Exhibit 10.3
DISTRIBUTION AGREEMENT
AGREEMENT made as of the __ day of July 2007 among ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
Holding, LLC, a Delaware limited liability company ("HOLDING"), ▇▇▇▇ ▇▇▇▇▇▇,
LLC, a Delaware limited liability company ("PR"), R&R Capital Group, Inc.
("RRCG"), a Delaware corporation that has elected to be taxed under subchapter
"S" of the Internal Revenue Code of 1986, as amended (the "CODE") and the
persons listed on Schedule A hereto (the "STOCKHOLDERS"), who constitute all of
the present stockholders of RRCG.
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, PR and RRCG (each a "Member" and, collectively, the "Members")
own all of the membership interests of Holding; and
WHEREAS, pursuant to a Securities Purchase Agreement, dated as of March
1, 2007, Holding agreed not to make any cash distributions with respect to its
shares other than a Tax Payment Distribution as defined in the Amended and
Restated Limited Liability Operating Agreement of Holding (the "OPERATING
AGREEMENT"); and
WHEREAS, pursuant to an Exchange Agreement, dated as of the date hereof
(the "EXCHANGE AGREEMENT"), PR has agreed to contribute its entire membership
interest in Holding to Enthrust Financial Services, Inc., a Delaware corporation
("ENTHRUST") in exchange for shares of Enthrust's common stock, par value $.001
per share (the "COMMON STOCK") and the Stockholders have agreed to contribute
their shares in RRCG to Enthrust in exchange for Common Stock (such transactions
being herein referred to as the "Exchange"); and
WHEREAS, Holding intends to make a final Tax Payment Distribution to the
Members as set forth below; and
WHEREAS, the parties hereto have agreed upon the following procedures
with respect to the final Tax Payment Distribution.
NOW, THEREFORE, for good and valuable consideration, the sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
1. On or before the date hereof, Holding has calculated, in
conjunction with its tax advisors, an estimate of Holding's taxable income for
the period beginning on January 1, 2007 and ending on the projected closing date
(such period being herein referred to as the "SHORT PERIOD") of the Exchange
(such amount being herein referred to as the "ESTIMATED SHORT PERIOD TAXABLE
INCOME").
2. Immediately prior to the consummation of the Exchange, Holding
will distribute to PR and RRCG, 70% and 30%, respectively, an amount (the
"PRELIMINARY FINAL DISTRIBUTION") not to exceed 80% of the product of (a)
45.498% (which is the maximum combined individual, Federal, New York State and
New York City income tax rate as determined by Holding's tax advisor, and
referred to herein as the "APPLICABLE TAX RATE") and (b) the Estimated Short
Period Taxable Income.
3. Following the date on which the Exchange is consummated, and
within the periods required by applicable federal, state and local tax laws,
Holding will prepare and file final tax returns (federal, state and local) for
the Short-Period (the "FINAL TAX RETURNS"), which shall
set forth all of the items of income, gain, deduction, loss and credit making up
Holding's consolidated taxable income for the Short Period ("ACTUAL SHORT PERIOD
TAXABLE INCOME") and shall deliver Schedules K-1 to each of PR and RRCG as filed
with the Final Tax Returns.
4. Within 10 days after the filing of the Final Tax Returns,
Holding shall make a supplemental payment to PR and the Stockholders, 70% and
30%, respectively, in an amount equal to (a) the product of (i) the Applicable
Tax Rate and (ii) the Actual Short Period Income ("ACTUAL TAXES") less (b) the
Preliminary Final Distribution. Any amount determined to be due to the
Stockholders shall be paid to them in accordance with their respective interests
as set forth on Schedule A hereto.
5. In the event that the Preliminary Final Distribution exceeds the
Actual Taxes (the "EXCESS DISTRIBUTION"), Holding shall so notify PR and the
Stockholders and, within thirty (30) days of receipt of such notice, PR shall
reimburse Holding 70% of such Excess Distribution and the Stockholders shall
reimburse Holding 30% of such Excess Distribution, in accordance with their
respective interests as set forth on Schedule A hereto.
6. Miscellaneous
(a) All notices, consents, waivers and other communications under
this Agreement must be in writing and will be deemed to have been duly given
when (a) delivered by hand (with written confirmation of receipt), (b) sent by
telecopier (with written confirmation of receipt), or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by written notice to the other parties):
If to Holding:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, Chief Financial Officer
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
If to PR:
c/o Rodman & ▇▇▇▇▇▇▇, LLC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
If to any Stockholder to the
address set forth next to such Stockholder's
name on Schedule A
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In each case, with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
(b) Any dispute or controversy under this Agreement shall be settled
exclusively by arbitration in the City of New York, County of New York in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitration award in any court having
jurisdiction.
(c) The parties agree (i) to furnish upon request to each other such
further information, (ii) to execute and deliver to each other such other
documents, and (iii) to do such other acts and things, all as any other party
may reasonably request for the purpose of carrying out the intent of this
Agreement.
(d) This Agreement supersedes all prior agreements between the
parties with respect to its subject matter and constitutes a complete and
exclusive statement of the terms of the agreement between the parties with
respect to its subject matter. This Agreement may not be amended except by a
written agreement executed by the party against whom the enforcement of such
amendment is sought.
(e) No party may assign any of its rights under this Agreement
without the prior consent of the other parties, except that RRCG may assign any
of its rights to the Stockholders. Subject to the preceding sentence, this
Agreement will apply to, be binding in all respects upon, and inure to the
benefit of and be enforceable by the respective successors and permitted assigns
of the parties. This Agreement and all of its provisions and conditions are for
the sole and exclusive benefit of the parties to this Agreement and their
successors and assigns.
(f) If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
(g) The headings of Sections in this Agreement are provided for
convenience only and will not affect its construction or interpretation. All
references to "Section" or "Sections" refer to the corresponding Section or
Sections of this Agreement. All words used in this Agreement will be construed
to be of such gender or number as the circumstances require. Unless otherwise
expressly provided, the word "including" does not limit the preceding words or
terms.
(h) This Agreement will be governed by the laws of the State of New
York without regard to conflicts of laws principles.
(i) This Agreement may be executed in one or more counterparts, each
of which will be deemed to be an original copy of this Agreement and all of
which, when taken together, will be deemed to constitute one and the same
agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first set forth above.
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ HOLDING, LLC
By:
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Name:
Title:
▇▇▇▇ ▇▇▇▇▇▇, LLC
By:
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Authorized Member
R&R Capital Group, Inc.
By:
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▇▇▇▇ ▇. ▇▇▇▇▇, III.
Chief Executive Officer
RRCG STOCKHOLDERS:
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▇▇▇▇ ▇. ▇▇▇▇▇ III
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SCHEDULE A
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STOCKHOLDERS
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NAME ADDRESS INTEREST
---- ------- --------
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇, III ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 40.690%
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 4.994%
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 9.090%
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 2.962%
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ 18.218%
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ 1.493%
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ 1.493%
▇▇ ▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 13.750%
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇. ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 0.068%
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 7.243%
TOTAL 100.0%
