SIEBERT FINANCIAL CORP. Item 1.01 Entry into a Material Definitive Agreement.
On
Stock Purchase Agreements
On
Concurrent with the execution of the First Tranche Stock Purchase Agreement, the
Company and Kakaopay entered into a second Stock Purchase Agreement (the "Second
Tranche Stock Purchase Agreement", and together with the First Tranche Stock
Purchase Agreement, the "Stock Purchase Agreements"), pursuant to which the
Company will issue and sell to Kakaopay an additional 25,756,470 shares of
Common Stock (the "Second Tranche Shares", and such transaction, the "Second
Tranche") at a per share price of
The consummation of each of the First Tranche and the Second Tranche is subject
to a number of conditions, including among others, (i) the listing by the
Company of the shares of Common Stock issuable in the First Tranche and the
Second Tranche, respectively, on the Nasdaq Capital Market, (ii) the accuracy of
certain representations and warranties as of the closing of the First Tranche
and Second Tranche, respectively, (iii) the absence of any material adverse
effect having occurred between
The consummation of the First Tranche is further subject to specific conditions.
The conditions of Kakaopay's obligation to close the First Tranche, includes
among others, the filing by the Company of the notice of the change in ownership
and control of
The consummation of the Second Tranche is also subject to a number of specific
conditions. The conditions of Kakaopay's obligation to close the Second Tranche,
includes among others, (i) the affirmative vote of a majority of the outstanding
shares of Common Stock and the affirmative vote of the holders of a majority of
the outstanding shares of Common Stock not beneficially owned, directly or
indirectly, by the Gebbia Stockholders, Kakaopay or any of their respective
affiliates (together, the "Requisite Stockholder Approval"), (ii) approval by
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For the avoidance of doubt, the terms of the Stock Purchase Agreements contemplate the possibility that the First Tranche, but not the Second Tranche, is consummated.
The Stock Purchase Agreements and the transactions contemplated thereby (the "Transactions") were unanimously approved by the Company's board of directors (the "Board") based upon the unanimous recommendation of a special committee of independent directors (the "Special Committee"). The Company agreed that it will not solicit alternative proposals. However, the Company (acting upon the recommendation of the Special Committee) or the Special Committee, subject to certain conditions, may respond to an unsolicited Alternative Proposal (as defined below) and enter into an agreement for a Superior Proposal (as defined below and such agreement, an "Alternative Acquisition Agreement") and terminate the Stock Purchase Agreement only if the Board (acting on the recommendation of the Special Committee) or the Special Committee, in good faith, after consultation with its financial advisor and its outside legal counsel, determines (x) that a bona fide, written and unsolicited Alternative Proposal constitutes a Superior Proposal and (y) that failure to enter into an Alternative Acquisition Agreement and terminate the Second Tranche Stock Purchase Agreement pursuant to its terms could be inconsistent with the directors' fiduciary duties under applicable law; provided that the Company notifies Kakaopay in writing that the Board (acting on the recommendation of the Special Committee) or the Special Committee has made the determinations provided in the foregoing clause (x) and (y) ten (10) calendar days (the "Company Notice Period") prior to terminating the Second Tranche Stock Purchase Agreement or changing its recommendation to stockholders to approve the Second Tranche Stock Purchase Agreement. A "Superior Proposal" means a bona fide, written and unsolicited Alternative Proposal involving (i) assets that generate more than fifty percent (50%) of the consolidated total revenues of the Company and its subsidiaries, taken as a whole, (ii) assets that constitute more than fifty percent (50%) of the consolidated total assets of the Company and its subsidiaries, taken as a whole, or (iii) more than fifty percent (50%) of the total voting power of the equity securities of the Company, in each case, that the Board (after consultation with outside legal counsel and an independent financial advisor) reasonably determines, in good faith, would, if consummated, result in a transaction that is more favorable to the stockholders of the Company than the Transactions after taking into account all such factors and matters deemed relevant in good faith by the Board, including legal, financial (including the financing terms of any such proposal), regulatory, timing or other aspects of such proposal and the Transactions. An "Alternative Proposal" means any proposal or offer relating to (i) a merger, consolidation, share exchange or business combination involving the Company or any of its Subsidiaries, (ii) a sale, lease, exchange, mortgage, transfer or other disposition, in a single transaction or series of related transactions, of ten percent (10%) or more of the assets of the Company and its subsidiaries, taken as a whole, (iii) a purchase or sale of shares of capital stock or other securities, in a single transaction or a series of related transactions, representing ten percent (10%) or more of the voting power of the capital stock of Company or any of its subsidiaries, including by way of a tender offer or exchange offer, (iv) a reorganization, recapitalization, liquidation or dissolution of the Company or any of its subsidiaries or (v) any other transaction having a similar effect to those described in clauses (i) - (iv) or that would prevent or materially impede or delay the consummation of the closing of either the first or second stock purchase, in each case, other than the Transactions.
Neither the Special Committee nor the Board shall withdraw, modify or amend, or propose to withdraw the Board's recommendation to the Company stockholders that they vote in favor of approval of the Second Tranche (the "Board Recommendation") in any manner adverse to Kakaopay unless the Company terminates the Second Tranche Stock Purchase Agreement as provided in the Second Tranche Stock Purchase Agreement and described below. During the Company Notice Period (which may be extended by mutual written consent between the parties), the Company shall negotiate with Kakaopay in good faith in respect of adjustments in the terms and conditions of the Second Tranche Stock Purchase Agreement such that such Alternative Proposal would cease to constitute a Superior Proposal, if the Company, in its sole discretion, proposes to make such adjustments (it being agreed that in the event that, after commencement of the Company Notice Period, there is any revision to the terms of a superior proposal, including, any revision in price, the Company Notice Period shall be extended by four (4) Business Days (it being understood that there may be multiple extensions)). If, following the end of such Company Notice Period (as extended pursuant to the preceding sentence), the Board determines in good faith, after consulting with outside financial advisor and legal counsel, that such Alternative Proposal continues to constitute a Superior Proposal after taking into account any adjustments made by Kakaopay during the Company Notice Period upon the terms and subject to the conditions of the Second Tranche Stock Purchase Agreement, provided that the Company shall have complied with its obligations under such agreement, and the Board shall terminate the Second Tranche Stock Purchase Agreement pursuant to its terms to enter into an agreement relating to such Superior Proposal.
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The Stock Purchase Agreements provide for the termination of such agreements under certain circumstances, including among others, (i) by mutual consent of the parties, (ii) by either party upon the outside date of each respective agreement, and (iii) by either party for breaches by the other party of certain representations and warranties.
The Second Tranche Stock Purchase Agreement can also be terminated under certain
circumstances, including among others, (i) by either party if the First Tranche
Stock Purchase Agreement has been terminated by its own terms, (ii) by either
party if certain closing conditions have not been satisfied, including those
relating to CFIUS and obtaining the Requisite Stockholder Approval, (iii) by
Kakaopay if the Board (acting upon the recommendation of the Special Committee)
fails to make, withdraws, modified or amends in any manner adverse to Kakaopay,
the Board Recommendation, and (iv) by the Company if the Board has authorized
the Company to enter into an Alternative Acquisition Agreement. The Second
Tranche Stock Purchase Agreement also provides that the Company shall pay to
Kakaopay a termination fee of
The foregoing descriptions of the First Tranche Stock Purchase Agreement and Second Tranche Stock Purchase Agreement are not complete and are qualified in their entirety by reference to the First Tranche Stock Purchase Agreement and Second Tranche Stock Purchase Agreement, copies of which are attached to this Current Report on Form 8-K as Exhibits 10.28 and 10.29 and incorporated herein by reference.
Foreign Broker-Dealer Fee Sharing Agreement
Concurrent with the execution of the Stock Purchase Agreements,
The foregoing description of the Foreign Broker-Dealer Fee Sharing Agreement is not complete and is qualified in its entirety by reference to the Broker-Dealer Fee Sharing Agreement, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.30 and incorporated herein by reference.
Support and Restrictive Covenant Agreement
Concurrent with the execution of the Stock Purchase Agreements, Company
Directors
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The Gebbia Stockholders also agreed that until earlier of the closing of the Second Tranche or the termination of the Second Tranche Stock Purchase Agreement (the "Restricted Period"), the Gebbia Stockholders would not, directly or indirectly, (i) transfer or otherwise dispose of their shares, or enter into any undertakings with respect to such transfer or disposal, subject to certain limited exceptions; (ii) engage, or resolve or agree to engage, in various activities that would reasonably be expected to lead to any Alternative Proposal. The Gebbia Stockholders also agreed that during the three year-period following consummation of the First Tranche (but in no event surviving the termination of the Second Tranche Stock Purchase Agreement), they (i) would not solicit any employee or customer or interfere with business relationships between the Company (or its subsidiaries) and any of its customers or suppliers; provided, however, such non-solicitation restriction does not apply to soliciting customers on behalf of two companies in which certain Gebbia Stockholders have an interest or to real estate ventures (the "Permitted . . .
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. The following exhibit is furnished with this Form 8-K.
Ex. No Description of Exhibits
10.28 First Tranche Stock Purchase Agreement
10.29 Second Tranche Stock Purchase Agreement
10.30 Foreign Broker-Dealer Fee Sharing Agreement
10.31 Support and Restrictive Covenant Agreement
10.32 Support and Restrictive Covenant Agreement
10.33 Support and Restrictive Covenant Agreement
10.34 Support and Restrictive Covenant Agreement
10.35 Support and Restrictive Covenant Agreement
10.36 Support and Restrictive Covenant Agreement
10.37 Support and Restrictive Covenant Agreement
10.38 Stockholders' Agreement
10.39 Registration Rights and Lock-Up Agreement
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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