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EXHIBIT 99.1
STOCK REDEMPTION AGREEMENT
THIS AGREEMENT, dated as of May ___, 2001 ("Agreement"), is by and
between New Horizon Kids Quest, Inc., a Minnesota corporation ("Company"), and
Lakes Gaming, Inc. a Minnesota corporation and a shareholder of the Company
("Seller").
WITNESSETH
WHEREAS, the Company desires to purchase and retire 875,000 shares of
its common stock, $.01 par value, owned by the Seller (the "Shares") on the
terms and conditions as set forth herein; and
WHEREAS, the Seller desires to sell the Shares to the Company on the
terms and conditions as set forth herein; and
NOW THEREFORE, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. SALE OF SHARES TO THE COMPANY.
1.1 Subject to the terms and conditions hereof, the Seller hereby
agrees to sell, transfer and deliver to the Company the
Shares.
1.2 In consideration for sale of the Shares to the Company, the
Company shall, as provided in this Agreement, pay to the
Seller the purchase price set forth in Section 2 of this
Agreement (the "Purchase Price").
1.3 At the Closing, the Seller shall transfer and deliver to the
Company certificates representing the Shares, duly endorsed in
blank or accompanied by duly executed stock powers in blank
with the signature guaranteed by a bank or trust company.
2. PURCHASE PRICE; PAYMENT.
2.1 The purchase price payable to Seller for each of the Shares is
$1.25, aggregating of $1,093,750 (the "Purchase Price") plus
interest at a rate equal to 10% per annum on the unpaid
Purchase Price. Interest shall accrue on the Purchase Price
commencing on the execution of this Agreement and shall
terminate upon the Closing Date.
2.2 The Purchase Price shall be paid on the Closing Date (defined
in Section 6.1 below) by wire transfer of immediately
available funds to an account specified by Seller at least 48
hours prior to the Closing Date or in the event wire
instructions are not provided, by check.
3. CANCELLATION AND RETIREMENT OF SHARES.
Upon redemption by the Company, the Shares shall be deemed canceled,
retired and returned to the status of authorized but unissued shares.
4. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller represents and warrants that:
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4.1 Seller is the record owner and holder of the Shares. Seller
will not, prior to the Closing Date, assign, sell or transfer
any of the Shares.
4.2 Seller has all requisite corporate power to execute and
deliver this Agreement. The execution, delivery and
performance of this Agreement by the Seller have been duly and
validly authorized by all necessary corporate action, and this
Agreement constitutes the legal, valid and binding obligation
of the Seller, enforceable in accordance with its terms,
except as enforceability may be limited by the application of
bankruptcy, insolvency, moratorium or similar laws affecting
the rights of creditors generally and by judicial limitations
on the right of specific performance.
4.3 On the Closing Date, Seller will sell, assign and transfer the
Shares to the Company free and clear of all liens,
encumbrances, charges and assessments of any nature and
subject to no restriction on transferability, other than
compliance with United States securities laws and "Blue sky"
or state securities laws.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the Seller as follows:
5.1 The Company has all requisite corporate power to execute and
deliver this Agreement. The execution, delivery and
performance of this Agreement by the Company have been duly
and validly authorized by all necessary corporate action, and
this Agreement constitutes the legal, valid and binding
obligation of the Company, enforceable in accordance with its
terms, except as enforceability may be limited by the
application of bankruptcy, insolvency, moratorium or similar
laws affecting the rights of creditors generally and by
judicial limitations on the right of specific performance.
5.2 There are no legal restrictions on the Company's ability to
purchase the Stock.
5.3 No consents from third parties are required to enable the
Company to enter into this Agreement or consummate the
transactions contemplated hereby.
6. CLOSING.
6.1 Time and Place. The closing of this transaction shall take
place within 48 hours after written notice of same is provided
by the Company to Seller but in no event later than the sixth
month anniversary date of this Agreement (the "Closing Date").
6.2 Documents to be Delivered by Seller. At the closing, Seller
shall deliver to the Company the following documents:
(a) Certificates representing the Shares duly endorsed in
blank or accompanied by duly executed stock powers in
blank with the signature guaranteed by a bank or
trust company; and
(b) A certificate signed by the Chief Executive Officer
of the Seller that the representations and warranties
made by the Seller in this Agreement are accurate in
all material respects on and as of the Closing Date
with the same effect as though such representations
and warranties had been made on or given on and as of
the Closing Date and that Seller has performed and
complied with all of its obligations under this
Agreement which are to be performed or complied with
by, prior to or on the Closing Date.
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6.3 Documents to be Delivered by the Company. At the Closing, the
Company shall:
(a) cause the total Purchase Price plus accrued interest
for the Shares to be paid; and
(b) deliver a certificate signed by the Chief Executive
Officer of the Company stating that the
representations and warranties made by the Company in
this Agreement are substantially accurate in all
material respects on and as of the Closing Date with
the same effect as though such representations and
warranties had been made on or given on and as of the
Closing Date and the Company has performed and
complied with all of its obligations under this
Agreement which are to be performed or complied with
by, prior to or on the Closing Date.
7. PERSONAL GUARANTEE OF XXXXXXX XXXXXXX. The obligations of the Company
hereunder shall be personally guaranteed by Xx. Xxxxxxx and Xx. Xxxxxxx
shall execute such form of personal guarantee as shall be reasonably
satisfactory to the parties.
8. MISCELLANEOUS.
8.1 This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
8.2 All notices and communications pertaining to this Agreement
shall be made in writing and shall be deemed sufficiently
given if delivered in person or sent by facsimile to the
respective parties as indicated below, or mailed by first
class registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:
To Seller: Lakes Gaming, Inc.
000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxx 00000
Copies to: Xxxx Sell, Esq.
Xxxxxx Xxxxxxx Xxxxxx & Brand
3300 Norwest Center
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
(Fax) 000-000-0000
To Company: New Horizon Kids Quest, Inc.
00000 00xx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxxx 00000
(Fax) 000-000-0000
Copies to: Xxxxxxx Xxxxxx, Esq.
Dunkley, Bennett, Xxxxxxxxxxx & Xxxxxxx, P.A.
Xxxxx 000
000 Xxxxxx Xxxxxx Xxxxx
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0
Xxxxxxxxxxx, Xxxxxxxxx 00000
(Fax) 000-000-0000
8.3 This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota.
8.4 This Agreement may not be assigned by any party without the
prior written consent of the other parties. This Agreement
shall inure to the benefit of and be binding upon the parties
hereto and their respective heirs, legal representatives,
successors and permitted assigns.
8.5 The parties hereto agree that the remedy at law for any breach
of this Agreement will be inadequate and that any party by
whom this Agreement is enforceable shall be entitled to
specific performance in addition to any other appropriate
relief or remedy. Such party may, in its sole discretion,
apply to a court of competent jurisdiction for specific
performance or injunction or such other relief as such court
may deem just and proper in order to enforce this Agreement or
prevent any violation hereof and, to the extent permitted by
applicable law, each party hereto waives any objection to the
imposition of such relief.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
SELLER:
LAKES GAMING, INC.
By: /s/ Xxxx Xxxxxx
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Its: /s/ Chairman
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COMPANY:
NEW HORIZON KIDS QUEST, INC.
By: /s/ Xxxxxxx Xxxxxxx
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Its: /s/ Chief Executive Officer
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I guarantee to be bound by the terms and conditions of the Company as set forth
herein.
/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
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