STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is entered into as of
March 13, 1997, by and between Mity-Lite, Inc., a Utah corporation, (the
"Purchaser") and Xaio, Inc., a Delaware corporation (the "Seller"). The
Purchaser and the Seller are referred to hereinafter collectively as the
"Parties." The Seller owns 934.342 shares (the "Shares") of common stock (the
"Common Stock") of DO Group, Inc., a Delaware corporation (the "Company"). This
Agreement contemplates transactions in which the Purchaser will purchase from
the Seller, and the Seller will sell to the Purchaser, all of the Shares for
cash.
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein made, the Parties agree as follows:
1. PURCHASE AND SALE OF THE SHARES.
1.1 Basic Transactions. On and subject to the terms and conditions of
this Agreement, the Purchaser agrees to purchase from the Seller, and the Seller
agrees to sell to the Purchaser, all of the Shares for in cash payable (i)
$556,100 payable in cash by wire transfer or delivery of other immediately
available funds at the Closing and (ii) payment of the outstanding principal
balance of a promissory note payable by the Company to Seller in the original
principal amount of $250,000 (the "Note"), for an aggregate purchase price of
$806,100. Payment by Purchaser of the outstanding principal balance of the Note
in the amount of $250,000 shall constitute payment in full and complete
satisfaction of all amounts owing under the Note.
1.2 The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of LeBoeuf, Lamb,
Xxxxxx & XxxXxx, L.L.P. in Salt Lake City, Utah, commencing at 9:00 a.m. local
time on the second business day following the satisfaction or waiver of all
conditions to the obligations of the Parties to consummate the transactions
contemplated hereby (other than conditions with respect to actions the
respective Parties will take at the Closing itself) or such other date as the
Purchaser and the Seller may mutually determine (the "Closing Date").
1.3 Deliveries at the Closing. At the Closing, (a) the Seller will
deliver to the Purchaser the certificate referred to in Section 6.1.1 below, the
Note endorsed for transfer to Mity-Lite, Inc. and the stock certificate(s)
representing all of the Shares, endorsed in blank or accompanied by duly
executed assignment documents, and (b) the Purchaser will deliver the Purchase
Price to the Seller.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller represents
and warrants to the Purchaser that the statements contained in this Section 2
are correct and complete as of the date of this Agreement and will be correct
and complete as of the Closing Date (as though made then and as though the
Closing Date were substituted for the date of this Agreement throughout this
Section 2 ).
2.1 Organization of Seller. The Seller is duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
incorporation or organization.
2.2 Authorization of Transactions. The Seller has all necessary power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by the Seller and the consummation by the Seller of the transactions
contemplated hereby have been duly authorized by all requisite action by the
Seller, and, if applicable, its directors, members, partners and shareholders.
This Agreement has been duly executed and delivered by the Seller, and this
Agreement constitutes a legal, valid and binding obligation of the Seller,
enforceable in accordance with its terms. The Seller is not required to give any
notice to, make any filing with, or obtain any authorization, consent, or
approval of any third party or governmental agency in order to consummate the
transactions contemplated by this Agreement.
2.3 Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(a) violate or conflict with any law, judgment, order, or other restriction of
any government or court to which the Seller is subject or, if the Seller is a
corporation, any provision of its charter or bylaws or (b) conflict with, result
in a breach of, constitute a default under, or result in the creation of, any
lien, encumbrance, or claim on any of the assets or properties of the Seller
under any agreement, permit, or other arrangement by which the Seller is bound
or to which any of its assets is subject or affected, other than the Second
Amended and Restated Stockholders Agreement dated April 2, 1993 (the
"Stockholders Agreement"), the provisions of which have been waived.
2.4 Brokers' Fees. The Seller has no liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Purchaser could become
liable or obligated.
2.5 Company Shares and Note. The Seller holds of record and owns
beneficially (i) the Note and (ii) the number of shares of Common Stock set
forth above, free and clear of any restrictions on transfer (other than any
restrictions under the federal and state securities laws), taxes, mortgages,
pledges, encumbrances, claims, options, warrants, purchase rights, contracts,
commitments, puts, calls and demands. The Seller is not a party to any option,
warrant, purchase right, call, put or other contract or commitment that could
require the Seller to sell, buy, transfer, or otherwise dispose of any capital
stock of the Company (other than this Agreement and the Stockholders Agreement).
3. REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY AND ITS
SUBSIDIARY. The Seller represents and warrants to the Purchaser that, to the
Seller's knowledge, without investigation on the part of the Seller, the
statements contained in this Section 3 are correct and complete as of the date
of this Agreement and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date of
this Agreement throughout this Section 3).
3.1 Authorization, Qualification, and Corporate Power. Each of the
Company and its subsidiary, Sican Corporation (the "Subsidiary"), has all
necessary corporate power and authority and currently holds all licenses,
permits, and authorizations necessary to carry on the businesses in which it is
engaged and to own and use the properties owned and used by it. Neither the
Company nor its Subsidiary is in material violation of any provision of its
charter or bylaws. All material corporate actions taken by the Company and its
Subsidiary have been duly authorized or ratified.
3.2 Capitalization. The entire authorized capital stock of the Company
consists of 3,000 shares of Common Stock, of which 2,525.242 shares of Common
Stock are issued and outstanding and no shares of Common Stock are held in
treasury. All of the issued and outstanding capital stock of the Company and its
Subsidiary has been duly authorized, is validly issued, fully paid, and
nonassessable and held by such persons and in such amounts as shown on the books
of the Company. There are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights, calls,
puts or other contracts or commitments that could require the Company or its
Subsidiary to acquire or to issue, sell, dispose of or otherwise cause to become
outstanding, any of its capital stock or any securities or obligations
convertible into or exchangeable for its capital stock. There are no voting
trusts, proxies, or other agreements or understandings with respect to the
voting of the capital stock of the Company or its Subsidiary. The Company holds
of record and owns beneficially all of the outstanding shares of the Subsidiary,
free and clear of any restrictions on transfer (other than restrictions under
federal and state securities laws), taxes, mortgages, pledges, liens,
encumbrances, claims, security interests, options, warrants, purchase rights,
calls, puts, contracts, commitments, equities, claims, and demands. Neither the
Company nor its Subsidiary controls directly or indirectly any partnership,
corporation, limited liability company, association, or joint venture except the
Subsidiary.
3.3 Brokers' Fees. Neither the Company nor its Subsidiary has any
liability or obligation to pay any fees or commissions to any broker, finder, or
agent with respect to the transactions contemplated by this Agreement.
3.4 Financial Statements. All financial statements of the Company and
its Subsidiary present fairly the assets, liabilities and financial condition of
the Company and its Subsidiary and the results of operations of the Company and
its Subsidiary.
3.5 Recent Events. Since December 1, 1997, (a) there has not been any
material adverse change in the assets, liabilities, business, financial
condition, operations, results of operations, or future prospects of the Company
and its Subsidiary; (b) neither the Company nor its Subsidiary has entered into
any material agreement outside the ordinary course of business and (c) there has
not been any event, incident, action, failure to act, or transaction outside the
ordinary course of business involving the Company and its Subsidiary which could
have a material adverse effect on the Company or its Subsidiary. Since January
1, 1996, neither the Company nor its Subsidiary has issued, sold, or otherwise
disposed of any of its capital stock, or granted any options, warrants, or other
rights to purchase or obtain (including upon conversion, exchange, or exercise)
any of its capital stock.
3.6 Legal Compliance. Each of the Company, its Subsidiary, and their
respective predecessors and affiliates has complied with all laws applicable to
them in all material respects.
3.7 Certain Business Relationships with the Company and Its Subsidiary.
None of the Seller and its affiliates has been involved in any business
arrangement or relationship with the Company and its Subsidiary within the past
twelve (12) months, and none of the Seller and its affiliates owns any asset,
tangible or intangible, which is used in the business of the Company and its
Subsidiary, other than the Note and their relationship as directors of the
Company.
4. FURTHER ASSURANCES. In case at any time after the Closing any
further action is necessary or desirable to carry out the purposes of this
Agreement, each of the Parties will take such further action (including the
execution and delivery of such further instruments and documents) as any other
Party may request.
5. CONFIDENTIALITY. The Seller will not disclose except to the
Purchaser any confidential information of the Company and its Subsidiary,
including any trade secrets, research and development, manufacturing and
production processes, technical data, customer and supplier lists and
information, pricing and cost information, and financial business and marketing
data plans and shall deliver promptly to the Purchaser or destroy, at the
request and option of the Purchaser, all tangible embodiments (and all copies)
of such confidential information which are in its possession.
6. CONDITIONS TO OBLIGATION TO CLOSE.
6.1 Conditions to Obligation of the Purchaser. The obligation of the
Purchaser to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment, at or prior to Closing, of each of the following
conditions, any of which may be waived by the Purchaser; provided, however, the
Purchaser's election to proceed with the Closing of the transactions
contemplated herein shall not be deemed a waiver of any breach of any
representation, warranty or covenant herein, whether or not known to the
Purchaser or existing on the Closing Date;
6.1.1 the representations and warranties of the Seller contained in
this Agreement shall have been true and correct as of the date as of which they
were deemed to have been made and shall be true and correct in all material
respects at and as of the Closing Date and the Seller shall have delivered to
the Purchaser a certificate to that effect;
6.1.2 simultaneous with the Closing, the Purchaser shall have
consummated the transactions contemplated by the Contribution Agreement among
the Company, certain shareholders of the Company, and the Purchaser providing
for the funding of a newly formed holding company for the Company on terms
satisfactory to the Purchaser;
6.1.3 the Purchaser shall have had a full opportunity to complete its
due diligence review of the Company and its Subsidiary and the results of such
review shall have been satisfactory to the Purchaser in its sole discretion; and
6.1.4 the Seller shall have delivered to the Purchaser the Note and
certificate(s) for all of the Shares, free and clear of any mortgage, pledge,
lien, encumbrance, claim, or other security interest or restrictions other than
restrictions under state and federal securities laws, endorsed in blank or
accompanied by duly executed assignment documents.
6.2 Conditions to Obligation of the Seller. The obligation of the
Seller to consummate the transactions to be performed by it in connection with
the Closing is subject only to the Seller having received the Purchase Price.
7. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties of the Seller shall survive the Closing
hereunder. From and after the Closing Date, the Seller, on behalf of its
directors, officers, employees, agents and affiliates, hereby waives any and all
claims and causes of action against the Company and its Subsidiary in any way
related to facts arising before the Closing Date other than claims of directors
for indemnification for actions by the Company against such directors. The
Purchaser agrees that it will not cause the Company to bring any action against
the Seller, its directors, officers, employees, agents and affiliates, in any
way related to facts arising before the Closing Date related to any of Seller's
officers' or directors' service as a director of the Company. Nothing herein
shall prohibit the Purchaser from bringing claims against the Seller based upon
breaches of the Seller's representations and warranties herein.
8. TERMINATION. The Purchaser may terminate this Agreement by giving
written notice to the Seller (a) on or before thirty (30) days following the
date of this Agreement if the Purchaser is not satisfied with the results of its
due diligence regarding the Company and its Subsidiary, (b) in the event the
Seller has breached any representation, warranty, or covenant contained in this
Agreement in any material respect or (c) if the Closing shall not have occurred
on or before April 1, 1997. The Seller may terminate this Agreement by giving
written notice to the Purchaser if the Closing shall not have occurred on or
before April 1, 1997.
9. MISCELLANEOUS.
9.1 Press Releases and Public Announcements. The Seller shall not issue
any press release or make any public announcement relating to the subject matter
of this Agreement prior to the Closing without the prior written approval of the
Purchaser.
9.2 Entire Agreement; Counterparts. This Agreement (including the
documents referred to herein) constitutes the entire agreement among the Parties
and supersedes any prior understandings, agreements, or representations by or
among the Parties, written or oral, to the extent they related in any way to the
subject matter hereof. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
9.3 Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns.
9.4 Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Utah without giving effect to
any choice or conflict of law provision or rule (whether of the State of Utah or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Utah.
9.5 Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Purchaser and the Seller. No waiver by any Party of any default or breach of
warranty or covenant hereunder, whether intentional or not, shall be deemed to
extend to any prior or subsequent default or breach of warranty.
9.6 Expenses. The Seller agrees that neither the Company nor its
Subsidiary has borne or will bear any of the Seller's costs and expenses
(including any of its legal fees and expenses) in connection with this Agreement
or any of the transactions contemplated hereby.
9.7 Construction; Severability. No presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. The word "including" shall mean including
without limitation. Any term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall not affect the validity
or enforceability of the remaining terms and provisions hereof or the validity
or enforceability of the offending term or provision in any other situation or
in any other jurisdiction.
9.8 Specific Performance. Each of the Parties acknowledges and agrees
that the other Parties would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the Parties agrees that
the other Parties shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted in any
court of the United States or any state thereof having jurisdiction over the
Parties and the matter, in addition to any other remedy to which they may be
entitled, at law or in equity.
9.9 Submission to Jurisdiction. Each of the Parties submits to the
jurisdiction of any state or federal court sitting in Salt Lake City, Utah, in
any action or proceeding arising out of or relating to this Agreement and agrees
that all claims in respect of the action or proceeding may be heard and
determined in any such court. Each Party also agrees not to bring any action or
proceeding arising out of or relating to this Agreement in any other court. Each
of the Parties waives any defense of inconvenient forum to the maintenance of
any action or proceeding so brought and waives any bond, surety, or other
security that might be required of any other Party with respect thereto. Any
Party may make service on any other Party by sending or delivering a copy of the
process to the Party to be served at the address set forth above.
9.10 Attorneys' Fees. If any party to this Agreement brings an action
to enforce its rights under this Agreement the prevailing party shall be
entitled to recover its costs and expenses including, without limitation,
reasonable attorneys' fees incurred in connection with such action, including
any appeal of such action.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
MITY-LITE, INC.
By: /s/ Xxxxxxx X. Xxxxxx
Title: President
XAIO, INC.
By: /s/ Xxxxx Gaehwaler
Title: President
