EXHIBIT 10.4 - AGREEMENT OF BUSINESS COMBINATION BY EXCHANGE
OF ASSETS FOR STOCK BETWEEN THE XXXXX GROUP, INC. AND XXXXXX
XXXXXX, XX. DOING BUSINESS AS HARDYSTON DISTRIBUTORS
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AGREEMENT OF BUSINESS COMBINATION
BY EXCHANGE OF ASSETS FOR
STOCK
AGREEMENT dated this 22 day of April, 1999, by and
between THE XXXXX COUP, INC., a corporation having its
principal place of business at 00 Xxxxxx Xxxxx, Xxxxx 000,
Xxxxx, Xxx ,xxxxxx 00000 ("PURCHASER"), and Xx. Xxxxxx
XxXxxx, Xx., doing business as Hardyston Distributors,
having
his principal place of business at 00-X Xxxxxxxx Xxxx,
Xxxxxxxx, XX 00000 (the "COMPANY").
W I T N E S S E T H
WHEREAS, The COMPANY is desirous of exchanging all or
substantially all of its assets; and
WHEREAS, PURCHASER is desirous of acquiring all of the
assets of the Company; and,
WHEREAS, the PURCHASER wishes to employ Xx. Xxxxxx X.
XxXxxx,
Xx. ("Employee"); and,
WHEREAS, Employee wishes to be employed by the PURCHASER;
and,
WHEREAS, PURCHASER is a holding company which is publicly
held and which owns automotive related products; and,
WHEREAS, the COMPANY is an automotive distributor in
Northwest New Jersey;
IT IS NOW THEREFORE AGREED that in consideration of the
mutual covenants and agreements hereinafter set forth, the
parties hereto agree as follows:
0.Xxxxxxxx of Assets.
1.1 Subject to the terms and conditions of this
Agreement and the performance by the parties hereto of their
respective obligations hereunder, then Company shall
exchange, transfer, convey, assign and deliver to PURCHASER,
and PURCHASER shall receive, acquire and accept on the
Closing Date (as such term is hereinafter defined) all of
the right, title and interest of the Company, including all
aspects to the business, assets, goodwill, and rights of
Company as shall exist on the Closing Date, including,
without limitation, inventory, accounts receivable,
goodwill, rights in tradenames, trademarks and copyrights,
all rights relating to or arising out of the business
conducted by the Company under express or implied warranty
(as from the suppliers of the Company with respect to the
Assets being transferred to PURCHASER), all books and
records, correspondence, employment records and files of or
relating to the business or Assets of the Company being
exchanged with PURCHASER and all of the Company's right,
title and interest in and to each lease, contract,
agreement, purchase order or commitment to which the Company
is a party or in which the Company has rights, (all of such
assets are collectively referred to hereinafter as the
"Assets"), free and clear of all liabilities, obligations,
liens and encumbrances, except as expressly assumed by
PURCHASER under Section 2 below.
1.2 The transfer of the Assets as herein provided shall
be effected by bills of sale, endorsements, assignments,
drafts, checks, deeds and other instruments of transfer and
conveyance delivered to PURCHASER on the Closing Date in
form sufficient to transfer the Assets as contemplated by
this agreement and as shall be reasonably requested by
PURCHASER. Company covenants that (i) it will, at any time
and from time to time after the Closing Date, execute and
deliver such other instruments of transfer and conveyance
and do all such further acts and things as may be reasonably
requested by PURCHASER to transfer and deliver to PURCHASER
or to aid and assist PURCHASER in collecting and reducing to
possession, any and all of the Assets; (ii) PURCHASER, after
the Closing Date, shall have the right and authority to
collect, for the account of PURCHASER, all checks, notes and
other evidences of indebtedness or obligations to make
payment of money and other items which shall be transferred
to PURCHASER as provided herein and to endorse with the name
of Company any such checks, notes or other instruments
received after the Closing Date; and (iii) Company will
transfer and deliver to PURCHASER any cash or other property
that Company may receive after the Closing Date in respect
of or arising out of the business conducted by Company.
After the Closing Date, at reasonable times and upon
reasonable notice, Company shall have access to the books
and records conveyed to PURCHASER hereunder, and PURCHASER
shall have access to any minute books, stock books and
similar corporate records retained by Company.
1.3 Company covenants that between the date hereof and
the Closing Date and, if reasonably requested by PURCHASER,
after the Closing Date, Company shall use its best efforts
to obtain the consent of any parties to any contracts,
licenses, leases, commitments, sales orders, purchase orders
or other agreements being assigned by Company to PURCHASER
hereunder as shall be reasonably requested by PURCHASER. If
any such required consent is not obtained, this agreement
shall not constitute an agreement to assign the instrument
relating thereto, however Company shall cooperate with
PURCHASER in any reasonable arrangement to provide for
PURCHASER the benefits under any such contract, license,
lease, commitment, sales order, purchase order or other
agreement, including enforcement, at the cost and for the
benefit of PURCHASER, of any and all rights of Company
against the other party thereto arising out of the breach or
cancellation by such party or otherwise.
2. Assumption of Liabilities. PURCHASER shall assume no
liabilities of Company, except as specified in the list of
liabilities which is attached hereto as Exhibit II.
3. Closing. The Closing hereunder (the "Closing") shall
take place on or about the 8th day of April, 1999 at the
offices of Xxxxx X. Xxxxxx, Esq. 000 Xxxxx xxxxxx, Xxxx
Xxxx, Xxx Xxxxxx 00000 or at such other time and place as
may be agreed by PURCHASER and the Company (the "Closing
Date").
0.Xxxxxxxx Terms; Allocation.
4.1 In consideration of the exchange and transfer of
the Assets herein contemplated, on the Closing Date,
PURCHASER shall deliver at Closing to Employee the sum of
five thousand dollars ($5,000.00) in cash. Certificates for
shares of said PURCHASER'S common stock shall be issued to
Employee not later than 90 days after closing. The number of
these shares shall be equal to the value of the assets less
$15,000 divided by the average of the bid and asked price on
the day before the Closing. The value of the assets shall be
determined by taking the sum of the cost of inventory, plus
the collectable value of the accounts receivable, plus the
fair market value of the equipment and rolling stock
multiplied by 1.05. No other factors shall be taken into
account when calculating the value of the assets for the
purpose of this Agreement. In addition, Employee shall
receive two additional payments of $5,000.00 each to be paid
60 and 120 days after the date of Closing. Employee shall
also execute at Closing, the attached Employment Agreement.
4.2 On the date of Closing, PURCHASER represents that
in addition to the above mentioned shares to be delivered to
Employee, there shall remain outstanding, in addition
thereto, only the following shares held by other
shareholders, to wit:
Fifty Five Million (55,000,000).
5.Representations and Warranties of Company. Company
hereby represents and warrants as follows:
5.1 Company is a sole proprietorship operating under the
name of Hardyston Distributors under the laws of the
State of New Jersey and has full power and authority to own
its properties and carry on its business as and in the
places where such properties are now owned or such business
is now being conducted. on or before closing Company shall
establish to the satisfaction of PURCHASER that it has title
to the Assets and authority to convey the same in accordance
with the terms of this Agreement. Complete and correct
copies of such documents as the PURCHASER may demand will be
turned over prior to Closing. The Company is duly qualified
to do business and is in good standing in all jurisdictions
in which such qualification is necessary because of the
character of the properties owned by it or the nature of its
activities. Company has taken no action and has not failed
to take any action, which action or failure would preclude
or prevent Company from conducting the business of Company
in the manner heretofore conducted.
5.2 Company has no subsidiaries.
5.3 Company is solely owned by the Employee.
5.4 Employee has full power and authority, corporate
and otherwise, to enter into this agreement on behalf of
Company and to cause Company to assume and perform its, his
or her obligations hereunder. The execution and delivery of
this agreement and the performance by Company of its
obligations hereunder have been duly authorized by the Board
of Directors of Company, if any, and no further action or
approval, corporate or otherwise, is required in order to
constitute this agreement as a binding and enforceable
obligation of Company. The execution and delivery of this
agreement and the performance by Company of its obligations
hereunder do not and will not violate any provision of, nor
conflict with or result in any breach of any condition or
provision of, or constitute a default under, or result in
the creation or imposition of any lien, charge or
encumbrance upon any of the Assets by reason of the terms of
any contract, mortgage, lien, lease, agreement indenture,
instrument, judgment or decree to which Company is a party
or which is or purports to be binding upon Company or which
affects or purports to affect any of the Assets.
5.4 No action, approval, consent or authorization,
including but not limited to any action, approval, consent
or authorization by any governmental or quasi-governmental
agency, commission, board, bureau or instrumentality is
necessary as to Company in order to constitute this
agreement as a binding and enforceable obligation of Company
in accordance with its terms.
5.5 Company has not incurred any obligation or
liability (absolute or contingent, liquidated or
unliquidated, xxxxxx or inchoate) except current obligations
and liabilities incurred in the ordinary course of their
businesses which would act as a lien against the Assets.
5.6 Company has not leased or effected any transfer of
any of the Assets;
6. Representations and Warranties of PURCHASER.
PURCHASER hereby represents and warrants that on the closing
date all of the following will be true:
6.1 PURCHASER is a corporation duly organized, validly
existing and in good standing under the laws of the state of
Delaware. PURCHASER is not conducting any business in any
location. Complete and correct copies of the Certificate of
incorporation of Company and all amendments thereto,
certified in each case by the Secretary of State of the
State of Delaware, and of the By-Laws of PURCHASER, and all
amendments thereto, certified by the Secretary of PURCHASER,
have been or will be delivered to Company on or prior to the
Closing Date by PURCHASER. PURCHASER will present at closing
a certificate of good standing for the State of Delaware.
PURCHASER has taken no action and has not failed to take any
action, which action or failure would preclude or prevent
Company from conducting the business of Company in the
manner heretofore conducted. PURCHASER is approved for
trading in the over-the-counter market with not less than
two market makers.
6.2 PURCHASER has subsidiaries.
6.3 PURCHASER has no authorized or outstanding
securities other than its common stock, x.0001 par value per
share (the "Common Stock"), which consists of 80,000,000
authorized shares of which not more than 55,000,000 shares
are currently outstanding. All outstanding Common stock is
duly authorized, validly issued, fully-paid and
non-assessable (except for such statutory and constitutional
obligations as may be imposed notwithstanding full payment
for and valid issuance of such shares), and there are no
presently issued or outstanding securities of PURCHASER
convertible into common stock nor are there any outstanding
options, warrants, agreements, rights or commitments of any
kind relating to the authorized but unissued Common Stock.
All transfer taxes, if any, with respect to transfers of
securities of PURCHASER made prior to the date hereof have
been paid. All of the common stock is owned, both
beneficially and of record, free of any security interests,
liens, pledges, claims, charges, escrows encumbrances,
options, rights of first refusal, mortgages, indentures,
security agreements or other contracts (whether or not
relating in any way to credit or the borrowing of money) and
the designated owner thereof has the unrestricted right to
vote such Common Stock. PURCHASER also has authorized shares
of Preferred Stock having a par value of $.001 per share,
none of which are issued and/or outstanding.
6.4 PURCHASER' s Board of Director's will recommend to
certain controlling shareholders, as soon as practicable
after receipt of Company's certified financial statements,
approval of the transaction contemplated herein and obtain
written consent to take such acts and actions as may be
deemed necessary or advisable by counsel to Company to fully
empower PURCHASER and its Board of Directors to enter into
and consummate this transaction.
6.5 PURCHASER has full power and authority, corporate
and otherwise, to enter into this agreement and to assume
and perform its, his or her obligations hereunder. The
execution and delivery of this agreement and the performance
by PURCHASER of its obligations hereunder have been duly
authorized by the Board of Directors of PURCHASER and no
further action or approval, except shareholder approval,
corporate or otherwise, is required in order to constitute
this agreement as a binding and enforceable obligation of
PURCHASER. The execution and delivery of this agreement and
the performance by PURCHASER of its obligations hereunder do
not and will not violate any provision of the Certificate of
incorporation or By-Laws of PURCHASER and do not and will
not conflict with or result in any breach of any condition
or provision of, or constitute a default under, or result in
the creation or imposition of any lien, charge or
encumbrance upon.any of its assets by reason of the terms of
any contract, mortgage, lien, lease, agreement indenture,
instrument, judgment or decree to which PURCHASER is a party
or which is or purports to be binding upon Company or which
affects its assets.
6.6 No action, approval, consent or authorization,
including but not limited to any action, approval, consent
or authorization by any governmental or quasi-governmental
agency, commission, board, bureau or instrumentality is
necessary as to PURCHASER in order to constitute this
agreement as a binding and enforceable obligation of
PURCHASER in accordance with its terms.
6.7 PURCHASER has not during the last 30 days, except
as may be required to satisfy the terms of this Agreement:
6.7.1 authorized, issued, sold or converted any
securities, or entered into any agreement with respect
thereto;
6.7.2 declared, set aside or made any dividend or other
distribution or purchased, redeemed or reclassified any of
their capital stock or effected any stock split, stock
dividend, exchange or recapitalization or entered into any
agreement in respect of the foregoing;
6.7.3 incurred any damage, destruction or similar loss,
whether or not covered by insurance, materially affecting
their businesses or. properties;
6.7.4 sold, assigned or transferred- any of their
tangible assets or any patent, trademark, trade name,
copyright, license, franchise, design or other intangible
assets or properties;
6.7.5 mortgaged, pledged, granted or suffered to exist
any lien or other encumbrance or charge on any of their
assets or properties, tangible or intangible;
6.7.6 waived any rights of material value or canceled,
discharged, satisfied or paid any material debts or claims;
6.7:7 incurred any obligation or liability (absolute or
contingent, liquidated or unliquidated, xxxxxx or inchoate);
6.7.8 leased or effected any transfer of any of their
assets or properties;
6.7.9 entered into, made any amendment of or terminated
any lease, material contract or license;
6.7.10 amended its Certificate of Incorporation or
By-Laws;
6.7.11 effected any change in their accounting
practices, procedures or methods;
6.7.12 became obligated to make any payment to any
shareholder of PURCHASER in any capacity, or entered into
any transaction of any nature with any shareholder of
PURCHASER in any capacity;
6.7.13 increased the compensation payable to any of
their directors, officers or employees or became obligated
to increase any such compensation;
6.7.14 entered into any transaction other than in the
ordinary course of business, or changed in any way any of
their business policies or practices.
6.8 PURCHASER is not a party to or has any contract or
commitment of any kind or nature whatsoever, written or
oral, formal or informal, including, without limitation, any
lease, license, franchise, employment, maintenance,
consultant or commission agreement, pension, profit-sharing,
bonus, stock purchase, stock option, retirement, severance,
hospitalization, accident, insurance or-other plan or
arrangement involving employee benefits, contract with any
labor union or contract for services, materials, supplies,
merchandise, inventory or equipment, for the sale or
purchase of any of its services, products or assets, for the
borrowing of money or for a line or letter of credit, with
any current or former director, officer or employee of
PURCHASER which will be in effect on the Closing Date, with
any government or agency thereof, pursuant to which its
right to compete with any entity or person in the conduct of
its business is restrained or restricted for any reason or
in any way, guaranteeing the performance, liabilities or
obligations of any Entity or person, for capital
improvements or expenditures or with any contractor or
subcontractor for in excess of $100.00, for charitable
contributions aggregating in excess of $100.00, or involving
in excess of ;100.00 in cash over its term (including any
periods covered by any options to renew by any party).
6.9. PURCHASER has no liabilities except as shown on
its financial statements, no contracts or other obligations
whatsoever including any contingent liabilities.
7. Financial Statements and Form 10.
Company shall deliver to PURCHASER, on or before the
Closing Date, sufficient financial information in a form
acceptable to the United States Securities and Exchange
Commission for consolidation with PURCHASER'S financial
statements and will be in compliance with generally accepted
accounting principles and Regulation SX promulgated under
the Securities Act of 1933, as amended, and as it applies to
corporations which have registered securities upon Form 10 or
Form 10SB under the 1934 Securities Exchange Act. After
closing, the new management represents that it will promptly
update Company's Form 10-SE and timely file the same and all
other forms required by the United States Securities and
Exchange Commission.
8.Miscellaneous.
a)This Agreement shall constitute the entire agreement
of the parties hereto and may not be amended, except by
written consent of the parties hereto in writing executed by
them.
b) This Agreement shall be construed according to the
laws of the State of New Jersey and shall be enforceable in
any court of competent jurisdiction located therein.
c) This Agreement shall inure to the benefit of the
parties and their successors in interest, if any, but shall
not otherwise be assignable.
d) Where in this Agreement one gender or the other is
used, of the singular or the plural is used, and if to
effect the intent of the parties hereto the use of the other
gender or number is needed then it is understood that such
gender or both or such number or both is implied.
e) This Agreement may be executed in counterparts and
receipt-of facsimile transmission of signatures shall be
sufficient to effect acceptance of this Agreement, although
the parties hereto agree to submit within a reasonable time
duplicate original signed copies of this Agreement to each
other.
9. Indemnification.
Each party to this Agreement shall indemnify and hold
harmless each other party at all times after the date of
closing against and in respect of any liability, damage or
deficiency, all actions, suits, proceedings, demands,
assessments, judgments, costs and expenses, including
attorney's fees incident to any of the foregoing, resulting
from any misrepresentation, breach of covenant or warranty
for non-fulfillment of any agreement on the part of such
party under this Agreement, or from any misrepresentation in
or omission from any certificate furnished or to be
furnished to a party hereunder. Subject to the terms of this
Agreement, the defaulting party shall reimburse the other
party or parties on demand for any reasonable payments made
by said parties at any time after the date of closing, in
respect to any liability or claim to which the foregoing
indemnity relates, if such payment is made after reasonable
notice to the other party to defend or satisfy the same, and
such party failed to defend or satisfy the same.
10.Covenant Not to Disclose.
(a) I shall not at any time during or after the
termination of my employment by Company reveal, divulge, or
make known to any person (other than Company or its
Affiliates) or use for my own account any confidential
information used by Company or any of its Affiliates during
my employment by Company before and during the term of this
Agreement and made known to me by reason of my employment by
Company. I shall retain all such knowledge and information
which I may acquire during my employment by Company in trust
for the sole benefit of Company and its Affiliates and their
successors and assigns.
(b) As used in this Agreement, the term "Affiliate"
shall mean any corporation, company, partnership or other
person or entity that directly or indirectly through one or
more intermediaries, controls or is controlled by or is
under common control with the person of which such
corporation, company, partnership or other person or entity
is an affiliate.
11. Brokers. No brokers have been utilized in
connection with this transaction. PURCHASER shall not be
liable for the payment of any finder's or consultant's fees
except as specifically provided herein.
IN WITNESS WHEREOF THE PARTIES HERETO, CORPORATE PARTIES
HAVING BEEN DULY AUTHORIZED BY THEIR RESPECTIVE BOARDS OF
DIRECTORS, HAVE SET THEIR HANDS AND SEALS ON THE DATE FIRST
ABOVE WRITTEN.
THE XXXXX GROUP, INC.
By: (s) Xxxxxx Xxxxxxxxxxx By: (s) Xxxxxx XxXxxx
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Xxxxxx Xxxxxxxxxxx, Xx. Xxxxxx X. XxXxxx, Xx.
PRESIDENT d/b/a Hardyston
Distributor
