purchaser's Agreements on or prior
to the Closing Date.
ARTICLE VII
GENERAL PROVISIONS
7.01 Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"Closing Date" means the close of business on the date hereof.
"Encumbrances" means any mortgage, lien, security interest,
restriction, violation, assessment or encumbrance of any nature affecting in any
way the value of the assets or property involved.
"Party" means Purchaser or Seller or RPII (collectively,
"Parties").
"Representatives" of either Party means such Party's
employees, accountants, auditors, actuaries, counsel, financial advisors,
bankers, investment bankers and consultants.
"Tax" or "Taxes" means all income, gross receipts, sales,
excise, bulk transfer, use, employment, franchise, profits, property or other
taxes, fees, stamp taxes and duties, assessments, levies or charges of any kind
whatsoever (whether payable directly or by withholding), together with any
interest and any penalties, additions to tax or additional amounts imposed by
any taxing authority with respect thereto.
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7.02 Expenses. Except as otherwise provided herein, all costs and
expenses, including without limitation, fees and disbursements of
Representatives, incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the Party incurring such costs and
expenses, whether or not the Closing shall have occurred.
7.03 Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made as of the date delivered or mailed if delivered personally or mailed by
registered or certified mail (postage prepaid, return receipt requested) to the
Parties at the following addresses (or at such other address for a Party as
shall be specified by like notice, except that notices of changes of address
shall be effective upon receipt):
(a) If to Seller:
Research Partners International, Inc.
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxx
Chief Operating Officer, Executive Vice
President
Fax: (000) 000-0000
with a copy to:
Xxxxxxxx Mollen & Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxx Xxxxxx, Esq.
Fax No.: (000) 000-0000
(b) If to Purchaser:
Xxxx, Xxxx & Co.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxx X. Xxxxxxx, President
Xxxxxxx Xxxxxxx, Senior Vice President
Fax No.: (000) 000-0000
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with a copy to:
Pitney Xxxxxx, Xxxx and Xxxxx
000 Xxxxxx Xxxxx
Xxxxxxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxx
Fax: (000) 000-0000
7.04 Amendment. This Agreement may not be amended or modified except by
an instrument in writing signed by the Parties.
7.05 Waiver. At any time prior to the Closing, either Party may (a)
extend the time for the performance of any of the obligations or other acts of
the other Party, (b) waive any inaccuracies in the representations and
warranties of the other Party contained herein or in any document delivered
pursuant hereto and (c) waive compliance by the other Party with any of the
agreements or conditions contained herein. Any such extension or waiver shall be
valid if set forth in an instrument in writing signed by the waiving Party.
7.06 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
7.07 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any Party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the Parties shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
Parties as closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the extent possible.
7.08 Entire Agreement. This Agreement and the Schedules and Exhibits
hereto constitute the entire agreement and supersede all prior agreements and
undertakings, both written and oral, between the Parties with respect to the
subject matter hereof and are not intended to confer upon any other person any
rights or remedies hereunder. Notwithstanding the foregoing, the confidentiality
provisions set forth in the confidentiality agreement between RPII and
16
Purchaser, dated February 25, 1999 ("Confidentiality Agreement"), shall survive
and continue to bind the parties bound by such provisions through the execution,
consummation and any subsequent termination of this Agreement.
7.09 Assignment. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of the Parties.
7.10 Governing Law; Consent to Jurisdiction. This Agreement shall be
governed by, and construed in accordance with, the internal law of the State of
New York without regard to principles of conflicts of law. Each Party hereby
submits to the exclusive jurisdiction of the courts (city, state and federal)
located in the County of New York, State of New York, for any action, proceeding
or claim brought by any other Party pursuant to this Agreement or any other
agreement, instrument or other document executed and delivered in connection
with this Agreement or pursuant hereto. Service of process in any such action or
proceeding brought against a Party may be made by registered mail addressed to
such Party at the address set forth in Section 7.03 or to such other address as
such Party shall notify the other Party in writing is to be used for such
purpose pursuant to Section 2.03 (d). For purposes hereof, the address
designated for Seller shall also be the address designated for Seller's
shareholders.
7.11 Survival. None of the representations and warranties of Seller and
RPII or of Purchaser shall survive the Closing except the representations and
warranties of Seller and RPII contained in Section 3.01, 3.02(a), 3.02(b), 3.03
and 3.07 and the representations and warranties of Purchaser contained in
Sections 4.01, 4.02(a), 4.02(b), 4.03, 4.04 and 4.06 shall survive until the two
year anniversary of the Closing Date. Seller and RPII shall, jointly and
severally, indemnify Purchaser for any claim, losses, damages and expenses
(including reasonable legal fees) which Purchaser may incur as a result of any
breach by Seller and RPII of a surviving representation for a period of two
years. Purchaser shall indemnify Seller for any claim, losses, damages and
expenses (including reasonable legal fees) which Seller may incur as a result of
any breach by Purchaser of a surviving representation for a period of two years.
The covenants and agreements of Seller, RPII and Purchaser shall survive the
Closing.
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7.12 Counterparts. This Agreement may be executed in one or more
counterparts, and by the different Parties in separate counterparts, each of
which when executed shall be deemed to be an original but all of which when
taken together shall constitute one and the same agreement.
[The remainder of this page is blank.]
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.
SOUTHEAST RESEARCH PARTNERS, INC.
By: /s/ Xxxxx X. Xxxx
----------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
RESEARCH PARTNERS INTERNATIONAL, INC.
By: /s/ Xxxxx X. Xxxx
-------------------------------
Name: Xxxxx X. Xxxx
Title: Chief Operating Officer and
Executive Vice President
XXXX, XXXX & CO., INC.
/s/ Xxxxx X. Xxxxx
By: ------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
SCHEDULES
to
Asset Purchase Agreement
1.01 Transferred Assets
1.04 Key Employees
3.03 Software Licenses
3.05 Litigation
5A.03 Excluded Key Employees
SCHEDULE 1.01
TRANSFERRED ASSETS
A. All rights under the following Leases for real property: (i) lease dated
January 22, 1993, between Xxxx One, Inc. and Seller regarding premises located
at 0000 Xxxxxxxxx Xxxxxxxxx, Xxxx Xxxxx, Xxxxxxx; (ii) lease dated March 15,
1998, between X'Xxxxx Properties LLC and Seller regarding premises located at
000 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx; (iii) lease dated April 30, 1997,
between Spartan Madison Corp. and Seller regarding premises located at 000
Xxxxxxx Xxxxxx, Xxx Xxxx; and (iv) lease dated December 1, 1997, between
Buckingham Research Group, Incorporated and Seller regarding premises located at
000 Xxxxx Xxxx Xxx, Xxxx Xxxxx, Xxxxxxx.
B. Leasehold improvements and fixed assets and software programs and other
intangibles related thereto used at the above-referenced four locations, as
listed on the attachments to this Schedule.
C. All rights under contracts, leases and licenses, as listed on the attachments
to this Schedule.
D. All rights under and to the confidentiality agreements executed by all
potential buyers of Seller's services, as follows: RBC Dominion Securities,
Avalon Research Group, Mesirow Financial and Ernst & Company.
E. Names and addresses of customers of Key Employees.
F. The name "Southeast Research Partners, Inc." and all the goodwill associated
therewith.
SCHEDULE 1.04
Key Employees
Name
Betes, Xxxxxx
Xxxxx, Xxxxxxx
Xxxxxx, Xxxxxx
Xxxxxxx, Xxxxx
Xxxxx, Xxxxxx
Xxxx, Xxxxxxx
Xxxxx, Xxxxxxx
Xxxxx, Xxxxxx
Xxxxxxx, Xxxxxx
Xxxxx, Xxxxxx
Xxxx, Xxxxxxx
Xxxxxxxxx, Xxxxx
Xxxxxx, Xxxxx
Xxxxx, Xxxxxxx
Xxxxx, Xxxx
XxXxxxxx, Xxxxxx
Xxxxxxxxxx, Xxxxx
Xxxxxxxx, Xxxxxxxx
Xx, Xxxxxxxx
Xxxxxxx, Xxxxxxxx
XxXxxxx, Xxxxxx
XxXxxxxx, Xxxxx
Mix, Xxxx
Xxxx, Xxxxxxx
Xxxxxx, Xxxxxxxx
Xxxxxxxxx, Xxxxxxx
Xxxxxxxxxx, Xxxxxxxx
Xxxxxxx, Xxxxxx
Xxxxxx, Xxxx
Xxxxx, Xxxx
Xxxxxxxx, Xxxxx
Xxxxxxxxx, Xxx
Xxxxxxxxx, Xxxxxx
Xxxxx, Xxxxxx
Xxxxx, Xxxxxxx
Xxxx, Le Xxxx
SCHEDULE 3.03
Software Licenses
Boca Raton
10 MS Windows 95
2 MS Windows 98
3 MS Windows NT Workstation 4.0
1 MS Windows NT Server 4.0
1 Foxpro 2.5
New York
13 MS Windows NT Workstation 4.0
13 MS Office 97
Palm Beach
2 MS Windows NT Workstation 4.0
Boston (none- all hardware / software leased)
SCHEDULE 3.05
Litigation
Xxxxxxx and Xxxxxxx Todrni v. Southeast Research Partners, Inc., and
Xxxx Xxxxxxxx, NASD No. 98-03646.
The above matter is the only remaining open case against Southeast
Research Partners, Inc. ("SERP"). The Todrin arbitration was filed with the NASD
and, in November 1998, was submitted to SERP for a response. SERP filed a motion
for a more definite statement. In response to SERP's motion for a more definite
statement, claimants submitted an amended claim in February 1999. An answer was
submitted by SERP in March 1999.
Claimants allege that their account executive at SERP, Xxxx Xxxxxxxx,
executed unsuitable transactions in their account that resulted in a loss of
$80,000. Claimants allege that SERP is liable for failure to appropriately
supervise the activity in their account.
SERP responded that the activity in their account was consistent with
the information provided on the new account documentation. In addition, SERP
asserted that Josephthal, Lyon & Xxxx had contractually agreed to provide SERP
with certain "back office" functions, such as compliance. SERP asserted
cross-claims against Xxxxxxxx and Josephthal, Lyon & Xxxx for indemnification or
contribution, or both, as the case may be.
An arbitration panel has been selected but no hearing date has been
scheduled.
In addition, please be advised of the facts and circumstances
surrounding the trades executed for the Christie Group entered by Xxxx Xxxxx of
the Christie Group. Both the Christie Group and Xxxx Xxxxx failed to settle 3
transactions in March of 1999 resulting in a loss to RPII of approximately
$397,000. An investigative case is pending.
SCHEDULE 5A.03
Excluded Key Employees
Xxxx Xxxxx
Xxxxx Xxxx
Xxxx Xxxx
