EXHIBIT 1
STOCK REDEMPTION AGREEMENT
THIS STOCK REDEMPTION AGREEMENT (the "Agreement") is made this 28th day
of May, 1997 by and among Research, Incorporated, a Minnesota corporation (the
"Company"), Xxxx Xxxxx Xxxxxxxx and Xxxx Xxxxx Xxxxxxxx, as personal
representative for the Estate of Xxxxxx X. Xxxxxxxx (individually, the "Seller"
and collectively, the "Selling Shareholders").
RECITALS
WHEREAS, the Selling Shareholders collectively own 237,519 shares of
common stock, $.50 par value, of the Company (the "Shares");
WHEREAS, the Selling Shareholders are willing to sell the Shares to the
Company; and
WHEREAS, the Company's Board of Directors has unanimously determined
that a purchase price of $6.45 per share is fair and that it is in the best
interests of the Company that the Company redeem the Shares, and that the offer
of the Selling Shareholders should be accepted upon the terms and conditions set
forth herein.
WITNESSETH
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties, conditions and agreements herein contained, and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
REDEMPTION OF SHARES
1.1. REDEMPTION OF COMMON STOCK. Each Seller hereby sells, conveys,
transfers, assigns and delivers to the Company on the date of this Agreement all
right, title and interest in the number of Shares set forth opposite each
Seller's name on the signature page hereof, free and clear of all liens,
encumbrances, purchase rights, claims, pledges, mortgages, security interests,
or other limitations or restrictions whatsoever.
1.2. REDEMPTION PRICE. In reliance upon the representations, warranties
and covenants of each Seller contained herein and in full consideration of such
sale, conveyance, transfer, assignment and delivery of the Shares to the
Company, the Company hereby delivers to each Seller an aggregate redemption
price set forth opposite each Seller's name on the signature page hereof (the
"Redemption Price"). The per share price for the Shares is $6.45. The Redemption
Price paid to each Seller shall be paid at the Closing by: (i) Company check
payable to each Seller in the amounts set forth on the signature page hereof,
receipt of which is hereby acknowledged; and (ii) the remainder, as applicable,
by Promissory Note in the form attached hereto as Exhibit A (the "Promissory
Note"). The Promissory Note shall be secured by certain assets of the Company as
provided in the Security Agreement in the form attached as Exhibit B (the
"Security Agreement").
1.3. CLOSING. The closing of the redemption of the Shares (the
"Closing") is taking place simultaneous with the signing of this Agreement at
the offices of the Company on May 28, 1997 (the "Closing Date"). At the Closing,
(i) the Selling Shareholders shall convey, assign, transfer and deliver to the
Company stock certificates representing the Shares, together with an executed
stock power or other form of conveyance or transfer as may be reasonably
requested by the Company, including broker instruction letters; and (ii) the
Company shall deliver the cash Redemption Price, Promissory Note and Security
Agreement as provided in Section 1.2 above.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLING SHAREHOLDERS
2.1. OWNERSHIP OF THE SHARES. Each Seller is the record and beneficial
owner of the Shares set forth opposite such Selling Shareholder's name on the
signature page hereof, free and clear of all liens, encumbrances, purchase
rights, claims, pledges, mortgage purchase rights, security interests, or other
limitations or restrictions whatsoever. The Shares represent the Selling
Shareholders' entire equity interest in the Company. Seller is not subject to,
or a party to, any articles of incorporation or bylaws provisions, shareholder
voting or control agreements, buy-sell agreements, contracts, instruments or
other restrictions of any kind or character which, directly or indirectly,
restrict or otherwise limit in any manner the sale of the Shares pursuant to
this Agreement.
2.2 AUTHORITY OF SELLER. Each Seller has full and unrestricted legal
right, power and authority to enter into this Agreement, and to sell, convey,
assign, transfer and deliver to the Company valid, lawful and marketable title
to the Shares to be sold, conveyed, assigned, transferred and delivered by such
Seller pursuant to this Agreement.
2.3. TITLE. Upon delivery to the Company of certificates representing
all of the Selling Shareholders' Shares, the Company will acquire lawful, valid
and marketable title to the Shares, free and clear of all liens, encumbrances,
purchase rights, claims, pledges, mortgages, security interests or other
limitations or restrictions whatsoever.
2.4. LITIGATION. Neither Seller is presently a party to, or subject to,
or bound by, any agreement or any judgment, order, writ, injunction or decree of
any court or any governmental body which contains any provision or requirement
which would or could operate to prevent the carrying out of this Agreement or
the transactions contemplated hereby. There is no litigation, proceeding or
governmental investigation pending or, so far as known to the Selling
Shareholders, or threatened against either Seller which would adversely affect
the transactions contemplated by this Agreement.
2.5. ACCESS TO INFORMATION AND OPPORTUNITY TO EVALUATE. Each Seller has
been represented by independent legal counsel and has been afforded reasonable
access, and the opportunity, to inspect the Company's books, records, documents,
financial statements, public filings and other information. Each Seller has been
provided with all financial and other information regarding the Company which
has been requested and has been afforded the opportunity to discuss the same
with the management of the Company, as well as his or her legal counsel,
accountants or other representatives prior to the Closing.
2.6 CONSENTS. No consent is required in connection with the sale by the
Selling Shareholders of the Shares.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF COMPANY
3.1. ORGANIZATION AND GOOD STANDING. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Minnesota.
3.2. AUTHORITY OF COMPANY. No provision of the Company's Articles of
Incorporation or Bylaws, or of any agreement, instrument or understanding, or
any judgment, order, decree, rule or regulation to which the Company is a party
or by which it is bound, has been or will be violated by the execution by the
Company of this Agreement, or the performance or satisfaction of any agreement,
term or condition herein upon its part to be performed or satisfied.
3.3. AUTHORIZATION OF AGREEMENT. The execution, delivery and
performance of this Agreement has been duly authorized by all necessary
corporate action by the Company and its Board of Directors. This Agreement will,
upon execution and delivery, be the legal, valid and binding obligation of the
Company, enforceable in accordance with its terms.
3.4. CONSENTS. Any material consent required by the Company in
connection with the transactions provided for or contemplated by this Agreement
has been obtained by the Company.
ARTICLE IV
INDEMNIFICATION
4.1. INDEMNIFICATION. The Selling Shareholders shall jointly and
severally indemnify, defend and hold harmless the Company from and against any
and all loss, liability, damage or expense (including interest paid to third
parties, penalties, accountants' expense and attorneys' fees) due to a breach of
any of the representations and warranties of the Selling Shareholders contained
in Sections 2.1, 2.2 or 2.3 of this Agreement.
ARTICLE V
MISCELLANEOUS
5.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations,
warranties, covenants and agreements set forth in this Agreement will survive
the date of this Agreement and the consummation of the transactions contemplated
hereby.
5.2. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the internal laws (and not the law of conflicts) of the State of
Minnesota.
5.3. ENTIRE AGREEMENT. This Agreement, including the other documents or
instruments referred to herein which form a part hereof, contains the entire
understanding of the parties hereto with respect to the subject matter contained
herein. There are no restrictions, promises, warranties, covenants or
undertakings other than those expressly provided for herein. This Agreement
supersedes all prior agreements and undertakings between the parties with
respect to the subject matter. No waiver, modification or amendment of any
provision of this Agreement shall be effective unless specifically made in
writing and duly signed by the party to be bound thereby.
5.4. SEVERABILITY OF INVALID PROVISION. If any one or more covenants or
agreements provided in this Agreement should be determined to be contrary to law
by a court of competent jurisdiction, then such covenant or covenants, agreement
or agreements shall be null and void and shall in no way affect the validity of
other provisions of this Agreement.
5.5. SUCCESSORS AND ASSIGNS. Subject to the transfer restrictions
contained in this Agreement, this Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns, and no other person shall acquire or have any right under or by virtue
of this Agreement.
5.6. SECTION HEADINGS. Section headings contained in this Agreement are
inserted only as a matter of convenience and in no way define, limit, extend or
describe the scope of this Agreement or the intent of any provisions hereof.
5.7. GENERAL RELEASE. Each Seller does, for and on behalf of himself or
herself and his or her heirs, administrators, executors, agents, successors and
assigns, agree to and hereby does release and forever discharge the Company, its
directors, officers, shareholders, employees, agents, successors and assigns,
and each and all thereof, of and from any and all obligations and claims which
have arisen or might arise out of facts or actions existing or taken on or prior
to the date hereof, except for claims which may be made against the Company
under this Agreement or the Promissory Note for its failure to fulfill its
obligations hereunder or thereunder, and any indemnification rights, if any,
which are available to Sellers under the Minnesota Business Corporation Act or
the Company's Articles or Bylaws.
5.8. TERMINATION OF OTHER AGREEMENTS. The Company and the Selling
Shareholders agree that the rights of the Selling Shareholders with respect to
the Shares being redeemed under this Agreement shall be governed solely under
the terms of this Agreement, which shall supersede any other agreement, bylaw
provision or buy-sell agreement with respect to the Shares. The Selling
Shareholders waive any and all rights they may have under such provisions and
agreements, if any, with respect to the Shares; provided the Selling
Shareholders do not waive any claims which are not released under Section 5.7
above.
5.9. SPECIFIC PERFORMANCE. In addition to other relief provided by law,
the parties hereby acknowledge and agree that damages may not be an appropriate
remedy and that the Company may enforce the covenants and the terms of this
Agreement and that damages, specific performance and an injunction shall all be
proper modes of relief and are not considered as alternative remedies.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto on the day and year first above written.
RESEARCH, INCORPORATED
By: /s/ Xxxxxx X. Xxxxxxx
Its: President
/s/ Xxxx Xxxxx Xxxxxxxx
XXXX XXXXX XXXXXXXX
THE ESTATE OF XXXXXX X. XXXXXXXX
By: /s/ Xxxx Xxxxx Xxxxxxxx
Xxxx Xxxxx Xxxxxxxx
Its: Personal Representative
NUMBER OF
SELLER SHARES SOLD REDEMPTION PRICE CASH PORTION
------ ----------- ---------------- ------------
XXXX XXXXX XXXXXXXX 124,189 $801,019.05 $ 35,019.05
THE ESTATE OF XXXXXX X. XXXXXXXX 113,330 $730,978.50 $ 730,978.50
