STOCK-FOR-STOCK AGREEMENT
REORGANIZATION AGREEMENT between Bargain Products, Inc., a Nevada
corporation (hereinafter referred to as "BRGN"), and shareholders of Troika, a
Delaware corporation (hereinafter referred to as "Troika").
For the Acquisition by BRGN of all the outstanding stock of Troika, in
exchange for stock of BRGN.
AGREEMENT, dated as of this 10th day of April, 1999, between BRGN and all
of the Shareholders of Troika (hereinafter collectively referred to as the
"Troika Shareholders").
WHEREAS, the Troika Shareholders own 1,000,000 shares of common stock, $.01
par value per share, of Troika, and which constitutes all of the outstanding
shares of common stock of Troika.
of the outstanding common stock of Troika, for a total of 1,000,000 issued and
outstanding shares of common stock of Troika.
WHEREAS, the Troika Shareholders own and have the right to sell, transfer
and exchange all of the shares for the purchase of the capital stock of Bargain
Products, Inc., Bargain Products, Inc. hereby offers 6,000,000 shares of its
restricted common stock to the Troika Shareholders for all of the outstanding
common stock of Troika and Bargain Products will have $80,000 in its corporate
account at the time of the exchange. The Troika Shareholders wish to make said
exchange.
WHEREAS, the parties hereto intend that the securities exchange described
herein between Bargain Products, Inc. and the Shareholders of Troika will be tax
free in accordance with the provisions of Section 368(a)(1)(B) of the Internal
Revenue Code.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
hereinafter set forth, the parties hereto have agreed and by these present do
hereby agree as follows:
0.Xxxxxxxx of Securities. Subject to the terms and conditions
hereinafter set forth, at the time of the closing referred to in Section 6
hereof (the "Closing Date"), Bargain Products, Inc. will issue and deliver, or
cause to be issued and delivered to the Troika Shareholders, in exchange for all
of the issued and outstanding shares of Troika, 6,000,000 shares of its common
stock.The shares of Bargain Products, Inc. will be allocated as set forth in
Schedule I, attached hereto. The shares of Troika Shareholders will be
exchanged for shares in Bargain Products, Inc. on a six-for-one (6 for 1)
basis.
2.Representations and Warranties by Troika and Troika Shareholders.
Troika and Troika Shareholders each represent and warrant to Bargain Products,
Inc., all of which representations and warranties shall be true at the time of
closing, and shall survive the closing for a period of six (6) months from the
date of closing, except as to the warranties and representations set forth in
subsection (i) herein, which shall survive for a period of three (3) years from
the date of closing, and those set forth in subsection (l) herein, which shall
survive for a period of six (6) months from the date of closing, or from the
date when the accounts receivable may become due and payable, whichever shall
occur later, that:
(a)Troika is a corporation duly organized and validly existing and
in good standing under the laws of the State of Delaware and has the
corporate powers to own its property and carry on its business as and where
it is now being conducted. Copies of the Certificate of Incorporation and
the By-Laws of Troika, which have heretofore been furnished by Troika
Shareholders to Bargain Products, Inc., are true and correct copies of said
Certificate of Incorporation and By-Laws including all amendments to the
date hereof.
(b)The authorized capital stock of Troika consists of 4,000,000
shares of common stock, $.01 par value ("Common Stock of Troika"), of which
1,000,000 shares have been validly issued and are now outstanding.
(c)Troika Shareholders have full power to exchange the shares to
purchase the capital stock of Bargain Products, Inc. on behalf of
themselves upon the terms provided for in this Agreement, and said shares
have been duly and validly issued and are free and clear of any lien or
other encumbrance.
(d)From the date hereof, and until the date of closing, no
dividends or distributions of capital, surplus, or profits shall be paid or
declared by Troika in redemption of their outstanding shares or otherwise,
and except as described herein no additional shares shall be issued by said
corporation.
(e)Since the date hereof, Troika has not engaged in any transaction
other than transactions in the normal course of the operations of their
business, except as specifically authorized by Bargain Products, Inc. in
writing.
(f)Troika is not involved in any pending or threatened litigation
which would materially affect its financial condition disclosed to Bargain
Products, Inc. in writing.
(g)Troika has and will have on the Closing Date, good and
marketable title to all of its property and assets shown on Schedule II,
attached hereto, free and clear of any and all liens or encumbrances or
restrictions, except as shown on Schedule II, attached hereto and except
for taxes and assessments due and payable after the Closing Date and
easements or minor restrictions with respect to its property which do not
materially affect the present use of such property.
(h)(1)The inventories of Troika as reflected in Schedule II,
furnished by Troika Shareholders to Bargain Products, Inc. prior to the
execution hereof, are valued at book value.
(2)The inventory of Troika listed on the schedule referred
to in (h) (1) above is hereinafter collectively referred to as the
"Inventory." The Inventory is in good and usable condition.
(i)As of the date hereof, there are no accounts receivable of
Troika of a material nature, except for those accounts receivable set forth
in Schedule II, attached hereto.
(j)Troika does not now have, nor will it have on the Closing Date,
any long-term contracts ("long-term" being defined as more than one year)
except those set forth in Schedule II attached hereto.
(k)Troika does not now have, nor will it have on the Closing Date
any pension plan, profit-sharing plan, or stock purchase plan for any of
its employees except those set forth in Schedule II, attached hereto and
certain options to proposed executive officers.
(l)Troika does not now have, nor will it have on the Closing Date,
any known liabilities or contingent liabilities.
(m)Upon completion of the stock exchange described herein, the
former Troika shareholders who will be receiving the 6,000,000 shares of BRGN
restricted common stock will not cause or allow BRGN to undertake a reverse
stock split until all options to purchase any currently outstanding common stock
have been exercised.
3.Representations and Warranties by Bargain Products, Inc.. Bargain
Products, Inc. represents and warrants to the Troika Shareholders, all of which
representations and warranties shall be true at the time of closing, and shall
survive the closing for a period of six (6) months from the date of closing, as
follows:
(a)Bargain Products, Inc. is a corporation duly organized and
validly existing and in good standing under the laws of the State of Nevada
and has the corporate power to own its properties and carry on its business
as now being conducted and has authorized capital stock consisting of
10,000,000 shares of common stock, $.01 par value per share, of which there
are 508,461 shares presently outstanding.
(b)Bargain Products, Inc. has the corporate power to execute and
perform this Agreement, and to deliver the stock required to be delivered
to Troika Shareholders hereunder.
(c)The execution and delivery of this Agreement, and the issuance
of the stock required to be delivered hereunder have been duly authorized
by all necessary corporate actions, and neither the execution nor delivery
of this Agreement, nor the issuance of the stock, nor the performance,
observance or compliance with the terms and provisions of this Agreement
will violate any provision of law, any order of any court or other
governmental agency, the Certificate of Incorporation or By-Laws of Bargain
Products, Inc. or any indenture, agreement or other instrument to which
Bargain Products, Inc. is a party, or by which Bargain Products, Inc. is
bound, or by which any of its property is bound.
(d)The shares of Common Stock of Bargain Products, Inc. deliverable
pursuant hereto will on delivery in accordance with the terms hereof, be
duly authorized, validly issued, and fully paid, and non-assessable.
(e)Bargain Products, Inc., agrees not to undertake a reverse stock
split until such time as all options to purchase any currently outstanding
common stock have been exercised.
4.Conditions to the Obligations of Bargain Products, Inc.. The
obligations of Bargain Products, Inc. hereunder shall be subject to the
conditions that:
(a)Bargain Products, Inc. shall not have discovered any material
error or misstatement in any of the representations and warranties by the
Troika Shareholders herein, and all the terms and conditions of this
Agreement to be performed and complied with shall have been performed and
complied with.
(b)There shall have been no substantial adverse changes in the
conditions, financial, business otherwise of Troika from the date of this
Agreement, and until the date of closing, except for changes resulting from
those operations in the usual and ordinary course of business, and between
such dates the business and assets of Troika shall not have been materially
adversely affected as the result of any fire, explosion, earthquake, flood,
accident, strike, lockout, combination of workmen, taking over of any such
assets by any governmental authorities, riot, activities of armed forces,
or acts of God or of the public enemies.
(c)Bargain Products, Inc. shall upon request and at the time of
closing, receive an opinion of counsel to the effect that: (1) Troika is
duly organized and validly existing under the laws of the State of Delaware
and has the power and authority to own its properties and to carry on its
respective business wherever the same shall be located and operated as of
the Closing Date; and, (2) this Agreement has been duly executed and
delivered by Troika Shareholders and constitutes a legal, valid and binding
obligation of the Troika Shareholders enforceable in accordance with its
terms.
(d)Troika does not now have, nor will it have on the date of
closing, any known or unknown liabilities or contingent liabilities, except
as specifically set forth on Schedule II, attached hereto.
5.Conditions to the Obligations of Troika Shareholders. The obligations
of the Troika Shareholders hereunder are subject to the conditions that:
(a)Troika Shareholders shall not have discovered any material error
or misstatement in any of the representations and warranties made by
Bargain Products, Inc. herein and all the terms and conditions of this
Agreement to be performed and complied with by Bargain Products, Inc. shall
have been performed and complied with.
(b)The Troika Shareholders shall upon request, at the time of
closing, receive an opinion of counsel to the effect that: (1) Bargain
Products, Inc. is a corporation duly organized and validly existing under
the laws of the State of Nevada, and has the power to own and operate its
properties wherever the same shall be located as of the Closing Date; (2)
the execution, delivery and performance of this Agreement by Bargain
Products, Inc. has been duly authorized by all necessary corporate action
and constitutes a legal, valid and binding obligation of Bargain Products,
Inc., enforceable in accordance with its terms; (3) the securities to be
delivered to Troika Stockholders pursuant to the terms of this Agreement
has been validly issued, is fully paid and non-assessable; (4) the exchange
of the securities herein contemplated does not require the registration of
the Bargain Products, Inc. securities pursuant to any Federal law dealing
with the issuance, sale, transfer, and/or exchange of corporate
securities;
(5) that Bargain Products, Inc. is not under investigation by the SEC, the
NASD or any state securities commission; (6) that there are no known
securities violations; (7) all shares issued by Bargain Products, Inc. have
been validly issued in accordance with Nevada or Federal law, are fully
paid and non-assessable; and (8) there are no outstanding options, rights,
warrants, conversion privileges or other agreements which would require
issuance of additional shares.
6.Closing Date. The closing shall take place on or before April 9,
1999, or as soon thereafter as is practicable, at the Law Offices of Xxx X.
Xxxxxx, 0000 Xxxx Xxxxxxxx Xxxx, Xxxxx X, Xxx Xxxxx, Xxxxxx 00000, or at such
other time and place as the parties hereto shall agree upon.
7.Actions at the Closing. At the closing, Bargain Products, Inc. and
Troika Shareholders will each deliver, or cause to be delivered to the other,
the securities to be exchanged in accordance with Section I of this Agreement
and each party shall pay any and all Federal and State taxes required to be
paid in connection with the issuance and the delivery of their own securities.
All stock certificates shall be in the name of the party to which the same are
deliverable.
8.Conduct of Business, Board of Directors, etc. Between the date hereof
and the Closing Date, Troika will conduct its business in the same manner in
which it has heretofore been conducted and the Troika Shareholders will not
permit Troika to: (1) enter into any contract, etc., other than in the ordinary
course of business; or (2) declare or make any distribution of any kind to the
stockholders of Troika, without first obtaining the written consent of Bargain
Products, Inc..
Upon closing, the old officers and members of the board of directors of
Bargain Products, Inc. will tender their resignations and a new Board of
Directors will be elected by the shareholders of Bargain Products, Inc., which
shall consist of the following individuals:
Xxxxx Xxxxxxxx
Xxxxxx Xxxxxxx
Upon election of the above Board of Directors, and subject to the authority
of the Board of Directors as provided by law and the By-Laws of Bargain Products
Inc., the new officers of Bargain Products, Inc., after the closing date of this
Agreement shall be as follows:
Simon KublanovPresident and Chief Executive Officer
Xxxxxx KuvykinSecretary & Treasurer
9.Access to the Properties and Books of Troika. The Troika Shareholders
hereby grant to Bargain Products, Inc., through their duly authorized
representatives and during normal business hours between the date hereof and the
Closing Date, the right of full and complete access to the properties of Troika
and full opportunity to examine their books and records.
10.Miscellaneous
(a)This Agreement shall be controlled, construed and enforced in
accordance with the laws of the State of Nevada.
(b)Each of the Constituent Corporations shall bear and pay all
costs and expenses incurred by it or on its behalf in connection with the
consummation of this Agreement, including, without limiting the generality
of the foregoing, fees and expenses of financial consultants, accountants
and counsel and the cost of any documentary stamps, sales and excise taxes
which may be imposed upon or be payable in respect to the transaction.
(c)At any time before or after the approval and adoption by the
respective stockholders of the Constituent Corporations, if required, this
Reorganization Agreement may be amended or supplemented by additional
written agreements, as may be determined in the judgment of the respective
Boards of Directors of the Constituent Corporations to be necessary,
desirable or expedient to further the purpose of this Reorganization
Agreement, to clarify the intention of the parties, to add to or to modify
the covenants, terms or conditions contained herein, or otherwise to
effectuate or facilitate the consummation of the transaction contemplated
hereby. Any written agreement referred to in this paragraph shall be
validly and sufficiently authorized for the purposes of this Reorganization
Agreement if signed on behalf of Troika or Bargain Products, Inc., as the
case may be, by its Chairman of the Board, or its President.
(d)This Reorganization Agreement may be executed in any number of
counterparts and each counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
Reorganization Agreement.
(e)This Agreement shall be binding upon and shall inure to the
benefit of the heirs, executors, administrators and assigns of the Troika
Shareholders and upon the successors and assigns of Bargain Products, Inc..
(f)All notices, requests, instructions, or other documents to be
given hereunder shall be in writing and sent by registered mail:
If to Troika
Shareholders, then:Xxxxx Xxxxxxxx
00-00 00xx Xxxxxx
Xxxxxxxx, XX 00000
If to Bargain Products, Inc.,
then:Bargain Products, Inc.
0000 X. Xxxxxxxx Xxxx, Xxx. X
Xxx Xxxxx, XX 00000
The foregoing Reorganization Agreement, having been duly approved or adopted
by the Board of Directors, and duly approved or adopted by the stockholders of
the constituent corporation, as required, in the manner provided by the laws of
the State of Nevada, the Chairman of the Board, the President or the Secretary
of said corporations, and the Shareholders of Troika do now execute this
Reorganization Agreement under the respective seals of said corporation by the
authority of the directors and stockholders of each, as required, as the act,
deed and agreement of each of said corporations. This Stock-For-Stock Agreement
may be signed in two or more counterparts.
BARGAIN PRODUCTS, INC.
By:____________________
Mont Xxxxxx, President
SHAREHOLDERS
_____________________
Xxxxx Xxxxxxxx
_____________________
Xxxxxx Xxxxxxx
SHAREHOLDERS OF TROIKA
Name Number of Shares
Xxxxx Xxxxxxxx 300,000
Xxxxxx Xxxxxxx 700,000
