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EXHIBIT 99.3
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "AGREEMENT") is dated as of
September 30, 2001 between Stockwalk Group, Inc., a Minnesota corporation (the
"Buyer"), Xxxxx X. Xxxxxxxxxx (the "TRUSTEE"), solely in his capacity as trustee
for the liquidation of the business of MJK Clearing, Inc., a Minnesota
corporation (the "DEBTOR"), for the purchase and sale of all right, title, and
interest of the Trustee in 1,000 shares (the "SHARES") of common stock, $100 par
value per share, of Xxxxxx Xxxxxxx Xxxxxxxx Xxxxxxx, Inc. a Minnesota
corporation (the "COMPANY"), representing all of the shares of capital stock of
the Company in possession of the Trustee.
RECITALS
Subject to the terms and conditions of this Agreement, the Trustee
desires to sell all right, title, and interest of the Trustee in the Shares to
the Buyer in consideration for the payment set forth herein.
The Buyer desires to acquire from the Trustee all right, title, and
interest of the Trustee in the Shares upon the terms and conditions of this
Agreement.
AGREEMENT
Accordingly, the parties hereby agree as follows:
ARTICLE I
TERMS OF THE TRANSACTION
1.1 Purchase and Sale of the Shares. Subject only to the entry of an
order by the United States Bankruptcy Court for the District of Minnesota
approving the purchase and sale of the Shares (the "ORDER"), the Trustee hereby
sells, transfers, and assigns to the Buyer all right, title, and interest of the
Trustee in the Shares.
1.2 Purchase Price and Payment. As the purchase price for all right,
title, and interest of the Trustee in the Shares, the Buyer shall pay $3.2
million to the Trustee on the date of the Order. In order to effect such
payment, the Buyer hereby absolutely, unconditionally, and irrevocably, subject
only to entry of the Order, authorizes the Trustee to withdraw such amount from
the account of the Buyer maintained at the Debtor.
1.3 Certificate for Shares. The Debtor has conditionally reflected the
transfer of the Shares to the Buyer on the stock records of the Company and, at
the request of the Buyer, has conditionally delivered such certificate,
registered in the name of the Buyer to the Trustee, as pledgee and secured
party, as more fully provided in Section 4.3. The only condition to final entry
of such transfer on the stock records of the Company and final delivery to the
Trustee of the certificate representing the Shares is the entry of the Order.
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1.4 Trustee Letter. In consideration of the purchase of all right,
title, and interest of the Trustee in the Shares by the Buyer, the Trustee has
executed and delivered to the Buyer, simultaneously with the execution and
delivery of this Agreement, the letter attached as Exhibit A hereto.
1.5 Further Assurances. From time to time after the date hereof, each
party shall, at the request of the other and without further consideration,
execute and deliver such other documents and instruments and take such other
actions as the requesting party may reasonably require to give effect to the
transactions contemplated hereby.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE BUYER
2.1 Sophistication. The Buyer acknowledges that its subsidiaries are
engaged in the securities business and that it understands the risks presented
by the transactions contemplated hereby. The Buyer further acknowledges that, as
an affiliate of the Company until September 27, 2001, it has substantial
knowledge concerning the Company and its financial condition and operations.
2.2 SEC Matters. The violation of the minimum net capital and customer
segregation requirements of the Securities and Exchange Commission (the "SEC")
by the Debtor beginning on or about September 25, 2001 did not result from,
directly or indirectly, any fraud, willful misconduct, or gross negligence of
the Buyer or any of its officers or directors.
ARTICLE III
COVENANTS
3.1 Trustee's Access. The Buyer shall cause to be provided to the
Trustee such access to the facilities, books, records, and personnel of the
Buyer and the Company as the Trustee may reasonably request in connection with
the administration of the estate of the Debtor.
3.2 Support Services. The Buyer shall provide such support services for
SWS Securities, Inc. as SWS Securities may reasonably request from time to time
in connection with the conduct of its clearing operations for the Assigned
Accounts during the Transition Period (as such capitalized terms are defined in
the Agreement dated as of the date hereof among SWS Securities, Inc., the
Trustee, and the Securities Investor Protection Corporation). Without limiting
the generality of the foregoing, during the Transition Period the Buyer shall
maintain in good standing, without default on the part of the Buyer, the office
lease for its Wayzata Boulevard facilities.
ARTICLE IV
INDEMNITY, REMEDIES, AND COLLATERAL
4.1 Indemnification. In the event of any misrepresentation or breach of
warranty contained herein by the Buyer, or in the event of any breach of any
covenant herein contained by the Buyer, the Buyer shall indemnify and hold
harmless the Trustee from and against any loss, claim, damage, or liability
resulting therefrom, and the Trustee shall be entitled to all remedies
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available to it at law or in equity. The foregoing indemnification obligation
shall expire immediately upon judicial approval of the Trustee's final report
and accounting of the affairs of the Debtor.
4.2 Additional Remedies in Certain Events. In the event of a breach of
warranty or misrepresentation by the Buyer with respect to the last sentence of
Section 2.2, the Trustee may, in its discretion, elect to rescind the purchase
and sale of the Shares pursuant hereto.
4.3 Collateral Security. Subject to the entry of the Order, to secure
its indemnification obligations under Section 4.1, the Buyer hereby grants to
the Trustee a security interest in, and hereby pledges to the Trustee, the
Shares. In order to perfect such security interest and pledge, the Buyer has
delivered the certificate for the Shares to the Trustee, as provided in Section
1.3, and has delivered to the Trustee a stock power for such Shares, executed in
blank. Upon a default by the Buyer in any of its obligations hereunder, the
Trustee may foreclose upon such security interest and pledge and/or exercise all
voting power with respect to the Shares. This right of foreclosure shall not
affect the other rights that the Trustee may have against the Buyer or the
Company at law or in equity.
4.4 Release of Collateral Security. Provided that the Trustee shall not
have theretofore foreclosed on the Shares and that foreclosure proceedings are
not then pending, the Trustee shall release the security interest and pledge on
September 30, 2003.
ARTICLE V
MISCELLANEOUS
5.1 Amendment. This Agreement may be amended, modified, or supplemented
only by written agreement of the Buyer and the Trustee.
5.2 Waiver of Compliance. Any failure of a party to comply with any
obligation, covenant, agreement, or condition herein, to the extent legally
allowed, may be waived in writing by the other, but any such waiver or failure
to insist upon strict compliance with the obligation, covenant, agreement, or
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure. Whenever this Agreement requires or permits consent
by or on behalf of any party hereto, the consent shall be given in writing in a
manner consistent with the requirements for a waiver of compliance as set forth
in this Section 5.2.
5.3 Announcements. No party may issue any press release or make any
public announcement relating to the subject matter hereof without the prior
written approval of the other party, which may not be unreasonably withheld;
provided, however, that a party may make any public disclosure it believes in
good faith is required by applicable law or regulations or any listing agreement
concerning its publicly traded securities.
5.4 Notices. All notices, requests, demands, and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given (a) on the date of service if served personally on the party to whom
notice is to be given, (b) on the day of transmission if sent via facsimile
transmission to the facsimile number given below, and telephonic confirmation of
receipt is obtained promptly after completion of transmission, (c) on the day
after delivery to Federal Express or similar overnight courier or the Express
Mail service
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maintained by the United States Postal Service, or (d) on the fifth day after
mailing, if mailed to the party to whom notice is to be given, by first-class
mail, registered or certified, return-receipt requested, postage prepaid and
properly addressed, to the party as follows:
(1) If to the Buyer:
Stockwalk Group, Inc.
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Chief Executive Officer
(2) If to the Trustee:
Xxxxx X. Xxxxxxxxxx, Trustee
Faegre & Xxxxxx LLP
2200 Xxxxx Fargo Center
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
5.5 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties and their respective successors and
permitted assigns, but neither this Agreement nor any of the rights, interests,
or obligations hereunder may be assigned or delegated by any party without the
prior written consent of the other party or parties. This Agreement is not
intended to confer upon any other person except the parties any rights or
remedies hereunder.
5.6 Governing Law. This Agreement shall be governed by the laws of the
State of Minnesota, without giving effect to choice-of-law principles, except
for those provisions that may be governed by federal law. The parties agree that
the United States Bankruptcy Court for the District of Minnesota shall have
exclusive jurisdiction to hear any disputes between them arising out of this
Agreement.
5.7 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
5.8 Entire Agreement. This Agreement embodies the entire agreement and
understanding of the parties in respect of the subject matter contained herein
and supersedes all prior agreements and understandings among the parties with
respect to that subject matter. There are no restrictions, promises,
representations, warranties (express or implied), covenants, or undertakings of
the parties, other than those expressly set forth or referred to in this
Agreement.
5.9 Severability. If any provision hereof is held by a court of
competent jurisdiction to be invalid, void, or unenforceable, the remainder of
the provisions hereof shall continue in full force and effect and shall in no
way be affected or invalidated.
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In witness whereof, the parties have caused this Agreement to be executed as of
the date first written above.
STOCKWALK GROUP, INC.
By /s/ Xxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman and CEO
TRUSTEE
/s/ X.X. Xxxxxxxxxx
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Xxxxx X. Xxxxxxxxxx, solely in his capacity as
Trustee for the liquidation of the business of
MJK Clearing, Inc.
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September 30, 2001
Xxxxx X. Xxxxxx
Stockwalk Group, Inc.
0000 Xxxxxxx Xxxx. Xxxxx 000
Xxxxxxxxxxx, XX 00000
Dear Xx. Xxxxxx:
This letter is delivered in connection with that certain Stock Purchase
Agreement dated as of September 30, 2001 (the "Agreement") between Stockwalk
Group, Inc. ("Stockwalk") and Xxxxx X. Xxxxxxxxxx (the "Trustee"), solely in his
capacity as trustee for the liquidation of the business of MJK Clearing, Inc., a
Minnesota corporation (the "Debtor").
The Trustee agrees that, upon approval of the Agreement by the Bankruptcy Court,
the Trustee will permit Stockwalk to withdraw up to $1,500,000 from its account
with the Debtor for the sole purpose of making a capital contribution to Miller,
Johnson, Steichen, Kinnard, Inc. ("MJSK").
On October 31, 2001, if nothing in the Trustee's investigation under 15 U.S.C.
Section 78fff-1(d) has caused him to believe that any facts or circumstances
exist which would support a claim by the liquidating estate of the Debtor (the
"Estate") against Stockwalk or any officer or director of Stockwalk, the Trustee
may determine, in his sole discretion, to permit Stockwalk to withdraw an
additional $1,500,000 from its account at the Debtor for the sole purpose of
making a capital contribution to MJSK.
On December 31, 2001, if nothing in the Trustee's investigation under 15 U.S.C.
Section 78fff-1(d) has caused him to believe that any facts or circumstances
exist which would support a claim by the liquidating estate of the Debtor (the
"Estate") against Stockwalk or any officer or director of Stockwalk, the Trustee
may determine, in his sole discretion, to permit Stockwalk to withdraw an
additional $1,500,000 from its account at the Debtor for the sole purpose of
making a capital contribution to MJSK.
No such permitted withdrawals from Stockwalk's account at the Debtor shall
result in, be construed as or operate as a waiver or release of any claims that
the Trustee or the Estate has or may have against Stockwalk or prevent the
Trustee from recovering such amounts from Stockwalk if the Trustee discovers
facts or circumstances which would support a claim by the Trustee or the Estate
against Stockwalk or any officer or director of Stockwalk.
Sincerely,
Xxxxx X. Xxxxxxxxxx, solely in
his capacity as trustee for the
liquidation of the business of
MJK Clearing, Inc.
