Asset Purchase Agreement (2001)Full Document 

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                            ASSET PURCHASE AGREEMENT

                                  by and among

                              PCH SECURITIES, INC.,

                                 TIMOTHY HURLEY,

                             PPI CAPITAL GROUP, INC.

                                       and

                               DP SECURITIES, INC.

                           Dated as of October 2, 2001






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                                TABLE OF CONTENTS
                                -----------------


ARTICLE I....................................................................  1
1.1.     Certain Definitions:................................................  1
1.2      Transfer of the Assets:.............................................  4
1.3      Assumption by the Buyer of Certain Liabilities:.....................  4
1.4      Non-Assumed Liabilities:............................................  5
1.5      Purchase Price for the Assets; Restrictions on Transfer:............  5
1.6      Closing Adjustments.................................................  5

ARTICLE II...................................................................  5
2.1      The Closing:........................................................  5
2.2      Additional Actions to be Taken on the Closing Date:.................  6

ARTICLE III..................................................................  6
3.1      Organization and Qualification:.....................................  6
3.2      Subsidiaries :......................................................  7
3.3.     Validity and Execution of Agreement:................................  7
3.4.     No Conflict:........................................................  7
3.5      Litigation:.........................................................  7
3.6      The Assets:.........................................................  8
3.7      Intangible Property:................................................  8
3.8      No Material Adverse Change:.........................................  8
3.9      Contracts and Other Agreements:.....................................  8
3.10     ERISA:..............................................................  8
3.11     Environmental Matters:..............................................  8
3.12     Licenses and Permits:...............................................  8
3.14     Investment Representations:.........................................  8
3.14     Tax Matters.........................................................  9
3.15     Undisclosed Liabilities.............................................  9
3.16     Financial Statements................................................ 10
3.17     Compliance with Laws................................................ 10

ARTICLE IV................................................................... 10
4.1      Organization and Qualification:..................................... 11
4.2      Validity and Execution of Agreement:................................ 11
4.3      No Conflict:........................................................ 11
4.4.     The Shares:......................................................... 11

ARTICLE V.................................................................... 12
5.1      Survival:........................................................... 12
5.2      Indemnification..................................................... 12
5.3      Method of Asserting Claims:......................................... 12

ARTICLE VI................................................................... 14
6.1      Compliance With Agreement........................................... 14
6.2      Absence of Litigation............................................... 14
6.3      Consents and Approvals.............................................. 15


6.4      Clearing Arrangements............................................... 15
6.5      Registration of Hurley.............................................. 15

ARTICLE VII.................................................................. 15
7.1      Compliance With Agreement........................................... 15

ARTICLE VIII................................................................. 15
8.1      Affirmative Covenants of Seller..................................... 15
8.2      Negative Covenants.................................................. 16
8.3      Termination......................................................... 16
8.4      Effect of Termination............................................... 17
8.5      Waiver of Right to Terminate........................................ 17

ARTICLE IX................................................................... 17
9.1      Sales and Transfer Taxes............................................ 17
9.2      Post-Closing Further Assurances..................................... 17
9.3      Notices............................................................. 17
9.4      Publicity........................................................... 18
9.5      Entire Agreement.................................................... 18
9.6      Waivers and Amendments.............................................. 19
9.7      Governing Law....................................................... 19
9.8      Binding Effect; No Assignment....................................... 19
9.9      Variations in Pronouns.............................................. 19
9.10     Counterparts........................................................ 19
9.11     Exhibits and Schedules.............................................. 19
9.12     Effect of Disclosure on Schedules................................... 19
9.13     Headings............................................................ 19
9.14     Severability of Provisions.......................................... 20
9.15     Brokers............................................................. 20
9.16     Confidential Information............................................ 20


                                    Exhibits
                                    --------

EXHIBIT A - Assignment & Assumption Agreement
EXHIBIT B - Bill of Sale
EXHIBIT C - Employment Agreement


                                    Schedules
                                    ---------

1.1(a)    - Excluded Assets
1.2       - Assets
1.3(b)    - Assumed Liabilities
3.1       - Jurisdictions of Qualification
3.5       - Litigation
3.9       - Material Agreements
3.10      - Real Estate


                            ASSET PURCHASE AGREEMENT

         ASSET PURCHASE AGREEMENT, dated as of October 2, 2001 by and between
PCH Securities, Inc., a California corporation ("Seller"), DP Securities, Inc.,
a California corporation (the "Buyer"), PPI Capital Group, Inc., a Utah
corporation ("Buyer Parent"), and F. Timothy Hurley, and individual residing at
811 Minor Drive, Escondido, CA 92025 ("Hurley").

                              W I T N E S S E T H :
                              - - - - - - - - - -

         WHEREAS, the Seller is engaged in the business of operating a financial
services firm located at 504 West Mission Avenue, Suite 201,Escondido, CA 92025
(the "Business"); and

         WHEREAS, the Seller owns certain assets comprising the Assets (as
hereinafter defined) which are related to the conduct of the Business; and

         WHEREAS, the Seller wishes to transfer, and the Buyer wishes to
purchase, the Assets, subject to the assumption by the Buyer of certain
liabilities of the Seller comprising the Assumed Liabilities (as hereinafter
defined) in exchange for the Shares (as hereafter defined); and

         WHEREAS, Seller and Buyer have adopted a plan of reorganization and
intend that the sale of the Assets qualify as a reorganization within the
meaning of Section 368(a)(1)(C) of the Internal Revenue Code of 1986, as amended
(the "Code") .

NOW, THEREFORE, in consideration of the mutual terms, conditions and other
agreements set forth herein, the Seller, Hurley, Buyer Parent and the Buyer
hereby agree as follows:

                                    ARTICLE I

                      DEFINITIONS; PURCHASE OF THE ASSETS;
               ASSUMPTION OF ASSUMED LIABILITIES; PURCHASE PRICE;
                    CLOSING ADJUSTMENTS; CONDITION OF ASSETS

         1.1   Certain Definitions. As used in this Agreement, the following
terms have the following meanings unless the context otherwise requires:

         "Affiliate" means, with respect to any Person, any other Person
controlling, controlled by or under common control with such Person.

         "Assets" has the meaning specified in Section 1.2.

         "Assigned Contracts and Leases" means the executory contracts and
leases set forth on Schedule 3.9 that are specifically identified as assigned
contracts and leases.

         "Assignment and Assumption Agreement" means an instrument substantially
in the form of Exhibit A attached hereto.


         "Assumed Liabilities" has the meaning specified in Section 1.3.

         "Bill of Sale" means an instrument substantially in the form of Exhibit
B attached hereto.

         "Business" has the meaning specified in the Recitals.

         "Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks are authorized or required by law to close in New York
City.

         "Buyer" has the meaning specified in the introductory paragraph of this
Agreement.

         "Claim Notice" has the meaning specified in Section 5.2(a).

         "Closing" has the meaning specified in Section 2.1(a).

         "Employment Agreement" means an instrument substantially in the form of
Exhibit [E] attached hereto.

         "Environmental Law" means any and all present and future federal,
state, local and statutes, laws, regulations, ordinances, rules, judgments,
orders, decrees, permits, grants, franchises, licenses or agreements relating to
(a) the protection of the environment, health or workers safety; (b) pollution
or environmental contamination; or (c) the use, processing, distribution,
generation, treatment, storage, recycling, transportation, disposal, handling,
Release or threatened or potential Release of any Material of Environmental
Concern.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

         "Excluded Assets" means those assets of the Seller or an Affiliate of
Seller set forth on Schedule 1.1(a).

         "Fair Market Value" shall mean, with respect to any issuance date, the
average closing price of the shares of common stock of Buyer Parent as reported
on the principal exchange (or electronic quotation system) on which such shares
are traded (or quoted) for the twenty (20) trading days immediately preceding
such issuance date.

         "Governmental or Regulatory Body" means any government or political
subdivision thereof, whether federal, state, county, local or foreign, or any
agency, authority or instrumentality of any such government or political
subdivision.

         "Hurley" has the meaning specified in the introductory paragraph of
this Agreement.

         "Indemnified Party" has the meaning specified in Section 5.2.

                                      -2-


         "Indemnifying Party" has the meaning specified in Section 5.2.

         "Leases" has the meaning specified in Section 3.10.


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