Exhibit 10.37
PURCHASE AGREEMENT
This PURCHASE AGREEMENT (the "Agreement") is entered into on December
2, 2009, by and between BKF Capital Group, Inc., a Delaware corporation, having
an address at 0 Xxxxx Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx 00000
("Purchaser") and Xxxxxx X. Xxxxxxx, an individual, having an address at 0 Xxxxx
Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx 00000 and Xxxxxxxx Xxxxxxx, an
individual, having an address at 0 Xxxxx Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxx Xxxxx,
Xxxxxxx 00000 (collectively the "Sellers").
W I T N E S S E T H:
WHEREAS, Catalyst Financial, LLC (the "Company"), a New York limited
liability company, is a broker-dealer registered with the United States
Securities and Exchange Commission (the "Commission") and a member in good
standing of the Financial Industry Regulatory Authority ("FINRA").
WHEREAS, Sellers are the owners of 100% of the membership interests in
the Company. Xxxxxx X. Xxxxxxx is the owner of 99% of the membership interests
in the Company and Xxxxxxxx Xxxxxxx is the owner of 1% of the membership
interests in the Company. Sellers are the owners of 100% of the equity of the
Company.
WHEREAS, Purchaser desires to acquire, and Sellers desire to sell, 100%
of the membership interests of the Company, upon the terms and conditions
hereinafter set forth. In connection with Purchaser's acquisition of the
Company, the Purchaser shall assume and succeed to the Company's registration
with the Commission as a broker-dealer and the Company's membership with FINRA,
NOW, THEREFORE, in consideration of the covenants and agreements
hereafter set forth, and other valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, the parties hereto agree as
follows:
ARTICLE I
Purchase and Sale of the Company
--------------------------------
1. Purchase and Sale of the Company. Sellers agree to sell, transfer
and deliver to Purchaser, and Purchaser agrees to purchase and accept, upon the
terms and conditions hereinafter set forth, at the Closing, as defined below,
100% of the membership interests (the "Membership Interests") of Catalyst
Financial, LLC, a limited liability company organized under the laws of New York
(the "Company"). Sellers are the owners of 100% of the Membership Interests of
the Company. Upon the sale and transfer of the Sellers' Membership Interests to
Purchaser, the Purchaser will own 100% of the Membership Interests of the
Company and the Company shall maintain all registrations and/or approvals from
the Commission and/or FINRA necessary to operate the broker-dealer business of
the Company (the "Business") as an on-going concern as contemplated by this
Agreement.
ARTICLE II
Transfer of Assets and Liabilities
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2. Assets.
2.1 Acquired Assets. Upon the terms and subject to the conditions set
forth in this Agreement, at the Closing the Purchaser shall acquire all of
Sellers' right, title and interest in and to the Company and all of Sellers'
property and assets, real, personal or mixed, tangible and intangible, of every
kind and description, wherever located, which are used in connection with the
Business (collectively, the "Acquired Assets"), including the following (but
excluding the Excluded Assets, as defined below):
2.1.1 Assumed Contracts. Purchaser agrees to assume all rights and
obligations under the specific contracts, agreements and/or understandings of
the Company related to the Business;
2.1.2 Franchises, Licenses and Permits. All franchises, licenses,
certificates, and/or permits from third parties, including, but not limited to,
governmental authorizations and all pending applications therefore or renewals
thereof, used primarily in or related primarily to the operation of the
Business, in each case to the extent transferable to Purchaser;
2.1.3 Business Information and Records. All financial books, data and
records (whether on paper, computer storage media or any other form) owned by
Sellers and used primarily in or related primarily to the operation of the
Company and the Business, including, but not limited to the Company's
organizational documents, business records, tax returns and all other documents
and records required to be maintained under the rules and regulations of the
Commission and FINRA.
2.2 Excluded Assets. Notwithstanding anything to the contrary contained
elsewhere in this Agreement, the assets of the Company set forth below (the
"Excluded Assets") are not part of the sale and purchase contemplated by this
Agreement, and are excluded from the Acquired Assets and shall remain the
property of Sellers after the Closing:
2.2.1 Tangible Personal Property. All tangible personal property not
used exclusively in the operation of the Business, to the extent owned by
Sellers;
2.2.2 All benefits and obligations under the Consulting Agreement,
dated as of June 6, 2008, between Ridgefield Acquisition Corp. and Catalyst
Financial LLC;
2.2.3 All cash and cash equivalents on hand in banks, certificates of
deposit, money market certificates, commercial paper and securities, including,
but not limited to the shares of common stock of Ridgefield Acquisition Corp.,
as of the Closing Date.
2.2.4 All claims for refund of Taxes and other governmental charges of
whatever nature relating to a tax period or event occurring prior to the Closing
Date;
2.2.5 All rights in connection with and assets of any Employee Benefit
Plan, including the Catalyst Financial, LLC Profit Sharing Plan;
2.2.6 All rights, claims and causes of action related to the Excluded
Assets and the Excluded Liabilities, as defined below.
2.3 Liabilities
2.3.1 Assumed Liabilities.
(a) Pre-Closing Liabilities. In the event the Closing occurs, the
Purchaser assumes and agrees to pay all of the expenses
incurred by the Company in its operations from August 24,
2009. Specifically, the Purchaser shall pay directly or
reimburse Sellers for all expenses incurred by the Company on
or after August 24, 2009, for operations, including employee
salaries and the expenses associated with satisfying the
conditions precedent to this Agreement, including, but not
limited to the Company's obtaining FINRA approval of the
transfer of control of the Company from Sellers to Purchaser
(the "Assumed Pre-Closing Expenses"). The Assumed Pre-Closing
Expenses shall be reduced by all revenues received by the
Company following August 24, 2009, except for any revenues
received by the Company under the Consulting Agreement, dated
as of June 6, 2008, between Ridgefield Acquisition Corp. and
Catalyst Financial LLC. A description of the Assumed
Pre-Closing Expenses is set forth on Schedule 2.3.1(a), which
is attached hereto and made a part hereof.
(b) Post-Closing Liabilities. On the Closing Date, Purchaser shall
assume and agree to discharge the liabilities arising on or
after the Closing Date relating to the business of the Company
including any liabilities under the Assumed Contracts included
in the Acquired Assets, other than any liability of Sellers
arising out of or relating to a breach of any such Assumed
Contract that occurred prior to the Closing Date (the "Assumed
Liabilities").
2.3.2 Excluded Liabilities. Except for liabilities specifically assumed
under this Agreement, Purchaser does not assume any liabilities, obligations and
commitments of Sellers or its Affiliates that have been created, or have arisen,
or arise out of any event occurring prior to the Closing, all of which shall be
retained and paid, performed and discharged when due by Sellers, and Purchaser
does not assume any other liability or obligation of Sellers or its Affiliates
of whatever nature, whether presently in existence or arising hereafter
(collectively, the "Excluded Liabilities"). For greater certainty, Excluded
Liabilities shall include, without limitation:
(a) Any liability to the customers of the Company incurred or
accrued prior to the Closing Date;
(c) Any liability under any contract not assumed by Purchaser,
except for any Assumed Pre- Closing Expenses;
(d) Any liability under any Assumed Contract assumed by Purchaser
that arises after the Closing Date but that arises out of or
relates to any conduct that occurred prior to the Closing
Date;
(d) Any liability for taxes arising as a result of Sellers'
operation of the Business or the Company or the ownership of
the Acquired Assets prior to the Closing Date;
(e) Any liability arising primarily out of or relating primarily
to an Excluded Asset;
(f) Any environmental, health and safety liabilities arising out
of or relating to the operation of the Business of the
Company, incurred or accrued prior to the Closing Date;
(g) Any liability under any Employee Benefit Plans or liability
incurred prior to the Closing Date relating to payroll,
vacation, sick leave, workers' compensation, unemployment
benefits, pension benefits, employee stock option or
profit-sharing plans, health care plans or benefits or any
other employee plans or benefits of any kind for Sellers'
employees or former employees or both;
(g) Any liability arising out of any proceeding or lawsuit
commenced after the Closing Date due primarily to any
occurrence or event happening prior to the Closing Date;
(h) Any liability arising out of or resulting from Sellers'
compliance or non-compliance with any legal requirement or any
order of any governmental authority prior to the Closing Date;
and
(i) Any liability of Sellers based upon Sellers' acts, errors or
omissions occurring on or prior to the Closing Date.
2.4 Consents of Third Parties.
Notwithstanding anything in this Agreement to the contrary, this
Agreement shall not constitute an agreement to assign any asset or any claim or
right or any benefit arising under or resulting from such asset if an attempted
assignment thereof, without the consent of a third party, would constitute a
breach or other contravention of the rights of such third party, would be
ineffective with respect to any party to an agreement concerning such asset, or
would in any way adversely affect the rights of Sellers or, upon transfer,
Purchaser under such asset. If any transfer or assignment by Sellers to, or any
assumption by Purchaser of, any interest in, or liability, obligation or
commitment under, any asset requires the consent of a third party, including,
but not limited to FINRA, then such assignment or assumption shall be made
subject to such consent being obtained. To the extent any Assumed Contract may
not be assigned to Purchaser by reason of the absence of any such consent,
Purchaser shall not be required to assume any Assumed Liabilities arising under
such Assumed Contract. If any such consent is not obtained prior to the Closing,
Sellers and Purchaser shall cooperate in any lawful and reasonable arrangement
reasonably proposed by Purchaser under which Purchaser shall obtain the economic
claims, rights and benefits under the asset, claim or right with respect to
which the consent has not been obtained in accordance with this Agreement
(offset by any related Liabilities which otherwise would have been assumed).
Such arrangement may include (i) the subcontracting, sublicensing or subleasing
to Purchaser of any and all rights of Sellers against the other party to such
third-party agreement arising out of a breach or cancellation thereof by the
other party, and (ii) the enforcement by Sellers of such rights.
ARTICLE III
Purchase Price
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3. Purchase Price. The purchase price ("Purchase Price") to be paid by
Purchaser for the Membership Interests and the Business is Eighty-Seven Thousand
Seven Hundred and Fifty Dollars ($87,750.00). The Purchaser shall tender payment
of the Purchase Price in acceptable funds at the Closing, as defined below.
ARTICLE IV
Conditions to Closing
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4. Conditions to Closing. The obligations of Purchaser to close
hereunder are subject, at the option of Purchaser, to the following conditions:
4.1 FINRA's approval or the expiration of the thirty (30) day notice
period required by FINRA Rule 1017(c) (1) concerning the sale and transfer of
Sellers' Membership Interests in the Company to the Purchaser;
4.2 All of the terms, covenants, conditions and deliveries to be
complied with or performed by Sellers under this Agreement on or before the
Closing shall have been complied with or performed in all material respects;
4.3 All representations or warranties of Sellers set forth herein are
true in all material respects as of the Closing Date; and
4.4 On the Closing Date, there shall be no liens or Encumbrances
against the Company, the Membership Interests and/or the Business, except as may
be specifically provided for herein.
ARTICLE V
The Closing
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5. The Closing. The "Closing" means the settlement of the obligations
of Sellers and Purchaser to each other under this Agreement, including the
payment of the Purchase Price to Sellers as provided in Article 3 hereof and the
delivery of the Closing documents provided for in Article 6 hereof. The Closing
shall be held at the offices of the Purchaser, at a mutually agreeable time,
within five (5) business days of the satisfaction of all of the conditions
precedent set forth in Article IV (the "Closing Date").
ARTICLE VI
Closing Documents
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6. Closing Documents.
6.1 At the Closing Sellers shall execute and/or deliver to Purchaser:
6.1.1 an executed agreement assigning the Membership Interests from
Sellers to Purchaser, in the form attached hereto as Schedule 6.1.1;
6.1.2 the Acquired Assets including the Assumed Contracts;
6.1.3 the operating agreement or other organizational documents of the
Company;
6.1.4 all other books and records of the Company, including all
documents and papers, customer lists and all records of the accounts of
customers used in the operation of or relating to the business of the Company;
6.1.5 an itemized list of all Assumed Pre-Closing Expenses incurred by
the Sellers, pursuant to Paragraph 2.3.1.(a), above, in operating the Company
and satisfying the conditions precedent to this Agreement since August 24, 2009;
and
6.1.6 such other instruments in form and substance satisfactory to
Purchaser's attorney as may be necessary or proper to transfer to Purchaser good
and marketable title to all other ownership interests in the Company to be
transferred under this Agreement.
6.2 At the Closing Purchaser shall execute and deliver to Sellers:
6.2.1 the Purchase Price, by check or other acceptable funds, to
Sellers in the amount of $87,750.00 in acceptable funds;
6.2.2 a check or other acceptable funds payable to Sellers in an amount
equal to the Assumed Pre-Closing Expenses in accordance with Paragraph
2.3.1.(a), above;
6.2.3 a check for all adjustments in accordance with Article VII,
below; and
6.2.4 such other instruments in form and substance satisfactory to
Purchaser's attorney as may be necessary or proper to transfer to Purchaser good
and marketable title to all other ownership interests in the Company to be
transferred under this Agreement.
ARTICLE VII
Closing Adjustments
-------------------
7. Closing Adjustments. The following items shall be apportioned as of
midnight of the day preceding the Closing Date:
7.1 Purchaser shall make a payment to Sellers for in an amount equal to
all cash and cash equivalents held by the Company on the Closing Date;
7.2 Federal, state and local taxes;
7.3 All state broker-dealer licensing/renewal fees incurred by the
Company for calendar year 2010.
7.4 The Company's CRD deposit;
7.5 The Company's fidelity bond deposit; and
7.6 Other fees relating to the Assumed Contracts.
The parties hereto represent and agree that any errors or omissions in
computing the apportionments under this Agreement shall be corrected after the
Closing.
ARTICLE VIII
Representations and Warranties of Sellers
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8. Representations and Warranties of Sellers. Sellers represent and
warrant to Purchaser as follows:
8.1 Sellers have full power and authority to carry out and perform its
undertakings and obligations as provided herein. The execution and delivery by
Sellers of this Agreement and the consummation of the transactions contemplated
herein do not and will not conflict with or result in any breach of any
condition or provision of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon the Company by
reason of the provisions of any contract, lien, lease, agreement, instrument or
judgment to which Sellers are a party, or which is or purports to be binding
upon Sellers or which affects or purports to affect the Company. No further
action or approval, corporate or otherwise, is required in order to constitute
this agreement the binding and enforceable obligation of Sellers.
8.2 No action, approval, consent or authorization, including without
limitation any action, approval, consent or authorization of any governmental or
quasi-governmental agency, commission, board, bureau or instrumentality, is
necessary for Sellers to constitute this agreement the binding and enforceable
obligation of Sellers or to consummate the transactions contemplated hereby.
8.3 The Company is a limited liability company duly organized under the
laws of the State of New York, and the Company validly exists and has not been
dissolved. The copies of the documents pertaining to the organization of the
Company provided by Sellers to Purchaser are true and complete copies of said
documents. The Company has no subsidiaries and neither owns nor has a right or
obligation to acquire any equity interest (or option therefore) of any
corporation, partnership, limited liability company, business trust or other
business or entity. The Company neither participates nor has an interest in any
joint venture or collective production, sales or marketing arrangement or
agreement.
8.4 Sellers are the owners of the Membership Interests, and the
Membership Interests are all of the issued and outstanding equity interests of
the Company. All of the Membership Interests are fully paid and non-assessable,
have not been assigned, pledged or hypothecated, and are free of all liens,
claims and encumbrances. There are no outstanding rights for subscription to any
additional interests of the Company by any person or entity. There are no unpaid
debts or liabilities to any member of the Company. At the Closing, Sellers will
transfer and convey, and Purchaser will acquire, good and marketable title to
the Membership Interests, free and clear of all liens, encumbrances, pledges,
security interests and claims whatsoever. Following the Closing, Purchaser shall
own 100% of Catalyst Financial, LLC.
8.5 The Company is the owner of all of the Acquired Assets enumerated
in Article 2 hereof, free of all liens, claims and encumbrances, except as may
be set forth herein.
8.6 There are no violations of any law or governmental rule or
regulation pending or, to the best of Sellers' knowledge, threatened against
Sellers, the Membership Interests or the Company. Sellers and the Company have
complied with all laws and governmental rules and regulations applicable to the
business or the Acquired Assets. The Business and operations of the Company have
been conducted and are now being conducted in compliance with all applicable
laws, rules and regulations of all regulatory authorities having jurisdiction
over the Company and/or relating to business, including but not limited to the
rules and regulations of the Commission and FINRA. The Company has made all
material filings and received all material approvals relating to the licenses
and/or registrations which are necessary in order for the Company to legally and
validly conduct its business after the Closing as it is currently and has
heretofore been conducted, including but not limited to all filings required by
the Commission and FINRA.
8.7 There are no judgments, liens, suits, actions or proceedings
pending or, to the best of Sellers' knowledge, threatened against Sellers, the
Membership Interests or the Company. Neither Sellers, the Membership Interests
nor the Company are a party to, subject to or bound by any agreement or any
judgment or decree of any court, governmental body or arbitrator which would
conflict with or be breached by the execution, delivery or performance of this
agreement, or which could prevent the carrying out of the transactions provided
for in this agreement, or which could prevent the use by Purchaser of the
Company or adversely affect the conduct of the business by Purchaser.
8.8 Except as set forth in Schedule 8.8, the Company has not entered
into, and is not subject to, any: (i) written contract or agreement for the
employment of any employee of the business; (ii) pension, profit-sharing,
retirement, bonus, insurance, or similar plan with respect to any employee of
the business; or (iii) similar contract or agreement affecting or relating to
the Company.
8.9 Except as provided for in this Agreement, at the time of the
Closing, the Company will not have any (secured or unsecured) creditors.
8.10 The Assumed Contracts are in full force and effect and without any
default by the Company thereunder. All copies of the Assumed Contracts provided
by Sellers to Purchaser are true and complete copies of the original Assumed
Contracts.
8.11 The Company has filed each tax return, including without
limitation all income, excise, property, gain, sales, franchise and license tax
returns, required to be filed by the Company prior to the date hereof. Each such
return is true, complete and correct, and the Company has paid all taxes,
assessments and charges of any governmental authority required to be paid by it
and has created reserves or made provision for all taxes accrued but not yet
payable. No government is now asserting, or to Sellers' knowledge threatening to
assert, any deficiency or assessment for additional taxes or any interest,
penalties or fines with respect to the Company.
8.12 Financial Statements. Sellers have provided Purchaser copies of
its audited financial statements for the years ended December 31, 2008, 2007 and
2006, un-audited for the nine months ended September 30, 2009, and monthly for
August 31, 2009, September 30, 2009 and October 31, 2009 (the "Financial
Statements"). The Financial Statements are true, correct and complete as of the
dates and for the periods set forth therein; have been prepared in accordance
with generally accepted accounting principles consistently applied; and fairly
represent the financial position of the Company at such dates and for such
periods. The Company had at said dates no liabilities or obligations of any
kind, contingent or otherwise, not reflected in Financial Statements. Except as
shown in the Financial Statements, the Company owns outright each asset or item
of property reflected therein, free of all liens, claims and encumbrances. Since
said dates and periods, there has been no material adverse change in the
financial condition, assets or liabilities of the Company. Except as disclosed
in the Financial Statements, the Company does not have any liability, and there
is no basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand against any of them giving
rise to any liability.
8.13. Litigation and Arbitration.
8.13.1 To Sellers' knowledge no claim, action, cause of action, suit,
proceeding, inquiry, investigation or Order by or before any Governmental
Authority, administrative body or arbitration or mediation panel, including the
Commission and/or FINRA, is pending or threatened against the Company. No order
of any Governmental Authority, arbitrator or mediator is outstanding against the
Company, the Membership Interests or the Business, operations or assets. Sellers
have no knowledge of any fact or circumstance which could reasonably be expected
to result in any other claim, action, cause of action, suit, proceeding,
inquiry, investigation or Order being filed against the Company.
8.13.2 No claim, action, suit, proceeding, inquiry or investigation has
been instituted and/or threatened to be instituted against the Company or the
Business.
8.14 Taxes
8.14.1 The Company has (i) filed all tax returns required to be filed
by any jurisdiction to which it is subject, (ii) paid in full on a timely basis,
including any extensions, all taxes due and claimed to be due by each such
jurisdiction, subject to audit by the taxing authority of such jurisdiction,
(iii) duly collected
or withheld and timely paid, including any extensions, all Taxes required to be
collected from others or deducted and withheld from any amounts paid to
employees or others, and (iv) properly completed and filed all sales tax
exemption certificates for sales where tax was not charged. Such tax returns
accurately and completely set forth all relevant items and accurately reflect
the tax liabilities for such periods. No tax deficiency or penalty has been
asserted or threatened by any such jurisdiction against the Company. No claim
has ever been made by an authority in a jurisdiction where the Company does not
file tax returns that it is or may be subject to taxation by that jurisdiction,
nor, to the knowledge of the Sellers or the Company, its counsel, its
representatives, and its tax advisers, is there any factual or legal basis for
any such claim. There is no audit of any tax return of the Company in progress.
The Company has not (i) waived any statute of limitations with respect to Tax
obligations or agreed to any extension of time with respect to a Tax assessment
or deficiency, (ii) been a party to any tax allocation or sharing agreement,
(iii) been a member of an affiliated group filing a consolidated federal income
tax return, nor taken any other action that could result in Liability for taxes
of an affiliated group under Treas. Reg. Section 1.1502-6 (or any similar
provision of state, local, or foreign law), as a transferee or successor, by
contract, or otherwise, or (iv) is currently the beneficiary of any extensions
of time within which to file any tax return.
8.14.2 To the knowledge of the Sellers, there is no threatened action,
suit, proceeding, investigation, audit, or claim against the Company or relating
to Taxes, there are no matters under discussion with any Governmental
Authorities with respect to Taxes that could result in an additional amount of
Taxes, and no Governmental Authority has indicated that it intends to audit any
Tax Return of the Company.
8.14.3 The earliest taxable period of the Company for which the statute
of limitations is still open is the fiscal year ended December 31, 2006 for New
York state taxes and the fiscal year ended December 31, 2006 for federal income
taxes. The Sellers have delivered to the Purchaser correct and complete copies
of all state, federal, and foreign income tax returns with respect to all
taxable periods ending on or after December 31, 2006, for which the statute of
limitations is still open.
8.14.4 There are no liens for taxes (other than for current Taxes that
are not yet due and payable or which are being contested in good faith) upon the
assets of the Company.
8.14.5 There are no joint ventures, partnerships, or other arrangements
or contracts to which the Company is a party and that could be treated as a
partnership for federal income tax purposes.
8.15. Contracts. All of the Assumed Contracts, whether written or oral,
express or implied or having any other legally binding basis, have been provided
to Purchaser. To Sellers' knowledge all such contracts are legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, and are in full force and effect to the
knowledge of Sellers. Neither the Company nor any other party to any such
contract is in material breach or default of its obligations thereunder, and
there exists no event or condition (including the transactions contemplated by
this Agreement) which has resulted or would result in a material breach or
default thereunder upon the giving of notice, the passage of time or both.
8.16. Insurance. Neither Sellers nor the Company currently maintains
any insurance policies (including, without limitation, all life insurance,
health insurance, death benefit and similar policies) for the benefit of the
Company or with respect to the Business conducted by the Company. To Sellers
knowledge there are no claims pending or threatened against the Company.
8.17 Labor Matters; Employees.
8.17.1 The Company is in compliance in all material respects with all
federal, state and local laws respecting employment and employment practices
(including, but not limited to Title VII of the Civil Rights Act of 1964, the
Americans with Disabilities Act and the Family and Medical Leave Act), terms and
conditions of employment, wages and hours, and nondiscrimination in employment.
The Company has not been charged by The National Labor Relations Board in any
unfair labor practice. No present or former employee of the Company has filed
within the applicable limitations periods or threatened any claim against the
Company under any Law, employment agreement or otherwise, for any reason,
including (i) wages or salary for any period other than the current payroll
period, (ii) any violation of any Law relating to minimum wages or maximum hours
of work, or (iii) any violation of any law relating to age, race, gender, or
national origin discrimination.
8.17.2 Except as set forth on Schedule 8.8, the Company is not a party
to, or subject to any obligation, liability or commitment with respect to, any
written or oral employment, compensation, consulting, collective bargaining,
severance pay or similar agreement. Schedule 8.8 sets forth a payroll list as of
the most recent available date, showing as of such date each employee of the
Company and his or her social security number, annual salary and date of hire.
8.17.3 Sellers have no knowledge of any employee who intends to
terminate his or her employment with the Company prior to or following the
Closing.
8.18 Disclosure. No representation or warranty by Sellers in this
Agreement and no statement by Sellers in any of the other documents or
agreements or previously disclosed to Purchaser contains any untrue statement of
a material fact or omits to state any material fact necessary in order to make
the statements made herein or therein, in light of the circumstances under which
they were made, not misleading.
ARTICLE IX
Representations and Warranties of Purchaser
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9. Representations and Warranties of Purchaser. Purchaser represents
and warrants to Sellers as follows:
9.1 Purchaser has full power and authority to carry out and perform its
undertakings and obligations as provided herein.
9.2 No action, approval, consent or authorization, including without
limitation any action, approval, consent or authorization of any governmental or
quasi-governmental agency, commission, board, bureau or instrumentality, is
necessary for Purchaser to constitute this agreement the binding and enforceable
obligation of Purchaser or to consummate the transactions contemplated hereby.
9.3 No representation or warranty by Purchaser in this Agreement and no
statement by Purchaser in any of the other documents or agreements or previously
disclosed to Sellers contains any untrue statement of a material fact or omits
to state any material fact necessary in order to make the statements made herein
or therein, in light of the circumstances under which they were made, not
misleading.
ARTICLE X
Additional Covenants and Warranties of Sellers and Purchaser
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10. Additional Covenants and Warranties of Sellers and Purchaser:
10.1 Restrictive Covenants. This Agreement does not impose any
restrictive covenants upon the Sellers.
10.2 Further Assurances; Cooperation. The parties shall from time to
time after the Closing, upon the request of any other party and without further
consideration, execute, acknowledge and deliver in proper form any further
instruments or documents, and take such further actions as such other party may
reasonably require, to carry out effectively the intent of this Agreement and
the other documents and agreements contemplated herein.
10.3 Cooperation on Tax Matters. Purchaser, the Company and Sellers
shall cooperate fully, as and to the extent reasonably requested by the other
party, in connection with the filing of Tax Returns pursuant to this Paragraph
and any audit, litigation or other proceeding with respect to Taxes. No party
shall file any Tax Return which is inconsistent with the express provisions of
this Agreement. All Tax Returns relating to federal or state income or franchise
taxes filed after the Closing affecting Sellers or the Company prior to the
Closing shall be submitted to the Sellers for review at least seven (7) days
prior to filing and Purchaser shall provide Sellers with reasonable access to
all of the Company's books and records with respect thereto. Purchaser
and Sellers further agree, upon request, to use their best efforts to obtain any
certificate or other document from any Governmental Authority or any other
Person as may be necessary to mitigate, reduce or eliminate any Tax that could
be imposed (including, but not limited to, with respect to the transactions
contemplated hereby). Sellers further agree, upon request, to provide Purchaser
with all information that is in Sellers' possession and that Purchaser may be
required to report pursuant to Paragraph 6043 of the Code and all Treasury
Regulations promulgated thereunder.
10.4 Right of Access and Copies. Purchaser shall make all of the
Company's corporate books and records available to Sellers for inspection and
copying for all periods prior to Closing for as long as any representations and
warranties survive.
10.5 Conduct of the Business. Sellers, until the Closing, shall:
10.5.1 conduct the Business in the normal, useful and regular manner,
including the hiring of at least two employees, to serve as investment bankers,
and obtaining all regulatory approvals necessary for the consummation of the
transactions contemplated by this Agreement;
10.5.2 preserve the Business and the goodwill of the Company and others
having relations with Sellers; and
10.5.3 give Purchaser and its duly designated representatives
reasonable access to the premises of the Company and the books and records of
the Company, and furnish to Purchaser such data and information pertaining to
the Company as Purchaser from time to time reasonably may request.
10.6 Transfer of Ongoing Business. It is the agreement and
understanding of the parties that the Company is being sold to Purchaser as an
ongoing business. Sellers shall endeavor to cause the operations of the Company
to continue be conducted, from the date of this Agreement until the Closing, in
substantially the same fashion as such operations have been conducted during the
preceding year, except that the it is anticipated that the Company will hire at
least 2 employees to pursue investment banking opportunities and the Sellers
shall endeavor to obtain all required approvals to transfer and convey the
Business to the Purchaser.
ARTICLE XI
Sellers' Representations Regarding the Business
-----------------------------------------------
11. In connection with the sale of the Membership Interests and the
transfer of the Business to the Purchaser the Sellers represent and warrant to
the Purchaser as follows:
11.1 The Company is a securities broker-dealer duly registered with the
Commission and registered in the jurisdictions set forth in Schedule 11.1
attached hereto to conduct business as a securities broker-dealer (the "BD
License"). All documents filed by the Company with the Commission, FINRA or any
State in connection with to the BD License are accurate and complete.
11.2 The Company is a member in good standing with FINRA (the "FINRA
Membership"). All documents filed by the Company with the Commission or FINRA in
connection with to the FINRA Membership are accurate and complete.
11.3 In connection with the Sellers' sale and transfer of the
Membership Interests and the Business to the Purchaser, the Sellers shall convey
and transfer all of its rights, benefits and interest in the BD License and
FINRA Membership to the Purchaser. The Sellers do not make any representations,
guarantees, warranties or promises, written or implied, as to any registered
representatives that may or may not maintain their professional registration
with the Company before during or after the sale. Nor do Sellers make any
representations, guarantees, warranties or promises, written or implied, as to
any customer accounts that may or may not maintain their accounts with the
Company before during or after the sale.
11.4 Sellers shall use their best efforts to obtain FINRA's approval of
the transactions contemplated by this Agreement, including Sellers' sale of the
Company and Business to Purchaser and the transfer of the BD License and FINRA
Membership to the Purchaser.
ARTICLE XII
Indemnification
---------------
12.1 Indemnification by Sellers.
12.1.1 General Indemnification. Sellers shall defend, indemnify, and
hold harmless Purchaser from, against and in respect of, any and all costs,
losses, claims, liabilities, fines, penalties, damages and expenses (whether or
not caused by negligence, including, without limitation, interest which may be
imposed in connection therewith, and court costs and reasonable fees and
disbursements of counsel) ("Damages") resulting from, arising out of or incurred
by Purchaser in connection with a claim by any party relating to: (i) any
Excluded Liabilities, (ii) any breach of the representations and warranties made
by Sellers in this Agreement, (iii) any failure or default by Sellers with
respect to the covenants or agreements made by Sellers in this Agreement and/or
any exhibits or schedules attached hereto, (iv) any claim against Purchaser or
the Company which is based upon or related to incidents and occurrences arising
out of the operation of the Business or the Company prior to the Closing Date or
(v) enforcement of this Paragraph.
12.1.2 Sellers' Indemnification Of Purchaser Relative To Customer
Complaints, Arbitrations And Other Legal Claims Relative To Customer Accounts
Prior To The Closing. Sellers shall defend, indemnify, and hold harmless
Purchaser from, against and in respect of, any and all Damages resulting from,
arising out of or incurred by Purchaser in connection with a claim by any a
customer or client of the Company accruing prior to the Closing Date.
12.2 Indemnification by Purchaser.
12.2.1 General Indemnification. Indemnification by Purchaser. Purchaser
shall defend, indemnify, and hold harmless Sellers from, against and in respect
of, any and all Damages resulting from, arising out of or incurred by Sellers in
connection with (i) any failure by Purchaser to timely pay, perform and
discharge the Assumed Liabilities, (ii) any breach of the representations and
warranties made by Purchaser in this Agreement, (iii) any failure or default by
Purchaser with respect to the covenants or agreements made by Purchaser in this
Agreement and/or any exhibits or schedules attached hereto, (iv) any claim
against Sellers which is based upon or related to incidents and occurrences
arising out of the operation of the Business or the Company after the Closing
Date, or (v) enforcement of this Paragraph.
12.2.2 Purchaser's Indemnification Of Sellers Relative To Customer
Complaints, Arbitrations And Other Legal Claims Relative To Customer Accounts
After The Closing. Purchaser shall defend, indemnify, and hold harmless Sellers
from, against and in respect of, any and all Damages resulting from, arising out
of or incurred by Sellers in connection with a claim by any a customer or client
of the Company accruing after the Closing Date.
12.3 Claims for Indemnification. If Purchaser or Sellers intend to seek
indemnity with respect to such claim under this Paragraph, such party must
promptly notify the other party ("Notified Party") of such claim. After receipt
of notice, the Notified Party shall undertake, at its sole expense, through
counsel of its choosing or its insurer the settlement or defense of the claim
(subject to the consent of the other party, such consent not to be unreasonably
withheld or delayed), and the other party shall reasonably cooperate in
connection with such efforts. The Notified Party shall permit the initial party
to participate in such settlement or defense through counsel of its choosing at
its sole expense. If the Notified Party does not promptly notify the initial
party that it elects to undertake the defense of a claim, the initial party
shall have the right to contest, settle, or compromise the claim in the exercise
of its exclusive discretion, but exercising reasonable business judgment, at the
expense of the Notified Party.
ARTICLE XIII
Miscellaneous Provisions
------------------------
13.1 Survival. The representations, warranties and covenants contained
herein or in any document, instrument, certificate or schedule furnished in
connection herewith shall survive the delivery of the Closing and shall continue
in full force and effect after the Closing, except to the extent waived in
writing.
13.2 Use of Pronouns. The use of the neuter singular pronoun to refer
to the Parties described in this Agreement shall be deemed a proper reference
even though the Parties may be an individual, a partnership, a corporation, a
LLC, or group of two or more individuals, partnerships, corporations or LLCs.
The necessary grammatical changes required to make the provisions of this
Agreement apply in the plural sense where there is more then one party to this
Agreement, and to either corporations, LLCs, partnerships or individuals, males
or females, shall in all instances be assumed as though in each case fully
expressed.
13.3. Governing Law. This Agreement shall be subject to and governed by
the laws of the State of Florida applicable to agreements made and performed
entirely therein. Any and all obligations or payments are due and payable in
Boca Raton, Florida.
13.4 Severability. If any provision of this Agreement should, for any
reason, be held in violation of any applicable law, and so much of this
Agreement be held unenforceable, then the invalidity of such a specific
provision in this Agreement shall not be held to invalidate any other provisions
in this Agreement, which other provisions shall remain in full force and effect
unless removal of the invalid provisions destroys the legitimate purposes of
this Agreement, in which event this Agreement shall be canceled.
13.5 Notices. All notices, demands and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been properly given if delivered by hand or by Federal Express courier or by
registered or certified mail, return receipt requested, with postage prepaid,
and addressed as follows:
Sellers' Address: Xxxxxx X. Xxxxxxx
0 Xxxxx Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Purchaser's Address: BKF Capital Group, Inc.
0 Xxxxx Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxx, Director
A party may change the address for notice by giving of such
change to the other party in writing.
13.6 Brokerage. The parties hereto represent and warrant to each other
that they have not dealt with any broker or finder in connection with this
Agreement or the transactions contemplated hereby, and no broker or any other
person is entitled to receive any brokerage commission, finder's fee or similar
compensation in connection with this Agreement or the transactions contemplated
hereby.
13.7 Further Assurances. In connection with the transactions
contemplated by this Agreement, the parties agree to execute and deliver such
further instruments, and to take such further actions, as may be reasonably
necessary or proper to effectuate and carry out the transactions contemplated in
this Agreement.
13.8 Changes Must Be In Writing. No delay or omission by either Sellers
or Purchaser in exercising any right shall operate as a waiver of such right or
any other right. This Agreement may not be altered, amended, changed, modified,
waived or terminated in any respect or particular unless the same shall be in
writing signed by the party to be bound. No waiver by any party of any breach
hereunder shall be deemed a waiver of any other or subsequent breach.
13.9 Captions and Schedules. The captions in this agreement are for
convenience only and are not to be considered in construing this Agreement. All
schedules attached hereto and referred to herein are an integral part of this
Agreement and are hereby incorporated herein by reference and expressly made a
part of this Agreement.
13.10 Counterparts. This Agreement may be executed in any number of
counterparts and any Party hereto may execute any such counterpart, each of
which when executed and delivered shall be deemed to be an original and all of
which counterparts taken together shall constitute but one and the same
instrument. This Agreement shall become binding when one or more counterparts
taken together shall have been executed and delivered (which deliveries may be
by facsimile or email) by the Parties.
13.11 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, executors,
administrators, successors and assigns.
13.12 Entire Agreement. This Agreement represents the entire
understanding of the Parties hereto. There are no oral agreements,
understandings, or representations made by any party to this Agreement that are
outside of this Agreement and are not expressly stated in it.
ARTICLE XIV
Definitions
-----------
14. For purposes of this Agreement, the following terms shall have the
meanings set forth below (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Acquired Assets" shall have the meaning set forth in Paragraph 2.1.
"Assumed Contracts" shall have the meaning set forth in Paragraph 2.1.1
"Business" shall have the meaning provided in the recitals to this
Agreement.
"Closing" shall mean the consummation of the transactions contemplated
by this Agreement.
"Closing Date" shall have the meaning set forth in Paragraph 5.
"Code" shall mean United States Internal Revenue Code, as amended.
"Company" shall mean Catalyst Financial, LLC, a New York limited
liability company
"Encumbrance" shall mean any lien, encumbrance, proxy, voting trust
arrangement, dower rights, pledge, security interest, collateral security
agreement, financing statement (and similar notices) filed with any Governmental
Authority, claim (including any claim as defined in the Code), charge, equities,
mortgage, pledge, burden, occupancy agreement, encroachment, objection, title
defect, option, easement, condition, reservation, covenant, restrictive
covenant, servitude, right-of-way, restriction on transfer of any nature
whatsoever and, for leased property or assets, lien or interest of the lessor or
of any mortgagee of the lessor arising by operation of law or pursuant to the
terms of the lease.
"Excluded Asset" shall have the meaning set forth in Paragraph 2.2.
"Governmental Authority" shall mean any government authority or
political subdivision thereof, whether federal, state, local or foreign, or any
agency, department, commission, board, bureau, court, tribunal, body,
administrative or regulatory authority or instrumentality of any such government
or political subdivision, including but not limited to the Commission and FINRA.
"Law" shall mean any law (including common law), rule, regulation,
restriction (including building or zoning code), code, statute, ordinance,
order, writ, injunction, judgment, decree or other requirement of a Governmental
Authority.
"Liability" shall mean any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated and whether due or to become due),
including any liability for Taxes.
"Losses" shall mean and include all demands, claims, actions, causes of
action, assessments, damages, losses, liabilities, judgments, settlements,
fines, penalties, sanctions, costs and expenses (whether absolute, accrued,
conditional or otherwise), including, without limitation, interest, penalties,
out-of-pocket expenses and reasonable attorneys' fees as incurred, and all other
reasonable costs of investigating and defending third-party claims as incurred.
"Purchaser" shall mean BKF Capital Group, Inc., a Delaware corporation.
"Order" shall mean any order, judgment, injunction, award, decree,
writ, rule or similar action of any Governmental Authority.
"Sellers" shall mean Xxxxxx X. Xxxxxxx and Xxxxxxxx Xxxxxxx.
"Tax" or "Taxes" shall mean any federal, state, local or foreign
income, gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under Code
Section 59A), customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value-added, alternative or add-on
minimum, estimated or other tax of any kind whatsoever, including any interest,
penalty or addition thereto, whether disputed or not.
"Tax Return" shall mean any return, declaration, report, claim for
refund or information return or statement relating to Taxes, including any
schedule or attachment thereto and any amendment thereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
XXXXXX X. XXXXXXX
By: ________________________
XXXXXXXX XXXXXXX
By: ________________________
BKF CAPITAL GROUP, INC.
By: ________________________
Xxxxxxx Xxxxx,
A duly authorized
representative
DISCLOSURE SCHEDULES
To The Purchase Agreement between BKF Capital Group, Inc.
and Xxxxxx X. Xxxxxxx and Xxxxxxxx Xxxxxxx, dated September , 2009
------------------------------------------------------------------
Schedule 2.3.1 (a) Description of Assumed Pre-Closing Expenses
Schedule 6.1.1 Form of Assignment Agreement between Sellers and
Purchaser
Schedule 8.8 Employees and Compensation Liabilities
Schedule 11.1 Jurisdictions in which Catalyst Financial, LLC is
registered as a securities broker-dealer
Schedule 2.3.1 (a)
Description of Assumed Pre-Closing Expenses
1. Cash compensation paid to Xxxx Xxxxxxxxx.
2. Cash compensation paid to Xxxxxx Xxxxx.
3. Cash compensation paid to Xxxxxx Xxxxx.
4. All business expenses, including travel and entertainment, incurred by
Xxxxxx X. Xxxxxxx, E. Xxxxxx zum Xxxxx, Xxxx Xxxxxxxxx and Xxxxxx
Xxxxx.
5. All expenses, including professional fees, incurred by Catalyst
Financial LLC in connection with satisfying the conditions precedent
contained in the Agreement, including but not limited to complying with
FINRA Rule 1017.
Schedule 6.1.1
Form of Assignment Agreement between Sellers and Purchaser
ASSIGNMENT AGREEMENT
This ASSIGNMENT AGREEMENT, entered into on June 30, 2009, between
Xxxxxx X. Xxxxxxx and Xxxxxxxx Xxxxxxx, individuals having an address at 0 Xxxxx
Xxxxxxx Xxxxxxx, Xxxxx 0X, Xxxx Xxxxx, Xxxxxxx 00000 ("Assignors"), BKF Capital
Group, Inc., a Delaware corporation having an address at 0 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 0X, Xxxx Xxxxx, Xxxxxxx 00000 ("Assignee") and Catalyst
Financial, LLC (the "Company"), a New York limited liability company having an
address at 0 Xxxxx Xxxxxxx Xxxxxxx, Xxxxx 0X, Xxxx Xxxxx, Xxxxxxx 00000.
RECITALS:
WHEREAS, the Company is engaged in business as a securities
broker-dealer and is duly registered with the United States Securities and
Exchange Commission and a member in good standing of the Financial Industry
Regulatory Authority.
WHEREAS, Assignors' are the owners of 100% of the membership interests
("Membership Interests") of the Company.
WHEREAS, Assignors desire to assign, sell, transfer and convey her
right, title and interest in the Membership Interests to Assignee; and the
Assignee desires to accept, acquire and assume the Membership Interests, upon
the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the covenants and agreements
hereafter set forth, and other valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, the parties hereto agree as
follows:
1. Assignor's Representation. Assignor represents and warrants that
they are the owners of the Membership Interests and that there are no liens,
claims, judgments or encumbrances on the Membership Interests, and that
Assignors have the power and authority to sell, convey, assign and transfer the
Membership Interests to Assignee.
2. Assignment of the Assignor's Interest. Assignors do hereby
irrevocably assign, convey, grant, transfer and deliver to Assignee, its
successors and assigns, forever, all of Assignor's right, title and interest in
and to the Membership Interests. The Assignors, the Company and the Assignee
acknowledge and agree that upon the execution and delivery of the Agreement, the
Assignee will own the Membership Interests, representing 100% of the equity
interests in the Company, and that the books and records of the Company shall
reflect the Assignee's ownership of a 100 % of the membership interests in the
Company.
3. Acceptance and Assumption. Assignee does hereby accept such
assignment, conveyance, grant, transfer and delivery and hereby assumes and
agrees to pay, perform and discharge, all of Assignors' rights and obligations
relating to the Membership Interests.
4. Consideration. The Assignors hereby acknowledges the receipt of good
and valuable consideration from Assignee in exchange for the assignment of the
Membership Interests to Assignee.
5. Effective Time. The assignment of the Membership Interests by
Assignors, and the acceptance of such assignment by Assignee, all pursuant to
this Agreement, shall be effective on the date this Agreement is executed and
delivered.
6. Miscellaneous Provisions.
a. This Agreement shall be subject to and governed by the laws of
the State of Florida applicable to agreements made and
performed entirely therein. Furthermore, both parties agree to
waive any and all right or claim to have any and all disputes
resolved through any arbitration process, regulatory or
otherwise, unless expressly agreed in writing by both parties.
b. All notices, demands and other communications required or
permitted to be given hereunder shall be in writing and shall
be deemed to have been properly given if delivered by hand or
by Federal Express courier or by registered or certified mail,
return receipt requested, with postage prepaid, to the parties
at the addresses set forth above.
c. In connection with the transactions contemplated by this
agreement, the parties agree to execute and deliver such
further instruments, and to take such further actions, as may
be reasonably necessary or proper to effectuate and carry out
the transactions contemplated in this agreement.
d. This Agreement may be executed in any number of counterparts
and any Party hereto may execute any such counterpart, each of
which when executed and delivered shall be deemed to be an
original and all of which counterparts taken together shall
constitute but one and the same instrument. This Agreement
shall become binding when one or more counterparts taken
together shall have been executed and delivered (which
deliveries may be by telephonic facsimile) by the Parties.
e. This agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, executors,
administrators, successors and assigns.
f. This Agreement represents the entire understanding of the
Parties hereto. There are no oral agreements, understandings,
or representations made by any party to this Agreement that
are outside of this Agreement and are not expressly stated in
it.
IN WITNESS WHEREOF, the parties have executed this agreement the date
first above written.
ASSIGNORS
XXXXXX X. XXXXXXX
---------------------------
Xxxxxx X. Xxxxxxx
XXXXXXXX XXXXXXX
---------------------------
Xxxxxxxx Xxxxxxx
ASSIGNEE
BKF CAPITAL GROUP, INC.
By:
-----------------------
Xxxxxxx Xxxxx
An Authorized Representative
Acknowledged by:
CATALYST FINANCIAL, LLC
By:
----------------------------
Xxxxxx X. Xxxxxxx, President
Schedule 8.8
Employees and Compensation Liabilities
1. Offer Letter, dated August 17, 2009 to Xxxx Xxxxxxxxx.
2. Offer Letter, dated August 18, 2009 to Xxxxxx Xxxxx.
3. Offer Letter, dated October 26, 2009 for Xxxxxx Xxxxx
4. Offer Letter, dated November 16, 2009 for E. Xxxxxx zum Tobel
5. Catalyst Financial, LLC Investment Banking Compensation Program
Schedule 11.1
Jurisdictions in which Catalyst Financial LLC is registered
as a securities broker-dealer.
Alabama Nevada
Alaska New Hampshire
Arizona New Jersey
Arkansas New Mexico
California New York
Colorado North Carolina
Connecticut North Dakota
Delaware Ohio
District of Columbia Oklahoma
Florida Oregon
Georgia Pennsylvania
Hawaii Rhode Island
Idaho South Carolina
Illinois South Dakota
Indiana Texas
Iowa Utah
Kansas Vermont
Kentucky Virginia
Louisiana Washington
Maine West Virginia
Maryland Wisconsin
Massachusetts Wyoming
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
