Agreement for Purchase and Sale of Certain Assets
Between Empire Holding Company, Inc.
and Rushmore Financial Group, Inc and Rushmore Securities Corp.
THIS AGREEMENT is entered into on July 31, 2002, between Empire Financial
Holding Company, Inc., a corporation organized under the laws of Florida
("Buyer"), and Rushmore Financial Group, Inc., a corporation organized under the
laws of Texas and Rushmore Securities Corp., a Texas corporation (collectively
the "Seller"),
WHEREAS, Seller is in the securities brokerage business, servicing
approximately 11,000 customer accounts;
WHEREAS, Buyer is in the financial services business ("Business"), and
has an interest in acquiring the Seller's accounts and registered representative
relationships;
WHEREAS, Seller desires to sell and Buyer desires to buy, to the extent
they exist, certain assets of the Seller including customer accounts, the
documentation relative thereto, registered representative relationships,
intellectual property required to maintain the client relationships prior to the
tape-tape transfer (but none of the liabilities) of Seller associated with the
Business as defined herein, upon the terms and conditions contained in this
Agreement; and
WHEREAS, Buyer, in consideration of the purchase of the Business, will
pay sums to the Seller pursuant to a revenue sharing arrangement as more
particularly outlined in the Agreement below.
NOW THEREFORE, in consideration of the mutual covenants hereinafter
contained and other good and valuable consideration the receipt of which hereby
acknowledged, the parties hereto agree as follows:
1. SALE OF BUSINESS.
1.1 Purchased Assets. Seller shall sell, assign, and deliver to Buyer,
and Buyer shall purchase and accept, on the date of Closing,
certain assets and properties owned by the Seller or in which it,
collectively or individually, has any right, title, or interest
inchoate or otherwise, of every kind and description, wherever
located, which shall be referred to as the "Purchase Assets."
Listed on Exhibit 1.1 are all of the Purchased Assets subject to
this Agreement, and shall include, but not be limited to, the
following items related to the Business:
(a) all trade, customer and client accounts ("Customer
Accounts") associated with the registered representative
relationships, including but not limited to credit
balances, debit balances, and securities positions;
Purchase and Sale of Certain Assets Page 1
(b) Seller's rights (but not obligations) in and to all
contracts and agreements related to the Business to which
Seller is a party on the Closing Date, including but not
limited to:
(i) all open Customer Account orders and contracts for
the purchase or sale of securities, (but not "fails"
or "DKs") related to the Business against which
deliveries have not been completed as of the Closing
Date ("Sales Contracts"); and
(ii) registered representative relationships successfully
transferred on the National Association of
Securities Dealers' ("NASD") records from the Seller
to the Buyer (but not the contractual obligations
associated therewith which includes specifically any
unpaid commissions relating to these relationships)
(c) all licenses, franchises, permits and other governmental
authorizations related to the Business to or from third
parries ("Licenses") (referred to collectively herein as
the "Assigned Agreements');
(d) all express or implied warranty rights from the vendors or
third parties related to any of the Purchased Assets;
(e) all books, records, data and documents relating solely to
the Purchased Assets; and
(f) all intellectual and proprietary rights including the
registered representative's associated codes, telephone
numbers, trade-marks, trade names, e-mail addresses and
related Internet access features in order for the
registered representative to continue daily sales
activities.
1.2 No Assumption of Liabilities. The Buyer shall have no
responsibility nor obligation to assume any debt, debit,
liability, or obligation, monetary, contractual or otherwise of
the Seller as part of this transaction. This includes, not by way
of limitation, any customer claims or complaints, current,
threatened or prospective, which relate to events occurring prior
to the conversion of the customer(s) accounts, registered
representative contracts, vendor contracts, clearing broker
obligations or unpaid commissions to registered representatives.
This shall not include customer "credit balances" but only to the
extent such flunds are accounted for in the transition and
conversion of the Customer Accounts. The Buyer will not be liable
to any vendor or third party for unsecured debit balances in
Customer Accounts transferred to the Buyer. Listed on Exhibit 1.2
are all of the Liabilities, real, pending or threatened, of the
Seller as of the execution of this Agreement.
1. (a) Taxes, etc. Seller shall pay all sales, transfer and
use taxes arising out of the transfer of the Purchased
Assets. Buyer shall not be responsible for any business,
occupation, withholding, or similar tax or required
contributions, or any taxes of any kind related to any
period before the Closing Date.
Purchase and Sale of Certain Assets Page 2
2. CONSIDERATION.
2.1 Revenue Sharing. In consideration of the sale of the Purchased
Assets under this Agreement and of all other things done and
agreed to be done by Seller, Buyer shall pay to the Seller
twenty-five (25%) percent of the gross revenues generated for a
period of twelve (12) months from the Closing Date. "Gross
Revenues" consist of total gross broker/dealer concessions,
commissions and 12b-1 or other trail commissions (including
Registered Investment Advisory (RIA) fees and insurance and
Annuity premiums which are to be calculated on a pro rata basis;
i.e., if a registered representative produces RIA fees or
Insurance premiums at a payout that is greater than his/her
broker/dealer payout then that portion of Gross Revenues shall be
adjusted pro rata to equate proportionally to other broker/dealer
concessions) generated or received by the Buyer and its
subsidiaries, from the Seller's retail client base from registered
representatives that are successfully transferred to the Buyer, in
accordance with the terms of this Agreement (the "Consideration").
2.2 Payment Schedule. The Base Gross Revenues for determining the
amount of Consideration, subject to adjustment, shall be
$1,052,204, resulting in Base Consideration of $263,051, subject
to adjustment. The Consideration shall be paid as follows:
(a) As a prepayment of part of the Consideration, on the
Closing Date, Buyer shall pay to Seller an initial payment
in the amount of Ninety-eight Thousand Six Hundred and
Forty-four ($98,644) dollars or 37.5% of the Consideration,
which ever is greater.
(b) The balance of the Consideration, subject to adjustment,
shall be paid in three installments, as follows:
1. The First Installment of Thirty-two Thousand Eight
Hundred and Eighty-one ($32,881) dollars or 12.5% of
the Consideration, as adjusted, which ever is
greater, shall be due the later of ninety days from
(i) the Closing Date (as defined below) or (ii) the
completion of the conversion of the Customer
Accounts from the Seller's clearing agents to
Empire's clearing agents and block transfers of the
Customer Accounts held at mutual fund and variable
insurance companies and also transfer of Seller's
Registered representative relationships to the Buyer
as evidenced by NASD records. Adjustments for the
Consideration paid at the Closing Date based on
actual named registered representative relationships
transferred to the Buyer will be calculated and paid
in cash with the Second Installment.
Purchase and Sale of Certain Assets Page 3
2. The Second Installment shall be due to the Seller
six (6) months following the first installment; and
3. The Third Installment shall be paid to the Seller
four (4) months following the second installment.
The additional month will be needed to afford a
accurate reconciliation of the 12 month Gross
Revenues.
(c) Each of the First, Second, and Third Installments shall be
adjusted ratably after determining the percentage of the
Base Gross Revenues actually received for the preceding
period. By way of example, should the Gross Revenues for
the period prior to the First Installment be 10% less than
25% of the Base Consideration, then the Second Installment
shall be reduced by 10%.
(d) Should Buyer pay or advance any Account Executive
commissions or other remuneration associated with the sale
of the assets under this Agreement, which would otherwise
be the Seller's obligations, then the Buyer shall receive
credit for these items and the Base Consideration shall be
adjusted accordingly.
(e) At the option of the Buyer, any or all of the Second or
Third Installments of the Consideration may be paid by the
Buyer in the Buyer's Rule 144(k) securities. In the event
any installment is paid in whole or in part with the
Buyer's Rule 144(k) securities, the value attributed to
each share shall be based on current market value of the
Buyers securities at the time of the payment. The number of
shares will be determined by dividing the Consideration due
in the Third and Fourth Installments by the then current
market price of the Buyers securities, calculated from the
average closing bid price for the preceding 5 trading days,
as quoted on the American Stock Exchange. The result will
be the number of shares paid as Consideration.
3. INSTRUMENTS OF TRANSFER; APPROVALS.
The sales, assignments, and deliveries to be made to Buyer pursuant to
this Agreement shall be affected by deeds, bills of sale, assignments,
endorsements, checks, NASD records and other instruments of transfer in
such form, as Buyer shall reasonably request. Seller shall prepare
appropriate forms of instruments of transfer and conveyance in conformity
with this Agreement and shall submit them to Buyer for examination as
least three days in advance of the Closing Date. Among other things,
these forms will include the customary ACAT or other acceptable transfer
forms executed by the customers to insure the timely assignments of the
Customer Accounts to the Buyer. Anytime and from *time to time after the
Closing Date, on Buyer's request, Seller will do, execute, acknowledge,
and deliver all such further acts, deeds, assignments, transfers, and
powers of attorney as may be required in conformity with this Agreement
for the adequate
Purchase and Sale of Certain Assets Page 4
assigning, transferring, granting, and confirming to Buyer of the assets
and properties sold to Buyer. In addition, the Seller will cooperate
fully in the transfer of its registered representative relationships as
evidenced in the NASD's Central Registration Depository ("CRD") as
contemplated by this Agreement. All transfers and sales contemplated by
this Agreement and the Closing, shall be conditioned on all necessary
regulatory approvals, if any, including that of the National Association
of Securities Dealers ("NASD") and Securities and Exchange Commission
("SEC").
4. ASSIGNMENT OF CONTRACT RIGHTS.
If any contract, license, commitment, or sales or purchase order
assignable to Buyer under this Agreement may not be assigned without the
consent of the other third parties, Seller will use their best efforts to
obtain the consent of such other party to the assignment. If any such
consent cannot be obtained, this Agreement may be declared void at the
option of the Buyer and all Consideration shall be returned to each party
hereto without deduction.
The Seller agrees, that subsequent to the Closing Date, all Gross
Revenues received by the Seller on behalf of the registered
representatives attached to this Agreement in Exhibit 1.1, and
subsequently adjusted, will promptly be forwarded to the Buyer. All such
Gross Revenues shall include the proper endorsement by the Seller to
allow the Buyer to deposit the Gross Revenues in its operating bank
accounts.
5. BOOKS AND RECORDS.
All client records, which relate to the Purchased Assets sold hereunder,
shall become the property of the Buyer. Each party shall have reasonable
access to, and the right to make extract copies of books, records, and
documents referred to in this Agreement that are in the possession of the
other party.
6. WAIVER OF COMPLIANCE WITH BULK SALES LAWS.
Buyer hereby waives its right to required compliance with any bulk sales
or similar laws and in consideration therefore, Seller agrees that Seller
shall indemnify and save and hold Buyer harmless form any liabilities
(including without limitation statutory penalties, damages or expenses
(including reasonable attorney's fees), arising from the failure of Buyer
or Seller to comply with any bulk sales or similar law applicable to the
transactions contemplated by this Agreement.
Purchase and Sale of Certain Assets Page 5
7. DETAILED CLOSING PROCEDURES AND DELIVERIES.
7.1 Closing/Closing Date. Subject to fulfillment of the conditions to
Closing specified in this Agreement and pursuant to the other
terms and conditions hereof, the closing of the transactions
provided for in this Agreement (the "Closing") shall take place at
the offices of the Buyer at 2:00 p.m. on July 31, 2002 or at such
other date and time as may be agreed upon in writing by the
parties hereto (the "Closing Date"), such closing to be effective
as of the close of business on the Closing Date.
7.2 Conditions to Closing. The obligations of Buyer to purchase the
Purchased Assets and to pay, perform and discharge, when due, and
of Seller to sell, transfer and assign the Purchased Assets as
provided in this Agreement are subject to the satisfaction, at the
Closing (except where specifically required or permitted to be
satisfied prior to or after the Closing or are expressly waived by
the party for whose benefit the condition exists), of all the
respective obligations of Buyer and Seller set forth below:
(a) Delivery of Purchased Assets to Buyer. Seller shall deliver
the Purchased Assets, by duly executed Xxxx of Sale, and
other appropriate assignments or other instruments of bulk
transfers or clearing firms conversion letters and
documents which conform to the requirements of the
Agreement, including executed approvals of all agencies and
instrumentalities, and any other persons requiring them.
Simultaneously with the consummation of the transfer,
Seller, through its officers, agents, and employees, will
put Buyer into full possession and enjoyment of all
Purchased Assets to be conveyed and transferred by this
Agreement and any and all Gross Revenues due to the Buyer
subsequently received by the Seller.
(b) Delivery of Purchase Price. Buyer shall deliver to Seller,
as prescribed by paragraph 2, immediately available funds
(or Rule 144(k) securities, as the case may be) in the
amount of the Consideration and other appropriate documents
which conform to the requirements of the Agreement.
(c) Certificate from Seller. Seller shall deliver to Buyer a
certificate(s) attached as Exhibit 7.2(c), dated the
Closing Date, signed by duly authorized officers of Seller
certifying that:
(i) the representations and warranties made by Seller
herein or in any Exhibit or Schedule hereto remain
true in all material respects on the Closing Date as
though made on such date except for changes
contemplated by the Agreement;
(ii) Seller has performed and complied in all material
respects with all Agreements, covenants and
conditions required by the Agreement to be performed
or complied with by Seller on or prior to the
Closing;
Purchase and Sale of Certain Assets Page 6
(iii) no litigation, proceedings or other actions are
pending or threatened against or affecting the
Seller which have resulted or reasonably could be
expected to result with or in an action to enjoin or
the prevention of the consummation of the
transactions contemplated by the Agreement;
(iv) Seller has received all consents or made
notifications required by the federal government,
SEC, NASD, any state or local governmental body, or
any other regulatory authority, to the transactions
contemplated by the Agreement, and such consents are
in full force and effect; and;
(v) that from the date of this Agreement through the
Closing Date, Seller have managed and conducted the
Business in the ordinary course as heretofore
managed and conducted as though no change of
ownership of the Business were contemplated, and has
used commercially reasonable efforts to preserve all
employee, vendor and customer relationships.
(d) Certificate of Buyer. Buyer shall deliver to Seller a
certificate attached as part of Exhibit 7.2(d), dated as of
the Closing Date, signed by a duly authorized office of
Buyer certifying that:
(i) the representations and warranties made by Buyer
herein or in any Exhibit or Schedule hereto remain
true in all material respects on the Closing Date as
though made on such dated except for changes
contemplated by the Agreement;
(ii) Buyer has performed and complied in all material
respects with all Agreements, covenants and
conditions required by the Agreement to be performed
or complied with by Buyer on or prior to the
Closing; and
(iii) no litigation, proceedings or other actions are
pending against or affecting the Buyer which have
resulted or reasonably could be expected to result
either in an action to enjoin or the prevention of
the consummation of the transactions contemplated by
the Agreement;
(iv) Buyer has received all consents required by the
federal government, SEC, NASD, any state or local
governmental body, or any other regulatory
authority, to the transactions contemplated by the
Agreement, and such consents are in full force and
effect.
(e) Opinions of Seller's Counsel. Seller agrees that an opinion
shall be delivered from Seller's attorney, attached as part
of Exhibit 7.2(e) dated the Closing Date and addressed to
Buyer, which shall be limited to the validity of this
transaction.
Purchase and Sale of Certain Assets Page 7
(f) Corporate Resolutions. As part of Exhibit 7.2(f), Buyer and
Seller shall deliver to each of the other parties hereto
copies of their respective corporation resolutions,
certified by the appropriate corporate officer, authorizing
the execution and delivery of the Agreement and the
consummation of the transactions contemplated hereby.
(g) Assignments and Guarantees. Seller shall deliver all
assignments and original copies of any guarantees or
warranties relating to the Purchased Assets.
(h) Other Agreements. Buyer and Seller shall each deliver to
the other copies of any governmental consent required to be
obtained pursuant to the Agreement.
8. REPRESENTATIONS OF THE PARTIES.
8.1 Representations of Seller. Seller represents, certifies and
warrants to the Buyer as follows;
(a) Organization and Qualification. The Seller is a corporation
duly organized, validly existing and in good standing under
the laws of the State of Texas. The Seller has all
requisite power and authority to own or operate its
properties and conduct its business as it is now being
conducted. The Seller is duly qualified and in good
standing as a foreign corporation or entity authorized to
do business in each of the jurisdictions in which the
character of the properties owned or held under lease by it
or the nature of the business transacted by it makes such
qualification necessary, except where the failure to
qualify would not have a Material Adverse Effect. The
Seller has delivered to Purchaser true and correct copies
of the Articles of Incorporation and Bylaws of the Company.
(b) Its Board of Directors has duly authorized the execution
and the delivery of this Agreement by Seller, and the
consummation of the transaction contemplated by this
Agreement. The Seller's Board of Directors on behalf of
Seller has full power and authority to enter into this
Agreement and to carry out all the terms and provisions
hereof, and all authorizations, assignments and consents
necessary for the execution and delivery of this Agreement.
No other corporate proceedings on the part of the Seller is
necessary to authorize this Agreement or to consummate the
transactions so contemplated.;
(c) This Agreement, assuming due authorization, execution, and
delivery by the other parties hereto, constitutes a legal,
valid and binding Agreement, enforceable against Seller in
accordance with its terms (subject, as to enforcement of
remedies, to applicable bankruptcy, insolvency, moratorium,
and similar laws affecting creditors, rights generally from
time to time in effect and to equitable principles limiting
the availability of the remedy of specific performance.)
Purchase and Sale of Certain Assets Page 8
(d) The Seller has delivered to Buyer copies of its financial
statements as of and for the year ended December 31. 2001,
certified by an independent Certified Public Accountant or
accounting firm, and NASD Focus Reports for the three
months ended March 31, 2002 (the "Seller Financial
Statements"). Each of the Seller Financial Statements
fairly presents the financial position of the entity or
entities to which it relates as of its date, and each of
the related statements of operations and retained earnings
and cash flows or equivalent statements in the Seller
Financial Statements (including any related notes and
schedules) fairly presents the results of operations,
retained earnings and cash flows, as the case may be, of
the entity or entities to which it relates for the period
set forth therein in each case in accordance with generally
accepted accounting principles applicable to the particular
entity consistently applied throughout the periods
involved, except as may be noted therein. The accounts
receivable, notes receivable and any other contingent asset
reflected on the latest balance sheet of the Seller arose
from bona fide transactions in the ordinary course of
business, and, to the best of the Seller's knowledge, are
not subject to any offset or counterclaim.
(e) Neither the execution and delivery of this Agreement by the
Seller nor the consummation of the transactions
contemplated hereby nor compliance by the Seller with any
of the provisions hereof will (i) conflict with or result
in any breach of any provision of the Articles of
Incorporation, Bylaws or other organization documents of
the Seller or agreement with any other party, (ii) require
any consent, approval, authorization or permit of, or
filing with or notification to, any governmental or
regulatory Authority (as defined herein), (iii) result in a
material default (with or without due notice or lapse of
time or both) (or give rise to any right of termination,
cancellation or acceleration) under any of the terms,
conditions or provisions of any note, bond, mortgage,
indenture, license, agreement or other instrument or
obligation to which the Seller is a party or by which the
Seller or its assets may be bound, except for such defaults
(or rights of termination, cancellation or acceleration) as
to which requisite waivers or consents have been requested,
(d) result in the creation or imposition of any lien,
charge or other encumbrance on the assets of the Seller, or
(e) violate any order, writ, injunction, decree, statute,
rule or regulation applicable to the Seller, or any of its
assets.
Purchase and Sale of Certain Assets Page 9
(f) Seller represents to the Buyer that (i) there is no action,
claim, or proceeding pending or, to the knowledge of the
Seller, threatened, to which the Seller or is or would be a
party before any court or Governmental Authority acting in
an adjudicative capacity, or any arbitrator or arbitration
tribunal; (ii) the Seller is not subject to any outstanding
order, writ, injunction or decree; and (c) since December
31, 2001, there have been no claims made or actions or
proceedings brought against any officer or director of the
Seller arising out of or pertaining to any action or
omission within the scope of his employment or position
with the Seller. There is no litigation and other
administrative, judicial or quasi-judicial proceedings to
which the Seller is a party or to which it has been
threatened to the Seller's knowledge to be made a party.
(g) Except as expressly contemplated by this Agreement or in
the Seller Financial Statements, the Seller has conducted
its business only in the ordinary and usual course.
(h) The Seller and all "Employee Benefit Plans" as defined in
Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), that cover any of its or
their employees (which Employee Benefit Plans are listed on
the Disclosure Schedule), comply in all material respects
with all applicable laws, requirements and orders under
ERISA and the Internal Revenue Code of 1986, as amended
(the "Code"), the breach or violation of which would have a
material adverse effect on the Seller, taken as a whole.
(i) The financial statements of it delivered to Buyer during
the course of the negotiations regarding this Agreement,
fairly reflect the financial position of Seller;
(j) Seller, individually, has good marketable title to all of
the Purchased Assets set forth and described in 1 and
Exhibit 1.1, which is attached, and incorporated by
reference. All Purchased Assets are free and clear of all
mortgages, liens, encumbrances and third party claims;
(k) All assets and properties that were used in the business of
Seller are owned by Seller, free and clear of all
mortgages, liens, and encumbrances.
(1) Seller is not in default or breach under any contract,
agreement, lease, or other document to which it is a party
(and the execution of this Agreement will not create any
such default or breach), and has complied with all laws,
regulations, and ordinances applicable to its business to
the date of this Agreement.
(m) Since July 17, 2002, there has been no substantial change
in the financial policies, accounts relations, or marketing
activities of Seller.
(n) No authorization or approval of any governmental body is
required to be obtained by Seller in connection with the
execution, delivery or performance of the Agreement, or, if
so required, all such authorizations or approvals have been
or will, prior to the Closing, be obtained by Seller.
Purchase and Sale of Certain Assets Page 10
(o) Seller has not engaged or otherwise used the services of
any broker or finder in connection with the Agreement or
the transactions contemplated hereby. Seller agrees to
indemnify and hold harmless Buyer from and against any
liability for any fee, compensation, commission or expense
(including attorneys' feed) arising out of any claim by any
person acting or claiming to act on behalf of Seller for
fees, compensation, commission or expenses with respect to
the Agreement or the transactions contemplated hereby.
(p) Within the times and in the manner prescribed by law,
Seller has, and shall have through the Closing Date, filed
all federal, state, foreign and/or local tax returns
required by law and have paid all taxes (including, without
limitation, income, franchise, sales, use, transfer,
payroll, withholding and ad valorem taxes), assessments,
and penalties due and payable with respect to the Purchased
Assets. Seller acknowledges that all taxes, assessments and
penalties, including, but not limited to, income and
franchise taxes through the Closing Date, are the Seller's
responsibility. There are no current disputes as to taxes
of any nature payable by Seller or that affect, the
Purchased Assets or the Business.
(q) The trade names, trademarks, copyrights, service marks and
registrations, all goodwill associated therewith, if any
(the "Marks"), are all those used in the conduct of the
Business, and are owned by Seller, or held by Seller
pursuant to licenses to use the same, free of any liens,
encumbrances, restrictions or to Seller's knowledge legal
or equitable claims of others. All Marks which are the
subject of any license are so identified in this Agreement.
Seller has good right to sell or assign any license for the
use of the Marks to Buyer as provided in the Agreement, and
to Seller's knowledge such use or license does not conflict
with, infringe, or otherwise violate any rights of others.
Seller has no knowledge of any infringement or alleged
infringement by anyone of any of such Marks.
(r) Seller has provided Buyer with complete information as to
all the trade secrets used in the Business (the "Trade
Secrets"), all the Trade Secrets are free and clear of any
liens, encumbrances, restrictions, and legal or equitable
claims of others. Seller has taken all reasonable security
measures to protect the secrecy, confidentiality, and value
of the Trade Secrets. Any of Seller's employees and any
other persons who, either alone or in concert with others,
developed, invented, discovered, derived, programmed, or
designed the Trade Secrets, or who have knowledge of or
access to information relating to the Trade Secrets, have
been put on notice and, if appropriate, have entered into
agreements that these secrets are proprietary to Seller and
are not to be divulged or misused. All of the Trade Secrets
are presently valid and protected, and are not in the
public domain nor have they been used, divulged, or
appropriated for the benefit of any past or present
employees or other persons, or to the detriment of
Purchase and Sale of Certain Assets Page 11
the Business. It is understood and agreed that the Marks
and Trade Secrets described herein are limited to the
representative relationships and customer accounts of the
Business purchased. Notwithstanding anything contained
herein to the contrary, the business and customer accounts
related to registered representatives of Seller that are
not specifically listed on Exhibit 1. and the customer
accounts, trade names, trademarks, copyrights, patients,
software, intellectual property, trade secrets and all
other assets known as or related to RushTrade, are not
included under the terms of this Agreement.
(s) There is no action, arbitration, suit, notice, order, real
estate tax contest or legal, administrative or other
proceeding before any court or governmental agency,
authority or body pending, or, to Seller's knowledge,
threatened against, or affecting Seller which would prevent
or materially interfere with the transactions contemplated
by this Agreement or the conduct of the Business as
currently conducted; or have a material adverse effect on,
or result in any material adverse change in, the Business.
(t) With respect to the Business, Seller is in compliance in
all material respects with all laws, rules and ordinances
of Federal, state, county and local authorities, including
but not limited to occupational health and safety, equal
employment, knowledge, is and has been in compliance in all
material respects with all authorities, including but not
limited to zoning, subdivision control, safety,
environmental, hazardous waste, building, use and occupancy
laws, ordinances, rules and regulations.
(u) Seller agrees to assist in obtaining a complete and current
schedule Business' customers and all necessary transfer
forms to the Buyer.
(v) Seller possesses all licenses, franchises, permits, and
other governmental authorizations necessary for the
continued conduct of the Business as currently conducted
without material interference or interruption and will be
in possession of same on the Closing Date, transfer of
which does not require any approvals and such transfers
from Seller to Buyer (if required by Buyer) will be made at
Closing.
(w) Seller is not and will not at Closing be in default with
respect to payment of premiums due under insurance
policies, if any, with respect to the Purchased Assets and
such policies will be continued in full force and effect
through the Closing Date; provided, however, that none of
such policies, or rights or benefits there under, will be
assigned or otherwise transferred to the Buyer pursuant to
this Agreement. There are no currently outstanding or
threatened claims under the insurance policies with respect
to the Purchased Assets.
(x) there are no employment agreements in effect as of the
Closing Date.
Purchase and Sale of Certain Assets Page 12
(y) Seller now has, and at Closing will have approximately,
(a) 3,000 funded or active customer accounts held at
Pershing & Co.
(b) 1,500 funded or active customer accounts held at
Xxxxxx
(c) 6,400 direct accounts with mutual fund and variable
annuity companies
8.2 Buyer's Representations and Warranties. Buyer hereby represents
and warrants to Seller that:
(a) Buyer is a corporation duly organized, validly existing and
in good standing under the laws of Florida with full
corporate power to enter into, and to perform its
obligations under, the Agreement.
(b) The execution, delivery and performance of the Agreement by
Buyer have been duly authorized by all necessary corporate
action and do not, and will not, violate or conflict with
the provisions of the Buyer's Certificate of Incorporation
or Bylaws or the provisions of any indenture, Agreement, or
other instrument to which Buyer is a party or by which any
of its property is bound. The Agreement constitutes a
legal, valid and binding obligation of Buyer.
(c) Buyer has not engaged or otherwise used the services of any
broker or finder in connection with the Agreement or the
transactions contemplated hereby and Buyer agrees to
indemnify and hold harmless Seller from and against any
liability for any fee, compensation, commission, or expense
(including attorneys' fees) arising out of any claim by any
person acting or claiming to act on behalf of Buyer for
fees, compensation, commission or expense with respect to
the Agreement or the transactions contemplated hereby.
(d) No authorization or approval of any governmental body is
required to be obtained by Buyer in connection with the
execution, delivery or performance of the Agreement, or, if
so required, all such authorizations or approvals have been
or will, prior to the Closing, be obtained by Buyer.
(e) There is no action, arbitration, suit, notice, order, real
estate tax contest or legal, administrative or other
proceeding before any court or governmental agency,
authority or body pending or, to Buyer's knowledge,
threatened against or affecting Buyer which would prevent
or interfere with the transactions contemplated by this
Agreement.
9. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS.
The obligations of Buyer under this Agreement are conditioned on the
following all having occurred on or before the Closing Date:
(a) All actions, proceedings, instruments, and documents
required of Seller under this Agreement shall be in a form
approved by counsel for Buyer, provided that such approval
shall not be unreasonably withheld.
Purchase and Sale of Certain Assets Page 13
(b) The representations and warranties made by Seller in this
Agreement shall be substantially correct on the Closing
Date, except as affected by transactions contemplated in
this Agreement and changes occurring in the ordinary course
of business, with the same force and effect as though the
representations and warranties had been made on the Closing
Date.
(c) The instruments executed and delivered to Buyer by each of
Seller pursuant to this Agreement are valid in accordance
with their terms and effectively vest in Buyer good and
marketable title to the assets and business as contemplated
by this Agreement, free and clear of any liabilities,
obligations, and encumbrances, except those liabilities and
obligations expressly assumed by Buyer as provided in this
Agreement.
(d) Buyer shall have approved by or received any necessary
government licenses.
(e) All Customer Accounts relating to the Business shall have
been assigned by Seller to Buyer (after obtaining any
requisite consents), and
(f) Buyer shall have received an assignment of all trademarks,
trade names and other intellectual property used in
connection with the Business.
10. BROKER'S FEES.
The parties each agree that no broker is involved and no brokerage fee is
owed in connection with this transaction.
11. RESTRICTIVE COVENANTS.
11.1 Confidentiality. The Seller and its principals (for purposed of
this 11, collectively the "Seller") acknowledge that during its
ownership and operation of the Business "Proprietary Information"
shall consist of customer lists, Customer Accounts, and other
information relating to the past, present, or future business,
finances, general operation, and policies of the Seller's
operations. The Seller agrees that he will not, directly or
indirectly divulge, furnish or make accessible any Proprietary
Information to any other person or entity without the prior
written consent of the Buyer. Without effect on other items which
Proprietary information shall not be deemed to include,
Proprietary Information shall not include any information which
any representative, employee or agent of the Buyer has disclosed
or in the future discloses to any person or entity not affiliated
with the Buyer, any information which could be known through
examination of documents made public by the Buyer, intentionally
or unintentionally, and any information which is generally known
by professionals in the securities industry.
Purchase and Sale of Certain Assets Page 14
11.2 Non-Solicitation. Seller agrees that it will not knowingly for a
period of five (5) years following the Closing Date, directly or
indirectly, on behalf of itself or any other person or entity,
offer employment to, or in any manner solicit the services of or
participate in the hiring of, any then current employee of the
Buyer or any registered representative transferred from the Seller
to the Buyer or induce any employee or registered representative
of the Buyer to terminate his or her employment with the Buyer. In
addition, Seller agrees that it will not knowingly for a period of
five (5) years following the Closing Date, directly or indirectly,
on behalf of itself or any other person or entity, solicit or
contact any customer or client of the Buyer or in any way induce
or attempt to induce such customer or client to terminate its
relationship with the Buyer, or to transfer any part of its
business away from the Buyer. A "customer" or "client" shall
include any person or entity which was a customer or client of the
Seller prior to the Closing Date, whether or not that customer or
client's account with the Seller was active or dormant; and any
customer or client of the buyer which existed prior to or after
the Closing Date, whether or not that customer or client's account
with the Seller was active or dormant.
11.3 Non-Disparagement and Future Conduct. The parties each agree that
they will not make any comments, either written or oral, which
could be construed as negative concerning the other or any of the
other's affiliates or any of the other's or its affiliated
directors, officers, personnel, businesses, facilities or programs
to any individual or entity, including but not limited to present
or potential, customers, vendors, employees, or financial or
credit institutions.
11.4 Remedies. The parties hereto acknowledge that a violation of this
11 by one party, will give rise to irreparable injury to the other
party, which may not be adequately compensable in damages.
Accordingly, the Buyer or the Seller may seek and obtain
injunctive relief against the breach or threatened breach of this
11, in addition to any other legal remedies, which may be
available, and such legal remedies are not waived by the Buyer or
the Seller by virtue of seeking injunctive relief. Without
limiting the generality of the foregoing, the Seller further
acknowledges that in the event of an actual breach of 11, in
addition to any remedy at law available to the Buyer, including
but not limited to monetary damages, the Buyer may, upon the
determination of an arbitration panel that such a breach has in
fact taken place, immediately suspend all payments of any amounts
to be made by the Buyer to the Seller or on his behalf under this
Agreement. Seller and Buyer acknowledge and agree that the
covenants contained herein are reasonable and necessary for the
protection of the Buyer's legitimate business interests and of the
Seller's business prospects and livelihood. Under no circumstances
will a violation of this 11 result in a termination of this
Agreement.
Purchase and Sale of Certain Assets Page 15
12. EXPENSES OF NEGOTIATION AND TRANSFER.
Each party shall pay the party's own expenses, taxes, and other costs
incident to or resulting from this Agreement, whether or not the
transactions contemplated hereby are consummated. The costs of Seller
shall include the preparation of documents of transfer and documentary
stamp taxes. Buyer's costs shall include fees for the filing or recording
of instruments of transfer.
13. NOTICES.
Any notice to be given under this Agreement shall be given in writing and
delivered personally, by facsimile, confirmed by overnight delivery or by
registered or certified mail, postage prepaid as follows:
(a) If to Buyer, addressed to: Xxxxxxx Xxxxx, Co-CEO
Xxxxx Xxxxx. Co-CEO
Empire Financial Holding, Inc.
0000 Xxxx Xxxxx Xxxx 000
Xxxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
With a copy to: Xxxxx X. Xxxxxx, P.A.
0000 Xxxx Xxxxxxx Xxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
(b) If to Seller, addressed to: Xxxxx X. ("Xxxxx") Xxxxx, Jr.
Rushmore Financial Group, Inc
Xxx Xxxxxxxx Xxxxx. Xxxxx 000
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
1. COVENANTS OF THE SELLER.
Unless and until the definitive acquisition agreement is terminated, (a)
the Seller shall operate the Business only in the ordinary course
consistent with past practice (b) the Seller shall use its best efforts
to preserve intact its business organization, to keep available the
services of its current employees and consultants, and to preserve its
present relationships with customers, suppliers and other persons with
which it has business relations.
Purchase and Sale of Certain Assets Page 16
2. INDEMNIFICATION.
16.1 The Seller agrees to indemnify and hold harmless Buyer and its
officers, directors, employees, and agents, and each Person or
entity, if any, who controls Buyer within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act,
together with the Controlling Persons (as defined in the
Registration Rights Agreement from and against any Damages, joint
or several, and any action in respect thereof to which Investor,
its partners, affiliates, officers, directors, employees, and duly
authorized agents, and any such Controlling Person becomes subject
to, resulting from, arising out of or relating to any
misrepresentation, breach of warranty or no fulfillment of or
failure to perform any covenant or agreement on the part of Seller
contained in this Agreement, as such Damages are incurred, except
to the extent such Damages result primarily from Buyer's failure
to perform any covenant or agreement contained in this Agreement
or Buyer's or its officer's, director's employee's agent's or
Controlling Person's negligence, recklessness or bad faith in
performing its obligations under this Agreement.
16.2 Method of Asserting Indemnification Claims. All claims for
indemnification by any Indemnified Party (as defined below) under
16.1 shall be asserted and resolved as follows:
(a) In the event any claim or demand in respect of which any
person claiming indemnification under any provision of 16.1
(an "INDEMNIFIED PARTY") might seek indemnity under 16.1 is
asserted against or sought to be collected from such
Indemnified Party by a person other than a party hereto or
an affiliate thereof (a "THIRD PARTY CLAIM"), the
Indemnified Party shall deliver a written notification,
enclosing a copy of all papers served, if any, and
specifying the nature of and basis for such Third Party
Claim and for the Indemnified Party's claim for
indemnification that is being asserted under any provision
of 16.1 against any person (the "INDEMNIFYING PARTY"),
together with the amount or, if not then reasonably
ascertainable, the estimated amount, determined in good
faith, of such Third Party Claim (a "CLAIM NOTICE") with
reasonable promptness to the Indemnifying Party. If the
Indemnified Party fails to provide the Claim Notice with
reasonable promptness after the Indemnified Party receives
notice of such Third Party Claim, the Indemnifying Party
shall not be obligated to indemnify the Indemnified Party
with respect to such Thirds Party Claim to the extent that
the Indemnifying Party's ability to defend has been
prejudiced by such failure of the Indemnified Party. The
Purchase and Sale of Certain Assets Page 17
Indemnifying Party shall notify the Indemnified Party as
soon as practicable within the period ending thirty (30)
calendar days following receipt by the Indemnifying party
of either a Claim Notice or an Indemnity Notice (as defined
below) (the "DISPUTE PERIOD") whether the Indemnifying
Party disputes its liability or the amount of its liability
to the Indemnified Party under 16.1 and whether the
Indemnifying Party desires, at its sole cost and expense,
to defend the Indemnified Party against such Third Party
Claim, (i) If the Indemnifying Party notifies the
Indemnified Party within the Dispute Period that the
Indemnifying Party desires to defend the Indemnifying party
with respect to the Third Party Claim pursuant to this
16.2(a), then the Indemnifying Party shall have the right
to defend, with counsel reasonably satisfactory to the
Indemnified Party, at the sole cost and expense of the
Indemnifying Party, such Third Party Claim by all
appropriate proceedings, which proceedings shall be
vigorously and diligently prosecuted by the Indemnifying
Party to a final conclusion or will be settled at the
discretion of the Indemnifying Party (but only with the
consent of the Indemnified Party in the case of any
settlement that provides for any relief other than the
payment of monetary damages or that provides for the
payment of monetary damages as to which the Indemnified
Party shall not be indemnified in full pursuant to 16.1).
The Indemnifying Party shall have full control of such
defense and proceedings, including any compromise or
settlement thereof; provided, however, that the Indemnified
party may, at the sole cost and expense of the Indemnified
Party, at any time prior to the Indemnifying Party's
delivery of the notice referred to in the first sentence of
this clause (i) file any motion, answer or other pleadings
or take any other action that the Indemnified Party
reasonably believes to be necessary or appropriate to
protect its interests; and provided further, that if
requested by the Indemnifying Party, the Indemnified Party
will, at the sole cost and expense of the Indemnifying
Party, provide reasonable cooperation to the Indemnifying
Party in contesting any Third Party Claim that the
Indemnifying Party elects to contest. The Indemnified Party
may participate in, but not control, any defense or
settlement of any Third Party Claim controlled by the
Indemnifying Party pursuant to this clause (i), and except
as provided in the preceding sentence, The Indemnified
Party shall bear its own costs and expenses with respect to
such participation. Notwithstanding the foregoing, the
Indemnified Party may takeover the control to the defense
or settlement of a Third Party Claim at any time if it
irrevocably waives its right to indemnity under 16.1 with
respect to such Third Party Claim. (ii) If the Indemnifying
Party fails to notify the Indemnified Party within the
Dispute Period that the Indemnifying Party desires to
defend the Third Party claim pursuant to 16.2(a), or if
Purchase and Sale of Certain Assets Page 18
the Indemnifying Party gives such notice but fails to
prosecute vigorously and diligently or settle the Third
Party Claim, or if the Indemnifying Party fails to give any
notice whatsoever within the Dispute Period, then the
Indemnified Party shall have the right to defend, at the
sole cost and expense of the Indemnifying Party, the Third
Party Claim by all appropriate proceedings, which
proceedings shall be prosecuted by the Indemnified Party in
a reasonable manner and in good faith or will be settled at
the discretion of the Indemnified Party (with the consent
of the Indemnifying Party, which consent will not be
unreasonably withheld.) The Indemnified Party will have
full control of such defense and proceedings, including a
compromise or settlement thereof; provided, however, that
if requested by the Indemnified Party, the Indemnifying
Party will, at the sole cost and expense of the
Indemnifying Party, provide reasonable cooperation to the
Indemnified Party and its counsel in contesting any Third
Party Claim which the Indemnified Party is contesting.
Notwithstanding the foregoing provisions of this clause
(ii), if the Indemnifying Party has notified the
Indemnified Party within the Dispute Period that the
Indemnifying Party disputes its liability or the amount of
its liability hereunder to the Indemnified Party with
respect to such Third Party Claim and if such dispute is
resolved in favor of the Indemnifying Party in the manner
provided in clause(iii) below, the Indemnifying Party will
not be required to bear the costs and expenses of the
Indemnified Party's defense pursuant to this clause (ii) or
of the Indemnifying Party's participation therein at the
Indemnified Party's request, and the Indemnified Party
shall reimburse the Indemnifying Party in full for all
reasonable costs and expenses incurred by the Indemnifying
Party in connection with such litigation. The Indemnifying
Party may participate in, but not control, any defense or
settlement controlled by the Indemnified Party pursuant to
this clause (ii), and the Indemnifying Party shall bear its
own costs and expenses with respect to such participation.
(iii) If the Indemnifying Party notifies the Indemnified
Party that it does not dispute its liability or the amount
of its liability to the Indemnified Party with respect to
the Third Party Claim under 16.1 or fails to notify the
Indemnified Party within the Dispute Period whether the
Indemnifying Party disputes its liability or the amount of
its liability to the Indemnified Party with respect to such
Third Party Claim, the amount of Damages specified in the
Claim Notice shall be conclusively deemed a liability of
the Indemnifying Party under 16.1 and the Indemnifying
Party shall pay the amount of such Damages to the
Indemnified Party on demand. If the Indemnifying Party has
timely disputed its liability or the amount of its
liability with respect to such claim, the Indemnifying
Party and the Indemnified Party shall proceed in good faith
to negotiate a resolution of such dispute; provided,
however, that if the dispute is not resolved within thirty
(30) days after the Claim Notice, the Indemnifying Party
shall be entitled to institute such legal action as it
deems appropriate.
Purchase and Sale of Certain Assets Page 19
(b) In the event any Indemnified Party should have a claim
under 16.1 against the Indemnifying Party that does not
involve a Third Party Claim, the Indemnified Party shall
deliver a written notification of a claim for indemnity
under 16 specifying the nature of and basis for such
claim, together with the amount or, if not then reasonably
ascertainable, the estimated amount, determined in good
faith, of such claim (an "INDEMNITY NOTICE") with
reasonable promptness to the Indemnifying Party. The
failure by any Indemnified Party to give the Indemnity
Notice shall not impair such party's rights hereunder
except to the extent that the Indemnifying Party
demonstrates that it has been irreparably prejudiced
thereby. If the Indemnifying Party notifies the Indemnified
Party that it does not dispute the claim or the amount of
the claim described in such Indemnity Notice or fails to
notify the Indemnified Party within the Dispute Period
whether the Indemnifying Party disputes the claim or the
amount of the claim described in such Indemnity Notice, the
amount of Damages specified in the Indemnity Notice will be
conclusively deemed a liability of the Indemnifying Party
under 16.1 and the Indemnifying Party shall pay the amount
of such Damages to the Indemnified Party on demand. If the
Indemnifying Party has timely disputed its liability or the
amount of its liability with respect to such claim, the
Indemnifying Party and the Indemnified Party shall however,
proceed in good faith to negotiate a resolution that if the
dispute is not resolved within thirty (30) days after the
Claim of such dispute; provided Notice, the Indemnifying
Party shall be entitled to institute such legal action as
it deems appropriate.
(c) The indemnity agreements contained herein shall be in
addition to (i) any cause of action or similar rights of
the Indemnified Party against the Indemnifying Party or
others, and (ii) any liabilities the Indemnifying Party may
be subjected to.
17. MISCELLANEOUS.
17.1 Entire Agreement; Merger. It is agreed that as a material
consideration for the execution of this Agreement there are and
were no verbal or written representations, agreements or promises
pertaining to the subject matter of this Agreement not
incorporated in writing in this Agreement. This Agreement
supersedes all other agreements by and among the parties.
Purchase and Sale of Certain Assets Page 20
17.2 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
17.3 Confidentiality and Disclosure. All confidential information which
shall have been furnished or disclosed by Buyer or Seller to the
other pursuant to this Agreement shall be held in confidence
pursuant and shall not be disclosed to any person other than their
respective employees, directors, legal counsel, accountants or
financial advisors, with a need to have access to such
information. The Seller shall not make any public announcement or
disclosure pertaining to this Agreement or its substance without
the prior written consent of the Buyer.
17.4 Modification. This Agreement may be amended, changed, waived,
discharged, or terminated only by an instrument in writing signed
by the party against which enforcement of such change; waiver,
discharge or termination is sought.
17.5 Survival. The representations, covenants and agreements of the
Parties herein contained shall survive the date hereof and
Closing.
17.6 Governing Law. The validity, performance and enforcement of this
Agreement and any agreement entered into pursuant hereto, unless
expressly provided to the contrary, will be governed by the Laws
of Florida, without giving effect to the principles of conflicts
of law thereof.
17.7 Successors and Assigns. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective
successors of the parties hereto; provided, however, that this
Agreement may not be assigned by the seller without the prior
written consent of the buyer. The buyer may assign this agreement
at anytime, to any party at the buyer's sole discretion. If this
Agreement is assigned with such consent or pursuant to such
exceptions, the terms and conditions hereof shall be binding upon
and shall inure to the benefit of the parties hereto and their
respective assigns; provided, however, that no assignment of this
Agreement or any of the rights or obligations hereof shall relieve
the seller of its obligations under this Agreement. With the
exception of the parties to this Agreement, there shall exist no
right of any person to claim a beneficial interest in this
Agreement or any rights occurring by virtue of this Agreement.
17.8 Headings and Whereas Clauses. The headings of the Sections and
paragraphs of this Agreement are inserted for convenience only and
shall not be deemed to constitute part of this Agreement or to
affect the construction hereof. The "Whereas" clauses shall be
deemed to constitute a part of this Agreement.
Purchase and Sale of Certain Assets Page 21
17.9 No Waiver. No action taken pursuant to this Agreement, including
any investigation by or on behalf of any party hereto will be
deemed to constitute a waiver by the party taking any action of
compliance with any representation, warranty or agreement
contained herein. The waiver by any party hereto of any condition
or of a breach of any other provision of this Agreement will not
operate or be construed as a waiver of any other condition or
subsequent breach. The waiver by any party of any of the
conditions precedent to its obligations under the Agreement will
not preclude it from seeking redress for breech of this Agreement
other than with respect to the condition so waived. Any waiver
must be in writing, signed by both parties hereto.
17.10 Expenses. Seller and Buyer shall each pay all costs and expenses
incurred by it or on its behalf in connection with this Agreement
and the transactions contemplated hereby, including, without
limiting the generality of the foregoing, fees and expenses of its
own financial consultants, accountants and counsel.
17.11 Arbitration; Venue. Any dispute or controversy arising out of, or
related to this Agreement or to the Patent, shall be resolved in
binding arbitration in accordance with the Commercial Rules of the
National Association of Security Dealers (NASD), the venue for
which shall be in Orlando, Florida.
17.12 Specific Performance. Buyer on the one hand, and Seller, on the
other hand, each acknowledge that the other will be irreparably
harmed and that there will be no adequate remedy at law in the
event of a violation by it of any of its covenants or agreements
which are contained in this Agreement. It is accordingly agreed
that, in addition to any other remedies which may be available
upon the breach of such covenants and agreements, Seller or Buyer,
as the case may be, shall have the right to obtain injunctive
relief to restrain any breach or threatened breach of, or
otherwise to obtain specific performance of, the other's covenants
or agreements contained in this Agreement.
Purchase and Sale of Certain Assets Page 22
IN WITNESS WHEREOF the parties have executed this Agreement at 2pm CST, 2002 on
the day and year first above written.
Witnesses: Rushmore Financial Group, Inc. and
Rushmore Securities Corp.
_____________________________ By: /s/ Xxxxx X. ("Xxxxx") Xxxxx, Jr.
-----------------------------------
_____________________________ Xxxxx X. ("Xxxxx") Xxxxx, Jr.
President
Empire Financial Holding Co., Inc.
_____________________________ By:
-----------------------------------
_____________________________ Xxxxxxx Xxxxx, Co-CEO
Empire Financial Holding; Inc.
_____________________________ By:
-----------------------------------
_____________________________ Xxxxx Xxxxx, Co-CEO
Purchase and Sale of Certain Assets Page 23
Exhibit 1.1
Purchased Asset Schedule Addendum to
Agreement for Purchase and Sale of Certain Assets
Between Empire Financial Group, Inc. and Rushmore Securities Corp, Inc.
0000
XXX 4-02 Actual
YTD 4-02 Annualized Revenue Average
-------- ---------- ------- -------
ARLEIN (1) 1 $11,026 $33,077 $58,896 $45,986
XXXXXXXXX 2 14,360 43,080 44,382 43,731
BOTTER 3 4,069 12,207 11,984 12,096
XXXXXXXXX 4 9,657 28,971 43,319 36,145
XXXXXXX 5 19,474 58,422 75,752 67,087
XXXX, M 6 27,805 83,415 88,965 86,190
XXXXX (1) 7 7169 21,506 15,651 18,578
XXXXXXX 8 28,928 86,784 105,300 96,042
GILANI 9 24,922 74,766 47,508 61,137
XXXXXXXX 10 14,643 43,929 52,152 48,041
XXXXXX-V 11 20,321 60,963 60,963 60,963
XXXX, W 12 6,089 18,267 44,793 31,530
XXXXXXX 13 17,198 51,594 25,797
XXXXX 14 2,324 6,972 7,258 7,115
MIDDLETON 15 2,655 7,965 15,071 11,518
XXXXXX 16 428 1,284 4,945 3,115
XXXXXXXX 17 15,704 47,112 55,713 51,413
PEARSE-J 18 4,313 12,939 49,197 31,068
XXXXXXX 19 1,680 5,040 12,547 8,794
XXXX 20 12,214 36,642 36,300 36,471
XXXXXX 21 6,692 20,076 89,203 54,640
XXXXXXX (1) 22 835 2,505 40,048 21,277
XXXXXX 23 9,954 29,862 8,462 19,162
SHAH 24 17,778 53,334 77,872 65,603
XXXXXXX 25 6,226 18,678 23,372 21,025
XXXXXXXXX 26 7,781 23,343 48,110 35,727
XXXXXX, T 27 821 2,463 3,325 2,894
XXXXXXX (1) 28 9,999 29,996 57,856 43,926
ZOFFUTO 29 1,396 4,188 6,086 5,137
----- ----- ----- -----
Total $306,460 $919,379 $1,185,029 $1,052,204
Purchase and Sale of Certain Assets Page 24
Exhibit 1.1, Continued
XXXXXXXX (2) 30 50,000 25,000
XXXXXXX (2) 31 250,000 250,000 250,000
XXXXXX (2) 32 50,000 50,000 50,000
XXXXXXX (2) 33 50,000 50,000 50,000
XXXXXX (2) 34
Footnotes:
(1) Designates Boca Raton branch office that were terminated by Seller
and subsequently joined the Buyer, at the advice and direction of Seller, prior
to the date of this Agreement. Production is shown at 50% of actual numbers to
reflect a purchase price calculated at 12.5%.
(2) No Consideration is reflected, as no production numbers are available
for these newly hired registered representatives.
Purchase and Sale of Certain Assets Page 25
Exhibit 1.2
Addendum to Agreement
for Purchase and Sale of Certain Assets
Between Empire Financial Group, Inc. and Rushmore Securities Corp, Inc.
Certificate of Liabilities
The undersigned being a duly authorized officer of the Seller do hereby certify
to the Buyer the following:
(i) The buyer shall have no responsibility or obligation to assume any debt,
liability or obligation described in Section 1.2 of this Agreement.
(ii) There are no liabilities real, pending or threatened against the Seller
that will encumber the Sellers ability to execute this Agreement and transfer
the assets of the Seller to the buyer debt free.
Signed this the 31st day of July 2002.
Rushmore Financial Group, Inc. and Rushmore Securities Corp.
By: /s/ Xxxxx X. ("Xxxxx") Xxxxx, Jr.
----------------------------------
Xxxxx X. ("Xxxxx") Xxxxx, Jr.
President
Purchase and Sale of Certain Assets Page 26
Exhibit 7.2(c)
Certificate from Seller
Addendum to Agreement
for Purchase and Sale of Certain Assets
Between Empire Financial Group, Inc. and Rushmore Securities Corp, Inc.
The undersigned being a duly authorized officer of the Seller do hereby certify
to the Buyer the following:
(i) The representations and warranties made by Seller
herein or in any Exhibit or Schedule hereto remain
true in all material respects on the Closing Date as
though made on such date except for changes
contemplated by the Agreement;
(ii) Seller has performed and complied in all material
respects with all Agreements, covenants and
conditions required by the Agreement to be performed
or complied with by Seller on or prior to the
Closing;
(iii) No litigation, proceedings or other actions are
pending or threatened against or affecting the
Seller which have resulted or reasonably could be
expected to result with or in an action to enjoin or
the prevention of the consummation of the
transactions contemplated by the Agreement;
(iv) Seller has or will receive all consents required by
the federal government, SEC, NASD, any state or
local governmental body, or any other regulatory
authority, to the transactions contemplated by the
Agreement, and such consents are in full force and
effect; and; that from the date of this Agreement
through the Closing Date, Seller have managed and
conducted the Business in the ordinary course as
heretofore managed and conducted as though no change
of ownership of the Business were contemplated, and
has used commercially reasonable efforts to preserve
all employee, vendor and customer relationships.
Signed this the 31st day of July 2002.
Rushmore Financial Group, Inc. and Rushmore Securities Corp.
By: /s/ Xxxxx X. ("Xxxxx") Xxxxx, Jr.
----------------------------------
Xxxxx X. ("Xxxxx") Xxxxx, Jr.
President
Purchase and Sale of Certain Assets Page 27
(Corporate Seal)
Subscribed and Sworn to Before Me
This 31st day of July, 2002
/s/ Xxxx Xxxxx Xxxxxxxx [Notary Seal]
-----------------------------
Notary Public
(Affix Seal)
Purchase and Sale of Certain Assets Page 28
Exhibit 7.2(f)
Corporate Resolutions
Addendum to Agreement
for Purchase and Sale of Certain Assets
Between Empire Financial Group, Inc. and Rushmore Securities Corp, Inc.
Document 2
________________________________________________________________________________
Corporate Resolution
I, Xxxxx X. Xxxxx, Xx., in my official capacity, hereby certify that I am an
officer, namely President of Rushmore Securities Corp, Inc., a corporation duly
organized under the laws of Texas; that at a meeting of the Board of Directors
of this corporation, duly and regularly convened and held on the 28th day of
June, 2002, at which a quorum for the transaction of business was present and
acting; the following resolution was duly and regularly adopted, and is still in
full force and effect, and appears as follows in the minutes of the meeting:
________________________________________________________________________________
RESOLVED: that Xxxxx X. Xxxxx, Xx., who is the President of this
corporation is hereby authorized to sell, assign and transfer the Assets
per the executed Agreement for Purchase and Sale of Certain Assets
Between Empire Holding Company, Inc. and Rushmore Financial Group, Inc
and Rushmore Securities Corp. of which this Exhibit 7.2(f) is a part of
and to execute any and all instruments necessary, proper or desirable for
the purpose; further, that any past action in accordance herewith is
hereby ratified and confirmed; and further, that any officer of this
corporation is hereby authorized to certify this resolution to whom it
may concern.
________________________________________________________________________________
I further certify that the foregoing resolution is not contrary to any provision
in the charter or bylaws of this corporation, that Xxxxx X. Xxxxx, Xx. now is
President, and Xxxxx X. Xxxxxxx now is Secretary of this corporation, and that I
have been duly authorized to make this certificate on behalf of this
corporation.
In witness whereof, I hereunto set my hand and affix the seal of this
corporation on this 31st day of July, 2002.
/s/ Xxxxx X. Xxxxx, Xx.
-------------------------------
Signature of Certifying Officer
________________________________________________________________________________
Purchase and Sale of Certain Assets Page 29
(Corporate Seal)
Subscribed and Sworn to Before Me
This 31st day of July, 2002
/s/ Xxxx Xxxxx Xxxxxxxx [Notary Seal]
-----------------------------
Notary Public
(Affix Seal)
Purchase and Sale of Certain Assets Page 30
Exhibit 7.2(f)
Corporate Resolutions
Addendum to Agreement
for Purchase and Sale of Certain Assets
Between Empire Financial Group, Inc. and Rushmore Securities Corp, Inc.
Document 3
________________________________________________________________________________
Corporate Resolution
I, Xxxxxxx Xxxxx and Xxxxx Xxxxx in our official capacity, hereby certify that
we are officers, namely Co-CEOs of Empire Financial Holding, Inc. a corporation
duly organized under the laws of Florida; that at a meeting of the Board of
Directors of this corporation, duly and regularly convened and held on the 31st
day of July, 2002, at which a quorum for the transaction of business was present
and acting; the following resolution was duly and regularly adopted, and is
still in full force and effect, and appears as follows in the minutes of the
meeting:
________________________________________________________________________________
RESOLVED: that Xxxxxxx Xxxxx and Xxxxx Xxxxx who Co-CEOs of this
corporation is hereby authorized to sell, assign and transfer the Assets
per the executed Agreement for Purchase and Sale of Certain Assets
Between Empire Holding Company, Inc. and Rushmore Financial Group, Inc
and Rushmore Securities Corp. of which this Exhibit 7.2(f) is a part of
and to execute any and all instruments necessary, proper or desirable for
the purpose; further, that any past action in accordance herewith is
hereby ratified and confirmed; and further, that any officer of this
corporation is hereby authorized to certify this resolution to whom it
may concern.
________________________________________________________________________________
I further certify that the foregoing resolution is not contrary to any provision
in the charter or bylaws of this corporation, that Xxxxx X. Xxxxx, Xx. now is
President, and Xxxxx X. Xxxxx, Xx. now is Secretary of this corporation, and
that I have been duly authorized to make this certificate on behalf of this
corporation.
In witness whereof, I hereunto set my hand and affix the seal of this
corporation on this 31st day of July, 2002.
___________________________________
Signature of Certifying Officer
________________________________________________________________________________
Purchase and Sale of Certain Assets Page 31
(Corporate Seal)
Subscribed and Sworn to Before Me
This 31st day of July, 2002
[Notary Seal]
-----------------------------
Notary Public
(Affix Seal)
Purchase and Sale of Certain Assets Page 32
