Exhibit 99.1
EQUITY CONTRIBUTION Agreement
THIS EQUITY CONTRIBUTION AGREEMENT (the "Agreement") is made this 17th day
of October 2003 by and among X.X. Xxxxxxxx & Co., Inc., d/b/a Crown Financial
Group, Inc., a New Jersey corporation with offices at 000 Xxxxxxxxxx Xxxx.,
Xxxxxx Xxxx, Xxx Xxxxxx 00000 ("Crown") and Xxxxxx X. Xxxxxxxx as Manager of JSA
Investment LLC (the "Transferor").
WHEREAS, Xxxxxx X. Xxxxxxxx is a former founder, Chairman, and Chief
Executive Officer of Crown.
WHEREAS, Xxxxxx X. Xxxxxxxx presently is the beneficial owner of 11.7% of
outstanding shares Crown common stock.
WHEREAS, the Transferor wishes to contribute assets with a market value in
the amount of $1.7 million to Crown for Crown's equity, and without compensation
by Crown or the creation of any liability to the Transferor, in an effort to
preserve the value of the existing Crown securities owned by the Transferor.
WHEREAS, Crown is the intended beneficiary of the asset contribution
effected by this Agreement.
For good and valuable consideration, the receipt and sufficiency of which
is acknowledged by the parties hereto, the Transferor and Crown hereby agree as
follows:
1. Each of the parties represents and warrants that it has entered into
this Agreement voluntarily, and that it has had an opportunity to
confer with its own counsel in connection with the negotiation and
execution of this Agreement.
2. Transferor agrees to contribute to Crown and does hereby contribute,
and Crown agrees to accept from Transferor, and does hereby accept,
full title to the assets listed on Exhibit A attached hereto (the
"Assets"). Transferor represents, warrants and agrees that they
relinquish any claim to the Assets, that Crown owes no obligation to
the Transferor in respect to the contribution of the Assets to the
capital of Crown, and that the Transferor will not commence litigation
against Crown including any past or present director, employee or
affiliated party for the return of the Assets or for compensation for
the Assets. Similarly, Crown agrees with respect to the subject matter
of this Agreement to not commence litigation against Xxxxxx X.
Xxxxxxxx and releases Xxxxxx X. Xxxxxxxx from liability to Crown with
respect to the subject matter of this Agreement.
3. Transferor represents, warrants and agrees that effective as of the
date of this Agreement, Crown shall have full right, title and
interest to the Assets, free and clear of any lien, claim, right or
encumbrance.
4. Effective as of the date of this Agreement, Transferor hereby
irrevocably surrenders, forfeits and releases all right, title and
interest in the Assets.
5. Transferor and Crown agree to pay the respective reasonable costs and
expenses that are incurred with respect to the negotiation, execution,
delivery and performance of this Agreement.
6. If Crown, in its sole determination, commences legal action against
its former auditor, Xxxxxxxx & Co. ("Xxxxxxxx"), due to its audits of
Crown during the term of Crown's engagement of Xxxxxxxx, Crown will
share equally, net of expenses, the proceeds of such legal action with
Transferor for proceeds up to and including $3.4 million.
7. Transferor and Crown agree to execute such additional instruments
(including such stock powers, powers
of attorney, assignments, assumptions or other title documents or
instruments of transfer) as may be reasonably requested by Crown, and
to take such further action as may reasonably be necessary to carry
out the intent of this Agreement.
8. This Agreement is governed by and will be construed in accordance with
the laws of the State of New Jersey.
9. The Transferor represents, warrants and agrees that the current market
value of the Assets are no less than one million seven hundred
thousand dollars ($1,700,000) and the Crown is the intended
beneficiary of this Agreement.
10. Crown agrees to liquidate the assets to cash at fair market value as
soon as reasonably possible. If the total net cash from the
liquidation of the assets exceeds $1,700,000, the amount of net cash
in excess of $1,700,000 shall be returned to Transferor as within one
business day of Crown's receipt of notice of settlement.
11. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, executors, personal
representatives, successors and assigns.
12. This Agreement contains the entire agreement between Transferor and
Crown with respect to the subject matter of this Agreement and
supercedes any prior or contemporaneous representations or agreements.
13. This Agreement may be executed in multiple counterparts that together
constitute a single document and may be amended only by a writing
signed by Transferor and Crown.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of October 17, 2003.
CROWN FINANCIAL GROUP, INC.
By: /s/ Xxxx X. Xxxxxxxx
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Name: Xxxx X. Xxxxxxxx
Title: Chief Executive Officer and President
/s/ Xxxxxx X. Xxxxxxxx
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XXXXXX X. XXXXXXXX
Manager, JSA Investments LLC
