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
---------------------- ----------------
Xxxxxx Xxxxxxxxxxx, Xx. Xxxxxx X. XxXxxx, Xx.
PRESIDENT d/b/a Hardyston
Distributor
