Exhibit 10.2
CESSATION AGREEMENT
This CESSATION AGREEMENT, dated as of June 28, 1999, between
RESEARCH PARTNERS INTERNATIONAL, INC. ("RPII"), each of the persons listed on
Schedule I hereto (individually and collectively "Former Shareholder(s)") and
each of the persons listed on Schedule II hereto (individually and collectively
"Former Employee(s)" and together with the Former Shareholders, "Former
Affiliates").
WHEREAS, in connection with a merger ("Merger") of Southeast
Research Partners, Inc. ("SERP") with and into SERP Merger Corp., a wholly-owned
subsidiary of RPII, pursuant to a Merger Agreement ("Merger Agreement") dated
March 7, 1997, by and among RPII, SERP Merger Corp., SERP, the Former
Shareholders, Xxxxx X. XxXxxxxx ("XxXxxxxx") and Xxxxxx XxXxxxx ("XxXxxxx" and,
together with XxXxxxxx, "Executive Management"), founders and Managing Directors
of SERP,, the Former Shareholders received cash, RPII common stock and Series A
Preferred Stock of RPII ("Preferred Shares") in exchange for all of their shares
of the common stock of SERP;
WHEREAS, pursuant to an Asset Purchase Agreement ("Asset
Purchase Agreement"), dated the date hereof, by and between RPII, SERP and Xxxx,
Xxxx & Co., Inc. ("RBC"), SERP is selling certain of its assets to RBC;
WHEREAS, pursuant to an Agreement For Exchange of Stock and
Group Employment Conditions, dated the date hereof, by and between RBC and the
Former Shareholders, RBC is continuing the employ of key personnel and other
employees of SERP and purchasing all of the Preferred Shares owned by the Former
Shareholders in exchange for stock of BankAtlantic Bancorp, Inc., a Florida
corporation which is a thrift holding company and the parent company of RBC;
WHEREAS, on the date hereof, in connection with the closing
("Closing") of the transactions contemplated by the Asset Purchase Agreement,
RBC is tendering to a wholly-owned subsidiary of RPII all of the Preferred
Shares purchased from and owned by the Former Shareholders; and
WHEREAS, in view of the fact that immediately following the
Closing, (i) the Former Shareholders will no longer own any Preferred Shares and
therefore, no longer be entitled to the rights and benefits of such Preferred
Shares, and (ii) the Former Employees will no longer be employed by SERP, the
parties hereto desire to clarify their post-Closing rights and obligations.
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 agree as follows:
1. Termination of Merger Agreement; Exceptions; Cancellation of
Preferred Shares; Remedial Action.
1.1 Termination of Merger Agreement. The Merger Agreement is
hereby terminated and of no further force and effect, with the exception of the
following sections, which shall survive the termination of the Merger Agreement:
1.1.1 Exceptions
a. Sections 5.08 (a), (b), (e) and (f)
of the Merger Agreement relating to confidentiality (provided, however, that (i)
the customer lists of the Former Employees and (ii) the clients, trade secrets,
customer leads, information concerning customers and the "know-how" or
methodologies of the Former Employees regarding their SERP business or the
business that they conducted on behalf of Early Bird Investor AG ("Early Bird")
shall no longer be deemed confidential information of RPII or its wholly-owned
subsidiary SERP); and
b. Sections 7.01 (ii), 7.02 (ii),
7.03 and 7.06 of the Merger Agreement relating to indemnification for the
operations of SERP prior to March 7, 1997 (and not with respect to
representations and warranties set forth in the Merger Agreement) and such
provisions shall survive until March 7, 2000.
1.1.2 Effect of Termination of Merger Agreement.
Except as set forth in 1.1.1 above and as otherwise provided in this Agreement,
all further obligations of the parties to the Merger Agreement to each other
shall terminate, no party shall have any right against the other party thereto.
1.2 Cancellation of Preferred Shares. All of the Preferred
Shares owned by any Former Shareholder are being retired by RPII simultaneously
with the execution of this Agreement and the Former Shareholders shall have no
rights or benefits with respect thereto.
1.3 Remedial Action. If any Former Affiliate commits a
material breach, or threatens to commit a material breach, of any of the
provisions of this Cessation Agreement, RPII shall have the right and remedy to
have the provisions of this Cessation Agreement specifically enforced by any
court having equity jurisdiction, it being acknowledged and agreed by each
Former Affiliate that his or her acts contemplated hereunder are of a special
and unique character and that any such material breach or threatened material
breach will cause irreparable injury to RPII and that money damages will not
provide an adequate remedy to RPII.
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2. Payment. The following payments or payment arrangements shall be
made or effected on July 15, 1999 in accordance with RPII's customary payment
practices.
2.1 RPII's Payment to Former Affiliates. RPII shall pay to
each Former Affiliate, his or her compensation pro-rated through the date of the
Closing, less applicable withholding and other deductions required by federal,
state and local law consistent with past practice.
2.3 Escrow and Reserves. Pursuant to the Merger Agreement, an
escrow account of $100,000 ("Escrow Fund") was established and maintained by an
escrow agent ("Escrow Agent") pursuant to an escrow agreement ("Escrow
Agreement") to cover adjustments to the purchase price paid under the Merger
Agreement, based on SERP's audited net tangible book value. The parties hereto
acknowledge and agree that the entire Escrow Fund shall be released to RPII
whenever it requests same from the Escrow Agent. This Agreement shall constitute
written instructions by the Former Shareholders to the Escrow Agent under the
Escrow Agreement to dispose of the Escrow Fund as indicated above. RPII
represents that it will maintain $3,775 on its books as a reserve for the
purpose of reimbursing RPII for costs it may incur in connection with the
outstanding arbitrations regarding the Former Affiliates.
2.4 Cash Payments to Former Shareholders Become Vested. Cash
payments made to the Former Shareholders pursuant to the Merger Agreement, shall
be fully vested and not subject to forfeiture to RPII pursuant to the terms of
the Merger Agreement.
2.5 Vesting of Stock and Stock Options. Any vesting provisions
contained in any stock option or other agreement relating to stock of RPII or
options to purchase stock of RPII granted to Former Affiliates to purchase any
shares of RPII shall be honored by RPII in accordance with the terms of such
agreement; provided, however, that any stock of RPII or options to purchase
stock of RPII which have not vested as of the day of Closing shall be
accelerated and will be deemed vested as of the day of the Closing.
Notwithstanding the foregoing, all options which are exercisable or become
exercisable pursuant to the preceding sentence, but which are not exercised as
of the date of Closing, shall expire on the 91st day after the Closing date.
2.6 Vesting of 401(k) Employer Contribution. Any matching
contribution of RPII's common stock to the account of a Former Affiliate, to the
extent possible and in the manner provided for under RPII's 401(k) plan, shall
"vest" in the account of such Former Affiliate and such shares of common stock
may be transferred pursuant to and at the direction of such Former Affiliate.
2.7 Loan Forgiveness. RPII hereby forgives loans made to Xxxx
Xxxxx and Xxxxxxx Xxxxx in the aggregate amount of $41,666,67 and to Xxxxxxxx
Xxxxxxx, L. Xxxxxx Xxxxx, Xxxxxx Xxxxx and Xxxxxxx Xxxxxxxxx.
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3. Representations, Warranties and Covenants of the Former Affiliates.
3.1 Former Affiliates. Each of the Former Affiliates severally
and not jointly represents, warrants and covenants to RPII and SERP as follows
and acknowledges that RPII and SERP are relying upon such representations,
warranties and covenants in connection with the consummation of the transactions
contemplated by the Cessation Agreement and the Asset Purchase Agreement:
3.1.1 Except as otherwise provided in this
Cessation Agreement, he or she expressly waives any rights or claims that he or
she may have or assert, as a result of being an owner of Preferred Shares.
3.1.2 That in deciding to execute this
Cessation Agreement, he or she has been advised to consult with an attorney
and/or any other advisors of his or her choice and has relied entirely upon his
or her own judgment, and that of his or her counsel, and that he or she has read
this Cessation Agreement and has adequate time to consider its terms and effects
and to ask questions that he or she may have of anyone, including legal counsel.
3.1.3 Other than as set forth in Schedule 3.1.3
attached hereto, (a) there is no action, suit, arbitration, or other proceeding
pending or to his or her best knowledge, threatened against him or her before
any court, federal, state, municipal or other governmental department or agency
or other tribunal; and (b) he or she is not subject to any order, judgment,
injunction or decree which could materially adversely affect RPII or SERP. He or
she has not filed any action, complaint, charge, grievance or arbitration or
commenced any other proceeding, administrative or judicial regarding RPII and/or
SERP.
3.1.4 He or she understands that this agreement
is legally binding. He or she had voluntarily chosen to enter into this
agreement and has not been forced or pressured in any way to sign it. Each of
the Former Employees has been advised to consult with an attorney prior to
executing this Cessation Agreement and the General Release annexed hereto as
Exhibit A. He or she, in executing this Cessation Agreement and the General
Release, has not relied upon any representation or statement not set forth
herein made by RPII or SERP with regard to the subject matter, basis or effect
of this Cessation Agreement or otherwise.
3.1.5 He or she has full power and authority to enter
into this Cessation Agreement and to carry out the transactions contemplated
hereby. This Cessation Agreement has been duly executed by him or her and
constitutes a valid and legally binding obligation of him or her enforceable
against him or her 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 in an action for specific
performance.
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3.1.6 To the best of his or her knowledge,
the performance of this Cessation Agreement by him or her in accordance with its
terms will not, with or without the giving of notice or the passage of time or
otherwise, conflict with, or result in a breach or violation of or constitute a
default under any material contract or other material agreement to which he or
she is a party (other than as contemplated by this Cessation Agreement),
terminate or modify or give any third party the right to terminate or modify,
the provisions or terms of any material contract to which SERP or RPII is a
party relating to him or her, or result in any suspension, revocation,
impairment, forfeiture or non renewal of any material permit, license,
qualification, authorization or approval applicable to SERP.
3.1.7 Except as set forth in Schedule 3.1.7
hereof, he or she has at all times during his or her employment with SERP,
conducted his or her business in compliance in all material respects with all
applicable laws, rules, regulations and court or administrative orders and
processes including without limitation, any that relate to broker-dealer
regulations and internal compliance, and if applicable, supervisory rules of
SERP and/or GKN Securities Corp.
3.1.8 Each of the Executive Management, jointly
and severally represents to RPII and SERP, and acknowledges that RPII and SERP
are relying upon such representations in connection with the consummation of the
transactions contemplated by this Cessation Agreement and the Asset Purchase
Agreement, that the representations of SERP in Sections (3.03 (ii) -- only to
the best of their knowledge), 3.04, 3.05, 3.06 (3.07(i) -- only to the best of
their knowledge) and 3.07(ii), (iii) and the remainder of 3.07 of Article III of
the Asset Purchase Agreement are true and correct in all respects.
3.2 Each Former Affiliate has executed the Specific Release
attached as Exhibit A hereto and acknowledges and that it shall be delivered to
RPII upon its execution of this Agreement.
3.3 The Executive Management have executed the appropriate
resignations attached as Exhibit B hereto and acknowledge that they shall be
delivered to RPII upon its execution of this Agreement.
4. Representations and Warranties of RPII and SERP. RPII and SERP,
jointly and severally, represents and warrants to each Former Affiliate, as
follows:
4.1 Each of RPII and SERP represents that it is a corporation
duly organized and validly existing under the law of the State of its
incorporation and is qualified to do business in each State in which it is
required to so qualify.
4.2 Each of RPII and SERP has full corporate power and
authority to enter into this Cessation Agreement and to carry out the
transactions contemplated hereby. The execution, delivery and performance of
this Cessation Agreement by each of RPII and SERP has been duly authorized by
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all necessary corporate action. This Cessation Agreement has been duly executed
by each of RPII and SERP and constitutes a valid and legally binding obligation
of each of them enforceable against them 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 in an
action for specific performance.
4.3 The performance of this Cessation Agreement by each of
RPII and SERP in accordance with its 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 either RPII or SERP, or (ii) any mortgage, indenture or deed of
trust or any material lease, license, franchise or other agreement to which
either RPII or SERP is a party or by which either of them (or any of their
respective assets, properties, operations or business) may be bound or affected.
5. Additional Covenants of Former Affiliates.
5.1 Each Former Affiliate shall execute such documents and
other papers and take such further actions as may be reasonably required or
requested by RPII to carry out the transactions contemplated hereby and by the
Asset Purchase Agreement. Each Former Affiliate shall use his or her best
efforts to fulfill his obligations under and to take or cause to be taken, all
actions and to do, or cause to be done, all other things necessary proper or
advisable or as reasonably requested by RPII to consummate or make effective, as
promptly as possible, the transactions and covenants contemplated by this
Cessation Agreement (including, without limitation in Section 2 hereof), the
Asset Purchase Agreement, the Research Agreement contemplated by the Asset
Purchase Agreement and the Agreement for Exchange of Stock and Group Employment
Conditions contemplated by the Asset Purchase Agreement.
5.2 Each Former Affiliate shall indemnify and hold harmless
RPII and SERP and their respective directors, officers and agents, from and
against, and shall reimburse such persons for any and all loss, liability,
claim, damage and expense whatsoever (including, but not limited to, reasonable
attorneys' fees and costs) to which any of them may become subject, arising out
of or relating to (a) the breach of such Former Affiliate's representations,
warranties and/or covenants contained in this Cessation Agreement or (b) any
investigation of or claim, order, fee or award arising out of such Former
Affiliate's brokerage activities by any governmental authority, agency or
customer.
5.3 Each Former Affiliate shall execute such documents and
other papers and take such further actions and cooperate with RPII in any manner
as may be reasonably required or requested by RPII in connection with RPII's
defense of any complaint, claim, investigation or other matter relating to such
Former Affiliate.
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6. Covenants of RPII and SERP.
6.1 Each of RPII and SERP shall execute such documents and
other papers and take such further actions as may be reasonably required or
requested by any Former Affiliate to carry out the provisions hereof and the
transactions contemplated hereby. Each of RPII and SERP 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 propr or available or as reasonably requested
by any Former Affiliate to consummate and make effective, as promptly as
possible the transactions and covenants contemplated by this Cessation Agreement
(including, without limitation in Section 2 hereof).
6.2 Each of RPII and SERP will cooperate with the Former
Affiliates and execute and deliver to them such other instruments and documents
and take such other actions as may be reasonably requested from time to time by
such Former Affiliates as necessary to carry out, evidence and confirm the
intended purposes of this Cessation Agreement.
7. Miscellaneous.
7.1 Press Release; Public Announcements. The parties hereto
shall not make any public announcements in respect of this Cessation Agreement
or the Asset Purchase Agreement or the transactions contemplated herein or
therein without the prior approval as to the form and content thereof by RPII or
the Executive Management. Notwithstanding the foregoing, (i) RPII may make any
disclosure which its counsel deems is necessary or advisable and (ii) each of
RPII and the Former Affiliates may make appropriate disclosure of the
transactions contemplated by this Cessation Agreement and the Asset Purchase
Agreement to their professional advisors and/or executive officers and
directors, as the case may be.
7.2 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 to this Cessation Agreement 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 RPII or SERP:
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
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with a copy to:
Xxxxxxxx Xxxxxx & Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxx Xxxxxx, Esq.
Fax No.: (000) 000-0000
(b) If to a Former Affiliate:
to the address set forth on
Schedule I or II attached hereto
with a copy to:
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
7.3 Amendment. This Agreement may not be amended or modified
except by an instrument in writing signed by the parties hereto and by the
parties to the Asset Purchase Agreement.
7.4 Severability. If any term or other provision of this
Cessation Agreement is invalid, illegal or incapable of being enforced by any
rule of law or public policy, all other conditions and provisions of this
Cessation 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 Cessation 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.
7.5 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 hereto
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 provisions set forth in the Merger Agreement referenced in
Section 1.1.1 hereof shall survive and continue to bind the parties bound by
such provisions through the execution, consummation and any subsequent
termination of this Cessation Agreement.
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7.6 Assignment. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of the parties. This Agreement
shall not be assigned by operation of law or otherwise, provided, however, that
RPII may assign its rights to one or more, direct or indirect, wholly owned
subsidiaries, provided further, however, in the event of any assignment by RPII,
RPII shall remain liable with respect to all of its obligations hereunder. For
purposes of this Agreement, the term "RPII" shall include any such assignee.
7.7 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 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 Cessation Agreement or any other
agreement, instrument or other document executed and delivered in connection
with this Cessation 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 7.2 or to such other
address as such party shall notify the other Party in writing.
7.8 Counterparts. This Cessation 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.
7.9 Nature and Survival of Representations and Warranties. All
representations and warranties made in this Cessation Agreement by the parties
hereto shall survive the Closing to the same extent and for the same duration as
that of the SERP representations in the Asset Purchase Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed as of the date first above written.
RESEARCH PARTNERS INTERNATIONAL, INC.
/s/ Xxxxx X. Xxxx
By: ______________________________________
Name: Xxxxx X. Xxxx
Title: Chief Operating Officer and
Executive Vice President
FORMER SHAREHOLDERS
/s/ Xxxxxx XxXxxxx /s/ Xxxxxxx X. Xxxx
---------------------- ------------------------
XXXXXX XxXXXXX XXXXXXX X. XXXX
/s/ Xxxxx X. XxXxxxxx /s/ Xxxxxx Xxxxxxxxx
---------------------- ------------------------
XXXXX X. XxXXXXXX XXXXXX XXXXXXXXX
/s/ Xxxxxxx X. Xxxxx /s/ Xxxx X. Xxxxxx
---------------------- ------------------------
XXXXXXX X. XXXXX XXXX X. XXXXXX
/s/ Xxxxx X. Xxxxxxxxxx /s/ Xxxx Xxxx
----------------------- ------------------------
XXXXX X. XXXXXXXXXX XXXX XXXX
/s/ Xxxxx X. Xxxxx /s/ Xxx Xxxxxxxxx
----------------------- ------------------------
XXXXXX X. XXXXX XXX XXXXXXXXX
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FORMER EMPLOYEES
/s/ Xxxxxx Xxxxx /s/ Xxxxxxx Xxxxx
-------------------------- ------------------------
XXXXXX XXXXX XXXXXXX XXXXX
/s/ Xxxxxx Xxxxxx /s/ Xxxxxxxx Xx
-------------------------- ------------------------
XXXXXX XXXXXX XXXXXXXX XX
/s/ Xxxxx Xxxxxxx /s/ Xxxxxxxx Xxxxxxx
-------------------------- --------------------------
XXXXX XXXXXXX XXXXXXXX XXXXXXX
/s/ Xxxxxx Xxxxx /s/ Xxxxxx XxXxxxx
-------------------------- --------------------------
XXXXXX XXXXX XXXXXX XxXXXXX
/s/ Xxxxxxx Xxxx /s/ Xxxxx XxXxxxxx
------------------------- --------------------------
XXXXXXX XXXX XXXXX XxXXXXXX
/s/ Xxxxxx Xxxxx /s/ Xxxx Mix
------------------------- ---------------------------
XXXXXX XXXXX XXXX MIX
/s/ Xxxxxx Xxxxx /s/ Xxxxxxx Xxxx
------------------------- ---------------------------
XXXXXX XXXXX XXXXXXX XXXX
/s/ Xxxxxx Xxxxxxx /s/ Xxxxxxxx Xxxxxx
------------------------- ---------------------------
XXXXXX XXXXXXX XXXXXXXX XXXXXX
/s/ Xxxxxx Xxxxx /s/ Xxxxxxx Xxxxxxxxx
------------------------- ---------------------------
XXXXXX XXXXX XXXXXXX XXXXXXXXX
/s/ Xxxx Xxxx /s/ Xxxxxxxx Xxxxxxxxxx
------------------------- ---------------------------
XXXX XXXX XXXXXXXX XXXXXXXXXX
/s/ Xxxxxxx Xxxx /s/ Xxxxxx Xxxxxxx
------------------------- ---------------------------
XXXXXXX XXXX XXXXXX XXXXXXX
11
/s/ Xxxxx Xxxxxxxxx /s/ Xxxx Xxxxxx
------------------------- ---------------------------
XXXXX XXXXXXXXX XXXX XXXXXX
/s/ Xxxxx Xxxxx /s/ Xxxx Xxxxx
------------------------- ---------------------------
XXXXX XXXXX XXXX XXXXX
/s/ Xxxxxxx Xxxxx /s/ Xxxxx Xxxxxxxx
------------------------- ---------------------------
XXXXXXX XXXXX XXXXX XXXXXXXX
/s/ Xxxx Xxxxx /s/ Xxx Xxxxxxxxx
------------------------- ---------------------------
XXXX XXXXX XXX XXXXXXXXX
/s/ Xxxxxx Xxxxxxxx /s/ Xxxxxx Xxxxxxxxx
------------------------- ---------------------------
XXXXXX XXXXXXXX XXXXXX XXXXXXXXX
/s/ Xxxxx Xxxxxxxxxx /s/ Xxxxxx Xxxxx
------------------------- ---------------------------
XXXXX XXXXXXXXXX XXXXXX XXXXX
/s/ Xxxxxxxx Xxxxxxxx /s/ Xxxxxxx Xxxxx
------------------------- ---------------------------
XXXXXXXX XXXXXXXX XXXXXXX XXXXX
/s/ Le Xxxx Xxxx
---------------------------
LE XXXX XXXX
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Schedule 1
A. Series A Preferred Shareholders (Former Shareholders)
Series A
Preferred Social Security
Name Shares Number Address
------------------- ---------- ---------------- -----------------
XxXXXXX, Xxxxxx X. 307,200 ###-##-#### 00000 Xxxxx Xxxxx Xxxx Xxxxx Xxxxxxx XX 00000
XxXXXXXX, Xxxxx X. 307,200 ###-##-#### 0000 X.X. 00xx Xxxx Xxxx Xxxxx XX 00000
XXXXX, Xxxxxxx X. 120,000 ###-##-#### 0000 X.X. 0xx Xxxx. Xxxx Xxxxx XX 00000
XXXXXXXXXX, Xxxxx X. 79,200 ###-##-#### 00000 X. Xxxxxxxxxxx Xx. Xxxx Xxxxx XX 00000
DODGE, Xxxxxx X. 72,000 ###-##-#### 0000 Xxxxx Xxxx Xxxx Xxxx Xxxxx XX 00000
XXXXXXXXX, Xxx 43,200 ###-##-#### 0000 Xxxxxxx Xxxxx Xxxx Xxxxx XX 00000
XXXXXX, Xxxx X. 48,000 ###-##-#### 0000 X.X. 00xx Xxx Xxxx Xxxxx XX 00000
XXXX, Xxxxxxx X. 31,200 ###-##-#### 0000 Xxxxx Xxxxxxxxxx Xx. Xxxx Xxxxx XX 00000
XXXXXXXXX, Xxxxxx 24,000 ###-##-#### 0000 Xxxxxxx Xxxxxx Xxxx Xxxxx XX 00000
XXXX, Xxxx 7,200 ###-##-#### 0000 Xxxxxx xxxx Xxxx Xxxxx XX 00000
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Schedule II
FORMER EMPLOYEES
Name
Betes, Xxxxxx
Xxxxx, Xxxxxxx
Xxxxxx, Xxxxxx
Xxxxxxx, Xxxxx
Xxxxx, Xxxxxx
Xxxx, Xxxxxxx
Xxxxx, Xxxxxxx
Xxxxx, Xxxxxx
Xxxxxxx, Xxxxxx
Xxxxx, Xxxxxx
Xxxx, Xxxx
Xxxx, Xxxxxxx
Xxxxxxxxx, Xxxxx
Xxxxx, 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
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Schedule 3.1.3
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.
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EXHIBIT A
SPECIFIC RELEASE
WHEREAS, I, __________________________ and Research Partners
International, Inc. ("RPII") have entered into a Cessation Agreement involving
all matters presently existing between us ("Cessation Agreement");
WHEREAS, as a condition of RPII performing its obligations as provided
in the Cessation Agreement, I have agreed to execute and comply fully with the
terms and provisions of the Cessation Agreement; and
WHEREAS, the Cessation Agreement provides that I will execute and
comply fully with the terms and conditions of the General Release herein:
NOW, THEREFORE, I _________________________, for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
hereby release and forever discharge RPII and any and all of RPII's divisions,
affiliates, subsidiaries, predecessors, successors, assigns, partners, officers,
directors, trustees, employees, agents, stockholders, administrators,
representatives, attorneys, insurers or fiduciaries (hereinafter collectively
referred to as the "Releasee"), from all claims for compensation which may be
due to me from Releasee and all contracts and/or agreements, known or unknown,
which against or with Releasee, I ever had, now have or hereafter can, shall or
may have; provided, however that I do not release Releasee for monies due to me
for (i) my activities during the month of June 1999; (ii) my designated orders;
(iii) the Research Pool amount listed on the attached Exhibit A hereto, as
designated by the Executive Management; (iv) with respect to Xxxxxxx Xxxx, 20%
of the underwriting compensation regarding Cheap Tickets, American Classic
Voyages and Marine Drilling in excess of $1,789.88 but in an amount
substantially the same as set forth on Exhibit A and the amount regarding
Objective Communications set forth on Exhibit A; and (v) the Warrant
distribution as set forth on Exhibit A.
I understand that this Specific Release is a legally binding release
and that by signing this release, I am prevented from filing or commencing any
action, complaint, charge, grievance, arbitration or any other proceedings,
administrative or judicial, with regard to any of the claims released in this
Specific Release.
I further affirm that no statements, representations or promises have
been made to me to influence me to sign this Specific Release except as stated
in the Cessation Agreement and in this Specific Release, and that I have signed
this Specific Release of my own free will, relying entirely upon my own judgment
and after conferring with my private legal counsel, on behalf of myself and each
and every one of my dependents, heirs, executors, administrators, personal
and/or legal representatives and assigns.
I further affirm that I have read this Specific Release and have had
adequate time to consider its terms and effects and to ask any questions that I
may have of anyone, including counsel of my own choosing, and that I have
executed this Specific Release voluntarily and with full understanding of its
terms and effects.
I further affirm that no fact, evidence, event or transaction currently
unknown to me but which hereafter may become known to me shall affect in any way
or manner the final and unconditional nature of this Specific Release.
Dated: _________________, 1999 _______________________________
Signature
_______________________________
Print Name
Exhibit B
[Date]
Research Partners International, Inc.
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Southeast Research Partners, Inc.
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxx Xxxxx, XX 00000
Dear Sirs:
Effective immediately, the undersigned hereby resigns as an officer and/or
director of Research Partners International, Inc. and all of its affiliates,
including Southeast Research Partners, Inc.
Very truly yours,
/s/ Xxxxxx XxXxxxx
--------------------
Xxxxxx XxXxxxx
Exhibit B
[Date]
Research Partners International, Inc.
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Southeast Research Partners, Inc.
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxx Xxxxx, XX 00000
Dear Sirs:
Effective immediately, the undersigned hereby resigns as an officer and/or
director of Research Partners International, Inc. and all of its affiliates,
including Southeast Research Partners, Inc.
Very truly yours,
/s/ Xxxxx X. XxXxxxxx
----------------------
Xxxxx X. XxXxxxxx
