STOCK PURCHASE AGREEMENT
XXXXXXX XXXXXXX HARDWARE COMPANY AGREEMENT, made as of the 18th day of May,
2007, by and between
XXXXXXX XXXXXXX CLIFF, 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
("Sellers")
AND:
WISEBUYS STORES, INC., a Delaware Corporation with its office located at
00-00 Xxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxxx, XX 00000 ("Purchaser")
RECITALS
Sellers own all of the issued and outstanding shares of XXXXXXX XXXXXXX
HARDWARE COMPANY ("Hacketts") The New York State Corporation with its principal
office at 0000 Xxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxx; said shares being owned
as follows:
Xxxxxxx Xxxxxxx Xxxxx 32 shares
Xxxxxxx Xxxxxxx, Xx. 32 shares
Xxxxxx X. Xxxxxxxx 32 shares
TOTAL 96 shares
Sellers and the Purchaser have agreed to the sale of all of issued and
outstanding shares of Hacketts, by Sellers to Purchaser, subject to and upon
certain terms, conditions and contingencies said forth in this Agreement.
AGREEMENT
1. SALE OF STOCK. The Sellers shall sell to the Purchaser 96 shares of the
capital stock of Hacketts, which constitute all of the issued and
outstanding shares of Hacketts.
2. PURCHASE PRICE. Purchaser, subject to the terms and conditions of this
Agreement, shall purchase all of the shares of Hacketts from Sellers at a
total purchase price of SIX MILLION DOLLARS ($6,000,000.00).
3. TERMS OF PAYMENT. At the time of Closing, Purchaser shall pay the purchase
price to Sellers in the following manner:
a. The sum of TWO MILLION DOLLARS ($2,000,000.00) in immediately
available funds at Closing, one third (1/3) of which is to be paid to
each Seller;
b. 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 TWO
HUNDRED SEVENTY (270) days after closing and substantially identical
to Note No. 1, appended hereto as Exhibit A;
c. Purchaser shall execute and deliver to each seller a promissory note
in the amount of THREE HUNDRED THIRTY THREE THOUSAND THREE HUNDRED AND
THIRTY THREE DOLLARS AND THIRTY THREE CENTS ($333,333.33) payable
THREE HUNDRED SIXTY FIVE (365) days after closing, substantially
identical to Note No. 2, appended hereto as Exhibit B;
d. Purchaser will execute and deliver to each seller an installment
promissory note in the amount of EIGHT HUNDRED THIRTY THREE THOUSAND
THREE HUNDRED THIRTY THREE DOLLARS AND THIRTY THREE CENTS
($833,333.33) substantially identical to Note No. 3, appended hereto
as Exhibit C. Notes # 1, 2 and 3 shall collectively be referred to as
the "Notes".
4. SECURITY. The promissory notes, appended hereto as Exhibits A, B and C
shall be secured as follows:
a. The personal guarantee of payment of all the Notes by Xxxxxx X.
Xxxxxxxxxx by execution and delivery to Sellers at Closing of a
Guaranty Agreement, substantially similar to Exhibit D appended
hereto;
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;
c. The execution and delivery by Xxxxxx X. Xxxxxxxxxx of a Stock Pledge
Agreement covering the pledged shares described in subparagraph b
above, substantially similar to Exhibit E appended hereto;
d. Said stock pledges described in subparagraph b and the Stock Pledge
Agreement appended hereto as Exhibit E shall secure payment of all of
the Notes and shall terminate upon timely payment in full of the Note
No. 1 and Note No. 2 appended hereto as Exhibits A and B, together
with all interest accrued hereon. The Personal Guarantee of Xxxxxx X.
Xxxxxxxxxx shall continue to apply thereon to the installment
promissory notes appended hereto as Exhibit C.
5. DEFAULT. All of the notes given to each Seller and appended hereto as
Exhibits A, 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 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 and 2,
payment of which shall constitute full satisfaction of all liabilities
owing by Purchaser by reason of Purchaser's default.
6. EMPLOYMENT AGREEMENTS. Purchaser and each of the Sellers shall execute
employment agreements substantially identical to Exhibits F-1, F-2 and F-3
appended hereto at least ten (10) business days before the Date of Closing.
Upon parent effectuating a "going public" transaction, an option pool of
five percent (5%) of the outstanding common stock shall be created and
allocated to Sellers.
7. WARRANTIES AND REPRESENTATIONS. Purchaser and Xxxxxx X. Xxxxxxxxxx
represent and warrant that as of the date hereof and as of the Closing
Date, the following representations shall be true and correct and in full
force and effect:
a. Organization and Good Standing. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the
State of New York.
b. Authority, Approvals and Consents. Purchaser has the corporate power
and authority to enter into this Agreement and to perform its
obligations hereunder. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby
have been duly authorized and validly approved by the Board of
Directors of Purchaser and by their respective stockholders if
necessary and no other corporate or other proceedings on the part of
Purchaser have necessary to authorize and approve this Agreement and
the transactions contemplated hereby. Purchaser hereby expressly
represents that it has fully and properly complied with all aspects of
applicable New York corporate law in entering into this Agreement and
for consummating the transactions contemplated hereunder. This
Agreement has been duly executed and delivered by, and constitutes a
valid and binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms.
c. Consents and Approvals. No consent, approval or authorization of, or
declaration, filing, or registration with, any Governmental Entity
will be required to be made or obtained by Purchaser in connection
with the execution, delivery, and performance of this Agreement and
the consummation of the transactions contemplated hereby.
d. No Violations. Neither the execution, delivery, or performance of the
Agreement by Purchaser, nor the consummation by Purchaser of the
transactions contemplated hereby, nor compliance by Purchaser with any
of the provisions hereof will (a) conflict with or result in any
breach of any provisions of the certificate of incorporation or bylaws
of the Purchaser, (b) result in a violation, or breach of, or
constitute (with or without due notice or lapse of time) a default (or
give rise to any right of termination, cancellation, vesting, payment,
exercise, acceleration, suspension or revocation) under any of the
terms, conditions or provisions of any contract, agreement or any
material note, bond, mortgage, deed of trust, security interest,
indenture, license, contract, agreement, plan or other instrument or
obligation to which Purchaser is a party or (c) violate any order,
writ, injunction, decree, statue, rule or regulation applicable to
Purchaser, except in the case of clauses (b) or (c) for violations,
breaches, defaults, terminations, cancellations, accelerations,
creations, impositions, suspensions or revocations that would not be
reasonably likely to have a material adverse effect.
e. Binding Nature. This Agreement shall be, when duly executed and
delivered a legally binding obligation of the Purchaser enforceable in
accordance with its terms.
f. Non-Merger and Survival. The representations and warranties of
Purchaser contained herein will be true at and as of Closing in all
material respects as though such representations and warranties were
made as of such time. Notwithstanding the completion of the
transactions contemplated hereby, the waiver of any condition
contained herein (unless such waiver expressly releases a party from
any such representation or warranty) or any investigation made by
Sellers, the representations and warranties of Purchaser shall survive
the Closing.
g. Debt Repayment and Loan Guarantees. Any indebtedness to Xxxxxx Xxxx,
estimated to be approximately $528,581, shall be paid in full at
closing. Purchaser shall have any personal loan guarantees by Sellers
removed or replaced on or after Closing, or have the debt repaid on or
within a reasonable time after Closing.
h. Hacketts' Assets. Purchaser agrees that until Note No. 1 and Note No.
2 are paid in full that, neither Hacketts nor any successor will
assign, transfer, distribute nor in any way dispose of any assets of
Hacketts or any successor, subsidiary, or affiliate other than in the
ordinary course of business without prior written consent of the
Sellers.
i. Board Representation. Seller agrees that at closing, one Director
(to be named by seller) will be elected to the Board of Hacketts
or its successor.
8. REPRESENTATIONS AND WARRANTIES OF SELLERS. Each Seller represents and
warrants that as of the date of the Closing Date, the following
representations shall be true and correct and in full force and effect:
a. Authority, Approvals and Consents. This Agreement has been duly
executed and delivered by, and constitutes a valid and binding
obligation of each Seller, enforceable against each Seller in
accordance with its terms, except as may be limited by laws affecting
bankruptcy, insolvency and creditors' rights and equitable remedies
and jurisdiction under general and corporate law.
b. Consents and Approvals. No consent, approval or authorization of, or
declaration, filing, or registration with, any Governmental Entity
will be required to be made or obtained by Sellers in connection with
the execution, delivery, and performance of this Agreement and the
consummation of the transactions contemplated hereby, save such, if
any as might be applicable in respect of any matter referenced herein.
c. No Violations. Neither the execution, delivery, or performance of the
Agreement by Sellers, nor the consummation by Sellers of the
transactions contemplated hereby, nor compliance by Sellers with any
of the provisions hereof will (a) conflict with or result in any
breach of any provisions of the certificate of incorporation or bylaws
of the Sellers (if applicable), (b) result in a violation, or breach
of, or constitute (with or without due notice or lapse of time) a
default (or give rise to any right of termination, cancellation,
vesting, payment, exercise, acceleration, suspension or revocation)
under any of the terms, conditions or provisions of any contract,
agreement or any material note, bond, mortgage, deed of trust,
security interest, indenture, license, contract, agreement, plan or
other instrument or obligation to which each Seller is a party or (c)
violate any order, writ, injunction, decree, statue, rule or
regulation applicable to Sellers other than as referenced herein,
except in the case of clauses (b) or (c) for violations, breaches,
defaults, terminations, cancellations, accelerations, creations,
impositions, suspensions or revocations that would not be reasonably
likely to have a material adverse effect.
d. Binding Nature. This Agreement shall be, when duly executed and
delivered a legally binding obligation of the Sellers enforceable in
accordance with its terms, except as may be limited by laws affecting
bankruptcy, insolvency and creditors' rights and equitable remedies
and jurisdiction under general and corporate law.
e. Non-Merger and Survival. The representations and warranties of Sellers
contained herein will be true at and as of Closing in all material
respects as though such representations and warranties were made as of
such time. Notwithstanding the completion of the transactions
contemplated hereby, the waiver of any condition contained herein
(unless such waiver expressly releases a party from any such
representation or warranty) or any investigation made by Purchaser,
the representations and warranties of Sellers shall survive the
Closing.
9. CLOSING. The Closing of this Purchase and Sale shall occur on or about June
30, 2007, (the "Closing Date") at Hacketts place of business.
At the Closing, Sellers shall deliver to Purchaser the following:
a. Duly executed stock certificates, transferring and assigning to
Purchaser all of the issued and outstanding shares of Hacketts;
b. 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.
At the Closing, Purchaser shall deliver to Sellers:
a. TWO MILLION DOLLARS ($2,000,000.00) in immediately available funds;
b. Duly executed Notes appended hereto as Exhibits A, B and C;
c. A duly executed Guaranty of Payment appended hereto as Exhibit D;
d. Duly executed Stock Pledge Agreement, appended hereto as Exhibit E;
e. 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
f. Purchaser shall provide proof for payments of the Hacketts
indebtedness as required in Section 7g.
10. GENERAL PROVISIONS
a. Expenses. Each of the Parties hereto shall pay its own fees and
expenses (including the fees of any attorneys, accountants or others
engaged by such Party) in connection with this Agreement and the
transactions contemplated hereby whether or not the transactions
contemplated hereby are consummated.
b. Paragraph Headings and Language Interpretations. The paragraph
headings contained herein are for reference only and shall not be
considered substantive provisions of this Agreement. The use of a
singular or plural form shall include the other form, and the use of a
masculine, feminine or neuter gender shall include the other genders,
as applicable.
c. Notices. All notices, claims, demands, and other communications
hereunder shall be in writing and shall be deemed given upon (a)
confirmation of receipt of a facsimile transmission, (b) confirmed
delivery by a standard overnight carrier or when delivered by hand, or
(c) the expiration of five (5) business days after the day when mailed
by registered or certified mail (postage, prepaid, turn receipt
requested), addressed to the respective parties at the following
addresses (or such other address for a party as shall be specified by
like notice):
a) If to the Purchaser, to:
Wise Buys Stores, Inc.
00-00 Xxxx Xxxxxx, 0" Xxxxx
Xxxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxxxxx
b) If to the Seller to:
Xxxxxxx Xxxxxxx Xxxxx Xxxxxxx Xxxxxxx, Xx. Xxxxxx Xxxxxxxx
000 Xxxxxxxxxx Xxxxxx 000 Xxxxxxxxx Xxxxxx 0000 Xxxxx 00
Xxxxxxxxxx, Xxx Xxxx 00000 Xxxxxxxxxx, Xxx Xxxx 00000 Xxxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx
0000 Xxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxx, Xxx Xxxx 00000-0000
d. Assignments. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the Parties hereto and their
respective successors and permitted assigns; provided, however, that
neither this Agreement nor any of the rights, interests, or
obligations hereunder may be assigned by any of the Parties hereto
without the prior written consent of the other Party. Purchaser agrees
that any such assignment shall not relieve Purchaser of its
obligations hereunder.
e. Entire Agreement. This Agreement, Guaranty Agreement, the Stock Pledge
Agreement and the Notes (collectively, the "Transaction Documents")
embody the entire agreement and understanding of the Parties with
respect to the subject matter hereof and supersede all prior written
or oral commitments, arrangements, understandings and agreements with
respect thereto. There are no restrictions, agreements, promises,
warranties, covenants or undertakings with respect to the transactions
contemplated hereby other than those expressly sat forth herein.
f. Modifications, Amendments and Waivers. At any time prior to the
Closing, to the extent permitted by law, (i) Purchaser and Seller may,
by written and mutually signed agreement, modify, amend or supplement
any term or provision of this Agreement and (ii) any term or provision
of this Agreement may be waived in writing by the Party which is
entitled to the benefits thereof.
g. Counterparts. This agreement may be executed in two (2) or more
counterparts, all of which shall be considered one (1) and the same
agreement and each of which shall be deemed an original. Each Party
shall receive a fully signed copy of this Agreement.
h. Governing Law. This Agreement shall be governed by the laws of the
Sate of New York as to all matters including, but not limited to,
matters of validity, construction, effect and performance.
i. Severability. If any one (1) or more of provisions of this Agreement
shall be held to be invalid, illegal or unenforceable, the validity,
legality, or enforceability of the remaining provisions of this
Agreement shall not be affected thereby. To the extent permitted by
applicable law, each party waives any provision of law which renders
any provision of this Agreement invalid, illegal of unenforceable in
any respect.
j. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, successors,
legal representatives and assigns.
IN WITNESS WHEREOF the parties have executed this Agreement effective as of the
day and year first above written.
WISEBUYS STORES, INC.
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Xxxxxx Xxxxxxxxxx
Treasurer & CFO
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
