AMENDMENT
THIS AMENDMENT is effective as of the 18th day of September, 2007
AMONG:
WISEBUYS STORES, INC., a company formed pursuant to the laws of the
State of Delaware and having an office for business located at 00-00
Xxxx Xxxxxx, Xxxxx 0, Xxxxxxxxxx, Xxx Xxxx 00000 ("Purchaser")
AND:
XXXXXXX XXXXXXX XXXXX, residing at 000 Xxxxxxxxxx Xxxxxx, Xxxxxxxxxx,
Xxx Xxxx;
XXXXXXX XXXXXXX, XX., residing at 000 Xxxxxxxxx Xxxxxx, Xxxxxxxxxx,
Xxx Xxxx, and;
XXXXXX X. XXXXXXXX, residing at 0000 Xxxxx 00, Xxxxxxxxxx, Xxx Xxxx
(collectively, the "Sellers")
WHEREAS:
A. Purchaser and Seller are party to certain Stock Purchase Agreement, Pledge
Agreement, Guarantee Agreement, Employment Agreements, and Promissory
Notes, dated May 24, 2007 (collectively, the "Agreements"); and,
B. The parties wish to amend certain provisions of the Agreements, but wish to
have the Agreements continue in full force and effect, as amended.
NOW THEREFORE THESE AGREEMENTS WITNESSETH THAT in consideration of the premises
and the mutual covenants, agreements, representations and warranties contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto hereby agree as follows:
1. Section 3(a) of the Stock Purchase Agreement shall be amended in its
entirety as follows:
"a. The sum of ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500,000.00) in
immediately available funds at Closing, one third (1/3) of which is to be
paid to each Seller;"
2. Section 3(e) shall be added to Section 3 of the Stock Purchase Agreement as
follows:
"e. Purchaser shall execute and deliver to each Seller a promissory note in the
amount of ONE HUNDRED SIXTY SIX THOUSAND SIX HUNDRED AND SIXTY-SIX DOLLARS
AND SIXTY SEVEN CENTS ($166,666.67), payable FOUR HUNDRED FIFTY (450) days
after closing and on other terms identical to Note No. 1, which note ("Note
1(i)") shall be appended hereto as Exhibit A(i)."
3. Section 4(b) of the Stock Purchase Agreement shall be amended in its
entirety as follows:
"b. The pledge of 96 shares of Hacketts being purchased by Purchaser pursuant
to this Agreement by delivery to Sellers of certificates evidencing all of
said shares registered in the name of Purchaser, with separate stock powers
duly executed in blank by Purchaser. Substantially all of the retail assets
of WiseBuys Stores, Inc. shall be immediately and irrevocably
transferred/contributed by WiseBuys Stores, Inc. into Hacketts and are
subject to the Stock Pledge Agreement;"
4. Section 5 of the Stock Purchase Agreement shall read:
"5. DEFAULT. All of the notes given to each Seller and appended hereto as
Exhibits A, A(i), B and C shall be interrelated so that a default under an
one Note shall automatically constitute an immediate default under each and
every of the other Notes if outstanding at that time, thereby fully
accelerating and making immediately due and payable the aggregate unpaid
principal balances of all said Notes, plus all interest accrued thereon. In
the event of default of Note Nos. 1, 1(i) or 2, Sellers shall retain and
transfer into their ownership all of the shares of Hacketts, and shall
exercise and pursue any of the rights and remedies available to Sellers
against Purchaser and/or Guarantor Xxxxxx X. Xxxxxxxxxx to collect Notes 1,
1(i) and 2, payment of which shall constitute full satisfaction of all
liabilities owing by Purchaser by reason of Purchaser's default.
5. Section 7(g) of the Stock Purchase Agreement shall be amended in its
entirety as follows:
"g. Debt Repayment and Loan Guarantees. Purchaser shall execute a debt Guaranty
agreement with Community Bank with an effective date of the Closing date.
Indebtedness to Xxxxxx Xxxx estimated to be approximately $479,439 at the
time of Closing shall be paid in full at Closing. "
6. Section 7(i) of the Stock Purchase Agreement shall be amended in its
entirety as follows:
"7(i). Board Representation. Seller agrees that effective upon the closing, all
current Hacketts board members shall resign, and two (2) Directors (to be
named by Seller) will be elected to the Board of Hacketts or its successor
or parent holding company."
7. Section 9 of the Stock Purchase Agreement shall be amended in its entirety
as follows:
"9. CLOSING. The Closing shall occur on or before November 30, 2007 (the
"Closing Date") at Hacketts place of business. If not closed before January
1,2008, this agreement shall be in default On or before September 30, 2007,
proof acceptable to Sellers of availability of at least 1.5 million dollars
to be applied to the payment to Sellers required at Closing and
availability of funds required to fully pay the indebtedness owing by
Hacketts to Xxxxxx Xxxx at Closing.
a. At the Closing, Sellers shall deliver to Purchaser the following:
i. Duly executed stock certificates, transferring and assigning to
Purchaser all of the issued and outstanding shares of Hacketts;
ii. Any and all other documents, certificates, instruments, etc. that
are deemed necessary and appropriate to transfer to Purchaser
good, clear and marketable title to all of the Xxxxxxx shares
being sold pursuant hereto. These documents shall include but not
limited to, all past and outstanding loan documents, previous
board minutes, original articles of incorporation, amendments to
articles of incorporation, by-laws, the stock ledger, and all
such materials related to the governance and good standing of
Hacketts.
b. At the Closing, Purchaser shall deliver to Sellers:
i. ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500,000.00) in
immediately available funds;
ii. Duly executed Notes appended hereto as Exhibits A, A(i) B and C;
iii. A duly executed Guaranty of Payment appended hereto as Exhibit D;
iv. Duly executed Stock Pledge Agreement, appended hereto as Exhibit
E;
v. Payment in full of the indebtedness owing by Hacketts to Xxxxxx
Xxxx in immediately available funds;
vi. Stock certificates evidencing 96 shares of Hacketts registered in
the name of Purchaser with duly executed and separate stock power
as provided in Paragraph 4(b) of the Agreement; and
c. Conditions Precedent to Closing:
i. The Closing shall occur upon the completion of an acceptable (to
WiseBuys, in its sole discretion) audit of Hacketts' financial
statements for its prior two fiscal years. The cost of this audit
shall be borne solely by WiseBuys. All Hacketts records shall be
made available to WiseBuys' accountants. Hacketts shall commit
its best efforts and provide any and all reasonable assistance as
may be necessary to complete such audit at no cost to WiseBuys.
ii. Payment in full of the indebtedness owing by Hacketts to Xxxxxx
Xxxx as provided in Section 9.b.v. above.
iii. Sellers shall have been fully released from their personal
guarantees of indebtedness owing by Hacketts to Community Bank,
N.A.
iv. Indebtedness owing by Hacketts to Xxxxxxx Xxxxxxx Xxxxx, Xxxxxxx
Xxxxxxx, Xx., Xxxxx Leader (and family), Xxxxxxxx X. and Xxx
Xxxxxx, Xxxxxxxx and Xxxxxxxx Xxxxxx shall have been replaced
with convertible debentures substantially identical to Exhibits
G-1,G-2.G-3,G-4, G-5 and G-6 appended to this Agreement.
d. Purchaser shall provide proof for payments of the Hacketts
indebtedness as required in Section 7g.
7. The first Whereas clause of the Stock Pledge Agreement shall be amended in
its entirety as follows:
"WHEREAS WISEBUYS STORES, INC. ("Purchaser") had entered a Stock Purchase
Agreement (the "Agreement") with Pledgees for the purchase of all of the issued
and outstanding shares of Xxxxxxx Xxxxxxx Hardware Company from Pledgees
whereunder Purchaser is making and delivering to Pledgees three (3) Promissory
Notes each in the amount of $166,666.67, designated as Notes No. 1 in said
Agreement, three (3) Promissory Notes each in the amount of $166,666.67,
designated as Notes No. 1(i) in said Agreement, three (3) Promissory Notes each
in the amount of $333,333.33, designated as Notes No. 2 in said Agreement; and
three (3) Convertible Installment Promissory Notes each in the amount of
$833,333.33, designated as Notes No. 3 in said Agreement copies of which are
appended hereto as Exhibits X-0, X-0, X-0, X(x)-0, X(x)-0, X(x)-0, X-0, X-0,
B-3, C-1,C-2 and C-3 and"
8. Section 6 of the Stock Pledge Agreement Paragraph 6 Termination shall be
amended in its entirety as follows:
"6. Termination. This Pledge Agreement shall end and all of the collateral
pledged to and held by Sellers shall be returned to Pledgor upon the timely
payment of all principal and accrued interest evidenced by Notes # 1, #1(i)
and # 2. If any default occurs resulting in acceleration of Notes # 1,
#1(i) or # 2, said collateral shall be applied by Pledgees against total
unpaid principal and interest of all of said Notes # 1, #1(i) and # 2.
IN WITNESS WHEREOF the parties have executed this Amendment effective as of the
day and year first above written.
WISEBUYS STORES, INC
By: /S/ Xxxxxx X. Xxxxxxxxxx
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Xxxxxx X. Xxxxxxxxxx
Chief Financial Officer
INDIVIDUALLY
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Xxxxxx Xxxxxxxxxx
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Xxxxxxx Xxxxxxx Cliff
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Xxxxxxx Xxxxxxx, Xx.
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Xxxxxx Xxxxxxxx
