EXHIBIT 10.2
AMENDMENT TO SELECT ASSET PURCHASE AGREEMENT
AMENDMENT, dated June 17, 2002 (this "Amendment"), to that certain
Select Asset Purchase Agreement , dated as of May 29, 2002 (the "Original
Agreement"), among vFINANCE INVESTMENTS, INC., a Florida corporation ("Buyer"),
SOMERSET FINANCIAL PARTNERS, INC., a Delaware corporation ("SFP"), SOMERSET
FINANCIAL GROUP, INC., a Delaware Corporation ("SFG") (SFP and SFG, jointly, the
"Seller"), and Xxxxxxx Xxxx ("Xxxx") and Xxxxxxxx Xxxxxxxx ("Xxxxxxxx") (Xxxx
and Xxxxxxxx, jointly, the "Stockholders").
W I T N E S S E T H:
WHEREAS, the parties have entered into the Original Agreement; and
WHEREAS, the parties have determined to amend same.
NOW, THEREFORE, it is mutually agreed to by and between the parties as
follows:
1. The definition of "Independent Contractor" in Section 1.01
shall be amended to read as follows:
"Independent Contractor" means a duly licensed or registered individual
who is providing services pursuant to a valid Office of Supervisory
Jurisdiction ("OSJ") Agreement, as set forth in Exhibit H.
2. The first paragraph of Section 2.01 shall be amended to read
as follows:
Section 2.01. Purchase and Sale. Except as otherwise provided below,
upon the terms and subject to the conditions of this Agreement, Buyer
agrees to purchase from Seller and Seller agrees to sell, convey,
transfer, assign, and deliver, or cause to be sold, conveyed,
transferred, assigned, and delivered, to Buyer at the Closing, free and
clear of all Liens, other than Permitted Liens, all of Seller's right,
title, and interest in, to and under the assets, properties, and
business, of every kind and description, wherever located, real,
personal, or mixed, tangible or intangible, owned, held, or used in the
conduct of the Business by Seller or the subsidiaries at its Toms
River, NJ, and Westport, CT offices (the "Locations") as the same shall
exist on the Closing Date, including all assets and not disposed of in
the ordinary course of business as permitted by this Agreement, and all
assets of the Business thereafter acquired by Seller (the "Purchased
Assets"), and including, without limitation, all right, title, and
interest of Seller in, to and under:
3. Section 2.01(g) is hereby amended to read as follows:
(g) all of the capital stock (or other equity interests of Seller)
of Somerset Lending Services, Inc., a Delaware corporation,
Somerset Gold I, LLC, a
Delaware limited liability company, America's Credit Resource
Group, LLC, a Delaware limited liability company, and Somerset
Platinum I, LLC, a Delaware limited liability company (the
"Subsidiaries");
4. Section 2.07 is hereby amended to read as follows:
Section 2.07. Payment of Purchase Price. The Purchase Price for the
purchased assets (the "Purchase Price") shall be paid as follows:
(a) (i) The issuance, subject to the terms hereof, of the
Shares, the Options and the Warrants (as those terms are
defined below).
(ii) (X) The term "Shares" means 3,000,000 legend, restricted
common shares of Buyer's parent, vFinance, Inc. ("vFinance").
Of the Shares, subject to the other terms of this Section
2.07(a) and the terms of Section 2.07(b), (1) 1,000,000 Shares
(the "Initial Shares") shall be delivered at Closing to
individuals or entities other than Seller or Affiliates of
Seller (which shall, however, qualify as an Accredited
Investor under Regulation D under the 0000 Xxx) as Seller
shall designate in a schedule delivered to Buyer on or prior
to delivery of the Releases; provided, however, that if, as
set forth in Section 2.07(b)(ii), the Delivery Conditions, as
defined below, have not been satisfied, such Initial Shares
shall be held in escrow by the Escrow Agent subject to the
terms of this Agreement and the Escrow Agreement, as those
terms are defined below, to be released from escrow as
provided in subject the Escrow Agreement), and (2) 2,000,000
common shares (the "Additional Shares") shall be held in
escrow by the Escrow Agent subject to the terms of this
Agreement and the Escrow Agreement, to be released from escrow
in monthly installments commencing on last business day of the
first full calendar month subsequent to Closing; provided,
however, that the release from escrow of the Shares and the
Warrants deposited in escrow shall be further conditioned on
the satisfaction of both of the following conditions: (x) 80%
of the Key Transferred Employees set forth in the Disclosure
Schedule, shall have had all registration and licenses
transferred to Buyer, and such registration and licenses shall
remain with Buyer for a period of not less than thirty (30)
days after Closing; and (y) the average Gross Production of
such Transferred Employees (determined on a cumulative basis
as provided in the Escrow Agreement) received by Buyer (net of
any monies held by any clearing agents with respect to Gross
Production by the Transferred Employees) on a monthly basis
during such months, equals or exceeds $350,000.
(Y) Gross Production under this Section 2.07 shall be
cumulative, and excesses or shortfalls shall be carried
forward to the next month or months, provided, however, that
(i) subject to Section 2.07(b) :
(A) on such date prior to the date (the "First Anniversary
Date") which is the first anniversary of Closing that the
Gross Production equals or exceeds $4,200,000, any balance up
to a maximum of 1,500,000 Additional Shares will be released,
(B) on such date prior to the First Anniversary Date that the
Gross Production equals or exceeds $6,000,000, and additional
250,000 Additional Shares will be released, and
(C)on such date prior to the First Anniversary Date that the
Gross Production equals or exceeds $8,000,000,a final
250,000Additional Shares will be released :and
(D) if on the First Anniversary Date the Gross Production
shall not equal or exceed $8,000,000, no further shares shall
be released by the Escrow Agent and all remaining Escrowed
Consideration shall be immediately returned to the Buyer.
(iii) The term "Options" means non-transferrable options
issued to Seller or Affiliates of Seller (which shall qualify
as an Accredited Investor under Regulation D under the 0000
Xxx) to purchase 1,400,000 shares of vFinance, which options
shall be substantially in the form annexed as Exhibit G. Of
the Options, (1) 1,200,000 options shall be issued at Closing
solely to the Key Transferred Employees listed on Schedule
2.07(c)(i) and in the amounts set forth in said Schedule, and
(2) 200,000 options shall be issued as directed by Seller to
other Accredited Investors acceptable to Buyer and identified
within ninety (90) days of Closing Date. The options are not
cancelable but will vest in four equal annual installments
commencing on the first anniversary of Closing shall bear an
exercise price of $.35 per share, and shall carry piggy-back
registration rights as set forth in Section 6.03. To the
extent any such options are issued to Stockholders or Key
Transferred Employees, all vested rights thereunder shall
terminate 90 days after the termination of any
employer-employee relationship or OSJ relationship with Buyer,
unless same shall have been terminated for Cause in which
event such rights will terminate immediately, and all
non-vested rights shall expire upon such termination. The
options shall not have cashless exercise rights.
(iv) The term "Warrants" means warrants issued to individuals
or entities other than to Seller or Affiliates of Seller
(which shall qualify as an Accredited Investor) acceptable to
Buyer and identified within ninety (90) days of Closing Date
to purchase 500,000 shares of vFinance, which warrants shall
be substantially in the form annexed hereto as Exhibit G. Such
warrants shall bear an exercise price of $.35 per share, and
shall carry piggy-back registration rights as set forth in
Section 6.03. The warrants shall not have cashless exercise
rights.
(v) The term "Escrow Agent" means Xxxxxxx & Xxxxxx LLP, as
escrow agent pursuant to the terms of an escrow agreement (the
"Escrow Agreement") substantially in the form of Exhibit K to
this Agreement, or a successor escrow agent acting in such
capacity under the terms of the Escrow Agreement.
(vi) The term "Delivery Conditions" means satisfaction of all,
but not less than all, of (x) the Opinion Condition, (y) the
Releases Condition, and (z) the Agreements Condition.
(vii) The term "Opinion Condition" means the delivery to Buyer
of the Seller's Opinion (as defined below).
(viii) The terms "Releases Condition" means the delivery by
Seller to Buyer, with a copy to the Escrow Agent, of executed
covenants, addressed to Buyer, not to xxx (in the form annexed
as Exhibit K) from the holders of 85% in principal amount of
the Seller's equity or debt identified on Schedule 3.07-
Financing Profile dated May 31, 2002 (collectively the
"Releases).
(ix) The term "Agreements Condition" means that each of the
agreements referred to in Section 10.01(c) through (e),
inclusive, of this Agreement, as amended, but not less than
all of them, shall have been entered into with the Buyer.
(x) The term "Escrowed Consideration" means the Escrowed
Shares and Warrants (but not the Options) as the context may
require.
(b) (i) Neither the Buyer nor the Escrow Agent shall be
obligated to release or deliver any Shares or other Escrowed
Consideration at Closing or thereafter, unless no later than
forty-five (45) days of the Closing Date the Seller shall have
satisfied both the Opinion Condition and the Releases
Condition.
(ii) If both the Opinion Condition and the Releases Condition
have been timely satisfied but (i) on or prior to the Closing
Date, SFG shall be engaged, or under applicable regulatory
guidelines shall be required to engage, in a liquidating
transaction, or (ii) the Agreements Condition is not satisfied
within forty-five (45) days of the Closing Date, the Initial
Shares and the Warrants (as defined below) shall be delivered
to the Escrow Agent and released under the terms of the Escrow
Agreement pari passu with the release of the initial 1,500,000
Additional Shares.
(iii)Notwithstanding timely satisfaction of both the Opinion
Condition and the Releases Condition, the Escrow Agent shall
not be obligated to release any Shares or other Escrowed
Consideration unless the Seller on or prior to any escrow
release date shall have paid all approved and unpaid
commissions, payroll, bonuses and other forms of compensation
due to any Transferred Employee or employees of the Seller
incurred prior to the Closing Date as set forth in a schedule
to be delivered within forty-five (45) days of the execution
of this Amendment ,
(iv) The parties shall equitably adjust the number of Shares
hereunder at Closing, in respect of any unpaid or otherwise
outstanding obligations of Seller under any leases of real
property, equipment leases, and other agreements or contracts
not listed on Schedules 3.08, 3.11 and 3.11 (b) or
assumed by Buyer, which Buyer elected or is required to pay
after the Closing, will be assuming, or will be required to
assume at Closing.
(c) [INTENTIONALLY OMITTED]
5. Section 2.08 is hereby amended to read as follows:
Section 2.08. Closing. The closing (the "Closing") of the purchase and
sale of the Purchased Assets and the assumption of the Assumed
Liabilities hereunder shall take place at the offices of Xxxxxxx &
Prager, LLP as soon as possible, but in no event later than 10 business
days, after satisfaction of the conditions set forth in Article 10, or
at such other time or place as Buyer and Seller may agree. At the
Closing:
(a) Buyer shall deliver to Seller, Stockholders, or their
respective designees, or Escrow Agent the Shares, Options and
Warrants set forth in Section 2.07, as may be applicable;
(b) Seller and Buyer shall enter into an Assignment and
Assumption Agreement, and Seller shall deliver to Buyer such
special warranty deeds, bills of sale, endorsements, consents,
assignments, and other good and sufficient instruments of
conveyance and assignment as the parties and their respective
counsel shall deem reasonably necessary or appropriate to vest
in Buyer all right, title and interest in, to and under the
Purchased Assets; and
(c) Seller shall deliver all the capital stock (or other
equity interest) in the Subsidiaries by appropriate
instruments to Buyer's affiliate, vFinance Investment
Holdings, Inc.; and
(d) the opinion, certificates and documents required pursuant
to Article 10.
6. Section 10.01 shall be amended to read as follows:
Section 10.01. Conditions to Obligations of Buyer and Seller. The
obligations of Buyer and Seller to consummate the Closing are subject
to the satisfaction of the following conditions:
(a) No provision of any applicable law or regulation and no
judgment, injunction, order, or decree shall prohibit the
consummation of the Closing.
(b) All actions and consents by or in respect of or filings
with any governmental body, agency, official, or authority
required to permit the consummation of the Closing shall have
been taken, made, or obtained, including the requirements of
the Securities and Exchange Commission, the National
Association of Securities Dealers and CSC.
(c) Buyer and Stockholders shall have entered into an
acceptable Independent Contractor Agreement with Somerset
Financial Group, Inc. and Xxxxxxxx Xxxxxxxx with respect to
the Princeton, New Jersey office.
(d) Buyer shall have entered into acceptable Independent
Contractor Agreements with the Independent Contractors in its
existing Melville, New York and Westport, Connecticut offices.
(e) Buyer and each of Xxxxxxx Xxxxxxxx and Xxxxxxx Xxxxxxx
shall have entered into Employment Agreements acceptable to
Buyer.
7. Section 10.02 is hereby amended to read as follows:
Section 10.02. Conditions to Obligation of Buyer. The obligation of
Buyer to consummate the Closing is subject to the satisfaction of the
following further conditions:
(a) (i) Seller shall have performed in all material respects
all of its obligations and covenants hereunder required to be
performed by it on or prior to the Closing Date, (ii) the
representations and warranties of Seller contained in this
Agreement and in any certificate or other writing delivered by
Seller pursuant hereto (A) that are qualified by materiality
or Material Adverse Effect shall be true at and as of the
Closing Date as if made at and as of such date, and (B) that
are not qualified by materiality or Material Adverse Effect
shall be true in all material respects at and as of the
Closing Date as if made at and as of such time, and (iii)
Buyer shall have received a certificate signed by the Chief
Executive Officer of Seller to the foregoing effect.
(b) There shall not be threatened, instituted, or pending any
action or proceeding by any Person before any court or
governmental authority or agency, domestic or foreign, (i)
seeking to restrain, prohibit, or otherwise interfere with the
ownership or operation by Buyer or any of its Affiliates of
all or any material portion of the Purchased Assets or the
business or assets of Buyer or any of its Affiliates or to
compel Buyer or any of its Affiliates to dispose of all or any
material portion of the Purchased Assets or of Buyer or any of
its Affiliates or (ii) seeking to require divestiture by Buyer
or any of its Affiliates of any Purchased Assets.
(c) There shall not be any action taken, or any statute, rule,
regulation, injunction, order, or decree proposed, enacted,
enforced, promulgated, issued, or deemed applicable to the
purchase of the Purchased Assets, by any court, government, or
governmental authority or agency, domestic or foreign, that,
in the reasonable judgment of Buyer could, directly or
indirectly, result
in any of the consequences referred to in clauses 10.02(b)(i)
and 10.02(b)(ii) above.
(d) Buyer shall have received an opinion of Xxxxxx, Gotbetter
& Xxxxxxxx, Esqs., counsel to Seller, dated the Closing Date
in the form annexed hereto (the "Seller's Opinion"). In
rendering such opinion, such counsel may rely upon
certificates of public officers, as to matters governed by the
laws of jurisdictions other than New York and Delaware or the
federal laws of the United States of America, upon opinions of
counsel reasonably satisfactory to Buyer, and, as to matters
of fact, upon certificates of officers of Seller, copies of
which opinions and certificates shall be contemporaneously
delivered to Buyer.
(e) Execution and delivery of other relevant agreements,
including non-compete, employment agreements, trademark or
software licenses, leases, clearing, service or administrative
agreements, or other transition agreements.
(f) Seller shall have received all Required Consents, Other
Consents, Permits, and all consents, authorizations or
approvals from the governmental agencies referred to in
Section 3.05, in each case in form and substance reasonably
satisfactory to Buyer, and no such consent, authorization, or
approval shall have been revoked.
(g) Seller shall have delivered duly executed Releases as
required under Section 2.07 (a) (viii).
(h) Buyer shall have received, in all respects the Required
Approvals for each facility or real property leased, or
operated by Seller with respect to the Purchased Assets and
any required state or municipal transfer form from the Seller.
Such forms shall be satisfactory to Buyer in its sole
discretion and shall not impose upon Buyer any obligations or
liabilities to which Buyer shall not have consented in writing
prior to the Closing.
(i) Buyer shall have received all documents it may reasonably
request relating to the existence of Seller and the authority
of Seller for this Agreement, all in form and substance
reasonably satisfactory to Buyer.
8. The parties hereto acknowledge and agree that for purposes of the
Original Agreement and this Amendment, (a) the term "Agreement" means the
Original Agreement, as amended by this Amendment, and (b) the term "Closing" or
"Closing Date" as used in the Agreement means the date of this Amendment.
9. (a) Except with respect to the obligations of a party under Article
11 and Section 12.02 of the Original Agreement, Buyer, on the one hand, and
Seller and the Stockholders (collectively, the "Seller Group"), on the other
hand, acknowledge and agree that if both the Opinion Condition and the Releases
Condition are not satisfied within forty-five (45) days of the Closing, neither
the Buyer nor the Seller Group shall have any further obligations to the other
or to any Affiliate or designee of such party under the Agreement and each of
Buyer and each
member of the Seller Group specifically acknowledges and agrees, for itself and
its respective Affiliates and designees, that, in such event, it (or such
Affiliate or designee) will not make any claim in any forum (including, but not
necessarily limited to, any federal or state court, any arbitration board, any
government, quasi-government or regulatory body or agency) against any other
party hereto (or any Affiliate, principal, officer, director, agent,
representative, or employee thereof) on account of the Agreement or the
transactions contemplated thereby, including any claim with respect to actions
leading up to the execution and delivery of the Agreement.
(b) Each party agrees that any right to designate an Affiliate or
another designee to receive any benefits under the Agreement is expressly
conditioned upon such party's affirmatively obtaining the acknowledgment and
agreement of such Affiliate or designee, as the case may be, to the provisions
of this Section 9 of this Amendment.
10. Except as specifically set forth herein, nothing contained herein
shall in any way be deemed to effect or modify the representations, warranties,
rights and obligations of the respective parties as set forth in the Original
Agreement between the parties.
11. As hereby modified and amended, the Original Agreement shall remain
in full force and effect.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have executed this agreement as of the
date first above written.
vFINANCE INVESTMENTS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Executive Officer
SOMERSET FINANCIAL PARTNERS, INC.
By: /s/ Xxxxxxx Xxxx
----------------
Name: Xxxxxxx Xxxx
Title: Chief Executive Officer
SOMERSET FINANCIAL GROUP, INC.
By: /s/ Xxxxxxx Xxxx
----------------
Name: Xxxxxxx Xxxx
Title: Chief Executive Officer
XXXXXXX XXXX
By: /s/ Xxxxxxx Xxxx
----------------
XXXXXXXX XXXXXXXX
By: /s/ Xxxxxxxx Xxxxxxxx
---------------------
EXHIBIT K
In consideration of the payment to me, ________________________
(Releasor), of One Dollar ($1.00), the receipt whereof is hereby acknowledged, I
, being over eighteen (18) years of age, do hereby covenant and agree with
_______________________ (Releasee), that I will not institute any suit or action
at law or otherwise against vFinance Investments, Inc., its affiliates,
directors, officers, successors, assigns, heirs, executors or administrators,
and not institute, prosecute or in any way aid in the institution or prosecution
of any claim, demand, action or cause of action for damages, costs, loss of
service, expenses or compensation for or on account of any damage or loss,
whether developed or undeveloped, resulting or to result, known or unknown,
which I ever had, now have, or which I, my heirs, executors or administrators
hereafter can, shall, or may have for, or by reason of any matter, cause or
thing whatsoever relating to the purchase, acquisition and transfer of certain
assets (tangible and intangible) of Somerset Financial Group, Inc. and Somerset
Financial Partners to vFinance Investments, Inc., including any claim or demand
relating to any outstanding liability of Releasee or any affiliate thereof to
Releasor.
It is further understood and agreed that the payment of the said sum is
not to be construed as an admission on the part of _____________________
(Releasee) of any liability whatsoever.
The undersigned expressly reserves all rights of action, claims and
demand against any and all other persons whosoever not herein named.
IN WITNESS WHEREOF, I have hereunto set my hand this ___ day of
________, 2002.
-----------------------------------
Signature
County of
State of
On the ______ day of ______________________ in the year 2002 before me,
the undersigned, a notary public in and for said state, personally appeared
________________________, personally known to me or proved to me on the basis of
satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed
to the within instrument and acknowledged to me that he/she/they executed the
same in his/her/their capacity(ies), and that by his/her/their signature(s) on
the instrument, the individual(s), or the person upon behalf of which the
individual(s) acted, executed the instrument.
NOTARY PUBLIC
