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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): May 25, 1995
STIFEL FINANCIAL CORP.
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(Exact Name of Registrant as specified in its Charter)
Missouri 1-9305 43-1273600
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(State of Incorporation) (Commission File Number) (IRS Employer
Identification No.)
500 North Broadway
St. Louis, Missouri 63102
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(Address of principal executive offices including zip code)
(314) 342-2000
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(Registrant's telephone number, including area code)
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Item 2. Acquisition or Disposition of Assets.
On May 25, 1995 (the "Closing Date"), Stifel, Nicolaus & Company,
Incorporated, a Missouri corporation ("Stifel"), a wholly-owned subsidiary of
Stifel Financial Corp. (the "Company"), sold the assets of its Oklahoma
division (including three Texas offices) to Capital West Financial Corporation,
an Oklahoma corporation ("CWFC"), pursuant to an Amended and Restated Asset
Purchase Agreement, dated May 25, 1995 (the "Purchase Agreement"), by and among
Stifel, CWFC and Capital West Securities, Inc., an Oklahoma corporation
("CWSI") and a wholly-owned subsidiary of CWFC.
The aggregate consideration to be delivered to Stifel pursuant to the
Purchase Agreement was (a) $150,000 in cash; (b) a $300,000 Senior Secured Note
due May 24, 1997, obligating payment from CWFC to Stifel; (c) a $1,550,000
Senior Secured Note due May 24, 2000 (the "Long-Term Note"), obligating payment
from CWFC to Stifel; (d) warrants of CWFC exercisable into common stock of CWFC
representing a fully diluted ownership interest in CWFC of 19.9% as of the
Closing Date, which warrants shall carry an exercise price equal to the fair
market value of such common stock at the Closing Date and expire on the later
of the five year anniversary of the Closing Date or 90 days after payment in
full of all amounts owing under the Long-Term Note; (e) payment (the "Municipal
Payments") to Stifel by CWSI of a portion of gross revenues net of third party
transaction-related expenses derived from the municipal finance, institutional
sales and trading functions of CWSI (collectively, the "Municipal Operations")
for the period beginning on the Closing Date and ending on the third
anniversary of the Closing Date calculated annually as follows: (i) 0% of the
first $500,000 of annual gross revenue net of third party transaction-related
expenses of CWSI derived from the Municipal Operations, (ii) 15% of the next
$750,000 of annual gross revenue net of third party transaction-related
expenses of CWSI derived from the Municipal Operations, plus (iii) 25% of the
annual gross revenue net of third party transaction-related expenses of CWSI in
excess of $1,250,000; (f) 20% of the 12b-1 fees ("12b-1 Portion") earned by
CWSI for the period beginning on the Closing Date and ending on the third
anniversary of the Closing Date; and (g) monthly payments (the "Investment
Executive Monthly Payments") to Stifel from CWSI, over the remaining terms of
the notes payable to Stifel from certain investment executives (the "Investment
Executives"), in an amount equal to 5.0% of each such Investment Executive's
gross sales commission for the prior month.
Stifel received cash, secured and subordinated notes, and warrants to
purchase a minority interest in CWFC. CWFC assumed certain office and
equipment lease obligations of Stifel. The sale resulted in the reduction of
approximately 70 investment executives and approximately 50 support staff
located in 26 branch offices.
Stifel will provide clearing services to CWSI, George H. Walker, III,
Stifel's chairman of the board, will serve on the board of directors of CWFC
and CWSI.
Item 5. Other Events.
On May 24, 1995, the Oklahoma Turnpike Authority (the "Authority")
filed an action against Stifel, Nicolaus & Company, Incorporated, the Company's
subsidiary, and two former officers, DeWayne Von Feldt and Robert Cochran. The
lawsuit was filed in the District Court in and for Oklahoma County, State of
Oklahoma and is styled "The Oklahoma Turnpike Authority v. Stifel, Nicolaus &
Company, Inc., Robert Cochran and DeWayne Von Feldt", Case number CJ 95 3472.
The Authority alleges that Stifel received an undisclosed payment of $6.5
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million in connection with a forward purchase contract executed between the
Authority and Sakura Global Capital for reinvesting proceeds from the
Authority's 1992 bond issue which was underwritten by Stifel and Merrill Lynch,
Pierce, Fenner & Smith. The Authority alleges that it received income of
$12,357,000 from Sakura Global Capital for the forward purchase contract. The
Authority also alleges that Stifel was not entitled to the $6.5 million payment
but that the $6.5 million, in addition to the $12,357,000, should have been
paid to the Authority or for its benefit. The Authority further alleges that
Robert Cochran was primarily responsible for the services provided by Stifel
for the 1992 Turnpike offering and that DeWayne Von Feldt, who also was a
director of Stifel Financial Corp., was responsible for supervising Mr.
Cochran's work.
The Authority's petition contains four counts: (1) Breach of Agency
and Fiduciary Duties; (2) Breach of Implied-in-Law Contractual Duties/Unjust
Enrichment; (3) Deceit by Non-Disclosure/Concealment; and (4) Negligence -
Failure to Supervise. The Authority seeks compensatory damages in the amount
of $6.5 million and an unspecified amount of punitive damages.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Businesses Acquired.
None.
(b) Pro Forma Financial Information.
Pro forma information related to the sale of the assets of the
Oklahoma division and three Texas offices of Stifel, Nicolaus & Company,
Incorporated to Capital West Financial Corporation, an Oklahoma corporation, in
Note Q on page 50 of Stifel Financial Corp.'s Form 10-K for the year ended
December 31, 1994 and in Note D on page 9 of Stifel Financial Corp.'s Form 10-Q
for the quarter ended March 31, 1995, are incorporated herein by reference.
(c) Exhibits.
Exhibit 2(a): Amended and Restated Purchase Agreement, dated
May 25, 1995, by and among Stifel, Nicolaus & Company,
Incorporated, Capital West Financial Corporation and Capital
West Securities, Inc., a wholly-owned subsidiary of Capital
West Financial Corporation.
Exhibit 99(a): Press Release dated May 25, 1995 announcing
the sale of the assets of the Oklahoma division and three
Texas offices of Stifel, Nicolaus & Company, Incorporated to
Capital West Financial Corporation, an Oklahoma corporation.
Exhibit 99(b): Note Q on page 50 of Stifel Financial Corp.'s
Form 10-K for the year ended December 31, 1994.
Exhibit 99(c): Note D on page 9 of Stifel Financial Corp.'s
Form 10-Q for the quarter ended March 31, 1995.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
STIFEL FINANCIAL CORP.
Date June 9, 1995 By: /S/ MARK D. KNOTT
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Name: Mark D. Knott
Title: Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Description
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Exhibit 2(a) Amended and Restated Asset Purchase Agreement,
dated May 25, 1995
Exhibit 99(a) Press Release dated May 25, 1995
Exhibit 99(b) Note Q on page 50 of Stifel Financial Corp.'s Form 10-
K for the year ended December 31, 1994
Exhibit 99(c) Note D on page 9 of Stifel Financial Corp.'s Form 10-Q
for the quarter ended March 31, 1995
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EXHIBIT 3(a)
AMENDED AND RESTATED ASSET PURCHASE AGREEMENT
---------------------------------------------
THIS AMENDED AND RESTATED ASSET PURCHASE AGREEMENT (the "Agreement")
is made as of this 25th day of May, 1995, by and among STIFEL, NICOLAUS &
COMPANY, INCORPORATED, a Missouri corporation ("Seller"), CAPITAL WEST
FINANCIAL CORPORATION, an Oklahoma corporation ("Purchaser"), and CAPITAL WEST
SECURITIES, INC., an Oklahoma corporation and a wholly-owned subsidiary of
Purchaser (the "Company").
RECITALS
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WHEREAS, Seller, Purchaser and the Company are parties to that certain
Asset Purchase Agreement (the "Prior Agreement") dated February 6, 1995;
WHEREAS, Seller, Purchaser and the Company desire to make certain
amendments to the Prior Agreement, as such Prior Agreement is amended and
restated herein;
WHEREAS, Seller desires to sell to Purchaser, the Purchased Assets (as
defined below), and to assign to Purchaser the Assumed Liabilities (as defined
below) and Assumed Obligations (as defined below), on the following terms and
conditions; and
WHEREAS, Purchaser desires to purchase from Seller the Purchased
Assets and to assume the Assumed Liabilities and Assumed Obligations, on the
following terms and conditions; and
WHEREAS, as an inducement for the Seller to enter into the
transactions contemplated by this Agreement, which provide the opportunity for
the Company to begin operation of its business, the Company desires to make
certain payments to, and enter into certain obligations with, the Seller.
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants, representations, warranties, conditions and agreement
hereinafter expressed, the parties agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
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1.1 Assets to be Purchased. Subject to the terms and conditions
hereof, on the Closing Date (as hereinafter defined), Seller agrees to sell to
Purchaser and Purchaser agrees to purchase from Seller the assets (excluding
those assets identified on Schedule 1.1(a) hereto) located at Seller's offices
listed on Schedule 1.1(b) (the "Oklahoma Locations"), including furniture,
fixtures and equipment, leasehold improvements, customer lists, operating files
and other office supplies, which will be set forth on the Closing Asset
Schedule (as hereinafter defined). The assets of Seller to be purchased by
Purchaser hereunder are set forth on Schedule 1.1(c) attached hereto (the
"Closing Asset Schedule") and are herein sometimes collectively called the
"Purchased Assets". Notwithstanding the foregoing, the "Purchased Assets" will
exclude all assets of Seller located at its office in Texarkana, Texas, which
office Purchaser and the Company acknowledge will continue to be operated by
Seller following the Closing, or at its offices located on the 19th floor of
One Leadership Square in Oklahoma City and 39th Street and Classen Boulevard,
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in Oklahoma City which offices shall be closed by Seller on or about the
Closing Date.
1.2 Liabilities and Obligations to be Assumed. Subject to the
terms and conditions hereof, as of the Closing Date, Seller agrees to assign
and transfer to Purchaser and Purchaser, as part of the consideration of this
Agreement, agrees to assume the following liabilities, and no others:
(a) The liabilities of Seller listed and described on
Schedule 1.2(a).
(b) The executory leases, contracts, underwriting
agreements and other agreements or instruments to which Seller is a
party which are listed and described on Schedule 1.2(b) hereto.
(c) Such other contracts, agreements, leases and purchase
and sale commitments as are entered into by Seller between the date of
this Agreement and the Closing Date in accordance with Section 4.1
hereof.
The liabilities referred to in Section 1.2(a) hereof are herein sometimes
collectively called the "Assumed Liabilities". The obligations and instruments
referred to in Sections 1.2(b) and (c) hereof are herein sometimes collectively
called the "Assumed Obligations". Neither Purchaser, nor any affiliate of
Purchaser, is assuming, becoming liable for, agreeing to discharge or in any
manner becoming in any way responsible for any of the liabilities of Seller
other than those expressly assumed herein.
Notwithstanding the foregoing, if the assignment and transfer of any
of the Assumed Obligations would cause a breach thereof and/or if any required
consent to such assignment and transfer has not been obtained from the third
party involved, then such obligation or instrument shall not be assigned and
transferred, but Purchaser agrees that it shall enter into a sublease or
subcontract, as the case may be, on the same terms as the original lease or
contract, as the case may be, and, pursuant to such sublease or subcontract,
shall make to Seller all payments required of Seller under such Assumed
Obligations, and Seller shall in turn make such required payments to the
applicable third party. All such subleases and subcontracts shall be in form
and substance reasonably satisfactory to Purchaser and Seller, consistent with
the foregoing sentence.
1.3 Aggregate Consideration. The aggregate consideration (the
"Aggregate Consideration") to be delivered to Seller on the Closing Date in
exchange for the Purchased Assets, shall be:
(a) $150,000 in cash;
(b) a $300,000 Senior Secured Note due on the second anniversary
of the Closing Date (the "Short-Term Note"), substantially in
the form as such Short-Term Note stands as of the date hereof,
bearing interest at a rate of 10.0% per annum, obligating
payment from Purchaser to Seller of equal installments of
principal, together with all accrued interest, on the twelve-
month anniversary of the Closing Date, the eighteen-month
anniversary of the Closing Date and the two year anniversary
of the Closing Date;
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(c) a $1,550,000 Senior Secured Note due on the five year
anniversary of the Closing Date (the "Long-Term Note,"
together with the Short-Term Note, the "Notes"), substantially
in the form as such Long-Term Note stands as of the date
hereof, and bearing interest at a rate of 10.0% per annum,
obligating payment from Purchaser to Seller of principal and
interest semiannually, payable as follows:
(i) beginning on the twelve-month anniversary of the
Closing Date and ending on and including the three
year anniversary of the Closing Date the amount of
12b-1 fees (the 12b-1 fees from money fund balances
only) earned by the Company over the previous six-
month period less any amount of such fees paid to
Seller pursuant to Section 1.3(f) below with respect
to such period, shall first be applied to interest
accrued to such date with any excess being applied to
principal, and
(ii) beginning on the date six months after the three year
anniversary of the Closing Date and ending on and
including the five year anniversary of the Closing
Date, the remaining principal due on the three year
anniversary of the Closing Date to Seller shall be
paid in four equal installments, together with all
accrued interest;
(d) warrants of Purchaser (the "Warrants") exercisable into
Purchaser Common Stock (as hereinafter defined) representing a
fully diluted ownership interest in Purchaser of 19.9% as of
the Closing Date, which Warrants shall be exercised pursuant
to a warrant agreement, dated the Closing Date, by and among
the Purchaser and Seller, substantially in the form as such
Warrant Agreement stands as of the date hereof (the "Warrant
Agreement") and shall (i) carry an exercise price equal to the
fair market value of such Purchaser Common Stock at the
Closing Date and (ii) expire on the later of the five year
anniversary of the Closing Date or 90 days after payment in
full of all amounts owing under the Long-Term Note, provided
that if Seller or Seller's parent, Stifel Financial Corp.
("Stifel Financial"), is acquired by a third party or merges
with a third party where the third party is the surviving
corporation, Purchaser shall have the right to purchase the
Warrants at their then fair market value as determined by an
appraisal;
(e) payment (the "Municipal Payments") to Seller by the Company of
a portion of gross revenues net of third party transaction-
related expenses derived from the municipal finance,
institutional sales and trading functions of the Company
(collectively, the "Municipal Operations") for the period
beginning on the Closing Date and ending on the third
anniversary of the Closing Date calculated annually as
follows:
(i) 0% of the first $500,000 of annual gross revenue net
of third party transaction-related expenses of the
Company derived from the Municipal Operations;
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(ii) 15% of the next $750,000 of annual gross revenue net
of third party transaction-related expenses of the
Company derived from the Municipal Operations; plus
(iii) 25% of the annual gross revenue net of third party
transaction-related expenses of the Company in excess
of $1,250,000;
and such Municipal Payments for the 12-month period ending on
the one year, two year and three year anniversary of the
Closing Date shall be paid to Seller thirty days following
each such anniversary;
(f) 20% of the 12b-1 fees (the "Seller's 12b-1 Portion") earned by
the Company for the period beginning on the Closing Date and
ending on the third anniversary of the Closing Date, and such
Seller's 12b-1 Portion for the 12-month periods ending on the
one year, two year and three year anniversary of the Closing
Date shall be paid to Seller by the Company 30 days following
each such anniversary;
(g) monthly payments (the "Investment Executive Monthly Payments")
to Seller from the Company, over the remaining terms of the
notes payable to Seller set forth on Schedule 1.3(g) hereto
(the "IE Notes") of certain investment executives set forth on
Schedule 1.3(g) hereto ("Scheduled Investment Executives"), in
an amount equal to 5.0% of each such Scheduled Investment
Executive's gross sales commission for the prior month, and
such Investment Executive Monthly Payments shall be paid on or
before the 15th day of each month with respect to each
Scheduled Investment Executives' prior monthly gross sales
commission. In the event an Investment Executive resigns from
the Company or is terminated by the Company prior to the end
of the term of the applicable IE Note, the Company shall
notify Seller of any such departure within seven (7) business
days of such departure and Seller shall have the right but not
the obligation to pursue and collect any amounts due from such
Investment Executive under the applicable IE Note. In the
event Seller does not commence an action against such
Investment Executive within 90 days of receiving notice from
the Company, Seller shall assign all its right, title and
interest in the applicable IE Note to the Company. Only to
the extent of any net amount Seller may recover from the
Investment Executive as a result of an action initiated
pursuant to this paragraph, Seller shall repay to the Company
any payments the Company has made to Seller pursuant to this
paragraph with respect to such Investment Executive; provided,
however, if Seller does not recover any amount from the
Investment Executive, Seller shall not be obligated to repay
any amounts provided for herein.
1.4 Closing. The closing of the transactions contemplated hereby
(the "Closing") shall take place on May 25, 1995 (the "Closing Date") at
9:00 A.M., effective as of the close of business on such date , at the offices
of Bryan Cave in St. Louis, Missouri, or such other time, date and place as the
parties may agree, provided that all conditions to the Closing have been
satisfied or waived in writing. On the Closing Date, (1) Seller shall execute,
as required in this Agreement, and deliver to Purchaser, all appropriate
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instruments of assignment, transfer and conveyance, such other documents as the
Purchaser or its counsel shall reasonably request or as specified in Sections
6.5 and 6.7 of this Agreement, (2) each of the Company and Purchaser shall
execute, as required in this Agreement, and deliver to Seller, all such
documents as Seller or its counsel shall reasonably request or as specified in
Sections 7.5, 7.6, 7.7. and 7.8.
1.5 Due Diligence; Confidentiality. Seller shall cause the
Company and Purchaser to have, and the Company and Purchaser shall have, access
to Seller, during normal business hours, for the purpose of conducting a due
diligence investigation, with respect to all of the lease files, contract
files, data, records, financial records, and the other information, data and
records of Seller pertaining to the Oklahoma Locations. Seller shall give all
reasonable assistance and access to the Company and Purchaser and the Company's
and Purchaser's representatives in conducting the due diligence investigation.
The Company and Purchaser shall each hold, and shall each cause each of its
representatives to hold, in strict confidence, all documents and information
which it obtains (to the extent that such documents and information are not a
matter of public record and except as may be required in the Company's
applications for regulatory approvals). If the transactions contemplated
herein are not consummated, such confidence shall be maintained, all original
and copied documents shall be returned to Seller, the Company and Purchaser and
Seller, the Company and Purchaser shall not use, or allow others to use, any
information which it has obtained for any purposes.
1.6 Allocation of Purchase Price. The Aggregate Consideration
provided for herein shall be allocated as stated in Schedule 1.6. Schedule 1.6
shall be finalized and attached hereto within ten days after the Closing Asset
Schedule is approved by the Company.
1.7 Seller's Payment to the Company. In exchange for Purchaser
assuming the Assumed Liabilities as set forth on Schedule 1.2(a) hereto, Seller
shall deliver to Purchaser on the Closing Date $228,557.35 in cash.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
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Seller hereby makes the following representations and warranties with
respect to the Purchased Assets, Assumed Liabilities and the Assumed
Obligations, each of which is true and correct on the date hereof and will be
true and correct on the Closing Date (except for changes in the ordinary course
of business or as permitted or contemplated in this Agreement) and each of
which shall survive the Closing Date and the transactions contemplated hereby
to the extent set forth in Section 9.4 hereof.
2.1 Corporate Existence and Qualification of Seller. Seller is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Missouri. Seller has the corporate power and authority to
own and use its properties and to transact the business in which it is engaged,
is duly licensed or qualified to do business as a foreign corporation and is in
good standing in, and is duly registered as a broker-dealer in, the States of
Missouri, Oklahoma and Texas.
2.2 Approval of Agreement. The execution and delivery of this
Agreement has been duly authorized and approved by the Board of Directors of
Stifel Financial, and will be authorized and approved by the Board of Directors
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of Seller prior to Closing. Certified copies of the resolutions giving said
authorization and approval will be delivered to the Purchaser at the Closing
and said authorization and approval will not have been altered, amended or
revoked. Pursuant to such authorization and approval, Seller will on the
Closing Date have full power and authority to enter into this Agreement and all
other documents contemplated hereby and to perform its obligations hereunder
and thereunder. This Agreement does, and when executed all other documents to
be entered into by Seller pursuant hereto shall, constitute valid and binding
agreements of Seller enforceable in accordance with their respective terms.
2.3 Assumed Obligations. The Assumed Obligations are all valid
and in full force and effect and Seller is not in default with respect to any
material term or condition thereof, nor to the best of Seller's knowledge after
reasonable inquiry has any event occurred which, through the passage of time or
the giving of notice, or both, would constitute a default thereunder by Seller
or would cause the acceleration of any obligation of Seller. Except as set
forth on Schedule 2.3, no consent is necessary for the assignment of the
Assumed Obligations to Purchaser. Schedule 2.3 shall be finalized and attached
hereto within two weeks after the date hereof.
2.4 Real and Personal Property - Leased to Seller. All real
property leases of offices of Seller relating to the Oklahoma Locations to be
assumed by Purchaser hereunder are set forth at Exhibit I. All office
equipment, computer terminal, quotation delivery equipment and other equipment
leases to be assumed by Purchaser hereunder are set forth at Exhibit II. The
premises or property described in the leases set forth at Exhibits I and II are
presently occupied or used by Seller as lessee under the terms of said leases.
Seller has all right, title and interest of the lessee under the terms of said
leases, free of all liens, claims or encumbrances and all such leases are valid
and in full force and effect.
2.5 Title and Transfer of Purchased Assets. Seller has good and
marketable title to all the Purchased Assets, and, upon consummation of the
transactions contemplated hereby, good and marketable title thereto shall be
vested in the Purchaser free and clear of all taxes, liens and encumbrances.
Except as set forth on Schedule 2.6 hereto, no consent is necessary to, and
there exists no restriction on, the transfer of any of the Purchased Assets to
Purchaser, and there exists no condition, restriction or reservation affecting
the title to or utility of the Purchased Assets which would prevent Purchaser
from occupying or utilizing the Purchased Assets, or any part thereof, to the
same extent that Seller might continue to do so if the sale and transfer
contemplated hereby did not take place.
2.6 No Breach of Statute, Decree, Order or Contract. To the best
of Seller's knowledge after reasonable inquiry, and except as set forth on
Schedule 2.6 hereto, the execution of this Agreement and the consummation of
the transactions contemplated hereby has not and will not constitute or result
in any default under or violation of, any applicable statute, law, ordinance,
decree, order, rule or regulation of any governmental body, or the provisions
of any franchise or license, or default under or violation of any provision of
its articles of incorporation, by-laws, any promissory note, indenture or any
evidence of indebtedness or security therefor, lease, contract, purchase or
other commitment or any other agreement to which Seller is a party or by which
it is bound. No governmental permits or consents are necessary for Seller to
effect the transactions contemplated hereby.
2.7 Litigation. Except as set forth on Schedule 2.7 hereto, there
is no suit, claim, action or proceeding now pending or to the best of Seller's
<PAGE> 7
knowledge after reasonable inquiry threatened before any court, administrative
or regulatory body, or any governmental agency, to which Seller, in connection
with its Oklahoma Locations, is a party which to the best of Seller's knowledge
after reasonable inquiry could have any material adverse effect upon the
Purchased Assets or Assumed Obligations. No such judgment, order or decree has
been entered against Seller nor to the best of Seller's knowledge after
reasonable inquiry has any such liability been incurred which has, or could
have, such effect. There is no claim, action or proceeding now pending or to
the best of Seller's knowledge after reasonable inquiry threatened before any
court, administrative or regulatory body, or any governmental agency, which
will, or could, prevent the consummation of the transactions contemplated by
this Agreement.
2.8 Broker's Fees. Except for First Albany Corporation, whose
fees will be paid by Seller, Seller has not retained any broker, finder or
agent or agreed to pay any brokerage fees, finder's fees or commissions for
which the Purchaser is or will be liable with respect to the transactions
contemplated by this Agreement.
2.9 Employees at Oklahoma Locations. There are, except as
disclosed on Schedule 2.9, no collective bargaining, bonus, profit sharing,
compensation or other plans, agreements, trusts, funds or arrangements
maintained by Seller for the benefit of the employees at the Oklahoma
Locations. Except as set forth on Schedule 2.7, there is no action or
proceeding now pending or to the best of the knowledge of Seller after
reasonable inquiry threatened before any agency or regulatory body against any
employee at any Oklahoma Location.
2.10 Environmental Matters.
(a) As used in this Agreement, "Environmental Laws" means all
material local, state and federal environmental, health and safety laws and
regulations in Oklahoma, including, without limitation, the Federal Resource
Conservation Recovery Act, the Federal Comprehensive Environmental Response,
Compensation and Liability Act, the Federal Clean Water Act, the Federal Clean
Air Act, the Federal Occupational Safety and Health Act.
(b) To the best of Seller's knowledge after reasonable inquiry,
neither the conduct nor operation of Seller nor any condition of any property
owned or leased violates Environmental Laws in any material respect and no
condition or event has occurred with respect to any of them or any such
property that, with notice or the passage of time, or both, would constitute a
material violation of Environmental Laws or obligate (or potentially obligate)
Seller to remedy, stabilize, neutralize or otherwise alter the environmental
condition of any such property. Seller has not received any notice from any
person or entity that Seller or the operation of any facilities or any property
owned were or are in violation of any Environmental Laws or that it is
responsible (or potentially responsible) for the cleanup of any pollutants,
contaminants, or hazardous or toxic wastes, substances or materials at, on or
beneath any such property.
2.11 Federal Americans with Disability Act. To the best of Seller's
knowledge after reasonable inquiry, the Seller is in substantial compliance
with the Federal Americans with Disability Act and has not received notice that
it is in violation of the Federal Americans with Disability Act.
<PAGE> 8
2.12 Certain Financial Representations.
(a) The average monthly commissionable revenue as shown on the
internal operating statements on the books of the Seller with respect to the
Oklahoma Locations was in excess of $798,000 for the three months ended
December 31, 1994.
(b) The average monthly "Fixed and Controllable" expenses (as
generally set forth on Schedule 2.12(b) hereto) as shown on Seller's internal
operating statements (excluding professional fees and errors) on the books of
the Seller with respect to the Oklahoma Locations did not exceed $320,000 for
the three months ended December 31, 1994.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND PURCHASER
-----------------------------------------------------------
Each of the Company and Purchaser hereby makes the following
representations and warranties, each of which is true and correct on the date
hereof and will be true and correct on the Closing Date (except for changes in
the ordinary course of business or as permitted or contemplated in this
Agreement) and each of which shall survive the Closing Date and the sale
contemplated hereby to the extent set forth in Section 9.4 hereof.
3.1 Corporate Existence of the Company. The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Oklahoma. The Company has the corporate power and
authority to own and use its properties and to transact the business in which
it is engaged, is duly licensed and qualified to do business as a foreign
corporation and is in good standing in the jurisdictions listed on
Schedule 3.1, and is not required to be licensed or qualified to do business in
any other jurisdiction.
3.2 Corporate Existence of Purchaser. Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Oklahoma. Purchaser has the corporate power and authority to own and
use its properties and to transact the business in which it is engaged, is duly
licensed and qualified to do business as a foreign corporation and is in good
standing in the jurisdictions listed on Schedule 3.2, and is not required to be
licensed or qualified to do business in any other jurisdiction.
3.3 Approval of Agreement. The execution and delivery of this
Agreement has been duly authorized and approved by the Board of Directors of
the Company and the Board of Directors of Purchaser. Certified copies of the
resolutions giving said authorization and approval by the Company and Purchaser
will be delivered to Seller at the Closing and said authorization and approval
has not been altered, amended or revoked. Pursuant to such authorization and
approval, each of the Company and Purchaser has full power and authority to
enter into this Agreement and all other documents contemplated hereby and to
perform its obligations hereunder and thereunder. This Agreement does, and
when executed all other documents to be entered into by the Company and/or
Purchaser pursuant hereto shall, constitute the valid and binding agreements of
such the Company and/or Purchaser, respectively, enforceable in accordance with
their respective terms.
3.4 No Breach of Statute, Decree, Order or Contract. Neither the
Company nor Purchaser is in default under or in violation of, any applicable
<PAGE> 9
statute, law, ordinance, decree, order, rule, or regulation of any governmental
body, or the provisions of any franchise or license, or in default under, or in
violation of, any provision of its articles of incorporation, by-laws, any
promissory note, indenture or any evidence of indebtedness or security
therefor, lease, contract, purchase or other commitment or any other agreement
to which it is a party or by which it is bound which may result in a material
adverse effect on the business or condition, financial or otherwise, of the
Company or Purchaser; and the execution of this Agreement and the consummation
of transactions contemplated hereby has not and, to the best of the Company's
and Purchaser's knowledge after reasonable inquiry, will not constitute or
result in any such default, breach or violation or in the creation of any lien,
charge or encumbrance upon any of the assets of the Company or Purchaser.
Except as set forth on Schedule 3.4, no governmental permits or consents are
necessary for the Company or Purchaser to effect the transactions contemplated
hereby.
3.5 Capitalization and Net Worth of the Company and Purchaser.
(a) The entire authorized capital stock of the Company consists of
3,000,000 shares of common stock, $.01 par value per share (the "Company Common
Stock") and 2,000,000 shares of preferred stock, $.01 par value per share (the
"Company Preferred Stock"). As of the Closing Date, there will be issued and
outstanding 100 shares of the Company Common Stock all of which will have been
duly authorized, validly issued, fully paid and non-assessable prior to the
Closing. There are no presently issued or outstanding shares of the Company
Preferred Stock nor will there be as of the Closing Date. Except as set forth
on Schedule 3.5 hereto, there are no outstanding warrants, options, contracts,
calls, or other rights of any kind with regard to any authorized and unissued,
or issued but not outstanding, shares of the Company Common Stock or the
Company Preferred Stock.
(b) The entire authorized capital stock of Purchaser consists of
3,000,000 shares of common stock, $.01 par value per share (the "Purchaser
Common Stock") and 2,000,000 shares of preferred stock, $.01 par value per
share (the "Purchaser Preferred Stock"). As of the Closing Date, there will be
issued and outstanding 500,000 shares of Purchaser Common Stock all of which
will have been duly authorized, validly issued, fully paid and non-assessable
prior to the Closing. The shares of Purchaser Common Stock to be issued to
Seller pursuant to the Warrants will when issued be duly authorized, validly
issued, fully paid and non-assessable. There are no presently issued or
outstanding shares of Purchaser Preferred Stock nor will there be as of the
Closing Date. As of the Closing Date, Purchaser and the Company will have a
consolidated net worth in excess of $450,000. Except as set forth on
Schedule 3.5 hereto, there are no outstanding warrants, options, contracts,
calls, or other rights of any kind with regard to any authorized and unissued,
or issued but not outstanding, shares of Purchaser Common Stock or Purchaser
Preferred Stock.
3.6 Litigation. Except as set forth on Schedule 3.6 hereto, there
is no suit, claim, action or proceeding now pending or to the best of the
Company's and Purchaser's knowledge after reasonable inquiry threatened before
any court, administrative or regulatory body, or any governmental agency, to
which the Company or Purchaser is a party which to the best of the Company's
and Purchaser's knowledge after reasonable inquiry could have any material
adverse affect upon the assets of the Company or Purchaser or upon the business
or condition, financial or otherwise, of the Company or Purchaser. No such
judgment, order or decree has been entered against the Company or Purchaser nor
to the best of the Company's and Purchaser's knowledge after reasonable inquiry
<PAGE> 10
has any such liability been incurred which has, or could have, such affect.
There is no claim, action or proceeding now pending or to the best of the
Company's and Purchaser's knowledge after reasonable inquiry threatened before
any court, administrative or regulatory body, or any governmental agency, which
will, or could, prevent the consummation of the transactions contemplated by
this Agreement.
3.7 Broker's Fees. Neither the Company nor Purchaser has retained
any broker, finder or agent or agreed to pay any brokerage fees, finder's fees
or commissions for which Seller is or will be liable with respect to the
transactions contemplated by this Agreement.
ARTICLE IV
CONDUCT OF BUSINESS
-------------------
Seller covenants and agrees with the Purchaser that, from and after
the date of this Agreement and until the Closing Date, Seller will conduct its
business as operated at the Oklahoma Locations subject to the following
provisions and limitations:
4.1 Operation of Business. Without the prior written consent of
the Purchaser, and except as contemplated or permitted by this Agreement, and
except for any transaction not relating to any of the Purchased Assets, Assumed
Liabilities or Assumed Obligations, Seller will not:
(a) Enter into any contract or commitment or engage in any
transaction which is not in the usual and ordinary course of business or which
is inconsistent with past practices.
(b) Perform any act, or attempt to do any act, or permit any act
or omission to act, which will cause a breach of any Assumed Obligations.
(c) Remove any material assets of Seller located at the Oklahoma
Locations unless otherwise permitted by this Agreement.
4.2 Preservation of Business. With respect to the Oklahoma
Locations, Seller shall carry on its business diligently and substantially in
the same manner as heretofore conducted and shall use reasonable efforts to
keep its business organization intact, including its present employees and
present relationships with customers and others having business relations with
it; provided that, it shall not be a violation hereof or a condition hereto, if
(despite such reasonable efforts) such business organization and such customer
relationships do not remain in whole or in any part intact.
ARTICLE V
ADDITIONAL AGREEMENTS
---------------------
5.1 Covenants Not To Compete.
(a) As an inducement to the Purchaser and Company to enter into
this Agreement, and in consideration of the promises and representations of the
Purchaser and Company under this Agreement, Seller covenants and agrees that
for a period of three years following the Closing Date, neither it nor its
affiliates, successors or assigns will, nor will any of them have any material
<PAGE> 11
interest, directly or indirectly, in any other person, firm or corporation, or
other entity, other than the Company and/or Purchaser, which will, (i) solicit
municipal finance underwriting in the State of Oklahoma, (ii) open retail
brokerage offices in the State of Oklahoma, (iii) actively recruit or hire
Seller's employees who become employed by the Purchaser or Company on the
Closing Date without the written consent of the Purchaser or Company, as the
case may be or (iv) solicit former retail customers of Seller on the books of
the Oklahoma Locations, except to the extent that such retail customer is also
on the books of any office of Seller which is not an Oklahoma Location. Seller
specifically acknowledges and agrees that the foregoing covenants are
commercially reasonable and reasonably necessary to protect the interests of
the Purchaser and Company.
(b) As an inducement to Seller to enter into this Agreement, and
in consideration of the promises and representations of Seller under this
Agreement, each of the Company and Purchaser covenants and agrees that for a
period of three years following the Closing Date, neither it nor its
affiliates, successors or assigns will, nor will any of them have any material
interest, directly or indirectly, in any other person, firm, corporation or
other entity, other than the Seller, which will, (i) solicit municipal finance
underwriting in the State of Missouri, (ii) open retail brokerage offices in
the State of Missouri or (iii) actively recruit, hire or contract with Seller's
employees without the written consent of Seller. Each of the Company and
Purchaser specifically acknowledges and agrees that the foregoing covenants are
commercially reasonable and reasonably necessary to protect the interests of
Seller.
(c) The covenants contained in paragraphs (a) and (b) above shall
be deemed to be a series of separate covenants (each a "Separate Covenant").
If any court or tribunal of competent jurisdiction shall refuse to enforce one
or more of the Separate Covenants because, taken together, they are more
extensive than is deemed to be reasonable or because the time limit applicable
thereto is deemed to be unreasonable, it is expressly understood and agreed
that such Separate Covenant or Separate Covenants shall not be void but that
for the purpose of such proceeding the restriction contained therein or time
limitation shall be deemed to reduced to the extent necessary to permit the
enforcement of such Separate Covenant or Separate Covenants. Furthermore, to
the extent any Separate Covenant is found to be unenforceable, the remaining
Separate Covenants shall be severable and enforceable in accordance with their
terms.
(d) Each of the Company, Purchaser and Seller hereby acknowledge
that the business of the other is unique and that each of the Company and
Purchaser and their respective successors and assigns and each of Seller and
its respective successors and assigns will suffer irreparable and continuing
harm to the extent that the foregoing covenants set forth in paragraphs (a) and
(b) above, respectively, are breached and that legal remedies would be
inadequate in the event of any such breach.
(e) Nothing contained herein shall restrict Seller from owning 2%
or less of the corporate securities of any entity in competition with the
Company and/or Purchaser or the Company and/or Purchaser from collectively
owning 2% or less of the corporate securities of any entity in competition with
the Seller, which ownership would otherwise be a violation of paragraphs (a)
and (b) above, if such securities are listed on any national securities
exchange or authorized for quotation on the Automated Quotations System of the
NASD, and if such entity has no other connection or relationship, direct or
indirect, with the issuer of such securities.
<PAGE> 12
5.2 Advances Receivable. The Company acknowledges that Seller
expects and is entitled to repayment of advances receivable from James Barnes,
Larry Edzards, David Jensen, Walter Johnson, James McIntyre and Gary Tillman
(collectively, the "Institutional Salesmen") in accordance with the original
terms of their compensation agreements set forth at Exhibit V (the
"Institutional Salesmen Agreements"). The Company agrees that it shall remit
to Seller any net amounts due, after withholding taxes, derived from any
commissions earned and payable to the Institutional Salesmen but owed by the
Institutional Salesmen pursuant to the Institutional Salesmen Agreements with
respect to all periods up to and including December 31, 1995. Seller agrees
that such amounts received from the Company shall be deducted from the amounts
owed by the Institutional Salesmen pursuant to the applicable Institutional
Salesmen Agreement. In the event any of the Institutional Salesmen resign or
the Company or Purchaser terminates the employment of any of the Institutional
Salesmen for "just cause" (as defined in the Institutional Salesmen Agreements)
prior to December 31, 1995, Seller shall have the right to pursue and collect
all amounts owed by such Institutional Salesman pursuant to the applicable
Institutional Salesmen Agreement. Seller agrees to indemnify and hold harmless
the Company for any claims from the Institutional Salesmen for the Company's
acts pursuant to and in accordance with Section 5.2, and notwithstanding
anything to the contrary contained in this Agreement such indemnification is
not subject to any limitations contained herein.
5.3. Clearing Services. Seller hereby agrees to provide securities
clearing services to the Company, on a fully disclosed basis, subject to an
agreement (the "Clearing Agreement"), which shall be entered into by Seller and
the Company, dated as of the Closing Date, substantially in the form as such
Clearing Agreement stands as of the date hereof, and cancelable by either party
subject to the terms of that contract.
5.4 Right to Review Records.
(a) The Company, Purchaser and Seller each hereby agree that it
shall provide the others, at all reasonable times, with full access to all
records relating to activities occurring on or prior to the Closing Date with
respect to the Oklahoma Locations and in its possession and/or control or its
respective affiliates or representatives (the "Pre-Closing Records"), and each
of the Company, Purchaser and Seller agree to furnish to the others any
information in respect of such Pre-Closing Records as any of them may from time
to time request. Each of the Company, Purchaser and Seller agree to provide
the others with any copies of such Pre-Closing Records as may be requested by
any of them and such copies shall be at the expense of the requesting party.
Each of the Company, the Purchaser and Seller agree that, in the event that it
desires to dispose of any of such Pre-Closing Records, it shall notify the
others of such intention and, if so requested by any of the others, deliver
such Pre-Closing Records to the other.
(b) The Company and the Purchaser each hereby agrees that in order
to allow Seller to verify the proper payment to Seller of advance receivables
in accordance with Section 5.2 herein, of payment of principal and interest
pursuant to the Long-Term Note and of Municipal Payments, Seller's 12b-1
Portion and Investment Executive Monthly Payments in accordance with Sections
1.3(e), 1.3(f) and 1.3(g) herein, Seller shall have the right to inspect, and
obtain copies of, at Seller's expense, all records of the Company and the
Purchaser created after the Closing Date (the "Post-Closing Records") upon the
receipt by the Company and/or Purchaser of written notice at least 30 days
prior to such inspection; provided, however, that so long as the Company and
the Purchaser are not in breach of any of their respective obligations with
<PAGE> 13
respect to such payments, Seller may only inspect the Post-Closing Records once
during each of the Company's or the Purchaser's fiscal quarters, as the case
may be. Notwithstanding the foregoing limitations, Seller shall be provided
access to, and copies of, such Post-Closing Records as set forth in
Section 5.7.
5.5 Belle Isle Real Property Lease. Purchaser hereby agrees that
it shall enter into a five year real property lease, dated as of the Closing
Date, substantially in the form as such lease stands as of the date hereof,
covering the real property on which the Belle Isle office is located (the
"Belle Isle Real Property Lease"). Purchaser and Seller hereby agree that the
Belle Isle Real Property Lease shall (i) have a base monthly rent of $3,500 and
(ii) have an option to purchase the property covered by such Belle Isle Real
Property Lease, during the term of such Belle Isle Real Property Lease, at a
price to be determined by a fair market appraisal, provided, however, that the
purchase price of such option (the "Option Price") shall be no more than
$460,000 and no less than $405,000 and any prior lease payments will not be
applied to such Option Price.
5.6 Cooperation. Each of the Company and Purchaser agrees that,
notwithstanding any limitations set forth in Section 5.4(b), (a) it shall, and
shall use its best efforts to cause its affiliates, officers, directors and
employees to, cooperate with Seller or, at Seller's request, with any of its
present or former affiliates, officers, directors or employees (each a "Seller
Party") in connection with any and all matters related to, arising out of, or
resulting from the Seller Party's relationship to the Oklahoma Locations,
including, without limitation, any and all threatened, pending, contemplated or
completed civil, criminal, administrative or investigative actions, suits,
proceedings or other controversies (whether or not initiated prior to or after
the Closing Date) relating thereto (collectively, the "Oklahoma Litigation")
and (b) neither it, nor any of its affiliates, officers, directors nor
employees, shall do anything that is contrary to the best interests of, nor say
anything untrue about, a Seller Party in connection with any Oklahoma
Litigation. For purposes of the foregoing sentence, each of the Company and
Purchaser agree that its cooperation with Seller or, at Seller's request, with
any Seller Party in connection with any Oklahoma Litigation in which it is
involved, shall include, without limitation, each of the Company and Purchaser
(i) providing Seller with notice of any proposed testimony by the Company,
Purchaser or any of their respective affiliates, officers, directors or
employees (each a "Witness") immediately upon the receipt of notice by the
Witness of any request or requirement to do so, (ii) permitting Seller or, at
Seller's request, any Seller Party, to contact and interview each of the
Company's and Purchaser's affiliates, officers, directors or employees with
respect to matters referring or pertaining, directly or indirectly, to Oklahoma
Litigation generally and both prior to and after any such testimony, (iii)
requesting and providing Seller or, at Seller's request, any Seller Party, with
a copy of any and all available transcripts of any testimony of any Witness,
(iv) permitting Seller or, at Seller's request, any Seller Party, to review in
advance, and providing a copy of any written statement of the Witness,
(v) providing Seller or, at Seller's request, any Seller Party, in advance with
full access, at all reasonable times, to any and all documents which the
Company, Purchaser or any of their respective affiliates, officers, directors
or employees possess and/or control which refer or pertain, directly or
indirectly, to any Oklahoma Litigation and (vi) voluntarily providing
testimony, upon request by Seller, at any hearing, trial, arbitration or other
proceeding with respect to matters referring or pertaining, directly or
indirectly, to Oklahoma Litigation. Any out-of-pocket expenses incurred in
connection with actions taken by the Company or Purchaser pursuant to and in
<PAGE> 14
accordance with this Section 5.6 shall be reimbursed to the Company or
Purchaser, as the case may be, by Seller.
5.7 Best Efforts. The Company agrees to properly prepare and
submit an application for a Broker-Dealer license with the Securities and
Exchange Commission and the NASD within ten business days of the date hereof
and to take all reasonable action necessary to have such application approved
on a timely basis.
5.8 Board of Directors. The Company agrees that so long as there
are any amounts outstanding under the Short-Term Note or the Long-Term Note, or
so long as the Warrants are outstanding, whichever period is longer, Seller
shall have the right to have one director on the Board of Directors of the
Company which has been designated by Seller. Purchaser agrees that so long as
there are any amounts outstanding under the Short-Term Note or the Long-Term
Note, or so long as the Warrants are outstanding, whichever period is longer,
Seller shall have the right to have one director on the Board of Directors of
Purchaser which has been designated by Seller.
5.9 Transactions in Progress. Attached hereto as Schedule 5.9 is
a list of all investment banking transactions in progress with respect to the
Oklahoma Locations. The Company shall perform such services and take such
other actions as are, in its judgment, necessary to complete such transactions.
The Company hereby agrees that with respect to each transaction on such
Schedule 5.9 it will remit to Seller a percentage, equal to the percentage
completion for such transaction listed on Schedule 5.9, of any fees or other
revenues received with respect to such transaction.
5.10 Institutional Finance Business. It is the intent of both the
Company and Seller that each shall use commercially reasonable efforts to work
with each other with respect to sales to institutional buyers in connection
with municipal finance business generated by either the Company or Seller
following the Closing Date; provided, however, this paragraph does not and
shall not be deemed to create an obligation on the part of either the Company
or Seller.
5.11 Remarketing Transactions. Seller agrees to use its best
efforts to assist the Company in connection with the assumption of any
remarketing agreements effective on the Closing Date. In connection therewith,
Seller agrees, where possible, to assign such remarketing agreements to the
Company. Where assignment is not possible, Seller agrees to use the Company as
a sub-agent with respect to such remarketing agreements. Where neither
assignment nor sub-agency is possible, Seller agrees to transact the
remarketing and to remit all fees earned with respect to such remarketing to
the Company and the Company hereby agrees to provide Seller with any assistance
necessary in connection with transacting the remarketing.
5.12. Operating Covenants.
(a) So long as any amount under either the Short-Term Note or the
Long-Term Note shall remain unpaid, the Company will, unless the Seller shall
otherwise consent in writing:
(i) Compliance with Laws. Etc. Comply in all material
respects with all applicable laws, rules, regulations and orders.
(ii) Payment of Taxes, Etc. Pay and discharge before the
<PAGE> 15
same shall become delinquent, all taxes, assessments and governmental
charges or levies imposed upon it or its property; provided, however,
that the Company shall not be required to pay or discharge any such
tax, assessment, charge or claim that is being contested in good faith
and by proper proceedings and as to which appropriate reserves are
being maintained.
(iii) Maintenance of Insurance. Maintain insurance with
insurance companies or associations, which the Company reasonably
believes to be responsible and reputable, in such amounts and covering
such risks as the Company shall reasonably believe to be adequate in
light of the businesses the Company conducts and the properties the
Company operates.
(iv) Preservation of Corporate Existence, Etc. Preserve
and maintain its corporate existence, rights (charter and statutory)
and franchises, including without limitation its Broker-Dealer
licenses with all applicable regulatory authorities.
(v) Keeping of Books. Keep accurate and complete books of
record and account in accordance with United States generally accepted
accounting principles and industry regulatory requirements in effect
from time to time.
(vi) Maintenance of Properties, Etc. Maintain and preserve
its properties that are used or useful in the conduct of its business
in good working order and condition, ordinary wear and tear excepted.
(vii) Reporting Requirements. Furnish to the Seller:
(A) as soon as available and in any event concurrently
with the filing of such reports with the applicable regulatory
authorities, a copy of the monthly and quarterly FOCUS reports
of the Company filed with the applicable regulatory
authorities, certified by the chief executive officer and
chief financial officer of the Company; provided, however, the
first report shall be due with respect to the month ended
June, 1995;
(B) as soon as available and in any event concurrently
with the filing of such reports with the applicable regulatory
authorities, a copy of the annual audited FOCUS reports of the
Company, certified by the Company's independent public
accountants and accompanied by their report of their audit
thereof;
(C) as soon as possible and in any event within five
days after the occurrence of any Event of Default (as defined
in the Notes) and each event which, with the giving of notice
or lapse of time, or both, would constitute an Event of
Default, continuing on the date of such statement, a statement
of the chief executive officer of the Company setting forth
details of such Event of Default or event and the action which
the Company has taken and proposes to take with respect
thereto; and
(D) upon an occurrence and during the continuance of
an Event of Default, or an event which, with the giving of
notice or the passage of time or both would become an Event of
<PAGE> 16
Default, such other information supplied or required to be
supplied to the lenders under the terms of any credit
agreement to which the Purchaser or the Company is a party or
any other Indebtedness (as defined in the Notes) of the
Purchaser or the Company.
(b) So long as any amount under the either the Short-Term Note or
Long-Term Note shall remain unpaid, the Company will not, without the written
consent of the Seller:
(i) Liens. Directly or indirectly, create, incur, assume
or permit to exist any Lien (as defined in the Notes) on or with
respect to any fixed assets or personal property of the Company,
whether now owned or hereafter acquired, or any income therefrom or
rights in respect thereof; provided that, the Company shall be
entitled to grant liens on the related securities inventories or
customer receivables in connection with temporary advances of capital
to it in the ordinary course of business as part of its participation
in underwriting syndicates.
(ii) Indebtedness. Directly or indirectly, create, incur,
assume, guarantee, or otherwise become or remain liable with respect
to, any Indebtedness, whether secured or unsecured, other than
obligations to the Seller incurred in the Company's day-to-day
operations pursuant to the Clearing Agreement; provided that, the
Company shall be entitled to incur short-term indebtedness to cover
temporary advances of capital to it in the ordinary course of business
as part of its participation in underwriting syndicates.
(iii) Prepayment of Indebtedness. Prepay or otherwise
reduce any Indebtedness, prior to 30 days before its originally stated
maturity, or become obligated to do so by amending the terms or
otherwise.
(iv) Restricted Payments.
(A) Purchase, redeem or otherwise acquire for value or
retire any shares of any class of capital stock of the Company
or any Affiliate (as defined in the Notes) or any warrants,
rights or other options to acquire any such shares, now or
hereafter outstanding; provided, however, that the Company may
make payments required pursuant to the terms of this
Agreement, the Ancillary Documents (as hereinafter defined)
and all other documents contemplated by this Agreement
(collectively, the "Related Agreements");
(B) Pay aggregate compensation and benefits on a
consolidated basis with Purchaser, including related payroll
taxes (the "Total Compensation"), such that the percentage
(the "Compensation Percentage") of Total Compensation to gross
revenues of the Company and the Purchaser, on a consolidated
basis, for any month does not exceed 80% and with respect to
any consecutive six-month period the average of the
Compensation Percentage for any three months within such
consecutive six-month period does not exceed 75%.
(v) Dividends. Enter any agreement restricting its
ability to declare, pay or make, or agree to declare pay or make any
<PAGE> 17
dividend payment or other distribution of assets, properties, cash,
rights, obligations or securities on account of any shares of any
class of capital stock of the Company.
(vi) Mergers, Etc. Merge or consolidate with or into, or
convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) a material portion of its
assets (whether now owned or hereafter acquired) to any person or
entity other than Purchaser; provided, however, the Company may merge
or consolidate with any person if the Company is the surviving entity,
such merger or consolidation does not constitute a Change of Control
(as defined in the Notes), and the Company continues to be wholly-
owned subsidiary of Purchaser.
(vii) Affiliated Transactions. Enter, directly or
indirectly, into any transaction or series of related transactions
(including, without limitation, the sale, purchase, exchange or lease
of assets, property or services) with any Affiliate of the Company,
other than any transaction or series of transactions expressly
contemplated by or referred to in the Related Agreements, unless (A)
the board of directors of the Company determines that such transaction
or series of transactions is or are on terms that are no less
favorable to the Company than those that could have been obtained at
the time of such transaction or transactions in a comparable
transaction in arm's-length dealings with an unaffiliated third party,
(B) the Company delivers a certificate of an officer to the Seller
certifying that such transaction or transactions complies with clause
(A) above, and provides the Seller with such information in respect of
such transaction as such Seller may reasonably request and (C) the
transaction or series of transactions with an Affiliate of the Company
involves aggregate payments below $10,000; provided, however, if at
any one time, the Company has entered into a transaction, series of
related transactions or multiple transactions with any number of
Affiliates of the Company so that the aggregate amount of money
involved in all transactions with Affiliates exceeds $50,000, the
Company must obtain the prior written consent of Seller prior to
entering into any additional or new transaction(s) or extension(s),
renewal(s) or modification(s) of any existing transaction(s) without
regard to the amount of payments involved.
(viii) Charter Amendments. Amend its certificate of
incorporation or bylaws, if such amendment may be adverse to the
Seller.
(ix) Partnerships. Become a general partner in any general
or limited partnership.
(x) Subsidiaries. Organize or acquire any Subsidiary or
make any equity investment in any other person or entity.
5.13 Equipment Subleases. Purchaser hereby agrees that is shall
enter into sublease(s) (the "Equipment Subleases"), dated as of the Closing
Date, substantially in the form such Equipment Subleases stand as of the date
hereof, covering the equipment set forth on Exhibit VI. Such Equipment
Subleases shall be on substantially similar terms as the original lease and,
pursuant to such sublease, Purchaser shall make to Seller all payments required
of Seller under such original lease, and Seller shall in turn make such
required payments to the applicable third party.
<PAGE> 18
5.14 Best Efforts Regarding Investment Executives. So long as the
Company desires, Seller agrees to use its best efforts to cause the Scheduled
Investment Executives to remain as employees of the Company over the remaining
term of their respective IE Notes.
5.15 The Company to Remain Subsidiary. For a period of three and
one-half years from the Closing Date or so long as the Warrants are
outstanding, whichever period is longer, unless otherwise agreed to in writing
by Seller, Purchaser and the Company agree that (i) the Company will remain as
a wholly-owned subsidiary of Purchaser and (ii) each of the Company and the
Purchaser will not sell, transfer or assign a material portion of its assets
except for a sale transfer or assignment between the Company and Purchaser.
ARTICLE VI
CONDITIONS TO PURCHASER'S OBLIGATIONS
-------------------------------------
The obligations of the Purchaser to consummate the transactions
provided for in this Agreement shall be subject to the satisfaction of each of
the following conditions on or before the Closing Date, subject to the right of
the Purchaser to waive any one or more of such conditions:
6.1 Representations and Warranties of Seller. The representations
and warranties of Seller contained in this Agreement and in the certificates
and papers to be delivered to the Purchaser pursuant hereto and in connection
herewith shall be true and correct in all material respects on the date hereof
and on the Closing Date (except for changes specifically permitted or
contemplated hereunder) as though such representations and warranties were made
on the Closing Date.
6.2 Performance of this Agreement. Seller shall have duly
performed or complied with substantially all of the obligations to be performed
or complied with by it under the terms of this Agreement on or prior to the
Closing Date.
6.3 Certificate of Seller. The Purchaser shall have received a
certificate signed by the President or any Vice-President of Seller dated as of
the Closing Date and subject to no qualification certifying that the conditions
set forth in Sections 6.1 and 6.2 hereof have been fully satisfied. Such
certificate shall be deemed a representation and warranty of Seller under this
Agreement.
6.4 No Lawsuits. No suit, action or other proceeding or
investigation shall be pending before or by any court or governmental agency
concerning this Agreement or the consummation of the transactions contemplated
hereby.
6.5 Documents. The Purchaser shall receive from Seller on the
Closing Date:
(a) Appropriate documents conveying to the Purchaser good
and marketable title to the Purchased Assets (except as otherwise
herein contemplated or disclosed).
(b) Assignments of the Assumed Obligations being assumed
by the Purchaser pursuant to the provisions of Section l.2 hereof,
<PAGE> 19
with related consents, if any are so required (except as otherwise
herein contemplated or disclosed).
(c) the Purchaser shall have received, on and as of the
Closing Date, an opinion of counsel to Seller, dated the Closing Date,
substantially to the effect that:
(i) Seller is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Missouri;
(ii) The execution, delivery and performance of
this Agreement, the Clearing Agreement, the Belle Isle Real
Property Lease and the Equipment Subleases by Seller has been
duly authorized by the Board of Directors of Seller;
(iii) Each of this Agreement, the Clearing Agreement,
the Belle Isle Real Property Lease and the Equipment Subleases
has been duly executed and delivered by Seller and constitutes
a valid and binding obligation of Seller, enforceable against
Seller in accordance with its terms, except with respect to
Section 5.1 of this Agreement and except to the extent that
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, receivership, moratorium,
fraudulent conveyance and other similar laws relating to or
affecting the rights and remedies of creditors generally and
by general principals of equity;
and such opinion shall be subject to customary limitations, and may be
based on opinions of local counsel to the extent such counsel is not
admitted to practice in a jurisdiction relevant to such opinion,
provided such opinion of local counsel is delivered to the Purchaser.
6.6 Broker-Dealer License. The Company's applications for a
broker-dealer license filed with the Securities and Exchange Commission and the
NASD shall have been approved.
6.7 Ancillary Documents. Seller shall have executed and delivered
to the Purchaser, the Pledge Agreement (as hereinafter defined), the Warrant
Agreement, the Clearing Agreement, the Belle Isle Real Property Lease and the
Equipment Subleases and each sublease and each subcontract to be entered into
between Purchaser and Seller.
ARTICLE VII
CONDITIONS TO SELLER'S OBLIGATIONS
----------------------------------
The obligations of Seller to consummate the transactions provided for
in this Agreement shall be subject to the satisfaction of each of the following
conditions on or before the Closing Date, subject to the right of Seller to
waive any one or more of such conditions:
7.l Representations and Warranties of the Company and Purchaser.
The representations and warranties of each of the Company and Purchaser
contained in this Agreement and in the certificates and papers delivered or to
be delivered to Seller pursuant hereto and in connection herewith shall be true
and correct in all material respects on the date hereof and on the Closing Date
<PAGE> 20
(except for changes specifically permitted hereunder) as though such
representations and warranties were made on the Closing Date.
7.2 Performance of this Agreement. The Company and Purchaser
shall each have duly performed or complied with substantially all of the
obligations to be performed or complied with by it under the terms of this
Agreement on or prior to the Closing Date.
7.3 Certificate of the Purchaser. Seller shall have received a
certificate signed by the President or any Vice President of the Purchaser
dated as of the Closing Date and subject to no qualification certifying that
the conditions set forth in Sections 7.1 and 7.2 hereof have been fully
satisfied. Such certificate shall be deemed a representation and warranty of
the Purchaser hereunder.
7.4 No Lawsuits. No suit, action or other proceeding or
investigation shall be pending before or by any court or governmental agency
concerning this Agreement or the consummation of the transactions contemplated
hereby.
7.5 Delivery of Aggregate Consideration and Assumption of
Liabilities and Obligations. Seller shall receive from the Company and
Purchaser on the Closing Date the Aggregate Consideration provided for in
Section l.3(a) hereof and appropriate documents assuming the Assumed Obligation
and Assumed Liabilities, as provided in Section 1.2 hereof.
7.6 Pledge of Stock. The Purchaser, the sole shareholder of the
Company, shall have entered into a pledge agreement (the "Pledge Agreement"),
dated as of the Closing Date, substantially in the form as such Pledge
Agreement stands as of the date hereof, whereby Purchaser shall pledge all its
right, title and interest in the Company to Seller as security for the Short-
Term Note, the Long-Term Note, the Warrant Agreement and any and all subleases
and subcontracts entered into between the Purchaser and Seller for so long as
such Short-Term Note, Long-Term Note, Warrant Agreement, subleases and
subcontracts remain outstanding.
7.7 Security Agreement. The Purchaser shall have entered into a
security agreement (the "Security Agreement"), dated as of the Closing Date,
substantially in the form as such Security Agreement stands as of the date
hereof, whereby Purchaser shall grant to Seller a continuing security interest
in and to all of Purchaser's tangible and intangible properties, assets and
rights wherever located, whether now owned or hereafter acquired or arising.
7.8 Ancillary Documents. The Company shall have executed and
delivered to Seller the Clearing Agreement. The Purchaser shall have executed
and delivered to Seller, the Short-Term Note, the Long-Term Note, the Pledge
Agreement, the Security Agreement, the Warrant Agreement, the Belle Isle Real
Property Lease and the Equipment Subleases and each sublease and each
subcontract to be entered into between Purchaser and Seller (collectively with
the Clearing Agreement, the "Ancillary Documents").
7.9 Opinion. Seller shall have received, on and as of the Closing
Date, an opinion of counsel to the Company and Purchaser, dated the Closing
Date, substantially to the effect that:
(a) Each of the Company and Purchaser is a corporation
duly organized, validly existing and in good standing under the laws
of the State of Oklahoma;
<PAGE> 21
(b) The execution, delivery and performance of this
Agreement and the Clearing Agreement by the Company has been duly
authorized by the Board of Directors of the Company;
(c) The execution, delivery and performance of this
Agreement, the Short-Term Note, the Long-Term Note, the Warrant
Agreement, the Belle Isle Real Property Lease, the Equipment
Subleases, the Security Agreement and the Pledge Agreement by
Purchaser has been duly authorized by the Board of Directors of
Purchaser;
(d) Each of this Agreement and the Clearing Agreement has
been duly executed and delivered by the Company and constitutes a
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except with respect to
Section 5.1 of this Agreement and except to the extent that
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, moratorium, fraudulent conveyance and
other similar laws relating to or affecting the rights and remedies of
creditors generally and by general principals of equity;
(e) Each of this Agreement, the Short-Term Note, the Long-
Term Note, the Warrant Agreement, the Security Agreement, the Belle
Isle Real Property Lease, the Equipment Subleases and the Pledge
Agreement has been duly executed and delivered by Purchaser and
constitutes a valid and binding obligation of Purchaser, enforceable
against Purchaser in accordance with its terms, except with respect to
Section 5.1 of this Agreement and except to the extent that
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, moratorium, fraudulent conveyance and
other similar laws relating to or affecting the rights and remedies of
creditors generally and by general principals of equity;
and such opinion shall be subject to customary limitations and may be based on
opinions of local counsel to the extent such counsel is not admitted to
practice in a jurisdiction relevant to such opinion, provided such opinion of
local counsel is delivered to Seller.
ARTICLE VIII
INDEMNIFICATION
---------------
8.1 Indemnification.
(a) Seller hereby agrees to indemnify and hold harmless the
Company and Purchaser and any officer, director, agent or employee of either of
them (each a "Purchaser Indemnified Party"), from and against any and all
losses, claims, damages, liabilities, costs, counsel fees and other expenses of
every nature whatsoever (each a "Loss") incurred by or asserted against a the
Purchaser Indemnified Party, resulting from or arising out of (i) any breach by
Seller of any representation, warranty, covenant, agreement or other obligation
of Seller made or incurred under or pursuant to this Agreement or (ii) any
liabilities or claims relating to activities occurring on or prior to the
Closing Date with respect to the Oklahoma Locations (including, without
limitation, any liabilities related to the litigation set forth on Schedule
2.7) and asserted against a the Purchaser Indemnified Party by third parties;
provided, however, that the right of indemnity pursuant to this Section 8.1(a)
<PAGE> 22
shall be limited to cumulative sums in excess of $25,000 (the "Purchaser's
Limitation"). Any recovery by a the Purchaser Indemnified Party shall be net
of any tax benefit to such the Purchaser Indemnified Party (including the tax
effect of any such recovery) and of any recoveries from third parties
(including insurance companies) in respect thereof. Seller shall be entitled
to all rights of subrogation against others, and to assignment of any accounts
receivable or other rights of action for which it indemnifies a the Purchaser
Indemnified Party pursuant hereto. Notwithstanding anything to the contrary
contained within this Agreement, the liability of Seller with respect to any
employees of Seller to the extent such liability is on the books of the Seller
at the Closing or can reasonably be proven that such liability should have been
on the books of the Seller and which liability has not specifically been
assumed by the Purchaser herein, shall not be subject to the Purchaser's
Limitation set forth in this Section 8.1(a).
(b) Each of the Purchaser and the Company hereby agrees to
indemnify and hold harmless Seller and Stifel Financial and any officer,
director, agent or employee of either of them (each a "Seller Indemnified
Party"), from and against any and all Losses incurred by or asserted against a
Seller Indemnified Party, resulting from or arising out of (i) any breach by
the Company or Purchaser of any representation, warranty, covenant, agreement
or other obligation of the Company or Purchaser made or incurred under or
pursuant to this Agreement or (ii) any liabilities or claims relating to
activities occurring subsequent to the Closing Date with respect to the
Oklahoma Locations and asserted against a Seller Indemnified Party by third
parties; provided, however, that the right of indemnity pursuant to this
Section 8.1(b) shall be limited to cumulative sums in excess of $25,000
("Seller's Limitation"). Any recovery by a Seller Indemnified Party shall be
net of any tax benefit to such Seller Indemnified Party (including the tax
effect of any such recovery) and of any recoveries from third parties
(including insurance companies) in respect thereof. The Company and Purchaser
shall be entitled to all rights of subrogation against others, and to
assignment of any accounts receivable or other rights of action for which it
indemnifies a Seller Indemnified Party pursuant hereto. Notwithstanding
anything to the contrary contained within this Agreement, the liability of the
Purchaser with respect to the Assumed Liabilities and Assumed Obligations shall
not be subject to the Seller's Limitation set forth in this Section 8.1(b).
8.2 Participation in Litigation. In the event any suit or other
proceeding is initiated against any the Purchaser Indemnified Party or Seller
Indemnified Party (each, an "Indemnified Party") with respect to which such
Indemnified Party alleges that Seller, the Purchaser or the Company (each, an
"Indemnifying Party"), as the case may be, is or may be obligated to indemnify
such Indemnified Party pursuant to Section 8.1 herein, the Indemnifying Party
shall be entitled to participate in such suit or proceeding, at its expense and
by counsel of its choosing, provided that (a) such counsel is reasonably
satisfactory to the Indemnified Party, (b) if the Indemnifying Party shall set
aside sufficient funds to satisfy the claims made in such suit or proceeding,
such Indemnifying Party shall have primary control over such suit or
proceeding, and (c) if sufficient funds are not so set aside, the Indemnified
Party shall retain primary control over such suit or proceeding. Each of the
Indemnified Party and the Indemnifying Party and their respective counsels
shall afford full cooperation and access to all information pertinent to the
suit or proceeding in question to the other party and its counsel.
8.3 Claims Procedure. In the event an Indemnified Party believes
that it has or will suffer any Loss for which an Indemnifying Party is
obligated to indemnify it hereunder, it shall promptly notify such Indemnifying
<PAGE> 23
Party in writing of the claim, specifying therein the reason why the
Indemnified Party believes that the Indemnifying Party is or will be obligated
to indemnify it, the amount claimed, and the basis on which the Indemnifying
Party has calculated such amount. If the Indemnifying Party and the
Indemnified Party do not agree on the claims submitted by the Indemnified
Party, they shall endeavor to settle and compromise said claim. If they are
unable to agree after a period of 30 days, the dispute shall be submitted to
arbitration in accordance with the provisions of Section 9.14. The Company and
Purchaser shall not withhold or setoff any amounts owed to Seller pursuant to
this Agreement or any Ancillary Documents or any other document contemplated
hereby, unless the Company and/or Purchaser has obtained a final arbitration
judgement against Seller with respect to Seller's indemnification obligations
under Section 8.1(a) or the Seller has entered into a written agreement with
the Company and/or Purchaser stipulating and agreeing to any amounts owed to
the Company and/or Purchaser by Seller pursuant to Section 8.1(a), provided,
further that the Company and/or Purchaser may only setoff or withhold such
amounts deemed owed by Seller to the Company and/or Purchaser by such final
arbitration judgement or written agreement.
ARTICLE IX
MISCELLANEOUS
-------------
9.1 Assignment: Binding Agreement. Neither this Agreement nor
any of either party's rights or obligations hereunder may be assigned by such
party without the prior written consent of the other party. This Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
to their respective successors and permitted assigns, including without
limitation, any entity which acquires all or substantially all of the assets of
Seller or common stock issued by Seller or any entity which is the surviving
corporation of a merger with Seller.
9.2 Termination of Agreement. This Agreement and the transactions
contemplated hereby may be terminated prior to the Closing Date only as
follows:
(a) By mutual consent of the Purchaser and Seller.
(b) By either the Purchaser or Seller if the Closing shall not
have occurred on or before May 31, 1995, or such other date, if any, as the
Purchaser and Seller shall mutually agree upon.
(c) By the Purchaser if (i) between the date hereof and the
Closing Date, the average monthly commissionable revenues of the Seller with
respect to the Oklahoma Locations decline by greater than 20% from the average
monthly commissionable revenues on the books of the Seller with respect to the
Oklahoma Locations for the three month period ending December 31, 1994 or (ii)
for any fiscal month period prior to the Closing "Fixed and Controllable"
expenses as shown on Seller's internal operating statements (excluding
professional fees and errors) on the books of the Seller with respect to the
Oklahoma Locations increases by more than 20% over the average of the three
months ended December 31, 1994.
9.3 Manner and Effect of Termination.
(a) If this Agreement is terminated pursuant to Section 9.2 hereof
without fault of any party to or breach of this Agreement, all obligations of
<PAGE> 24
Seller, the Company and Purchaser hereunder shall terminate, without liability
of Seller to the Company or Purchaser or of the Company or Purchaser to Seller.
In such event, each party hereto shall pay all legal and other costs and
expenses incurred by such party in connection with this Agreement and the
transactions contemplated hereby; provided, however, if this Agreement is
terminated pursuant to Section 9.2(b) due to the failure to satisfy the closing
condition set forth at Section 6.6, the Purchaser agrees to pay to Seller an
amount in liquidated damages equal to $75,000.
(b) Nothing in this Section 9.3 or elsewhere in this Agreement
shall impair or restrict the rights of any party to any and all remedies at law
or in equity in event of a breach of or default under this Agreement.
9.4 Survival of Representations and Warranties. All
representations and warranties of the Company, Purchaser and Seller made under
or pursuant to this Agreement shall survive the Closing Date for a period of
two years.
9.5 Remedies. Except as provided in Section 8.1, nothing
contained herein is intended to or shall be construed so as to limit the
remedies which either party may have against the other in the event of a breach
by either party of any representation, warranty or agreement made under or
pursuant to this Agreement, it being intended that any remedies shall be
cumulative and not exclusive.
9.6 Entire Agreement and Modification; Termination. This
Agreement, including the Schedules attached hereto and the documents delivered
pursuant hereto, constitutes the entire agreement between the parties, except
that Seller may after the date hereof update information contained in Schedules
hereto so that they may be accurate as of the Closing Date, but no Assumed
Obligations may be so added without the written consent of the Purchaser. No
other changes of, modifications of, or additions to this Agreement shall be
valid unless the same shall be in writing and signed by all parties hereto.
9.7 Severability. If any provision of this Agreement shall be
determined to be contrary to law and unenforceable by any court of law, the
remaining provisions shall be severable and enforceable in accordance with
their terms.
9.8 Counterparts. This Agreement may be executed in one or more
identical counterparts, each of which shall be deemed an original but all of
which together will constitute one and the same instrument.
9.9 Headings. The headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of the Agreement.
9.10 Governing Law. This Agreement shall be construed and
interpreted according to the laws of the State of Missouri.
9.11 Payment of Fees and Expenses. Except as otherwise provided in
Section 9.3(a), each party hereto shall pay all fees and expenses of such
party's respective counsel, accountants and other experts and all other
expenses incurred by such party incident to the negotiation, preparation and
execution of this Agreement and the consummation of the transaction
contemplated hereby, including any finder's or brokerage fees.
<PAGE> 25
9.12 Further Documents. The parties hereto agree to deliver to
each other such other and further agreements, consents, documents or
instruments of conveyance, assignment, transfer or assumption and to do such
other things and to take such other actions, supplemental or confirmatory, as
may reasonably be required by the requesting party for the purpose of or in
connection with the consummation or evidencing of the transactions contemplated
hereunder. Each party agrees to make such conveyances, assignments or
transfers to the other party or its assigns, and to execute such assumptions,
as directed by the other party.
9.13 Notices. All notices, requests, demands and other
communications hereunder shall be deemed to have been duly given when actually
received by the other party, and shall be in writing and shall be delivered
personally or sent by registered or certified mail, postage prepaid, and
addressed as set forth below:
(a) If to the Company or Purchaser:
Capital West Securities, Inc.
232 East Main Street, Suite B
Norman, Oklahoma 73069
Attention: Donald A. Pape
copy to:
T. Ray Phillips, III, Esq.
Phillips McFall McCaffrey McVay & Murrah, P.C.
211 North Robinson
Oklahoma City, Oklahoma 73102
(b) If to Seller:
Stifel, Nicolaus & Company, Incorporated
500 North Broadway
St. Louis, MO 63102
Attention: Gregory F. Taylor
copy to:
William F. Seabaugh, Esq.
Bryan Cave
One Metropolitan Square
St. Louis, Missouri 63102-2750
Any party or person entitled to a copy may change the address to which
notices are to be addressed by giving the other parties notice in the manner
herein set forth.
9.14 Arbitration. The parties hereto agree that all claims,
disputes and other matters in question between the parties to this Agreement,
arising out of or relating to this Agreement or the breach thereof, shall be
decided by binding arbitration in accordance with the Code of Arbitration
Procedure and applicable arbitration rules of the NASD then in effect unless
the parties mutually agree otherwise. Such arbitration shall be conducted
before a panel of three arbitrators. Each of the parties hereto shall have the
right to select one of the three arbitrators, and the two arbitrators so
selected shall select the third arbitrator. Notice of the demand for
arbitration shall be filed in writing with the other party to this Agreement
<PAGE> 26
and with the NASD. The demand shall be made within a reasonable time after the
claim, dispute or other matter in question has arisen. The award rendered by
the arbitrators shall be final, and judgement may be entered upon it in
accordance with applicable law in any court having jurisdiction thereof.
9.15 News Releases. The Company, Purchaser and Seller will each
advise the others of the text of, and will consult with each other concerning,
any news release or any other public announcement proposed to be issued by the
Company, Purchaser or Seller, as the case may be. No party will issue any news
release or other public announcement concerning this Agreement to which any
other party reasonably objects unless advised by its counsel that such release
is required by law.
9.16 Effect. The parties hereto agree that as of the date hereof
and upon due execution of this Agreement all of the provisions of the Prior
Agreement shall cease to have effect and are replaced by the provisions of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
as of the day and year first above written.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE
ENFORCED BY THE PARTIES.
CAPITAL WEST SECURITIES, INC.
By: /S/ GREGORY M. JONES
--------------------------------
Name: Gregory M. Jones
Title: Secretary
CAPITAL WEST FINANCIAL CORPORATION
By: /S/ DONALD A. PAPE
--------------------------------
Name: Donald A. Pape
Title: Chairman
STIFEL, NICOLAUS & COMPANY,
INCORPORATED
By: /S/ GREGORY F. TAYLOR
--------------------------------
Name: Gregory F. Taylor
Title: President,
Chief Executive Officer
<PAGE> 27
SCHEDULE 1.1(a)
EXCLUDED ASSETS
1. The securities inventory of Seller including inventory relating to its
Oklahoma Locations.
2. The automobiles and other vehicles owned by Seller including
automobiles and other vehicles relating to its Oklahoma Locations.
3. The real property owned by Seller located at 2520 N.W. Expressway,
Oklahoma City, Oklahoma.
4. All files of closed deals with respect to the Oklahoma Locations;
provided, however, that the Purchaser and Company shall have the
right, at its expense, to make copies of all such files, provided,
further, however that the Company or Purchaser, as the case may be,
shall return the original files within 60 days of receipt of such
original files and shall provide access to the Seller to such files at
any times such files are in the Company's and/or Seller's possession.
5. All deposits listed on Schedule 1.1(a)(i). Additionally, the Company
and Purchaser hereby agree to remit to Seller any amounts received
with respect to the deposits listed on Schedule 1.1(a)(i) promptly
upon receipt by the Company and/or Seller of such amounts.
<PAGE> 28
SCHEDULE 1.1(a)(i)
<TABLE>
Deposits to be Returned to Stifel
---------------------------------
<C> <C>
Lease Deposits:
- ---------------
Pugh & Pugh (Edmond office) $ 1,000.00
R. Reed (Poteau office) 500.00
Timbers office park (Midwest City office) 800.00
Stillwater Property Management (Stillwater office) 750.00
Operahouse (Altus office) 1,000.00
Case & Associates 3,828.19
Jeff & Marilyn Properties 800.00
Utility Deposits:
- -----------------
Edmond office electric utility deposit 125.00
Other Deposits:
- ---------------
Deposit to Central Registration Depository ("CRD") made on
behalf of Capital West Securities, Inc. on 5/18/95
(Receivable from Capital West Securities, Inc.) 5,000.00
Goodfaith Deposits:
- -------------------
Independent School District #87
(Kay County, Oklahoma) 20,500.00
Independent School District #6
(Oklahoma County, Oklahoma) 20,500.00
Independent School District #27
(Carter County, Oklahoma) 31,000.00
Treasury ISD 16,500.00
Independent School District #9
(Garvin County, Oklahoma) 5,500.00
----------
$94,000.00
</TABLE>
<PAGE> 29
SCHEDULE 1.1(b)
OKLAHOMA LOCATIONS
Altus, Oklahoma
Ardmore, Oklahoma
Bartelsville, Oklahoma
Broken Arrow, Oklahoma
Cordell, Oklahoma
Edmond, Oklahoma
El Reno, Oklahoma
Elk City, Oklahoma
Enid, Oklahoma
Lawton, Oklahoma
McAlester, Oklahoma
Midwest City, Oklahoma
Norman, Oklahoma
Oklahoma City, Oklahoma (Belle Isle Office)
Oklahoma City, Oklahoma (Founders Office)
Oklahoma City, Oklahoma (16th Floor of the Leadership Office)
Ponca City, Oklahoma
Poteau, Oklahoma
Shawnee, Oklahoma
Tulsa, Oklahoma (South office)
Tulsa, Oklahoma (Downtown office)
Stillwater, Oklahoma
Woodward, Oklahoma
Hillsboro, Texas
Keller, Texas
New Braunfels, Texas
<PAGE> 30
SCHEDULE 1.1(c)
<TABLE>
CLOSING ASSET SCHEDULE
Furniture & Equipment Appraisal
<CAPTION>
Office Furniture Equipment Total
- ---------------------------------------------- --------- --------- ---------
<C> <C> <C> <C>
Oklahoma City, OK (Leadership) $42,923 $49,838 $92,761
Norman, OK $5,100 $3,996 $9,096
Lawton, OK $1,760 $10,553 $12,313
Shawnee, OK $6,374 $6,876 $13,250
Enid, OK $6,937 $2,846 $9,783
Edmond, OK $2,840 $2,803 $5,643
El Reno, OK $200 $8,172 $8,372
Woodward, OK $0 $1,811 $1,811
Bartlesville, OK $0 $5,478 $5,478
Ardmore, OK $1,240 $2,961 $4,201
McAlester, OK $3,995 $10,685 $14,680
Poteau, OK $2,805 $4,653 $7,458
Midwest City, OK $3,904 $6,037 $9,941
Elk City, OK $5,834 $5,059 $10,893
Altus, OK $3,360 $3,133 $6,493
Cordell, OK $2,555 $3,442 $5,997
Tulsa, OK $32,095 $48,345 $80,440
Stillwater, OK $6,659 $4,351 $11,010
Broken Arrow, OK $3,340 $3,171 $6,511
Tulsa, OK (South) $42,269 $15,841 $58,110
Oklahoma City, OK (Belle Isle) $33,461 $12,169 $45,630
Oklahoma City, OK (Founders) $4,695 $11,424 $16,119
Ponca City, OK $4,505 $3,580 $8,085
Hillsboro, TX $15,359 $8,049 $23,408
Keller, TX $4,436 $2,735 $7,171
New Braunfels, TX $3,920 $4,241 $8,161
--------- --------- ---------
TOTAL $240,566 $242,249 $482,815
Xerox 5065 Copier (Ser. # 0C4-017541) 3,704
BAMCH Petty Cash 3,000
---------
$489,519
=========
</TABLE>
<PAGE> 31
SCHEDULE 1.2(a)
<TABLE>
ASSUMED LIABILITIES
The following employee liabilities shall be assumed by Purchaser at the
Closing. The amounts will be updated as of the Closing.
<C> <C>
Employee Vacation and Sick Time $43,196.85
(see Schedule 1.2(a)(i) for detail)
Investment Executive Deferred Compensation 185,360.50
(see Schedule 1.2(a)(ii) for detail)
</TABLE>
<PAGE> 32
SCHEDULE 1.2(a)(i)
<TABLE>
CAPITAL WEST
VACATION/SICK PAY
THROUGH MAY 19, 1995
<CAPTION>
Vacation Vacation Vacation Vacation Sick Sick Sick Sick
Hours Hrs taken Balance Dollars Hours Hrs taken Balance Dollars
-------- --------- -------- -------- ------- --------- ------- ---------
<C> <C> <C> <C> <C> <C> <C> <C> <C>
Garner, Rowena 127.66 40.00 87.66 951.28 179.46 179.46 1947.49
Lyon, Linda 34.87 40.00 -5.13 -55.12 164.99 134.99 1450.40
Benton, Helen 23.96 23.96 187.79 169.99 169.99 1332.32
Davis, Janell 45.00 45.00 379.82 422.91 422.91 3569.55
Pate, Janet 67.14 67.14 404.78 210.26 210.26 1267.64
Mills, Rebecca 96.25 8.00 88.25 1064.09 174.51 174.51 2104.18
Roberts, Althea 70.50 70.50 786.31 93.28 7.00 86.28 962.31
Devinney, Eileen 45.00 45.00 434.13 189.61 189.61 1829.23
Floyd, Doris 15.00 15.00 116.84 176.03 176.03 1371.16
Jones, Kristen 125.00 125.00 753.61 294.65 294.65 1776.41
Clark, Kelly 117.00 117.00 1763.44 219.09 219.09 3302.15
Jones, Charlene 36.78 36.78 381.95 203.78 40.00 163.78 1700.81
Thompson, Becky 109.97 8.00 101.97 952.88 173.46 173.46 1620.94
Williams, Carol 39.30 39.30 213.24 50.66 50.66 274.88
Martich, Melissa 109.08 109.08 1183.73 160.00 160.00 1736.31
Kabelitz, Carol 71.76 71.76 865.26 122.76 122.76 1480.20
Delp, Lawana 93.89 93.89 665.11 65.89 65.89 466.76
Robertson, Lesley 50.78 50.78 344.90 31.28 7.00 24.28 164.91
Hanigar, Jeannie 15.23 15.23 165.27 47.23 47.23 512.52
Vincent, Lorie 41.28 41.28 497.74 48.28 48.28 582.14
Canady, Barbara 53.28 53.28 361.91 37.28 1.00 36.28 246.44
Rodgers, Debbie 39.96 39.96 433.64 31.96 31.96 346.83
Friesen, Lisa 13.32 13.32 96.06 13.32 13.32 96.06
McWilliams, Mary 13.32 13.32 106.56 13.32 13.32 106.56
-------- --------- -------- -------- ------- --------- ------- ---------
Totals 1442.01 1346.01 12948.66 3280.68 55.00 3195.68 30248.19
======== ========= ======== ======== ======= ========= ======= =========
<PAGE> 33
<CAPTION>
Timesheet Timesheet Timesheet
5/6/95 5/13/95 5/19/95
--------- --------- ---------
<C> <C> <C> <C>
Garner, Rowena X
Lyon, Linda
Benton, Helen X
Davis, Janell X
Pate, Janet X
Mills, Rebecca
Roberts, Althea
Devinney, Eileen
Floyd, Doris
Jones, Kristen
Clark, Kelly
Jones, Charlene
Thompson, Becky X
Williams, Carol X
Martich, Melissa
Kabelitz, Carol
Delp, Lawana
Robertson, Lesley
Hanigar, Jeannie X
Vincent, Lorie
Canady, Barbara
Rodgers, Debbie
Friesen, Lisa X
McWilliams, Mary
</TABLE>
<PAGE> 34
SECTION 1.2(a)(ii)
<TABLE>
STIFEL, NICOLAUS & CO., INC.
Deferred Compensation Balances for Oklahoma Region
As of 4/30/95
<CAPTION>
EE# NAME TOTAL BONUS
<C> <C> <C>
2908 Allred, J $981.73
1762 Arnold, V $4.26
45 Avant, J $8,589.11
1085 Avant, T $9,380.05
1930 Bayouth, C $3,414.78
289 Benefiel, J. $12,310.64
288 Birdwell, R $9,590.60
1526 Burget, G $9,992.99
2481 Burks, W $5,995.98
1702 Chenoweth, W $1,733.20
2356 Clark, M $942.20
2973 Costello, M $45.39
3130 Currie, M $1,997.07
3028 Demery, R $638.01
2555 Duncan, D $2,642.46
876 Fox, L $1,806.40
2899 Galloway, N $9.02
807 Garrett, A $5,874.87
2905 Gilbert, R $213.48
3374 Graves, J $1,310.25
3232 Greenway, J $297.37
287 Hallren, J $3,575.91
1953 Harris, R $2,276.96
2681 Hoffman Sr., R $13.33
2293 Holloway, M $4,521.41
684 Horkey, L $83.90
2947 Howard, R $681.86
3020 Ihle, S $1,808.23
3336 Inman, P $180.13
2777 Jack, W $223.77
304 Jones, R $7.76
1595 Kliewer, H $13,062.70
795 Landry, E $24,846.03
2782 Lawson, J $101.93
1529 Lisle, J $3,806.32
3133 Lopp, D $224.97
293 Mason, C $5,045.67
37 McNeil, B $1,639.85
3307 McWilliams, D $387.16
490 Mercer, D $5,530.03
2696 Montgomery, J $118.79
1632 Pistulka, R $8,270.60
3193 Reaka, P $5.16
2384 Riesen, M $6,289.48
3066 Ryder, C $30.99
2946 Schlosser, E $84.78
1830 Shedrick S. $794.20
2528 Sigmon, J $91.00
<PAGE> 35
326 Sigmon, M $10,337.79
2624 Snapp, J $1,079.40
2926 Sullivan, J $852.98
3182 Symons, T $85.62
1648 Taron, M $2,525.32
2627 Teeter, C $45.56
1778 Thompson, J $3,139.13
3101 Warren, P $66.61
2321 Warshaw, R $472.15
2927 Williams, L. $624.39
1784 Wilson, M. $3,956.18
2712 Young, S $702.59
TOTAL $185,360.50
</TABLE>
<PAGE> 36
SCHEDULE 1.2(b)
ASSUMED OBLIGATIONS
1. All real property leases and month-to-month rental agreements relating
to the Oklahoma Locations set forth at Exhibit I.
2. All computer software contracts set forth at Exhibit II.
3. All information services contracts set forth at Exhibit III.
4. All broker, investment executive and other employee or consultant
contracts and agreements set forth at Exhibit IV.
5. All subleased equipment set forth at Exhibit VI.
<PAGE> 37
SCHEDULE 1.3(g)
<TABLE>
INVESTMENT EXECUTIVE NOTES
<CAPTION>
Term April 30, 1995
------------ Unamortized
Investment Executive Original Balance From To Balance
- ------------------------------- ---------------- ----- ----- --------------
<C> <C> <C> <C> <C>
Jack Graves 215,400 9/94 9/99 186,680
David McWilliams 100,000 9/94 9/99 86,667
Paul Inman 50,000 9/94 9/99 43,334
John Greenway 34,000 4/94 4/00 28,334
Jill Ihle 37,857 7/93 7/97 20,506
Mark Taron 15,700 6/94 6/97 10,903
Marita Currie 50,000 10/94 10/99 45,000
</TABLE>
<PAGE> 38
SCHEDULE 1.6
ALLOCATION OF PURCHASE PRICE
The Aggregate Consideration shall be allocated as follows:
(1) $286,519 shall be allocated to property, plant and equipment
(2) $3,000 shall be allocated to cash
(3) The balance shall be allocated to good will and the covenant not to
compete of Seller
<PAGE> 39
SCHEDULE 2.3
CONSENTS
1. Consent from Computer Sales International Inc. with regard to
Quotation delivery equipment leased by Stifel Financial Corp. from
Computer Sales International Inc.
2. Consents from all real estate landlords under non month-to-month
leases between Seller and such landlords (see Schedule 2.3(a) for
details). All such consents to be obtained in accordance with the
letter to Capital West Financial Corporation dated May 25, 1995.
<PAGE> 40
SCHEDULE 2.3(a)
<TABLE>
"Long Term" (non month-to-month)
Stifel, Nicolaus & Company, Incorporated
----------------------------------------
Real Estate Leases
------------------
<CAPTION>
Address Lessor Expiration
- ------------------------------ ------------------------------ ---------------
<C> <C> <C>
100 North Main Street Operahouse Center Ltd. 2/6/99
Altus, OK 73521 P.O. Box 898
Altus, OK 73522
333 West Main Street Neustadt Land & Development Co. 11/30/95
Suite 100 333 West Main Street
Ardmore, OK 73401 P.O. Box 788
Ardmore, OK 73402
500 S.W. Keeler KABIR Inc. 2/29/2000
Suite 200 Professional Building
Bartlesville, OK 74003 1200 N. Walker
Suite 400
Oklahoma City, OK 73102
2017 South Elm Place J.D. Hudkins 8/31/96
Suite 100 4008 South Elm Place
Broken Arrow, OK 74102 Suite A
Broken Arrow, OK 74011
201 East Main Street H. Phillips Kliewer 3/31/96
Cordell, OK 73632 100 E. Seventh
Cordell, OK 73632
221 S. Main Street R & D Properties 12/31/97
Elk City, OK 73644 224 South Main Street
Elk City, OK 73644
601 "C" Avenue Burgess and Burgess Inc. 9/30/97
Suite 100 601 "C" Avenue, Suite 201
Lawton, OK 73501 Lawton, OK 73501
1384 South Douglas Blvd. Joe Crosthwait 12/31/95
Suite 200 1384 S. Douglas Blvd.
Midwest City, OK 73130 Midwest City, OK 73130
900 24th Avenue N.W. David A. Huettner 3/31/97
Norman, OK 73069 Peppertree Plaza
1807 Valley Park
Norman, OK 73072
9520 North May Avenue Founders Bank & Trust Co. 1/31/96
Suite 120 9520 North May Avenue
Oklahoma City, OK 73120 Oklahoma City, OK 73118
<PAGE> 41
#1 Leadership Square Metropolitan Life Insurance Co. 4/30/98
Suite 1600 North One Warren Place
Oklahoma City, OK 73012 Suite 320
6100 S. Yale
Tulsa, OK 74136
200 East Grand Avenue Ruth Duroy 1/31/96
Ponca City, OK 74601 832 North Fifth
Ponca City, OK 74601
216 East Grand Avenue Stillwater Property Management 8/31/95
Suite 200 416 S. Main Street
Stillwater, OK 74074 Stillwater, OK 74074
4200 East Skelly Drive CIGNA Advisory Co. 7/31/99
Suite 1020 c/o Case & Associates Properties
Tulsa, OK 74135-3247 4200 Skelly Drive, Suite 800
Tulsa, OK 74135
601 South Boulder Avenue CTMC Inc. 7/31/97
Suite 1200 601 South Boulder Avenue
Tulsa, OK 74119 Tulsa, OK 74119
225 North Seguin Avenue Reagan, Burris, Dierksen, 8/31/95
Suite 100 Lamon & Bluntzer P.C.
New Braunfels, TX 78130 205 N. Seguin Avenue
New Braunfels, TX 73130
106 North Covington Roy K. Paxton and 3/31/98
Hillsboro, TX 76645 Karen Jane Paxton
Route 3, Box 647-K
Whitney, TX 76692
726 Price Street Jeff & Marilyn Properties 8/31/97
Suite 5 209 Pleasantview Drive West
Keller, TX 76248 Hurst, TX 76054
</TABLE>
<PAGE> 42
SCHEDULE 2.6
BREACH OF STATUTE, DECREE, ORDER OR CONTRACT OF SELLER
1. Section 5.11(a) of the Senior Convertible Note Agreement between Stifel
Financial Corp. and Life Investors Inc. (now AEGON USA INC.) dated
October 15, 1988.)
<PAGE> 43
SCHEDULE 2.7
LITIGATION OF SELLER
Arst vs. Shoaf and Stifel, Nicolaus & Company, Incorporated
Crowley vs. Bogdan, Prescott Ball & Turben and Stifel, Nicolaus & Company,
Incorporated
Goldman vs. Stifel, Nicolaus & Company, Incorporated, Rowland, Simon L.P.,
Newhard Cook & Company & Advest
Neville Hayes vs. Stifel, Nicolaus & Company, Incorporated, Jack Smith,
Shields and Olde Discount Brokerage
Holder vs. Stifel, Nicolaus & Company, Incorporated and Badger
Kniep, Paul M. vs. Stifel, Nicolaus & Company, Incorporated
Meldridge Syndicate Class Action
* Midamerica Healthcare/Shawnee Hospital vs. Stifel, Nicolaus & Company,
Incorporated
* Oklahoma Turnpike Authority v. Stifel Nicolaus & Company, Incorporated
Robert M. Cochran and Dewayne R. Von Feldt
* Peak, Robert vs. Meroer, Kretz, CMC, Inc. and Stifel, Nicolaus & Company,
Incorporated
Peleski Estate vs. Proctor, Prescott Ball & Turben, Prudential Securities
and Stifel, Nicolaus & Company, Incorporated
* Pulliam, Sue and Michael TTEE vs. Stifel, Nicolaus & Company, Incorporated
Saliba vs. Rick Smith and Stifel, Nicolaus & Company, Incorporated
Stella and Francis Danchus vs. Robert Timney and Stifel, Nicolaus &
Company, Incorporated
Struab vs. Stifel, Nicolaus & Company, Incorporated
Weigel vs. Stifel, Nicolaus & Company, Incorporated
* Woolsey and Co. vs. Bowles and Stifel, Nicolaus & Company, Incorporated
Several arbitrations involving Stifel, Nicolaus & Company, Incorporated and
Nick Fegen (SN Broker) regarding transactions in the common stock of
Skolniks Inc.
* Involve matters arising from activities in the State of Oklahoma.
<PAGE> 44
SCHEDULE 2.9
ARRANGEMENTS WITH EMPLOYEES AT OKLAHOMA LOCATIONS
1. The employee agreements listed on Exhibit IV and Exhibit V hereto.
2. Stifel, Nicolaus & Company, Incorporated employee benefit plans maintained
by Seller as follows:
- Medical, Dental, Life and Disability Insurance Plans
- Employee Stock Ownership Plan
- Employee Stock Purchase Plan
- Incentive Stock Option Plan
- Section 401(k) Savings Plan
- Investment Executive Deferred Compensation Plan
3. Bonus arrangement with Regional Manager based on profitability of region.
The first year of this arrangement falls for a guaranteed bonus of not less
than $54,000.
4. Branch manager bonus arrangement based on the gross commission revenue
generated by the respective branch (not applicable to all branches).
5. The Bonus Notes with the Investment Executives listed on Schedule 1.3(g)
hereto.
6. Employment Agreement with Jim Fried.
<PAGE> 45
SCHEDULE 2.12(b)
A copy of the general form of Seller's internal operating statements
showing Fixed and Controllable Expenses is attached hereto as Schedule 2.12(b).
The Purchaser has previously reviewed such types of statements of Seller.
<PAGE> 46
SCHEDULE 3.1
JURISDICTIONS OF THE COMPANY
Oklahoma
Texas
<PAGE> 47
SCHEDULE 3.2
JURISDICTIONS OF PURCHASER
Oklahoma
<PAGE> 48
SCHEDULE 3.4
REQUIRED GOVERNMENTAL CONSENTS
None
<PAGE> 49
SCHEDULE 3.5
WARRANTS, OPTIONS, ETC.
The Company
- -----------
None
Purchaser
- ---------
None
<PAGE> 50
SCHEDULE 3.6
LITIGATION OF THE COMPANY AND PURCHASER
None
<PAGE> 51
SCHEDULE 5.9
<TABLE>
Deals in Process
<CAPTION>
Client FEE Percent Complete
- ---------------------------------------------------- ------- ----------------
<C> <C> <C>
Moore Public Schools $15,625 30%
Mid-Del Public Schools 16,125 30%
Inola Public Schools 6,500 25%
Allen Bowden Public Schools 6,500 20%
Poteau Public Schools 11,125 30%
Cashion Public Schools 9,250 20%
Dibble Public Schools 6,500 25%
Total Fees $71,625
Note: percentage complete amounts are estimates and are based upon perception.
</TABLE>
<PAGE> 52
EXHIBIT I
<TABLE>
REAL PROPERTY LEASES
<CAPTION>
LOCATION TERM MONTHLY RENTAL
- ------------------------------------------ ------------------- --------------
<C> <C> <C>
100 North Main Street
Altus, OK 73521 2/6/94 - 2/6/99 $1,000.00
333 West Main Street
Suite 100
Ardmore, OK 73401 12/1/94 - 11/30/95 $498.75
500 S.W. Keeler
Suite 200
Bartelsville, OK 74003 3/1/95 - 2/29/00 $1250.21
2017 South Elm Place
Suite 100
Broken Arrow, OK 74102 9/1/93 - 8/31/96 $923.75
201 East Main Street
Cordell, OK 73632 4/1/93 - 3/31/96 $475.00
2600 South Broadway
Suite 1 and Suite 2
Edmond, OK 73013 month to month $600.00
2100 South Country Club Road
Suite 100
El Reno, OK 73036 month to month $850.00
115 East Broadway
Elk City, OK 73648 1/1/95 - 12/31/97 $800.00
205 West Maple
Enid, OK 73701 month to month $650.00
801 "C" Avenue
Suite 100
Lawton, OK 73501 10/1/94 - 9/30/97 $950.00
100 North 5th Street
McAlester, OK 74501 month to month $575.00
1384 South Douglas Boulevard
Suite 200
Midwest City, OK 73130 1/1/92 - 12/31/95 $800.00
900 24th Avenue N.W.
Norman, OK 73069 4/1/92 - 3/31/97 $727.00
9520 North May Avenue
Suite 120
Oklahoma City, Oklahoma 73120 (Founders Office) 2/1/91 - 1/31/96$2,780.40
<PAGE> 53
#1 Leadership Square
Suite 1600 North
Oklahoma City, Oklahoma 73012
(16th Floor of the Leadership Office) 5/1/88 - 4/30/98 $10,899.16
200 East Grand Avenue
Ponca City, OK 74601 2/1/91 - 1/31/96 $325.00
101 Smith Street
Poteau, OK 74953 month to month $550.00
130 Broadway Building
Suite 100
Shawnee, OK 74801 month to month $481.15
216 West 6th Street
Suite 200
Stillwater, OK 74074 9/1/94 - 8/31/95 $850.00
4200 East Skelly Drive
Suite 1020
Tulsa (South), OK 74135-3247 8/1/94 - 7/31/99 $3,452.88
601 South Boulder
Suite 1200
Tulsa (Downtown), OK 74119 8/1/87 - 7/31/97 $8,347.27
1424 Main Street
Woodward, OK month to month $700.00
225 North Seguin Avenue, Suite 100
New Braunfels, TX 78130 9/1/93 - 8/31/95 $787.50
126 East Elm
Hillsboro, TX 76645 4/1/95 - 3/31/98 $750.00
426 Price Street
Suite 5
Keller, TX 76248 9/1/94 - 8/31/97 $725.00
- ---------------
<FN>
Note: Current monthly rental may be subject to escalation and/or operating
cost recovery.
</TABLE>
<PAGE> 54
EXHIBIT II
SOFTWARE CONTRACTS
None
<PAGE> 55
EXHIBIT III
INFORMATION SERVICES CONTRACTS
All quotation, news and market data information now under master contract with
Stifel Nicolaus & Company, Incorporated (except for "basic" BetaQuote) will be
terminated by Seller with respect to the Oklahoma Locations and the Company
agrees to execute their own contracts directly with Vendors of Quotation, News
and Market Data Services (except for Basic BetaQuote which will be included in
the Clearing Agreement).
<PAGE> 56
EXHIBIT IV
EMPLOYEE AND CONSULTING CONTRACTS
1. Compensation agreements with:
Walter Johnson
James Barnes
Larry Edzards
David Jensen
James McIntyre
Gary Tillman
2. Consulting Agreement with Otie Ann Fried
3. Deferred Compensation Agreement with Marita Blanton Currie
<PAGE> 57
EXHIBIT V
INSTITUTIONAL SALESMEN AGREEMENTS
1. Compensation agreements with:
Walter Johnson
James Barnes
Larry Edzards
David Jensen
James McIntyre
Gary Tillman
<PAGE> 58
EXHIBIT VI
SUBLEASED EQUIPMENT
1. All Quotation Delivery Equipment required to service the Oklahoma Locations
and located in the State of Oklahoma
<PAGE> 1
EXHIBIT 99(a)
[CORPORATE LOGO] Stifel Financial
- ------------------------------------------------- News
500 North Broadway
St. Louis, Missouri 63102
(314) 342-2000
STIFEL, NICOLAUS SELLS OFFICES
IN OKLAHOMA AND TEXAS
FOR IMMEDIATE RELEASE
- ---------------------
St. Louis, Mo.... Stifel, Nicolaus & Company, Incorporated has sold
the assets of its Oklahoma division and three Texas offices to Capital West
Financial Corporation, according to Gregory F. Taylor, Stifel president and
chief executive officer.
Capital West, a newly formed company, will provide retail investment
services, municipal finance and institutional sales in both states.
Taylor said Stifel's Oklahoma and Texas divisions had not been
profitable for the firm for some time. He said, "We will continue to provide
clearing services for Capital West, which is now the largest securities firm
based in Oklahoma."
George H. Walker III, Stifel board chairman said, "We believe Capital
West will be successful because it offers the advantages of local ownership,
coupled with very talented leadership." Walker will serve on the board of
Capital West.
Stifel, Nicolaus is a financial services holding company whose
subsidiaries are engaged in general securities brokerage, investment banking
and money management. It has 42 office in 14 states and employs approximately
300 brokers.
- End -
<PAGE> 1
EXHIBIT 99(b)
Form 10-K for the year ended December 31, 1994
Note Q -- Subsequent Event
On February 7, 1995, the Company announced an agreement to sell the
assets of its Oklahoma City-based operations to Capital West Corp. subject to
certain conditions. Included in the agreement are the assets related to the
Company's retail offices in Oklahoma, several retail offices in Texas, and the
Oklahoma-based public finance, institutional trading, and sales departments.
If the transaction is consummated the Company will receive cash, secured and
subordinated notes, and warrants to purchase a minority interest in Capital
West Corp. In addition, the agreement calls for Capital West Corp. to assume
certain office and equipment lease obligations of the Company. The sale would
result in the reduction of approximately 70 investment executives and
approximately 50 support staff located in 26 branch offices.
Unaudited pro forma financial information assuming the transaction had taken
place at the beginning of the year is presented below:
Unaudited Pro Forma Combined Results of Operations
Revenue $ 81,413,000
Net Loss 4,427,000
Loss Per Primary Share 1.04
The above pro forma statements do not purport to be indicative of results which
actually would have occurred had the sale been made on January 1, 1994.
<PAGE> 1
EXHIBIT 99(c)
Form 10-Q for the quarter ended March 31, 1995
Note D--Sale of Oklahoma-Based Operations
On February 7, 1995, the Company announced an agreement to sell the
assets of its Oklahoma City-based operations to Capital West Financial
Corporation subject to certain conditions. Included in the agreement are the
assets related to the Company's retail offices in Oklahoma, several retail
offices in Texas, and the Oklahoma-based public finance, institutional trading,
and sales departments. If the transaction is consummated the Company will
receive cash, secured and subordinated notes, and warrants to purchase a
minority interest in Capital West Financial Corporation. In addition, the
agreement calls for Capital West Financial Corporation to assume or sublease
certain office and equipment lease obligations of the Company. The sale would
result in the reduction of approximately 70 investment executives and
approximately 50 support staff located in 26 branch offices. This sale is
planned to be consummated in May 1995.
Pro forma financial information assuming the transaction had taken
place at the beginning of the year is presented below:
Pro Forma Combined Results of Operations
-----------------------------------------------
Revenue $ 21,244,383
Net Income $ 149,623
Earnings per primary share $ 0.04
The above proforma financial information do not purport to be
indicative of results which actually would have occurred had the sale been made
on January 1, 1995.
