PURCHASE AGREEMENT
This agreement was entered into on September 24,1999, between WHY USA
North America, Inc., a corporation organized and existing under the laws of
Wisconsin, with its principal place of business at 0000 Xxxxx Xxxxxxxx, Xxxxx
000, Xxxxxxxxx, Xxxxxxxxx, referred to as seller-corporation, Xxxxxxx X.
Xxxxxx and Xxx X. Xxxxxx, Xxxx X. Xxxxx and Xxxxxx X. Xxxxx of Menomonie, Xxxx
County and Xxxxx 0. Xxxxxx and Xxxxxx Xxxxxx of New Auburn, Chippewa County,
Wisconsin, referred to as seller-shareholders, and Northwest Financial Group,
Inc., a corporation organized and existing under the laws of Minnesota, with
its principal place of business at 0000 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxx,
Xxxxxxxxx, referred to as buyer.
WHEREAS,
(1) Seller-shareholders own all of the outstanding shares of capital
stock of seller-corporation; and
(2) Seller-corporation is engaged in the business of selling franchises
for real estate brokerage businesses.
(3) Buyer desires to enter the real estate brokerage business nationwide,
and to this end, desires to acquire the shares of capital stock of seller-
corporation on the terms and conditions set forth in this agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained in
this agreement and other good and valuable consideration, it is agreed as
follows:
SECTION ONE
SALE OF STOCK
On the terms and subject to the conditions set forth in this agreement,
seller-shareholders agree to sell, transfer, assign and deliver to buyer, and
buyer agrees to purchase, all of the outstanding shares of capital stock of
seller-corporation, consisting of 3,000 shares of common nonpar stock.
SECTION TWO
CONSIDERATION FOR STOCK
On the terms and subject to the conditions set forth in this agreement,
buyer agrees to pay to seller-shareholders, as the purchase of the shares of
capital stock of seller-corporation, the sum of Two Million ($2,000,000.00)
Dollars as follows:
Fifty Thousand ($50,000.00) Dollars as nonrefundable xxxxxxx money at the
time of execution of this agreement ($10,000.00 of which has all ready been
paid), and the balance to be paid in full at the time of closing. In the event
Seller-corporation does not
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comply with the terms of Section Six (4) (execution of estoppel agreement),
prior to or at the time set for closing, the above-described xxxxxxx money
shall be refunded to buyer.
The seller-corporation is negotiating the repurchase of one of a regional
director's territory ("Xxx X'Xxxx Territory") for an approximate purchase
price of Seventy-five Thousand ($75,000.00) Dollars. In the event this
territory purchase is closed prior to the closing described in SECTION FOUR,
the above purchase price shall be increased by the amount of consideration
paid by seller-corporation for the "Xxx X'Xxxx Territory". Seller-corporation
shall notify buyer in the event that the purchase price of the "Xxx X'Xxxx
Territory" exceeds $75,000.00.
SECTION THREE
CONDUCT OF BUSINESS BEFORE CLOSING
Seller-corporation and seller-shareholders covenant and agree that, from
the date of this agreement until the date of closing, seller-corporation will
at all times conduct its business in the usual and ordinary course and will
not, without the written consent of buyer, (a) purchase, sell, or otherwise
dispose of any property or services of any kind, other than purchase and sales
in the ordinary course of business and other than as noted in SECTION TWO
regarding the "Xxx X'Xxxx Territory"; (b) mortgage, pledge, create security
interests in or otherwise encumber any of its properties or assets; (c) make
or incur any capital commitment or expenditures or any unusual or long term
commitment; (d) grant any increase in salary or other increased compensation
to any of its employees; (e) declare or pay any dividend or make any other
distribution to shareholders other than the distribution of accounts
receivables as stated in SECTION FIVE below; (f) reveal to third persons any
trade secrets, customer lists, or other confidential or proprietary
information, or act otherwise in any manner that may adversely affect its
rights, interests, assets, or business; or (g) issue or sell any additional
stock or other securities, or grant any rights to subscribe for or to
purchase, or any options or warrants for the purchase of, any additional stock
or other securities.
SECTION FOUR
CLOSING
The closing of the purchase and sale provided for in this agreement shall
take place at 0000 Xxxxx Xxxxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx, Xxxx
Xxxxxx, at 10:00 A.M., on November 1, 1999. The closing date can be extended
to 12-31-99 or at such other time and place as may be mutually agreed to by
the parties, upon payment by Buyers of additional nonrefundable xxxxxxx money
of $50,000.00. At the closing, seller-shareholders shall deliver to buyer all
share certificates, assignments, and other instruments that may be necessary
to transfer and assign to buyer all of the outstanding shares of seller-
corporation, all in form satisfactory to buyer's counsel. Upon transfer of
such shares, buyer shall have full and complete ownership of WHY USA North
America, Inc. and thereby all interest in all of the assets of the corporation
(except for the accounts receivable accrued up to date of closing) and
responsibility for all of the corporate debt.
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SECTION FIVE
ACCOUNTS RECEIVABLE OF SELLER-CORPORATION
The uncollected accounts receivables which exist at the time of closing
shall belong solely to and be distributed to the seller-shareholders, and
shall not be conveyed with the other corporation assets to buyer.
SECTION SIX
REPRESENTATIONS AND WARRANTIES OF
SELLER-SHARE HOLDERS
Seller-shareholders represent and warrant to buyer as follows:
(1) Seller-corporation is a corporation organized, and in good standing
under the laws of Wisconsin, with full corporate power to carry on its
business as now being conducted and to own and operate the properties and
assets now owned and operated by it.
(2) The authorized capital stock of seller-corporation consists of 9,000
shares of common stock nonpar value of which 3,000 shares are issued and
outstanding as of the date of this agreement. All of the outstanding shares of
seller-corporation are validly issued, fully paid, and nonassessable.
(3) All business records, balance sheets, itemization of debts, franchise
registrations, trademark and copyright documentation, current contracts, and
other information provided by seller-corporation to buyer prior to the
execution of this agreement have been complete and accurate.
(4) Xxxxxxx Xxxxx, WHY USA, Inc., WHY USA Franchise Corporation and WHY
USA Development Corporation have no interest in or claim to the trademarks
copyrighted materials, franchises or other assets owned by seller-corporation;
seller-corporation will obtain the signature of said parties to the Estoppel
Agreement which is attached hereto and made a part hereof.
(5) No litigation, is pending against seller-corporation before any court
or any governmental agency and, to the knowledge of the seller-shareholders,
no such litigation is threatened or anticipated. Seller-corporation has not
violated any laws, regulations, or orders applicable to its business or
activities.
(6) Seller-corporation has filed all federal, state, and other tax
returns that are required to be filed by it and has paid or made provision for
the payment of all taxes due pursuant to those returns.
(7) Seller-corporation has no debts, liabilities, or obligations that
will remain unpaid and/or owing at the time of closing. It is the interest of
the parties that Buyer I purchasing Seller-corporation in a "debt free
condition".
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SECTION SEVEN
NONCOMPETE CLAUSE
Seller-shareholders agree not to reestablish or reopen any business,
trade, or occupation similar to the business of seller-corporation, or in any
manner to become involved directly or indirectly as owner, partner, agent,
stockholder, officer or otherwise in any such business within North America
for a term of five years.
SECTION EIGHT
LEGAL FEES AND CHOICE OF LAW
If any party breaches this agreement, a party thereby damaged shall, in
addition to all other available legal or equitable remedies, be entitled to
recover reasonable attorneys fees.
This agreement shall be construed according to the laws of Wisconsin.
In witness whereof, the parties have executed this agreement at
Menomonie, Wisconsin, on the date first above written.
Dated this 24th day of September , 1999.
/s/ Xxxxx X. Xxxxxx /s/Xxxxxxx X. Xxxxxx
WHY USA North America, Inc. Seller-shareholder, Xxxxxxx X. Xxxxxx
By: Xxxxx 0. Xxxxxx
President
/s/Xxxx X. Xxxxx
Seller-shareholder, Xxxx X. Xxxxx
`
/s/ Xxxxx X. Xxxxxx
Seller-shareholder, Xxxxx 0. Xxxxxx
Northwest Financial Group, Inc.
By: /s/ Xxxxxx Xxxxxxxxx
President
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