PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT ("Agreement") entered effective on this
27th day of March 2001, by and among Xxxx X. Xxxxxx ("Seller"); Traderight,
Corp. d/b/a/ Traderight Securities, Inc., a Florida Corporation ("Traderight");
and Traderight Securities, LLC, a Florida Limited Liability Corporation
("Tradeology") herein called ("Buyer") ("Buyer and Seller" herein collectively
called " the parties").
WITNESSETH:
WHEREAS, Seller is sole shareholder of Traderight, a Broker/Dealer
registered with the NASD, SEC, AL, CA, CO, CT, DC, FL, GA, HI, IA, ID, IL ,LA,
MA, MD, MI, MT, NC, NM, NV, NY, OK, OR, PA, RI, SC, SD, TN, UT, WA, WI, WV, and
WY; and
WHEREAS, Buyer is a Florida LLC and
WHEREAS, Buyer desires to purchase from the Seller all shares in Traderight
a Broker/Dealer business as a going concern, free of any obligations for
accounts payable or other liabilities of Traderight subject to the terms and
conditions and based upon Seller's representations, warranties and covenants
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and the mutual benefits to be derived therefrom, the parties
agree as follows:
1. EVENTS PRECEDING EFFECTIVENESS
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This agreement is contingent on Buyers substitution of Traderight's cash in the
capital accounts and other pre paid expenses as per per Exhibit "A" upon
contract execution and the cash in the capitol accounts per Exhibit "A" and
other pre paid expenses as per Exhibit "A" being paid to Gardyn upon signing of
the Purchase and Sale agreement. This agreement is subject to Buyers receiving
approval, registration and membership by the NASD, SEC, State of Florida, etc.
as required by lawfully continue the Broker/Dealer as a going concern. The
Buyer of Traderight shall have procured all regulatory approvals, consents,
waivers or administrative actions of governmental entities or other persons or
agencies that are necessary or appropriate to the consummation of the
transactions contemplated by this Agreement, and no approval, consent, waiver or
administrative action referred to in this Section shall have included and
condition or requirement that would (i) result in a materially adverse effect on
Buyers or Sellers or (ii) so materially and adversely affect the economic or
business benefits of the purchase that Buyers, in the judgment of Buyers and
Seller, would not have entered into this Agreement has such conditions or
requirements been known at the date hereof.
2. SALE OF BUSINESS
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Seller shall sell to Buyer all its shares of Traderight. Said shares to be sold
represent One Hundred percent (100%) equity ownership of Traderight, as a going
concern, with its Broker Dealer license in good standing and as a registered
member of the NASD. Title to shares of Traderight are solely owned by Gardyn
and are free and clear of any pledge, lien, claim, restriction or encumbrance of
any kind or nature. Such sale shall include the following: the goodwill of the
firm; the exclusive right to use the trade name Traderight; all Traderight
checking and deposit accounts held in financial institutions or clearing
agencies as elected by Buyer or retain; all records, correspondence, files, and
, subject to the provisions of paragraph 3, all contracts agreements and
accounts between the firm, customers and clearing agencies; the corporation of
the Broker/Dealer, and delivery at closing the corporation books of accounting
and tax records, provided that Seller's may keep copies and shall have access to
originals as may be reasonably required for tax or regulatory purposes; stock
certificates representing all of the shares, duly endorsed or accompanied by
duly executed stock powers for transfer to buyer, company's minute books, stock
record books, corporate seals, articles of incorporation, and By-laws of the
company, Broker/Dealer records not limited to: Supervisory Procedures, Business
Plan, compliance, firm element of continuing education, etc. However, such sale
shall exclude the xxx.xxxxxxxxxxxxxxxx.xxx domain name and any educational
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materials and educational technologies.
3. ESCROW AND CLOSING
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Buyer shall place Twenty-Five Thousand Dollars ($25,000.00) with Buyers Escrow
Agent, Xxxxx & Xxxxxxx, Attorneys at Law, 0000 Xxxx Xxxxxxxxxx Xxxx., Xxxxxxxxx
Xxxxx X, Xx. Xxxxxxxxxx, XX 00000. At closing, determined by, contingent on and
within 3 business days of the approval of the NASD, the SEC, the State of
Florida has been received by the Buyer at one or more Closings shall pay over to
the Seller all impounded funds plus any accrued interest. The sum of Fifty
Thousand Dollars ($50,000.00) and the net due Seller as per Exhibit "A" shall be
paid to Seller upon signing of this agreement.
Upon execution of this contract an officer of Tradeology will be appointed
C.E.O. of Traderight subject to the approval of the NASD and any other
regulatory agency. Concurrently, Buyer will establish a bank account in the
name of Traderight that will be under the control of said C.E.O. These funds
will be considered capital rules under Rule 15-C-3-1 of the Securities and
Exchange Act of 1934. This agreement is subject to approval by the NASD and any
other regulatory agency.
4. EXCLUSIONS
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This sale does not include any accounts receivable due to Traderight at the date
of closing, nor accounts receivable which accrue after the date of closing for
transactions placed before the date of closing. For the purpose of this
agreement, "transactions placed before the date of closing" shall include only
those transactions that have been completed, approved by the client, and
transmitted to the appropriate trader or clearing agency before the date of
closing.
5. COLLECTION OF ACCOUNTS RECEIVABL
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All checks or other proceeds received by the Buyer in payment of orders or
transactions due to Traderight at the date of closing and in payment of accounts
receivable which accrue after the date of closing for orders or transactions
placed before the date of closing shall be immediately turned over to the Seller
in the form in which they are received. The Seller shall have the right to
endorse the name of the Traderight on all checks and other proceeds in a bank
account maintained in his/her own name. The Seller covenants that funds in this
bank account will first be used to pay all accounts payable and other
liabilities incurred by the Traderight up to the date of signing this Purchase
and Sale agreement, including liabilities for or in connection with orders or
transactions placed before the date of closing.
6. OBLIGATIONS OF SELLER
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All accounts payable and other liabilities incurred by the firm up to the date
of signing this Purchase and Sale agreement, including liabilities for or in
connection with orders or transactions placed before the date of signing this
Purchase and Sale agreement, shall be paid by the Sellers, and the Sellers shall
indemnify and hold the Buyer harmless against all such accounts payable and
other liabilities. Buyer is not acquiring, directly or indirectly any of
Traderight's liabilities, including but not limited to; the physical plant,
equipment, communication lines, leasehold improvements, rent, leases, etc., and
no such assumption shall accrue to Buyer by operation of law or otherwise.
Buyer will fully cooperate with Seller to facilitate the transfer of the current
lease between The Flatly Company and Traderight Corp. to Seller or an assignee
of Seller at no cost to Seller. The Buyer further agrees to cooperate to
transfer any and all other assets relating to the lease and any and all
equipment that is currently located at 0000 Xxxxx Xxxxxxx Xxxxxxx, Xxxx Xxxxx,
Xxxxxxx 00000 to Seller or an assignee of Seller at no cost to Seller. The
Buyer shall have the use of one office of Sellers choice to operate Traderight
from its existing location for a period not to exceed ninety (90) days.
7. CONTRACTS
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The Buyer acknowledges that Traderight have made no representations with respect
to contracts, arrangements and accounts with the clients of the firm or with
respect to contracts, arrangements, or accounts between the firm and any
clearing agencies ("Contracts"). The Buyer assumes the risk that all such
Contracts may be cancelled at will and without notice, either by the clients of
the firm or by the clearing agencies. Traderight make no representation that
any Contracts are assignable.
8. PURCHASE PRICE
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The purchase price for the assets described in paragraph 2 is Seventy-Five
Thousand Dollars ($75,000.00). Any cash on hand and deposit accounts, if any
are retained by Buyer are subject to verification by Buyers escrow agent the law
firm Xxxxx and Vecchio at time of closing. Any monies received will be
deposited and disbursed through the escrow agent at the time of the closing.
Liabilities are excluded from this transaction as provided for in paragraph #6
(see attached Exhibit "A"). In addition, Buyer shall be responsible for all
costs incurred in the pursuit of the necessary approvals to consummate this
transaction.
9. CONDUCT OF BUSINESS PENDING CLOSING
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Between the date of this agreement and the date of closing, the Buyers shall use
their best efforts to conduct, maintain and preserve the business of the
Broker/Dealer and its corporation. Up until closing, and at Buyers expense,
Buyer shall continue all required reporting and filings as required to maintain
compliance with any and all governing bodies.
10. REPRESENTATIONS AND WARRANTIES OF BUYER
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Buyer's purchase of Traderight will not violate any State or Federal security
law known to Buyer. Tradeology is in good standing and has authority to engage
in this transaction, and this transaction will not violate any agreements to
which Buyer is a party. The representations and warranties contained in this
section 10 do not contain any untrue statement of material fact or omit to state
any material fact necessary in order to make the statements and information
contained in this section 10 not misleading.
11. REPRESENTATIONS AND WARRANTIES OF SELLER
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Seller represents and warrants to Buyer as follows:
11.1 Organization, Standing, and Capitalization of Seller.
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a) Traderight is duly organized and validly existing corporation and is in
good standing under the laws of the State of Florida. Traderight has the
corporate power and authority to own and hold its material properties and to
carry on its business as it is now being conducted. Traderight has no
subsidiaries or affiliated companies and is not a party to any joint ventures or
partnerships.
b) All shares of capital stock of Seller are validly issued and outstanding,
fully paid, and non-assessable. There are no outstanding options, warrants,
rights, or obligations of any kind entitling the holder thereof to acquire
shares of the capital stock of Seller, and there are no outstanding securities
or instruments of any kind that are convertible into shares of the capital stock
of Seller.
c) Copies of all articles of incorporation and by-laws of the Traderight are
to be provided per 11.6 and all such copies are true and correct as of the
closing date. The minute books of Traderight, as above, will be made available
to Buyer for inspection, and are to be complete in all material respects and
accurately record the actions taken by the stockholders and directors of
Traderight.
d) The authorized capital stock of Traderight consists exclusively of 1000
shares of Common Stock, par value $1.00 per share, 500 shares of which are
validly issued and outstanding, fully paid, and non-assessable.
e) The representations and warranties made by Traderight shall be true and
correct in all material respects on and as of the closing date with the same
force and effect as though such representations and warranties had been made on
and as of the closing date, except for such changes therein as are expressly
required or permitted by the terms of this agreement or consented to in writing
by purchasers.
11.2 No Undisclosed Liabilities.
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Except as and to the extent reflected or reserved against in the consolidated
financial statements of Traderight, to be provided to Buyer, Traderight, at the
dates of such consolidated financial statements, did not have any material
liabilities or obligations (whether accrued, absolute, or contingent) required
under generally accepted accounting principles to be reflected thereon which
would materially and adversely affect the fair presentation of such financial
statements. Traderight has not incurred any liability since the date of the
consolidated financial statements referred herein which would materially and
adversely affect the condition (financial or otherwise), assets, liabilities,
business or operations of Traderight, other than liabilities that have been
incurred in the ordinary course of business.
11.3 Absence of Certain Changes or Events.
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Since January 1, 2001, there has not been:
Any materially adverse change in the financial position, results of operations,
assets, liabilities, or business of Traderight, other than changes incurred in
the ordinary course of business;
11.4 Complete and Accurate Disclosure.
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Neither this Agreement (insofar as it relates to Traderight, the Common Stock of
Seller, and the involvement of Traderight in the transactions contemplated
hereby) nor any financial statement, schedule, certificate, or other statement
or document set forth on a schedule by Traderight to Buyer in connection with
this Agreement, when considered in the aggregate, contains any statement which,
at the time and in light of the circumstances under which it is made, is false
or misleading with respect to any material fact or omits to state any material
fact necessary to make the statements contained herein or therein not false or
misleading.
11.5 Title to Properties: Absence of Liens and Encumbrances: Compliance with
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Laws.
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Except as otherwise disclosed, Traderight has good and marketable title to all
of their respective properties and assets, including those reflected in the
consolidated financial statements referred to in Section 11.2, except as sold or
otherwise disposed of for value and only in the ordinary course of business,
free and clear of all liens and encumbrances. Traderight owns or has the rights
to use all real and personal properties and assets that are material to the
conduct of the business as presently conducted by Traderight.
11.6 Due Diligence Period.
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Traderight shall provide all necessary documents to Buyer which are to include,
but are not limited to, if available, all expense sheets, commission sheets,
contracts, tax returns, financials, licenses from NASD, SEC or any other
applicable jurisdiction, articles of incorporation, certificate of
incorporation. Upon receipt of these documents, Traderight agrees that Buyer
shall have two (2) days to inspect said documents. If inspection proves the
purchase to be unfeasible, or for whatever reason, Buyer may terminate agreement
by written notice and any deposits will be refunded to buyer. This section 11.6
shall become null and void upon the signing of this Purchase and Sale agreement.
11.7 Litigation, Etc.
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There is no litigation, proceeding, or investigation pending or, to the best
knowledge of Traderight, threatened against Traderight which would result in any
materially adverse change in the condition (financial or otherwise), assets,
liabilities, business, operations, or future prospects of Traderight. There are
no outstanding orders, writs, injunctions, judgments, decrees, directives,
consent agreements or memoranda of understanding issued by any federal, state,
or local court or governmental authority or arbitration tribunal issued against
or with the consent of Traderight that materially and adversely affect the
condition (financial or otherwise), assets, liabilities, business, operations,
or future prospects or that in any manner restricts Traderight right to carry on
its business as presently conducted. Traderight is aware of no fact or
condition presently existing that might give rise to any litigation,
investigation or proceeding which, if determined adversely to Traderight would
materially and adversely affect the condition (financial or otherwise), assets,
liabilities, business, operations, or future prospects of Seller, or would
restrict in any manner Traderight's rights to carry on its business as presently
conducted. Traderight has disclosed all litigation in which Traderight is
involved as a party.
11.8 No Conflicts with Other Documents
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Neither the execution and delivery of this Agreement nor the carrying our of the
transactions contemplated hereunder will result in any violation, termination,
or default or acceleration of, or be in conflict with, any terms of any contract
or other instrument to which Traderight are a party, or of any judgment, decree,
or order applicable to Traderight, or result in the creation of any lien,
charge, or encumbrance upon any of its properties or assets, except for any of
the foregoing which would not have a material adverse effect upon the financial
condition, assets, liabilities, business or operations of Traderight.
11.9 Compliance with Laws: Governmental Authorizations.
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Except where noncompliance would not have a material and adverse effect upon the
condition (financial or otherwise), assets, liabilities, business or operations
of Traderight, (i) Traderight is in compliance with all statutes, laws,
ordinance, rules, regulations, judgments, orders, decrees, directives, consent
agreements, memoranda of understanding, permits, concessions, grants franchises,
licenses, and other governmental authorizations of approvals applicable to
Traderight or any of its properties; and (ii) all permits, concessions, grants,
franchises, licenses and other governmental authorizations and approvals
necessary for the conduct of the business of Traderight as presently conducted
have been duly obtained and are in full force and effect, and there are no
proceedings pending or, to Traderight knowledge, threatened which may result in
the revocation, cancellation, suspension or materially adverse modification of
any thereof.
11.10 Authority; Enforceability.
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The execution, delivery, and performance of this Agreement by Seller have been
duly and validly authorized by its Board of Directors, subject only to requisite
approval by appropriate governmental regulatory authorities and stockholders.
This Agreement is a valid and binding agreement of Sellers, enforceable against
it in accordance with its terms, subject as to enforcement to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
11.11 Insurance.
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All insurance policies held by Traderight relating to its operations (except for
title insurance policies) are in full force and effect. Traderight's have not
received any notice of cancellation with respect to any such policies and has no
reason to expect that it will receive a notice of cancellation from any of its
present insurance carriers.
11.12 Binding Obligations.
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This agreement has been duly executed and delivered by Buyer, Seller and
Traderight and is a legal, valid and binding obligation of Buyer, Seller and
Traderight, enforceable in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization
or other laws affecting the enforcement of creditors' rights or the availability
of equitable remedies.
11.13 Performance and Closing
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a) Traderight shall have complied with and performed in all material
respects all covenants and obligations required by this agreement to be complied
with or performed by Traderight on or prior to the closing date
b) Closing shall take place and final monies of $25,000.00 disbursed upon
receipt of all required regulatory approvals, including but not limited to the
NASD, SEC, and the State of Florida. Current principals must stay on at Buyer's
sole expense without change or substitution until necessary approvals are
received. Further, upon execution of this agreement Buyer may, at their
discretion register its personnel with Traderight.
12. BUSINESS ACTIVITIES
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Upon execution of this Agreement, registration of Buyers licensed personnel and
the substitution of Seller's net capital, Buyer may then conduct business as
provided for by the NASD in Traderight's Membership Agreement. Specifically,
the Buyer, prior to change of ownership may conduct Proprietary Trading, which
is already approved by the NASD.
Buyer may conduct any business prior to ownership change. Buyer will be
responsible for any decreases in Net Capital and assume all liabilities for the
operation of such new business.
a) Buyer must be permitted to open a separate account under the corporate
name Traderight with Tradeology designated principal as sole signatory.
b) Current principals of Traderight must stay on without change or
substitution until necessary approvals are received at Buyer's sole expense.
c) If this transaction fails to close for any reason all transactions,
payments, and deposits shall be immediately reversed, allowing for losses.
Buyer agrees to indemnify and hold Seller and Traderight harmless of and from
any and all liabilities, losses, or damages arising out of said Business
Activities.
Seller may continue to clear all current and future trades through Traderight at
cost plus 25% on clearing firm charges. Seller shall be entitled to all ticket
profits from all trades from any existing accounts. Buyer shall have the sole
right to terminate said relationship by providing a written 30-day notice.
13. CORPORATE NAME
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At the time of execution of this Agreement, or as shortly thereafter as may be
reasonably possible, Traderight shall cause the corporate name, and business,
including licenses, customers, goodwill, registrations, and the like, to be
transferred to Buyer in such manner so that Buyer has the name Traderight
Securities after the sale. Traderight shall cause all of the existing business
and assets (excluding the current lease and other assets listed on Exhibit "A")
of Traderight to be transferred to Buyer, free and clear of liens, encumbrances,
liabilities, and claims, as of the closing date and shall file such documents
with the State of Florida as may be necessary to transfer the name "Traderight
Securities" to Buyer.
14. INDEMNIFICATION BY SELLER
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Maximum Liability. Notwithstanding anything contained in the Agreement
document and or its respective Exhibits or attachments or other documents
attached hereto or delivered to Tradeology by Seller and or Traderight or
agents, the Seller's maximum aggregate liability for any damages under any
Section in this Agreement document and or its respective Exhibits or attachments
or other documents attached hereto shall not be in excess of $25,000.00
(twenty-five thousand dollars). There shall be a minimum deductible of
$1,000.00 (one thousand dollars) for any single occurrence relating to any
indemnification by the Seller. Furthermore, if any payment is due pursuant to
this indemnification section or any indemnification sections or any other
sections relating to Seller, Tradeology will only use as its sole recourse the
twenty five thousand dollars ($25,000.00) being held in escrow to pay any
damages. Tradeology's sole recourse in the event of any indemnification and
damages will be limited to a set-off of such amounts against the remaining
twenty five thousand dollars ($25,000.00) being held in escrow. The parties
agree that this INDEMNIFICATION BY SELLER paragraph 14 (a) shall supersede any
and all other indemnifications, if there is a conflict. The term for this
INDEMNIFICATION BY SELLER shall expire ninety (90) days from the date of this
agreement.
15. NOTICES
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Any notice, demand, offer or other written instrument required or permitted to
be given, made or sent hereunder shall be in writing, signed by the party giving
or making same, and shall be sent by United States Mail, registered or
certified, return receipt requested, postage prepaid, to the Seller or Buyer at
its registered office and to Buyer and Seller at his current address as it
appears in the records of the corporation. The date of mailing of any offer,
demand, notice or instrument, and shall be effective from such date. Any party
may form time-to-time change his address to which notice is to be sent pursuant
hereto by sending notice of such change in conformity with the foregoing
requirements to the Corporation and parties hereto or any legal representative
of the Estate of the deceased Stockholder.
16. ENTIRE AGREEMENT, MODIFICATION, ETC.
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This contract contains the entire Agreement of the parties hereto; and no
modification, amendment, change, or discharge of any terms or provisions of the
Agreement shall be binding or valid unless the same is in writing and signed by
all the parties hereto. No waiver of any of the terms of this Agreement shall
be valid unless signed by the party against whom such waiver is asserted. This
Agreement revokes all other such proposed agreements in existence.
17. EXPENSES AND BROKER RECOGNITION.
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Whether or not the transaction hereunder is consummated, each party to the
agreement shall pay its own expenses relating hereto, including fees and
disbursements of its counsel and accountants. The parties understand and agree
that there was no brokerage services rendered and no broker is due a fee or
commission in this transaction.
18. GOVERNING LAW
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This Agreement shall be governed by, and shall be interpreted in accordance
with, the laws of the State of Florida or, to the extent applicable, the federal
laws of the Untied States of America. The parties agree that if there are any
disagreements between the parties, that the parties will first use mediation to
settle any dispute and if mediation is not successful they will use binding
arbitration (the American Arbitration Association) in Palm Bach County Florida.
19. TIME IS OF THE ESSENCE
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The parties acknowledge and agree that time is of the essence in the execution
of this agreement and in the completion of the sale and the accompanying
responsibilities herein set forth.
20. INDEMNIFICATION BY SELLER
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Seller agrees to indemnify and hold Buyer, any affiliated companies and officers
harmless of and from any and all liabilities, losses, or damages, arising out of
any gross misrepresentation, breach of warranty, or nonfulfillment of any
provision of this agreement, including but not limited to any error or omissions
in any statement delivered to Buyer or any claim, liability, or obligation of
Seller including but not limited to Sellers involvement with XXXx.xxx, Inc.
business address 0000 Xxxxxx Xxxxxxx Xxxxx, Xxxxxx, XX, Seller agrees that at
Buyers sole discretion prior to a closing, Seller will release Buyer from all
provisions of this contract rendering it null and void, Seller will make Buyer
whole and Seller will indemnify and hold Buyer harmless of and from any and all
liabilities, losses, or damages arising out of any circumstance pertaining to,
or arising out of Sellers negotiations, verbal or written contractual
obligations, intent of the parties, commitments, misrepresentation, etc.
involving XXXx.xxx, Inc. The indemnification shall in no event exceed twenty
five thousand dollars ($25,000.00).
21. GENERAL
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The section heading contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretations of this
Agreement. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors but shall not be assigned to and shall not create any
rights in favor of any other party. Any purported assignment in violation of
this Section shall be void.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands and
seals this 27th day of March 2001.
SIGNED, SEALED AND DELIVERED
IN THE PRESENCE OF:
______________________________________
Traderight, Corp. d/b/a
Traderight Securities a
Florida Co., Sole shareholder
By:______________________________
Xxxx X. Xxxxxx
Attest:______________________________
Tradeology Securities, LLC
By:__________________________________
Jygnesh Xxxxx, Managing Member
Attest:_
