DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT (the "Agreement") is made and entered
into this 30th day of May, 2001, between Pawnbrokers Exchange, Inc., a Utah
corporation ("Pawnbrokers"); and Pawnbrokers Exchange No. One, Inc., a Utah
corporation and wholly-owned subsidiary of Pawnbrokers ("Pawnbrokers No.
One").
W I T N E S S E T H:
RECITALS
WHEREAS, Pawnbrokers is the parent of Pawnbrokers No. One, and
Pawnbrokers No. One is a newly formed wholly-owned subsidiary of Pawnbrokers;
and
WHEREAS, the respective Boards of Directors of Pawnbrokers and
Pawnbrokers No. One have adopted resolutions pursuant to which Pawnbrokers
shall, in consideration of the issuance of 1,000 shares of "restricted
securities" (common stock) of Pawnbrokers No. One, assign, convey and transfer
pursuant to and subject to the terms and conditions of this Agreement (the
"Conveyance"), all of its right, title and interest in and to all properties,
assets, liabilities, business, good will, its name and/or all other real or
personal tangible or intangible property of every kind or description that is
in any way connected with, related to or is or has been utilized by
Pawnbrokers in its present business operations ("Pawnbrokers Assets"); and
WHEREAS, it is the intention of the parties that all present
operations of Pawnbrokers shall be carried on by and through Pawnbrokers No.
One, with Pawnbrokers being the parent and holding company of Pawnbrokers No.
One, its wholly-owned subsidiary; and
WHEREAS, it is further understood and agreed that Pawnbrokers may
acquire other pawnshops that will be operated by Pawnbrokers separately
through other subsidiaries to be formed in the future, when and if needed;
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein, it is agreed:
Section 1
Conveyance of Pawnbrokers Assets and Plan of Distribution
1.1 Conveyance and Payment. Pawnbrokers hereby makes the
Conveyance of Pawnbrokers Assets, without qualification, to Pawnbrokers No.
One, excluding only those liabilities comprising the costs and expenses of the
Conveyance and this Agreement; and Pawnbrokers No. One acquires Pawnbrokers
Assets and agrees that it shall issue to Pawnbrokers 1,000 shares of its
common stock in consideration of the Conveyance.
1.2 Delivery of Title of Conveyances. The Conveyance of
Pawnbrokers Assets shall be effected by the delivery to Pawnbrokers No. One at
the closing (the "Closing") of the required certificates of title, if
applicable, or notarized assignments, as may be deemed to be reasonably
required or necessary, or other documentation, that is deemed reasonably
sufficient to convey the right, title and interest of Pawnbrokers in
Pawnbrokers Assets to Pawnbrokers No. One.
1.3 Further Assurances. At the Closing and from time to time
thereafter, Pawnbrokers shall execute such additional instruments and take
such other action as Pawnbrokers No. One may reasonably request in order to
more effectively transfer Pawnbrokers' right, title and interest in
Pawnbrokers Assets to Pawnbrokers No. One.
1.4 Assumption of Liabilities and Indemnification. Pawnbrokers
No. One shall assume, pay and indemnify and hold Pawnbrokers harmless from and
against any and all pre-Agreement liabilities of Pawnbrokers, whether by
contract, lease, license or otherwise, without qualification, except the costs
and expenses related to the Conveyance and this Agreement.
Section 2
Closing
The Closing contemplated by Section 1 shall occur on or before ten
calendar days following the execution and delivery of this Agreement, unless
another time is agreed upon in writing by the parties. The Closing may be
accomplished by wire, express mail or other courier service, conference
telephone communications or as otherwise agreed by the respective parties or
their duly authorized representatives.
Section 3
Representations and Warranties of Pawnbrokers
Pawnbrokers represent and warrant to, and covenant with, Pawnbrokers
No. One as follows:
3.1 Corporate Status. Pawnbrokers is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Utah and is licensed or qualified as a foreign corporation in all states in
which the nature of its business or the character or ownership of its
properties makes such licensing or qualification necessary.
3.2 Corporate Authority. Pawnbrokers has full corporate power
and authority to enter into this Agreement and to carry out its obligations
hereunder and will deliver to Pawnbrokers No. One or their respective
representatives at the Closing a certified copy of resolutions of its Board of
Directors authorizing execution of this Agreement by its officers and
performance thereunder.
3.3 Due Authorization. Execution of this Agreement and
performance by Pawnbrokers hereunder have been duly authorized by all
requisite corporate action on the part of Pawnbrokers, and this Agreement
constitutes a valid and binding obligation of Pawnbrokers and performance
hereunder will not violate any provision of the Articles of Incorporation,
Bylaws, agreements, mortgages or other commitments of Pawnbrokers.
Section 4
Representations, Warranties and Covenants of Pawnbrokers No. One
Pawnbrokers No. One represents and warrants to, and covenant with,
Pawnbrokers as follows:
4.1 Corporate Status. Pawnbrokers No. One is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Utah and is licensed or qualified as a foreign corporation in all states in
which the nature of its business or the character or ownership of its
properties makes such licensing or qualification necessary.
4.2 Corporate Authority. Pawnbrokers No. One has full corporate
power and authority to enter into this Agreement and to carry out its
obligations hereunder and will deliver to Pawnbrokers or its representative at
the Closing a certified copy of resolutions of its Board of Directors
authorizing execution of this Agreement by its officers and performance
thereunder.
4.3 Due Authorization. Execution of this Agreement and
performance by Pawnbrokers No. One hereunder have been duly authorized by all
requisite corporate action on the part of Pawnbrokers No. One, and this
Agreement constitutes a valid and binding obligation of Pawnbrokers No. One
and performance hereunder will not violate any provision of the Articles of
Incorporation, Bylaws, agreements, mortgages or other commitments of
Pawnbrokers No. One.
Section 5
General Provisions
5.1 Further Assurances. At any time, and from time to time,
after the Closing, each party will execute such additional instruments and
take such action as may be reasonably requested by the other party to confirm
or perfect title to any property or assets transferred hereunder or otherwise
to carry out the intent and purposes of this Agreement.
5.2 Waiver. Any failure on the part of any party hereto to
comply with any of its or their obligations, agreements or conditions
hereunder may be waived in writing by the party to whom such compliance is
owed.
5.3 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been given if delivered in
person or sent by prepaid first-class registered or certified mail, return
receipt requested, as follows:
If to Pawnbrokers: 000 Xxxxx Xxxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
With a copy to: Xxxxxxx X. Xxxxxxxxxx, Esq.
455 East 000 Xxxxx, #000
Xxxx Xxxx Xxxx, Xxxx 00000
If to Pawnbrokers No. One: 000 Xxxxx Xxxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
5.4 Entire Agreement. This Agreement constitutes the entire
agreement between the parties and supersedes and cancels any other agreement,
representation or communication, whether oral or written, between the parties
hereto relating to the transactions contemplated herein or the subject matter
hereof.
5.5 Headings. The section and subsection headings in this
Agreement are inserted for convenience only and shall not affect in any way
the meaning or interpretation of this Agreement.
5.6 Governing Law and Venue of Actions. This Agreement shall be
governed by and construed and enforced in accordance with the laws of the
State of Utah, except to the extent pre-empted by federal law, in which event
(and to that extent only), federal law shall govern.
5.7 Assignment. This Agreement shall inure to the benefit of,
and be binding upon, the parties hereto and their successors and assigns.
5.8 Counterparts. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
5.9 Default. In the event of any default hereunder, the
prevailing party in any action to enforce the terms and provisions hereof
shall be entitled to recover reasonable attorney's fees and related costs.
5.10 Survival of Representations and Warranties. The
representations, warranties, covenants and agreements contained herein shall
survive the Closing and be fully binding on the parties until the expiration
of the applicable statute of limitations period.
IN WITNESS WHEREOF, the parties have executed this Agreement
and Plan of Reorganization effective the day and year first above written.
PAWNBROKERS EXCHANGE, INC.
Date: 5/30/01. By/s/Xxxxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxx, President
PAWNBROKERS NO. ONE, INC.
Date: 5/30/01. By/s/Xxxxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxx, President