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 ($265,000).
3.) REPRESENTATIONS AND WARRANTIES OF MEDICAL. Medical represents and
warrants to the Buyers as follows:
(a) ORGANIZATION. The Corporation is a Minnesota corporation duly
organized, validly existing, and in good standing under the laws of
the State of Minnesota and has all the necessary corporate powers to
own its
properties and to carry on its business as now owned and operated by
it. The Corporation is now, and has been at all times since its
creation, duly authorized, qualified and licensed to carry on its
business in the places and in the manner as conducted at the time
such businesses were conducted. The Corporation is duly qualified to
do business as a foreign corporation and in good standing in all
jurisdictions in which it leases real property or in which the
conduct of its business requires such qualification, except where
failure to be so qualified would not have a material adverse effect
on its business.
(b) CAPITAL. The authorized capital stock of the Corporation consists
of one million (1,000,000) shares of common stock, having a par value
of One Cent ($.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
(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 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
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.
(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 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.
(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
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.
(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;
(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
(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 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.
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 :
(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.
(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
(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 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.
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.
(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: /s/ Xxxxxxx X. Xxxxxx /s/ Xxxx XxXxxxx
------------------------ ------------------------
Its: President Xxxx XxXxxxx
XXXXXXX XXXXXXXX
/s/ Xxxxxxx Xxxxxxxx
------------------------
Xxxxxxx Xxxxxxxx
XXXXXXX XXXXX
/S/ Xxxxxxx Xxxxx
------------------------
Xxxxxxx Xxxxx
