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| 8-K - SFG FINANCIAL CORPORATION FORM 8-K MARCH 19, 2010 - SFG FINANCIAL CORP | sfgs8k2010319.htm |
PURCHASE
AND SALE AGREEMENT BETWEEN
SFG
FINANCIAL CORPORATION AND NCG MARKETS CORPORATION
THIS
AGREEMENT, made as of the 8th day of March 2010 between NCG MARKETS CORPORATION
(“NCG”), with an address of 215-15 50th AVENUE, BAYSIDE,
NY 11364, CHANGYING ZHU, LEE CHEN, individuals with an address of
215-15 50th AVENUE, .BAYSIDE, NEW YORK 11364. NCG, CHANGYING ZHU and LEE CHEN
are collectively hereinafter referred to as SELLERS (“Sellers”) and SFG
FINANCIAL CORPORATION, (“SFG” ) a Delaware Corporation with an address of 575
MADISON AVENUE, NEW YORK, NEW YORK 10022, hereinafter referred to as
PURCHASER.
W I T N E
S E T H:
WHEREAS,
SELLERS are the Owners of 200 Shares of the issued and outstanding
Shares of NCG Markets Corporation Common Stock, no par value, , such shares
representing100% of the issued and outstanding shares of Capital Stock of NCG
Markets Corporation (the “NCG Common Stock”); and
WHEREAS,
NCG is a member of the National Futures Association (the “NFA”) and
the Commodities Futures Trading Commission (“CFTC”) as a non-guaranteed
Introducing Broker and it is duly registered pursuant to the Commodity Exchange
Act (the “CEA”);
WHEREAS,
SELLERS wish to sell to the PURCHASER an aggregate of 100% of the issued and
outstanding shares of the NCG Markets Corporation Common Stock, (“NCG Common
Stock shall hereinafter collectively referred to the “NCG Shares”), which said
Shares of NCG constitutes 100% of the issued and outstanding NCG Shares, and the
PURCHASER is desirous of acquiring the 100% of the NCG Markets Corporation
Shares on the terms and conditions hereinafter set forth; and
WHEREAS,
PURCHASER has agreed to acquire NCG Shares for $50,000 Dollars, and
other good and valuable consideration.
NOW, THEREFORE, in consideration of the
mutual agreements herein, the sufficiency of which is hereby acknowledged, each
of the parties hereto agrees as follows:
1.
Sale and Delivery of the Securities. Subject to
and contingent upon the terms and conditions of this Agreement, SELLER hereby
agrees to sell, assign and transfer to the PURCHASER and the PURCHASER hereby
agrees to purchase from SELLER all right, title and interest in NCG Markets
Corporation Common Stock Shares.
2.
Purchase Price.
(a) The
purchase price for the securities shall be $50,000 Dollars (the “Purchase
Price”), which shall be allocated to SELLER.. The Purchase Price shall be paid
by the delivery to Seller in the form of a certified or bank cashier’s checks in
New York Clearing House Funds, payable to the order of the SELLER or, at the
SELLER’s option, by wire transfer of immediately available funds into the
account designated by the seller.
3.
Closing.
(a) Subject to the
fulfillment of the conditions to closing as set forth in Section 6 herein and
conditioned thereon, the closing of the transactions contemplated thereon,
hereby, shall take place subject to the condition precedent set forth in this
Agreement, at the offices of Sichenzia Ross Friedman Ference LLP, 61 Broadway,
New York, New York 10006, at 10:00 a.m. on May 30 ___, 2010 or such other time,
date or place as the SELLER and the PURCHASER mutually agreed upon in writing
(the “Closing Date”) and shall be deemed to have been consummated and become
effective for all purposes as of the close of business on the Closing
Date.
(b) At the
Closing:
(i) SELLER
shall deliver to the PURCHASER certificate(s) with fully executed stock powers,
signature guaranteed, representing the NCG Common Stock Shares.
(ii) PURCHASER
shall deliver to the SELLER, , in certified check or bank check or by wire
transfer to the SELLER’s designated bank account, the Purchase
Price.
(iii) Said
shares shall be distributed at the direction of SFG Financial Corporation
(“SFG”) to parties named on an allocation list supplied by SFG to the Seller
prior to Closing.
(c) Within
ten (10) days from the Closing Date the SELLER shall prepare and file such
documents as are required by the CFTC, NFA, and applicable states listing the
new additional shareholders of NCG Market Corporation..
4.
Representations and Warranties of SELLER and NCG.
SELLERS,
jointly and severally, represent, warrant, with such representations, warranties
and agreements surviving the Closing and continuing thereafter, as
follows:
4.1. Corporate
Organization. NCG Markets Corporation is a corporation duly organized and
validly existing in good standing under the laws of the State of New York and
has the corporate power to own its property and to carry on its business as now
being conducted. NCG Markets Corporation is duly qualified to
transact business and is in good standing in each jurisdiction wherein the
nature of the business transacted by it makes such
qualification. There are no pending actions or proceedings to limit
or impair NCG Markets Corporation’s power to engage in business or to dissolve
NCG. A certified copy of the Articles of Incorporation will be
ordered from the Secretary of State of New York and shall be delivered to the
Purchaser promptly upon receipt from New York Secretary of State, but no later
than seventy-two hours prior to Closing.
4.2
Authorized Capital. The authorized capital stock of NCG Markets
Corporation is 200 shares of Common Stock, no par value, of which 200 are issued
and outstanding. There are no authorized or outstanding options,
warrants or other rights to purchase or encumber any authorized or outstanding
share of stock.
4.3.
Title to NCG Markets Corporation Shares. SELLERS have good title,
beneficially and of record, to the NCG Markets Corporation Shares, free and
clear of all claims, liens and encumbrances; such shares are validly issued and
outstanding, fully paid and non-assessable; and SELLERS have full legal right,
power and authority to sell, assign and transfer the NCG Markets
Shares. When delivered as provided in Section 1 of this Agreement,
the certificates for the NCG Markets Corporation Shares so delivered will vest
ownership of such shares of Stock in the PURCHASER free and clear of all claims,
liens and encumbrances of SELLER or created by SELLER, which certificates will
then represent 100% of the outstanding shares of the capital stock of
NCG. NCG has not created or granted any other option, warrant or
right with regard to shares of NCG Markets Corporation Common
Stock.
4.4
Financial Statements. The audited financial statements of
NCG Markets Corporation for the year ended December 31, 2009,
prepared by Zhuang Mu Liu and the un-audited financial statements for the twelve
months period ended March 8, 2010 and attached as Annex A (collectively, the
“Financial Statements”), are true and correct, having been prepared in
accordance with statutes, regulations and principles prescribed by the IRS, SEC
and CFTC or other relevant Federal, State or local governmental authority, with
statutes, regulations and principles have been consistently adhered to
throughout the periods indicated, and fairly and accurately indicate the
financial condition of NCG Markets Corporation and the results of its operations
as of the date and throughout the periods indicated. NCG Markets
Corporation had no liabilities or obligations of any nature, whether accrued,
absolute, contingent or otherwise, including without limitation, tax liabilities
due or to become due, except as disclosed in schedule 4.4.
4.5
CFTC Registration. NCG Markets
Corporation is registered as an Introducing Broker dealer under the Commodity
Exchange Act, and is a member firm of the CFTC and NFA in good
standing.
4.6
CFTC Restrictions. NCG Markets Corporation is subject to the rules
and regulation of the CFTC, NFA and other pertinent regulatory bodies. NCG
Markets Corporation is current in payments incident to all financial obligations
to the aforementioned agencies. .
4.7
Transactions since March 1, 2010. Except as
disclosed herein, since March 1, 2010, there is no material adverse position or
property of NCG Markets Corporation. Other than provided for herein, NCG Markets
Corporation has not since March 1, 2010:
(a) issued or
sold or made any agreement of any kind to issue or sell any of the shares of its
stock, bonds or other corporate securities, or merged or consolidated with any
other corporation;
(b) incurred
any debt, obligation or liability (fixed or contingent), except debts,
obligations and liabilities incurred in the ordinary course of
business;
(c) discharged
or satisfied any lien or encumbrance or paid any obligation or liability (fixed
or contingent) other than current liabilities included in the Financial
Statements and current liabilities incurred since that date in the ordinary
course of business;
(d) declared or made any
payment or distribution to shareholders;
(e) purchased or redeemed
any shares of its capital stock;
(f) made any
general wage or salary increase or increased compensation of any officers or
management employee nor paid or accrued any bonus or salary (which is defined
herein to include pension and profit sharing contributions) to
Sellers;
(g) mortgaged,
pledged or subjected to lien or otherwise encumbered any of its assets, tangible
or other intangible;
(h) sold,
assigned or transferred any patents, trademarks, trade names, copyrights,
licenses or other intangible assets;
(i) suffered
any event or condition of any character materially and adversely affecting NCG
Markets Corporation’s business or future prospects (including, without
limitation, knowledge of or notification by any state or federal securities
regulatory agency of any violation or claim arising from the conduct of the
securities business);
(j) suffered
any material net operating loss or any extraordinary loss or waived any rights
of substantial value or entered into any transaction not in the ordinary course
of business; or
(k) become a
party to any agreement which affects or may affect materially and adversely NCG
Markets Corporation.
4.8.
Loans; Indebtedness. NCG Markets Corporation
represents that NCG Markets Corporation has no outstanding loans or
indebtedness, subordinated or otherwise.
4.9
Net Capital.
(a) The
net capital of NCG shall comply with rules set forth by the CFTC and NFA and
other pertinent regulatory State and Federal agencies at the date of this
Agreement and on the Closing Date.
(b) Immediately
following the Closing, Purchaser shall permit Seller to withdraw funds held by
NCG Markets Corporation, as well as all securities held in the name of NCG
Markets Corporation, and the cash in the bank account identified in Section 4.23
hereof. Notwithstanding the above, Seller shall cause to maintain net capital
amounts sufficient to insure continued compliance with all net capital
requirements for a period not to exceed the earlier of, the 60th
anniversary day from the Closing or the purchase of NCG Markets Corporation
Common Stock, subject to the receipt of appropriate Regulatory
Approval.
4.10 Contracts. NCG
Markets Corporation is not a party to any written or oral contract, employment
contract, contract with any labor union or association, bonus, pension plan,
profit sharing, retirement, stock purchase, hospitalization, insurance or other
plan providing employee benefits; lease with respect to any property, real or
personal, whether as lessor or lessee; contract or commitment for capital
expenditures; or contract (in the ordinary course of business or
otherwise).
4.11 Tax
Returns. All tax returns and reports of NCG Markets Corporation
required by law (including without limitation, all income tax, unemployment
compensation, social security, sales and excise tax laws of the United States or
any state, territory or municipal or political subdivision thereof) to be filed
have been duly filed, and all taxes, assessments, contributions, fees and other
government charges (other than those presently payable without penalty or
interest and those currently being contested in good faith) which are due and
payable as shown by said tax returns or reports have been paid. NCG Markets
Corporation has paid wages or salaries and has withheld from the salaries and
wages of its employees any income taxes required to be withheld and NCG Markets
Corporation is not delinquent in the payment to the Internal Revenue Service of
such funds. NCG Markets Corporation knows and does not have reasonable grounds
to know of any additional assessments or any basis for any additional
assessments in respect to the United States or state taxes upon or measured by
income of NCG Markets Corporation. The Financial Statements contain adequate
provision for all federal income, federal excess profits, state income,
franchise, real property and all other taxes of NCG Markets Corporation,
including interest and penalties in respect thereof, for all periods ended on or
before March 1, 2010.
4.12 Compliance
with Laws. To the best knowledge of NCG Markets Corporation,
neither the execution and delivery of this Agreement nor compliance with the
terms and provisions of this Agreement on the part of SELLER , subject to the
receipt of appropriate regulatory approvals, breach any statute or regulation of
any governmental authority, domestic or foreign, or will at Closing conflict
with or result in a breach of any of the terms, conditions or provisions of any
agreement or instrument to which the SELLER or SFG are a party or by which they
are or may be bound or constitute a default thereunder, or result in the
creation of an imposition of any lien, charge, encumbrance or
restriction of rights, including rights of termination or
cancellation.
4.13 Insurance. NCG
maintains no insurance policies or broker’s fidelity bonds.
4.14 No
Suits Pending or Imminent. There are no outstanding and unpaid
judgments, liens or security agreements as a result of which NCG Markets
Corporation is or may become a judgment debtor. Further, there are no
actions at law or equity or SEC or other administrative proceedings or CFTC or
NFA proceedings known to be contemplated or pending against NCG Markets
Corporation or its officers or in which it will be a plaintiff or
petitioner. There are no actions at law or equity or administrative
proceedings pending in which it is anticipated that NCG Market Corporation will
join or be joined as a party. There is no litigation pending,
contemplated or threatened relating to the shares or relating to any other
ownership interest in NCG Markets Corporation. There is no
pending, contemplated or threatened litigation or proposed violation of law or
regulation of any nature whatsoever (including, but not limited to, CFTC, NFA,
SEC, OSHA fire codes or similar laws and regulations).
4.15. No
Dividends. The Board of Directors of NCG Markets Corporation
has not declared any dividends, nor are there any dividends unpaid that were
declared in an earlier period.
4.16. No
Salary Increases; No New Employees. Since March 1, 2010, NCG
Markets Corporation has not increased any employee’s salary or hired any new
employees. At the Closing Date, other than as discussed herein, NCG
Markets Corporation will have no contractual obligations to
employees.
4.17. Officers
and Directors. The sole officer and director of NCG Markets
Corporation is Lee Chen.
4.18. Articles
of Incorporation. The Articles of Incorporation, as amended to
the date hereof, and the By-Laws, as amended to the date hereof, of NCG Markets
Corporation, which are being delivered to the Purchaser concurrently herewith,
are true and correct copies in effect at the date hereof.
4.19. Minute
Books. A
copy of the minute books of NCG Markets Corporation, including minutes of
meetings of stockholders and directors which are being delivered to the
Purchaser concurrently herewith are true, complete and correct copies at the
date hereof. There are no omissions from such minute books of the
minutes of any meetings, proceedings and/or actions of the stockholders or the
Board of Directors of NCG Markets Corporation or any committee
thereof.
4.20. No
Subsidiaries. NCG Markets Corporation does not have any
subsidiaries and does not own any shares of stock or other securities of or
interest in any other corporation, firm, partnership or
association.
4.21. Contractual
Performance. To
the best of NCG’s knowledge, information and belief, all obligations that NCG
has been required to comply with have been fully satisfied and the Seller is not
in default on any lease, contract, agreement, etc.
4.22. Other
Agreements. Neither SELLERS nor NCG Markets Corporation is a
party to any agreement, oral, written or otherwise, direct or indirect, other
than this agreement, to sell, option or transfer any shares of stock of NCG
Markets Corporation; any assets of NCG Markets Corporation or otherwise, nor are
the securities of NCG subject to any agreement other than provided
herein.
4.23. Bank
& Brokerage Accounts. Other than the bank accounts and
Clearing Accounts maintained by NCG as listed schedules on Schedule 4.23, there
are no other depositories where funds of NCG are held.
4.24. No
Misrepresentation. NCG represents and warrants that no
representation or warranty by NCG in this Agreement and no statement or
certificate furnished to PURCHASER pursuant hereto or in connection with the
transactions contemplated hereby will contain any untrue statement of a material
fact or will omit statements of a material fact necessary to make the statements
contained herein or therein not misleading. NCG has disclosed in writing to
PURCHASER all events, conditions or facts which materially and adversely affect
or have any effect on the condition (financial, business operations, liquidity,
assets, liabilities or obligations) of NCG.
5. PURCHASER’s
Warranties. The Purchaser represents warrants, and agrees that
the following items shall survive the Closing and continue thereafter, as
follows:
(a) The
PURCHASER has full legal right, power and authority to enter into this Agreement
and to consummate all the transactions hereby contemplated;
(b) The
PURCHASER is purchasing the Securities for its own account and investment and
not with a view to distribution or resale;
(c) The
PURCHASER acknowledges that all documents, records and books requested by the
PURCHASER have been made available for inspection and have been inspected by the
PURCHASER;
Certain
Covenants of SELLER and NGC
(a)
All licenses held by NCG Markets Corporation with the NFA are valid and in good
standing as of the date hereof.
6.
Conditions to Closing.
6.1. Documents
Delivered. As conditions to Closing, Seller or the appropriate
person holding such item shall deliver:
(a) to
the PURCHASER, stock certificates of NCG Markets Corporation, as provided in
Section 1 hereof;
(b) to the
PURCHASER, NCG’s books of account and business records, tax returns, minute
book, stock transfer book, blank stock certificates and seal;
(c) to
the PURCHASER, copies of all agreements, contracts and leases to which NCG is a
party;
(d) to
the PURCHASER, any other documents so requested related to this
transaction.
6.2.
Conditions Precedent.
(a) The
representations, warranties, covenants and agreements of the SELLER herein are
conditions precedent to this Agreement. The breach by the SELLER of
any of the aforesaid Sections shall entitle the other party to rescind this
Agreement at any time after discovery of said breach and to recover upon demand
any and all sums paid hereunder as well as any other damages resulting there
from, whether direct or consequential.
(b) The
obligations of PURCHASER under this Agreement, including without limitation,
PURCHASER’s obligation to consummate the transactions contemplated hereby, are
subject to the receipt of appropriate regulatory approvals prior to Closing, as
may be necessary.
6.3.
Due Diligence. PURCHASER shall have contemplated to its full
satisfaction diligence of NCG Markets Corporation and shall have been provided
with full access to all documents, records and other information.
7.
Indemnification. The Parties the Agreement agree agrees
to indemnify and hold each Party, and its successors and assigns, harmless from
all claims, actions, proceedings, damages, expenses, liabilities and/or
judgments of whatsoever nature arising out of or in connection with any and all
transactions, business, or occurrences of any kind resulting from the Seller’s
ownership or operation of NCG Markets Corporation. The PURCHASER, or
its successors and assigns, shall notify SELLER of any such liability, asserted
liability, or any claims against PURCHASER, with reasonable promptness:
provided, however, that the failure to notify Seller shall not impact in any
manner SELLER’s indemnification obligations hereunder.
8.
Miscellaneous.
8.1. Laws
of New York to Govern. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard to
the conflicts of laws, principles, thereof and the actual domicile of the
parties.
8.2. Notices. All
notices, requests, demands and other communications hereunder shall be deemed
given only if in writing, signed by sender and delivered at or mailed (by
certified or registered mail, postage prepaid) to the receiving party’s address
below or to such other address as the receiving party may designate beforehand
by giving notice, referring to this Agreement, to the sender.
8.3. Headings. The
headings in this Agreement are inserted for convenience only and do not
constitute a part hereof.
8.4. Agreement
Binding. This Agreement is binding upon and shall insure to the
benefit of the parties heirs, executors, administrators, successors and
assigns.
8.5
Finder. Seller
represents that there are no finder fees being paid in connection with this
Agreement.
8.6. Amendments. This
Agreement may not be modified, amended or terminated except by agreement in
writing executed by the parties hereto.
8.7. Survival.
The parties agree that all warranties, representations, covenants and
obligations contained herein shall (notwithstanding any investigation or inquiry
which any party hereto or any representative of any party hereto may have made)
forever survive the execution, delivery and closing of this Agreement and any
and all documents delivered in connection herewith and any and all performances
in accordance herewith.
8.8. Counterparts. This
Agreement may be signed in one or more counterparts with the same effect as if
the parties signed the same document. All counterparts shall be
construed together and shall constitute one document.
8.9. Confidentiality.
Unless otherwise required by law, the parties hereto agree not to disclose any
and all terms of this Agreement or any document related to the sale by this
Agreement to a third party.
8.10. Severability.
In the event that any one or more of the provisions contained in the Agreement
or any application thereof shall be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
of this agreement and other applications thereof shall not in any way be
affected or impaired.
8.11. Entire
Agreement. This Agreement and all schedules hereto, all of which are hereby made
as part hereof as if fully set forth in the Agreement, contain the entire
agreement between the parties with respect to the transaction contemplated
herein and supersede all prior agreements or understandings between the parties
related to the transaction contemplated by this Agreement.
IN
WITNESS WHEREOF, the undersigned parties have hereunder set their hands as of
the date set forth below.
Signatures
SFG
Financial Corporation
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/s/ Michael C.
Caska
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BY: Michael
C. Caska
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Dated:
March 8, 2010
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Title:
Chief Executive Officer
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NCG
Markets Corporation, Inc.
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/s/ Lee
Chen
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Dated:
March 8, 2010
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BY:
Lee Chen
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Title: President
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/s/ Lee
Chen
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Dated:
March 8, 2010
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Lee
Chen
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/s/ Changying
Zhu
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Dated:
March 8, 2010
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Changying
Zhu
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