**Exhibit 10.1**

 

 

 

 

ASSET PURCHASEAGREEMENT

 

 

between

 

 

DEERFIELD CAPITALMANAGEMENT LLC

 

 

and

 

 

LUKE D. KNECHT

 

 

 

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Dated as of September 30,2010

 

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TABLE OF CONTENTS

 
| ** **                                                                                | ** **                                                                             | **Page** |
|-------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------|----------|
|                                                                                      |                                                                                   |
| ARTICLE I  DEFINITIONS                                                               | 1                                                                                      |
|                                                                                      |                                                                                   |
| ARTICLE II  TRANSFER OF ASSETS AND ASSUMPTION OF LIABILITIES                         | 4                                                                                      |
| Section 2.1                                                                          | Purchase and Sale of Assets                                                            | 4        |
| Section 2.2                                                                          | Excluded Assets                                                                        | 4        |
| Section 2.3                                                                          | Assignment and Assumption of Certain Liabilities and  Expenses                         | 4        |
| Section 2.4                                                                          | Limited Warranty; Nonrecourse; Conveyance; Release                                     | 4        |
|                                                                                      |                                                                                   |     |
| ARTICLE III  REPRESENTATIONS AND WARRANTIES OF SELLER                                | 5                                                                                      |
| Section 3.1                                                                          | Organization and Powers                                                                | 5        |
| Section 3.2                                                                          | Corporate Authority                                                                    | 5        |
| Section 3.3                                                                          | No Conflicts                                                                           | 6        |
| Section 3.4                                                                          | Absence of Certain Liens and Litigation                                                | 6        |
| Section 3.5                                                                          | Disclaimer of other Representations and Warranties                                     | 6        |
|                                                                                      |                                                                                   |     |
| ARTICLE IV  REPRESENTATIONS AND WARRANTIES OF PURCHASER                              | 6                                                                                      |
| Section 4.1                                                                          | No Conflicts                                                                           | 6        |
| Section 4.2                                                                          | Consents and Approvals                                                                 | 7        |
| Section 4.3                                                                          | Absence of Certain Liabilities and Litigation                                          | 7        |
| Section 4.4                                                                          | No Other Representations and Warranties; Estimates,  Projections and Other Predictions | 7        |
|                                                                                      |                                                                                   |     |
| ARTICLE V  COVENANTS OF THE PARTIES                                                  | 7                                                                                      |
| Section 5.1                                                                          | Cooperation                                                                            | 7        |
| Section 5.2                                                                          | Use of Names, Trademarks, Service Marks and  Technology Systems                        | 8        |
| Section 5.3                                                                          | Limitations                                                                            | 8        |
| Section 5.4                                                                          | Bulk Sales Laws                                                                        | 9        |
| Section 5.5                                                                          | Transition Assistance                                                                  | 10       |
| Section 5.6                                                                          | Certain Tax Matters                                                                    | 10       |
| Section 5.7                                                                          | Possession                                                                             | 10       |
|                                                                                      |                                                                                   |     |
| ARTICLE VI  OBLIGATIONS OF PARTIES ON THE CLOSING DATE                               | 10                                                                                     |
| Section 6.1                                                                          | Closing Date and Place                                                                 | 10       |
| Section 6.2                                                                          | Obligations of Purchaser on the Closing Date                                           | 10       |
| Section 6.3                                                                          | Obligations of Seller on the Closing Date                                              | 11       |
| Section 6.4                                                                          | Additional Payments                                                                    | 11       |
|                                                                                      |                                                                                   |     |
| ARTICLE VII  CONDITIONS TO PURCHASER’S OBLIGATION TO CONSUMMATE THE TRANSACTION | 12                                                                                     |
| Section 7.1                                                                          | Representations and Warranties                                                         | 12       |
| Section 7.2                                                                          | Compliance with Covenants                                                              | 12       |

 

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TABLEOF CONTENTS(Continued)

 
| ** **                                                                              | ** **                                                    | **Page** |
|-----------------------------------------------------------------------------------------|---------------------------------------------------------------|----------|
|                                                                                    |                                                          |
|                                                                                    |                                                          |     |
| ARTICLE VIII  CONDITIONS TO SELLER’S OBLIGATION TO CONSUMMATE THE TRANSACTION | 12                                                            |
| Section 8.1                                                                        | Representations and Warranties                                | 12       |
| Section 8.2                                                                        | Compliance with Covenants                                     | 12       |
| Section 8.3                                                                        | Termination Agreement                                         | 12       |
|                                                                                    |                                                          |     |
| ARTICLE IX  INDEMNIFICATION                                                        | 13                                                            |
| Section 9.1                                                                        | Survival                                                      | 13       |
| Section 9.2                                                                        | Indemnification by Purchaser                                  | 13       |
| Section 9.3                                                                        | Limitations on Indemnification; Exclusive Remedy              | 13       |
|                                                                                    |                                                          |     |
| ARTICLE X  TERMINATION                                                             | 14                                                            |
|                                                                                    |                                                          |     |
| ARTICLE XI  GENERAL PROVISIONS                                                     | 14                                                            |
| Section 11.1                                                                       | Entire Agreement; Modification; Waiver                        | 14       |
| Section 11.2                                                                       | Counterparts; Effectiveness; Third Party  Beneficiaries       | 14       |
| Section 11.3                                                                       | Interpretation                                                | 14       |
| Section 11.4                                                                       | Payment of Expenses                                           | 15       |
| Section 11.5                                                                       | Governing Law; Waiver of Jury Trial; Consent to  Jurisdiction | 15       |
| Section 11.6                                                                       | Addresses of Notice                                           | 16       |
| Section 11.7                                                                       | Intentionally Omitted                                         | 16       |
| Section 11.8                                                                       | Severability                                                  | 16       |
| Section 11.9                                                                       | Specific Performance                                          | 17       |
| Section 11.10                                                                      | Rules of Construction                                    | 17       |
| Section 11.11                                                                      | Employees and Agents of Seller                                | 17       |
| Section 11.12                                                                      | Remittances                                                   | 17       |

 

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ANNEXES AND EXHIBITS

 
| ANNEX A: |   | CERTAIN ASSETS AND THE ELIGIBLE EMPLOYEES |
|----------|--------|-------------------------------------------|
|     |   |                                      |
| ANNEX B: |   | BILL OF SALE                              |

 

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ASSET PURCHASE AGREEMENT, dated as of September 30,2010, by and between Deerfield Capital Management LLC, a Delaware limitedliability company (“***Seller***”), and Luke D. Knecht(“***Purchaser***”).

 

W I T N E S S E T H:

 

WHEREAS, Seller owns a license to use certainproprietary software and related materials for managing the duration ofinvestment portfolios and other assets (collectively, ***“ReturnProfile Management”***or “***RPM***”);

 

WHEREAS, upon the terms and subject to theconditions of this Agreement, Seller wishes to sell, convey, assign, transferand deliver to Purchaser, and Purchaser desires to acquire from the Seller, theAcquired Assets, subject to certain liabilities;

 

WHEREAS, prior to or concurrently with the executionand delivery of this Agreement, and as a condition to the willingness of Sellerto enter into this Agreement, Luke D. Knecht is entering into a terminationagreement with Seller pursuant to which, among other things and subject tocertain conditions, he has agreed to resign from his positions with Seller andits Affiliates effective as of the Closing (the “***TerminationAgreement***”).

 

NOW, THEREFORE, in consideration of the foregoingrecitals and the following terms, covenants, and conditions, the parties agreeas follows:

 

ARTICLE I DEFINITIONS

 

“***Acquired Assets***”means the Equipment, the Software and the Track Record, and all of Seller’sright, title and interest in RPM, including relevant databases andspreadsheets.

 

“***Affiliate***”means, with respect to any Person, any other Person that directly or indirectlycontrols, is controlled by or is under common control with, such firstPerson.  For the purposes of thisdefinition, “control” (including, with correlative meanings, the terms “controlling,”“controlled by” and “under common control with”), as applied to any Person,means the possession, directly or indirectly, of the power to direct or causethe direction of the management and policies of that Person, whether throughthe ownership of voting securities, by contract or otherwise.

 

“***Agreement***”means this Agreement as the same may be amended, supplemented or modified fromtime to time in accordance with the terms hereof.

 

“***Assumed Liabilities***”has the meaning ascribed to it in Section 2.3.

 

“***Bill of Sale***”****means the bill of sale in substantially the form andsubstance attached hereto as Annex B.

 

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“***Business Day***”means any day other than Saturday, Sunday or a day on which commercial banks inNew York, New York are authorized or required by Law to close.

 

“***Closing***”has the meaning ascribed to it in Section 6.1(a).

 

“***Closing Date***”has the meaning ascribed to it in Section 6.1(a).

 

“***Code***” meansthe Internal Revenue Code of 1986, as amended (including any successor code),and the rules and regulations promulgated thereunder.

 

“***Eligible Employees***”has the meaning ascribed to it in Section 11.11.

 

“***Equipment***”means the computer hardware, equipment and peripherals, including desktop andlaptop personal computers, listed on Annex A attached hereto.

 

“***Excluded Assets***”has the meaning ascribed to it in Section 2.2.

 

“***Governmental Entity***”means any (i) region, state, county, municipality, city, town, village,district or other jurisdiction, (ii) foreign, federal, state, provincial,local, municipal or other government, (iii) governmental orquasi-governmental authority of any nature (including any governmental agency,branch, department, self-regulatory organization (including any securitiesexchange) or other entity and any court or other tribunal), (iv) bodyexercising, or entitled to exercise, any administrative, executive, judicial,legislative, policy, regulatory or taxing authority or power of any nature or (v) officialof any of the foregoing.

 

“***Initial Payment***”means $150,000.

 

“***Judgment***”means any judgment, ruling, order, arbitral award or decree of any GovernmentalEntity.

 

***“Knowledge***” or “***Know***” and similarterms means (a) with respect to a natural person, the actual knowledge ofsuch person as of the date of this Agreement, and (b) with respect to aperson that is not a natural person, the actual knowledge, after reasonableinquiry, of any director, manager or executive officer of any such non-naturalperson as of the date of this Agreement.

 

“***Law***” meansany writ, injunction, Judgment, law, decision, opinion, statute, rule orregulation of any governmental, judicial, legislative, executive,administrative or regulatory authority of the United States, or of any state orlocal government or any subdivision thereof, or of any Governmental Entity.

 

“***Liabilities***”means all liabilities or obligations of any kind or nature, whether known orunknown, whether absolute, accrued, contingent, choate, inchoate or otherwise,whether due or to become due, and whether or not required to be reflected on abalance sheet prepared in accordance with United States generally acceptedaccounting principles, as in effect from time to time.

 

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“***Lien***” meansany mortgage, deed of trust, lien, security interest, pledge, lease,conditional sale contract, claim, charge, easement, right of way, assessment,restriction and other encumbrance or claim of every kind.

 

“***New Firm***”has the meaning ascribed to it in Section 5.3(a).

 

“***Person***”means any natural person, corporation, general partnership, limitedpartnership, limited liability company, proprietorship, other businessorganization, trust, union, association or Government Entity.

 

“***Purchaser***”has the meaning ascribed to it in the preamble.

 

“***Representative***”means, with respect to a particular Person, any director, officer, manager,employee, agent, consultant, advisor, legal counsel, accountant or otherrepresentative of that Person.

 

“***Restricted Period***”has the meaning ascribed to it in Section 5.3(a).

 

“***Seller***” hasthe meaning ascribed to it in the preamble.

 

“***Seller’s Clients***”has the meaning ascribed to it in Section 5.3(b).

 

“***Software***”means the perpetual, non-exclusive license to use certain software described inthat certain ANALYSIS GROUP, INC./THEORETICS, INC. AGREEMENT RCMSYSTEM (Agreement No. 91202969) dated as of December 31, 1996, alongwith the data files associated with the Software, as such was assigned toSeller by Dresdner RCM Global Investors LLC (“***DRCM***”)pursuant to that certain assignment agreement dated as of May 24, 2002.

 

“***Tax Return***”means any report, return or other information required to be supplied to ataxing authority in connection with Taxes.

 

“***Taxes***”means all taxes, charges, fees, levies or other like assessments, includingincome, gross receipts, excise, real and personal and intangible property,sales, use, transfer (including transfer gains taxes), withholding, license,payroll, recording, ad valorem and franchise taxes imposed by any GovernmentalEntity and such term shall include any interest, penalties or additions to taxattributable to such assessments.

 

“***Termination Agreement***”has the meaning ascribed to it in the recitals.

 

“***Third Party Consents***”means all consents (or in lieu thereof waivers) from a third party to theperformance by the applicable Person of its obligations under this Agreementand the other Transaction Documents or to the consummation or performance ofthe transactions contemplated hereby and thereby as are required under anyContract to which such Person is a party or any agreement by which any of theAcquired Assets are bound or which constitute any of the Acquired Assets.

 

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“***Track Record***”means documentation to support the historic performance records of allportfolios managed by Seller with the use of RPM and related marketingmaterials and client correspondence and any documentation previously acquiredby the Seller from DRCM relating to the operation of RPM.

 

“***Transaction Documents***”has the meaning ascribed to it in Section 3.2.

 

ARTICLE II TRANSFER OF ASSETS AND ASSUMPTION OF LIABILITIES

 

Section 2.1            Purchase and Sale of Assets.  Upon the terms and subject to the conditionsof this Agreement, Purchaser agrees to purchase from Seller, and Seller agreesto sell, convey, transfer, assign and deliver, or cause to be sold, conveyed,transferred, assigned and delivered, to Purchaser at the Closing, all of Seller’sright, title and interest in, to and under the Acquired Assets.   For the avoidance of doubt, the partieshereto agree that all accrued fees payable by RPM clients for the third quarterof 2010 shall be payable to the Seller.

 

Section 2.2            Excluded Assets.  Purchaser expressly understands and agreesthat Purchaser is not acquiring from Seller, and Seller shall retain ownershipof all right, title and interest in and to, any property or asset other thanany right, title or interest in or to the Acquired Assets, including anyinterest in or right to use any logo, name, trademark or service mark presentlyor previously used by Seller or any of its Affiliates (including the name “Deerfield”and any related trademarks or service marks) (collectively, the “***Excluded Assets***”).  Purchaser further expressly understands andagrees that Seller retains the right to maintain copies of the Track Record anddisclose the Track Record as necessary for legal, regulatory or accountingpurposes.

 

Section 2.3            Assignment and Assumption ofCertain Liabilities and Expenses. Subject to the terms and conditions set forth in this Agreement, on theClosing Date, Seller shall assign to Purchaser, and Purchaser shall(i) accept and assume from Seller and (ii) thereafter pay, performand discharge in a timely manner when due all obligations with respect to andbe liable for any and all Liabilities of Seller arising out of or in connectionwith the development, use or ownership of the Acquired Assets that wereincurred or result from actions taken from and after the Closing Date, and anyand all Liabilities expressly provided in this Agreement that are required tobe borne by Purchaser, including Purchaser’s indemnification obligations under Section 9.3(collectively, the “***AssumedLiabilities***”).

 

Section 2.4            Limited Warranty; Nonrecourse;Conveyance; Release.

 

(a)           THE CONVEYANCE OF ALL ACQUIRED ASSETS PURCHASED BYPURCHASER UNDER THIS AGREEMENT AND UNDER ANY CONVEYANCE DOCUMENT EXECUTED INCONNECTION HEREWITH SHALL BE MADE, AS NECESSARY, BY SELLER’S ASSIGNMENT OR BILLOF SALE, IN “AS IS” AND “WHERE IS” CONDITION, AND WITHOUT ANY

 

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REPRESENTATIONS OR WARRANTIES WHATSOEVER WITHRESPECT TO SUCH ACQUIRED ASSETS, EXPRESS OR IMPLIED, WITH RESPECT TOMERCHANTABILITY, FITNESS FOR A SPECIFIC PURPOSE, ENVIRONMENTAL CONDITION,ENFORCEABILITY, COLLECTIBILITY, DOCUMENTATION OR FREEDOM FROM LIENS ORENCUMBRANCES (IN WHOLE OR IN PART), CONDITION OF PROPERTY OR ANY OTHER MATTER,AND PURCHASER SHALL NOT BE ENTITLED TO RELY ON ANY REPRESENTATION OR WARRANTYWHATSOEVER EXCEPT AS EXPRESSLY SET FORTH IN ARTICLE III OF THIS AGREEMENT.

 

(b)           Purchaser shall execute and deliver to Seller, and Sellershall execute and deliver to Purchaser such further instruments and documentsof conveyance (in form and substance reasonably satisfactory to Seller andPurchaser) as shall be reasonably necessary to vest in Purchaser the full legaland equitable title of Seller in and to the Acquired Assets, free and clear ofall Liens.

 

(c)           On and after the Closing Date, Purchaser shall execute,acknowledge and deliver to Seller all such acknowledgements and other instrumentsas Seller shall reasonably request (in form and substance reasonablysatisfactory to Purchaser and Seller) to effectively relieve and dischargeSeller when due from any of the Assumed Liabilities.

 

ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER

 

Seller represents and warrants to Purchaser asfollows:

 

Section 3.1            Organization and Powers.  Seller is a limited liability company, dulyorganized and validly existing under the laws of Delaware.  Seller has the requisite limited liabilitycompany power and authority to own or lease and operate the Acquired Assets.

 

Section 3.2            Corporate Authority.  Seller has the requisite limited liabilitycompany power and authority to execute and deliver this Agreement, theTermination Agreement and any other documents, agreements or instrumentsexpressly contemplated by this Agreement (collectively, the “***Transaction Documents***”) towhich Seller is a party and to consummate the transactions contemplated herebyand thereby.  The execution and deliveryof this Agreement and the other Transaction Documents to which Seller is aparty and the consummation of the transactions contemplated hereby and thereby,have been duly authorized by all necessary limited liability company action onthe part of Seller and no further limited liability company action on the partof Seller is necessary to approve this Agreement or any of the otherTransaction Documents to which it is a party or to consummate the transactionscontemplated hereby and thereby.  ThisAgreement has been, and as of the Closing Date, each of the other TransactionDocuments to which Seller is a party will have been, duly executed anddelivered by Seller and, assuming the due authorization, execution and deliveryof this Agreement by

 

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Purchaser and each of theother Transaction Documents to which it is a party by Purchaser, this Agreementconstitutes, and as of the Closing Date each of the other Transaction Documentsto which Seller is a party will constitute, the legal, valid and bindingobligations of Seller enforceable against Seller in accordance with theirterms, except as enforceability may be limited by applicable bankruptcy,insolvency, reorganization, fraudulent conveyance or transfer, moratorium orsimilar laws affecting the enforcement of creditors’ rights generally and bygeneral principles of equity relating to enforceability (regardless of whetherconsidered in a proceeding at law or in equity).

 

Section 3.3            No Conflicts.  Neither the execution or delivery by Sellerof this Agreement or any other Transaction Document to which Seller is a partynor the performance of the transactions contemplated hereby or thereby to beperformed by either of them shall (a) violate the certificate of formationor limited liability company agreement of either of them, (b) violate anyapplicable Law or (c) require any consent or other action by any Person,including without limitation any Third Party Consent, under, constitute adefault under or give rise to any right of termination, cancellation oracceleration of any right or obligation or to a loss of any benefit to whicheither of them is entitled under any provision of any agreement or otherinstrument binding upon Seller, except in the case of clauses (b) and (c) asto matters which would not reasonably be expected to have a material adverseeffect on the ability of Seller to perform its obligations hereunder or underany of the other Transaction Documents to which it is a party.

 

Section 3.4            Absence of Certain Liens andLitigation.  Seller and itscontrolled Affiliates have not created a Lien on, sold, licensed or otherwiseconveyed any of its rights, title or interest in or to any of the AcquiredAssets.  To the Knowledge of Seller,there are no Liens on the Acquired Assets and there is no Litigation that ispending or threatened involving or related to the Acquired Assets.

 

Section 3.5            Disclaimer of otherRepresentations and Warranties. Except as expressly set forth in this Article III, neither Sellernor any of its Affiliates makes any representation or warranty, express orimplied, relating to the Acquired Assets or any other matter, including anyrepresentation or warranty as to merchantability, habitability, profitability,future performance, fitness for a particular purpose or non-infringement.  All of such additional representations andwarranties are hereby disclaimed.

 

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Purchaser hereby represents and warrants to Selleras follows:

 

Section 4.1            No Conflicts.  Neither the execution or delivery byPurchaser of this Agreement or any other Transaction Document to whichPurchaser is a party nor the performance of the transactions contemplatedhereby or thereby to be performed by it shall (a) violate any Law applicableto Purchaser or (b) require any

 

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consent or other action byany Person under, constitute a default under or give rise to any right oftermination, cancellation or acceleration of any right or obligation or to aloss of any benefit to which Purchaser is entitled under any provision of anyagreement or other instrument binding upon Purchaser, except as to matterswhich would not reasonably be expected to have a material adverse effect on theability of Purchaser to perform its obligations hereunder or under any of theother Transaction Documents; provided, that, for greater clarity,nothing in this Section 4.1 shall be deemed to constitute a representationor warranty as to whether a Third Party Consent is required under any of theAcquired Assets for Purchaser to accept the sale, conveyance, transfer,assignment or delivery of all of Seller’s right, title and interest therein.

 

Section 4.2            Consents and Approvals.  Purchaser is not required to obtain anyapproval or any Third Party Consents in connection with (a) Purchaser’sexecution and delivery of this Agreement or any Transaction Document to whichit is a party or (b) the consummation by Purchaser of the transactionscontemplated hereby or thereby.

 

Section 4.3            Absence of Certain Liabilitiesand Litigation.  To the Knowledge ofPurchaser, there are no Liabilities of Seller or any of its Affiliates createdwith the authorization or at the direction of Purchaser arising out of or inconnection with the development, use or ownership of the Acquired Assets andthere is no Litigation that is pending or threatened involving or related to,directly or indirectly, the Acquired Assets.

 

Section 4.4            No Other Representations andWarranties; Estimates, Projections and Other Predictions.Purchaser is aninformed and sophisticated purchaser, experienced in the evaluation andpurchase of property and assets such as the Acquired Assets as contemplatedhereunder.  Purchaser has undertaken suchinvestigation and has been provided with and has evaluated such documents andinformation as it has deemed necessary to enable it to make an informed andintelligent decision with respect to the execution, delivery and performance ofthis Agreement and the other Transaction Documents to which it is a party.  Purchaser acknowledges that Seller has givenPurchaser complete and open access to the Acquired Assets and the key employeesand books and records related thereto. Purchaser will undertake prior to Closing such further investigation andrequest such additional documents and information as it deems necessary.  Purchaser understands that any costestimates, projections or other predictions which have been provided to it arenot and shall not be deemed to be representations or warranties of Seller.  Purchaser acknowledges that there areuncertainties inherent in attempting to make such estimates, projections andother predictions, that Purchaser is familiar with such uncertainties, thatPurchaser is taking full responsibility for making its own evaluation of theadequacy and accuracy of all estimates, projections and other predictions sofurnished to it, and that Purchaser shall have no claim against anyone withrespect thereto.

 

ARTICLE VCOVENANTS OF THE PARTIES

 

Section 5.1            Cooperation.  Subject to the terms and conditions of thisAgreement, and unless another standard of efforts is expressly set forth inthis Agreement, Seller and Purchaser shall cooperate with each other and usetheir respective commercially reasonable efforts to consummate the transactions

 

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contemplated by this Agreement, and each shall takeall commercially reasonable actions necessary to accomplish such transactions.

 

Section 5.2            Use of Names, Trademarks, ServiceMarks and Technology Systems.

 

(a)           Subject to Section 5.2(c), no interest in or right touse any logo, name, trademark or service mark presently or previously used bySeller or any of its Affiliates (including the name “Deerfield” and any relatedtrademarks or service marks) is being conveyed pursuant to this Agreement.

 

(b)           Subject to Section 5.2(c), Purchaser agrees thatafter the Closing Date neither it nor any of its Affiliates shall use orauthorize others to use the name “Deerfield” or any related trademarks orservice marks or any similar name, trademark or service mark indicatingaffiliation after the Closing with Seller or any of its Affiliates, inconnection with any business activity engaged in by Purchaser or any of itsAffiliates.

 

(c)           As promptly as practicable following the Closing Date andexcept as otherwise agreed by Seller in writing, Purchaser shall (i) commencethe removal of Seller’s trade names, names (including any reference to “Deerfield”or any similar name indicating affiliation after Closing with Seller or any ofits Affiliates), trademarks or service marks, logos, insignia, slogans,emblems, symbols, designs, and other identifying characteristics (“***Names***”) from the AcquiredAssets, and from all printed materials and related business literature and (ii) notmake reference to “Deerfield” or Seller or any of its Affiliates in itsmarketing, solicitation or client materials other than to factually reference (A) Purchaser’speriod of employment at Seller, (B) the period during which RPM was operatedby Seller, (C) Seller’s continuing interest in the revenue related to RPMand (D) the terms of this Agreement which have been publicly disclosed.

 

(d)           Except as specifically provided in this Agreement, neitherSeller nor any of its Affiliates shall have any obligation to provide anyservices (transition or otherwise) to Purchaser in respect of the AcquiredAssets or any other matter.  For a periodof three months following the Closing Date, upon reasonable advance notice fromPurchaser, Seller will use commercially reasonable efforts to providePurchaser, at Purchaser’s sole cost and expense and during normal businesshours, with reasonable consulting services related to matters concerning themanner in which the Software functioned within Seller’s information technologysystems (it being acknowledged that Seller shall not have any obligation toprovide such consulting services to the extent doing so would unreasonablyinterfere with the business or operations of Seller or to make available anyparticular employee of Seller to provide such consulting services).

 

Section 5.3            Limitations.

 

(a)           Purchaser will have the right to affiliate with any otherinvestment management firm (a “***New Firm***”)for the purpose of continuing to offer RPM

 

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to existing RPM clients of Seller and otherprospective clients; provided that an affiliation with any New Firm during theone year period following Closing Date (the “***RestrictedPeriod***”) shall be require the Seller’s prior written consent,not to be unreasonably withheld.

 

(b)           Purchaser will not solicit any client of the Seller (“***Seller’s Clients***”) for any productother than RPM without the Seller’s prior written consent during the RestrictedPeriod.  Purchaser and Seller shall agreein writing upon a list of Seller’s Clients prior to Closing.  During the Restricted Period, any New Firmshall be prohibited from soliciting the Seller’s Clients for investments inhigh yield bonds and bank loans, residential mortgage backed securities andasset backed securities and structured products secured by any of the precedingclasses of assets unless the New Firm had a pre-existing relationship with suchSeller’s Client.

 

(c)           Purchaser will not sell, convey, transfer, assign ordeliver or cause to be sold, conveyed, transferred, assigned or delivered anyof Purchaser’s right, title or interest in, to and under the Acquired Assets,or any of the economics related thereto, to another Person without securingsuch Person’s written agreement, in form and substance reasonably acceptable tothe Seller, to abide by the terms and provisions of the Transaction Documents,including, without limitation, the obligations under this Article V and Section 6.4of this Agreement.

 

(d)           Seller will not acquire, build or offer an investmentproduct with a strategy substantially similar to that of RPM (i.e., durationmanagement in the U.S. Treasury bond market or similar markets for governmentdebt issued by G-7 countries) nor solicit existing RPM clients for such aproduct during the Restricted Period; provided, however, that Seller shall bepermitted to solicit existing RPM clients for investments in other investmentproducts offered by Seller as of the Closing Date .  After the Restricted Period, nothing in any TransactionDocument shall be construed to prohibit or otherwise limit or restrict theability of Seller or its Affiliates to engage or participate in (including asan owner, partner, member, shareholder, investor, financing source, manager,adviser, agent or otherwise), or render services for, any Person or entityengaged in any asset management of related business.

 

(e)           During the three months following the Closing Date,Purchaser shall use reasonable efforts to cooperate in Seller’s efforts tointroduce other investment products managed or to be managed by Seller toexisting RPM clients, including by making introductions of senior personnel ofthe Seller, provided that such investment products do not compete with productsmanaged by any New Firm.

 

(f)            During the twenty-four months following the Closing Date,Seller shall use reasonable efforts to promptly refer any inquiries regardingthe RPM product to the Purchaser.

 

Section 5.4            Bulk Sales Laws.  Each of the parties hereby waives compliancewith all applicable provisions of the “bulk sales” or similar laws of anyjurisdiction and all bulk sales tax provisions in all states.

 

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Section 5.5            Transition Assistance.  Seller shall, and shall cause its Affiliatesto, cooperate reasonably with Purchaser and otherwise take such actions as maybe reasonably requested by Purchaser in connection with the transfer of theTrack Record to the Purchaser during the sixty days following the Closing Date.

 

Section 5.6            Certain Tax Matters.

 

Seller and Purchaser shall provide each other withsuch assistance as reasonably may be requested by either of them in connectionwith (i) the preparation of any Tax Return related to, or with respect to,the Acquired Assets, or (ii) any audit or other examination by any taxingauthority, or any judicial or administrative proceedings relating to liabilityfor Taxes arising from, or with regard to, the Acquired Assets.  The party requesting assistance hereundershall reimburse the other party for reasonable out-of-pocket expenses incurredin providing such assistance, provided, however, that, forpurposes of receiving reimbursement, no independent contractors, such asaccountants or attorneys, shall be consulted without the written consent of theparty requesting assistance, which consent shall not be unreasonably withheld.

 

Section 5.7            Possession.  Purchaser shall be permitted to takepossession of, and use and otherwise enjoy all of Seller’s rights, title andinterest in all of the Acquired Assets immediately following the Closing.  Immediately following the Closing, Sellershall take, and shall cause its Affiliates to take, such steps as may berequired to put Purchaser in actual possession and operating control of theAcquired Assets.

 

ARTICLE VI OBLIGATIONS OF PARTIES ON THE CLOSING DATE

 

Section 6.1            Closing Date and Place.

 

(a)           Subject to the satisfaction or waiver of the conditionsset forth in Articles VII and VIII, the closing of the sale and purchase of theAcquired Assets and the assumption and assignment of the Assumed Liabilities(the “***Closing***”) shalltake place at the offices of Seller in Rosemont, Illinois on the datehereof (the “***Closing Date***”).  The transfer of the Acquired Assets toPurchaser and the assumption of the Assumed Liabilities, if any, by Purchasershall be deemed to occur at 10:00 a.m. on the Closing Date.

 

(b)           Any deliveries, assignments, or transfers required underthis Agreement, other than the foregoing, shall be made at the time and datespecified in this Agreement (and where no time is specified, on or before theclose of business on the date specified) and in the manner and place specifiedin this Agreement.

 

Section 6.2            Obligations of Purchaser on theClosing Date.  Subject to thesatisfaction or waiver of all conditions precedent to Purchaser’s obligationsand the simultaneous delivery by Seller of all items required underSection 6.3, Purchaser shall deliver to Seller at the Closing:  (a) the Initial Payment; and (b) dulyexecuted copies of

 

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the Bill of Sale andTermination Agreement and such other documents as Seller may reasonably requestand are necessary or appropriate to consummate the transactions contemplated bythis Agreement.

 

Section 6.3            Obligations of Seller on theClosing Date.  Subject to thesatisfaction or waiver of all conditions precedent to Seller’s obligations andthe simultaneous delivery by Purchaser of all items required underSection 6.2, Seller shall deliver or cause to be delivered, as applicable,to Purchaser at the Closing:  dulyexecuted copies of the Bill of Sale and Termination Agreement and such otherdocuments as Purchaser may request and are necessary or appropriate toconsummate the transactions contemplated by this Agreement.

 

Section 6.4            Additional Payments.  Following the Closing Date, the Purchasershall make (a) five annual payments to the Seller each in an amount equalto (i) the annual gross revenues earned by Purchaser, any New Firm and/orany Affiliate thereof relating to RPM and derived from RPM clients of Sellerexisting as of the Closing Date (and any Affiliates of such clients) duringeach of the five consecutive 12-month periods following the Closing Datemultiplied by (ii) 20%, payable in each case within 30 days of theapplicable anniversary of the Closing Date (or, if any applicable payments fromany RPM client are not received within 30 days, within five days after receiptsolely with respect to such payment) and (b) a one-time payment equal to (i) thegross revenues relating to RPM and derived from all RPM clients of Purchaser,any New Firm and/or any Affiliate thereof (other than those RPM clients ofSeller existing as of the Closing Date (and any Affiliates of such clients))earned by Purchaser, any New Firm and/or any Affiliate thereof during the fifth12-month period following the Closing Date multiplied by (ii) 10%, payablewithin 30 days of the fifth anniversary of the Closing Date (or, if anyapplicable payments from any RPM client are not received within 30 days, withinfive days after receipt solely with respect to such payment); provided,however, that any payment pursuant to Section 6.4(a) of thisAgreement relating to the first 12-month period after the Closing Date shall bereduced by the amount of the Initial Payment (not less than zero).  Within 10 Business Days of the end of eachcalendar quarter following the Closing Date, Purchaser shall deliver to Sellercopies of the quarterly invoice for management fees prepared for each of theRPM clients of Seller existing as of the Closing Date (and any Affiliates ofsuch clients) or, if copies of such invoices are not available, an estimate ofsuch management fees.  The copies of thefourth quarterly invoices for each 12-month period following the Closing Dateshall be accompanied by the Purchaser’s payment required by Section 6.4(a) ofthis Agreement.  The Purchaser’s paymentrequired by Section 6.4(b) of this Agreement shall be accompanied bya computation of the payment in a form similar to the one used by Purchaser toinvoice RPM clients for management fees. Unless Seller notifies Purchaser within 30 days of receipt of an annualpayment that Seller disputes the amount of such payment, then such paymentshall be deemed to be final.  Any Sellerdisputes shall be resolved by mutual agreement of Seller and Purchaser or, ifthey fail to agree following discussions for a reasonable period of time, by anaccounting, investment banking, valuation or appraisal firm designated mutuallyby Seller and Purchaser, one half of whose fees shall be paid by each of Sellerand Purchaser.

 

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ARTICLE VII CONDITIONS TO PURCHASER’S OBLIGATIONTO CONSUMMATE THE TRANSACTION

 

The obligations of Purchaser under this Agreementare subject to the satisfaction or waiver, on or before the Closing Date, ofthe following conditions:

 

Section 7.1            Representations and Warranties.  The representations and warranties of Sellercontained in this Agreement that are not qualified by a materiality standardshall be true and correct in all material respects and the representations andwarranties of Seller contained in this Agreement that are qualified by amateriality standard shall be true and correct in all respects, in each case,on and as of the Closing Date with the same force and effect as though suchrepresentations and warranties were made at the Closing (or, if given as of aspecific date, at and as of such date).

 

Section 7.2            Compliance with Covenants.  The covenants required to be performed bySeller at or prior to the Closing pursuant to the terms of this Agreement shallhave been duly performed in all material respects.

 

Any conditions specified in this Article VIImay be waived by Purchaser; provided, that no such waiver shall beeffective unless it is set forth in a writing executed by Purchaser.

 

ARTICLE VIII CONDITIONS TO SELLER’S OBLIGATIONTO CONSUMMATE THE TRANSACTION

 

The obligations of Seller under this Agreement to beperformed at the Closing shall be subject to the satisfaction or waiver, on orbefore the Closing Date, of the following conditions:

 

Section 8.1            Representations and Warranties.  The representations and warranties ofPurchaser contained in this Agreement that are not qualified by a materialitystandard shall be true and correct in all material respects, and therepresentations and warranties of Purchaser contained in this Agreement thatare qualified by a materiality standard shall be true and correct in allrespects, in each case, on and as of the Closing Date with the same force andeffect as though such representations and warranties were made at the Closing(or, if given as of a specific date, at and as of such date).

 

Section 8.2            Compliance with Covenants.  The covenants required to be performed byPurchaser at or prior to the Closing pursuant to the terms of this Agreementshall have been duly performed in all material respects.

 

Section 8.3            Termination Agreement.  No portion of the Termination Agreement,including any release thereunder, shall have been revoked.

 

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Any conditions specified in this Article VIIImay be waived by Seller; provided, that no such waiver shall beeffective unless it is set forth in writing executed by Seller.

 

ARTICLE IX INDEMNIFICATION

 

Section 9.1            Survival.  The representations andwarranties contained in this Agreement shall survive the Closing for a periodof one year, except that the representations and warranties set forth inSections 3.1, 3.2 and 3.3 and Sections 4.1, and 4.2  shall survive indefinitely, and the representationsand warranties set forth in Section 4.3 shall survive until the date whichis ninety (90) days after the end of the applicable statute of limitations(after giving effect to any waiver, mitigation or extension (whether automaticor with permission) thereof).  Unless aspecific period is set forth in this Agreement (in which event such specifiedperiod shall control), all other covenants and agreements contained in thisAgreement which are required to be performed after the Closing shall survivethe Closing and remain in effect indefinitely.

 

Section 9.2            Indemnification by Purchaser.  From and after the Closing, subject to theterms and limitations set forth herein, Purchaser shall indemnify, defend andhold harmless Seller, each of its Affiliates, and each of their Representatives(together, the “***SellerIndemnified Parties***”), from and against any and allIndemnifiable Losses relating to, resulting from or arising out of any of thefollowing:

 

(a)           any breach of or any inaccuracy in any representation orwarranty made by Purchaser in this Agreement or the Bill of Sale;

 

(b)           any breach of any covenant or undertaking of Purchasercontained in this Agreement or the Bill of Sale; or

 

(c)           (i) any liability or obligation of any nature orkind, known or unknown, fixed, accrued, absolute or contingent or any claim,demand or condition to the extent related to the Acquired Assets that isincurred or results from actions taken from and after the Closing (other thanby reason of the breach of any representation or warranty or covenant of Sellerin this Agreement or any failure by Seller or its Affiliates to obtain anyThird Party Consent), and (ii) any Assumed Liabilities.

 

Section 9.3            Limitations on Indemnification;Exclusive Remedy.

 

(a)           Following the Closing, the provisions of thisArticle IX shall be the exclusive remedy for any and all claims relatingto the subject matter of this Agreement or any of the other TransactionDocuments, except for fraud and any injunctive or other equitable remedy to whicheither party may be entitled.

 

(b)           To the extent that Seller or Purchaser shall have anyobligation to indemnify and hold harmless any other Person hereunder, suchobligation

 

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shall not include (i) consequential, special,punitive, incidental or indirect damages (and the injured party shall notrecover for such amounts) or (ii) any damages measured by lost profits,lost revenues, multiple of earnings, business interruption, cost of capital orloss of business reputation or opportunity, in any case for any breach ordefault under, or any act or omission arising out of or resulting from, thisAgreement or the other Transaction Documents or the transactions contemplatedhereby and thereby, under any form of action whatsoever, whether in contract orotherwise (other than indemnification for fraud or for amounts paid or payableto third parties in respect of any third party claim for which indemnificationhereunder is otherwise required).

 

ARTICLE X TERMINATION

 

IntentionallyOmitted.

 

ARTICLE XI GENERAL PROVISIONS

 

Section 11.1          Entire Agreement; Modification;Waiver.  This Agreement, includingall Annexes hereto, the other Transaction Documents and the documents referredto herein constitutes the entire agreement of the parties pertaining to thesubject matter contained herein and this Agreement supersedes all prior orcontemporaneous agreements, representations and understandings of theparties.  No supplement, modification oramendment to, or waiver of this Agreement shall be binding unless executed inwriting by Seller and Purchaser.  Nowaiver of any provision of this Agreement shall be deemed or shall constitute awaiver of any other provision, whether or not similar, nor shall any waiverconstitute a continuing waiver.  Nofailure or delay by any party in exercising any right, power or privilegehereunder shall operate as a waiver thereof nor shall any single or partialexercise thereof preclude any other or further exercise thereof or the exerciseof any other right, power or privilege. The rights and remedies herein provided shall be cumulative and notexclusive of any rights or remedies provided by Law.

 

Section 11.2          Counterparts; Effectiveness; ThirdParty Beneficiaries.  This Agreementmay be executed in two or more counterparts (by facsimile or otherwise), eachof which shall be deemed an original, but all of which together shallconstitute one and the same instrument. This Agreement shall become effective when each party hereto shall havereceived a counterpart hereof signed by the other party hereto.  No provision of this Agreement is intended toconfer any rights, benefits, remedies, obligations, or liabilities hereunderupon any Person other than the parties hereto and their respective successorsand assigns.

 

Section 11.3          Interpretation.  When a reference is made in this Agreement toAnnexes, such reference shall be to an Annex to this Agreement unlessotherwise indicated.  When a reference ismade in this Agreement to Articles or Sections, such

 

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reference shall be to anArticle or Section of this Agreement unless otherwise indicated.  For purposes of this Agreement, the words “include,”“includes” and “including” shall be deemed in each case to be followed by thewords “without limitation.”  The table ofcontents and headings contained in this Agreement are for reference purposesonly and shall not affect in any way the meaning or interpretation of thisAgreement.

 

Section 11.4          Payment of Expenses.  Except as otherwise expressly provided inthis Agreement, whether or not the transactions contemplated hereby areconsummated, all costs and expenses incurred in connection with this Agreementand the transactions contemplated hereby shall be paid by the party incurringsuch costs and expenses.

 

Section 11.5          GOVERNING LAW; WAIVER OF JURYTRIAL; CONSENT TO JURISDICTION.

 

(a)           THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED INACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO THECONFLICT OF LAW PRINCIPLES OF SUCH STATE THAT WOULD REQUIRED THE APPLICATION OFANY OTHER LAW.

 

(b)           EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BYAPPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANYACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.

 

(c)           PURCHASER AND SELLER EACH IRREVOCABLY SUBMITS TO THEEXCLUSIVE JURISDICTION OF (I) THE COURTS OF THE STATE OF ILLINOIS, COOKCOUNTY, AND (II) THE UNITED STATES DISTRICT COURT FOR THE NORTHERNDISTRICT OF ILLINOIS, FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDINGARISING OUT OF THIS AGREEMENT OR THE RELATED DOCUMENTS AND ANY TRANSACTIONCONTEMPLATED HEREBY OR THEREBY (AND EACH AGREES THAT NO SUCH ACTION, SUIT ORPROCEEDING RELATING TO THIS AGREEMENT OR THE RELATED DOCUMENTS SHALL BE BROUGHTBY IT OR ANY OF ITS AFFILIATES EXCEPT IN SUCH COURTS).  EACH OF PURCHASER AND THE SELLER FURTHERAGREES THAT THE SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY U.S.REGISTERED MAIL TO SUCH PERSON’S RESPECTIVE ADDRESS SET FORTH INSECTION 11.6 SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY ACTION, SUIT ORPROCEEDING IN ILLINOIS WITH RESPECT TO ANY MATTERS TO WHICH IT HAS SUBMITTED TOJURISDICTION AS SET FORTH ABOVE IN THE IMMEDIATELY PRECEDING SENTENCE.  EACH OF PURCHASER AND SELLER IRREVOCABLY ANDUNCONDITIONALLY WAIVES (AND AGREES NOT TO PLEAD OR CLAIM) ANY OBJECTION TO THELAYING OF VENUE OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF THIS AGREEMENTOR THE OTHER TRANSACTION DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY ORTHEREBY IN (I) THE COURTS OF THE STATE OF ILLINOIS, COOK

 

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COUNTY OR (II) THE UNITED STATES DISTRICT COURTFOR THE NORTHERN DISTRICT OF ILLINOIS, OR THAT ANY SUCH ACTION, SUIT ORPROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

Section 11.6          Addresses of Notice.  All notices, requests, demands and othercommunications provided for under this Agreement and under the relateddocuments shall be in writing (including telegraphic communication) and mailed(by registered or certified mail, return receipt requested, or delivered byFederal Express or other similar express overnight delivery service), ortelegraphed, telecopied or delivered to the applicable party at the addressesindicated below.

 
| If to Purchaser: | Luke Knecht                                 |
|------------------|---------------------------------------------|
|             | 285 West Westminster Road                   |
|             | Lake Forest, IL 60045                  |
|             |                                        |
| If to Seller:    |
|             | Deerfield Capital Management LLC            |
|             | 6250 North River Road, 12th Floor      |
|             | Rosemont, Illinois 60018               |
|             | Attention:   General Counsel |
|             | Facsimile:   (771) 380-1695  |

 

or,to each party, at such other address that party designates in a written noticeto the other party in accordance with this section.  All such notices, requests, demands or othercommunications shall be deemed delivered (i) if sent by messenger, uponpersonal delivery to the party to whom the notice is directed, (ii) ifsent by facsimile, upon electronic or telephonic confirmation of receipt fromthe receiving facsimile machine, (iii) if sent by reputable overnight courier,one Business Day after delivery to such courier, or (iv) if sent by mail,three Business Days following deposit in the United States mail, postageprepaid, certified mail, return receipt requested.

 

Section 11.7          Intentionally Omitted.

 

Section 11.8          Severability.  If any term, provision, covenant orrestriction of this Agreement is held by a court of competent jurisdiction orother authority to be invalid, void or unenforceable, the remainder of theterms, provisions, covenants and restrictions of this Agreement shall remain infull force and effect and shall in no way be affected, impaired or invalidatedso long as the economic or legal substance of the transactions contemplatedhereby is not affected in any manner materially adverse to any party.  Upon such a determination, the parties shallnegotiate in good faith to modify this Agreement so as to effect the originalintent of the parties as closely as possible in an acceptable manner in orderthat the transactions contemplated hereby be consummated as originallycontemplated to the fullest extent possible.

 

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Section 11.9          Specific Performance.  The parties hereto agree that irreparabledamage would occur if any provision of this Agreement were not performed in accordancewith the terms hereof and that the parties shall be entitled to an injunctionor injunctions to prevent breaches of this Agreement or to enforce specificallythe performance of the terms and provisions hereof in (i) the courts ofthe State of Illinois, Cook County or (ii) the United States DistrictCourt for the Northern District of Illinois, in addition to any other remedy towhich they are entitled at law or in equity.

 

Section 11.10       Rules of Construction.  The parties to this Agreement agree that theyhave been represented by counsel, or had the opportunity to be represented bycounsel, during the negotiation and execution of this Agreement and, therefore,waive the application of any Law or rule of construction providing thatambiguities in an agreement or other document will be construed against theparty drafting such agreement or document.

 

Section 11.11       Employees and Agents of Seller.  Purchaser is under no legal obligation toemploy any personnel formerly employed by Seller.  However, after the Closing Date, Purchasermay, but shall not be required to, offer employment to those Employees setforth on Annex A hereto and, except as provided in this Agreement andthe Termination Agreement, each such individual shall have the right, but onlyto the extent necessary, to accept such employment without breaching anynon-competition, non-solicitation or non-hire covenant or confidentialityobligations solely with respect to the Acquired Assets made by him or her infavor of Seller or its Affiliates or incurring any obligation to Seller or itsAffiliates (the “***Eligible Employees***”), whoshall be third party beneficiaries of this Section 11.11); provided,however, that Purchaser shall require, or cause any New Firm to require, that acondition to any Eligible Employee’s acceptance of an offer of employment byPurchaser or any New Firm be that such Eligible Employee release Seller fromany obligation to provide severance to such Eligible Employee and waive anyright to severance from Seller related to such Eligible Employee’s departurefrom Seller, in each case upon terms acceptable to Seller.

 

Section 11.12       Remittances.  Seller shall use commercially reasonableefforts to cause all remittances, mail and other communications relating to theAcquired Assets, Assumed Liabilities or the Purchaser received by Seller afterthe Closing Date to be promptly forwarded to Purchaser.

 

*[Remainder of Page IntentionallyLeft Blank]*

 

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IN WITNESS WHEREOF, the parties have executed thisAgreement as of the date first above written.

 
| ** ** | **SELLER:**                          |
|------------|--------------------------------------|
| ** ** | ** **                           |
|       | **DEERFIELD CAPITAL MANAGEMENT LLC** |
|       | ** **                           |
|       | ** **                           |
|       | By:                                  | /s/ Robert A. Contreras |
|       | ** **                           | Name: | Robert A. Contreras |
|       | ** **                           | Title: | General Counsel |
|       | ** **                           |
|       | ** **                           |
| ** ** | **PURCHASER:**                       |
| ** ** | ** **                           |
|       | **LUKE D. KNECHT**                   |
|       | ** **                           |
|       | By:                                  | /s/ Luke D. Knecht |

 

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** **

**ANNEX A**

 

**ASSETS AND ELIGIBLE EMPLOYEES**

 

Assets

 

1.                                      Knecht’s laptopcomputer, external monitor and all locally installed software and data files(excluding anything specific to Seller and not relevant to the operation of theRPM product or servicing of the RPM clients).

2.                                      Frye’s tradingdesk computer, monitors and all locally installed software and data files(excluding anything specific to Seller and not relevant to the operation of RPMor the servicing of the RPM clients).

3.                                      Knecht’strading desk computer, monitors and all locally installed software and datafiles (excluding anything specific to Seller and not relevant to the operationof the RPM product or servicing of the RPM clients).

4.                                      The Synopsissoftware license and all installs of the software and the associated filesnecessary to make the software function (Knecht’s laptop, Frye’s trading deskcomputer and Knecht’s trading desk computer)

5.                                      All RATssoftware, licenses and related data files as contained on the above mentionedcomputers and network T drive

6.                                      All data filesnecessary for the Synopsis and RATs software to function (files located on theT drive under the directory DDM

7.                                      Allspreadsheets relating to the historic results or simulated results of DDM andRPM as contained in the network T drive under the DDM directory in varioussub-folders

8.                                      All PowerPoint, Word documents, PDF files and Excel files containing client update ormarketing material specific to RPM including those on the T drive under the DDMdirectory as well as those on the Presentations Drive in the directoryMarketing/RPM

9.                                      Hard copy RPMclient files maintained by Knecht

10.                               Hard copy ofhistoric presentations to RPM clients and prospects

11.                               All manuals andother documentation regarding Synopsis and RATs whether in electronic (MS Word,PDF, Excel, Power Point or Access) or hard copy form.

12.                               Hard copies ofall client contracts and correspondence relating to RPM maintained by Legal andAccounting

13.                               Copies of allclient records necessary to support the historic performance record of RPMincluding the records acquired by Seller when it acquired the product from RCMand copies of all month-end RPM custodial statements.

14.                               MicrosoftOutlook PST files for Knecht and Frye including contacts

15.                               Copies of RPMdaily trading records

 

Eligible Employees

 

 

Christine Frye

 

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**ANNEX B**

 

**BILL OF SALE**

 

**THIS BILL OF SALE** (this “***Bill of Sale***”) is made andentered into as of [date], 2010, by and between Deerfield Capital Management LLC,a Delaware limited liability company (“***Seller***”),and Luke D. Knecht (“***Purchaser***”).  Unless otherwise defined herein, allcapitalized terms used in this Bill of Sale shall have the respective meaningsascribed to them in the Agreement (defined below).

 

**WHEREAS**, pursuant tothe Asset Purchase Agreement, dated as of [ ], 2010 (the “***Agreement***”),by and between Seller and Purchaser, Purchaser has agreed to purchase fromSeller, and Seller has agreed to sell and deliver to Purchaser, all of itsright, title and interest in and to the Acquired Assets.

 

**NOW, THEREFORE**, inconsideration of the foregoing and for other good and valuable consideration,the receipt and adequacy of which are hereby acknowledged by Seller, Sellerdoes hereby sell, convey, assign, transfer and deliver to Purchaser, and itssuccessors and assigns, all of Seller’s right, title and interest in and to theAcquired Assets.

 

In accordance with the Agreement, the AcquiredAssets shall not include, and Purchaser is not acquiring from Seller, any ofthe Excluded Assets, and Seller shall retain ownership of all right, title andinterest in and to the Excluded Assets.

 

Seller covenants and agrees with Purchaser thatSeller will from time to time execute, acknowledge and deliver such other andfurther instruments and will take such other action as may be necessary ordesirable to carry out more effectively the transfer of the Acquired Assetsprovided for herein.

 

Nothing in this instrument, express or implied, isintended or shall be construed to confer upon, or give to, any Person otherthan Purchaser and its successors and permitted assigns, any remedy or claimunder or by reason of this instrument or any agreements, covenants or termshereof, and all the agreements, covenants and terms contained in thisinstrument shall be for the sole and exclusive benefit of Purchaser and itssuccessors and permitted assigns.

 

This Bill of Sale shall inure to the benefit of andbe binding upon and enforceable against Seller, Purchaser and their respectivesuccessors and permitted assigns.

 

This Bill of Sale shall be governed by and construedin accordance with the laws of the State of Illinois, without regard to theconflict of laws principles thereof that would require the application of anyother law.

 

EXCEPT AS EXPRESSLY SET FORTH IN THE AGREEMENT,NEITHER SELLER NOR ANY OF ITS AFFILIATES MAKES ANY REPRESENTATION OR WARRANTY,EXPRESS OR IMPLIED, RELATING TO

 

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THEASSETS OR ANY OTHER MATTER, INCLUDING ANY REPRESENTATION OR WARRANTY AS TOMERCHANTABILITY, HABITABILITY, PROFITABILITY, FUTURE PERFORMANCE, FITNESS FOR APARTICULAR PURPOSE OR NON-INFRINGEMENT, AND THE PURCHASE AND SALE OF THE ASSETSIS BEING MADE ON AN “AS IS, WHERE IS” BASIS.

 

The terms of the Agreement (including thedefinitions and usage provisions) are incorporated herein by reference and willnot be superseded, modified, replaced, amended, changed, rescinded or otherwiseaffected by this Bill of Sale, but will remain in full force and effect to thefull extent provided therein.  If thereis any inconsistency between the Agreement and this Bill of Sale, the Agreementwill control and govern.

 

This Bill of Sale may not be amended, supplementedor otherwise modified except in a written document executed by the partyagainst whose interest the modification will operate.

 

This Bill of Sale may be executed in any number ofcounterparts (including by facsimile or otherwise), each of which shall bedeemed to be an original, and all of which together shall be deemed to be oneand the same instrument.

 

This Bill of Sale is given pursuant to theAgreement, and, except as herein otherwise provided, the transfer of theproperty hereunder is made subject to the terms and provisions of theAgreement.

 

**IN WITNESS WHEREOF**, this Bill ofSale has been duly executed and delivered by the duly authorized office ofSeller as of the date first written above.

 
| ** **                | **DEERFIELD CAPITAL MANAGEMENT LLC** |
|---------------------------|--------------------------------------|
| ** **                |                                 |
| ** **                | By:                                  |   |
| ** **                |                                 | Name: |
| ** **                |                                 | Title: |
| ** **                |                                 |
| ** **                |                                 |
| **AGREED  AND ACCEPTED:** |
|                      |
| ** **                | **LUKE D. KNECHT**                   |
| ** **                | ** **                           |
| ** **                | ** **                           | ** ** |

 

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