Exhibit 10.1
RESEARCH AGREEMENT
RESEARCH AGREEMENT dated as of June 28, 1999, at 9:00 a.m., by
and between RESEARCH PARTNERS INTERNATIONAL, INC., a Delaware corporation
located at Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("RPII") and XXXX,
XXXX & CO., INC., a New Jersey corporation located at 000 Xxxxx Xxxxxx Xxxxxx,
Xxxxxxxxxx, XX 00000 ("RBC").
WITNESSETH:
WHEREAS, RBC is in the securities business and provides
research;
WHEREAS, RPII is a holding company engaged, through its
subsidiaries, in the securities business;
WHEREAS, RPII and Southeast Research Partners, Inc. ("SERP"),
a wholly-owned subsidiary of RPII, have entered into an asset purchase agreement
with RBC, dated the date hereof ("Asset Purchase Agreement"), pursuant to which
RPII and SERP are selling certain of SERP's assets to RBC;
WHEREAS, RPII desires to purchase research from RBC and RBC
agrees to sell its research to RPII on the terms and conditions set forth
herein.
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:
1. Obligation to Provide Research. During the term of this Agreement, RBC
agrees to provide RPII and its subsidiaries with its securities research,
including daily, weekly and special topic reports and all notes thereto and
updates thereon (collectively, "Research"). RBC covenants that the Research to
be provided shall be substantially the same as the type of research which RBC
and SERP currently provide. Notwithstanding the foregoing, (i) RBC is not
required to provide research with respect to any of the Excluded Companies (as
defined below); (ii) RBC may discontinue covering any particular company or
securities; and (iii) from time to time RBC may change the format and structure
of the Research provided. Research may be provided under the name "Southeast
Research Partners" or "Xxxx, Xxxx & Co." or any derivation thereof.
1.1 Use of Research by RPII; Non-Use by RBC.
1.1.1 RBC agrees that it shall provide the Research to
(a) RPII and its subsidiaries (the "RPII Entities") and (b) Early Bird Investor
AG, a Swiss public company, E B Investor (Jersey) Limited, a company established
under the laws of Jersey, Channel Islands and A&A Investment Management AG
(previously known as GKN Asset Management AG), a company established under Swiss
law (collectively the "Early Bird Entities"). The RPII Entities and the Early
Bird Entities shall have unrestricted access to the Research for their own use
and the RPII Entities (but not the Early Bird Entities) may, at no charge to the
customers, provide the Research to their customers (including Internet
customers). Neither the RPII Entities or the Early Bird Entities shall be
authorized to resell or provide the Research to any other person.
1.1.2 RBC shall retain the right to resell and provide
the Research to its retail and institutional clients and to resell the Research
to third parties; provided, however, that until the one-year anniversary of the
date hereof, RBC shall not sell or provide, or agree to sell or provide, for
cash or other consideration or for no consideration, the SERP Research to any
broker dealer with its principal office located in Florida or New York State or
to any entity (excluding FirstCall or Multex) who offers the Research to its
customers through the Internet. Notwithstanding the foregoing, RBC can provide
the Research to BankAtlantic Bancorp, Inc. and any affiliate thereof (regardless
of their locations), but RBC covenants that BankAtlantic Bancorp., Inc. and its
affiliates shall continue to be bound by the restriction contained in this
paragraph. An affiliate of BankAtlantic Bancorp, Inc. shall mean any entity of
which BankAtlantic Bancorp, Inc. owns at least 25% of its outstanding capital
stock. SERP Research means research provided by the Key Employees (as defined in
the Asset Purchase Agreement) directly or indirectly as employees of RBC.
1.2 Source of Research May Be Disclosed. The RPII Entities and
the Early Bird Entities will disclose that RBC/SERP is the source of the
Research. In addition, the provision of RBC/SERP's Research may be referenced in
the context of mentioning the performance results of Early Bird Investor AG and
E B Investor (Jersey) Limited.
1.3 Delivery of Research. RBC agrees to provide the Research
to the RPII Entities on a timely basis, each business day by noon with respect
to daily reports; RBC and SERP's customary day of the week with respect to
weekly reports; and as soon as practicable with respect to special reports and
updates. Unless RPII consents to a lesser number of copies, RBC shall provide to
the RPII Entities the quantities of copies of the Research in substantially the
same number as previously provided by SERP to RPII during the last six month
period.
1.3.1 Morning Call. Before the opening of the market on
each business day, a member of the RBC staff will call the research designee at
RPII to discuss the Research.
1.3.2 Cooperation. The parties agree to cooperate with
each other to adjust, from time to time the substance, manner and timing of the
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provision of Research provided thereunder by RBC to the RPII Entities, but no
party shall be obligated to agree to any suggested change.
2. Compensation.
2.1 In General. As compensation for RBC's provision of
Research to RPII, except as set forth in paragraph 3 hereof, RPII shall pay to
RBC an "override" on gross commissions which are generated by the RPII Entities
on the sale or purchase to or from customers of RPII Entities of securities of
companies that are the subject of the Research ("Subject Securities") during the
term of this Agreement but not in connection with a registered public offering
or private placement by a company or a selling shareholder. The "override"
payable by RPII to RBC during the first full 12 commission months and during the
remainder of the commission month from the date hereof (which shall be
calculated based upon actual commissions generated) shall be 10% of the gross
commissions. During the remainder of the term of this Agreement (48 full
commission months), the override shall be 7.5% of the gross commissions
generated by the sale or purchase of the Subject Securities through the Retail
Force and 10% of the gross commissions generated by the sale or purchases of the
Subject Securities through Non-Retail Brokerage. For the purposes of calculating
the override, the "Retail Force" shall refer to the retail brokers employed by
the RPII Entities and "Non-Retail Brokerage" shall refer to sales and purchases
(i) generated by the Internet system established by the RPII Entities, (ii) to
or from the Early Bird Entities and (iii) any other sales or purchases by RPII
for the account of others but not in connection with a registered public
offering or private placement by a company or a selling shareholder; provided,
however, that RBC shall be entitled to only a 5% override with respect to the
purchase and sales of the following Subject Securities: Xxxxxxxxx Industries,
Inc., Vicon Industries, Inc., WinStar Communications, Inc. and Encore Medical,
Inc.
2.2 Early Bird. During the term of this Agreement, RBC shall
be entitled to retain only 12% of the gross commissions generated on sales or
purchases of the Subject Securities effected by RBC to or from the Early Bird AG
account and RBC shall tender monthly to RPII's designee the balance of any such
commission. For purposes of this paragraph and Section 2.1 above, gross
commissions shall include agency commissions and xxxx-ups on principal trades
and other forms of compensation derived from selling securities to or buying
securities from a customer, not including in connection with a public offering,
or a private offering pursuant to Regulation D promulgated under the Securities
Act, all without deduction or offset. RPII shall authorize Early Bird AG account
trades made through RBC to count against Early Bird AG's minimum trading
requirement with RPII.
2.3 Monthly Payments and Reports. The compensation due
pursuant to Section 2.1 shall be paid monthly to RBC within 10 business days of
the end of each month. RPII shall provide monthly reports reflecting the basis
upon which such compensation shall be paid. RBC shall have the right, at its
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expense, to audit such monthly reports. RPII agrees to provide RBC and its
agents access to the RPII Entities records to audit such reports.
3. Excluded Subject Securities - Prior Banking Relationship. RPII has
served as an investment banker for the companies (the "Excluded Companies")
listed on Schedule I attached hereto, as shall be amended from time to time in
accordance with this paragraph. Securities of such Excluded Companies shall not
be "Subject Securities" under this Agreement and RBC shall not be entitled to an
override on gross commissions with respect to the sales or purchases of such
securities. If any Excluded Company is acquired by another company (which is not
an Excluded Company) the successor company shall not be considered an Excluded
Company. RPII may add a company to the list of Excluded Companies if RBC was not
providing research for such company and within 5 business days after any of the
following events, RPII sends notice to RBC: RPII enters into a written agreement
to serve as an investment banker for such company or otherwise to participate in
or effects a public or private offering of securities for such company.
RBC has no obligation to provide RPII with Research on any
Excluded Company, even if RBC otherwise covers such an Excluded Company for its
research generally.
4. Term and Termination.
4.1 Term. The term of this Agreement shall begin on the date
hereof and shall continue until the last day of the 60th full commission month
following the date hereof, unless otherwise extended to a later date or
terminated on an earlier date by mutual agreement of the parties.
4.2 Termination. This Agreement may be terminated prior
to the end of the term:
4.2.1 By mutual written consent of both parties to
this Agreement.
4.2.2 By RPII or RBC if a material default or breach
shall be made by the other party with respect to the due and timely performance
of any of its covenants and agreements contained herein; provided, however, if
such default could be cured, notice has been given and such default has not been
cured within a reasonable period of time and has not been waived.
4.3 Effect of Termination.
4.3.1 In the event of termination pursuant to
Section 4.2.1 above, all further obligations of the parties shall terminate, no
party shall have any right against the other party hereto, and each party shall
bear its own costs and expenses.
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4.3.2 In the event of a termination by either party
pursuant to Section 4.2.2 above, it is agreed that such termination shall not
relieve any party from liability for any breach of this Agreement or defeat or
impair the right of any party to pursue such relief as may otherwise be
available to it as a result of a breach of this Agreement.
5. Consent to Jurisdiction. Each party hereto 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
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 to such party at the address set forth on
page one of this Agreement or to such other address as such party shall notify
the other party in writing.
6. Miscellaneous. This agreement (a) may only be modified by a written
instrument which is executed by both of us, (b) shall be governed by the laws of
the State of New York applicable to contracts made and to be wholly performed
therein, (c) constitutes our entire agreement with respect to the subject matter
hereof, (d) shall be binding upon, and inure to the benefit of, both of us and
our respective successors and assigns and (e) may be signed in counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the first date written above by their respective officers duly
authorized.
RESEARCH PARTNERS INTERNATIONAL, INC.
/s/ Xxxxx X. Xxxx
By: ___________________________________
Xxxxx X. Xxxx, Chief Operating Officer and
Executive Vice President
XXXX, XXXX & CO.
/s/ Xxxxxxx X. Xxxxx
By: ___________________________________
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
Schedule I
As of May 27, 1999, the list of Excluded Companies is as follows:
Enamelon
Global Telecom
Individual Investor
Millbrook Press
Niagara
PTI Holding
Teardrop Golf
Ariel
Globix
ACTV
Source Media
