DOB: CHF Technologies Stipulation

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IN THE MATTER OF:

CHF TECHNOLOGIES, INC.
GERALD GRAYSON
GRAYSON & ASSOCIATES, INC.
DOUGLAS MISCOLL
RAVELLO PARTNERS, LLC

    

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STIPULATION
AND AGREEMENT

No. ST-05-7205-S


WHEREAS the Banking Commissioner (the “Commissioner”) is responsible for administering Chapter 672a of the Connecticut General Statutes, the Connecticut Uniform Securities Act (the "Act") and Sections 36b-31-2 et seq. of the Regulations of Connecticut State Agencies (the "Regulations") promulgated under the Act;

WHEREAS CHF Technologies, Inc. (“CHF”) of 4135 Blackhawk Plaza Circle, Suite 280, Danville, California is an issuer of securities, specifically Series A preferred stock (the “Preferred Stock”);

WHEREAS Gerald Grayson is a director of CHF and a principal of Grayson & Associates, Inc. of One Tabor Center, Suite 980, 1200 Seventeenth Street, Denver, Colorado;

WHEREAS Douglas Miscoll is a principal of Ravello Partners, LLC which maintains an office at 1197 Broadway, New York, New York;

WHEREAS on August 24, 2004, the Securities and Business Investments Division (the “Division”) received from CHF a Rule 506 notice filing pursuant to Section 36b-21(e) of the Act.  Such notice filing disclosed that CHF had paid finder’s fees in connection with sales of the Preferred Stock;

WHEREAS following an inquiry by the Division pursuant to Section 36b-26 of the Act, CHF 1) admitted that Gerald Grayson of Grayson & Associates, Inc. and Douglas Miscoll of Ravello Partners, LLC (collectively, the “Finders”) had each received $4,096 in finder’s fees plus warrants for introducing two Connecticut investors to CHF; and 2) provided subscription documents showing that the Rule 506 notice filing had been made five months late;

WHEREAS the Division ascertained that none of the Finders was registered as an agent of issuer under Section 36b-6(a) of the Act or as a broker-dealer under the Act;

WHEREAS after learning of the Division’s regulatory concerns, CHF extended a $102,400 rescission offer to the two Connecticut investors, each of whom represented himself as “accredited” under Rule 501(a) of federal Regulation D, 17 C.F.R. 230.501(a);

WHEREAS the Commissioner acknowledges that, upon being notified of the Division’s concerns, the parties hereto cooperated with the Division in providing requested information;

WHEREAS Section 4-177(c) of Chapter 54 of the Connecticut General Statutes provides that "[u]nless precluded by law, a contested case may be resolved by stipulation, agreed settlement, or consent order or by the default of a party”;

WHEREAS CHF and the Finders desire to resolve the matters described herein informally, and, without either admitting or denying the truth of the Commissioner’s allegations set forth hereinabove, voluntarily enter into this Stipulation and Agreement, acknowledging that this Stipulation and Agreement is in lieu of any court action or administrative proceeding adjudicating any issue of fact or law on the matters described herein;

WHEREAS CHF and the Finders, through their execution of this Stipulation and Agreement, voluntarily waive any rights each has to seek judicial review or otherwise challenge or contest the terms and conditions of this Stipulation and Agreement;

NOW THEREFORE, THE PARTIES HERETO DO MUTUALLY AGREE AS FOLLOWS:

1. Gerald Grayson and Grayson & Associates, Inc. represent and agree that each shall refrain from transacting business as an agent or a broker-dealer in connection with the offer or sale of securities in or from Connecticut unless registered under Section 36b-6(a) of the Act or subject to a definitional exclusion under Section 36b-3 of the Act;
2.
No later than the date this Stipulation and Agreement is executed by the Commissioner, Gerald Grayson and Grayson & Associates, Inc. shall pay to the department by check made payable to “Treasurer, State of Connecticut” the sum of four thousand dollars ($4,000) as an administrative fine reflecting the disgorgement of fees earned in connection with the sale of the Preferred Stock to the Connecticut investors;
3. Douglas Miscoll and Ravello Partners, LLC represent and agree that each shall refrain from transacting business as an agent or a broker-dealer in connection with the offer or sale of securities in or from Connecticut unless registered under Section 36b-6(a) of the Act or subject to a definitional exclusion under Section 36b-3 of the Act;
4. No later than the date this Stipulation and Agreement is executed by the Commissioner, Douglas Miscoll and Ravello Partners, LLC shall pay to the department by check made payable to “Treasurer, State of Connecticut” the sum of four thousand dollars ($4,000) as an administrative fine reflecting the disgorgement of fees earned in connection with the sale of the Preferred Stock to the Connecticut investors;
5. CHF represents and agrees that it will refrain from employing an unregistered agent of issuer or engaging an unregistered broker-dealer in connection with future offers or sales of securities in or from Connecticut;
6. No later than the date this Stipulation and Agreement is executed by the Commissioner, CHF shall remit to the department by check payable to “Treasurer, State of Connecticut” the sum of two thousand five hundred dollars ($2,500) as an administrative fine;
7. Execution of this Stipulation and Agreement by the Commissioner is without prejudice to the right of the Commissioner to take enforcement action against any of the parties hereto, their officers, agents, employees and representatives based upon a violation of this Stipulation and Agreement or the basis for its entry if the Commissioner determines that compliance is not being observed with the terms hereof or if any representation made by CHF, Gerald Grayson, Grayson & Associates, Inc., Douglas Miscoll or Ravello Partners, LLC and reflected herein is subsequently determined to be untrue; and
8. This Stipulation and Agreement shall become binding when executed by all parties hereto.


IN WITNESS WHEREOF, the undersigned have executed this Stipulation and Agreement on the dates indicated.

Dated at Hartford, Connecticut               __________/s/__________________
this 4th day of January 2006.                  John P. Burke
                                                         Banking Commissioner



I, Arthur Bertolero, state and on behalf of CHF Technologies, Inc., that I have read the foregoing Stipulation and Agreement; that I know and fully understand its contents; that I am authorized to execute this Stipulation and Agreement on behalf of CHF Technologies, Inc., and that CHF Technologies, Inc. agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein.

                                                        CHF Technologies, Inc.

 

                                                 By
                                                         ________/s/_______________
                                                         Arthur Bertolero
                                                         President


 On this 20 day of December 2005, personally appeared Arthur Bertolero, signer of the foregoing Stipulation and Agreement, who, being duly sworn, did acknowledge to me that he was authorized to execute the same on behalf of CHF Technologies, Inc., a corporation, and acknowledged the same to be his free act and deed, before me.


_______________/s/______________
Notary Public
My Commission Expires:  3/20/09


 I, Gerald Grayson, state individually and on behalf of Grayson & Associates, Inc., that I have read the foregoing Stipulation and Agreement; that I know and fully understand its contents; that I am authorized to execute this Stipulation and Agreement on behalf of Grayson & Associates, Inc. and that both I and Grayson & Associates, Inc. agree freely and without threat or coercion of any kind to comply with the terms and conditions stated herein.

                                                         Grayson & Associates, Inc.

      

                                                   By    __________/s/______________
                                                          Gerald Grayson
                                                          President

 On this 29th day of Nov. 2005, personally appeared Gerald Grayson, signer of the foregoing Stipulation and Agreement, who, being duly sworn, did acknowledge to me that he was authorized to execute the same on behalf of Grayson & Associates, Inc., a corporation, and acknowledged the same to be his free act and deed, before me.


_______________/s/_________________
Notary Public
My Commission Expires:  08/04/2007

                                                            ___________/s/______________
                                                           Gerald Grayson
                                                           (Individually)


Subscribed and sworn to before me this 29th
day of Nov. 2005.


_____________/s/_________________
Notary Public
My Commission Expires:  08/04/2007

 

I, Douglas Miscoll, state individually and on behalf of Ravello Partners, LLC, that I have read the foregoing Stipulation and Agreement; that I know and fully understand its contents; that I am authorized to execute this Stipulation and Agreement on behalf of Ravello Partners, LLC and that both I and Ravello Partners, LLC agree freely and without threat or coercion of any kind to comply with the terms and conditions stated herein.

                                                             Ravello Partners, LLC

               

                                                    By      __________/s/_________________
                                                             Douglas Miscoll
                                                             Member


 On this 6th day of December 2005, personally appeared Douglas Miscoll, signer of the foregoing Stipulation and Agreement, who, being duly sworn, did acknowledge to me that he was authorized to execute the same on behalf of Ravello Partners, LLC, a limited liability company, and acknowledged the same to be his free act and deed, before me.


________________/s/____________
Notary Public
My Commission Expires:  02/19/06

 

                                                             __________/s/_________________
                                                            Douglas Miscoll
                                                            (Individually)

 

Subscribed and sworn to before me this 6th
day of Dec. 2005.


_______________/s/______________________
Notary Public
My Commission Expires:  02/19/06

 

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