EXHIBIT 2.1
AGREEMENT FOR PURCHASE AND SALE OF STOCK
THIS AGREEMENT FOR PURCHASE AND SALE OF STOCK, is made and entered into
effective as of the 30th day of June, 1999, by and among OXBORO MEDICAL
INTERNATIONAL, INC., a Minnesota corporation ("Medical") and XXXX XXXXXXX,
XXXXXXX XXXXXXXX and XXXXXXX XXXXX, all individuals residing in the state of
Minnesota (collectively, the "Buyers").
WITNESSETH:
WHEREAS, Medical Owns all of the issued and outstanding stock of OXBORO
OUTDORS, INC. (the "Corporation"); and
WHEREAS, the Buyers desire to purchase from Medical and Medical desires
to sell to the Buyers all of the issued and outstanding stock of the Corporation
(the "Shares");
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and mutual promises of the parties hereto and the mutual benefits to
be gained by the performance thereof, the parties hereto agree as follows:
1.) Purchase and Sale of Shares. Subject to the terms and conditions
set forth in this Agreement, on the Closing Date, Medical shall transfer, assign
and convey the Shares to the Buyers as provided on Schedule 1, and the Buyers
shall acquire the Shares from Medical.
2.) Purchase Price. As full payment for the Shares, the Buyers shall
pay to Medical a purchase price (the "Purchase Price") equal to Six Hundred
Fifty Thousand Dollars ($650,000). At the Closing, the Purchase Price shall be
paid by the Buyers to Medical as follows:
(a) Cash. Three Hundred Eighty-Five Thousand Dollars ($385,000) by
cashier's check or money order and made payable to Medical.
(b) Promissory Note. A promissory note in the form of Schedule 2(b)
attached hereto (the "Promissory Note"), duly executed by the Buyers
and Medical and payable to Medical in a principal amount of Two Hundred
Sixty-Five Thousand Dollars ($265,000).
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3.) Representations and Warranties of Medical. Medical represents and
warrants to the Buyers as follows:
(a) Organization. The Corporation is a Minnesota corporation duly
organized, validly existing, and in good standing under the laws of the
State of Minnesota and has all the necessary corporate powers to own
its properties and to carry on its business as now owned and operated
by it. The Corporation is now, and has been at all times since its
creation, duly authorized, qualified and licensed to carry on its
business in the places and in the manner as conducted at the time such
businesses were conducted. The Corporation is duly qualified to do
business as a foreign corporation and in good standing in all
jurisdictions in which it leases real property or in which the conduct
of its business requires such qualification, except where failure to be
so qualified would not have a material adverse effect on its business.
(b) Capital. The authorized capital stock of the Corporation consists
of one million (1,000,000) shares of common stock, having a par value
of One Cent ($.01) per share, of which twenty-five thousand (25,000)
shares are issued and outstanding. All of the shares are validly
issued, fully paid, and nonassessable. No subscriptions, options,
rights, warrants, convertible securities, or other agreements or
commitments of any kind exist which obligate the Corporation to issue
or transfer from treasury any of its authorized by unissued capital
stock.
(c) Title. Medical is the owner, beneficially and of record, of all the
Shares free and clear of all liens, encumbrances, security agreements,
equities, options, claims, charges, and restrictions.
(d) Subsidiaries. The Corporation does not own, directly or indirectly,
any interest or investment (whether equity or debt) in any corporation,
limited liability company, partnership, business, trust, or other
entity.
(e) Financial Statements. Attached as Schedule 3(e) are copies of the
following financial statements of the Corporation (collectively, the
"Financial Statements"):
(1) The balance sheet as of May 31, 1999 and statement of
income for the eight (8) month period then ended;
(2) The consolidated balance sheets of Medical and the
Corporation as of September 30, 1998 and September
30, 1997, and the related statements of operations
and shareholders' equity for the two (2) years ending
on these dates. These Financial Statements agree to
the completed audited Financial Statements as
reported by the Corporation's independent public
accountants; and
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(3) The unaudited statements of income of the Corporation
for the fiscal years ending September 30, 1998 and
1997.
The audited Financial Statements have been prepared in
accordance with generally accepted accounting principles (and
the unaudited have generally been prepared in accordance with
generally accepted accounting principles) both consistently
followed by the Corporation throughout the periods indicated,
and fairly present the financial position and results of
operations of the Corporation as of the respective dates of
the balance sheets and statements of operations included in
the Financial Statements.
(f) Absence of Changes. Since the date of the most recent balance sheet
attached hereto, there has not been any:
(1) Transaction by the Corporation except in the ordinary
course of business as conducted on that date;
(2) Capital expenditure by the Corporation exceeding One
Thousand Dollars ($1,000);
(3) Material adverse change in the financial condition,
liabilities, assets, business, or prospects of the
Corporation;
(4) Destruction, damage to, or loss of any asset of the
Corporation (whether or not covered by insurance)
that materially and adversely affects the financial
condition, business, or prospects of the Corporation;
(5) Labor trouble or other event or condition of any
character materially and adversely affecting the
financial condition, business, assets, or prospects
of the Corporation;
(6) Change in accounting methods or practices (including,
without limitation, any change in depreciation or
amortization policies or rates) by the Corporation;
(7) Reevaluation by the Corporation of any of its assets;
(8) Declaration, setting aside for payment of a dividend
or other distribution in respect to the capital stock
of the Corporation, or
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any direct or indirect redemption, purchase, or other
acquisition by the Corporation of any of its shares
of capital stock;
(9) Increase in the salary or other compensation payable
or to become payable by the Corporation to any of its
officers, directors, or employees, or the
declaration, payment, or commitment or obligation of
any kind for the payment of a bonus or other
additional salary or compensation to any such person;
(10) Sale or transfer of any asset of the Corporation,
except in the ordinary course of business;
(11) Amendment or termination of any contract, agreement,
or license to which the Corporation is a party,
except in the ordinary course of business;
(12) Loans by the Corporation to any person or entity, or
guaranty by the Corporation of any loan;
(13) Mortgage, pledge, or other encumbrance of any asset
of the Corporation;
(14) Waiver or release of any right or claim of the
Corporation, except in the ordinary course of
business;
(15) Other event or condition of any character that has or
might reasonably have a material and adverse effect
on the financial condition, business, assets, or
profit of the Corporation;
(16) Issuance or sale by the Corporation of any shares of
its capital stock of any class, or of any other of
its securities; or
(17) Agreement by the Corporation to do any of the things
described in the preceding clauses (1) through (16).
(g) Absence of Undisclosed Liabilities. Attached as Schedule 3(g) is a
complete and accurate list of accounts payable of the Corporation as of
May 31, 1999, as reflected in the balance sheet of that date, included
in the Financial Statements, together with an accurate aging of these
accounts. These accounts payable, and all accounts payable of the
Corporation after that date, arose from transactions in the ordinary
course of business. Except as provided on Schedule 3(g), in Section
3(ff) or any future liabilities relating to the licenses attached
hereto as Schedule 3(o), the Corporation has no debt, liability, or
obligation of any nature, whether accrued, absolute, contingent, or
otherwise (including any
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due to Medical except as provided on Schedule 3(g)), and whether due or
to become due, that is not reflected or reserved against in the most
recent balance sheet included in the Financial Statements, except for
those that may have been incurred after the date of that balance sheet.
All debts, liabilities, and obligations incurred after that date were
incurred in the ordinary course of business, and are usual and normal
in amount both individually and in the aggregate.
(h) Tax Returns. Attached as Schedule 3(h) are the tax returns of the
Corporation for the tax years ending on September 30, 1998 and 1997.
Within the times and in the manner prescribed by law, the Corporation
has filed all federal, state, and local tax returns required by law and
has paid all taxes, assessments, and penalties due and payable. There
are no present disputes as to taxes of any nature payable by the
Corporation.
(i) Real Property. Attached as Schedule 3(i) is a copy of the lease
agreement by and between the Corporation and Medical (the "Lease
Agreement"). All representations and warranties relating to the real
property that are contained in the Lease Agreement are incorporated
herein by reference and, as such, shall be an integral part of this
Agreement. Notwithstanding the foregoing, there are no existing
violations of any environmental, pollution or hazardous waste laws,
rules regulations affecting the real property. In addition, the Buyers
and the Corporation may rely on the representations and warranties
contained in the Lease Agreement regardless of any inspection which the
Buyers or the Corporation may make of the real property.
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(j) Inventory. Attached as Schedule 3(j) is a complete and accurate
list of the inventories of raw materials, work in process, and finished
goods (collectively, the "Inventories") as shown on the Corporation's
most recent balance sheet included in the Financial Statements. Such
Inventories consist of items of a quality substantially similar to the
quality of the items at the time of purchase of such Inventory. Except
for sales made in the ordinary course of business since that date, all
the Inventories are the property of the Corporation. As of the Closing
Date, no items have been pledged as collateral or are held by the
Corporation on consignment from others. The Inventories are based upon
quantities determined by physical count or measurement, taken within
the preceding six (6) months, and are valued at a cost basis consistent
with that of prior years.
(k) Other Property. Attached as Schedule 3(k) is a complete and
accurate list of all personal property of the Corporation including,
but not limited to, all trucks, automobiles, machinery, equipment,
furniture, supplies, tools, dies, jigs, molds, patterns, drawings, and
all other tangible personal property, that is used by the Corporation
in connection with its business (except inventories of raw materials,
work in process, and finished goods). As of the Closing Date, the
Corporation has good title to the properties and assets used by it and
all such properties and assets are free and clear of all security
interest, liens or other claims. The property listed on Schedule 3(k)
constitutes all such tangible personal property necessary for the
conduct by the Corporation of its business as now conducted. Except as
provided on Schedule 3(k), no personal property used by the Corporation
in connection with its business is held under any lease or conditional
sales contract or is other than in the possession and under the control
of the Corporation.
(l) Accounts Receivable. Attached as Schedule 3(l) is a complete and
accurate list of the accounts receivable of the Corporation as of May
31, 1999, as reflected in the balance sheet as of that date, included
in the Financial Statements, together with an accurate aging of these
accounts. These accounts receivable, and all accounts receivable of the
Corporation after that date, arose from valid sales in the ordinary
course of business.
(m) Trade Names and Rights. Attached as Schedule 3(m) is a schedule of
all trade names, trademarks, service marks, and copyrights and their
registration, owned by the Corporation or in which it has any rights or
licenses, together with a brief description of each. To best of the
Corporation's knowledge, the Corporation has not infringed, and is not
now infringing, on any trade name, trademark, service xxxx, or
copyright belonging to any other person, firm, or corporation. The
Corporation owns adequate licenses or other rights to use all
trademarks, service marks, trade names, and copyrights necessary for
its
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business as now conducted by it, and that ownership or use does not,
and will not, conflict, infringe on, or otherwise violate any rights of
others.
(n) Patents. Attached as Schedule 3(n) is a complete schedule of all
patents, inventions, industrial models, processes, designs, and
applications for patents owned by the Corporation or in which it has
any rights, licenses, or immunities. The patents and applications for
patents listed on Schedule 3(n) are valid and in full force and effect
and are not subject to any taxes, maintenance fees, or actions falling
due within ninety (90) days after the Closing Date. There have not been
any interference actions or other judicial, arbitration, or other
adversary proceedings concerning the patents or applications for
patents listed on Schedule 3(n). The manufacture, use, or sale of the
inventions, models, designs, and systems covered by the patents and
applications for patents listed on Schedule 3(n) do not violate or
infringe on any patent or any proprietary or personal right of any
person, firm, or corporation; and the Corporation has not infringed and
is not now infringing on any patent or other right belonging to any
person, firm, or corporation.
(o) Licenses and Permits. Attached as Schedule 3(o) are true and
correct copies of all licenses in which the Corporation is a party.
Except for the licenses attached as Schedule 3(o), there are no pending
(or to Medical's knowledge threatened) revocations of any licenses or
permits required to operate the business of the Corporation, nor has
Medical received notice that any additional permits or licenses are or
will be required for the operation of the business of the Corporation.
Except for the licenses included on Schedule 3(o), the Corporation is
not a party to any license, agreement, or arrangement, whether as
licensee, licensor, or otherwise, with respect to any patent,
application for patent, invention, design, model, process, trade
secret, or formula. The Corporation has the right and authority to use
such inventions, trade secrets, processes, models, designs, and
formulas as are necessary to enable it to conduct and to continue to
conduct all phases of its business in the manner presently conducted by
it, and that use, to the best of the Corporation's knowledge, does not,
and will not, conflict with, infringe on, or violate any patent or
other right of others.
(p) Name. Medical represents, warrants, and covenants that it has
granted to the Corporation the right, in perpetuity, to use the name
"Oxboro Outdoors" as part of the Corporation's name for and in
connection with all business of whatever kind and character conducted
previously or in the future by the Corporation, and that it has not
granted to any other person, firm, or corporation the right to use its
name as part of the corporate or firm name of any other such firm,
corporation, or business.
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(q) Title to Assets. The Corporation has good and marketable title to
all its assets and interests in assets, whether real, personal, mixed,
tangible, or intangible, which constitute all of the assets and
interests in assets used in the business of the Corporation. Except as
provided on Schedule 3(o), all of these assets are free and clear of
restrictions on or conditions to transfer or assignment, and free and
clear of mortgages, liens, pledges, charges, encumbrances, equities,
claims, easements, rights-of-way, covenants, conditions, or
restrictions, except for:
(1) Those disclosed in the Corporation's most recent
balance sheet, included in the Financial Statements;
and
(2) Possible minor matters that, in the aggregate, are
not substantial amounts and do not materially detract
from or interfere with the present or intended use of
any of these assets, or materially impair business
operations.
The tangible personal property of the Corporation is generally in good
operating condition and repair, ordinary wear and tear excepted. The
Corporation is in possession of all premises leased to and from others.
Except for the Lease Agreement, neither Medical, nor any officer,
director, or employee of the Corporation, nor any spouse, child, or
other relative of any of these persons, owns, or has any interest,
directly or indirectly, in any of the real or personal property owned
by or leased to the Corporation or any copyrights, patents, trademarks,
trade names, or trade secrets licensed by the Corporation. To the best
of the Corporation's knowledge, the Corporation does not occupy any
real property in violation of any law, regulation, or decree.
(r) Customers. Attached as Schedule 3(r) is a correct and current list
of the ten (10) largest customers of the Corporation. Medical has no
information and is not aware of any facts, indicating any of these
customers intend to cease doing business with the Corporation or
materially alter the amount of the business that they are presently
doing with the Corporation.
(s) Employment Contracts. Attached as Schedule 3(s), and except as
provided on Schedule 3(x), is a list of all employment contracts,
collective bargaining agreements, and all pension, bonus, profit
sharing, stock option, or other agreements providing for employee
remuneration or benefits to which the corporation is a party or by
which the Corporation is bound. All of these contracts and arrangements
are in full force and effect, and neither the Corporation nor any other
party is in default under them. There have been no claims of default
and, to the best knowledge of Medical, there are no facts or conditions
which if continued, or on notice, will result in a default under these
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contractual arrangements. There is no pending or, to Medical's
knowledge, threatened labor dispute, strike, or work stoppage affecting
the Corporation's business.
(t) Insurance Policies. Attached as Schedule 3(t) is a description of
all insurance policies held by the Corporation concerning its business
and properties. The Corporation (through Medical) has maintained and
now maintains (i) insurance on all its assets and businesses of a type
customarily insured, covering property damage and loss of income by
fire or other casualty, and (ii) adequate insurance protection against
all liabilities, claims, and risks against which it is customary to
insure.
(u) Employee Benefit Plans. Attached as Schedule 3(u) is a complete and
accurate and complete list of all employee benefit plans, within the
meaning of Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), whether or not any such employee benefit
plans are otherwise exempt from the provisions of ERISA, established,
maintained, or contributed to by the Corporation including all
employers which, by reason of common control, are treated together with
the Corporation and/or Medical as a single employer within the meaning
of Section 414(c) of the Internal Revenue Code.
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(v) Other Contracts. The Corporation is a party to numerous
distributor/broker agreements all of which are usual and customary in
duration and amount. A copy of a standard "Broker Agreement" for
licensed products of the Corporation is attached hereto as Schedule
3(v) as well as a current listing of such brokers. Except as provided
on Schedule 3(v), the Corporation is not a party to, nor is its
property bound by, any distributors' or manufacturers' representative
or agency agreement, any output or requirements agreements, any
agreement not entered into in the ordinary course of business, any
indenture, mortgage, deed of trust, lease, or any agreement that is
unusual in nature, duration, or amount. To the best of the
Corporation's knowledge, there is no default or event that with notice
or lapse of time, or both, would constitute a default by any party to
any of these agreements. The Corporation has not received notice that
any party to any of these agreements intends to cancel or terminate any
of these agreements or to exercise or not exercise any options under
any of these agreements. The Corporation is not a party to, nor is the
Corporation or its properties bound by, any agreement that is
materially adverse to the business, properties, or financial condition
of the Corporation.
(w) Compliance with Laws. To the best of the Corporation's knowledge,
the Corporation has complied with all, and is not in violation of any,
applicable federal, state, or local statutes, laws, and regulations
(including, without limitation, any applicable building, zoning, or
other law, ordinance, or regulation) affecting its property or the
operation of its business.
(x) Litigation. Except as provided on Schedule 3(x), there is no suit,
action, arbitration, or legal, administrative, or other proceeding, or
governmental investigation pending or, to the best knowledge and belief
of Medical, threatened against or affecting the Corporation, or any of
its businesses, assets, or financial condition. The matters set forth
in Schedule 3(x), if decided adversely to the Corporation, will not
result in a material adverse change in the business, assets, or
financial condition of the Corporation. The Corporation is not in
default with respect to any order, writ, injunction, or decree of any
federal, state, local, or foreign court, department, agency, or
instrumentality. The Corporation is not presently engaged in any legal
action to recover monies due either of them or damages sustained by
either of them with respect to the business of the Corporation.
(y) No Breach or Violation. The consummation of the transactions
contemplated by this Agreement will not result in or constitute any of
the following:
(1) A breach of any term or provision of this Agreement;
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(2) A default or an event that, with notice or lapse of
time or both, would be a default, breach, or
violation of the Articles of Incorporation or Bylaws
of the Corporation or any lease, license, promissory
note, conditional sales contract, commitment,
indenture, mortgage, deed of trust, or other
agreement, instrument, or arrangement to which
Medical or the Corporation, or their property, is
bound;
(3) An event that would permit any party to terminate any
agreement (except as provided on Schedule 3(o)) or to
accelerate any maturity of any indebtedness or other
obligation of the Corporation; or
(4) The creation or imposition of any lien, charge, or
encumbrance on any of the properties of the
Corporation.
(z) Authority. Medical has the right, power, legal capacity, and
authority to enter into and perform its obligations under this
Agreement and no approvals and consents of any person other than
Medical is necessary. The execution and delivery of this Agreement by
Medical, and the performance of its obligations hereunder, has been
duly authorized by its Board of Directors.
(aa) Interest in Customers, Suppliers and Competitors. Except as
provided on Schedule 3(aa), neither Medical, nor any officer, director,
or employee of the Corporation, nor any spouse or child of any of them,
has any direct or indirect controlling interest in any competitor,
supplier, or customer of the Corporation or in any person from whom or
to whom the Corporation leases any real or personal property, or in any
other person with whom the corporation is doing business.
(bb) Corporate Documents. The Corporation has furnished to the Buyers
for their examination the following:
(1) Copies of the Articles of Incorporation and Bylaws of
the Corporation;
(2) The minute book of the Corporation containing all
records required to be set forth of all proceedings,
consents, actions, and meetings of the shareholders
and Board of Directors of the Corporation;
(3) All permits, orders, and consents issued with respect
to the Corporation, or any security of the
Corporation and all applications for such permits,
orders, and consents; and
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(4) The stock transfer books of the Corporation setting
forth all transfers of any capital stock.
(cc) Personnel. Attached as Schedule 3(cc) is a list of the names of
all officers, directors, and employees of the Corporation, stating the
rates of compensation payable to each.
(dd) Banking. Attached as Schedule 3(dd) is a list of the names and
addresses of all banks or other financial institutions in which the
Corporation has an account, deposit, or safe deposit box, with the
names of all persons authorized to draw on these accounts or deposits
or to these boxes.
(ee) Full Disclosure. None of the representations and warranties made
by Medical herein or made in any written certificate or memorandum
furnished (or to be furnished) by Medical (or on its behalf), contains
or will contain any untrue statement of material fact, or omit any
material fact the omission of which would be misleading.
(ff) Intercompany Loan. Medical acknowledges, agrees and represents
that any amounts due to Medical from the Corporation including, but not
limited to, the intercompany loan listed in the Financial Statements
for the month ended May 31, 1999 in the amount of One Million Six
Hundred Twenty-Nine Thousand and Twenty-Four Dollars ($1,629,024) (and
other than accounts payable of less than Five Thousand Dollars
($5,000)) have been converted to equity of the Corporation.
Furthermore, such amount is not a liability or obligation of the
Corporation and neither the Corporation nor the Buyers shall have any
responsibility or liability to pay such amount to Medical.
(gg) Survival. Regardless of any investigation made by the Buyers or
their representatives, or any knowledge which they may have that any
such representation or warranty is or may be untrue or incorrect, the
representations and warranties made in this Section 3 shall be true and
accurate in all respects as of the Closing Date and shall survive the
Closing of this Agreement, for a period of two (2) years after the
Closing Date, except that Medical's representations and warranties set
forth in Sections 3(a), (b), (c), (d), (h), (u) and (z) shall survive
forever.
4.) Conditions Precedent To Buyer's Performance.
(a) Conditions. The obligations of the Buyers to purchase the Shares
pursuant to this Agreement are subject to the satisfaction at or before
closing, of all the conditions set forth in this Section 4. The Buyers
may waive any or all of these conditions in whole or in part without
prior notice provided, however, that no such waiver of a condition
shall constitute a waiver by the Buyers of any of their
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other rights or remedies at law or in equity, if Medical shall be in
default of any of its representations, warranties, or covenants under
this Agreement.
(b) Accuracy of Representations. Except as otherwise permitted by this
Agreement, all representations and warranties of Medical contained in
this Agreement (or in any written statement delivered to the Buyers by
Medical) shall be true on and as of the Closing Date as though made at
that time.
(c) Performance of Medical. Medical shall have performed, satisfied,
and complied with all covenants, agreements, and conditions required by
this Agreement to be performed or complied with by them on or before
the Closing Date.
(d) Consents. All necessary agreements and consents of any parties to
the consummation of the transactions contemplated by this Agreement, or
otherwise pertaining to the matters covered by it, shall have been
obtained by Medical and delivered to the Buyers.
(e) Approval of Documents. The form and substance of all certificates,
instruments, and other documents delivered to the Buyers under this
Agreement shall be satisfactory in all reasonable respects to the
Buyers and their counsel.
(f) Resignations. Medical shall have caused to be delivered to the
Buyers, except as otherwise requested by the Buyers, the written
resignation or termination of all the officers and directors of the
Corporation, and will cause any other action to be taken with respect
to these resignations that the Buyers may reasonably request.
5.) Conditions Precedent To Performance Of The Buyers. The obligations
of Medical and the Corporation to sell and transfer the Shares under this
Agreement are subject to the Buyers having performed and complied with all
covenants and agreements, and satisfied all conditions that it is required by
this Agreement to perform, comply with, or satisfy, before or at the closing.
6.) Closing. The Closing of the transactions contemplated herein shall
take place at the offices of Larkin, Hoffman, Xxxx & Xxxxxxxx, Ltd., 1500
Norwest Financial Center, 0000 Xxxxxx Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx
00000, on June 30, 1999, or such other place or earlier date as may be agreed
upon by Medical and the Buyers (the "Closing Date"). The transactions which
occur on the Closing Date shall be deemed to have taken place at the beginning
of business on the Closing Date. "Closing" shall refer to the Closing Date and
the transactions to occur on that date.
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7.) Medical's Obligations at Closing. At Closing, Medical shall
deliver, or cause to be delivered, the following to the Buyers against delivery
of the items specified in Section 8:
(a) A certificate or certificates representing the Shares, registered
in the name of Medical, duly endorsed by Medical for transfer or
accompanied by an assignment of the Shares duly executed by Medical.
Upon submission of that certificate or certificates to the Corporation
for transfer, the Corporation shall issue to the Buyers certificates,
as provided on Schedule 1 and representing the Shares, registered in
the name of the Buyers;
(b) The stock books, stock ledgers, minute books, and corporate seal of
the Corporation;
(c) The written resignations or terminations of all the officers and
directors of the Corporation;
(d) All certificates, schedules, exhibits and attachments in a complete
form and specifying the information required by the provisions of this
Agreement;
(e) Certified copies of corporate authorizations of Medical to enter
into the transaction herein contemplated;
(f) The Promissory Note by and among Medical and the Buyers in the form
attached hereto as Schedule 2(b);
(g) The Lease Agreement by and between Medical and the Corporation in
the form attached hereto as Schedule 3(i); and
(h) Such other documents as may be reasonably requested by the Buyers
to evidence the performance by Medical of its obligations hereunder.
Simultaneously with the delivery of the aforementioned documents,
Medical will put the Buyers into full possession and enjoyment of the
Corporation and its business.
8.) The Buyers' Obligations at Closing. At Closing, the Buyers shall
deliver, or cause to be delivered, the following to Medical against delivery of
the items specified in Section 7:
(a) The Promissory Note, duly executed by the Buyers;
(b) Three Hundred Eighty-Five Thousand Dollars ($385,000) by cashier's
check or money order :
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(c) The Lease Agreement duly executed by the Corporation; and
(d) Such other documents as may be reasonably requested by Medical to
evidence the performance by the Buyers of their obligations hereunder.
9.) Medical's Post-Closing Obligations.
(a) Medical's Indemnification. Medical agrees, for a period of two (2)
years after the Closing Date, to indemnify, defend, and hold the Buyers
and the Corporation harmless from and against and in respect of any and
all claims, demands, losses, costs, expenses, obligations, liabilities,
damages, recoveries, and deficiencies, including interest, penalties,
and reasonable attorneys' fees the Buyers or the Corporation may incur
or suffer, which arise, result from, or relate to any breach of, or
failure by Medical to perform, any of its representations, warranties,
covenants, or agreements in this Agreement or any schedule,
certificate, exhibit, or other instrument furnished or to be furnished
by Medical under this Agreement provided, however, the maximum total
dollar amount that the Sellers shall be required to indemnify the
Buyers or the Corporation hereunder shall be limited to the amount paid
for the Shares pursuant to Section 2. Notwithstanding the foregoing,
there shall be no indemnification limitation pursuant to Sections 3(h)
and (x).
(b) Set-off. In addition to the obligation to indemnify the Buyers and
the Corporation as set forth in Section 9(a), and without prejudicing
the Buyers' or the Corporation's other remedies, the Buyers shall be
entitled to offset and withhold the following amounts against any part
of the obligation owed to the Medical pursuant to the Promissory Note:
(1) In the event that any of the fourteen (14) entities
or persons listed below refuses, in writing and
during the term of the Promissory Note, to the
continuation of the license they have entered into
with the Corporation, the amount due and payable
pursuant to the terms of the Promissory Note shall be
reduced by Ten Thousand Dollars ($10,000) for each
such license: ISC Race Tracks; Xxxx Xxxxxx; Xxxxx
Xxxxxxx; Xxxx Xxxxxx; Xxxxx Xxxxxxx; Xxxxx
Xxxxxxxxxx; Xxxx Xxxxxx; Xxxx Xxxxxx; Xxxxx Xxxxxxxx;
Xxxxx Xxxxxxx; Xxxx Xxxxxxx; Xxxxx Xxxx,; NASCAR
Drivers and NASCAR Logo. Notwithstanding the
foregoing, if the Buyers reduce the amount due under
the Promissory Note pursuant to this Section 9(b)(1)
and the Corporation (or any affiliate thereof) then
enters into a like or similar license with such
person or entity within forty-five (45) days after
the reduction of the Promissory Note, such amount
shall be due and payable within thirty (30) days
thereafter.
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(2) In the event that NFL Properties refuses, in writing
and during the term of the Promissory Note, to the
continuation of the license with NFL Properties (a
copy of which is attached hereto as Schedule 9(b))
after the purchase of the Shares by the Buyers, the
amount due and payable pursuant to the terms of the
Promissory Note shall be reduced by One Hundred
Twenty-Five Thousand Dollars ($125,000).
Notwithstanding the foregoing, if the Buyers reduce
the amount due under the Promissory Note pursuant to
this Section 9(b)(2) and the Corporation (or any
affiliate thereof) then enters into a like or similar
license with the NFL Properties within forty-five
(45) days after the reduction of the Promissory Note,
such amount shall be due and payable within thirty
(30) days thereafter.
(c) Noncompetition. Medical agrees that it shall not, for a period of
five (5) years after Closing, directly or indirectly, for its own
account or for the account of others, whether as principal or agent or
through the agency of any corporation, partnership or other business
entity, engage in the sale of licensed or unlicensed sports products.
In the event of a violation of this Section 9(c) by Medical, it is
agreed that the Buyers and the Corporation shall be entitled to money
damages or injunctive relief, or both. Furthermore, Medical agrees to
indemnify the Buyers and the Corporation for all costs and expenses,
including reasonable attorneys' fees and court costs, incurred in any
action brought to enforce this Agreement. The provisions of this
Section 9 may be enforced by an injunction. Medical, the Buyers and the
Corporation agree that if any claim is made by any person asserting
that the covenant contained in this Section 9(c) is unenforceable,
predicated upon the length of the term, geographic area, or otherwise,
the provision or provisions upon which such unenforceability is
predicated shall not be rendered unenforceable but instead shall be
modified so as to be valid and fully enforceable for the maximum
duration and geographic area (but never for a longer period or greater
area than set forth above) that any court of competent jurisdiction
shall find to be reasonable, necessary, valid and legally enforceable.
(d) Costs. If any legal action or other proceeding is brought for the
enforcement of this Agreement, or because of an alleged dispute,
breach, default, or misrepresentation in connection with any of the
provisions of this Agreement, the successful or prevailing party or
parties shall be entitled to recover reasonable attorneys' fees and all
other costs incurred in that action or proceeding, in addition to any
other relief to which it may be entitled.
10.) Tax Elections
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(a) Section 338(h)(10) Election. The purchase and sale of the Shares is
intended to qualify as a "qualified stock purchase" under Section
338(d)(3) of the Internal Revenue Code and Medical, the Corporation and
the Buyers shall join in making a timely election under Section
338(h)(10) of the Internal Revenue Code and similar elections under
state, local and foreign laws, as applicable (the "Election"). Medical
and the Buyers acknowledge and agree that, for U.S. federal income tax
purposes, the purchase and sale of the Shares pursuant to the Election
will be treated as a sale of assets of the Corporation followed by the
complete liquidation of the Company.
(b) Purchase Price Allocation. The Purchase Price and the liabilities
and obligations assumed by Buyer pursuant to this Agreement shall be
allocated among the properties and assets acquired by Buyer in
accordance with the manner and timing prescribed by the Treasury
Department regulations promulgated under Section 338 of the Internal
Revenue Code and as set forth on Schedule 10(b) attached hereto.
Medical and the Buyers covenant and agree that such person will not
take any position on any Tax Return, before any governmental body
charged with the collection of any income tax or in any judicial
proceeding that is in any way inconsistent with the provisions of this
Section 10 and Schedule 10(b). Both Medical and the Buyers shall notify
the other as soon as reasonably practicable of any audit adjustment or
proposed audit adjustment by any governmental body that affects the
allocation under this Section 10(b).
11.) Miscellaneous.
(a) Arbitration. In the event there is any dispute between the parties
hereto arising out of or relating to this Agreement and the parties
hereto cannot resolve such dispute themselves, the parties hereto agree
to refer and submit such dispute to the American Arbitration
Association, Minneapolis, Minnesota (the "Association"), for
arbitration, and any such proceeding shall be conducted in the
Minneapolis, Minnesota metropolitan area. Any such arbitration shall be
before a panel of three (3) arbitrators and shall be conducted in
accordance with the rules of the Association, except that the parties
shall be permitted discovery prior to any hearing in accordance with
the Federal Rules of Civil Procedure, and the Federal Rules of Evidence
and Federal Rules of Civil Procedure shall apply at any hearing. No
arbitrator shall have any connection to the parties to this Agreement.
The arbitrators shall have the right to award or include in their award
any relief they deem proper, including without limitation, money
damages, interest, specific performance, attorneys fees, cost and
expenses incurred, but not exemplary or punitive damages. The award
decision of the arbitrators shall be conclusive and binding upon all
parties and may be entered in any court of competent jurisdiction. The
parties agree to bring
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all claims in this arbitration which relate to the original claim. This
provision shall continue after any expiration or termination of this
Agreement.
(b) Broker Fee. Medical and the Buyers acknowledge that no fees or
commissions in the nature of finder, originator, or broker fees in
connection with the subject matter of this Agreement have been incurred
by any of them. Each party to this Agreement shall indemnify the others
and hold them harmless against any claim for brokerage or to other
commissions from any person claiming to have worked on its behalf
relative to the transactions contemplated by this Agreement.
(c) Expenses. Whether or not the transactions contemplated by this
Agreement are consummated, each of the parties hereto shall pay the
fees and expenses of its respective counsel, accountants, other experts
and all other expenses incurred by such party incidental to the
negotiations, preparation, and execution of this Agreement.
(d) Captions. Article, paragraph, or section titles or other headings
contained in this Agreement are for convenience only and shall not be
deemed a part of the context of this Agreement.
(e) Assignment; Binding Effect; Amendment. This Agreement and the
rights hereunder may not be assigned (except by operation of law) and
shall be binding upon and shall inure to the benefit of the parties
hereto, the successors of the corporate parties hereto, and the
respective heirs and legal representatives of the Shareholder. This
Agreement, upon execution and delivery, constitutes a valid and binding
agreement of the parties hereto enforceable in accordance with its
terms and may be modified or amended only by a written instrument
executed by all parties hereto.
(f) No Waiver. No delay of, or omission in the exercise of any right,
power or remedy accruing to any party as a result of any breach or
default by any other party under this Agreement, shall impair any such
right, power or remedy, nor shall it be construed as a waiver of or
acquiescence in any such breach or default, or in any similar breach or
default occurring later; nor shall any waiver of any-single breach or
default be deemed a waiver of any other breach of default occurring
before or after that waiver.
(g) Notice. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if sent by registered
or certified mail to the parties at the addresses set forth below their
respective names or at such other place as the parties shall designate
in writing by certified or registered mail.
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As to Medical Xx. Xxxxxxx Xxxxxx
President
Oxboro Medical International, Inc.
00000 Xxxxxxx Xxxxxx XX
Xxx Xxxx, Xxxxxxxxx 00000
With a copy to: Xxxxxxx X. Xxxxxx, Esq.
Xxxxxx & Xxxxxx, P.A.
000 Xxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
As to the Buyers: Mr. Xxxx XxXxxxx
Xx. Xxxxxxx Xxxxxxxx
Xx. Xxxxxxx Xxxxx
--------------------------
--------------------------
With a copy to: Xxxxxxx X. Xxxxxxxx, Esq.
Larkin, Hoffman, Xxxx & Xxxxxxxx,
Ltd.
1500 Norwest Financial Center
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
(h) Schedules. All documents and other papers included as a part of any
exhibits and schedules referred to in this Agreement are hereby
incorporated into this Agreement by reference.
(i) Entire Agreement. This Agreement is the final, complete and
exclusive statement and expression of the agreement among the parties
hereto with relation to the subject matter of this Agreement, it being
understood that there are no oral representations, understandings or
agreements covering the same subject matter as this Agreement. This
Agreement supersedes, and cannot be varied, contradicted or
supplemented by evidence of any prior or contemporaneous discussions,
correspondence, or oral or written agreements of any kind.
(j) Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original and all
of which together shall constitute but one and the same instrument.
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(k) Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Minnesota, without
giving effect to any choice or conflict of law provision or rule
(whether of the State of Minnesota or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than
the State of Minnesota.
(l) Severability. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, it shall, to the extent possible, be
modified in such manner as to be valid, legal and enforceable but so as
most nearly to retain the intent of the parties. If such modification
is not possible, such provision shall be severed from this Agreement.
In either case the validity, legality and enforceability of the
remaining provisions of this Agreement shall not in any way be affected
or impaired thereby.
(m) Further Assurances. At any time, and from time to time before and
after the Closing, the Buyers, the Corporation and Medical shall, at
the request of the other party, and without additional consideration,
execute, acknowledge, and deliver such other documents and instruments,
and take such other actions as may be reasonably necessary, in order to
consummate the transactions contemplated by this Agreement and to
accomplish the purposes of this Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
MEDICAL: THE BUYERS:
OXBORO MEDICAL INTERNATIONAL, INC. XXXX XXXXXXX
By:
-------------------------------------
Its: Xxxx XxXxxxx
XXXXXXX XXXXXXXX
------------------------------------
Xxxxxxx Xxxxxxxx
XXXXXXX XXXXX
------------------------------------
Xxxxxxx Xxxxx
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