Exhibit 2.6
AGREEMENT OF PURCHASE AND SALE OF ASSETS
This Agreement ("Agreement") is made as of January 26, 2000, at Eden
Prairie, Minnesota, by and among MT Acquiring Corp., a Minnesota corporation
("Buyer Corp"), Xxx Xxxxxx and Xxxx Xxxx ("Buyer's Principals," and, together
with Buyer Corp, "Buyers"), having their principal offices in Eden Prairie,
Minnesota, Global MAINTECH, Inc. ("Shareholder") and Magnum Technologies, Inc.,
a Minnesota corporation ("Seller Corp"), and Global MAINTECH Corporation, a
Minnesota corporation and Shareholder's parent company ("Shareholder's Parent")
(together with Seller Corp. and Shareholder, "Sellers" and, together with
Shareholder and Buyers, the "Parties"), having their principal offices in Eden
Prairie, Minnesota.
Buyer Corp desires to purchase from Sellers, and Sellers desire to sell to
Buyer Corp, on the terms and subject to the conditions of this Agreement,
including the release of all Claims (as defined below), all of the business and
properties of the business currently conducted by Buyer's Principals under the
name Magnum Technologies, Inc. (the "Business").
This Agreement also resolves a number of disputes among the Parties
respecting ownership of the common stock of Seller Corp, funds owed by Sellers
to Buyer's Principals, funds owed by Seller Corp to Shareholder (e.g., payroll
intercompany receivables), and the grant to Buyer's Principals of certain
options with respect to the common stock of Shareholder's Parent (the "Stock
Options"). In exchange for the conveyance, transfer, assignment and delivery to
Buyer Corp of the Assets and other consideration set forth herein, Buyers have
agreed, inter alia, that Seller Corp is a wholly-owned subsidiary of
Shareholder, and to resolve the disputes between them, and to purchase and sell,
respectively, the assets for the consideration set forth herein.
In consideration of the mutual covenants, agreements, representations, and
warranties contained in this Agreement, the Parties agree as follows:
ARTICLE ONE: PURCHASE AND SALE OF ASSETS
Sale and Transfer of Assets: Sellers hereby sell, convey, transfer, assign,
and deliver to Buyer Corp, and Buyer Corp hereby purchases from Sellers, all the
assets and properties used in the Business (the "Assets"), of every kind,
character, and description, whether tangible, intangible, personal, or mixed,
and wherever located, including, without limitation, the following:
All property and other rights of Sellers related to the
Business, including but not limited to those items listed in
the Exhibit A attached hereto, other than property and
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rights specifically excluded herein or therein; including
all supplies, materials, work in process, finished goods,
equipment, machinery, furniture, fixtures, claims and rights
under contracts, notes, evidences of indebtedness, purchase
and sales orders, copyrights, service marks, trademarks,
trade names, trade secrets, patents, patent applications,
licenses, royalty rights, deposits, and rights and claims to
refunds and adjustments of any kind (except contracts with
or obligations to Shareholder or Shareholder's Parent).
The Assets shall, without limitation, include all assets and property of the
Business reflected on its balance sheet as of December 31, 1999, and attached
hereto as Exhibit B, and all assets and property thereafter acquired by the
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Business before the date hereof, except those assets disposed of in the ordinary
course of business at the direction of Buyer's Principals or as permitted by
this Agreement.
Sellers' Release of Claims: Sellers hereby release Buyers from any and all
claims arising out of the association of Buyer's Principals with Sellers, and
hereby terminate all obligations of Buyer's Principals under any agreement,
written or oral, with Sellers, except the agreements contained herein.
Consideration from Buyer Corp at Closing: The following, taken together
with Buyer's representations, warranties and covenants set forth herein, shall
constitute full payment for the transfer of the Assets by Sellers to Buyer Corp.
Assumption of Liabilities: Buyer Corp hereby assumes only those obligations
and contracts listed in Exhibit C attached hereto. It is expressly understood
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and agreed that Buyer Corp shall not be liable for any of the obligations or
liabilities of Sellers of any kind and nature other than those specifically
assumed by Buyer Corp under this paragraph. Specifically, and without limiting
the foregoing, Buyer Corp shall not and does not assume any inter-company
receivables owed to Shareholder's Parent for payroll advances made on behalf of
Seller Corp, nor for the withholding taxes payable for Seller Corp or its
employees prior to the date hereof. Furthermore, Buyer Corp does not assume any
liability for rent payable by Seller Corp to Shareholder's Parent for any period
prior to the date hereof.
The assumption by Buyer Corp of the debts, liabilities, and obligations set
forth on Exhibit C shall expressly exclude: (i) any tax imposed on Sellers
because of the sale of their assets and business; (ii) any of the liabilities or
expenses of Sellers incurred in negotiating and carrying out their obligations
under, or contemplated by, this Agreement; (iii) any obligations of Sellers
under employee agreements with existing employees of Sellers except Buyer's
Principals; (iv) any obligations incurred by Sellers after the Closing Date; and
(v) any liabilities or obligations incurred by Sellers in violation of, or as a
result of Sellers' violation of, this Agreement.
Subordinated Promissory Note: Buyer Corp agrees to deliver a subordinated
promissory note payable to Shareholder in the amount of $214,000 in
substantially the form attached hereto as Exhibit D (the "Subordinated
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Promissory Note").
Allocation of Consideration: The consideration provided Buyer Corp
hereunder (the "Purchase Price") shall be allocated as follows:
1. Total current assets $117,248
2. Machinery and equipment 79,038
3. Furniture and fixtures 10,000
4. Patents, trademarks and copyrights 147,086
5. Goodwill --
6. All other assets --
TOTAL PURCHASE PRICE $353,372
Each of the Parties agrees to report this transaction for federal tax
purposes in accordance with the foregoing allocation of the Purchase Price.
Excise, Withholding, and Property Taxes: Sellers shall pay all sales and
use taxes arising out of the transfer of the Assets and shall pay their portion,
prorated as of the Closing Date, of state and local real and personal property
taxes of the Business. Buyers shall not be responsible for any business,
occupation, withholding, or similar tax, or any taxes of any kind related to any
period before the Closing Date.
ARTICLE TWO: REPRESENTATIONS AND WARRANTIES OF SELLERS
The following representations and warranties of Sellers are expressly
limited to the extent that Buyers have any information not disclosed to Sellers
that would render such representations and warranties materially false,
misleading, incorrect, or inaccurate. Buyers shall have no right to
indemnification from Sellers for any damage caused by inaccuracies in the
following if prior to the date hereof Buyers knew in fact that such information
was
materially false, misleading, incorrect, or inaccurate. Furthermore, the
following shall assume that Buyer's consideration set forth herein has been
given (i.e., the transfer of Buyer's interest in Sellers Corp has taken place).
Subject to the foregoing, Sellers, jointly and severally, represent and
warrant that:
Title to Assets: Sellers have good and marketable title to all of the
Assets. All of the 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 continuing servicing obligations upon
certain contracts with customers, which obligations are being assumed by Buyers
hereunder.
Other Tangible Personal Property: Exhibit A to this Agreement is a complete
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and accurate schedule describing, and specifying the location of, all machinery,
equipment, furniture, supplies, and all other tangible personal property owned
by, in the possession of, or used by Sellers in connection with the Business.
The property listed in Exhibit A constitutes all such tangible personal property
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necessary for the conduct of the Business as now conducted.
Except as stated in Exhibit A, no personal property used in connection with
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the Business is held under any lease, security agreement, conditional sales
contract, or other title retention or security arrangement, or is located other
than in the possession of Sellers.
Organization, Standing, and Qualification: Each Seller is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Minnesota and has all necessary corporate powers to own its properties
and to operate its business as now owned and operated by it.
Financial Statements: Exhibit B to this Agreement sets forth consolidated
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and consolidating balance sheets of the Business as reported internally, as of
November 30, 1999, and December 31, 1999, and the related consolidated and
consolidating statements of income for the fiscal periods ending on those dates.
The Financial Statements fairly present the transactions recorded throughout the
periods indicated and properly record those transactions in the balance sheets
and results of operations included in the Financial Statements.
Accounts Receivable: All accounts receivable of the Business shown on the
balance sheet of the Business as of December 31, 1999, included in the Financial
Statements, and all accounts receivable of the Business created after that date,
arose from valid sales in the ordinary course of business. With the exception
of any pledge or encumbrance created by or at the written direction of Buyers'
Principals, no account receivable of the Business is subject to pledge or
encumbrance.
Trade Names, Trademarks, and Copyrights: Exhibit A to this Agreement sets
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forth all trade names, trademarks, service marks, copyrights and their
registrations used in the Business and owned by Sellers or in which Sellers have
any rights or licenses, together with a brief description of same. Except as
set forth in Exhibit A, Sellers are not a party to any license, agreement, or
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arrangement, whether as licensor, licensee, or otherwise, with respect to any
trademarks, service marks, trade names, copyrights or applications for same. To
Sellers' knowledge, Sellers own, or hold adequate licenses or other rights to
use, all trademarks, service marks, trade names, and copyrights necessary for
the Business as now conducted and such use does not, and will not, conflict
with, infringe on, or otherwise violate any rights of others.
Patents and Patent Rights: Exhibit A to this Agreement sets forth all
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patents, inventions, industrial models, processes, designs, and applications for
patents used in the Business and owned by Sellers or in which Sellers have any
rights, licenses, or immunities. The patents and applications for patents
listed in Exhibit A are valid and in full force and effect and are not subject
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to any taxes, maintenance fees, or actions. Except as set forth in Exhibit G,
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there have not been any interference actions or other judicial, arbitration, or
other adversary proceedings concerning the patents or applications for patents
listed in Exhibit A. Each patent application is awaiting action by its
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respective patent office except as otherwise indicated in Exhibit A. The
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manufacture, use, or sale of the inventions, models, designs, and systems
covered by the patents and applications for patents listed in Exhibit A does not
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violate or infringe on any patent or any proprietary or personal right of any
person, firm, or corporation and, to Sellers'
knowledge, Sellers have not infringed and are now not infringing on any patent
or other right belonging to any person, firm, or corporation. Except as set
forth in Exhibit A, Seller Corp is not a party to any license, agreement, or
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arrangement, whether as licensee, licensor, or otherwise, with respect to any
patent, application for patent, invention, design, model, process, trade secret,
or formula. To Sellers' knowledge, Sellers have the right and authority to use
such inventions, trade secrets, processes, models, designs, and formulas as are
necessary to enable them to conduct and to continue to conduct all phases of the
Business in the manner currently conducted by them, and such use does not, and
will not, conflict with, infringe on, or violate any patent or other rights of
others.
Trade Secrets: Exhibit A to this Agreement contains a true and complete
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list, without extensive or revealing descriptions, of all of Sellers' trade
secrets, including technical data, used in the Business. The specific location
of each trade secret's documentation, including its complete description,
specifications, charts, procedures, and other material relating to it, is also
set forth within Exhibit A. Each trade secret's documentation is current,
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accurate, and sufficient in detail and content to identify and explain it, and
to allow its full and proper use by Buyers without reliance on the special
knowledge or memory of others.
Sellers are the sole owners of each of these trade secrets, free and clear
of any liens, encumbrances, restrictions, or legal or equitable claims of
others, except as specifically stated in Exhibit A.
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To Sellers' knowledge, all these trade secrets are presently valid and
protectable, are not part of the public knowledge or literature, and have not
been used, divulged, or appropriated for the benefit of any past or present
employees or other persons or to the detriment of Seller Corp.
Existing Employment Contracts: Exhibit E to this Agreement is a list of all
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Sellers' material employment contracts, collective bargaining agreements, and
pension, bonus, profit sharing, stock option, or other agreements in writing, if
any, providing for employee remuneration or benefits in connection with the
Business. To the best of Sellers' knowledge, Sellers are not in default under
any of these agreements.
Insurance Policies: Sellers have maintained and now maintain (i) insurance
on all of the Assets which are 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.
Compliance with Laws: Sellers have received no notice of any violation of
any applicable federal, state, or local statute, law, or regulation (including,
without limitation, any applicable building, zoning, or other law, ordinance, or
regulation) affecting the Assets or the Business, and to the best of their
knowledge there are no such violations.
Litigation: Except as set forth in Exhibit F there is no suit, action,
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arbitration, or legal, administrative, or other proceeding, or governmental
investigation pending or, to the best knowledge of Sellers, threatened against
Sellers that would, if determined in a manner adverse to Sellers, affect
Sellers' ability to sell and transfer the Assets.
No Breach or Violation: The consummation of the transactions contemplated
by this Agreement will not result in or constitute any of the following: (i) 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 by-laws of
Sellers or of any lease, license, promissory note, conditional sales contract,
commitment, indenture, mortgage, deed of trust, or other agreement, instrument,
or arrangement to which any Seller is a party or by which any Seller or the
property of any Seller is bound; (ii) an event that would permit any party to
terminate any agreement or to accelerate the maturity of any indebtedness or
other obligation of any Seller; or (iii) the creation or imposition of any lien,
charge, or encumbrance on any of the Assets.
Authority and Consents: Sellers have the right, power, legal capacity, and
authority to enter into, and to perform their respective obligations under, this
Agreement, and, except as set forth in Exhibit H hereto, no approvals or
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consents of any persons are necessary in connection with such execution and
performance. The execution, delivery and performance of this Agreement by
Sellers has been duly authorized by all requisite corporate action.
Full Disclosure: None of the representations and warranties made by Sellers
herein or in any certificate or memorandum furnished or to be furnished by any
of them in connection herewith, or on their behalf, contains any untrue
statement of a material fact, or omits any material fact the omission of which
would be materially misleading.
ARTICLE THREE: BUYERS' REPRESENTATIONS AND WARRANTIES
Buyers represent and warrant that:
Organization, Standing, and Qualification: Buyer Corp is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Minnesota and has all necessary corporate powers to own its properties and to
operate its business as now owned and operated by it.
Ownership of Claims: Buyer Corp has good and marketable title to all of the
Claims and all interests in all of the Claims. All of the Claims 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,
covenants, conditions, or restrictions.
Authority and Consents: Buyers have the right, power, legal capacity, and
authority to enter into and perform their respective obligations under this
Agreement, and no approvals or consents of any persons are necessary in
connection with such execution and performance. The execution, delivery and
performance of this Agreement by Buyers has been duly authorized by all
requisite corporate action.
Full Disclosure: None of the representations and warranties made by Buyers
herein or in any certificate or memorandum furnished or to be furnished by any
of them in connection herewith, or on their behalf, contains any untrue
statement of a material fact, or omits any material fact the omission of which
would be materially misleading.
Operation of the Business: Buyers' Principals have at all times up to the
date hereof operated the Business in ordinary course and without delaying
revenue recognition in any manner or otherwise intentionally reducing the
apparent value of the Business.
Bulk Sales Law: Buyers hereby waive compliance with the provisions of the
Minnesota Commercial Code relating to bulk transfers in connection with this
sale of assets, subject to the indemnities of Sellers contained herein. Nothing
in this paragraph shall estop or prevent either Buyers or Sellers from asserting
as a bar or defense to any action or proceeding brought under that law that it
is not applicable to the sale contemplated hereunder.
ARTICLE FOUR: CONDITIONS PRECEDENT TO BUYER CORP'S OBLIGATIONS
The obligation of Buyer Corp to purchase the Assets under this Agreement is
subject to the satisfaction, at or before the Closing, of all the conditions set
forth below. Buyer Corp 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 Buyer Corp of any of its other rights or remedies,
at law or in equity, if any of Sellers shall be in default of any of their
representations or warranties under this Agreement.
Accuracy of Sellers' Representations and Warranties: Except as otherwise
permitted by this Agreement, all representations and warranties by each of
Sellers herein or in any written statement that shall be delivered to Buyers by
any of Sellers under this Agreement shall be true on and as of the Closing Date.
Xxxx of Sale: Sellers shall execute and deliver to Buyer Corp a warranty
xxxx of sale (except as to matters caused by Buyers' Principals being in breach
of such warranty) with respect to all of the Assets (the "Xxxx of Sale").
Performance by Sellers: Sellers shall have satisfied all conditions
required by this Agreement to be satisfied by them, or any of them, on or before
the date hereof.
Opinion of Sellers' Counsel: Buyers shall have received from Xxxxxx &
Whitney LLP, counsel for Sellers, an opinion dated the date hereof, in form and
substance satisfactory to Buyers and their counsel, that:
(i) Sellers are corporations duly organized and validly existing and
in good standing under the laws of the State of Minnesota, and
each has all necessary corporate power to own its properties as
now owned and operate its business as now operated;
(ii) This Agreement has been duly and validly authorized and, when
executed and delivered by Sellers, will be valid and binding on
all of them and enforceable in accordance with its terms, except
as limited by bankruptcy and insolvency laws and by other laws
affecting the rights of creditors generally;
(iii) Neither the execution nor delivery of the Agreement nor the
consummation of the transactions contemplated in the Agreement
will constitute (a) a default, or an event that would with
notice or lapse of time or both constitute a default under, or
violation or breach of, Sellers' articles of incorporation, by-
laws, or any indenture, license, lease, franchise, mortgage,
instrument, or other agreement known to us to which any Seller
is a party, or by which they or their properties may be bound,
(b) an event that would permit any party to any agreement or
instrument known to us to terminate it or to accelerate the
maturity of any indebtedness or other obligation of Sellers, or
(c) an event that would result in the creation or imposition of
any lien, charge, or encumbrance on any of the Assets; and
(iv) Except as set forth in Exhibit F and G to the Agreement, counsel
does not know of any suit, action, arbitration, or legal,
administrative, or other proceeding or governmental
investigation pending or threatened against or affecting Sellers
or any of the Assets.
Approval of Buyers' Counsel: Buyers shall have received from their counsel,
Xxxxxxx X. Xxxxxxxxx, an opinion that may be based on the opinion of counsel for
Sellers, on any evidence referred to in the opinion of Sellers' counsel, and on
any other evidence that Buyers' counsel may deem necessary or desirable.
Corporate Approval: The execution, delivery and performance of this
Agreement by Sellers shall have been duly authorized by all necessary corporate
action, and Buyers shall have received copies of all resolutions pertaining to
such authorization, certified by the respective secretaries of Sellers.
Consents: All necessary agreements and consents to the consummation of the
transactions contemplated by this Agreement, or otherwise pertaining to the
matters covered hereby, shall have been obtained by Sellers from the persons and
entities set forth in Exhibit H hereto and delivered to Buyers.
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Approval of Documentation: The form and substance of all certificates,
instruments, opinions, and other documents delivered to Buyers under this
Agreement shall be satisfactory in all reasonable respects to Buyers and their
counsel.
ARTICLE FIVE: CONDITIONS PRECEDENT TO SELLERS' OBLIGATIONS
The obligation of Sellers to sell and transfer the Assets under this
Agreement is subject to the satisfaction, at or before the Closing, of all the
following conditions:
Accuracy of Buyers' Representations and Warranties: All representations and
warranties of Buyers in this Agreement or in any written statement delivered by
Buyers under this Agreement to be satisfied by them shall be true on and as of
the Closing Date.
Buyers' Performance: Buyers shall have satisfied all conditions required by
this Agreement to be satisfied by them on or before the date hereof.
Opinion of Buyers' Counsel: Buyers shall have furnished Sellers with an
opinion, dated the date hereof, of Xxxxxxx X. Xxxxxxxxx, counsel for Buyers, in
form and substance satisfactory to Sellers and their counsel, to the effect
that:
(i) Buyer Corp is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Minnesota
and has all requisite corporate power to perform its obligations
under the Agreement;
(ii) All corporate proceedings required by law or by the provisions
of the Agreement to be taken by Buyers on or before the Closing
Date in connection with the execution and delivery of the
Agreement and the consummation of the transactions contemplated
thereby have been duly and validly taken;
(iii) Buyer Corp has the corporate power and authority to acquire the
Assets for the consideration set forth herein;
(iv) Every consent, approval, authorization, or order of any court or
governmental agency or body that is required for the
consummation by Buyers of the transactions contemplated by the
Agreement has been obtained and will be in effect on the Closing
Date;
(v) The consummation of the transactions contemplated by the
Agreement does not violate or contravene any of the provisions
of any charter, by-law or resolution of Buyer Corp or of any
indenture, agreement, judgment, or order known to Buyers'
counsel to which Buyers are a party or by which Buyers are
bound.
In rendering its opinion, counsel for Buyers may rely on certificates of
governmental authorities.
Buyer Corp's Corporate Approval: The board of directors and holders of a
majority of the outstanding stock of Buyer Corp shall have duly authorized and
approved the execution and delivery of this Agreement and all corporate action
necessary or proper to fulfill the obligations of Buyers to be performed under
this Agreement on or before the Closing Date.
Consents: The parties listed on Exhibit H shall have consented to the
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transactions contemplated herein.
Approval of Documentation: The form and substance of all certificates,
instruments, opinions, and other documents delivered to Sellers under this
Agreement shall be satisfactory in all reasonable respects to Sellers and their
counsel.
ARTICLE SIX: THE CLOSING
Time and Place: The transfer of the Assets by Sellers to Buyer Corp (the
"Closing") occur concurrently with the execution of this Agreement on the date
first set forth above (the "Closing Date").
Sellers' Obligations at Closing: At the Closing, Sellers shall deliver or
cause to be delivered to Buyers:
(i) The Xxxx of Sale and all other necessary instruments of
assignment and transfer with respect to the Assets;
(ii) The opinion of counsel to Sellers, dated the Closing Date, as
provided for herein; and
(iii) The Assets.
Buyers' Obligations at Closing: At the Closing, Buyers shall deliver to
Sellers the following instruments and documents against delivery of the items
specified to be delivered by Sellers above:
(i) Certificates representing the total number of shares of Seller
Corp or Shareholder's Parent in the possession of Buyers to be
delivered at the Closing;
(ii) The opinion of counsel to Buyers, dated the Closing Date, as
provided for herein;
(iii) Certified resolutions of Buyer Corp's board of directors, in
form satisfactory to counsel for Sellers, authorizing the
execution, delivery and performance of this Agreement and all
actions to be taken by Buyer Corp under this Agreement; and
ARTICLE SEVEN: SELLERS' OBLIGATIONS AFTER CLOSING
Sellers' Indemnity: Sellers shall indemnify, defend, and hold harmless
Buyers 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, that Buyers shall
incur or suffer, which arise, result from, or relate to any breach of, or
failure by Sellers to perform any of their representations, warranties,
covenants, or agreements in this Agreement or in any schedule, certificate,
exhibit, or other instrument furnished or to be furnished by Sellers under this
Agreement; provided, however, that Sellers shall be under no obligation to
indemnify Buyers in connection with any claims arising hereunder unless and
until the losses the subject of such claims exceed $25,000 in the aggregate, in
which event Buyers shall be entitled to seek indemnification from Sellers only
for the amount of such losses in excess of $25,000.
Buyers shall promptly notify Sellers of the existence of any claim, demand, or
other matter to which Sellers' indemnification obligations would apply, and
shall give Sellers a reasonable opportunity to defend the same at their own
expense and with counsel of their own selection. If Sellers shall fail to
defend within a reasonable time after this notice, Buyers shall have the right,
but not the obligation, to undertake the defense of, and to compromise or settle
(exercising reasonable business judgment) the claim or other matter on behalf,
for the account, and at the risk, of Sellers. If the claim is one that cannot
by its nature be defended solely by Sellers (including, without limitation, any
federal or state tax proceeding), then Buyers shall make available all
information and assistance that Sellers may reasonably request.
Seller Corp's Name: Sellers agree that after the Closing Date they shall
not use or employ in any manner directly or indirectly the name "Magnum
Technologies, Inc.," and that they will dissolve Seller Corp promptly after the
Closing Date.
Non-Compete: Sellers agree that for a period of one year from the Closing
Date, they will not compete, directly or indirectly, with Buyer Corp in any
business in which the Business is currently engaged.
Business Offices: Sellers agree to permit Buyers to remain at the current
location of the Business for a period not to exceed 120 days from Closing at a
gross rental of $2000 per month payable to Shareholder.
Further Assurances: Sellers, at any time before or after the Closing Date,
will execute, acknowledge, and deliver any further deeds, assignments,
conveyances, and other assurances, documents, and instruments of transfer
reasonably requested by Buyers, and will take any other action consistent with
the terms of this Agreement that may reasonably be requested by Buyers for the
purpose of assigning, transferring, granting, conveying, and confirming to
Buyers, or reducing to possession, any or all property to be conveyed and
transferred by this Agreement. If requested by Buyers, Sellers further agree to
prosecute or otherwise enforce in their own name for the benefit of Buyers any
claims, rights, or benefits that are transferred to Buyers by this Agreement and
that require prosecution or enforcement in Sellers' name. Any prosecution or
enforcement of claims, rights, or benefits under this paragraph shall be solely
at Buyers expense, unless the prosecution or enforcement is made necessary by a
breach of this Agreement by any of the Sellers.
ARTICLE EIGHT: BUYERS' OBLIGATIONS AFTER CLOSING
Buyers' Release of Claims: Commencing on the Closing Date and forever
thereafter, Buyers shall not pursue, and hereby release Sellers from, any and
all claims relating to the following items (the "Claims"):
(i) any subscription payment owed by Shareholder to Seller Corp;
(ii) any shares of common stock of Seller Corp owned by Buyer's
Principals on or prior to the date hereof;
(iii) any web page and intranet services rendered by Buyer's
Principals as employees of Sellers;
(iv) any Stock Options or capital stock of Shareholder's Parent; and
(v) any obligations of Shareholder and/or Shareholder's Parent for
sums payable to Buyer's Principals pursuant to the grant of
stock options and the "earn out" formula(s) contemplated in the
April 1, 1998 letter agreement and its predecessor agreements
between Buyer's Principals and Shareholder.
(vi) the Parties' conduct prior to the date hereof, except for the
performance of the terms hereof.
Buyers' Indemnity: Buyers shall indemnify, defend, and hold harmless
Sellers 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, that Sellers
shall incur or suffer which arise, result from, or relate to any breach of, or
failure by Buyers to perform any of their representations, warranties,
covenants, or agreements in this Agreement or in any schedule, certificate,
exhibit, or other instrument furnished or to be furnished by Buyers under this
Agreement; provided, however, that Buyers shall be under no obligation to
indemnify Sellers in connection with any claims arising hereunder unless and
until the losses the subject of such claims exceed $25,000 in the aggregate, in
which event Sellers shall be entitled to seek indemnification from Buyers only
for the amount of such losses in excess of $25,000.
Sellers shall promptly notify Buyers of the existence of any claim, demand, or
other matter to which Sellers' indemnification obligations would apply, and
shall give Buyers a reasonable opportunity to defend the same at their own
expense and with counsel of their own selection. If Buyers shall fail to defend
within a reasonable time after this notice, Sellers shall have the right, but
not the obligation, to undertake the defense of, and to compromise or settle
(exercising reasonable business judgment) the claim or other matter on behalf,
for the account, and at the risk, of Buyers. If the claim is one that cannot by
its nature be defended solely by Buyers (including, without limitation, any
federal or state tax proceeding), then Sellers shall make available all
information and assistance that Buyers may reasonably request.
Non-Compete: Buyers agree that, for a period of one year from the Closing
Date, Buyers will not compete, directly or indirectly, with Sellers in any
business outside the scope of the Business as of the Closing Date.
ARTICLE NINE: PUBLICITY
All notices to third parties and all other publicity concerning the
transactions contemplated herein shall be jointly planned and coordinated by and
between Buyers and Sellers. None of the Parties shall act unilaterally in this
regard without the prior written approval of the others; provided, however, that
such approval shall not be unreasonably withheld.
ARTICLE TEN: COSTS
Finder's or Broker's Fees: Each of the Parties represents and warrants that
it has dealt with no broker or finder in connection with any of the transactions
contemplated herein, and no broker or other person is entitled to any commission
or finder's fee in connection with any of these transactions.
Sellers and Buyers each agree to indemnify and hold harmless one another
against any loss, liability, damage, cost, claim, or expense incurred by reason
of any brokerage, commission, or finder's fee alleged to be payable because of
any act, omission, or statement of the indemnifying party.
ARTICLE ELEVEN: FORM OF AGREEMENT
Effect of Headings: The subject headings of the paragraphs and
subparagraphs of this Agreement are included for purposes of convenience only,
and shall not affect the construction or interpretation of any of its
provisions.
Entire Agreement; Modification; Waiver: This Agreement constitutes the
entire agreement between the Parties pertaining to the subject matter hereof and
supersedes all prior and contemporaneous agreements, representations, and
understandings of the Parties. No supplement, modification, or amendment of
this Agreement shall be binding unless executed in writing by all the Parties.
No waiver of any of the provisions of this Agreement shall be deemed, or shall
constitute, a waiver of any other provision, whether or not similar, nor shall
any waiver constitute a continuing waiver. No waiver shall be binding unless
executed in writing by the party making the waiver.
Counterparts: This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
ARTICLE TWELVE: PARTIES
Parties in Interest: Except as otherwise provided herein, nothing in this
Agreement, whether express or implied, is intended to confer any rights or
remedies under or by reason of this Agreement on any persons other than the
Parties to it and their respective successors and assigns, nor is anything in
this Agreement intended to relieve or discharge the obligation or liability of
any third persons to any party to this Agreement, nor shall any provision give
any third persons any right of subrogation or action over against any party to
this Agreement.
Assignment: This Agreement shall be binding on, and shall inure to the
benefit of, the Parties to it and their respective heirs, legal representatives,
successors, and assigns; provided, however, that Buyer Corp may not assign any
of its rights hereunder, except to a wholly owned subsidiary of Buyer Corp. No
such assignment by Buyer Corp to its wholly owned subsidiary shall relieve Buyer
Corp of any of its obligations or duties hereunder.
ARTICLE THIRTEEN: REMEDIES
Arbitration: Any controversy or claim arising out of, or relating to, this
Agreement, or the making, performance, or interpretation thereof, shall be
settled by arbitration in Minneapolis, Minnesota in accordance with the Rules of
the American Arbitration Association then existing, and judgment on the
arbitration award may be entered in any court having jurisdiction over the
subject matter of the controversy. Arbitrators shall be persons experienced in
negotiating, and making and consummating acquisition agreements.
Specific Performance and Waiver of Rescission Rights: Each Party's
obligation under this Agreement is unique. Each of the Parties acknowledges
that if any Party should default in its obligations under this Agreement, it
would be extremely impracticable to measure the resulting damages; accordingly,
the nondefaulting party, in addition to any other available rights or remedies,
may xxx in equity for specific performance, and the Parties each expressly waive
the defense that a remedy in damages will be adequate. Notwithstanding any
breach or default by any of the Parties of any of their respective
representations, warranties, covenants, or agreements under this Agreement, if
the purchase and sale contemplated hereunder shall be consummated at the
Closing, each of the Parties
waives any rights that it or he may have to rescind this Agreement or the
transactions consummated hereunder; provided, however, this waiver shall not
affect any other rights or remedies available to the Parties under this
Agreement or under the law.
Recovery of Litigation Costs: If any legal action or any arbitration 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, in addition to any other relief to which
it or they may be entitled, reasonable attorneys' fees and other costs incurred
in that action or proceeding.
ARTICLE FOURTEEN: NATURE AND SURVIVAL OF
REPRESENTATIONS AND OBLIGATIONS
No representations or warranties whatever are made by any party, except as
specifically set forth in this Agreement or in any instrument, certificate,
opinion, or other writing provided for herein. All statements contained in any
of these instruments, certificates, opinions, or other writings shall be deemed
to be representations and warranties under this Agreement. The representations,
warranties, and indemnities made by the Parties in this Agreement, or in
instruments, certificates, opinions, or other writings provided for in the
covenants and agreements to be performed or complied with by the respective
Parties, shall be deemed to be continuing and shall survive the Closing, but
shall expire on the first anniversary date hereof. All claims on such matters
shall have been made, or an action at law or in equity shall have been commenced
or filed, before such anniversary date. Nothing in this paragraph shall affect
the obligations and indemnities of the Parties with respect to covenants and
agreements contained in this Agreement that are permitted to be performed, in
whole or in part, after the Closing Date.
The limitation period for the survival of the above-specified
representations and warranties shall not apply to any fraudulent breach,
representation, or warranty, or to any breach or inaccuracy in any
representations or warranties known to Sellers or Buyers on the Closing Date.
ARTICLE FIFTEEN: NOTICES
All notices, requests, demands, and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given on the
date of service if served personally on the party to whom notice is to be given,
or on the second day after mailing if mailed to the party to whom notice is to
be given, by first class mail, registered or certified, postage prepaid, and
properly addressed as follows:
To Sellers at: Global MAINTECH, Inc.
0000 Xxxxxx Xxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000
Attention: Chief Executive Officer
To Buyers at: MT Acquiring Corp.
0000 Xxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxxxx, XX 00000
Attn: Xxxx Xxxx, President
Any party may change its address for purposes of this paragraph by giving the
other Parties written notice of the new address in the manner set forth above.
ARTICLE SIXTEEN: GOVERNING LAW
This Agreement shall be construed in accordance with, and governed by, the
laws of the State of Minnesota without regard to conflicts of laws principles
thereof.
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IN WITNESS WHEREOF, the Parties have duly executed this Agreement on the day
and year first above written.
GLOBAL MAINTECH, INC
By /s/ Xxxxx Xxxx
----------------------
Xxxxx Xxxx
Chief Executive Officer
GLOBAL MAINTECH CORPORATION
By /s/ Xxxxx Xxxx
----------------------
Xxxxx Xxxx
Chief Executive Officer
MAGNUM TECHNOLOGIES, INC.
By: /s/ Xxxxx Xxxxxx
-----------------------
Xxxxx Xxxxxx
Treasurer
MT ACQUIRING CORP.
By: /s/ Xxxx Xxxx
-----------------------
Xxxx Xxxx
President
/s/ Xxx Xxxxxx
--------------------------
Xxx Xxxxxx
/s/ Xxxx Xxxx
--------------------------
Xxxx Xxxx
