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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
VFINANCE.COM, INC.,
NW HOLDINGS, INC.,
AND
ALVIN S. MIRMAN, ILENE MIRMAN, MARC N. SIEGEL, RICHARD L. GALTERIO,
VINCENT W. LABARBARA, ERIC M. RAND, AND MARIO MARSILLO, JR.
AS OF DECEMBER 22, 2000
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TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C> <C>
ARTICLE I. THE MERGER AND RELATED MATTERS............................................................. 2
ARTICLE II. CONVERSION OF SHARES....................................................................... 3
ARTICLE III. REPRESENTATIONS, WARRANTIES AND
COVENANTS OF SELLER........................................................................ 9
ARTICLE IV. REPRESENTATIONS, WARRANTIES AND COVENANTS
OF BUYER................................................................................... 32
ARTICLE V. COVENANTS OF SELLER........................................................................ 36
ARTICLE VI. COVENANTS OF BUYER......................................................................... 43
ARTICLE VII. CLOSING.................................................................................... 45
ARTICLE VIII. POST-CLOSING OBLIGATIONS................................................................... 51
ARTICLE IX. INDEMNIFICATION; DUE DILIGENCE; CONFIDENTIALITY............................................ 52
ARTICLE X. MISCELLANEOUS.............................................................................. 59
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SCHEDULE OF SCHEDULES AND EXHIBITS
SCHEDULE 2.2 Consummation of Funding Contingency
SCHEDULE 2.3 Purchase Price Allocation to Seller
SCHEDULE 2.10 Base Redemption Price
SCHEDULE 3.1 List of NWHI Officers and Directors
SCHEDULE 3.2(a) List of NWHI Capital Stock Shareholder List and
Dividend List
SCHEDULE 3.3 List of Subsidiary's Officers and Director
SCHEDULE 3.4 Merger Agreement Conflicts
SCHEDULE 3.6 Charter or Bylaw Violations in regards to Merger
Agreement
SCHEDULE 3.8 Employment Agreements, Consulting Agreements or
Similar Agreements and/or Arrangements for NWHI
and/or Subsidiary
SCHEDULE 3.9 Employee Welfare Benefit Plans maintained or
contributed to by NWHI or Subsidiary
SCHEDULE 3.10 Investigations, Settlements, Consents, Demands,
Actions or Proceedings Pending against or asserted by
NWHI, Subsidiary and Sellers before any court,
governmental body or arbitration tribunal
SCHEDULE 3.12 Material Violations
SCHEDULE 3.13 Title to Properties; Encumbrances for all of the
properties and assets (real, personal, and mixed,
tangible and intangible) reflected on the Financial
Statements for NWHI and Subsidiary
SCHEDULE 3.14 NWHI and Subsidiary's assets and inventory (including
stocks, bonds, warrants and other securities, etc.)
SCHEDULE 3.16 List of all Broker/Dealer State Licenses held and all
State Licences held for Individual Insurance Agents
and/or Insurance Agency
SCHEDULE 3.17 All Leases and Other Agreements for the Use of
Property to which each of NWHI or Subsidiary is a
party
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SCHEDULE 3.18 Any and All Customer Agreements with Seller, NWHI
and/or Subsidiary which, when taken in aggregate,
would constitute a material portion of either NWHI's
or Subsidiary's business (in excess of 15% of their
respective businesses) which intends to discontinue
the use of any service provided
SCHEDULE 3.19 All Accounts and Safety Deposit Boxes with Banks or
Other Financial Institutions Maintained By or on
Behalf of NWHI or Subsidiary
SCHEDULE 3.20 Any Agreements by NWHI or Subsidiary Relating to
Patents, Trademarks, Trade Names, Copyrights,
Technology, Know-how or Processes which are material
to the conduct of its business as currently conducted
SCHEDULE 3.21 List of Undisclosed Liabilities of NWHI and
Subsidiary
SCHEDULE 3.22 List of All Federal, State, Local, and Foreign Tax
Reports and Returns with respect to taxable periods
ending after December 31, 1998 required to be filed
by or on behalf of NWHI or Subsidiary which were not
filed or which were filed late and a list of any IRS
audits with the outcomes of such audit(s)
SCHEDULE 3.23 List of All Insurance Policies for NWHI or Subsidiary
currently in effect (with expiration dates)
SCHEDULE 3.24 Lists of all written agreements, contracts, and
commitments of each of NWHI and Subsidiary or by
which each of NWHI and Subsidiary is bound, which (i)
create indebtedness for money borrowed or any Liens,
(ii) (x) involve or may involve payments by or to
NWHI or Subsidiary of more than $25,000, and (y)
cannot be terminated by either NWHI or Subsidiary
without penalty upon notice of 60 days or less, or
(iii) are material to the business, financial
condition, or operations of either NWHI or
Subsidiary, as a whole, or which impose material
restrictions or obligations (other than the payment
of money) on either NWHI or Subsidiary in any case
SCHEDULE 3.29 Investigations, inquiries, enforcement actions,
consent orders and/or settlements entered into with
any state or federal agency or administrative body or
any self regulatory organization
SCHEDULE 4.3 Material Violations List
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SCHEDULE 4.8 Post Closing Revenue Allocations
SCHEDULE 7.1(a)(ix) List of any material adverse change in the business,
financial condition or operations of NWHI or
Subsidiary
SCHEDULE 10.6 List of any broker services used by NWHI or
Subsidiary in connection with the transaction
contemplated by this Agreement
EXHIBIT "A" Warrant Agreement
EXHIBIT "B" Closing Escrow Agreement
EXHIBIT "C" Employment Agreements
EXHIBIT "D" Non-Competition Agreements
EXHIBIT "E" [Intentionally Omitted]
EXHIBIT "F" [Intentionally Omitted]
EXHIBIT "G" Preferred Holders Release
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AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (the "Agreement") is made and entered
into as of this 22nd day of December, 2000, by and among vFINANCE.COM, INC., a
Delaware corporation (the "Buyer"), and NW Holdings, Inc., a Florida corporation
("NWHI") and Alvin S. Mirman, Ilene Mirman, Marc N. Siegel, Richard L. Galterio,
Vincent W. Labarbara, Eric M. Rand, and Mario Marsillo, Jr. (said individuals
being hereinafter referred to collectively as the "Seller").
W I T N E S S E T H
A. Seller owns all of the issued and outstanding common stock,
equity interests, warrants or claims to ownership interests of any sort
whatsoever (other than Series A Preferred Stock as hereinafter defined) of NW
Holdings Inc., a Florida Corporation;
B. NWHI owns all of the issued and outstanding capital stock,
equity interests, warrants of claims to ownership interests of any sort
whatsoever of First Level Capital, Inc., a NASD registered broker-dealer formed
under the laws of the state of Florida ("Subsidiary").
C. Seller desires to sell and Buyer desires to acquire the shares
and to immediately merge NWHI with and into the Buyer (the "Merger"); and
D. The parties hereto desire, but can provide no assurances, that
the Merger constitutes a tax-free reorganization for federal income tax purposes
under Section 368 (a)(i)(a) of the Internal Revenue Code, as amended, and the
regulations thereunder (the "Code").
NOW THEREFORE, in consideration of the premises, the mutual covenants
and agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
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ARTICLE I
THE MERGER AND RELATED MATTERS
1.1 The Merger. At the Effective Time and subject to the terms and
conditions of this Agreement and in accordance with the Delaware Corporation Law
and the Florida Business Corporation Code, as applicable, the Merger shall have
the effect set forth herein and in Section 259 of the Delaware Corporation Law
and the Florida Business Corporation Code.
(a) NWHI shall be merged with and into Buyer;
(b) the separate existence of NWHI shall cease; and
(c) Buyer shall continue as the surviving corporation.
1.2 Effective Time of Merger. The Merger shall become effective at
the Effective Time. The "Effective Time" shall be the time of Closing unless
otherwise agreed to by the parties.
1.3 Certificate of Incorporation; By-laws. The Certificate of
Incorporation and By-laws of the Buyer, as in effect immediately prior to the
Effective Time, shall become the Certificate of Incorporation and By-laws of the
surviving corporation.
1.4 Taking of Necessary Action; Further Action. The Buyer and
Seller, respectively, shall take all such further action as may be reasonably
necessary or appropriate in order to effectuate the transactions contemplated
and required by this Agreement. If at any time after the Effective Time, any
further action is necessary or desirable to carry out the purposes of this
Agreement or to vest the surviving corporation with full right, title, and
possession of all assets, properties, rights, privileges, powers and franchises
of the Buyer or Seller, the officers and directors of such corporations are
fully authorized in the name of the respective corporations or otherwise to
take, and shall take, all such lawful or necessary action.
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ARTICLE II
CONVERSION OF SHARES; MERGER PRICE
2.1 Conversion of Shares. In accordance with the terms and
conditions hereof, Seller shall exchange all of the Shares upon surrender to
Buyer of the certificates representing all of the shares of common stock, par
value $0.01 per share (the "Seller Common Stock"), for shares of Buyer Common
Stock, as defined below, payable as provided in Paragraphs 2.2 and 2.8 (the
"Merger Price").
2.2 Payment of Merger Price. The Merger Price to be paid to the
Seller subject to the merger price adjustment described in Section 2.9 herein
shall consist of: (i) One Million Seven Hundred Thousand (1,700,000) shares
("Merger Price Shares") of common stock of Buyer, par value $.01 per share, (the
"Buyer Common Stock") and (ii) warrants in the form attached hereto as Exhibit
"A" to purchase Five Hundred and Seventy-Five Thousand (575,000) shares of Buyer
Common Stock which shall have an exercise price of $2.25 per share and an
expiration date of five (5) years from the date of Closing (as hereinafter
defined) ("Merger Price Warrants").
2.3 Allocation of Purchase Price to Seller. The Merger Price shall
be allocated to the individuals comprising Seller as provided for in Schedule
2.3 hereof.
2.4 No Registration of Buyer Common Stock; Certain Restrictions.
Subject to Paragraph 2.6 hereof, the Buyer shall be under no obligation to
register with the United States Securities and Exchange Commission (the "SEC")
or any other state or local agency pursuant to any kind of registration
statement ("Registration Statement") any of the Buyer Common Stock to be
acquired by the Seller herein and accordingly, such stock may only be sold in
accordance with SEC Rule 144
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("Rule 144") promulgated by the SEC under the Securities Act of 1933, as amended
(the "1933 Act") and other applicable laws.
In addition, the Seller hereby warrants, covenants and agrees not to
sell, pledge, hypothecate or otherwise dispose of any of the Buyer Common Stock
to be acquired by the Seller herein for a period of at least one (1) year from
the date of the Closing (as hereinafter defined) regardless of whether such
acquired Buyer Common Stock shall become registered pursuant to Paragraph 2.6
hereinbelow prior to the one (1) year anniversary of the Closing.
The Buyer's Common Stock issuable to Seller shall bear a legend or
legends satisfactory to the Buyer with respect to restrictions on transfer under
applicable securities laws, including Rule 144, and with respect to restrictions
as described above.
2.5 No Price Protection. The Merger Price Shares and the number of
shares of Buyer Common Stock underlying the Merger Price Warrants will not be
subject to any price protection guarantee or "floor" from the Buyer.
2.6 Piggy-Back Registration Rights. If at any time prior to the
expiration of two years from the Closing, Buyer proposes to file with the SEC a
Registration Statement relating to an offering for its own account or the
account of others under the 1933 Act of any of its securities (other than on
Form S-4 or Form S-8 or their then equivalents relating to securities to be
issued solely in connection with the acquisition of any entity or business or
securities to be issued in payment of compensation for services or in connection
with stock options or other employee benefit plans, Buyer shall send to Seller
(or their assignee or distributees) written notice of Buyer's intention to file
a Registration Statement and of each of the individual's rights comprising
Seller under this Paragraph 2.6. If within twenty (20) days after receipt of
such notice, a Seller, or an assignee or distributee of
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a Seller, shall so request in writing ("Requesting Shareholder"), Buyer shall
include in such Registration Statement all or any part of the Buyer Common Stock
received by any Shareholder hereunder such person requests to be registered,
subject to the limitations of Paragraph 2.8 herein and the priorities set forth
below. If an offering in connection with which the Seller has registration
rights under this paragraph is an underwritten offering, then any part of the
Buyer Common Stock received by the Seller herein included in such Registration
Statement shall, unless otherwise agreed to by Buyer, be offered and sold using
the same underwriter or underwriters and on the same terms and conditions as
other shares of Buyer Common Stock included in such underwritten offering. The
Seller agrees to pay any underwriting discounts and fees in connection with such
registration statement. If the registration is to be an underwritten public
offering for the account of Buyer and the managing underwriter(s) advise Buyer
in writing, that in their reasonable good faith opinion, marketing or other
factors dictate that a limitation on the number of shares of Buyer Common Stock
which may be included in the Registration Statement (the "Registration Limit")
is necessary to facilitate and not adversely affect the proposed offering, then
Buyer may impose the Registration Limit on the offering and shall include
securities in such Registration Statement up to the Registration Limit in the
following priority: (i) first, up to the full number of securities Buyer
proposes to sell for its own account, (ii) second, up to the full number of
securities proposed to be registered for the account of the holders of
securities entitled to inclusion of their securities in the Registration
Statement by reason of demand registration rights, and (iii) third, the
securities requested to be registered by other holders of securities (including
Seller and its assignees or distributees) entitled to participate in the
registration pro rata based on the number each has requested to be included in
such registration.
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In connection with any Registration Statement in which a Requesting
Holder is participating, each such Requesting Holder agrees to severally and not
jointly indemnify, hold harmless and defend the Company, each of its directors,
officers, partners, employees, agents and each person, if any, who controls the
Company within the 1933 Act or the Securities Exchange Act of 1934, as amended
(the "1934 Act"), and any underwriter (as defined in the Act) for the Company,
and the directors and officers of, and each person, if any, who controls, any
such underwriter within the meaning of the Act or the 1934 Act (each, an
"Indemnified Person"), against any losses, claims, damages, liabilities,
judgments, fines, penalties, charges, costs, attorneys' fees, amounts paid in
settlement or expenses, joint or several, (collectively, "Claims") incurred in
investigating, preparing or defending any action, claim, suit, inquiry,
proceeding, investigation or appeal taken from the foregoing by or before any
court or governmental, administrative or other regulatory agency or body,
including without limitation the SEC, whether or not an indemnified party is or
may be a party thereto, to which any of them may become subject insofar as such
Claims (or actions or proceedings, whether commenced or threatened, in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact in a Registration Statement or any post-effective
amendment thereto or in any filing made in connection with the qualification of
the offering under the securities or other "blue sky" laws of any jurisdiction
in which all or any part of the Buyer Common Stock received by any Shareholder
hereunder are offered ("Blue Sky Filing"), or the omission or alleged omission
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which the statements
therein were made, not misleading (a "Violation"), in each case to the extent,
and only to the extent, that such Violation occurs in
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reliance upon and in conformity with information furnished to the Company by
such Requesting Holder for use in connection with such Registration Statement;
and such Requesting Holder will reimburse any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such Claim.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such Indemnified Person and shall survive
any transfer of all or any part of the Buyer Common Stock received by any
Shareholder hereunder. To the extent any indemnification by an indemnifying
party is prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable hereunder to the fullest extent permitted by law.
2.7 [INTENTIONALLY DELETED].
2.8 Closing Escrow. A closing escrow (the "Closing Escrow") with a
term of six months ("Term") shall be established for the purpose of retaining
five hundred fifty thousand (550,000) Merger Price Shares (the "Closing Escrow
Shares"), ratably from each individual comprising Seller, in accordance with the
terms of the Closing Escrow agreement and related stock pledge agreement
(collectively the "Closing Escrow Agreement") substantially in the form attached
hereto as Exhibit "B."
2.9 Merger Price Adjustment Based Upon Working Capital Deficit.
The parties acknowledge that the Merger Price has been determined in
part in reliance upon NWHI and Subsidiary's combined net working capital and
cash and marketable securities existing as of September 30, 2000. If at Closing,
said combined net working capital is less than $1,000,000.00 (the "Minimum Net
Capital") and/or said cash and marketable securities are less than $677,587.00
(the "Minimum Cash and Securities"), Seller shall immediately cure said
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shortfall(s) by delivering certified funds in the amount(s) thereof to Buyer.
2.10 Consummation of the Funding Contingency. The Buyer and the
Seller both agree that the transactions contemplated by this Agreement is
contingent upon (i) the Buyer contributing at Closing (as defined herein)
$1,000,000 in working capital to NWHI and (ii) at Closing, the holders of 100%
of NWHI's issued and outstanding preferred stock (hereinafter, the "Preferred
Stock," and the holders thereof, collectively, the "Preferred Holders")
receiving from NWHI, a minimum of $1,250,000, as provided in Schedule 2.10 (the
"Base Redemption Price") in redemption, exchange for and surrender of 100% of
the Preferred Stock.
2.11 Employee Stock Options. NWHI and Subsidiary do not maintain
any plans and are not parties to any agreement which grant options to any
employee or other person to acquire stock in NWHI or Subsidiary.
2.12 Closing. The closing of the transactions provided for in this
Agreement (the "Closing") shall take place at the offices of Sims Moss Kline &
Davis LLP, attorneys for Buyer, in Atlanta, Georgia on a mutually agreed date
within five (5) business days following the parties' determination that all
conditions to their respective obligations hereunder (other than those requiring
an exchange of a certificate, opinion, or other documents at the Closing or the
taking of other action at, or concurrently with, the Closing) have been
fulfilled, or such other time and place as the parties may mutually agree. In
the event that at the Closing no conditions to the obligations of the parties
hereto exist which have not been satisfied or waived, the parties shall (i)
deliver to each other at Closing the certificates, opinions, and other documents
required to be delivered at Closing under Article VII and (ii) at the Closing,
or as soon as practicable thereafter, the Buyer shall cause the Merger to be
consummated for NWHI and Buyer by making the
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following filings with:
(a) the Secretary of State of the State of Florida, Articles of
Merger in such form as required by, and executed in accordance
with the Florida Business Corporation Act;
(b) the Secretary of State of the State of Delaware, a Certificate
of Merger in such form as required by and executed in
accordance with the Delaware General Corporation Code.
ARTICLE III
REPRESENTATIONS, WARRANTIES
AND COVENANTS OF SELLER
Seller hereby jointly and severally represents, warrants and covenants
to Buyer as set forth in this Article III. Such representations, warrants and
covenants shall be true as of the date of this Agreement and as of the Closing.
3.1 Organization and Corporate Status of NWHI.NWHI is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Florida. NWHI has the corporate power to own or lease its
properties and to carry on its business as now being conducted in which the
business conducted by NWHI requires qualification. NWHI is duly qualified to do
business and is in good standing as a foreign corporation in each jurisdiction.
NWHI has made available to Buyer a true and correct copy of its Certificate of
Incorporation and Bylaws, each as amended to date. Schedule 3.1 lists the
directors and officers of NWHI and all names under which NWHI and Subsidiary
have transacted business as of the date of this
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Agreement.
3.2 NWHI Capital Structure.
(a) The authorized capital stock of NWHI consists of
1,000,000 shares of authorized Seller Common Stock, of which 50,000 shares are
issued and outstanding as of the date of this Agreement, and 1,000,000 shares of
authorized Preferred Stock, 200,000 of which are designated Series A Preferred
Stock, of which 125,000 shares are issued and outstanding as of the date of this
Agreement to the Preferred Holders. NWHI capital stock outstanding as of the
date of this Agreement (the "NWHI Capital Stock") is held of record by the
persons, with the addresses of record and in the amounts set forth on
Schedule 3.2(a) hereof, all of whom are "accredited investors" as defined in
Rule 501(a) of Regulation D promulgated by the 1933 Act. All outstanding shares
of NWHI Capital Stock are duly authorized, validly issued, fully paid and
non-assessable and not subject to preemptive rights created by statute, the
Certificate of Incorporation or Bylaws of NWHI or any agreement to which NWHI is
a party or by which it is bound. All of the outstanding shares of NWHI Capital
Stock have been issued or repurchased (in the case of shares that were
outstanding and repurchased by NWHI) in compliance with all applicable federal
and state securities laws. The designations, powers, preferences, rights,
qualifications, limitations and restrictions in respect of NWHI Preferred Stock
are as set forth in NWHI's Certificate of Incorporation. There are not
outstanding, any adjustments made or required to be made to the conversion rates
applicable to NWHI Preferred Stock set forth in NWHI's Certificate of
Incorporation. Other than the dividend description and amounts listed in
Schedule 3.2(a), there are no declared or accrued but unpaid dividends or
distributions or any unsatisfied Participation Rights (as described in the
Amended Articles of Incorporation filed
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December 2, 1998) of privately placed securities with respect to any shares of
NWHI Common Stock or NWHI Preferred Stock; and no Preferred Holder has exercised
any right to convert his holdings into NWHI Common Stock. NWHI has no other
capital stock authorized, issued or outstanding. The requisite vote required to
approve the Merger under applicable law, NWHI's Certificate of Incorporation,
NWHI's Bylaws, and any other agreement to which NWHI or any other stockholder of
NWHI is bound is as follows: the affirmative vote of a majority of the
outstanding shares of NWHI Capital Stock.
Seller owns both beneficially and of record, and has good and
marketable title to, the NWHI Common Stock, free and clear of any mortgage,
pledge, lien, encumbrance, security interest, restriction, charge or claim of
any kind (collectively, the "Liens"); and the NWHI Common Stock is not subject
to any restrictions or limitations prohibiting or restricting transfer, other
than restrictions on transferability imposed generally on securities by federal
or state securities laws, none of which will prevent the transactions
contemplated hereby. Preferred Stockholders own both beneficially and of record,
and have good and marketable title to, the NWHI Preferred Stock, free and clear
of any Liens; and the NWHI Preferred Stock is not subject to any restrictions or
limitations prohibiting or restricting transfer, other than restrictions on
transferability imposed generally on securities by federal or state securities
laws, none of which will prevent the transactions contemplated hereby. Each of
Seller and Preferred Stockholders has full right, power, and authority to sell
and transfer the NWHI Common Stock and NWHI Preferred Stock respectively,
pursuant to this Agreement. The certificates representing the NWHI Common Stock
and the NWHI Preferred Stock will at the Closing be genuine and, together with
any supporting papers, will at such time be in such form as to enable NWHI to
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reflect on its stock transfer books immediately, the transfer to Buyer of the
shares of NWHI Common Stock represented thereby and the redemption of the NWHI
Preferred Stock.
(b) There are no options, warrants, calls, rights,
commitments or agreements of any character, written or oral, to which NWHI is a
party or by which it is bound, obligating NWHI to issue, deliver, sell,
repurchase or redeem, or cause to be issued, sold, repurchased or redeemed, any
shares of the NWHI Capital Stock or obligating NWHI to grant, extend, accelerate
the vesting of, change the price of, otherwise amend or enter into any such
option, warrant, call right, commitment or agreement. There are no outstanding
or authorized stock appreciation, phantom stock, profit participation, or other
similar rights with respect to NWHI.
(c) All of the NWHI Capital Stock has been issued in
reliance upon and pursuant to validly exercised exemptions from registration;
and NWHI has complied with all applicable federal and state laws governing its
periodic offering and issuance of such capital stock.
3.3 Subsidiary Capital Structure. Other than First Level Capital,
Inc. ("Subsidiary"), NWHI does not have and has never had any subsidiaries or
affiliated companies. Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of Florida. The authorized capital
stock of Subsidiary consists solely of 1,000,000 shares of authorized common
stock, of which 2,000 shares are issued and outstanding as of the date of this
Agreement, and 1,000,000 shares of authorized preferred stock, of which no
shares are issued and outstanding as of the date of this Agreement. Subsidiary
has the corporate power to own and lease its properties and to carry on its
business as now being conducted. Subsidiary is duly qualified or licensed to do
business and in good standing as a foreign corporation in each jurisdiction in
which it
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conducts business. A true and correct copy of Subsidiary's charter documents and
bylaws, each as amended to date, has been made available to Buyer. Schedule 3.3
lists the directors and officers of Subsidiary as of the date of this Agreement.
All of the shares of capital stock of Subsidiary are owned of record and
beneficially solely by NWHI free and clear of any Liens; and said shares are not
subject to any restrictions or limitations prohibiting or restricting transfer,
other than restrictions on transferability imposed generally on securities by
federal or state securities laws, none of which will prevent the transactions
contemplated hereby. There are no options, warrants, calls, rights, commitments
or agreements of any character, written or oral, to which Subsidiary is a party
or by which it is bound obligating Subsidiary to issue, deliver, sell,
repurchase or redeem, or cause to be issued, sold, repurchased or redeemed, any
shares of the capital stock of Subsidiary or obligating Subsidiary to grant,
extend, accelerate the vesting of, change the price of, otherwise amend or enter
into any such option, warrant, call right, commitment or agreement. There are no
outstanding or authorized stock appreciation, phantom stock, profit
participation, or other similar rights with respect to Subsidiary.
All of Subsidiary's capital stock has been issued in reliance
upon and pursuant to validly exercised exemptions from registration; and
Subsidiary has complied with all applicable federal and state laws governing its
periodic offering and issuance of shares of such capital stock.
3.4 Authority; Enforceability. Each individual comprising Seller
and NWHI has all requisite corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of NWHI and Subsidiary. NWHI's Board of Directors has
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unanimously approved the Merger and this Agreement. This Agreement has been duly
executed and delivered by the Seller and NWHI and constitutes the valid and
binding obligation of Seller and NWHI, enforceable in accordance with its terms,
except as enforcement may be limited by general principles of equity, whether
applied in a court of law or a court of equity, and by bankruptcy, insolvency
and similar laws affecting creditors' rights and remedies generally. Except as
set forth on Schedule 3.4, the execution and delivery of this Agreement by
Seller and NWHI does not, and, as of the Effective Time, the consummation of the
transactions contemplated hereby will not, conflict with, or result in any
violation of, or default under (with or without notice or lapse of time, or
both), or give rise to a right of termination, cancellation or acceleration of
any obligation or loss of any benefit (a "Conflict") under: (i) any provision of
the Certificate of Incorporation or Bylaws of NWHI or any charter document of
Subsidiary or (ii) any mortgage, indenture, lease, contract or other agreement
or instrument, permit, concession, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to NWHI or Subsidiary or
their properties or assets. No consent, waiver, approval, order or authorization
of, or registration, declaration or filing with, any court, administrative
agency or commission or other federal, state, county, local or foreign
governmental authority, instrumentality, agency or commission (each a
"Governmental Entity") or any third party, including a party to any agreement
with NWHI or Subsidiary (so as not to trigger any Conflict) is required by or
with respect to NWHI or Subsidiary in connection with the execution and delivery
of this Agreement or the consummation of the transactions contemplated hereby,
except for (i) receipt of NASD Approval (as defined in Section 7.1(a)(vi)
hereof) by Buyer (ii) the filings of the Certificates of Merger with the
Delaware Secretary of State and the State of Florida, and (iii)
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such consents, waivers, approvals, orders, authorizations, registrations,
declarations and filings as may be required under applicable federal and state
securities laws, and (iv) such other consents, waivers, authorizations, filings,
approvals and registrations which, if not obtained or made, would have a
material impact on NWHI.
3.5 Partnerships. Neither NWHI nor the Subsidiary owns an
interest, directly or indirectly, in any general limited partnership or limited
liability company.
3.6 No Violation. Except as set forth in Schedule 3.6 and subject
to obtaining the NASD Approval, neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby:
(a) Violate any provision of the charter or Bylaws of
NWHI or Subsidiary;
(b) Violate, are in conflict with, constitute a default
(or an event which, with or without due notice or lapse of time, or both, would
constitute a default) under, or require the consent or approval of any other
person under, or cause or permit the acceleration of the maturity of, or excuse
performance by any person of its obligations under or by any such person to
terminate, any debt, obligation, contract, commitment or other agreement to
which Seller, NWHI or Subsidiary is a party or by which either is bound.
(c) Result in the creation or imposition of any Lien upon
any property or assets of Seller, NWHI, or Subsidiary under any debt,
obligation, contract, commitment or other agreement to which either is a party
or by which either is bound.
(d) Violate any material statute, rule, regulation or
other law or self-regulatory organization standards and rules or any judgment,
decree or order or material regulation or rule of any court or governmental
authority or arbitration tribunal binding upon Seller, NWHI or
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Subsidiary or violate or result in the revocation, cancellation, suspension or
adverse modification of any material franchise, license, permit or other
governmental authorization or approval of Seller, NWHI or Subsidiary.
(e) Require the consent, approval, authorization or
permit of, or notification to any governmental authority, except for any
applicable filings with and approval by the National Association of Securities
Dealers, Inc. ("NASD"), or the SEC.
3.7 Financial Statements. Seller has delivered to Buyer complete
and correct copies of audited, combined financial statements for NWHI and
Subsidiary for the last two (2) most recent fiscal years and for the six month
period ended June 30, 2000, and unaudited combined financial statements for NWHI
and Subsidiary for the period ended November 30, 2000 (said financial statements
being referred to herein collectively as the "Financial Statements" and attached
as Schedule 3.7(a) hereof). The Financial Statements include but are not limited
to (i) a statement of operations for the years ending 1998 and 1999 and (ii) a
balance sheet as of November 30, 2000, and related statement of cash flows and
related statements of changes in financial position, in each case presenting
combined information with respect to NWHI and Subsidiary. The Financial
Statements (x) have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods indicated, (y)
are accurate and complete in all material respects and fairly represent the
financial position of NWHI and Subsidiary on a combined basis, and the results
of operations and cash flows for the periods specified, and (z) Seller has
provided Buyer, upon the execution of this Agreement, with certificates of the
chief financial officers of NWHI and Subsidiary certifying that such is the
case. There are no material special or non-recurring items of income or expense
during the periods
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covered by the Financial Statements except as expressly noted therein.
3.8 Labor and Employment Contract Plans. Except as disclosed in
Schedule 3.8, neither NWHI nor Subsidiary is a party to any (a) employment
agreements, consulting agreements or similar arrangements which will survive the
Closing, (b) pension, profit-sharing, bonus, incentive compensation, deferred
compensation, stock option or stock purchase plans, or other arrangements,
agreements or plans providing for employee benefits (including but not limited
to vacation, sick leave, medical, hospitalization, life insurance and other
insurance plans, or related benefits) (collectively, the "Plans") under which
employees of NWHI or Subsidiary will continue to be eligible after Closing or
which Plans are qualified under ERISA (as hereinafter defined) or (c) collective
bargaining or union contracts. Schedule 3.8 contains an accurate and complete
list as of December 1, 2000, of the names and current salary or payment rates
(expressed on an annual basis) of all persons (including independent commission
agents) employed by or under contract with NWHI or Subsidiary whose current rate
of pay which, including any bonus or indirect compensation, if annualized, will
result in such person earning in excess of $50,000 per year. There is no pending
or, to Seller's, NWHI's or Subsidiary's knowledge, threatened labor dispute,
strike, work stoppage, or union campaign against NWHI or Subsidiary or which
threatens to affect in any materially adverse way NWHI's or Subsidiary's
business or assets. Each of NWHI and Subsidiary has complied in all material
respects with all of its obligations under the arrangements, agreements and
plans listed in Schedule 3.8 and with all applicable laws relating to the
employment of labor, including without limitation all provisions thereof
relating to wages, hours, equal opportunity, collective bargaining and the
payment of social security and other similar taxes. There are no violations of
such obligations or
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laws which are material to each of NWHI and Subsidiary.
3.9 ERISA. There are no "Pension Plans" within the meaning of the
Employee Retirement Income Security Act of 1974, as amended, and the regulations
thereunder ("ERISA"), which apply to NWHI or Subsidiary which: (a) have not been
operated in compliance with ERISA and IRC ss.401 or ss. 501; (b) have, on a plan
termination basis, any unfunded liabilities or any liabilities to the Pension
Benefit Guaranty Corporation; or (c) have had any prohibited transactions under
IRC ss.4975 or ERISA ss.406, any accumulated funding deficiencies (as defined in
ERISA ss.2302 or IRC ss.412), reportable events (as defined in ERISA ss. 4043)
or plan termination (as defined in Title 17 of ERISA or IRC ss. 411). Neither
NWHI nor Subsidiary maintains plans outside the United States. Except as set
forth in Schedule 3.9, neither NWHI nor Subsidiary maintains or contributes to
any employee welfare benefit plan, as such term is defined in ERISA, whether
insured or otherwise, and each such welfare plan is in material compliance with
the provisions of ERISA. Neither NWHI nor Subsidiary has been obligated to
contribute to any "multi employer plan" or "multiple employer plan" (as such
terms are defined in ERISA ss. 4001). Except as set forth in Schedule 3.9, no
filing, application or other matter with respect to any of such plans is pending
with the Internal Revenue Service, Pension Benefit Guaranty Corporation, United
States Department of Labor or other governmental body, none of such plans has
been terminated since September 1, 1974, neither the Pension Benefit Guaranty
Corporation, nor any other person has taken any action to terminate any of such
plans (and to the best of Seller's, NWHI's and Subsidiary knowledge, there
exists no basis for any such action) and no trustee has been appointed by any
court or governmental body to administer any thereof.
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3.10 Litigation.
(a) Schedule 3.10 accurately identifies all actions or
proceedings of any nature pending as of the date hereof by, against or with
respect to Seller, NWHI, Subsidiary or any officer, director, employee or
independent contractor of NWHI or Subsidiary before any court, governmental
body, agency, self regulatory organization ("SRO") or arbitration tribunal
other than proceedings disclosed on other schedules to this Agreement. Except
as disclosed in Schedule 3.10, neither Seller, NWHI nor Subsidiary (nor any
officer , director, employee or independent contractor of said entities) has
received prior to the date hereof, notice of the commencement or pendency of
any governmental or self regulatory investigation, enforcement action or
inquiry involving Seller, NWHI, Subsidiary, any officer, director, employee or
independent contractor of NWHI or Subsidiary or involving any securities
offered, solicited, sold, placed, underwritten or traded for their own account
by NWHI or Subsidiary.
(b) Except as disclosed in Schedule 3.10, there is, as
of the date hereof, no action or proceeding, whether threatened or pending,
against Seller, NWHI or Subsidiary, which questions the validity or legality of
this Agreement or any action taken or to be taken pursuant hereto or the
consummation of the transactions contemplated hereby or which, if determined,
would materially and adversely affect the business, financial condition or
operations NWHI or Subsidiary.
(c) Except as disclosed on Schedule 3.10, Seller are
unaware of any pending or threatened notice, demand, complaint, action,
proceeding, investigation or inquiry relating to the past or current sales
practices, supervisory activities or securities dealings of any employee of
Subsidiary who is deemed to be an NASD associated person.
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(d) Seller shall give Buyer prompt written notice of the
commencement of any notice, demand, complaint, action, proceeding, inquiry or
investigation involving Seller, NWHI, Subsidiary or the officers, directors,
employees, independent contractors or associated persons of NWHI and Subsidiary
after the date hereof that would be required to be described on Schedule 3.10
had such notice, demand, complaint, action, proceeding, inquiry or
investigation been initiated on the date hereof.
(e) Schedule 3.10 accurately identifies all settlements,
compromises, releases and consent orders to which Seller, NWHI and Subsidiary
are parties and which have not been satisfied in full as of the date hereof.
3.11 Court Orders and Decrees. Neither NWHI, Subsidiary nor any of
their officers or directors are in violation of any term of any material
judgment, decree, injunction, award, sanction or order of any court,
governmental agency, self-regulatory organization or arbitration tribunal
outstanding against it or him or by which it or he is bound. There is no such
outstanding judgment, decree, injunction, or order which could reasonably be
expected to have a material effect upon the financial condition, operations or
business of NWHI or Subsidiary.
3.12 Compliance with Instruments, Laws, Etc. Except as disclosed
on Schedule 3.12, neither NWHI nor Subsidiary is in violation of or has
received any notice of a violation of (a) any provision of its charter or
Bylaws, or any agreement pertaining to indebtedness, (b) any provision of any
other obligation, contract, commitment, or other agreement or (c) any federal
or state law, regulation, rule or administrative order.
3.13 Title to Properties; Encumbrances. Except as disclosed on
Schedule 3.13, NWHI and Subsidiary have good title to all of the properties and
assets (real, personal, and mixed,
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tangible and intangible) reflected on the Financial Statements or acquired
since November 30, 2000 and in each case such properties and assets are free
and clear of all Liens except, (a) materialman's, mechanic's, carrier's,
worker's, repairman's, and other similar liens arising or incurred in the
ordinary course of business or statutory landlord's liens under leases to which
NWHI or Subsidiary is a party, provided, however, that either the underlying
obligation is not in default or such obligation or Lien is being contested in
good faith and adequate reserves have been established for the payment or
discharge of such Lien to the extent required by generally accepted accounting
principles; (b) Liens disclosed in the Financial Statements; and (c) Liens for
taxes not yet delinquent or the validity or amount of which are being contested
in good faith, provided, however, that adequate reserves have been established
for the payment of such taxes to the extent required by generally accepted
accounting principles. The rights, properties and assets of NWHI and Subsidiary
include all the rights, properties and assets necessary for NWHI and Subsidiary
to conduct its businesses in the same manner as currently conducted.
3.14 Inventory and Assets. NWHI and Subsidiary's inventory and
assets (including stocks, bonds, warrants and other securities, etc.) are
listed in Schedule 3.14. The assets listed in Schedule 3.14 are assets that
NWHI and Subsidiary will retain, own, and maintain upon Closing and generally
includes all assets relating to the operation of the financial services and
securities businesses of NWHI and Subsidiary. The fixed assets currently in use
or necessary for the business and operations of NWHI and Subsidiary are in good
operating condition, normal wear and tear permitted, and have been maintained
in accordance with all manufacturer's specifications and warranties.
3.15 Technical Facilities. The technical facilities utilized by
NWHI and Subsidiary are
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in good operating condition, subject to normal wear and tear, are suitable for
the purpose for which they are used and are adequate and sufficient for all of
the current operations of NWHI and Subsidiary.
3.16 Status of Licenses.
(a) NWHI and Subsidiary have all state, federal and SRO
registrations and licenses that are necessary for their businesses and
operations, including, without limitation, (i) a broker-dealer license by
Subsidiary with the NASD, (ii) registration by Subsidiary as a broker- dealer
with the SEC, (iii) state licenses to conduct business as a broker-dealer in
all of the states listed on Schedule 3.16, and (iv) individual insurance agent
and/or insurance agency licenses for all of the states listed on Schedule 3.16
(collectively, the "Licenses"). Except as set forth in Schedule 3.16, all such
Licenses are valid and in full force and effect and shall remain valid and in
full force and effect for the benefit of Buyer at and following the Closing.
Seller's personal Licenses to transact the business and operations of NWHI and
Subsidiary shall be made available and shall be usable by Buyer to continue the
business of NWHI and Subsidiary without interruption at and after the Closing,
and such Licenses shall remain in full force and effect and usable by Buyer,
NWHI and Subsidiary so long as Seller remains employed by Buyer and/or NWHI or
Subsidiary. All of the state and federal Licenses of NWHI and Subsidiary in
their businesses and operations are set forth on Schedule 3.16. Except as
disclosed thereon as of the Closing, the Licenses identified on Schedule 3.16
are in full force and effect and have not been suspended, modified in any
material adverse respect, canceled or revoked, and each of NWHI and Subsidiary
has operated and will continue to operate in compliance with all material terms
thereof or any renewals thereof.
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(b) Except as identified on Schedule 3.16, all other
material permits, concessions, grants, franchises, and other governmental
authorizations and approvals necessary for the conduct of the businesses of
NWHI and Subsidiary, as currently conducted, have been duly obtained, are in
full force and effect, have not been suspended, modified, canceled or revoked,
and each of NWHI and Subsidiary has operated and, until the Closing, will
continue to operate in compliance with all applicable renewals thereof.
(c) Except as described in Schedule 3.16, none of
Seller, NWHI, or Subsidiary has notice of, and there is not pending, as of the
date hereof, any application, petition, objection, or other pleading with the
governmental body having jurisdiction or authority over any part of the
business or operations either NWHI or Subsidiary, which question the validity
of or contests any License or which, if accepted or granted, would result in
the revocation, cancellation, suspension, or any material adverse modification
of any license, permit, concession, grant, franchise, or other License of
either NWHI or Subsidiary.
(d) Seller shall give Buyer prompt written notice of the
filing of any material application, petition, objection or other pleading after
the date hereof that would be required to be described on Schedule 3.16 had
such action occurred prior to the date hereof.
3.17 Status of Leases and Agreements.
(a) Schedule 3.17 identifies completely and accurately
each lease and other agreement for the use of property to which each of NWHI or
Subsidiary is a party; and
(b) Except as disclosed in Schedule 3.17, all leases and
other agreements for the use of property to NWHI or Subsidiary, or by which
they are bound, are in full force and effect and neither Seller, NWHI, nor
Subsidiary has received any notice of termination or
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cancellation of any such lease or other agreement. There is no breach or
default by any of Seller, NWHI, or Subsidiary of any such lease and other
agreement which could result in the termination or cancellation thereof, or the
imposition of damages against any of Seller, NWHI, or Subsidiary. Seller agrees
to assist Buyer in assuming the leases more fully described in Section 3.17
hereof, which assumption is conditioned to Closing.
3.18 Customer Agreements. Except as provided in Schedule 3.18,
none of Seller, NWHI, or Subsidiary has any current customers of NWHI or
Subsidiary which, when taken in the aggregate, would constitute a material
portion of either NWHI's or Subsidiary's business (in excess of 15% of their
respective businesses) which intend to discontinue the use of any service
provided by either of NWHI or Subsidiary, including if the transactions
contemplated hereby are consummated.
3.19 Bank Accounts. Schedule 3.19 identifies all accounts and
safety deposit boxes with banks or other financial institutions maintained by
or on behalf of NWHI or Subsidiary, together with the authorized signatories to
such accounts.
3.20 Patents, Trade Names, Trademarks, Licenses, Etc.
(a) Except as provided in Schedule 3.20, neither NWHI
nor Subsidiary owns or has licensed or otherwise has the right to use any
patents, trademarks, trade names, copyrights, technology, know-how and
processes which are material to the conduct of its business as currently
conducted.
(b) Schedule 3.20 accurately identifies all significant
computer software for financial reporting, engineering functions and studies,
and inventory control, or used by NWHI or Subsidiary which NWHI or Subsidiary
will continue to have the right to use after the Closing.
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(c) The consummation of the transactions contemplated
hereby will not alter or impair in any material respect any intellectual
property rights of NWHI or Subsidiary. No claims have been asserted against
NWHI or Subsidiary by any person contesting the use by NWHI or Subsidiary of
the patents, trademarks, trade names, copyrights, technology, know-how, or
processes or challenging or questioning the validity or enforceability of any
such license or other right to use of such patent, trademark, trade name,
copyright, technology, know-how or processes, and to the best of Seller's
knowledge, there is no valid basis for any such claim and the use of such
patents, trademarks, trade names, copyrights, technology, know-how or processes
by NWHI or Subsidiary does not infringe on the rights of any person.
3.21 No Undisclosed Liability. Except as disclosed in Schedule
3.21, as of November 30, 2000, and as of the Closing, NWHI or Subsidiary has no
liabilities, whether absolute, accrued, contingent or otherwise, whatsoever
which are required under generally accepted accounting principles to be
disclosed or reserved in connection with in the Financial Statements or the
Closing Balance Sheet.
3.22 Taxes and Tax Returns.
(a) Except as set forth in Schedule 3.22, all federal,
state, local, and foreign tax reports and returns with respect to taxable
periods ending on December 31, 1998 and thereafter, required to be filed by or
on behalf of NWHI or Subsidiary have been duly filed on a timely basis and all
taxes, including, without limitation, income, gross receipts, ad valorem, value
added, turnover, sales, use, personal property (tangible and intangible), stamp
leasing, lease, user, leasing, excise, franchise, transfer, fuel, excess
profits, occupational (including without limitation, deposits required by law
to be made with respect to withholding taxes for
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employees) and interest equalization, and other charges of federal, state,
local at foreign taxing authorities, including all interest and penalties or
late charges on the foregoing (the "Taxes") attributable to the periods covered
by such reports and returns which Seller and NWHI and Subsidiary believe in
good faith to be due have been duly paid. Seller, NWHI and Subsidiary believe
in good faith that all such reports and returns, relating to NWHI and
Subsidiary, have been prepared in accordance with all laws and regulations
pertaining thereto.
(b) The reserves for taxes maintained by NWHI and
Subsidiary, all of which constitute current liabilities, will be adequate under
generally accepted accounting principles to cover the liability of such
entities for all Taxes for all periods ending on or prior to the Closing.
(c) There are no tax Liens upon any property or assets
of NWHI or Subsidiary other than Liens for Taxes not yet delinquent or the
validity or amount of which are being contested in good faith and for the
payment of which adequate reserves have been established to the extent required
by generally accepted accounting principles.
(d) Schedule 3.22 sets forth the latest taxable period
ending on December 31, 1998 and thereafter, for which the federal income tax
returns of NWHI or Subsidiary have been examined by the Internal Revenue
Service and the income taxes due as a result of such examination have been
finally determined. Schedule 3.22 sets forth all proposed adjustments which
have been raised in writing by the Internal Revenue Service in any examination
in respect of NWHI or Subsidiary, which, by application of similar principles,
reasonably could be expected to result in a proposed deficiency for any other
tax period of NWHI or Subsidiary not so examined. Except to the extent set
forth in Schedule 3.22:
(i) all deficiencies and assessments resulting
from examination of
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federal, state, and local tax returns and reports of NWHI or Subsidiary
with respect to taxable periods ending on December 31, 1998 and
thereafter, have been paid;
(ii) there are no outstanding agreements or
waivers extending the statutory period of limitation applicable to any
federal, state, local, or foreign return or report of NWHI or
Subsidiary for any period; and
(iii) there are no agreements by Seller, NWHI, or
Subsidiary for the extension of the time for the assessment of any
Taxes.
(e) Seller, NWHI, and Subsidiary do not currently have,
nor at any time on December 31, 1998 and thereafter, have had, in effect a tax
sharing or similar tax allocation agreement among and between each other, other
than:
(i) an election to allocate consolidated
federal income tax liability pursuant to Reg. Sec. 1.1552l(a)(1) and Reg. Sec.
1.1502-33(d)(2)(ii);
(ii) an allocation of federal, state and local
income and franchise taxes for financial statement purposes; and
(iii) any election as to a tax sharing or similar
tax allocation method which is deemed to be made under any federal, state or
local tax laws as a result of the filing of a combined or consolidated tax
return.
(f) True copies of all federal income tax returns of
NWHI and Subsidiary for all tax periods ending on December 31, 1998 and
thereafter, have been heretofore delivered to Buyer.
(g) NWHI, Subsidiary and Seller are not bound by any
contractual obligation to
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indemnify any other person or entity with respect to any taxes of any kind.
3.23 Insurance. NWHI and Subsidiary are covered as of the date
hereof under valid, outstanding, enforceable insurance policies, including but
not limited to commercial liability and broker errors and omission coverage, as
disclosed on Schedule 3.23. Each of NWHI and Subsidiary will continue to cover
themselves under such insurance policies in accordance with each of NWHI's and
Subsidiary's normal business practice from the date hereof through the Closing.
Such insurance policies are in full force and effect and all premiums due
thereon have been paid through the date of this Agreement and will be paid or
accrued, at a minimum, in accordance with generally accepted accounting
principles through the Closing. There are no pending claims which have been
made under any such insurance policies. NWHI and Subsidiary have delivered any
required notices and demands to the carrier insuring said policies according to
the term(s) thereof.
3.24 Contracts.
(a) Schedule 3.24 lists all written agreements,
contracts, insurance arrangements and commitments of each of NWHI and
Subsidiary or by which each of NWHI and Subsidiary is bound (complete copies of
which have been previously provided to Buyer), which (i) create indebtedness
for money borrowed or any Liens, (ii) (x) involve or may involve payments by or
to NWHI or Subsidiary of more than $25,000 individually, and (y) cannot be
terminated by either NWHI or Subsidiary without penalty upon notice of 60 days
or less, or (iii) are material to the business, financial condition, or
operations of either NWHI or Subsidiary, as a whole, or which impose material
restrictions or obligations (other than the payment of money) on either NWHI or
Subsidiary in any case. To the best of Seller's, NWHI's, and Subsidiary's
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knowledge, there are no oral agreements, contracts, or commitments of either
NWHI or Subsidiary or by which NWHI or Subsidiary are bound in excess of
$50,000 in the aggregate.
(b) Each of the agreements, contracts, and commitments
listed on Schedule 3.24 is valid and in full force and effect and (i) there is
no material default thereunder or claim of default or notice of cancellation
and (ii) there has not occurred any event which, with the passage of time or
the giving of notice (or both), would constitute a default thereunder, in any
case either on the part of either NWHI or Subsidiary or, to the best of
Seller's, NWHI's, and Subsidiary's knowledge, on the part of any other party
thereto.
(c) Except as set forth on Schedule 3.24, there is no
agreement, contract or commitment which limits the right of either NWHI or
Subsidiary to engage in any business or compete with any person.
(d) Seller has delivered or made available to Buyer
complete and correct copies of all written agreements, contracts and
commitments identified on any Schedule to this Agreement, together with all
written amendments thereto and waivers and consents with respect thereto.
3.25 Full Disclosure. Except as disclosed in this Agreement, no
fact exists which Seller, NWHI, and Subsidiary have not disclosed to Buyer
which has or would reasonably expect to have a material adverse effect on the
consummation of the transactions contemplated hereby or on the financial
condition, operations, or business of either NWHI or Subsidiary.
3.26 Changes. Since November 30, 2000, NWHI and Subsidiary each
have conducted their respective businesses only in the ordinary and usual
course consistent with reasonable business practice and have done none of the
acts described in subparagraph 5.1(b).
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3.27 Certain Transactions. None of the officers, directors, or
employees of the NWHI or Subsidiary is presently a party to any transaction
with either NWHI or Subsidiary (other than for services as employees, officers,
and directors), including any contract, agreement, or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments or sales
commission or fees to or from any officer, director, or such employee or, to
the knowledge of the Seller, any corporation, partnership, trust, or other
entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee, or partner.
3.28 Investment Intent; Accredited Investor Status. Each of the
individuals comprising Seller is an "accredited investor," as that term is
defined in Rule 501(a) of Regulation D promulgated by the Securities and
Exchange Commission under the Securities Act of 1933, and has knowledge and
experience in business and financial matters, that he or she is capable of
evaluating the merits and risks of an investment in the Buyer Common Stock
offered herein.
3.29 Regulatory Compliance.
(a) NWHI and Subsidiary have prepared, have made entries
upon and have maintained their books and records in compliance with the laws,
rules, regulations and standards of all federal, state and self regulatory
organizations that govern NWHI's and Subsidiary's operations.
(b) NWHI and Subsidiary have conducted their operations
(including but not limited to personnel supervision, sales practices and net
capital maintenance) in compliance with the laws, rules, regulations and
standards of all federal, state and self regulatory organizations that govern
NWHI's and Subsidiary's operations and have maintained all registrations and
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licenses necessary to their operations as required by any governmental
authority and self regulatory organization.
(c) Subsidiary has performed its activities, duties and
responsibilities as a broker, dealer, finder, underwriter or placement agent in
connection with any private offering, sale or placement of securities in
compliance with the laws, rules, regulations and standards of all federal,
state and self regulatory organizations that govern such activities, duties and
responsibilities.
(d) NWHI and Subsidiary have conducted reasonable due
diligence investigations into the issuers of those private securities which
NWHI and Subsidiary have underwritten, offered, sold or placed with any
investors.
(e) NWHI and Subsidiary have obtained all regulatory
approval necessary to operate branches as a broker-dealer in Sarasota and Boca
Raton, Florida, Red Bank, New Jersey and New York, New York.
(f) Seller, NWHI, Subsidiary and the officers and
directors of NWHI and Subsidiary have not been (and are not aware of any
circumstance which would result in their being) investigated by, not been the
subject of inquiry or an enforcement action by and not been sanctioned by or
entered into any consent order or settlement with any state or federal agency
or administrative body or any self regulatory organization except as identified
on Schedule 3.29.
3.30 Maintenance of Books and Records. NWHI and Subsidiary have
consistently maintained all corporate governance records and instruments;
capital stock transfer records; financial and accounting records; tax records;
and records reflecting the brokering, offering, underwriting, placing and sale
of securities in the ordinary course of business.
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3.31 Seller's Representations and Warranties: Seller knows of no
fact which would cause any representation or warranty of Seller contained in
this Agreement to not be true and complete.
ARTICLE IV
REPRESENTATIONS, WARRANTIES
AND COVENANTS OF BUYER
Buyer represents, warrants and covenants as set forth in this Article
IV. Such representations, warrants and covenants shall be true as of the date
of this Agreement and as of the Closing.
4.1 Organization, Standing and Capitalization of Buyer. Buyer is
a corporation duly incorporated, validly existing and in good standing under
the laws of the State of Delaware and has full corporate power and authority to
carry on its business and operations as currently conducted.
The authorized capital stock of Buyer consists of 25,000,000 shares of common
stock and 2,500,000 shares of preferred stock. As of September 30, 2000,
15,045,067 shares of common stock were issued and outstanding and no shares of
preferred stock were issued or outstanding.
4.2 Authority; Enforceability. Buyer has full corporate power and
authority to enter into this Agreement and to carry out the transactions
contemplated hereby. Buyer has taken all action required by law, its
Certificate of Incorporation, its Bylaws or otherwise to authorize the
execution and delivery of this Agreement and the consummation of transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by duly authorized officers of Buyer and constitutes the valid and
binding obligation of Buyer enforceable in
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accordance with its terms.
4.3 No Violation. Except as set forth in Schedule 4.3 and subject
to obtaining the regulatory approvals, neither the execution and delivery of
this Agreement nor the consideration of the transactions contemplated hereby
will:
(a) Violate any provision of the Certificate of
Incorporation or Bylaws of Buyer;
(b) Violate, be in conflict with, constitute a default
(or event which, with or without due notice or of time, or both, would
constitute a default) under, or require the consent or approval of any other
person under, or cause or permit the acceleration of the maturity of, any debt,
obligation, contract, commitment or other agreement (i) to which Buyer is a
party, and (ii) which is material to the business or financial condition of
Buyer;
(c) Result in the creation or imposition of any Lien
upon any property or assets of Buyer under any debt, obligation, contract,
commitment other agreement to which Buyer is a party or by which Buyer is
contractually bound; or
(d) Violate any statute or law or any judgment, decree,
order, regulation or rule of any court or governmental authority or arbitration
tribunal binding upon Buyer.
4.4 Investment Intent. Buyer is acquiring the Shares for its own
account and not with a view to, or for resale in connection with, the
distribution thereof.
4.5 Qualified Transferee. Buyer is financially and legally
qualified, and has the requisite financial, technical and business
capabilities, and assuming the accuracy of Seller's representations,
warranties, and covenants contained herein, to obtain all material regulatory
approvals promptly and to operate the businesses of NWHI and Subsidiary after
the Closing.
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There are no claims, suits or other proceedings before any court, governmental
agency or arbitration tribunal in which issues are raised which, if finally
determined adversely to Buyer, would have the effect of impairing Buyer's
ability promptly to obtain regulatory approvals.
4.6 Litigation. There is on the date hereof no action, suit or
proceeding pending or, to Buyer's knowledge, threatened against or involving
Buyer before any court, governmental agency or arbitration tribunal, which, if
determined, would materially and adversely affect the ability of Buyer to
consummate the transactions provided for herein. Buyer is not in violation of
any term of any judgment, decree, injunction or order outstanding against it or
them, which violation would have a material and adverse effect on the ability
of Buyer to consummate the transactions provided for herein. Buyer shall give
Seller prompt written notice of the commencement of any action, proceeding or
investigation involving Buyer after the date hereof that would, if adversely
determined, materially and adversely affect the ability of Buyer to consummate
the transactions provided for herein.
4.7 Compliance with Instruments, Laws, Etc. To the best of
Buyer's knowledge, Buyer is not in violation of and has not received any notice
of violation which would have a material adverse effect on (a) any provision of
its charter or Bylaws, or any agreement pertaining to indebtedness, (b) any
material provision of any other obligation, contract, commitment, or other
agreement, or (c) any material federal or state law, regulation, rule or
administrative order.
4.8 Post Closing Revenue Allocations. Following Closing, Buyer
and Seller shall comply with the allocations as set forth in Schedule 4.8
hereof.
4.9 Post Closing Subsidiary Operations. Buyer represents that
following Closing and unless an adverse financial circumstance would result, it
shall conduct the former business of
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NWHI and Subsidiary as a broker-dealer division, unit or subsidiary of Buyer or
a division or unit of a broker/dealer subsidiary of Buyer (the "LVL Division")
and shall permit the LVL Division to operate through its own management subject
to the LVL Division's annual operating budget approved by the LVL Division and
Buyer or its broker/dealer subsidiary if the LVL Division is a division or unit
thereof, and Buyer's, or its broker/dealer subsidiary's (if the LVL Division is
an operating division of such subsidiary) periodically prescribed corporate
directives, policies and practices. Excepting employment agreements to be
executed between Buyer and Seller, the LVL Division's management shall
determine its non-Seller employees' salaries and bonus structures subject to
its annual operating budget and sound business judgment; provided however, that
no bonuses shall be paid to the Seller and no bonuses shall be paid unless the
Division shall have operating income, after allocations as described in
Schedule 4.8 hereof, sufficient to pay said bonuses and concurrently fund its
other recurring operating expenses pursuant to and consistent with Buyer's
rules, procedures and practices governing salaries, bonuses, operating reserves
and financial ratios. Additionally, the LVL Division shall not enter into any
employment agreements or contracts or transactions outside the ordinary course
of business without first obtaining Buyer's, or its broker/dealer Subsidiary's
(if the LVL Division is an operating division of such subsidiary) written
approval. The LVL Division shall form an executive management committee to
direct its management decisions, which committee shall include Buyer's or its
broker/dealer Subsidiary's (if the LVL Division is an operating division of
such subsidiary) Chairman and/or Chief Executive Officer as a member. Buyer
further represents that if it acquires another entity which is engaged in a
business similar to the LVL Division, Buyer at its sole and absolute discretion
shall have the option of operating said entity
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separate and apart from the LVL Division or, alternatively, of combining said
entity and the LVL Division into a singular broker/dealer business unit having
consolidated revenues and earnings with the surviving broker/dealer entity
being determined in Buyer's sole and absolute discretion.
4.10 Buyer's Representations and Warranties. Buyer knows of no
fact which would cause any representation or warranty of Buyer contained in
this Agreement to not be true and complete.
ARTICLE V
COVENANTS OF SELLER
5.1 Conduct of Business Pending Closing. From the date hereof and
until the Closing or the termination hereof, Seller warrants and covenants
that, pending and as a condition precedent to Closing, except otherwise
consented to in writing by Buyer or as contemplated by this Agreement:
(a) It shall cause each of NWHI and Subsidiary :
(i) to conduct its business only in the
ordinary and usual course consistent with reasonable business practice and past
practice;
(ii) to use its best efforts to promote its
business and retain its customers, managers, employees, licensors, and
contractors; and
(iii) except for transactions in the ordinary and
usual course of business consistent with reasonable business practice, and
without being required to make any unusual expenditures or suffer any unusual
losses, to use its best reasonable efforts:
(w) to keep the organization of its
business intact, to preserve and maintain its assets, and to preserve the good
will of its suppliers, customers and others
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having business relations with it;
(x) to preserve the relationships and
goodwill between it and its employees and keep Buyer advised of any changes in
personnel that would affect its long-term operations;
(y) to continue to carry its existing
insurance, subject to variations in amounts required by the ordinary operations
of its business and any increases mutually agreed upon by Seller and Buyer; and
(z) to comply with and perform the
leases and other agreements to which it is a party or by which it is bound.
(b) It shall not permit either of NWHI or Subsidiary to:
(i) incur any indebtedness, obligation or
liability which would be characterized as a long term liability under generally
accepted accounting principles;
(ii) merge or consolidate with, or purchase
substantially all of the assets of, or otherwise acquire, any business of any
corporation, partnership, association or other business organization or
division thereof;
(iii) vary significantly its business methods and
practices with its present and prospective customers and subscribers, including
but not limited to the price and terms upon which it offers its service except
to the extent consistent with the ordinary and usual course of business;
(iv) grant any increase in salaries payable or
to become payable or grant any bonus to any officer, employee, agent, or
representative;
(v) increase benefits payable to any officer,
employee, agent, or
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representative under any Plan of NWHI or Subsidiary or by which NWHI or
Subsidiary will be bound after Closing or create, become bound by or modify any
such Plan.
(vi) grant any bonus, advance, compensation,
loan, severance or termination pay to, or enter into any employment or
severance agreement with, any of its directors, officers, or employees;
(vii) enter into, become bound by or modify, or
unless required by law, engage in any negotiations with respect to, any
collective bargaining or union agreement or commitment;
(viii) enter into any employment or consulting
agreement or other such agreement not terminable by its terms without penalty
or payment on 30 days or less notice after the Closing with any person;
(ix) declare, set aside, or pay any dividend or
make any distribution in respect of its equity securities;
(x) purchase, redeem, or otherwise acquire any
of its equity securities or reclassify, split up or otherwise dispose of any of
such equity securities;
(xi) issue, sell or otherwise dispose of any of
its equity securities, or create, sell or otherwise dispose of any options,
rights, conversion rights or other agreements or commitments of any kind
relating to the issuance, sale or disposition of any of its equity securities;
(xii) change its accounting method or treatment
of any material item;
(xiii) pay any obligation or liability, fixed or
contingent, other than current liabilities or the current portion of long-term
liabilities which arise prior to Closing;
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(xiv) enter into or become bound by any agreement
or commitment having a term in excess of one year or obligating it to pay more
than $25,000 in the aggregate under any such agreement or commitment;
(xv) enter into or become bound by any new or
renewed lease agreements or commitments having an economic value in excess of
$50,000 in aggregate;
(xvi) except in the ordinary and usual course of
business consistent with reasonable business practice, waive or compromise any
material right or claim;
(xvii) except in the ordinary and usual course of
business consistent with reasonable business practice, cancel, without full
payment, any note, loan, or other obligation owing to it;
(xviii) except in the ordinary and usual course of
business consistent with reasonable business practice, directly or indirectly
modify, amend, cancel, or terminate any of the material leases, contracts or
agreements to which it is a party, including but not limited to the partnership
or joint venture commitments;
(xix) except in the ordinary and usual course of
business consistent with reasonable business practice, acquire, lease, dispose
of any assets or make or obligate itself to purchase capital expenditures out
of the ordinary and usual course of business;
(xx) mortgage, pledge, or be subject to any lien
on any of its assets;
(xxi) take any actions outside the ordinary
course of business that would adversely affect the value of the assets relating
to the business of either NWHI or Subsidiary;
(xxii) enter into any agreement obligating it to do
any of the foregoing prohibited acts.
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5.2 Access and Information. Prior to Closing, the Seller, upon
reasonable notice, will allow the Buyer, its counsel, accountants, lenders,
capital providers and other agents and representatives, (i) to have full
access, during normal business hours, throughout the period prior to Closing to
the employees, agents, representatives, affiliates, files, customers,
suppliers, lenders, contracts, properties, books and records of each of NWHI
and Subsidiary, (ii) to discuss its affairs, finances and accounts with its
officers and accountants, and (iii) to be furnished all such information
concerning the business and affairs of NWHI and Subsidiary as Buyer or its
representatives may reasonably request.
5.3 No Solicitation By Each of NWHI and Subsidiary.
(a) Until this Agreement is terminated in accordance
with its terms, none of NWHI, Subsidiary, or Seller will take any action to (i)
initiate the submission of any acquisition, sale, merger financing, or capital
transaction with respect to NWHI or Subsidiary, (ii) cause or allow either NWHI
or Subsidiary to enter into any agreement with respect to any acquisition,
sale, merger, financing, or capital transaction or (iii) participate in
negotiations with, or provide information concerning either NWHI or Subsidiary,
their assets, liabilities, or business to any person (including any "person" as
defined in Section 13(d)(3) of the Exchange Act) in connection with any
acquisition, sale, merger, financing, or capital transaction. During such
periods of time, Seller, NWHI and Subsidiary will promptly communicate to Buyer
any solicitation or inquiry received by Seller, NWHI, or Subsidiary and the
terms of any proposal or inquiry that it may receive in respect of any
acquisition, sale, merger, financing, or capital transaction, or of any such
information requested from it or of any such negotiations or discussions being
sought to be initiated with it. Nothing in this Section 5.3 shall be construed
as prohibiting the Board of
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Directors of NWHI or Subsidiary or Seller from (i) making any disclosure to
NWHI shareholders, or (ii) responding to any unsolicited proposal or inquiry by
advising the person making such proposal or inquiry of the terms of this
Section 5.3. "Acquisition, sale, merger, financing or capital transaction"
means any proposed (i) acquisition, sale, merger, consolidation, financing or
similar transaction involving NWHI or Subsidiary, (ii) sale, lease or other
disposition directly or indirectly acquisition, sale, merger, consolidation,
financing, share exchange or otherwise of all or any substantial part of the
assets of NWHI or Subsidiary, (iii) issue, sale or other disposition of
securities representing 5% or more of the voting power of NWHI or Subsidiary
capital stock or (iv) transaction in which any person proposes to acquire
beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act)
of, or the right to acquire beneficial ownership of, or any "group" (as such
term is defined under the Exchange Act) shall have been formed which
beneficially owns or has the right to acquire beneficial ownership of, 5% or
more of the outstanding NWHI or Subsidiary capital stock.
(b) If Seller, NWHI, or Subsidiary breaches clause (a)
hereof, NWHI and Subsidiary, but not Seller, shall be jointly and severally
liable to pay to Buyer on demand, the sum of Fifty Thousand Dollars
($50,000.00). Such payment shall be the sole remedy of Buyer against Seller,
NWHI, and Subsidiary for a breach of this Section 5.3.
5.4 Post-Closing Availability. Seller hereby agrees that, from
time to time after Closing at Buyer's request and without further
consideration, Seller will execute and deliver such other instruments of
conveyance, assignment and transfer and take such other action as Buyer may
require to more effectively convey, transfer to and vest in Buyer, and to put
Buyer in possession of, the Shares purchased hereunder and otherwise to effect
the consummation of the
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transactions contemplated hereby, including, but not limited to, joining with
Buyer at Buyer's election, in making any tax elections or filings pursuant to
Section 368(a)(1)(a) of the Internal Revenue Code of 1986, as amended (the
"Code").
5.5 Employment Agreements. Subsidiary hereby agrees to enter into
employment agreements (the "Employment Agreement") with Alvin S. Mirman, Marc
N. Siegel, Richard L. Galterio, Vincent W. Labarbara, Eric M. Rand and Mario
Marsillo, Jr., substantially in the form attached hereto as Exhibit "C ."
5.6 Non-Competition Agreement. Each individual comprising the
Seller (except for Ilene Mirman) shall enter into a Non-Competition Agreement
with Buyer (the "Non-Competition Agreement") substantially in the form attached
hereto as Exhibit "D."
5.7 Best Reasonable Efforts. Seller shall use its best reasonable
efforts to consummate the transactions contemplated by this Agreement, merge at
Buyer's direction into an existing or to be formed or acquired broker/dealer or
other entity and to obtain as quickly as practicable the approvals and consents
necessary for such consummation.
5.8 Notice to Customers. Subject to Paragraph 9.6, Seller shall,
upon the request of Buyer, cooperate with and assist Buyer in informing
customers of NWHI and Subsidiary of the change in control of NWHI and
Subsidiary, and/or any name change, if applicable.
5.9 Goodwill Minimization. Seller shall use its best reasonable
efforts to help Buyer avoid or minimize the amount of goodwill Buyer will have
to record on its books as a result of the transaction contemplated by this
Agreement.
5.10 Disclosure as to Representations and Warranties. Seller shall
promptly inform Buyer in writing if at any time Seller, NWHI, or Subsidiary
shall become aware of any fact which
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would cause any representation or warranty of Seller contained in this
Agreement or in any certificate delivered pursuant hereto to not be true and
complete at and as of such time.
ARTICLE VI
COVENANTS OF BUYER
6.1 Notice to Customers. Subject to Paragraph 9.7, Buyer shall
cooperate with Seller in informing customers of NWHI and Subsidiary of the
change in control of NWHI or Subsidiary.
6.2 Offices. Subject to continuing regulatory approval and
consent, Buyer agrees to maintain an office in each of the following cities:
(i) New York, New York, (ii) Red Bank, New Jersey and (iii) Boca Raton,
Florida, for NWHI or Subsidiary for a period of at least two (2) calendar years
following the Closing so long as Subsidiary, operating as a wholly owned entity
or as a division, has not realized an operating loss, as reasonably determined
by Buyer, (i) for any two (2) consecutive quarters or (ii) at any time for any
fiscal year following the Closing. Such requirement to maintain an office shall
be deemed fulfilled if Buyer merges one or more locations into a single office
in an applicable city.
6.3 Access and Information. Until the termination of this
Agreement, as provided herein, the Buyer, upon reasonable notice, will allow
the Seller, its counsel, accountants, lenders, capital providers, and other
agents and representatives, (i) to have full access, during normal business
hours, throughout the period prior to the Closing to the employees, agents,
representatives, affiliates, files, customers, suppliers, lenders, contracts,
properties, books and records of Buyer, (ii) to discuss its affairs, finances
and accounts with its officers and
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accountants, and (iii) to be furnished all such information concerning the
business and affairs of Buyer as Seller or its representatives may reasonably
request. Such requests and inspections may include, but are not limited to,
technical due diligence of all the technology owned by and/or associated with
the business, environmental investigations of any real property, inspections of
all improvements used in connection with the business, investigations with
respect to compliance with applicable rules and regulations and with current
building and zoning standards, examinations of the tangible personal property,
review of all contracts and leases, licenses, review of accounts receivables,
accounts payable and examination of assets/securities inventory.
6.4 Conduct of Business Pending Closing. Buyer will not take any
action outside the ordinary course of business that would adversely affect the
value of the consideration to be received by Seller in accordance with
Paragraph 2.2 hereof.
6.5 Best Reasonable Efforts. Buyer shall use its best reasonable
efforts to consummate the transactions contemplated by this Agreement and to
obtain as quickly as practicable the approvals and consents necessary for such
consummation.
6.6 Disclosure as to Seller's Representations and Warranties.
Buyer shall promptly inform Seller if at any time Buyer shall become aware of
any fact which would cause any representation or warranty of Buyer contained in
this Agreement to not be true and complete at and as of such time.
6.7 Personnel; Options. After Closing, Buyer shall make
available, an aggregate of 250,000 options to be allocated among Subsidiary's
key personnel (which shall not include or be construed to mean any individual
who comprises the Seller) as Buyer may select and in such amounts as Buyer
shall determine in its sole discretion, for said key personnel to acquire
Buyer's
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common stock at $2.25 per share upon such terms, conditions, plans, policies
and procedures which Buyer now has or hereafter implements and consistent with
the rights of Buyer's employees who are similarly situated to said key
personnel. Said options shall grant the holders thereof standard piggyback
registration rights and shall vest over a four (4) year period at the rate of
50,000 options per year with the first 50,000 options to vest at Closing.
ARTICLE VII
CLOSING
7.1 Conditions Precedent to Closing.
(a) Buyer's obligation to close the purchase and sale of
the Shares shall be subject to satisfaction of all of the conditions set forth
in this subparagraph 7.1(a) (unless expressly waived in writing by it at, or
any time prior to, Closing):
(i) The representations and warranties of
Seller, NWHI, or Subsidiary contained in this Agreement or in any certificate
delivered pursuant hereto by or on behalf of Buyer or Seller, NWHI, or
Subsidiary shall have been true and complete when made and shall also be true
and complete at and as of the time of Closing (except for changes permitted
under Section 5.1 of Article V).
(ii) Seller, NWHI, and Subsidiary shall have
caused all covenants, agreements and conditions required by this Agreement to
be performed or complied with by each of them prior to or at Closing to be so
performed or complied with.
(iii) Seller shall have delivered to Buyer a
certificate, signed by each individual comprising Seller and dated as of the
Closing, certifying as to the fulfillment of the conditions set forth in
clauses (i) and (ii) of this subparagraph 7.1(a).
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(iv) The Chief Executive Officer or President of each of
NWHI and Subsidiary shall have delivered to Buyer a certificate, signed by each
of them and dated as of the Closing, certifying as to the fulfillment of the
conditions set forth in clauses (i) and (ii) of this subparagraph 7.1(a).
(v) No action or proceeding shall have been instituted
and remain pending by or before any court or other governmental body or
arbitration tribunal seeking, and there shall not be in effect any injunction,
order or decree of a court of competent jurisdiction the effect of which is, (x)
to restrain or prohibit or to recover damages in respect of the transactions
contemplated by this Agreement, (y) to revoke or suspend any material license,
permit, order or approval, or (z) to question the validity or legality of this
Agreement or any action taken or to be taken pursuant hereto or the consummation
of the transactions contemplated hereby, and there shall be no such action or
proceeding pending which, if adversely determined, would materially and
adversely affect, or injunction, order or decree in effect which materially and
adversely affects, the business, financial condition and operations of NWHI and
Subsidiary.
(vi) Regulatory approval from NASD, Inc. or any delegate
or division thereof to the change in ownership of First Level Capital, Inc.,
from Seller to Buyer shall have been obtained and the termination of any
required waiting period shall have occurred on terms reasonably satisfactory in
all material respects to Buyer and Seller ("NASD Approval").
(vii) All lessors under leases and parties to agreements of
NWHI and Subsidiary, other than such leases and agreements which do not require
consent for the consummation of the transactions contemplated by this Agreement,
shall have consented in writing to the consummation of the transactions
contemplated hereby. At Closing, Seller shall
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deliver to Buyer copies of all consents referred to in the preceding sentence.
(viii) [Intentionally Omitted].
(ix) Except as provided in Schedule 7.1(a)(ix), since
December 31, 1999, there shall not have been any material adverse change in the
business, financial condition or operations of NWHI or Subsidiary.
(x) All corporate proceedings in connection with the
transactions contemplated by this Agreement, and all documents and instruments
incident thereto, shall be reasonably satisfactory in all material respects in
substance and form to Buyer.
(xi) The Employment Agreement attached hereto as Exhibit
"C" shall have been executed by individuals comprising Seller, i.e., Messrs.
Mirman, Siegel, Galterio, Labarbara, Rand and Marsillo.
(xii) The Non-Competition Agreements shall have been
executed by all individuals comprising Seller and are attached hereto as Exhibit
"D".
(xiii) Stock certificates representing the Shares shall have
been duly endorsed for transfer to Buyer, or accompanied by a proper and duly
executed instrument of assignment to Buyer, and shall have all necessary stock
transfer stamps attached.
(xiv) The originals (to the extent reasonably available to
Seller) or duplicates of all of the minute books, stock books and all other
corporate and business records or documents of NWHI and Subsidiary shall have
been delivered or made available to Buyer;
(xv) Either an affidavit that Seller is not a foreign
person (as provided in I.R.C. ss.1445(b)(2) or an affidavit of NWHI and
Subsidiary that complies with I.R.C. ss.1445(b)(3) shall have been properly
executed.
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(xvi) All books and records of NWHI and Subsidiary shall
have been delivered or made available to Buyer at a location specified by Buyer.
(xvii) All holders of Seller's common stock entitled to vote
have unanimously approved this Agreement at the duly noticed annual or special
meeting of NWHI's and Subsidiary's shareholders.
(xviii) At Closing, the combined net working capital of NWHI
and the Subsidiary shall be at least the Minimum Net Capital and the combined
cash and marketable securities of said entities shall be at least the Minimum
Cash and Securities.
(xix) Seller shall have audited financials statement for
its two most recent fiscal years and for the period ending June 30, 2000, in
addition to unaudited reviewed financial statements for the period ending
September 30, 2000.
(xx) Seller shall have executed the Escrow Agreement and
Closing Escrow Agreement and respective Stock Pledge Agreements and shall have
pledged the respective Escrowed Securities and Closing Escrow Shares pursuant
thereto.
(xxi) Seller shall have caused NWHI to redeem the
$1,250,000 balance of the Preferred Redemption to the Preferred Holders, subject
to Buyer's review and approval in its sole discretion (and contingent upon NWHI
in the sole discretion of Buyer having adequate liquid assets and/or assets
prior to Closing to effectuate such redemption); and Seller shall have delivered
to Buyer redeemed share certificates of all the Preferred Holders.
(xxii) NWHI shall have delivered the Certificates of Merger
identified in Section 1.1 herein.
(xxiii) Seller shall have caused NWHI to obtain releases in
the form of
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Exhibit "G" attached hereto from all the Preferred Holders, releasing and
discharging NWHI and Subsidiary from any claims, demands, liabilities, losses,
expenses, preferences, participation rights and distributions arising in
connection with their purchase, ownership and retention of the Preferred Stock.
(xxiv) The results of Buyer's due diligence of NWHI and
Subsidiary shall be satisfactory to Buyer in its sole discretion.
(b) Seller's obligation to close the purchase and sale of the
Shares shall be subject to satisfaction of all of the conditions set forth in
this Subparagraph 7.1(b) (unless expressly waived in writing by it at, or any
time prior to, Closing):
(i) The representations and warranties of Buyer contained
in this Agreement or in any certificate delivered pursuant hereto by or on
behalf of Buyer shall have been true and complete when made and shall also be
true and complete at and as of the time of Closing.
(ii) Buyer shall have caused all covenants, agreements and
conditions required by this Agreement to be performed or complied with by it
prior to or at Closing to be so performed or complied with.
(iii) Buyer shall have delivered to Seller a certificate,
signed by its chairman, president or a vice president, and dated as of the
Closing, certifying as to the fulfillment of the conditions sat forth in clauses
(i) and (ii) of this subparagraph 7.1(b).
(iv) There shall not be in effect any injunction, order or
decree of a court of competent jurisdiction that prohibits or delays
consummation of the sale of the Shares by Seller and no action or proceeding
alleging that the consummation of the sale of the Shares by
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Seller violates or will violate any federal or state law, rule or regulation
shall have been instituted by or before any court or governmental body to
restrain or prohibit Seller from selling, or to recover damages from Seller in
respect of the sale of the Shares, unless Buyer elects to fully indemnify and
defend Seller in respect thereof.
(v) NASD Approval to the change in ownership of First
Level Capital, Inc., from Seller to Buyer of the transactions contemplated by
this Agreement shall have been obtained and the termination of any required
waiting period shall have occurred on terms reasonably satisfactory in all
respects to Buyer and Seller.
(vi) [Intentionally Omitted].
(vii) All corporate proceedings in connection with the
transactions contemplated by this Agreement and all documents and instruments
incident thereto, shall be reasonably satisfactory in all material respects in
substance and form to Seller.
(viii) Buyer shall have furnished evidence to the reasonable
satisfaction of Seller that Buyer is contributing the working capital funding to
NWHI pursuant to Paragraph 2.10 hereof.
(ix) Buyer shall have delivered the Merger Price Shares to
Seller in such amounts as described in Paragraph 2.2 hereof together with the
Merger Price Warrants, subject to the contribution of the Closing Escrow Shares
pursuant to the Closing Escrow Agreement as described in Paragraph 2.8 hereof.
(x) The shareholders and board of directors of Buyer
shall have approved this Agreement.
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ARTICLE VIII
POST-CLOSING OBLIGATIONS
8.1 Closing Balance Sheet. In connection with Closing, Seller
shall present its management's internal accounting of the balance sheets and
working capital (with working capital defined as current assets minus current
liabilities determined in accordance with generally accepted accounting
principles) of NWHI and Subsidiary as of the date of Closing (the "Closing
Balance Sheet") and management's representation affirming such balance sheet.
The Closing Balance Sheet shall fairly represent the financial position of NWHI
and Subsidiary as of the date specified; and the working capital and cash and
marketable securities of each of NWHI and Subsidiary and shall not be less than
as reflected on the current financial statements of each of NWHI and Subsidiary,
dated as of September 30, 2000 (the "Current Financial Statements"). Seller
shall prepare the Closing Balance Sheet and deliver it to Buyer no later than
twenty (20) business days following the Closing. Buyer shall have twenty (20)
business days following receipt thereof to review the Closing Balance Sheet and
to agree to any adjustments to the same, if and as appropriate. If Buyer and
Seller cannot agree on said adjustments, then their respective accountants shall
designate a third independent accountant to review and finally determine any
disputed adjustments and to assess his expenses against any or all of the
parties, as he shall deem appropriate. Seller, NWHI and Subsidiary represent and
warrant that the Closing Balance Sheet, as finally determined, shall reflect a
combined net working capital of at least the Minimum Net Capital and cash and
marketable securities of at least the Minimum Cash and Securities. If it is
determined that NWHI and Subsidiary have not achieved the Minimum Net Capital
and the Minimum Cash and Securities, Seller shall immediately cure said
shortfall(s) by delivering certified funds in the amount(s) thereof to Buyer. If
Seller shall fail to so deliver said funds,
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Buyer shall have the right to liquidate a sufficient amount of Closing Escrow
Shares which are held in the Closing Escrow to cure said deficiency.
8.2 Consolidated Financial Statements. Buyer shall prepare and
Seller shall cooperate in the preparation of consolidated financial statements
of NWHI, Subsidiary and Buyer as required by SEC rules and regulations.
8.3 Cooperation. Following the Closing, Seller shall cooperate in
the execution of any documents, and the taking of any actions which are
reasonable and necessary to effectuate the transaction contemplated by this
Agreement and the achievement of its intended objectives.
8.5 Power of Attorney. NWHI, Subsidiary and the individuals
comprising Seller, hereby irrevocably appoint and designate Alvin S. Mirman and
Richard L. Galterio as their collective and individual true and lawful attorneys
in their place and stead to execute and to deliver all documents and instruments
and to undertake and perform any and all actions which may be reasonable and
necessary at all times following Closing to effectuate the transactions
contemplated by this Agreement and the achievement of its intended objectives.
ARTICLE IX
INDEMNIFICATION; DUE DILIGENCE; CONFIDENTIALITY
9.1 Indemnification by Seller. Seller hereby indemnifies and
agrees to jointly and severally hold Buyer, its shareholders, directors,
officers, employees, attorneys, agents, affiliates, etc., harmless from,
against, and in respect of (and shall on demand reimburse any such entity for):
(a) Any and all loss, liability, or damage suffered or
incurred by Buyer by reason of any untrue representation, breach of warranty or
nonfulfillment of any covenant or
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agreement by Seller, NWHI, or Subsidiary contained in this Agreement or in any
certificate delivered to Buyer pursuant hereto;
(b) Any and all Taxes payable by Buyer or any entity with
which any of the foregoing are consolidated attributable to the business and
operations of NWHI and Subsidiary for periods prior to the Closing; and
(c) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses including without
limitation, reasonable legal fees and expenses, incident to any of the foregoing
or incurred in attempting to oppose the imposition thereof or in connection with
any investigation thereof, or in enforcing this indemnity.
9.2 Survival of Representations and Warranties. Each
representation and warranty, covenant and agreement made by either party hereto
in this Agreement or in any document, certificate, or other instrument delivered
pursuant to this Agreement shall survive the Closing and until the third
anniversary of the Closing, but only if a claim initiated by a party hereto with
respect thereto is made in a notice given to the party against whom such claim
is made on or before such date; however, the representations and warranties set
forth in Sections 3.1, 3.2, 3.3, 3.9, 3.10 and 3.22 shall survive for a period
of seven years following the Closing.
9.3 Seller's Breach and Payment with Closing Escrow. Buyer and Seller
agree that should the Buyer suffer any losses, damages, or liabilities
("Losses") due to a breach by Seller of any representations or warranties or
covenants contained herein, then the Buyer shall be able to retain the Closing
Escrow Shares held in the Closing Escrow pursuant to Paragraph 2.8 hereof or a
portion thereof in an amount sufficient to offset any such loss or damage.
Retention of all or part of such shares shall not be Buyer's sole remedy or
recovery under law or equity. In the event
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of a dispute as to whether the Buyer is entitled to retain any Closing Escrow
Shares, the Buyer and Seller shall be subject to binding arbitration under the
Commercial Arbitration Rules of the American Arbitration Association with the
hearing to be held in Ft. Lauderdale, Florida, by three arbitrators who shall be
appointed pursuant to said rules and shall have either NASD Series 8 and 24
securities licenses and/or law degrees. Said arbitrators shall be authorized to
award attorney's fees and expenses to the prevailing party and to assess and
allocate the costs of arbitration to the losing party. Nothing in this paragraph
shall prevent any party hereto from resorting to judicial proceedings if interim
relief from a court is necessary to prevent serious or irreparable injury.
9.4 Limitations on Indemnification. The Seller will not be liable
under this Agreement for losses, damages, claims, demands, expenses (including
but not limited to attorney's fees) or liabilities ("Losses") resulting from the
inaccuracy or breach of any covenants, representation or warranty until such
Losses exceed in the aggregate $35,000 and, in that event, the damaged party
shall be entitled to recovery only to the extent the aggregate amount of such
Losses exceeds $35,000. The limitations imposed by this Paragraph 9.4 shall not
apply to (a) any intentional, reckless, dishonest, fraudulent, illegal,
criminal, or malicious act by Seller or intentional, reckless, dishonest,
fraudulent, illegal, criminal, or malicious breach by Seller of any
representation, warranty, or covenant herein or (b) any Losses arising from or
in connection with the matters described in Paragraph 3.10. The amount of Losses
an indemnified party is liable for shall be called the "Indemnity Amount."
9.5 Third Party Claims. In order for Buyer (the "Indemnified
Party"), to be entitled to any indemnification provided for under this Agreement
in respect of, arising out of or involving a claim made by any person, firm,
governmental authority or corporation against the Indemnified
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Party (a "Third Party Claim"), such Indemnified Party must notify the
indemnifying party in writing of the Third Party Claim within a reasonable time
after receipt by such Indemnified Party of written notice of the Third Party
Claim unless the indemnifying party shall have previously received knowledge
thereof, but the failure to so notify the indemnifying party shall not relieve
it of any liability that it may have to any Indemnified Party except to the
extent the indemnifying party demonstrates that it is prejudiced thereby.
Thereafter, the Indemnified Party shall deliver to the indemnifying party,
within a reasonable time after the Indemnified Party's receipt thereof, copies
of all notices and documents (including court papers) received by the
Indemnified Party relating to the Third Party Claim.
(a) If a Third Party Claim is made against the
Indemnified Party, the indemnifying party will be entitled to participate in the
defense thereof, and if it so chooses, to assume the defense thereof with
counsel selected by the indemnifying party. Should the indemnifying party so
elect to assume the defense of a Third Party Claim, the indemnifying party will
not be liable to the Indemnified Party for any legal expenses subsequently
incurred by the Indemnified Party in connection with the defense thereof, other
than reasonable costs of investigation. If the indemnifying party elects to so
assume the defense of a Third Party Claim, the Indemnified Party (i) will
cooperate in all reasonable respects with the indemnifying party in connection
with such defense, (ii) will not admit any liability with respect to, or settle,
compromise, or discharge, any Third Party Claim without the indemnifying party's
prior written consent, and (iii) will agree to any settlement, compromise, or
discharge of a Third Party Claim which the indemnifying party may recommend if
(y) the sole relief provided against the Indemnified Party is monetary damages
which are paid by the indemnifying party and the
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Indemnified Party is completely released in connection with such Third Party
Claim, and (z) such settlement, compromise or discharge involves no finding or
admission of any violation of law or of the rights of any person or of any
breach of any agreement by the Indemnified Party;
(b) In the event the indemnifying party shall assume the
defense of any Third Party Claim, the Indemnified Party shall be entitled to
participate in (but not control) such defense with its own counsel at its own
expense. If the Indemnifying Party does not assume the defense of any such Third
Party Claim within a reasonable time under the circumstances, the Indemnified
Party may defend the same in such manner as it may deem appropriate, including,
but not limited to settling such claim or litigation after giving notice of same
to the indemnifying party on such terms as the Indemnified Party may deem
appropriate, and the indemnifying party will promptly reimburse the Indemnified
Party in accordance with the provisions of this Paragraph 9.5; and
(c) Notwithstanding the foregoing, if an Indemnified
Party determines in good faith that there is reasonable probability that an
action may materially and adversely affect it or its affiliates other than as a
result of monetary damages, such Indemnified Party may, by notice to the
indemnifying party, assume the exclusive right to defend, compromise, or settle
such action, but the indemnifying party shall be entitled to participate therein
(with control remaining with the Indemnified Party) and shall not be bound by
any determination of an action so defended or any compromise or settlement
thereof effected without its consent (which shall not be unreasonably withheld).
9.6 Confidentiality.
(a) For a period of two years from the date of this
Agreement, Seller will hold
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in confidence and use its reasonable efforts to have all its affiliates,
employees, agents, representatives, lenders and capital providers hold in
confidence all of the books, records, financial information, customer lists,
business plans, operating plans, or other knowledge or information of a
confidential or proprietary nature (the "Confidential Information") with respect
to Buyer and, if the Closing does occur, with respect to NWHI and Subsidiary and
will not disclose, publish, use (except as required in connection with the
transaction contemplated by this Agreement), or permit others to disclose,
publish, or use the same, provided, however, that the foregoing restriction
shall not apply to any Confidential Information which (i) becomes generally
available to the public in any manner or form through no fault of Seller, its
employees, agents, or representatives, (ii) is independently developed by Seller
without benefit of the above-described information, or rightfully received from
another source on a nonconfidential basis, (iii) is released for disclosure with
Buyer's consent, (iv) is required to be provided, published or used by law, or
by a court or a governmental agency (Seller agrees to give Buyer prior notice of
any such required disclosure so as to afford Buyer at its expense the
opportunity to seek an appropriate protective order), (v) is necessary in
connection with a bona fide dispute in order to seek an appropriate protective
order; or (vi) is necessary in connection with a bona fide dispute in order to
establish rights under this Agreement. In the event the Closing does not occur,
Seller shall promptly return to Buyer all Confidential Information and
non-public documents obtained from Buyer and any copies of such documents made
for or by Buyer.
(b) Buyer has held and will continue to hold such
Confidential Information as it receives from Seller in confidence and will not
prior to the Closing furnish such information to its affiliates, employees,
agents, representatives, lenders or funding sources for any use other than
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in evaluating and implementing the transactions contemplated in this Agreement.
In the event the Closing does not occur, Buyer shall promptly return to Seller
all Confidential Information and non-public documents obtained from Seller and
any copies of such documents made for or by Buyer. For a period of three years
from the date of termination of this Agreement if the Closing does not occur,
Buyer will hold in confidence and use its reasonable efforts to have all its
affiliates, employees, agents, representatives, lenders and funding sources who
had access to Confidential Information with respect to Seller, NWHI and
Subsidiary to hold such information in confidence and not disclose, publish, use
or permit others to use the same; provided, however, that the foregoing
restrictions shall not apply to any portion of the foregoing which (i) becomes
generally available to the public in any manner or form through no fault of
Buyer, its employees, agents or representatives, (ii) is independently developed
by Buyer without benefit of the above- described information, or rightfully
received from another source on a nonconfidential basis, (iii) is released for
disclosure with Seller's consent, or (iv) is required by a court or a
governmental agency (and Buyer agrees to give Seller prior notice of any such
required disclosure so as to afford Seller at its expense, the opportunity to
seek an appropriate protective order or other remedy and/or waive compliance
with this provision) or is otherwise required by law or is necessary in order to
establish rights under this Agreement.
(c) In the event that any consent or waiver of compliance
with any provision hereof shall be effective only if in writing, and no such
consent or waiver shall be deemed to extend beyond the particular subject
thereof.
(d) If any provision of this Paragraph 9.6 is determined
to be void or unenforceable, the remaining provisions shall nonetheless
constitute valid and enforceable
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obligations of the parties hereto.
9.7 Specific Performance. In the event of any breach or threatened
breach by either party of the provisions of Paragraph 9.6 of this Agreement and
notwithstanding any available damage remedy, the other party shall be entitled
in respect thereof to an injunction or other appropriate order (without the
necessity of setting any bond in connection therewith or demonstrating that any
harm will result from this breach thereof) restraining such party from violating
such provisions or requiring such party to perform its obligations hereunder. In
the event that any court with competent jurisdiction determines such provisions
to be too broad to enforce as written, such court is authorized by the parties
to construe and enforce such provisions only to the broadest extent permitted by
law.
ARTICLE X
GENERAL PROVISIONS
10.1 Termination.
(a) In the event that the Closing has not occurred by
February 15, 2000, this Agreement (except for Section 10.3) shall be terminated
and declared null and void except for the assertion of any claim for breach of
this Agreement which any party herein may assert against another party herein.
(b) If Seller fails to close the transaction for any
reason other than a failure to obtain NASD Approval, then the Seller shall be
required to pay Buyer, within ten (10) days of such breach, a fee of $100,000
(the "Break-Up Fee") as liquidated damages.
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10.2 Notices. All notices or other communications hereunder shall
be in writing and shall be deemed to have been duly given (i) on the date
delivered personally or by confirmed facsimile as set forth below; (ii) two (2)
days after being sent by Express Mail or such other similar service (i.e.,
Federal Express) and addressed as set forth below; or (iii) four (4) days after
being mailed by certified or registered mail, return receipt requested, postage
prepaid, and addressed as set forth below, as follows:
If to Seller: First Level Capital, Inc.
4183 Shell Road
Sarasota, Florida 34242
Attn: Al Mirman
Facsimile: (800) 600-8588
With a copy to:
-----------------------------------
-----------------------------------
-----------------------------------
Attn:
------------------------------
Facsimile: ( )
---- -----------------
If to Buyer: vFinance.com, Inc.
6600 North Andrews Avenue, Suite 304
Fort Lauderdale, FL 33309
Attn: D. Carr Moody, CFO
Facsimile: (954) 252-4551
With a copy to: Sims Moss Kline & Davis LLP
400 Northpark Town Center, Suite 310
1000 Abernathy Road, N.E.
Atlanta, Georgia 30328
Attn: Raymond L. Moss, Esq.
Facsimile: (770) 481-7210
or to such other address as a party shall have designated to the other by like
notice.
10.3 Entire Agreement; Amendments. This Agreement (i) constitutes
the entire agreement of the parties hereto and supersedes all prior agreements,
understandings,
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representations or warranties, both written and oral, between the parties with
respect to the subject matter hereof, (including, but not limited to, that
certain letter of intent dated September 12, 2000 between the parties hereto)
and (ii) may be amended or modified only by a written instrument executed by
Buyer and Seller.
10.4 Expenses. Except as otherwise expressly herein provided, each
party to this Agreement shall pay its own expenses (including, without
limitation, the fees and expenses of its agents, representatives, counsel and
accountants) incidental to the preparation and carrying out of this Agreement.
Seller, NWHI and Subsidiary, on the one hand, and Buyer on the other, shall pay
their respective expenses before Closing; and said respective expenses shall not
become the other party's obligation after Closing.
10.5 Transfer Taxes. Any and all sales, documentary, conveyance or
the transfer taxes levied by any federal, state, or local government or
authority which become payable by reason of the sale and purchase of the Shares
at Closing (excluding any taxes based on income) shall be borne by Seller.
10.6 Brokers. Except as set forth in Schedule 10.6, each party
represents to the other that it has not used the services of a broker and that
no broker or finder shall be entitled to any compensation in connection with the
transaction contemplated by this Agreement by reason of such party's actions.
Seller agrees to indemnify Buyer against any claim by any third person for any
commission, brokerage fee, finder's fee or other payment alleged to be due as a
result of this transaction based upon any alleged agreement or understanding
between such third person and Seller, NWHI or Subsidiary, whether expressed or
implied from the actions of Seller or its agents. Buyer agrees to indemnify
Seller against any claim by any third person for any
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commission, brokerage fee, finder's fee or other payment alleged to be due as a
result of this transaction based upon any alleged agreement or understanding
between such third person or Buyer, whether expressed or implied from the
actions of Buyer or its agents.
10.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.8 Parties in Interest. This Agreement shall inure to the benefit
of and be binding upon Buyer and Seller and their respective successors and
assigns. Nothing in this Agreement, express or implied, is intended to confer
upon any other person any rights or remedies under or by reason of this
Agreement.
10.9 Knowledge. Whenever any provision of this Agreement makes any
statement "to the knowledge" of any entity, other than a living person, or that
any such entity "knows" some fact or by similar formulation, such entity will be
deemed to have such knowledge and know such fact.
10.10 Applicable Law. This Agreement and the rights and obligations
of the parties hereunder shall be construed and enforced in accordance with and
governed by the laws of the State of Florida without giving effect to its choice
of law provisions.
10.11 Waiver. No provision in this Agreement shall be deemed waived
by course of conduct, including the act of Closing under Article VII, unless
such waiver is in writing signed by all parties and stating specifically that it
was intended to modify this Agreement.
10.12 Schedule and Exhibits. The schedules and exhibits attached
hereto shall be
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deemed to be incorporated by reference to this Agreement as if fully set forth
herein.
10.13 Announcements. Except to the extent required by law, prior to
Closing neither party shall make any public announcement or other disclosure
with respect hereto or the transactions contemplated hereby or disclose the
terms hereof to any third party without the consent of the other, which consent
shall not be unreasonably withheld, provided, however, that nothing contained
herein will prevent any party from promptly making all filings with applicable
governmental entities that may, in its reasonable judgment, be required or
advisable in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated by this Agreement so long as such
party gives timely notice to the other parties of the anticipated disclosure and
cooperates with the other parties in designing reasonable procedural and other
safeguards to preserve, to the maximum extent possible, the confidentiality of
all information furnished by the other parties pursuant to this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
BUYER:
VFINANCE.COM, INC.
By:/s/ Leonard J. Sokolow
----------------------------------
Name: Leonard J. Sokolow
-------------------------------
Title: Chief Executive Officer
-------------------------------
NW HOLDINGS, INC.
By:/s/ Alvin S. Mirman
----------------------------------
Name: Alvin S. Mirman
--------------------------------
Title: Chief Executive Officer
-------------------------------
SELLER:
/s/ Alvin S. Mirman
-------------------------------------
Alvin S. Mirman
Address: 4183 Shell Road
Sarasota, FL 33498
/s/ Ilene Mirman
-------------------------------------
Ilene Mirman
Address: 4183 Shell Road
Sarasota, FL 33498
/s/ Marc N. Siegel
---------------------------------
Marc N. Siegel
Address: 19461 Saturnia Lakes Dr.
Boca Raton, FL 33498
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/s/ Richard L. Galterio
-------------------------------------
Richard L. Galterio
Address: 13 Whitter Drive
Morganville, NJ 07751
/s/ Vincent W. Labarbara
-------------------------------------
Vincent W. Labarbara
Address: 67 Bellevue Avenue
Rumson, NJ 07760
/s/ Eric M. Rand
-------------------------------------
Eric M. Rand
Address: 345 Rumson Road
Little Silver, NJ 07739
/s/ Mario Marsillo, Jr.
-------------------------------------
Mario Marsillo, Jr.
Address: 1459 Arden Place
Staten Island, NY 10312
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