AGREEMENT OF PURCHASE AND SALE OF STOCK
This Agreement is made as of December 1, 2000 (the "Effective Date"),
among RF INDUSTRIES, LTD., a Nevada corporation, having its principal office at
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (referred to herein as "Buyer"); and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (collectively referred to
herein as "Shareholders"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, INC. , doing business as
BIOCONNECT, INC., a California corporation (referred to herein as
"Corporation"), having its principal office at ▇▇▇-▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇. Shareholders and Corporation are collectively referred to
in this Agreement as "Selling Parties."
Recitals
A. Shareholders represent that they own all outstanding shares of the
Corporation's stock, in the following amounts and proportions:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇: 850 shares (85%)
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇: 100 shares (10%)
▇▇▇▇▇▇▇ ▇▇▇▇▇▇: 50 shares (5%)
B. Shareholders' respective spouses have been informed of the transfers
contemplated by this Agreement and consent to those transfers and
terms and conditions of this Agreement by executing the Spousal
Consents attached hereto.
C. Buyer desires to purchase from Shareholders and Shareholders desire to
sell to Buyer all of the outstanding stock of Corporation (the
"Shares"); and Corporation desires that this transaction be
consummated.
Agreement
In consideration of the mutual covenants, agreements, representations,
and warranties contained in this Agreement, the parties agree as follows:
1. Sale, Sales Price, and Terms of Payment.
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▇.▇▇.▇▇▇▇ and Transfer of Shares. Subject to the terms and conditions set
forth in this Agreement, on the Closing Date (as defined in Section 2.01
herein), Shareholders will transfer and convey the shares to Buyer, and Buyer
will acquire the shares from Shareholders.
1.02. Consideration for Sale and Transfer of Shares. As consideration for
the transfer of the shares by Shareholders to Buyer, Buyer shall deliver, in the
aggregate, the following:
(a) At Closing, the sum of One Hundred Fifty Thousand Dollars
($150,000.00).
(b) On January 1, 2001, the sum of Fifty Thousand Dollars ($50,000.00).
(c) On January 1, 2002, the sum of Fifty Thousand Dollars ($50,000.00).
(d) On January 1, 2003 the sum of Fifty Thousand Dollars ($50,000.00).
The sums payable under this Section 1.02 shall be paid by checks drawn
on Buyer's corporate account payable to the Shareholders in proportion to their
respective ownership interests in the Corporation, as set forth in Recital A
hereof.
1.03. Liability of Note of $100,000.00 to ▇▇▇▇▇ ▇▇▇▇▇▇▇ . RF Industries
will assume the note of $100,000.00 USD at the time of the Bioconnect Inc.
acquisition closing as a liability.
2. Closing.
2.01. Time and Place of Closing. The transfer of the shares by Shareholders
to Buyer (the "Closing") shall take place at the Corporation's office at ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇., ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ at 10:00 a.m., on December 1, 2000, or at
such other time and place as the parties may agree to in writing. That date, or
such other date on which the Closing shall occur, is referred to herein as the
"Closing Date."
2.02. Selling Parties' Obligations at Closing. At the Closing, Shareholders
shall deliver to Buyer the following instruments and documents, in form and
substance satisfactory to Buyer and its counsel:
(a) Certificates representing the Shares, respectively registered in
the names of the Shareholders, each duly endorsed by the
respective Shareholder for transfer. On submission of those
certificates to Corporation for transfer, Corporation shall issue
to Buyer a new certificate representing the cumulative shares,
registered in the name of Buyer;
(b) The stock books, stock ledgers, minute books, and corporate seals
of Corporation;
(c) The certificate of the Shareholders and the Corporation, executed
by the Corporation's president and treasurer referenced in
Section 7.01(d);
(d) The statement of seller as provided in Section 7.01(e);
(e) The letter confirming the Corporation's financial condition as of
not more than five (5) business days prior to Closing, as
provided in Section 7.01(g);
(f) Except as otherwise specified by Buyer, the written resignations
of all the officers and directors of Corporation;
(g) Employment agreements between Shareholders and Corporation, dated
the Closing Date, in the form set forth in Exhibit 2;
(h) Certificate executed by the Selling Parties (including a
certificate of the Corporation signed by its president or vice
president and secretary or treasurer), dated the Closing Date,
certifying that their respective representations and warranties
in this Agreement are true and correct at and as of the Closing
Date, as though each representation and warranty had been made on
that date; and
(i) A general release in the form set forth in Exhibit 3, in favor of
Corporation, executed by each Shareholder, and dated the Closing
Date.
2.03. Buyer's Obligations at Closing. At the Closing, Buyer shall deliver
to Shareholders the following instruments and documents:
(a) Checks payable to each Shareholder in the proportionate amounts
specified in Section 1.02(a), above;
(b) The One Hundred Thousand Dollar ($100,000.00) loan described in
Section 1.03, above;
(c) An opinion of Buyer's counsel, dated the Closing Date, as
provided for in Section 8.01(c);
(d) Certified resolution of Buyer's board of directors, in form
satisfactory to counsel for Selling Parties, authorizing the
execution and performance of this Agreement and all actions to be
taken by Buyer under this Agreement; and
(e) A certificate executed by the president or vice president and the
secretary or treasurer of Buyer certifying that all Buyer's
representations and warranties under this Agreement are true as
of the Closing Date, as though each of those representations and
warranties had been made on that date.
3. SELLING PARTIES' REPRESENTATIONS AND WARRANTIES.
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3.01. Selling Parties' Representations and Warranties. Selling Parties,
jointly and severally, represent and warrant that:
(a) Corporation is a corporation duly organized, validly existing,
and in good standing under the laws of the State of California,
has all necessary corporate powers to own its assets and to carry
on its business as now owned and operated by it, and neither the
ownership of its assets nor the nature of its business requires
Corporation to be qualified in any jurisdiction other than the
state of its incorporation.
(b) The authorized capital stock of Corporation consists of 10,000
shares of common stock. 1,000 shares are issued and outstanding.
All the Shares are validly issued, fully paid, and nonassessable.
There are no outstanding subscriptions, options, rights,
warrants, convertible securities, or other agreements or
commitments obligating the Corporation to issue or to transfer
from treasury any additional shares of its capital stock of any
class.
(c) Shareholders are the owners, beneficially and of record, of all
the Shares, free and clear of all liens, encumbrances, security
agreements, equities, options, claims, charges, and restrictions.
Shareholders each have full power to transfer the shares to Buyer
without obtaining the consent or approval of any person or
governmental authority.
(d) Corporation has no subsidiaries and does not own, directly or
indirectly, any interest or investment (whether equity or debt)
in any corporation, partnership, business, trust, or other
entity.
(e) The Corporation's financial statements provided to Buyer have
been prepared in accordance with buyer's approval and generally
accepted accounting principles consistently followed by
Corporation throughout the periods indicated, and fairly present
the financial position of Corporation as of the respective dates
of those statements, and the results of the Corporation's
operations for the respective periods indicated.
(f) Corporation does not have any debt, liability, or obligation of
any nature, whether accrued, absolute, contingent, or otherwise,
and whether due or to become due, that is not reflected in
Corporation's financial statements provided to Buyer or otherwise
disclosed in writing to Buyer. All debts, liabilities, and
obligations incurred after the date of the financial statements
provided to Buyer were incurred in the ordinary course of
business, and are usual and normal in amount both individually
and in the aggregate.
(g) Within the times and in the manner prescribed by law, 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 Corporation.
(h) The Corporation's lease of its principal office at ▇▇▇-▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ is valid and in full force, and
there does not exist any default or event that with notice or
lapse of time, or both, would constitute a default under that
lease.
(i) Selling Parties, and each of them, have no knowledge of any
hazardous waste liabilities of the business as encompassed in 42
U.S.C. ss. 9601, et seq. or any other relevant state or federal
statute, nor do the premises of the business contain any
underground storage tanks, asbestos building materials, or any
other hazardous substances that require or may require removal or
other remedial attention.
(j) The Corporation's inventories of raw materials, work in process,
and finished goods (collectively called "inventories") consist of
items of a quality and quantity useable and salable in the
ordinary course of the Corporation's business. Except for sales
made in the ordinary course of business, all the inventories are
the property of Corporation. No items are subject to security
interest, except as otherwise disclosed in writing to Buyer.
(k) Exhibit 4 to this Agreement is a complete and accurate schedule
describing all automobiles, machinery, equipment, furniture,
supplies, tools, and all other tangible personal property owned
by, in the possession of, or used by Corporation in connection
with its business, except inventories of raw materials, work in
process, and finished goods. The property listed in Exhibit 4
constitutes all such tangible personal property necessary for the
operation by Corporation of its business as now conducted.
(l) Except as stated in Exhibit 5, no personal property used by
Corporation in connection with its business is held under any
lease, security agreement, conditional sales contract, or other
title retention or security arrangement, or is located other than
in Corporation's possession.
(m) Exhibit 6 to this Agreement is a complete and accurate schedule
of the Corporation's accounts receivable as of October 31, 2000,
together with an accurate aging of these accounts. These accounts
receivable, and all accounts receivable of Corporation created
after that date, arose from valid sales in the ordinary course of
business. These accounts have been collected in full since that
date, or are collectible at their full amounts. If following the
Closing, any of such accounts, or any accounts receivable arising
between October 31, 2000 and the Closing, to the extent then
remaining unpaid, are not paid in full on demand when due, the
Selling Parties, immediately upon notice from the Buyer to that
effect, will pay the full amount thereof to the Corporation or,
if the Buyer so specifies, to the Buyer, in exchange for delivery
to the Selling Parties of an assignment of the defaulted account
or accounts.
(n) Exhibit 7 to this Agreement is a schedule of all trade names,
trademarks, service marks, and copyrights and their
registrations, owned by Corporation or in which Corporation has
any rights or licenses, together with a brief description of
each. To the best of seller's knowledge the Corporation has not
infringed, and is not now infringing, on any trade name,
trademark, service ▇▇▇▇, or copyright belonging to any other
person, firm, or corporation. Except as set forth in Exhibit 7,
Corporation is not a party to any license, agreement, or
arrangement, whether as licensor, licensee, or otherwise, with
respect to any trademarks, service marks, trade names, or
applications for them, or any copyrights. Corporation owns or
holds adequate licenses or other rights to use, all trademarks,
service marks, trade names, and copyrights necessary for its
business as now conducted, and such use does not, and will not,
conflict with, infringe on, or otherwise violate any rights of
others.
(o) Exhibit 8 to this Agreement is a complete schedule of all
patents, inventions, industrial models, processes, designs, and
applications for patents owned by Corporation or in which it has
any rights, licenses, or immunities. The patents and applications
for patents listed in Exhibit 8 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. Except as otherwise disclosed to Buyer in writing, 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 8. The
manufacture, use, or sale of the inventions, models, designs, and
systems covered by the patents and applications for patents
listed in Exhibit 8 do not violate or infringe on any patent or
any proprietary or personal right of any person, firm, or
corporation; and Corporation has not infringed and is not now
infringing on any patent or other right belonging to any person,
firm, or corporation. Except as otherwise disclosed to Buyer in
writing, 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. 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, and that use does
not, and will not, conflict with, infringe on, or violate any
patent or other rights of others.
(p) Exhibit 9 to this Agreement is a true and complete list, without
extensive or revealing descriptions, of Corporation's trade
secrets, including all customer lists, processes, drawings,
specifications, know-how and other technical data. 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 with it in that
exhibit. Each trade secret's documentation is current, accurate,
and sufficient in detail and without reliance on the special
knowledge or memory of others. Corporation is the sole owner of
each of these trade secrets, free and clear of any liens,
encumbrances, restrictions, or legal or equitable claims of
others. Corporation has taken all reasonable security measures to
protect the secrecy, confidentiality, and value of these trade
secrets. Any of Corporation's employees and any other persons
who, either alone or in concert with others, developed, invented,
discovered, derived, programmed, or designed these secrets, or
who have knowledge of or access to information relating to them,
have been put on notice and, if appropriate, have entered into
agreements (as disclosed on Exhibit 9 hereto) that these secrets
are proprietary to Corporation and are not to be divulged or
misused. All these trade secrets are presently valid and
protectible, and are not part of the public knowledge or
literature, nor to Selling Parties' knowledge have they been
used, divulged, or appropriated for the benefit of any past or
present employees or other persons, or to the detriment of
Corporation.
(q) All real property and tangible personal property of Corporation
that are necessary to the operation of its businesses are in good
operating condition and repair, ordinary wear and tear excepted.
(r) Exhibit 10 to this Agreement is a list of all employment
contracts and all pension, bonus, profit-sharing, stock option,
or other agreements or arrangements providing for employee
remuneration or benefits to which Corporation is a party. To the
best of Selling Parties' knowledge, Corporation is not in default
under any of these agreements.
(s) Exhibit 11 to this Agreement is a description of all insurance
policies held by Corporation concerning its business, including
any products liability or "key man" policies. All these policies
are in the respective principal amounts set forth in Exhibit 11.
Corporation has maintained and now maintains (1) 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
(2) adequate insurance protection against all liabilities,
claims, and risks against which it is customary to insure.
(t) Corporation has complied with, and is not in violation of,
applicable federal, state, or local statutes, laws, and
regulations affecting the operation of its business.
(u) Except as disclosed to Buyer in writing, there is no suit,
action, arbitration, or legal, administrative, or other
proceeding, or governmental investigation pending, or, to the
best knowledge of Shareholders or Corporation, threatened against
or affecting Corporation or its business, assets, or financial
condition. Corporation is not in default with respect to any
order, writ, injunction, or decree of any federal, state or local
court, agency or instrumentality.
(v) 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 by-laws of Corporation, or any lease, license,
promissory note, conditional sales contract, commitment,
indenture, mortgage, deed of trust, or other agreement,
instrument, or arrangement to which any Shareholder or
Corporation is a party or by which any of them or the property of
any of them is bound; (3) an event that would permit any party to
terminate any agreement or to accelerate the maturity of any
indebtedness or other obligation of Corporation; or (4) the
creation or imposition of any lien, charge, or encumbrance on any
of the Corporation's assets.
(w) Selling Parties 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
other than Selling Parties are necessary in connection with it.
The execution and delivery of this Agreement by Corporation has
been duly authorized by its board of directors.
(x) Selling Parties have furnished to Buyer for its examination (1)
copies of the Corporation's articles of incorporation and
by-laws; (2) the Corporation's minute book containing all
proceedings, consents, actions, and meetings of the Corporation's
Shareholders and board of directors; and (3) the Corporation's
stock transfer book setting forth all transfers of any capital
stock.
3.02. Statement of Full Disclosure For Buyer. None of the foregoing
representations and warranties made by Shareholders or Corporation, or made in
any certificate or memorandum furnished or to be furnished by any of them, or on
their behalf, contains or will contain any untrue statement of a material fact,
or omit any material fact the omission of which would be misleading.
4. Buyer's Representations and Warranties.
4.01. Buyer's Representations and Warranties. Buyer represents and warrants
that it is a corporation duly organized, existing, and in good standing under
the laws of the State of Nevada and is duly qualified to do business in the
State of California. The execution and delivery of this Agreement and the
consummation of this transaction by Buyer have been duly authorized by Buyer's
board of directors, and no further corporate authorization is necessary on the
part of Buyer.
5. Selling Parties' Obligations Before Closing.
5.01. Selling Parties' Pre-Closing Covenants. Selling Parties covenant that
from the Effective Date of this Agreement until the Closing:
(a) Buyer and its counsel, accountants, and other representatives, shall,
after the execution hereof, have full access during normal business
hours to all assets, books, accounts, records, contracts, and
documents of, or relating to, the Corporation. Selling Parties shall
furnish or cause to be furnished to Buyer and its representatives all
data and information concerning the business, finances, and assets of
Corporation that may reasonably be requested.
(b) Corporation shall carry on its business and activities diligently and
in substantially the same manner as they previously have been carried
out, and shall not make or institute any unusual or novel methods of
manufacture, purchase, sale, lease, management, accounting, or
operation that will vary materially from those methods used by
Corporation as of the Effective Date of this Agreement.
(c) Corporation will use its best efforts (without making any commitments
on behalf of Buyer) to preserve its business organization intact, to
keep available to Corporation its present officers and employees, and
to preserve its present relationships with suppliers, customers, and
others having business relationships with them.
(d) Corporation will not:(i) amend its articles of incorporation or
by-laws, (ii) issue any shares of its capital stock, (iii) issue or
create any warrants, obligations, subscriptions, options, convertible
securities, or other commitments under which any additional shares of
its capital stock of any class might be directly or indirectly
authorized, issued, or transferred from treasury, or (iv) agree to do
any of the acts listed above.
(e) Corporation will continue to carry its existing insurance, subject to
variations in amounts required by the ordinary operations of its
business. At the request of Buyer and at Buyer's sole expense, the
amount of insurance against fire and other casualties that, at the
Effective Date of this Agreement, Corporation carries on any of its
properties or in respect of its operations shall be increased by such
amount or amounts as Buyer shall specify. Buyer will cause loss
payable endorsements to be added to all of the insurance policies
listed on Exhibit 11, the cost, if any, of such endorsements to be
borne by the Buyer.
(f) Corporation will not do, or agree to do, any of the following acts:
(i) grant any increase in salaries payable or to become payable by it,
to any officer, employee, sales agent, or representative; or (ii)
increase benefits payable to any officer, employee, sales agent, or
representative under any bonus or pension plan or other contract or
commitment.
(g) Corporation will not, without Buyer's written consent, do or agree to
do any of the following acts: (i) enter into any contract, commitment,
or transaction not in the usual and ordinary course of its business;
(ii) enter into any contract, commitment, or transaction in the usual
and ordinary course of business involving an amount exceeding $0,
individually, or $0 in the aggregate; (iii) make any capital
expenditure in excess of $0 for any single item or $0 in the
aggregate, or enter into any leases of capital equipment or property
under which the annual lease charge is in excess of $0; or (iv) sell
or dispose of any capital assets with a net book value in excess of $0
individually, or $0 in the aggregate.
(h) Corporation will not: (i) declare, set aside, or pay any dividend or
make any distribution in respect of its capital stock; (ii) directly
or indirectly purchase, redeem, or otherwise acquire any shares of its
capital stock; or (iii) enter into any agreement obligating it to do
either of the foregoing acts.
(i) Corporation will not do, or agree to do, any of the following acts:
(i) pay any obligation or liability, fixed or contingent, other than
current liabilities; (ii) waive or compromise any right or claim; or
(iii) cancel, without full payment, any note, loan, or other
obligation owing to Corporation.
(j) Corporation will not modify, amend, cancel, or terminate any of its
existing contracts or agreements, or agree to do any of those acts.
(k) At the request of Buyer, Corporation will document and describe any of
its trade secrets, processes, or business procedures specified by
Buyer, in form and content satisfactory to Buyer, subject to the
provision of Section 6.01, below.
5.02. Truth of Representations and Warranties. All representations and
warranties of Selling Parties set forth in this Agreement and in any written
statements delivered to Buyer by Selling Parties under this Agreement will also
be true and correct as of the Closing Date as if made on that date.
6. Buyer's Obligations Before Closing.
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6.01. Information to Be Held in Confidence. Whether or not the Closing
shall take place, Selling Parties waive any cause of action, right, or claim
arising out of the access of Buyer or its representatives to any trade secrets
or other confidential business information of Corporation from the Effective
Date of this Agreement until the Closing Date, except for the intentional
competitive misuse by Buyer or its representatives of such trade secrets or
other confidential business information if the Closing does not take place.
Notwithstanding the foregoing, Buyer agrees that unless and until the Closing
has been consummated, it and its officers, directors, and other representatives
will use their best efforts to hold in strict confidence, and not use to the
detriment of any Shareholder or the Corporation, all data and information
obtained in connection with this transaction or Agreement with respect to the
Corporation's business. If the transactions contemplated by this Agreement are
not consummated, Buyer will return to Selling Parties all the data and
information that Selling Parties may reasonably request, including, but not
limited to, worksheets, test reports, manuals, lists, memoranda, and other
documents prepared by or made available to Buyer in connection with this
transaction.
7. Conditions Precedent to Buyer's Performance.
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7.01. Conditions Precedent. The obligations of Buyer to purchase the Shares
under this Agreement are subject to the satisfaction, at or before the Closing,
of all of the following conditions set forth in paragraphs (a) to (m). Buyer may
waive any or all of these conditions in whole or in part without prior notice;
provided, however, that such waiver shall be in writing and that no such waiver
of a condition shall constitute a waiver by Buyer of any of its other rights or
remedies, at law or in equity, if any Shareholder or the Corporation is in
default of any of their representations, warranties, or covenants under this
Agreement.
(a) Except as otherwise permitted by this Agreement, all representations
and warranties by each of the Selling Parties in this Agreement or in
any written statement that shall be delivered to Buyer by any of them
under this Agreement shall be true on and as of the Closing Date as
though made at that time.
(b) Selling Parties shall have performed, satisfied, and complied with all
covenants, agreements, and conditions required by this Agreement to be
performed or complied with by them, or any of them, on or before the
Closing Date.
(c) Until the Closing Date, there shall not have been any material adverse
change in the financial condition or the results of operations of
Corporation and the Corporation shall not have sustained any material
loss or damage to its assets, whether or not insured, that materially
affects its ability to conduct its business.
(d) Buyer shall have received a certificate, dated the Closing Date,
signed and verified by each Shareholder and by the Corporation's
president and treasurer certifying, in such detail as Buyer and its
counsel may reasonably request, that the conditions specified in
paragraphs (a) through (c) have been fulfilled.
(e) Buyer shall have received from Selling Parties, a statement dated the
Closing Date, in form and substance satisfactory to Buyer, that:
(i) Corporation is a corporation duly organized and validly existing
and in good standing under the laws of the State of California
and has all necessary corporate power to own its assets as now
owned and operate its business as now operated;
(ii) The authorized capital stock of Corporation consists of 10,000
shares of common stock --, of which 1,000 shares, and no more,
are issued and outstanding. All outstanding shares are validly
issued, fully paid, and nonassessable. To the best knowledge and
belief of counsel, there are no outstanding subscriptions,
options, rights, warrants, convertible securities, or other
agreements or commitments obligating Corporation to issue or
transfer from treasury any additional shares of its capital
stock. Corporation does not have any subsidiaries and does not
own, directly or indirectly, any equity security of any
corporation;
(iii)This Agreement has been duly and validly authorized and, when
executed and delivered by all Selling Parties, will be valid and
binding on each 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;
(iv) Shareholders are the owners, beneficially and of record, of all
the issued and outstanding shares of the capital stock of
Corporation, free and clear of all liens, encumbrances, equities,
options, claims, charges, and restrictions and each Shareholder
has full power to transfer such shares to Buyer without obtaining
the consent or approval of any other person or governmental
authority;
(v) Except as otherwise disclosed to Buyer in writing, such counsel
does not know of any suit, action, arbitration, or legal,
administrative, or other proceeding or governmental investigation
pending or threatened against or affecting Corporation or its
business or assets, or financial or other condition;
(vi) Neither the execution nor delivery of this Agreement nor the
consummation of the transaction contemplated in this Agreement,
will constitute: (a) a default under or violation or breach of
Corporation's articles of incorporation, by-laws, or any
indenture, license, lease, franchise, mortgage, instrument, or
other agreement to which any of Selling Parties is a party, or by
which they or the Corporation's assets may be bound; (b) an event
that would permit any party to any agreement or instrument to
terminate it or to accelerate the maturity of any indebtedness or
other obligation of Corporation, or (c) an event that would
result in the creation or imposition of any lien, charge, or
encumbrance on any asset of Corporation;
(vii)Corporation has good and marketable title to all of its assets
and properties, including those described in the exhibits to this
Agreement, free and clear of all liens, encumbrances, equities,
conditional sales contracts, security interests, charges, and
restrictions, except as set forth in this Agreement or its
exhibits.
In rendering their opinion, counsel for Selling Parties may rely
on certificates of officers and directors of Corporation as to
factual matters.
(f) No action, suit, or proceeding before any court or any
governmental body or authority pertaining to the transaction
contemplated by this Agreement or to its consummation shall have
been instituted or threatened on or before the Closing Date.
(g) Buyer shall have received from Corporation's President or
Corporation's independent public accountant, a letter, dated the
Closing Date, that on the basis of a limited review (not an
audit) of the latest available accounting records of Corporation,
consultations with other responsible officers of Corporation and
the Shareholders, and other pertinent inquiries that they deem
necessary, they have no reason to believe that during the period
ending October 31, 2000 to a specified date, there was any change
in the financial condition or results of the Corporation's
operations, except changes incurred in the ordinary and usual
course of its business during that period that in the aggregate
are not materially adverse, and other changes or transactions, if
any, contemplated by this Agreement.
(h) The execution and delivery of this Agreement by Corporation, and
the performance of its covenants and obligations under it, shall
have been duly authorized by all necessary corporate action, and
Buyer shall have received copies of all resolutions pertaining to
that authorization, certified respectively by the Corporation's
secretary.
(i) Buyer shall have received a tax clearance certificate for the
Corporation, as of a date not more than ten (10) days before the
Closing Date, from the State of California Franchise Tax Board.
(j) Buyer shall have received a Certificate of Release from the State
of California Employment Development Department stating that, as
of a date not more than ten (10) days before the Closing Date, no
contributions, interest, or penalties are due that department
from Corporation.
(k) 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 Selling Parties and delivered to Buyer.
(m) Employment agreements in the form set forth in Exhibit 2, dated
the Closing Date, shall have been executed and delivered by each
Shareholder to Buyer.
(n) Except as otherwise requested by Buyer, Selling Parties shall
have delivered to Buyer the written resignations of all the
officers and directors of Corporation. Selling Parties will cause
any other action to be taken with respect to these resignations
that Buyer may reasonably request.
(o) The form and substance of all certificates, instruments,
opinions, and other documents delivered to Buyer under this
Agreement shall be satisfactory in all reasonable respects to
Buyer and its counsel.
8. Conditions Precedent to Selling Parties' Performance.
----------------------------------------------------
8.01. Conditions Precedent. The obligations of Shareholders to sell and
transfer the Shares under this Agreement are subject to the satisfaction, at or
before the Closing, of all the following conditions:
(a) All representations and warranties by Buyer contained in this
Agreement or in any written statement delivered by Buyer under
this Agreement shall be true on and as of the Closing as though
such representations and warranties were made on and as of that
date.
(b) Buyer shall have 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.
(c) Buyer shall have furnished Selling Parties with an opinion, dated
the Closing Date, of Lagerlof, Senecal, Bradley, ▇▇▇▇▇▇ & ▇▇▇▇▇,
LLP, counsel for Buyer, in form and substance satisfactory to
Selling Parties and their counsel, to the effect that:
(i) Buyer is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Nevada, and
has all requisite corporate power to perform its obligations
under this Agreement;
(ii) All corporate proceedings required by law or by the
provisions of this Agreement to be taken by Buyer on or
before the Closing Date, in connection with the execution
and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement, have been duly
and validly taken;
(iii)Buyer has the corporate power and authority to acquire the
shares for the consideration set forth in Section 1.02,
above;
(iv) Every consent, approval, authorization, or order of any
court or governmental agency or body that is required for
the consummation by Buyer of the transactions contemplated
by this Agreement has been obtained and will be in effect on
the Closing Date;
(v) The consummation of the transactions contemplated by this
Agreement does not violate or contravene any of the
provisions of any charter, by-law, or resolution of Buyer or
of any indenture, agreement, judgment, or order to which
Buyer is a party or by which Buyer is bound.
In rendering their opinion, counsel for Buyer may rely on
certificates of governmental authorities and on opinions of
associate counsel.
(d) The board of directors 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 Buyer to
be performed under this Agreement on or before the Closing Date.
9. Selling Parties' Obligations After Closing.
------------------------------------------
9.01. Seller's Indemnity. Selling Parties, and each of them, shall
indemnify, defend, and hold harmless Buyer from and against any and all claims,
demands, losses, costs, expenses, obligations, liabilities, damages, recoveries,
and deficiencies, including interest, penalties, and reasonable attorneys' fees,
that it may incur or suffer, which arise, result from, or relate to any breach
of, or failure by Selling Parties 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
Selling Parties under this Agreement, including Selling Parties' failure to
disclose any liabilities payable by the Corporation.
9.02. Notice Regarding Seller's Indemnity. Buyer shall promptly notify
Selling Parties of the existence of any claim, demand, or other matter to which
indemnification under Section 9.01 would apply, and shall give Selling Parties a
reasonable opportunity to defend the same at Selling Parties' own expense and
with counsel of Selling Parties' own selection; provided that Buyer shall at all
times also have the right to fully participate in the defense at its own
expense. If Selling Parties shall, within a reasonable time after this notice,
fail to defend, Buyer 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 Selling Parties. If the claim is one that cannot by its nature be defended
solely by Selling Parties (including, without limitation, any federal or state
tax proceeding), then Buyer shall make available and cause Corporation to make
available all information and assistance that Selling Parties may reasonably
request.
9.03. Liquidated Damages. It is agreed that in the event of intentional
and significant misrepresentation of the warranties known by the seller and set
forth in Section 3.01 of this Agreement for which it would be impracticable or
extremely difficult to fix the actual damages resulting to the Buyer from such
breach, and, therefore, the Selling Parties, jointly and severally, agree to pay
to Buyer, as liquidated damages, and not as a penalty, all amounts paid by Buyer
to the Selling Parties until the date such breach is discovered, which amount
represents a reasonable effort by the parties hereto to estimate a fair
compensation for the foreseeable losses that might result from such a breach. In
the event of an intentional misrepresentation of the aforesaid representations
and warranties by the Selling Parties, the Buyer shall be entitled to set off
against any sums that are owing or may become owing to the Selling Parties,
whether by reason of the terms of this Agreement, or otherwise, the aforesaid
liquidated damages.
9.04. Non-Competition; Confidentiality. Each Shareholder agrees that if he
or she resigns they will not at any time within the two-year period immediately
following the Closing Date, directly or indirectly, engage in, or have any
interest in any person, firm, corporation, or business (whether as an employee,
officer, director, agent, security holder, creditor, consultant, or otherwise)
that engages in, any activity that is the same as, similar to, or competitive
with any activity now engaged in by Corporation (or any successor thereto) in
any of those counties so long as Buyer or Corporation engages in such activity
in such counties.
The parties intend that the covenant contained in the preceding portion of
this section shall be construed as a series of separate covenants, one for each
county specified. Except for geographic coverage, each such separate covenant
shall be deemed identical in terms to the covenant contained in the preceding
paragraph. If, in any judicial proceeding, a court shall refuse to enforce any
of the separate covenants deemed included in this section, then the
unenforceable covenant shall be deemed eliminated from these provisions for the
purpose of those proceedings to the extent necessary to permit the remaining
separate covenants to be enforced.
Each Shareholder further agrees not to divulge, communicate, use to the
detriment of Buyer or Corporation or for the benefit of any other person or
persons, or misuse in any way, any confidential information or trade secrets of
Corporation, including personnel information, secret processes, know-how,
customer lists, recipes, formulas, or other technical data. Each Shareholder
acknowledges and agrees that any information or data he or she has acquired on
any of these matters or items was received in confidence and as a fiduciary of
Corporation.
10. Buyer's Obligations After Closing.
---------------------------------
10.01. Continuation of Employee Benefits. Buyer acknowledges that
Selling Parties have advised Buyer of the employee benefits Corporation provides
to its employees, including pension plan, annual vacations, and annual
discretionary bonuses. Buyer understands that the discontinuance of any of these
employment benefits might have a detrimental effect on employment relationships
and on the business being acquired, but Buyer reserves the right after Closing
to provide such employee benefits to Corporation's employees as it deems
appropriate in its sole discretion.
11. Termination; Default.
-------------------
11.01. Conditions Permitting Termination. Either party may terminate this
Agreement on the Closing Date without liability to the other if:
(a) Any bona fide action or proceeding is pending against either
party on the Closing Date that could result in an unfavorable
judgment, decree, or order that would prevent or make unlawful
the carrying out of this Agreement; or
(b) The legality and sufficiency of all steps taken and to be taken
by the parties and their shareholders in carrying out this
Agreement shall not have been approved by counsel as required by
this Agreement; or
(c) Any condition precedent of either party, as set forth herein, has
not been satisfied or waived.
11.02. Defaults Permitting Termination. If either Buyer or Selling Parties
materially default in the due and timely performance of any of its or their
warranties, covenants, or agreements under this Agreement, the non-defaulting
party or parties may on the Closing Date give notice of termination of this
Agreement, in the manner provided in Section 12.11. The notice shall specify
with particularity the default or defaults on which the notice is based. The
termination shall be effective three (3) days after the Closing Date, unless the
specified default or defaults have been cured on or before this effective date
for termination.
11.03. Specific Performance and Waiver of Rescission Rights. Each party's
obligation under this Agreement is unique. If any party should default in its
obligations under this Agreement, the parties each acknowledge that it would be
extremely impracticable to measure the resulting damages. Accordingly, the
non-defaulting party, in addition to any other available rights or remedies, may
▇▇▇ 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 by it shall be consummated at the Closing, each of the parties
waives any rights that it, he or she, may have to rescind this Agreement or the
transaction consummated by it; provided, however, this waiver shall not affect
any other rights or remedies available to the parties under this Agreement or
under the law.
12. Miscellaneous.
-------------
12.01. Costs of the Transaction. Each of the parties shall pay all costs
and expenses it incurs or will incur in negotiating and preparing this Agreement
and in closing and carrying out the transactions contemplated by this Agreement,
including all attorneys' fees, accountants' fees and fees of any consultants any
party may engage.
12.02. No Broker. Each of the parties represents and warrants that it has
dealt with no broker or finder in connection with any of the transactions
contemplated by this Agreement, and, insofar as it knows, no broker or other
person is entitled to any commission or finder's fee in connection with any of
this transaction. Each party agrees to indemnify the other parties against and
hold the other parties harmless from any brokerage or finder's fees arising from
this transaction.
12.03. 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.
12.04. Entire Agreement; Modification; Waiver. This Agreement constitutes
the entire agreement between the parties pertaining to the subject matter
contained in it 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.
12.05. 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.
12.06. Parties in Interest. 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.
12.07. 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, Buyer may not
assign any of its rights under it, except to a wholly owned-subsidiary
corporation of Buyer. No such assignment by Buyer to its wholly owned-subsidiary
shall relieve Buyer of any of its obligations or duties under this Agreement.
12.08. 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 San Diego, California in accordance with the
Commercial 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.
12.09. Attorneys' Fees. 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 reasonable attorneys' and accountants' fees and
other costs incurred in that action or proceeding, in addition to any other
relief to which it or they may be entitled.
12.10. Nature and Survival of Representations and Obligations. All
representations, warranties, covenants, and agreements of the parties contained
in this Agreement, or in any instrument, certificate, opinion, or other writing
provided for in it, shall survive the Closing.
12.11. 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 third (3rd) 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 Selling Parties at: Bioconnect
▇▇▇-▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
To Buyer at: RF INDUSTRIES, LTD.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
E-Mail: ▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
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.
12.12. Governing Law. This Agreement shall be construed in accordance with,
and governed by, the laws of the State of California.
12.13. Severability. In the event any paragraph, or paragraphs of this
Agreement shall be declared to be illegal, unenforceable, or otherwise
surplusage, then, nevertheless, all the remaining provisions of this Agreement
shall remain in full force and effect.
12.14. Preparation of Agreement. The parties have participated jointly in
the negotiation and drafting of this Agreement. If an ambiguity or question of
intent or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any of the
provisions of this Agreement.
12.15. Press Releases and Public Announcements. No party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement prior to Closing without the prior written consent of the other,
which consent shall not be unreasonably conditioned, withheld or delayed;
provided, however, that any party may make any public disclosure it believes in
good faith is required by applicable law or any listing or trading agreement
concerning its publicly-traded securities (in which case the disclosing party
will use its reasonable best efforts to advise the other parties prior to making
the disclosure).
In witness whereof, the parties to this Agreement have duly executed it on the
day and year first above written.
"Corporation" "Buyer"
BIOCONNECT, INC. RF INDUSTRIES, LTD.
a California corporation a Nevada corporation
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------- --------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President ▇▇▇▇▇▇ ▇. ▇▇▇▇, President/CEO
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------- ---------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Secretary ▇▇▇▇▇▇ ▇▇▇▇▇, Secretary
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Individually
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Individually
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Individually
SPOUSAL CONSENT
The undersigned acknowledges that she has read the foregoing Agreement
for Purchase and Sale of Stock and that she knows and approves of its contents.
She is aware that by the terms of the Agreement, her husband's interest, and any
community property interest she may possess, in the Shares conveyed thereunder
will be transferred to the Buyer.
The undersigned hereby consents to the transfer of the Shares owned by
her husband to the aforementioned Buyer in accordance with the terms and
conditions of the foregoing Agreement.
Dated: November 25, 2000 By: /s/ M. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
M. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇