28.1
PURCHASE AGREEMENT
THIS AGREEMENT, dated as of April ___, 2000, among Networth Financial
Group, LLC, a Georgia limited liability company, XCEL Capital, L.L.C., a Georgia
limited liability company ("XCEL"), First Atlanta Financial Group LLC ("FAFG")
(collectively, the "Sellers"), Institutional Equity Holdings, Inc., a Nevada
corporation (the "Purchaser") and First Atlanta Securities, L.L.C., a Georgia
limited liability company ("FAS").
WHEREAS, the number of authorized Interests of FAS is unlimited, of
which 2,399,000 Interests are now duly issued and outstanding (such Interests as
may be subsequently changed or adjusted by agreement of the parties prior to
closing will hereinafter be referred to as the "Interests"); and
WHEREAS, the Sellers own the respective Interests set forth opposite
their names on the signature page of this Agreement, which constitute all of the
issued and outstanding Interests of FAS; and
WHEREAS, FAS is registered with the Securities and Exchange Commission
(the "SEC") as a broker/dealer under Section 15 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and is in good standing as a member of
the National Association of Securities Dealers, Inc. (the "NASD") and the
Securities Investor Protection Corporation ("SIPC") and has no branch offices;
and
WHEREAS, the Sellers wish to sell to Purchaser, and Purchaser desires
to purchase from the Sellers, all of the Interests issued in the Sellers' names,
which constitute all of the issued and outstanding Interests; and
NOW, THEREFORE, in consideration of the mutual agreements herein, the
sufficiency of which is hereby acknowledged, each of the parties hereto agree as
follows:
1. Sale of the Interests. Subject to and contingent upon the terms and
conditions of this Agreement, the Sellers hereby agree to sell, assign and
transfer to Purchaser, and Purchaser hereby agrees to purchase from the Sellers,
all right, title and interest in and to the Sellers' Interests.
2. Purchase Price. The purchase price for the Interests shall be as set forth on
Schedule I ---------------- hereto.
3. Net Capital Deposit. Until the Closing
and thereafter, FAS's net capital of $25,000.00 then on deposit at FAS's
clearing firm, Pershing/DLJ shall not be withdrawn and shall remain as property
of FAS. At all times up to the date of Closing, FAS shall maintain FAS' required
net capital so as to comply with SEC Rule 15c3-1 and NASD net capital
requirements.
4. Closing.
4.01 Subject to the fulfillment of the conditions to Closing
set forth herein and conditioned thereon, the Closing of the transactions
contemplated hereby (the "Closing") shall take place ten (10) days from the date
of the NASD's approval of the transactions contemplated herein, (or upon the
following Monday if such 10th day is a Saturday or Sunday) at 10:00 a.m., E.S.T.
or E.D.T. as applicable at the offices of FAS located at Suite 515, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ or at such other time and date as
the parties hereto may mutually agree (the "Closing Date"), and shall be deemed
to have been consummated and become effective for all purposes as of the close
of business on the Closing Date. In the event NASD approval for the transaction
is not received by October 31, 2000, then this Agreement shall be null and void.
4.02 At the Closing, the Purchase Price shall be paid by the
Purchaser to the Sellers in accordance with Paragraph "2" hereinabove and
concurrently therewith the Assignment of Member's Interests for the Sellers'
Interests shall be delivered to Purchaser.
4.03 FAS' net capital of $25,000.00 then on deposit at FAS'
clearing firm, Pershing/DLJ shall not be withdrawn and shall remain as property
of FAS.
4.04 Schedule II to the Agreement and/or the Focus report and
financial statements attached hereto as Exhibits A and B identify the
liabilities of FAS known to Sellers as of the date of this Agreement. Except as
listed in Schedule III to this Agreement, the assets of FAS shall be delivered
free and clear of any claims, liens or encumbrances of any nature whatsoever.
The FAS subordinated secured note and underlying cash deposit shall be
transferred or otherwise assigned as described in Schedule I hereto.
4.05 After closing the Purchaser shall be entitled to
designate the signatories to all FAS bank accounts, clearing firms, etc. so that
all deposits, withdrawal and other instructions shall require the approval of
the Purchaser's designee.
5. Representations and Warranties of the Sellers and FAS. The Sellers
and FAS, jointly and severally, represent, warrant and agree, which shall
survive the execution of this Agreement and, if the transaction is closed,
continue thereafter until June 30, 2001, as follows:
5.1 Organization. FAS is a Georgia Limited Liability Company
duly organized and validly existing in good standing under the laws of the State
of Georgia and has full power to own its property and to carry on its business
as now being conducted. FAS is duly qualified to transact business and is in
good standing in each jurisdiction wherein the nature of the business transacted
by it makes such qualification necessary including, without limitation, licenses
to conduct a securities business in the State of Georgia.
5.2 Authorized Capital. The authorized capital of FAS is an unlimited number of
--------------------- Interests, of which 2,399,000 Interests are issued and
outstanding. There are no authorized or outstanding options, warrants or other
rights to purchase or encumber any authorized or outstanding Interests. 5.3
Title to Interests. The Sellers have or will have at closing good title,
beneficially and of record, to all of their Interests, free and clear of all
adverse claims, liens and encumbrances; such Interests are validly issued and
outstanding, fully paid and non-assessable; and the Sellers have or will have at
closing full legal right, power and authority to sell, assign and transfer the
Interests to the Purchaser. Delivery of the Assignment of Membership Interests
for the Interests to the Purchaser as provided in Paragraph "4" of this
Agreement will, when delivered, vest ownership of the Interests in the
Purchaser, free and clear of all adverse claims, liens and encumbrances of the
Sellers or created by the Sellers, which Assignments will then have transferred
to Purchaser all of the issued and outstanding Interests.
5.4 Financial Statements. The FOCUS Report of FAS on Form
X-17A-5, for the period ending March 31, 2000 attached hereto as Exhibit A is
true and correct in all material respects, having been prepared in accordance
with principles prescribed by the SEC and the NASD for broker-dealers, which
principles have been consistently followed throughout the period indicated, and
fairly and accurately represents in all material respects the financial
condition of FAS and the results of its operations as of the date and throughout
the period indicated. FAS' assets and liabilities as of March 31, 2000 are
reflected in all material respects on FAS' audited financial statement dated
_________ attached hereto as Exhibit B and FAS has no accrued or absolute
liabilities or obligations of any material nature, and to the best of the
knowledge of Sellers no material contingent liabilities, including without
limitation, tax liabilities due or to the best of the knowledge of Sellers tax
liabilities which will become due, except as disclosed in such audited financial
statement or Schedule II hereto.
5.5 NASD Restrictions. FAS is only subject to the NASD
operating restrictions under its rules and regulations and the membership
agreement between FAS and the NASD dated December 16, 1997 (the "FAS NASD
Membership Agreement"), copy of which is attached hereto as Exhibit C. FAS is
current in its payment of all NASD, state, SIPC and other membership dues, fees
and expenses.
5.6 Transactions Since March 31, 2000. Except as disclosed in
Schedule IV hereto, since March 31,2000, the date of FAS' audited financial
statement, there has been no material adverse change in the business,
operations, financial position or property of FAS.
5.7 Loans. The Sellers represent that FAS has no outstanding loans,
subordinated or
------
otherwise except as disclosed in Schedule V hereto.
5.8 Net Capital. The net capital of FAS shall comply
with SEC Rule 15c3-1 at the date of
-------------
this Agreement and shall hereafter be maintained up to the Closing Date.
5.9 Contracts. Except for the contracts, copies of which are
attached hereto as Exhibits D-1 through D-____ and a plan providing
hospitalization and medical coverage to employees, FAS is not a party to any (i)
employment contract, contract with any labor union or association, bonus,
pension plan, profit sharing, retirement, Interests purchase, or other plan
providing employee benefits; (ii) lease with respect to any property, real or
personal, whether as lessor or lessee; (iii) contract or commitment for capital
expenditures; or (iv) contract (in the ordinary course of business or otherwise)
continuing over a period of more than one month from its date and not cancelable
upon more than thirty days notice. The parties acknowledge and agree that the
Management Agreement between FAS and FAFG will be terminated at Closing without
any payment from FAS to FAFG or FAFG to FAS.
5.10 Tax Returns. All tax returns and reports of FAS required
by law (including, without limitation, all incorporation tax, unemployment
compensation, social security, sales and excise taxes under the laws of the
United States or any state, territory or municipal or political subdivision
thereof) to be filed have been duly filed, and all taxes, assessments,
contributions, fees and other government charges (other than those presently
payable without penalty or interest and those currently being contested in good
faith) which are due and payable, as shown by said tax returns or reports, have
been paid except possibly with respect to an amount not in excess of $5,000.00
claimed due in a recent communication from the Internal Revenue Service. FAS
will provide Purchaser with information available to it concerning such matter.
Excepting advances to brokers, which in aggregate of the date of this Agreement
do not exceed $150,000.00, FAS has paid wages or salaries and has withheld from
the salaries and wages of its employees any income taxes required to be withheld
and FAS is not delinquent in the payment to the Internal Revenue Service of such
funds except as may be asserted in the letter of the Internal Revenue Service
referenced herein. The Sellers do not know, and do not have reasonable grounds
to know, of any additional assessments or any basis for any additional
assessments in respect to the United States or state taxes upon or measured by
the income of FAS except as may be claimed in the above referenced letter.
5.11 Compliance with Laws. To the best knowledge of the
Sellers, neither the execution and delivery of this Agreement nor compliance
with the terms and provisions of this Agreement on the part of the Sellers will,
subject to the receipt of appropriate regulatory approvals, (i) breach any
statute or regulation of any governmental authority, domestic or foreign, or
(ii) during the period up to the Closing Date, conflict with or result in a
breach of any of the terms, conditions or provisions of any agreement or
instrument to which the Sellers or FAS are a party or by which they are or may
be bound or constitute a default thereunder, or (iii) result in the creation of
the imposition of any lien, charge, encumbrance or restriction of rights,
including rights of termination or cancellation (except as may be provided in
any applicable bulk sales acts) with respect to any of the properties, assets,
contracts or business of FAS.
5.12 Insurance. FAS maintains certain broker's fidelity
bond(s), copies of which are attached hereto as Exhibits E-1 through E-___. To
the best of the knowledge of Sellers, by maintaining such bonds, FAS satisfies
the requirements of applicable laws and regulations with respect to maintenance
of broker's fidelity bond(s).
5.13 No Suits Pending or Imminent. Except as disclosed on
Schedule VI hereto, there are no outstanding and unpaid judgments or, except as
otherwise referred to herein or in documents to be provided Purchaser by FAS,
any liens or security agreements as a result of which FAS is or may become a
judgment debtor. Further, except for the ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ NASD complaint (the
"Centofonti Matter"), there are no actions at law or in equity or SEC or other
administrative proceedings or NASD proceedings known to be contemplated or
pending against FAS or its officers or in which FAS is a plaintiff, defendant,
petitioner or respondent. FAS does not, at this time, propose to commence any
action at law or in equity, any administrative proceeding or any NASD proceeding
in which it will be a plaintiff or petitioner. Except for the Centofonti Matter,
there are no other actions at law or in equity or administrative proceedings
pending in which it is anticipated by FAS or Sellers that FAS will join or be
joined as a party. Except for the Centofonti Matter, there is no litigation
pending, and to the best of the knowledge of Sellers and FAS, contemplated or
threatened relating to the Interests or relating to any other ownership interest
in FAS. Except for the ▇▇▇▇▇▇▇▇▇▇ Matter, there is no pending, or to the best of
the knowledge of Sellers and FAS, contemplated or threatened litigation or
proposed violation of law or regulation of any nature whatsoever with respect to
FAS (including, but not limited to, NASD, SEC or similar laws and regulations).
5.14 No Dividends or Distributions. Since April 18, 2000, the
Board of Directors of FAS has not declared any dividends or distributions, nor
are there any dividends or distributions unpaid that were declared in an earlier
period.
5.15 Officers and Directors. The officers and directors of FAS are as follows:
-----------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Chairman, Secretary, Treasurer and Director
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice-Chairman, Vice-President and Director
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Vice-President and Director
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇, President and Director
▇▇▇▇ ▇▇▇▇▇▇, Vice-President
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ is the qualifying Series 24 General Securities Principal and
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ is the qualifying Series 27 Financial Principal of FAS. There are
no other officers and directors of FAS.
5.16 Articles of FAS and Operating Agreement. A copy of the
Articles of Organization, as amended to the date hereof, and the Operating
Agreement, as amended to the date hereof, of FAS are attached hereto
respectively as Exhibits F-1 and F-2.
5.17 Minutes. Copies of any minutes of meetings of
Directors or Interest Holders of FAS are
--------
attached hereto as Exhibits G-1 through G-2.
5.18 No Subsidiaries. FAS does not have any
subsidiaries and does not own any Interests or
-----------------
other securities of, or interest in, any other corporation, firm,
partnership or association except in the
ordinary course of its business.
5.19 Contractual Performance. To the best of the Sellers'
knowledge, information and belief, all obligations that FAS has been required to
comply with have been fully satisfied and the Sellers are not in default on any
lease, contract, agreement, etc.
5.20 Employees. Except for a medical and hospitalization plan,
FAS has not maintained or contributed to any deferred compensation, profit
sharing, savings, retirement, pension or other benefit plan or made arrangements
with, or for the benefit of, any person resulting from a relationship with FAS.
FAS shall be responsible for payment prior to Closing of any employment
benefits, including pension or profit sharing, medical insurance and accrued
vacation due by FAS to such employees.
6. The Purchaser's Representations and Warranties. The
Purchaser represents, warrants and agrees,
------------------------------------------------
which shall survive the execution of this Agreement and, if the transaction is
Closed, continue thereafter until
June 30, 2001, as follows:
6.1 The Purchaser has full legal right, power and authority to enter into this
Agreement and to consummate all of the transactions contemplated hereby;
6.2 The Purchaser is purchasing the Sellers' Interests for its own account for
investment and not with a view to distribution or resale; and
6.3 The Purchaser acknowledges that, to date, all documents,
records and books requested by the Purchaser have been made available for
inspection and have been inspected by the Purchaser.
6.4 Organization. Purchaser is a Nevada Corporation duly
organized and validly existing in good standing under the laws of the State of
Nevada and has full power to own its property and to carry on its business as
now being conducted. Purchaser is duly qualified to transact business and is in
good standing in each jurisdiction wherein the nature of the business transacted
by it makes such qualification necessary including, without limitation, licenses
to conduct a securities business in the State of Texas.
6.5 Securities of Purchaser to Be Issued to Sellers. The
shares of common stock of Purchaser to be issued to Sellers at closing shall be
duly authorized, validly issued and delivered to Sellers free and clear of all
adverse claims, liens and encumbrances; fully paid and non-assessable. The
Purchaser has full legal right, power and authority to issue such shares to
Sellers. Delivery of the certificates for such shares as provided in Paragraphs
"2" and "4" of this Agreement will, when delivered, vest ownership of such
shares in the Sellers, free and clear of all adverse claims, liens and
encumbrances of the Purchaser or created by the Purchaser.
6.6 Financial Statements. The FOCUS Report of Institutional
Equity Corporation ("IEC"), a New Jersey Corporation and a wholly owned
subsidiary of Purchaser on Form X-17A-5, for the period ending December 31, 1999
attached hereto as Exhibit H, is true and correct in all material respects,
having been prepared in accordance with principles prescribed by the SEC and the
NASD for broker-dealers, which principles have been consistently followed
throughout the period indicated, and fairly and accurately represents in all
material respects the financial condition of IEC and the results of its
operations as of the date and throughout the period indicated. IEC's assets and
liabilities as of December 31, 1999 are reflected in all material respects on
IEC's audited financial statement dated ____________ attached hereto as Exhibit
I and IEC has no accrued or absolute liabilities or obligations of any material
nature, or to the best of the knowledge of Purchaser no material contingent
liabilities, including without limitation, tax liabilities due or to the best of
the knowledge of Purchaser tax liabilities which will become due, except as
disclosed in such audited financial statement. Purchaser's assets and
liabilities as of December 31, 1999 and results of operations for the year
ending December 31, 1999 are reflected in all material respects on Purchaser's
audited financial statement dated ____________ attached hereto as Exhibit J and
Purchaser has no accrued or absolute liabilities or obligations of any material
nature, or to the best of the knowledge of Purchaser no material contingent
liabilities, including without limitation, tax liabilities due or to the best of
the knowledge of Purchaser tax liabilities which will become due, except as
disclosed in such audited financial statement.
6.8 NASD Restrictions. Purchaser and its subsidiaries are only
subject to the NASD operating restrictions under its rules and regulations and
the membership agreement between Redstone Securities, Inc. dated February 1,
1999 (the "Purchaser's NASD Membership Agreement") which is attached hereto as
Exhibit K. Purchaser and its subsidiaries and affiliates are current in their
payment of all NASD, state, SIPC and other membership dues, fees and expenses.
6.9 Transactions Since December 31, 1999. Except as disclosed
in Schedule VII hereto, since December 31, 1999, the date of Purchaser's and
IEC's audited financial statements, there has been no material adverse change in
the business, operations, financial position or property of Purchaser or its
subsidiaries or affiliates.
6.10 Tax Returns. Except for an assessment not in excess of
$25,000.00 with respect to Form 941 taxes for the period ending September 30,
1999, all tax returns and reports of Purchaser and its subsidiaries and
affiliates required by law (including, without limitation, all incorporation
tax, unemployment compensation, social security, sales and excise taxes under
the laws of the United States or any state, territory or municipal or political
subdivision thereof) to be filed have been duly filed, and all taxes,
assessments, contributions, fees and other government charges (other than those
presently payable without penalty or interest and those currently being
contested in good faith) which are due and payable, as shown by said tax returns
or reports, have been paid. Excepting advances to brokers when in aggregate as
of the date of this Agreement do not exceed $75,000.00, Purchaser and its
subsidiaries and affiliates have paid wages or salaries and has withheld from
the salaries and wages of its employees any income taxes required to be withheld
and Purchaser and its subsidiaries and affiliates are not delinquent in the
payment to the Internal Revenue Service of such funds. The Purchaser does not
know, and does not have reasonable grounds to know, of any additional
assessments or any basis for any additional assessments in respect to the United
States or state taxes upon or measured by the income of Purchaser and its
subsidiaries and affiliates.
6.11 Compliance with Laws. To the best knowledge of the
Purchaser, neither the execution and delivery of this Agreement nor compliance
with the terms and provisions of this Agreement on the part of the Purchaser
will, subject to the receipt of appropriate regulatory approvals, (i) breach any
statute or regulation of any governmental authority, domestic or foreign, or
(ii) during the period up to the Closing Date, conflict with or result in a
breach of any of the terms, conditions or provisions of any agreement or
instrument to which the Purchaser and/or its subsidiaries and affiliates are a
party or by which it or they is or may be bound or constitute a default
thereunder, or (iii) result in the creation of the imposition of any lien,
charge, encumbrance or restriction of rights, including rights of termination or
cancellation (except as may be provided in any applicable bulk sales acts) with
respect to any of the properties, assets, contracts or business of Purchaser
and/or its subsidiaries or affiliates.
6.12 Insurance. Purchaser and/or its subsidiaries and
affiliates maintains certain broker's fidelity bond(s) , copies of which are
attached hereto as Exhibits K-1 through K-_. To the best of the knowledge of
Purchaser, by maintaining such bonds, Purchaser and/or its subsidiaries and
affiliates satisfy the requirements of applicable laws and regulations with
respect to maintenance of broker's fidelity bond(s).
6.13 No Suits Pending or Imminent. Except as disclosed on
Schedule VIII hereto, there are no outstanding and unpaid judgments or liens as
a result of which Purchaser and/or its subsidiaries or affiliates is or may
become a judgment debtor. Further, there are no actions at law or in equity or
SEC or other administrative proceedings or NASD proceedings known to be
contemplated or pending against Purchaser and/or its subsidiaries or affiliates
and or its or their officers or in which Purchaser and/or one or more of its
subsidiaries or affiliates is a plaintiff, defendant, petitioner or respondent.
Purchaser does not, at this time, propose to commence any action at law or in
equity, any administrative proceeding or any NASD proceeding in which it and/or
one or more of its subsidiaries or affiliates will be a plaintiff or petitioner.
There are to the best of the knowledge of Purchaser no other actions at law or
in equity or administrative proceedings pending in which it is anticipated that
Purchaser and/or one or more of its subsidiaries or affiliates will join or be
joined as a party. To the best of the knowledge of Purchaser there is no
litigation pending, contemplated or threatened relating to the common shares of
Purchaser. To the best of the knowledge of Purchaser, there is no pending,
contemplated or threatened litigation or proposed violation of law or regulation
of any nature whatsoever with respect to Purchaser and/or its subsidiaries or
affiliates (including, but not limited to, NASD, SEC or similar laws and
regulations).
6.14 Contractual Performance. To the best of the Purchaser's
knowledge, information and belief, all obligations that Purchaser and/or its
subsidiaries or affiliates have been required to comply with have been fully
satisfied and the Purchaser is not in default on any lease, contract, agreement,
etc.
6.15. No Dividends. Since __________________, the Board of Directors of
Purchaser has not -------------- declared any dividends, nor are there any
dividends unpaid that were declared in an earlier period. 6.16. Employee
Benefits. Except as disclosed in Schedule IX hereto, Purchaser and/or its
subsidiaries or affiliates has not maintained or contributed to any deferred
compensation, profit sharing, savings, retirement, pension or other benefit plan
or made arrangements with, or for the benefit of, any person resulting from a
relationship with Purchaser and/or one or more of its subsidiaries or
affiliates.
7. Pre-Closing Covenants of the Sellers.
7.1 From the date hereof until the Closing, unless the
Purchaser otherwise consents in writing in advance, the Sellers shall cause FAS:
(a) to employ the properties owned, leased or used by it and conduct the
business only in the ordinary course of business; (b) to notify the Purchaser of
any material adverse change in the business other than changes resulting from an
event or condition generally applicable to the industry in which the business is
engaged; and (c) to refrain from making any material expenditures outside the
ordinary course of
business.
7.2 Prior to Closing, FAS will use its best efforts to
preserve intact its present business organization and to preserve relationships
with customers, suppliers and others having business dealings with them except
where changes may be appropriate in the best business judgment of FAS.
7.3 Prior to Closing, FAS shall not sell or pledge any
Interests or change the capitalization of FAS. Purchaser will not unreasonably
withhold consent to a request from FAS to sell or pledge Interests or change the
capitalization of FAS.
7.4 Prior to Closing, FAS will not (i) acquire, lease or
dispose of any assets, outside the ordinary course of business consistent with
past practice; (ii) mortgage, pledge or subject to any lien any of its assets;
(iii) enter into any other material transaction outside the ordinary course of
business consistent with past practice; (iv) make any payments with respect to
any indebtedness of FAS except such payments for indebtedness that arise prior
to the Closing Date and indebtedness required to be paid as described in
Schedule I; (v) acquire by merging or consolidating with, or by acquiring assets
of, or by purchasing a substantial ownership interest in, or by any other
method, any business or any other person or entity; or (vi) agree to do any of
the foregoing
7.5 FAS shall not declare or pay any dividends or distributions or repurchase
any of its securities.
7.6 FAS shall not change in any material respect any
compensation arrangements with its employees. Purchaser will not unreasonably
withhold consent to a request from FAS to change a compensation arrangement with
one or more of FAS' employees.
8. Additional Covenants of the Sellers.
8.01 Prior to Closing, without the prior written consent of
the Purchaser, FAS shall not issue any additional Interests, including, without
limitation, securities with equivalent rights as common shares, common shares,
or such equivalent securities, issuable upon the exercise of options, warrants
and other contract rights and securities convertible, directly or indirectly,
into common shares or such equivalent securities. Prior to Closing, without the
prior written consent of the Purchaser, FAS will not increase or decrease the
number of its issued and outstanding Interests, or change in any way the rights
and privileges of such Interests by any means including, without limitation, (i)
the payment of dividend or the making of any other distribution on such
Interests payable in its capital Interests, (ii) a forward or reverse split or
other subdivision of Interests, (iii) a consolidation or combination of
Interests, or (iv) a reclassification or recapitalization involving Interests,
the intent of the parties being that at the Closing and the issuance of the
Interests to the Purchaser, the Purchaser shall then own Interests of FAS
representing all of the issued and outstanding Interests of FAS. Purchaser will
not unreasonably withhold consent to a request from FAS to issue additional
Interests.
9. Pre-Closing Covenants of the Purchaser.
9.1 From the date hereof until the Closing, without the prior
written consent of the Sellers, the Purchaser shall:
(a) employ the properties owned, leased or used by it or conduct the business
only in the ordinary course of business, including, but not limited to the
properties and business of its subsidiaries and affiliates;
(b) notify the Sellers of any material adverse change in the business of
Purchaser, including that of its subsidiaries and affiliates, other than changes
resulting from an event or condition generally applicable to the industry in
which the
business is engaged; and
(c) refrain from making or allow its subsidiaries or affiliates to make any
material expenditures outside the ordinary course of business consistent with
past practice.
9.2 Prior to Closing, Purchaser will use its best efforts to
preserve intact its present business organization and that of its subsidiaries
and affiliates and to preserve relationships with customers, suppliers and
others having business dealings with them except where changes may be
appropriate in the best business judgment of Purchaser and/or its subsidiaries
or affiliates.
9.3 Prior to Closing, Purchaser shall not sell or pledge any
common stock of it or any of its subsidiaries or affiliates or change the
capitalization of Purchaser or its subsidiaries or affiliates. Sellers will not
unreasonably withhold consent to a request from Purchaser to sell or pledge
common stock of it or its subsidiaries or affiliates or to change their
capitalization. 9.4 Prior to Closing, Purchaser will not (i) acquire, lease or
dispose of any assets, outside the ordinary course of business consistent with
past practice; (ii) mortgage, pledge or subject to any lien any of its assets;
(iii) enter into any other material transaction outside the ordinary course of
business consistent with past practice; (iv) acquire by merging or consolidating
with, or by acquiring assets of, or by purchasing a substantial ownership
interest in, or by any other method, any business or any other person or entity;
or (v) agree to do any of the foregoing.
9.5 Prior to Closing, Purchaser will not (i) acquire, lease or
dispose of any assets, other than in the ordinary course of business consistent
with past practice; (ii) mortgage, pledge or subject to any lien any of its
assets; (iii) enter into any other material transaction other than in the
ordinary course of business consistent with past practice; or (iv) agree to do
any of the foregoing.
9.6 Prior to Closing, Purchaser shall not declare or pay any dividends or
repurchase any of its securities. 10. Additional Covenants of the Purchasers.
10.01 Prior to Closing, without the prior written consent of
the Sellers, Purchaser shall not issue any additional common stock of Purchaser
and/or its subsidiaries and affiliates except as provided in this Agreement
including, without limitation, securities with equivalent rights as common
shares, common shares, or such equivalent securities, issuable upon the exercise
of options, warrants and other contract rights and securities convertible,
directly or indirectly, into common shares or such equivalent securities. Prior
to Closing, except as provided in this Agreement, Purchaser will not increase or
decrease the number of its issued and outstanding common shares or that of its
subsidiaries or affiliates, or change in any way the rights and privileges of
such common shares by any means including, without limitation, (i) the payment
of dividend or the making of any other distribution on such common shares
payable in its common shares, (ii) a forward or reverse split or other
subdivision of Interests, (iii) a consolidation or combination of common shares,
or (iv) a reclassification or recapitalization involving the common shares.
Sellers shall not unreasonably withhold consent to a request from Purchaser to
issue additional common shares.
10.02 For a period of at least one year from the Closing Date,
the Purchaser shall cause FAS' main office located in Atlanta, Georgia to remain
open at the Purchaser's sole expense.
11. Inspection By Purchaser. The Purchaser shall, for a period of not
more than thirty (30) days from the date of execution of this Agreement and the
attachment of all schedules and exhibits thereto, have the right to make such
investigations and examinations (the "Inspection") of the assets and the
business of FAS as Purchaser may deem appropriate in its sole discretion. After
the end of the Inspection period and before Closing, Purchaser may request of
Sellers and FAS the opportunity to perform reasonable additional such
investigations and examinations and Sellers and FAS shall not unreasonably
withhold consent to such request.
(a) Such inspections may include, but are not limited to,
technical due diligence of all the technology owned by and/or associated with
the business, environmental investigations of all improvements used in
connection with the business, investigations with respect to compliance with
applicable rules and regulations and with current building and zoning standards,
examinations of the tangible personal property; review of all contracts and
leases and licenses; review of accounts receivable, accounts payable and
examination of assets/securities inventory.
(b) FAS shall also give the Purchaser full access at
reasonable times to: (i) the premises occupied by its
Business; (ii) FAS' books and records; (iii) FAS
technology (including, without limitation, software);
(iv) FAS information systems; and (v) All information
reasonably requested by Purchaser relating to FAS,
its business,
financial condition and prospects.
(c) In making such inspections, Purchaser shall keep all information obtained by
it confidential and shall use it only for the purpose of this transaction.
12. Inspection By Sellers. The Sellers shall, for a period of not more
than thirty (30) days from the date of execution of this Agreement and the
attachment of all schedules and exhibits thereto, have the right to make such
investigations and examinations (the "Inspection") of the assets and the
business of Purchaser and its subsidiaries and affiliates as Sellers may deem
appropriate in their sole discretion. After the end of the Inspection period and
before Closing, Sellers may request of Purchaser the opportunity to perform
reasonable additional such investigations and examinations and Purchaser shall
not unreasonably withhold consent to such request.
(a) Such inspections may include, but are not limited to,
technical due diligence of all the technology owned by and/or associated with
Purchaser's business, environmental investigations of all improvements used in
connection with the business, investigations with respect to compliance with
applicable rules and regulations and with current building and zoning standards,
examinations of the tangible personal property; review of all contracts and
leases and licenses; review of accounts receivable, accounts payable and
examination of assets/securities inventory.
(b) Purchaser shall also give the Sellers full access at
reasonable times to: (i) the premises occupied by its
Business; (ii) Purchaser's books and records; (iii)
Purchaser's technology (including, without
limitation, software); (iv) Purchaser's information
systems; and (v) All information reasonably requested
by Sellers relating to Purchaser, its
business, financial condition and prospects.
(c) In making such inspections, Sellers shall keep all information obtained by
them confidential and shall use it only for the purpose of this transaction.
(d) For purposes of this paragraph 12, Sellers' inspection
rights shall relate to both Purchaser and Purchaser's subsidiaries and
affiliates.
13. Conditions to Closing.
13.1 Documents Delivered. Within ten days of the date of execution of this
Agreement, FAS --------------------- shall: (a) make available to the Purchaser,
FAS' books of account and business records, tax returns, minutes and records
regarding Interests if such documents are in existence; (b) deliver to the
Purchaser copies of all agreements, contracts and leases to which FAS is a
party; (c) deliver to the Purchaser, copies of all records maintained pursuant
to SEC Rule 17(A)(3) and Rule 17(A)(4). The documents to be made available or
delivered by FAS to Purchaser shall be in a form and substance reasonably
acceptable to Purchaser. If such documents are not in a form and substance
reasonably acceptable to Purchaser, and if FAS upon request does not provide
documents suitable to Purchaser, Purchaser's remedy shall be to terminate this
Agreement in accordance with Paragraph 16.15 hereof.
13.02 FormB/D. On the date of Closing, the Sellers will
immediately prepare and file an amended Form B/D with the SEC, NASD and
applicable states, indicating the change in ownership of FAS and listing the new
officers, directors, shareholders and registered persons.
14. Conditions Precedent.
14.01 The obligations of the Purchaser under this Agreement
including, without limitation, the Purchaser's obligation to consummate the
transactions contemplated hereby are subject to the satisfaction of the
following conditions, prior to Closing:
(a) FAS will use their best efforts to cause to be approved all personnel
designated by the Purchaser who are required to be registered by the appropriate
regulatory authorities. (b) FAS agrees to cooperate fully with the Purchaser and
shall use its continuing best efforts to facilitate the business activities and
approvals contemplated by the Purchaser until such period of time that the
sought after approvals are obtained.
(c) The NASD shall have approved the transactions contemplated hereby
including, without limitation, the sale, assignment and transfer by the Sellers
of their Interests. (d) This Agreement and the transactions contemplated by this
Agreement shall have been duly approved by all requisite action of Sellers and
FAS. (e) FAS shall be responsible for and shall have satisfied all debts and
brokers commissions incurred by FAS up to and including the Closing Date payment
of which is more than thirty days past due as of the Closing Date. (f) FAS shall
have obtained all consents and approvals necessary for the operation of its
business. (g) Purchaser shall have had the opportunity to conduct its inspection
in accordance with this Agreement. 14.02 The obligations of the Sellers under
this Agreement including, without limitation, the Sellers' obligation to
consummate the transactions contemplated hereby are subject to the satisfaction
of the following conditions, prior to Closing: (a) The NASD shall have approved
the transactions contemplated hereby including, without limitation, the sale,
assignment and transfer by the Sellers of their Interests. (b) This Agreement
and the transactions contemplated by this Agreement shall have been duly
approved by all requisite action of Purchaser. (c) Sellers shall have had the
opportunity to conduct their inspection in accordance with this Agreement. (d)
The landlord for the business premises of FAS shall have consented to the
assumption of the lease for such premises by FAS or Purchaser. (e) The lessors
for certain leased furniture used by FAS in its business and for two copiers
used by FAS in its business shall have consented to the assumption of such
leases by FAS or Purchaser.
15. Contract Assumptions.
15.01. At Closing, FAS or Purchaser shall assume the lease for
the business premises used by FAS in Atlanta, Georgia if FAS obtains the
landlord's consent to such assumption, and Purchaser shall indemnify FAFG with
respect to post-closing lease obligations under such lease, including any
attorney's fees.
15.02. At Closing, FAS or Purchaser shall assume the lease for
certain leased furniture used by FAS in its business and for two copiers used by
FAS in its business if FAS obtains the lessors' consent to such assumptions, and
Purchaser shall indemnify FAFG with respect to post-closing lease obligations
under such leases, including any attorney's fees.
15.03. At Closing, FAS or Purchaser shall either assume the
liability insurance which FAFG is providing with respect to the business
premises of FAS or agree that FAFG may cancel such insurance as of the date of
closing. If FAS or Purchaser assumes such insurance, Purchaser, at closing,
shall pay to FAFG the portion of any premium paid by FAFG which is for insurance
after the date of closing. Such payment shall be calculated on a pro rata basis.
Further if FAS or Purchaser assumes such insurance, FAS and Purchaser shall
indemnify FAFG for any liability arising from such insurance, including any
attorney's fees.
16. Indemnification By FAS and Sellers.
16.01 FAS and the Sellers, jointly and severally, hereby
covenant and agree to (i) indemnify and hold the Purchaser, its successors and
assigns, harmless from any and all claims, actions, proceedings, damages,
expenses, liabilities, tax assessments and/or judgments of any nature whatsoever
arising out of the Centofonti Matter or any breach by Sellers or FAS of their
warranties, representations and covenants as set forth in paragraphs 5, 7 and 8
of this Agreement but only as to such matters of which Purchaser or its assigns
provides Sellers with specific written notice of a claim prior to June 30, 2001,
and (ii) pay all the Purchaser's expenses and/or losses of any nature whatsoever
including Purchaser's reasonable attorneys' fees if Sellers do not assume the
defense of a claim pursuant to Paragraph 16.02 hereof. The Purchaser, or its
successors and assigns, shall notify the Sellers in writing of any such
liability, asserted liability, or any claims against the Purchaser or FAS, with
reasonable specificity and promptness ("Notice of Claim"), but in any event
prior to June 30, 2001. FAS and Sellers shall not be obligated to indemnify
Purchaser or its assigns for any matter as to which Notice of Claim is received
after June 30, 2001 and further shall not be obligated to indemnify Purchaser
for the increased amount of any claim or other matter which would otherwise have
been payable to the extent such increase results from a failure to reasonably
and promptly provide Notice of Claim.
16.02 If the claim or demand set forth in the Notice of Claim
relates to a claim or demand asserted by a third party (a "Third Party Claim"),
Sellers shall have the right to employ counsel reasonably acceptable to
Purchaser or its assigns to defend any such claim or demand. Purchaser or its
assigns shall have the right to participate in the defense of any such Third
Party Claim at its own costs and expense. Sellers shall notify Purchaser or its
assigns in writing, within fifteen days of receipt of a Notice of Claim of their
decision to defend in good faith any Third Party Claim. So long as Sellers are
defending in good faith any such Third Party Claim, Purchaser or its assigns
shall not settle or compromise such Third Party Claim. The Purchaser shall make
available to the Sellers or their representatives all records and other
materials reasonably required by them for their use in contesting any Third
Party Claim and shall cooperate with the Sellers in connection therewith. If the
Sellers do not elect to defend any such Third Party Claim, the Purchaser shall
have no obligation to do so. If the Sellers do not assume the defense of any
such claim, the Purchaser may defend against such claim in such manner as it may
deem appropriate and may settle such claim on such terms as it deems
appropriate. For purposes of this paragraph 16.02, an election by Sellers shall
mean an election by Sellers holding a majority of Interests at Closing.
16.03 The right of indemnification of Purchaser and its
assigns shall not extend to claims or matters which in aggregate do not exceed
$25,000.00.
16.04 The maximum aggregate liability of a Seller for
indemnification or damages for breach of warranties, representations or
covenants shall not be in excess of the value of 50% of the common stock of
Purchaser (or 50% of the proceeds received therefor if such stock has been sold)
received by such Seller pursuant to Schedule I, paragraph 1 hereof or
$600,000.00 multiplied by the percentage of the Interests held by such Seller at
Closing, whichever amount is less. For purposes of this paragraph 16.04, the
value of the aforesaid common stock shall be determined at the time payment is
due pursuant to this indemnification (the "Indemnification Date") using the
average closing bid price for such stock for the 20 trading days preceding the
Indemnification Date. If a Seller still holds common stock of Purchaser on the
Indemnification Date, he or it may satisfy any indemnification obligation by
transferring to Purchaser or its assigns a sufficient number of shares of such
stock to satisfy the indemnification obligation with the stock to be valued as
set out above.
17. Indemnification By Purchaser.
17.01 Purchaser hereby covenants and agrees to (i) indemnify
and hold the Sellers, their successors and assigns, harmless from any and all
claims, actions, proceedings, damages, expenses, liabilities, tax assessments
and/or judgments of any nature whatsoever arising out of any breach by Purchaser
of their warranties, representations and covenants as set forth in paragraphs 6,
9 and 10 of this Agreement but only for the proportion of such claims, actions,
proceedings, damages, expenses, liabilities, tax assessments and/or judgments
allocable to the equity interest of Sellers in Purchaser and further only as to
such matters of which Sellers or their assigns provide Purchaser with specific
written notice of a claim prior to March 31, 2001, and (ii) pay all the Sellers'
expenses and/or losses of any nature whatsoever including Seller's reasonable
attorneys' fees if Purchaser does not assume the defense of a claim pursuant to
paragraph 17.02 hereof. The Sellers, or their successors and assigns, shall
notify the Purchaser in writing of any such liability, asserted liability, or
any claims against the Sellers, with reasonable specificity and promptness
("Notice of Claim"), but in any event prior to March 31, 2001. Purchaser shall
not be obligated to indemnify Sellers or their assigns for any matter as to
which Notice of Claim is received after March 31, 2001 and further shall not be
obligated to indemnify Sellers for the increased amount of any claim or other
matter which would otherwise have been payable to the extent such increase
results from a failure to reasonably and promptly provide Notice of Claim.
17.02 If the claim or demand set forth in the Notice of Claim
relates to a claim or demand asserted by a third party (a "Third Party Claim"),
Purchaser shall have the right to employ counsel reasonably acceptable to
Sellers or their assigns to defend any such claim or demand. Sellers or their
assigns shall have the right to participate in the defense of any such Third
Party Claim at their own costs and expense. Purchaser shall notify Sellers or
its assigns in writing, within fifteen days of receipt of a Notice of Claim of
its decision to defend in good faith any Third Party Claim. So long as Purchaser
is defending in good faith any such Third Party Claim, Sellers or their assigns
shall not settle or compromise such Third Party Claim. The Sellers shall make
available to the Purchaser or its representatives all records and other
materials reasonably required by it for their use in contesting any Third Party
Claim and shall cooperate with the Purchaser in connection therewith. If the
Purchaser does not elect to defend any such Third Party Claim, the Sellers shall
have no obligation to do so. If the Purchaser does not assume the defense of any
such claim, the Sellers may defend against such claim in such manner as they may
deem appropriate and may settle such claim on such terms as they deem
appropriate. For purposes of this paragraph 17.02, an election by Sellers shall
mean an election by Sellers holding a majority of Interests at Closing.
17.03 The right of indemnification of Sellers and their
assigns shall not extend to claims or matters which in aggregate do not exceed
$25,000.00.
17.04 The maximum aggregate liability of Purchaser for
indemnification or damages for breach of warranties, representations and
covenants shall not be in excess of $600,000.00. Purchaser may satisfy any
indemnification obligation in cash or by transferring to Sellers or its or their
assigns a sufficient number of shares of Purchaser's common stock to satisfy the
indemnification obligation. For purposes of determining the number of shares of
its common stock necessary to satisfy the indemnification obligation, the common
stock shall be valued at the time payment is due pursuant to this
indemnification (the "Indemnification Date") using the average closing bid price
for such stock for the 20 trading days preceding the Indemnification Date.
17.05 The provisions of this paragraph 17 shall not be
applicable to and shall not limit the obligations of FAS and Purchasers pursuant
to Paragraph 15 of this Agreement.
18. Miscellaneous.
18.01 Laws of Texas to Govern. This Agreement shall be
governed by and construed in accordance with the laws of the State of Texas
without regard to the conflicts of laws principles thereof and the actual
domicile of the parties.
18.02 Notices. All notices, requests, demands and other
communications hereunder shall be deemed given only if in writing, signed by the
sender and delivered at or mailed (by certified or registered mail, postage
prepaid, return receipt requested) to the receiving party's address as set forth
in Schedule X hereto or to such other address as the receiving party may
designate beforehand by giving written notice, referring to this Agreement, to
the sender with a copy to the Purchaser's attorney, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, 3100 Bank One Center, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇ and to the Sellers' attorney, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇'▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇ ▇▇▇▇, The ▇▇▇▇▇▇▇ Building, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇.
18.03 Headings. The headings in this Agreement are inserted for convenience only
and do not --------- constitute a part hereof.
18.04 Agreement Binding. This Agreement is binding upon and shall inure to the
benefit of the ------------------- parties hereto, and their respective heirs,
executors, administrators, representatives, successors and assigns. 18.05 Legal
Fees and Expenses. In accordance with the provisions of Paragraph 18.13 hereof,
each party shall be responsible for their own respective legal fees and expenses
incurred in connection with this Agreement.
18.06 Independent Counsel. The Sellers represent that they
have consulted with independent counsel of their choosing with respect to the
transactions recited herein whose name is ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and have received
such advice and approval with respect to this Agreement and the terms and
provisions recited herein as they deem necessary. The Purchaser represents that
it has consulted with independent counsel of its choosing with respect to the
transactions recited herein whose name is ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and has received such
advice and approval with respect to this Agreement and the terms and provisions
recited herein as it deems necessary.
18.07 Amendments. This Agreement may not be modified, amended
or terminated except by another agreement in writing executed by the parties
hereto.
18.08 Survival. The parties agree that all warranties,
representations, covenants and obligations contained herein shall
(notwithstanding any investigation or inquiry which any party hereto or any
representative of any party hereto may have made) survive for the period stated
in Paragraphs "5" and "6" hereof the execution, delivery and Closing of this
Agreement and any and all documents delivered in connection herewith and any and
all performances in accordance herewith.
18.09 Counterparts. This Agreement may be executed in multiple
counterparts and on facsimile paper and by facsimile transmission as necessary.
When each of the parties has signed and delivered at least one such counterpart,
each counterpart will be deemed an original and, when taken together with the
other signed counterpart(s), shall constitute one fully executed copy of this
Agreement, which shall be binding upon and effective as to the parties according
to its terms.
18.10 Confidentiality. Unless otherwise required by law, the
parties hereto agree not to disclose any and all terms of this Agreement or any
document related to the transactions contemplated in this Agreement to anyone
not having a need to know in connection with the businesses and business affairs
of the respective parties.
18.11 Severability. In the event that any one or more of the
provisions contained in this Agreement or any application thereof shall be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions of this Agreement and other
applications thereof shall not be affected or impaired in any way.
18.12 Entire Agreement. This Agreement and all exhibits
hereto, all of which are hereby made a part hereof as if fully set forth in this
Agreement, contain the entire agreement between the parties with respect to the
transactions contemplated herein and supersede all prior oral or written
agreements and understandings between the parties related to the transactions
contemplated by this Agreement.
18.13 Fees and Expenses. Whether or not the transaction is
consummated, the Purchaser shall pay all costs and expenses incurred by it in
connection with this transaction. Whether or not the transaction is consummated,
FAS shall pay all costs and expenses incurred by Sellers and FAS in connection
with this transaction.
18.14 Brokers. FAS, the Sellers and Purchaser each acknowledge
that they have retained no brokers or finders for which a commission or finder's
fee will be due or payable in connection with this transaction.
18.15 Termination. This Agreement is being prepared and
executed prior to attachment of all schedules and Exhibits. If by June 1, 2000,
all of such schedules and Exhibits are not attached to the Agreement and
initialed and dated by all parties so as to signify their satisfaction with the
form and substance of such documents as of such date, this Agreement shall be
null and void. Further either the Purchaser or Sellers collectively holding a
majority of the Interests may terminate this Agreement at any time prior to
Closing by giving written notice to the other parties.
IN WITNESS WHEREOF, the undersigned parties have hereunder set their
hands as of the date set forth above.
Interests Sellers:
509,000 Networth Financial Group, LLC
By:-------------------------------
1,370,000 First Atlanta Financial Group LLC
By: --------
520,000 XCEL Capital, L.L.C.
By: --------
FIRST ATLANTA SECURITIES, LLC
By:
------
INSTITUTIONAL EQUITY HOLDINGS, INC.
By:
------
59479_1/43190.00001
59479_1/43190.00001
SCHEDULE I
1. The number of shares of common stock of the Purchaser to be tendered to
Sellers by the Purchaser at Closing shall be either 400,000 unregistered shares
of common stock of Purchaser or the number of unregistered shares equivalent to
$1,200,000, divided by the average closing bid price for such stock for the 20
trading days preceding the Closing Date, whichever is higher. All shares
tendered shall have demand registration rights and piggyback registration rights
without limit as to time in the form of Exhibit "L". The shares received by
Sellers shall be divided between the Sellers proportionate to their respective
Interests, rounding down in the case of fractional shares.
2. Purchaser, at its sole discretion, may enter into mutually acceptable
employment agreements with key employees of FAS. Purchaser will consider issuing
options to key employees of FAS in amounts consistent with Purchaser's current
policies.
3. At Closing, XCEL shall assign to Purchaser that certain interest bearing
subordinated secured demand note of FAS to XCEL in the principal amount of One
Hundred Thousand Dollars ($100,000) (the "Subordinated Debt") and its security
interests in all assets which are securities for such note, including the
underlying cash deposit of $100,000.00. As of March 31, 2000, the accrued but
unpaid interest for such note is approximately $9,000.00. In consideration for
the assignment, Purchaser, at Closing, shall issue and deliver to XCEL the
greater of 50,000.00 unregistered shares of common stock of Purchaser or the
number of unregistered shares equivalent to $100,000 plus the amount of accrued
but unpaid interest on such note as of Date of Closing, divided by 60% of the
average closing bid price for such stock for the 20 trading days preceding the
Closing Date. The shares of Purchaser received by XCEL shall have demand
registration rights and piggyback registration rights in the form of Exhibit
"L".
4. The amount of shares to be issued to Sellers and XCEL at Closing shall be
adjusted pro rata for any stock split, stock dividend or similar event with
respect to the common stock of Purchaser occurring between the date of this
Agreement and the Date of Closing.
5. At such time after Closing that Purchaser and/or its subsidiaries and
affiliates ceases to use the name First Atlanta Securities as a trade name in
its securities business, Purchasers shall cause the name for FAS to be changed
pursuant to the laws of the State of Georgia (and any appropriate other
jurisdiction) to a name which does not include First or Atlanta. Immediately
thereafter for $1.00 in consideration to be paid to FAS by XCEL, Purchasers
shall cause FAS to assign to XCEL the trade names First Atlanta Securities and
First Atlanta Securities, L.L.C. and all logos and trademarks used with such
names so that XCEL thereafter has the exclusive right from FAS and Purchaser to
use the names First Atlanta Securities and First Atlanta Securities, L.L.C. and
any such logos and trade marks. Neither Purchaser nor FAS shall assign to anyone
each such trade names or any right to use such names or logos or trade marks.
SCHEDULE II
LIST OF LIABILITIES OF FAS
SCHEDULE III
CLAIMS, LIENS AND INCUMBANCES OF FAS
SCHEDULE IV
CHANGES IN FAS BUSINESS SINCE 3/31/00
SCHEDULE V
LOANS OF FAS
1. $100,000.00 Subordinate Debenture, First Atlanta Financial Group
SCHEDULE VI
FAS JUDGMENTS, LIENS AND SECURITY AGREEMENTS
SCHEDULE VII
CHANGES IN THE BUSINESS OF PURCHASER
SCHEDULE VIII
JUDGMENTS AND LIENS OF PURCHASER
SCHEDULE IX
PURCHASER'S EMPLOYEE BENEFIT CONTRIBUTIONS
SCHEDULE X
ADDRESSES FOR NOTICES
Networth Financial Group, LLC First Atlanta Financial Group LLC
XCEL Capital, LLC First Atlanta Securities, LLC
Institutional Equity Holdings, Inc.
EXHIBIT A
FAS FOCUS REPORT AT 3/31/00
EXHIBIT B
FAS AUDITED FINANCIAL STATEMENTS FOR YEAR ENDING 3/31/00
EXHIBIT C
FAS NASD MEMBERSHIP AGREEMENT
EXHIBIT D
FAS CONTRACTS
EXHIBIT E
FAS BROKER FIDELITY BONDS
EXHIBIT F
FAS ARTICLES OF ORGANIZATION AND OPERATING AGREEMENT
EXHIBIT G
FAS MINUTES
EXHIBIT H
INSTITUTIONAL EQUITY CORPORATION FOCUS REPORT
AT 12/31/99
EXHIBIT I
INSTITUTIONAL EQUITY CORPORATION
AUDITED FINANCIAL STATEMENTS FOR YEAR ENDING 12/31/99
EXHIBIT J
PURCHASER'S AUDITED FINANCIAL STATEMENTS FOR
YEAR ENDING 12/31/99
EXHIBIT K
PURCHASER'S NASD MEMBERSHIP AGREEMENT
EXHIBIT L
REGISTRATION RIGHTS AGREEMENT
FIRST AMENDMENT TO PURCHASE AGREEMENT