PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement ("Agreement") is made and entered into as
of this 28th day of July, 2000, by and between CRAMAR TECHNOLOGIES, INC., a
Colorado corporation ("Seller"), ACOUSTIC MARKETING RESEARCH, INC. , a Colorado
corporation d/b/a/ Sonora Medical Systems, Inc. ("Purchaser") and RANDY MUELOT,
in his individual capacity ("Muelot").
R E C I T A L S
A. Seller is in the business of servicing and refurbishing medical imaging
technology devices.
B. Muelot is the President and majority shareholder of Seller.
C. Purchaser desires to purchase from Seller and Seller desires to sell to
Purchaser certain of Seller's assets, as more specifically identified below.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants hereinafter set forth, the parties agree as follows:
1. Purchase and Sale of Assets. On the Closing Date, as hereinafter
defined, Seller shall sell and transfer to Purchaser and Purchaser shall
purchase and accept from Seller, free of all encumbrances and liens, the
following personal property:
(a) All of Seller's right, title and interest in and to the parts
and supplies specifically identified in EXHIBIT A attached
hereto and incorporated herein by this reference (the "Parts and
Supplies Inventory");
(b) All of Seller's right, title and interest in and to Seller's
customer data base (the "Data Base");
(c) All of Seller's right, title and interest in and to that certain
Reseller Agreement dated March 12, 2000, by and between Seller
and MPACS, LLC, a Wisconsin limited liability company ("MPACS"),
a photocopy of which is attached hereto as EXHIBIT C and
incorporated herein by this reference (the "MPACS Agreement");
(d) All of the Seller's right, title and interest in and to all of
Seller's service contracts (the "Service Contracts"); and
(e) All of Seller's right, title and interest in and to all
furniture, fixtures, equipment and miscellaneous personal
property (exclusive of Muelot's personal computer, Quick Books
software, Toshiba Powervision 7000 (Serial No. D 8553207) and
the phone system) located at or in Seller's business premises at
8670 Wolff Court, #160, Westminster, Colorado (the "Miscellaneous
Personalty").
For purposes of this Agreement, all of the above-described property may
sometimes hereinafter be collectively referred to as the "Acquired Assets."
2. Assignment and Assumption of MPACS Agreement. On the Closing Date,
Seller shall assign and transfer to Purchaser and Purchaser shall accept
assignment of Seller's rights in, to and under the MPACS Agreement. Such
assignment and acceptance thereof shall be evidenced by an Assignment and
Estoppel Agreement in the form of EXHIBIT D attached hereto and incorporated
herein by this reference (the "Assignment Agreement").
3. Liabilities Not Assumed. It is the express intent and agreement of the
parties that Seller is and shall remain solely and absolutely liable for all of
its liabilities and obligations of every kind and nature, including but not
limited to those created by contract (including the lease for its business
premises) and/or imposed by law. With respect to existing obligations and
liabilities of the Seller, Purchaser's only obligations shall be to accept an
assignment of the MPACS Agreement on a prospective basis and to honor existing
Service Contracts on a prospective basis.
4. Consulting Agreement and Non-Compete Covenant. Muelot agrees that for a
period of ninety (90) days subsequent to the Closing Date, Muelot shall provide
reasonable cooperation, assistance, consulting and training to Purchaser with
respect to the administration of the MPACS Agreement and the use and
application of the Acquired Assets (the "Consulting Services"). The
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Consulting Services shall be provided, from time to time, upon reasonable
written request of the Purchaser. As compensation for the Consulting Services,
Purchaser shall pay to Muelot, as an independent contractor, $150 per hour.
Such payments shall be made on a regular basis in accordance with Purchaser's
customary accounts payable practices. Any out-of-pocket costs or expenses
suffered or incurred by Muelot in connection with the provision of the
Consulting Services shall be reimbursed by the Purchaser; provided that, Muelot
shall have obtained the Purchaser's approval of such costs or expenses prior to
incursion of the same.
On the Closing Date, Muelot agrees to execute and deliver to Purchaser
a Covenant Not to Compete ("Non-Compete Covenant") in the form of EXHIBIT E
attached hereto and incorporated herein by this reference.
5. Purchase Price for Acquired Assets and Non-Compete Covenant; Payment
Thereof. The total purchase price and consideration for the Acquired Assets and
Non-Compete Covenant (the "Purchase Price") shall be Two Hundred Seventy Two
Thousand Nine Hundred Seven Dollars and Fifty Cents ($272,907.50) and shall be
payable as follows:
(a) By Purchaser tendering to Seller on the Closing Date the sum of
Two Hundred Forty Two Thousand Nine Hundred Seven Dollars
($242,907.50) in cash or other immediately available funds;
(b) The balance of Thirty Thousand Dollars ($30,000) shall be
tendered by Purchaser to Land Title Guarantee Company, as escrow agent
(the "Escrow Agent") as security for the performance of the covenants
of Seller and Muelot hereunder and the veracity of the
representations and warranties of Seller and Muelot contained herein.
The parties agree to execute and deliver standard escrow instructions
(the "Escrow Agreement") of the Escrow Agent. The Escrow Agreement
shall provide that the provisions of this Section 5(b) shall be the
special/disbursement instructions thereof. The Escrow Agent shall
deposit the escrowed funds in an interest-bearing account at a
FDIC-insured financial institution until December 27, 2000 (the
"Disbursement Date"). Interest earned on the escrowed funds shall be
and become the property of the party to whom the escrowed funds are
disbursed.
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If the Escrow Agent has not received a Default Notice, as hereinafter
defined, on or before the close of business on the business day
immediately preceding the Disbursement Date, then on the Disbursement
Date, the Escrow Agent shall disburse the escrowed funds and all
accrued interest thereon to Muelot. If the Escrow Agent has received
such a Default Notice on or before the close of business on the
business day immediately preceding the Disbursement Date, and has not
received a subsequent written waiver thereof from Purchaser, then on
the Disbursement Date, the Escrow Agent shall interplead such funds
into the registry of the Denver District Court. For purposes of this
Agreement, a "Default Notice" shall mean a written notice which may
be given by Purchaser to Escrow Agent in the event that Purchaser (i)
reasonably determines that either Seller and/or Muelot has materially
breached any covenant or obligation of this Agreement and/or the
Non-Compete Covenant, and Purchaser has suffered actual damages on
account thereof, or (ii) reasonably determines that any
representation or warranty of the Seller and/or Muelot made herein
was inaccurate or untrue in any material respect and Purchaser has
suffered actual damages on account thereof, or (iii) receives a claim
or notice of a claim of any right, title or interest in or to any of
the Acquired Assets from a third party or parties. Purchaser
acknowledges that it may not give Default Notice with respect to
post-Closing business functions of Seller which were assumed by
Purchaser. Fees of the Escrow Agent, if any, shall by paid by
Purchaser.
6. Allocation of Purchase Price. The total Purchase Price shall be
allocated, for all purposes, including federal, state and local taxation as
follows:
ASSET ALLOCATED AMOUNT
Parts and Supplies Inventory $247,906.50
Data Base $ 5,000.00
MPACS Agreement $ 5,000.00
Service Contracts $ 1.00
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Miscellaneous Personalty $ 15,000.00
TOTAL: $272,907.50
7. Closing. The date of closing of the transactions contemplated hereby
(the "Closing Date") shall be the date of full execution hereof and shall occur
at 10:00 a.m. at the offices of McGeady Sisneros, P.C., 1675 Broadway, Suite
2100, Denver, Colorado 80202 (the "Closing"). At the Closing, the following
shall occur:
(a) Seller shall execute and deliver to Purchaser a Bill of Sale,
with full and general warranty of title, conveying to Purchaser the
Parts and Supplies Inventory, Miscellaneous Personalty and the
Data Base;
(b) Seller shall deliver to Purchaser a computer disc containing the
Data Base;
(c) Purchaser, Seller and MPACS shall execute and deliver to each
other triplicate originals of the Assignment Agreement;
(d) Purchaser shall deliver to Seller Two Hundred Forty Two Thousand
Nine Hundred Seven Dollars and Fifty Cents ($242,907.50) in cash or
other immediately available funds;
(e) The parties shall execute the Escrow Agreement and Purchaser
shall deliver to Escrow Agent Thirty Thousand Dollars ($30,000) in
cash or other immediately available funds;
(f) Muelot shall execute and deliver to Purchaser the Non-Compete
Covenant;
(g) Seller shall deliver possession of the Acquired Assets to
Purchaser;
(h) Counsel for Seller and Muelot shall deliver to Purchaser an
Opinion of Counsel, in form and substance reasonably satisfactory to
the Purchaser and its legal counsel, confirming that this Agreement
and the agreements to be executed in connection herewith are valid
and binding under Colorado law and have been duly authorized by all
necessary actions;
(i) Seller shall execute and deliver to Purchaser an assignment of
the Service Contracts in the form of EXHIBIT F, attached hereto and
incorporated herein by this reference; and
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(j) Each of the parties shall execute and/or deliver, as applicable,
all documents and instruments reasonably necessary to carry out the
transactions contemplated by this Agreement.
8. Damage or Loss. All risk of loss with respect to the Acquired Assets
shall be borne by Seller until the Closing. From and after the Closing, all
risk of loss with respect to the Acquired Assets shall be borne by Purchaser.
In the event of a material casualty ( i.e., a loss by reason of fire, flood or
other similar occurrence to the Acquired Assets which exceeds the sum of Ten
Thousand Dollars ($10,000) and/or a termination or threatened termination or
default or allegation of default of or with respect to the MPACS Agreement),
Seller shall give immediate written notice to Purchaser of such material
casualty. Purchaser shall have forty-eight (48) hours from receipt of such
casualty notice or until the Closing Date, whichever first occurs, to advise
Seller of its election to either terminate this Agreement or to proceed to
close the transactions contemplated by this Agreement, in which event there
will be no adjustment to the Purchase Price; provided, however, that Purchaser
shall be entitled to receive the proceeds of any insurance payment(s) with
respect to such a material casualty covered by any insurance coverage carried
by Seller. If Purchaser does not respond to such casualty notice within such
forty-eight (48) hour period, it shall be deemed that Purchaser has elected to
proceed to close the transactions contemplated by this Agreement. If Purchaser
does so elect to terminate this Agreement, this Agreement shall terminate upon
receipt of Purchaser's notice and the parties shall be relieved from their
respective obligations and duties hereunder.
9. Representations and Warranties of Seller and Muelot. In order to induce
Purchaser to enter into this Agreement and to consummate the transactions
contemplated hereby, Seller and Muelot, jointly and severally represent and
warrant to Purchaser as follows:
(a) Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of Colorado. Seller has all
requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted.
Seller and Muelot each have the full legal right, power and authority
to execute and deliver this Agreement and all other agreements to be
executed in connection herewith and to consummate all of the
transactions
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contemplated herein and therein. This Agreement and the agreements
and documents to be executed in connection herewith constitute the
valid and binding obligations of Seller and Muelot, respectively, and
are enforceable in accordance with their respective terms.
(b) The execution and delivery of this Agreement and the performance
of Seller's and Muelot's obligations hereunder do not and will not
conflict with any agreement or instrument to which Seller or Muelot
is a party or by which either of them is bound.
(c) Seller has good and marketable title to all of the Acquired
Assets and none of such assets are subject to any mortgage, pledge,
lien, security interest, charge or encumbrance of any kind or nature.
None of the Acquired Assets are held under any lease or under any
similar arrangement. All of the Acquired Assets are in good operating
condition and repair, subject only to ordinary wear and tear.
(d) There is no action, suit or proceeding threatened or pending
against either Seller or Muelot which would question the validity of
this Agreement or of any action taken or to be taken in connection
with this Agreement or the consummation of the transactions
contemplated hereby.
(e) Seller has at all times conducted its business without
infringement or claim of third-party infringement of any patent,
patent right, trademark, trade name, service mark, copyright or other
intellectual property right of others.
(f) Seller has complied and is currently in compliance with all
applicable laws, rules and regulations relating to the employment of
labor, including without limitation those relating to wages, hours,
and payment of social security, withholding, employment and similar
taxes.
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(g) A true and correct copy of the MPACS Agreement is attached hereto
as Exhibit C and the MPACS Agreement is and remains in full force and
effect in accordance with its terms. There are and have been no
defaults under or with respect to the MPACS Agreement.
(h) Seller is financially solvent and the execution and delivery of
this Agreement and the consummation of the transactions contemplated
hereby shall not in any way hinder, delay or obstruct the ability of
the creditors of Seller to obtain any payments currently due or to
become due in the future.
(i) Seller has disclosed to Purchaser all of its service contracts
and the financial status thereof.
(j) The Seller has delivered to Purchaser a Profit and Loss Statement
dated as of June 30, 2000, a photocopy of which is attached hereto as
EXHIBIT G and incorporated herein by this reference (the "Financial
Statement"). The Financial Statement is true and complete in all
material respects, fully and adequately reflects all liabilities and
accrued expenses of the Seller and except as set forth therein,
Seller is not subject to any contingent liability or obligation.
All of the foregoing representations and warranties shall be deemed made as
of the date hereof and (with the exception of Subsection (j)) as of the Closing
Date. The representations and warranties set forth in Subsections (a), (b) and
(i) shall not be deemed merged into the Closing or the documents or instruments
executed and delivered at the Closing, but shall survive the Closing for a
period of one year.
10. Representations and Warranties of Purchaser. In order to induce Seller
and Muelot to enter into this Agreement and to consummate the transactions
contemplated hereby, Purchaser represents and warrants to Seller and Muelot as
follows:
(a) Purchaser is a corporation duly organized, validly existing and
in good standing under the laws of the State of Colorado.
(b) Purchaser has the full legal right, power and authority to
execute and deliver this Agreement and all other documents and
agreements to be executed in connection herewith and to consummate
all of the transactions contemplated herein and therein.
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This Agreement and such related documents and agreements constitute
the valid and binding obligations of Purchaser, and are enforceable
in accordance with their respective terms.
(c) Purchaser will honor existing Service Contracts and Purchaser has
received from Seller pro rata amounts on service obligations on
existing Service Contracts.
11. Survival of Certain Covenants. All covenants and agreements of the
parties hereto which contemplate performance, either in whole or in part,
subsequent to the Closing or the Closing Date shall survive the Closing and
shall not be merged therein or thereby.
12. Seller's Employees. Seller has advised Purchaser that as a matter
separate and distinct from this Agreement, and without any inducement or
request from or by Purchaser, Seller shall be terminating its employment
relations with all of its employees. It is expressly agreed that Seller is and
shall remain solely and exclusively liable for payment of all wages, taxes,
insurance premiums, pensions and other benefits or obligations arising or
accruing on account of or in connection with the hiring, retention and
termination of all of such employees. Purchaser may, in its sole and absolute
discretion, contact, interview, retain and/or hire any or all of such employees
as employees and/or independent contractors of Purchaser. If requested by
Purchaser, Seller and/or Muelot will lend reasonable cooperation and assistance
to Purchaser in evaluating whether or not to hire or retain any of such
employees. Seller and Muelot acknowledge and agree that any of such employees
shall be hired and/or retained by Purchaser in accordance with Purchaser's own
policies and procedures and neither Seller nor Muelot shall make any
representation or warranty to any of such employees that they will be retained
by Purchaser and/or that any particular terms or conditions will apply in the
event of such retention.
13. Taxes. The parties do not believe any sales tax will be applicable or
payable with respect to this Agreement or the transactions contemplated hereby.
Seller will timely record the transaction contemplated hereby as a wholesale
sale, keep and maintain all necessary evidence thereof and timely file all
sales tax returns with the City of Westminster and the State of Colorado. If
any sales tax is due with respect to the transactions contemplated hereby, the
same shall be payable by Seller. Ad Valorem personal property taxes related to
the Acquired Assets shall be timely paid by Seller for the period of Seller's
ownership. Use taxes due or payable with respect to the Acquired
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Assets through the Closing Date shall be the responsibility of Seller; use
taxes due or payable with respect to the Acquired Assets after the Closing Date
shall be the responsibility of Purchaser.
14. Indemnity. Seller and Muelot, jointly and severally, hereby agree to
indemnify, defend and hold the Purchaser harmless from and against any and all
losses, claims, damages, liabilities or expenses, including attorneys' fees
arising from or on account of any liens or claims existing or made against or
with respect to the Acquired Assets, claims or threatened claims made by any of
Seller's employees or former employees, or the breach of any covenant,
representation or warranty of Seller and/or Muelot made herein or in any
document or agreement delivered in connection herewith, and in that regard
agree to pay any and all costs or expenses suffered or incurred by the
Purchaser as a result thereof, including but not limited to judgments and
attorneys' fees and costs.
15. Brokers. Purchaser has used no broker or finder in connection with the
transactions contemplated hereby except Karen Line (S.P.C. Financial
Corporation), whom Purchaser will compensate by separate agreement. Each party
hereto shall indemnify, defend and hold harmless each other party hereto from
all claims, demands, actions, judgments, awards, costs and expenses, including
interest and attorneys' fees arising from the indemnifying party's engagement
of a broker, finder or other agent in connection with the transactions
contemplated by this Agreement.
16. Seller's Corporate Name. As an accommodation to Purchaser, Seller
agrees to change its corporate name at or before Closing and in connection
therewith to execute and deliver to Purchaser such documents as Purchaser may
reasonably require. Seller will deliver to Purchaser's counsel with
instructions to file, the documents required by the Colorado Secretary of State
to change Seller's corporate name. Purchaser will simultaneously file a
corporate name reservation for the abandoned corporate name with the Colorado
Secretary State.
17. Assignment. Neither party may assign any of its rights nor delegate
any of its duties under this Agreement to any other party without having first
obtained the prior written consent of the other parties hereto. Any such
attempted assignment or delegation without the required consent shall be void
and ineffectual. Except as so restricted, this Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns.
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18. Notices. Any notice to be given pursuant to this Agreement shall be in
writing and shall be either personally delivered, mailed, postage prepaid by
certified mail, return receipt requested, sent by commercial overnight courier
or sent by facsimile to the other parties addressed as follows:
If to Purchaser to:
G. Wayne Moore, President
Sonora Medical Systems
2021 Miller Dr.
Longmont, Colorado 80501
With a copy to:
Misonix Incorporated
1938 New Highway
Farmingdale, NY 11735
ATTN: Richard A. Zaremba
Facsimile: 631-694-3761
With a copy to:
Kenneth M. Koprowicz, Esq.
McGeady Sisneros, P.C.
1675 Broadway, Suite 2100
Denver CO 80202
Facsimile: 303-592-4385
If to Seller or Muelot, to:
Muelot Associates, Inc.
1512 Larimer Street #31
Denver CO 80202
ATTN: Randy Muelot
Facsimile: 303-534-6324
Each such notice shall be deemed given (a) if delivered personally or sent
by overnight courier, upon receipt; (b) if mailed, three business days after
depositing such notice, postage prepaid in care of the U.S. Postal Service; and
(c) if sent by facsimile upon confirmation of transmission.
19. Severability. If any provision of this Agreement is held by court of
competent jurisdiction to be invalid or unenforceable such invalidity or
unenforceability shall not affect any
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other provisions of this of this Agreement, and all such other provisions shall
remain in full force and effect.
20. Headings. The headings of paragraphs and sections are included for
reference purposes only and shall not control the meaning or interpretation of
any provision of this Agreement.
21. Entire Agreement. This Agreement is the entire agreement between the
parties with respect to the subject matter hereof and supercedes all prior
written or oral agreements. This Agreement may not be modified, amended or
altered unless done in writing signed by all of the parties hereto.
22. Governing Law. This Agreement is made and shall be construed under the
applicable laws of the State of Colorado.
23. Attorneys' Fees. In the event any party commences any litigation,
arbitration or other legal proceeding to enforce the terms hereof, the
prevailing party in such litigation, arbitration or other proceeding shall
receive, as part of its judgment or award, its reasonable attorneys' fees and
costs.
24. Joint Authorship. The parties acknowledge and agree that this
Agreement is the result of negotiations and joint authorship and agree that
this Agreement shall not be construed or interpreted against any single party
on the grounds of sole or primary authorship.
25. Remedies. In the event of a default by any party hereunder, the
non-defaulting party or parties shall be entitled to seek and obtain any and
all remedies available at law or in equity, including but not limited to
specific performance and damages. All remedies contained herein or contemplated
hereunder (including but not limited to claims against the funds escrowed
pursuant to Section 5(b) hereof and/or under the indemnity provisions of
Section 14 hereof) or otherwise available at law or in equity are cumulative
and not exclusive and may be pursued separately, successively or concurrently
and as often as occasion therefor shall arise.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
[SEE ATTACHED SIGNATURE PAGE]
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SIGNATURE PAGE FOR PURCHASE AND SALE AGREEMENT
Seller:
CRAMAR TECHNOLOGIES, INC.
By: /s/ Randy Muelot,
-------------------------------------------
Randy Muelot, President
Muelot:
/s/ Randy Muelot
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Randy Muelot, individually
Purchaser:
ACOUSTIC MARKETING RESEARCH, INC.
d/b/a Sonora Medical Systems, Inc.
By: /s/ Richard A. Zaremba
-------------------------------------------
Richard A. Zaremba, authorized agent