EXHIBIT 10.5

 

EXECUTION

 

ASSET PURCHASE AGREEMENT

 

This Asset Purchase Agreement (this “Agreement”) among Nature Vision, Inc., a
Minnesota corporation (the “Buyer”), and Cass Creek International, LLC, a New
York limited liability company (“Cass Creek”) and Gary R. Lynn (“Lynn”), John T.
Bergstue (“Bergstue”), and James G. Streib (“Streib”) (where Lynn, Bergstue and
Streib are individuals, each of whom may be referred to as a “Member” or
collectively as “Members,” and where Members and Cass Creek referred to
collectively as the “Sellers”), takes effect on September 20, 2007 (the “Closing
Date”). The Buyer, Cass Creek, Bergstue, Streib and Lynn are referred to
individually as a “Party” and collectively as the “Parties.”

 

RECITALS

A.

Cass Creek manufactures and distributes electronic game calling devices (the
“Business”).

B.

The Sellers desires to sell, transfer and otherwise convey, and the Buyer
desires to purchase and assume, all of the assets of the Sellers related to the
Business, on the terms and subject to the conditions of this Agreement.

AGREEMENT

In consideration of the above recitals and the promises set forth in this
Agreement, the Parties agree as follows.

1.

Basic Transaction.

 

1.1

Purchase and Sale of Assets. On the terms and subject to the conditions of this
Agreement, the Buyer hereby purchases from the Sellers, and the Sellers hereby
sell, transfer, convey and deliver to the Buyer, all right, title and interest
in, to and under all of the assets of the Sellers related to the Business
(collectively, the “Acquired Assets”), free and clear of all security interests,
liens, claims, charges, restrictions and encumbrances of any nature except the
Assumed Liabilities defined in Section 1.3 below, in exchange for the Purchase
Price (defined below), including the following:

 

(a)

all of the equipment, tools, molds, dies and other items and materials owned by
the Sellers and related to the Business, wherever located, including the assets
identified on Schedule 1.1(a) to this Agreement, together with all related
warranties, accessories and spare parts (collectively, the “Equipment”);

 

(b)

all inventories of supplies, raw materials, parts, finished goods,
work-in-process, product prototypes, samples, product labels and packaging
materials of the Sellers related to the Business, including the inventories
identified on Schedule 1.1(b) (collectively, the “Inventory”);

 

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(c)

all of the intellectual property related to the Business and its associated
goodwill, including (a) all inventions (whether patentable or unpatentable and
whether or not reduced to practice), all improvements, and all patents, patent
applications and patent disclosures, together with all reissuances,
continuations, continuations-in-part, revisions, extensions and reexaminations;
(b) all trademarks, service marks, trade dress, logos, trade names and corporate
names, together with all translations, adaptations, derivations and combinations
and including all associated goodwill, and all applications, registrations and
renewals; (c) all copyrightable works, all copyrights and all applications,
registrations and renewals; (d) all mask works and all applications,
registrations and renewals in connection therewith; (e) all trade secrets and
confidential business information (including ideas, research and development,
know-how, formulas, compositions, manufacturing and production processes and
techniques, technical data, designs, drawings, specifications, customer and
supplier lists, pricing and cost information, and business and marketing plans
and proposals); (f) all computer software (including data and related
documentation); (g) all other proprietary rights; and (h) all copies and
tangible embodiments (in whatever form or medium) (collectively, “Intellectual
Property”) owned by, licensed to or otherwise controlled by the Sellers or used
in, developed for use in or necessary to the conduct of the Business as now
conducted or presently proposed to be conducted, including the Intellectual
Property listed on Schedule 1.1(c);

 

(d)

the current telephone numbers, e-mail addresses, uniform resource locators,
domain names and websites of the Seller and the listings for each related to the
Business, including the website and related content found at www.CassCreek.com
and any rights to software related to the foregoing, identified on
Schedule 1.1(d) (collectively, “Addresses”);

 

(e)

all of the Sellers’ books, records and other documents and information related
to the Business, including, all customer, prospect, dealer and distributor
lists, sales literature, inventory records, purchase orders and invoices, sales
orders and sales order log books, customer information, product data, price
lists, product demonstrations, quotes and bids and product advertising and
brochures;

 

(f)

to the extent assignable, all permits, licenses and other governmental approvals
held by the Sellers and related to the Business;

 

(g)

all accounts receivable, customer deposits, notes receivable or other amounts
receivable arising from sales of merchandise or services to customers of the
Business set forth on Schedule 1.1(g) (the “Receivables”);

 

(h)

the licenses, contracts and agreements listed as assumed contracts on Schedule
1.3;

 

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(i)

all of Cass Creek’s cash and cash equivalents (including marketable securities
and short term investments) calculated in accordance with GAAP applied on a
consistent basis;

 

(j)

all claims, causes of action, rights of recovery, rights of set off and rights
of recoupment related to the Business; and

 

(k)

all goodwill and general intangibles associated with the Business.

 

1.2

Excluded Assets. The Buyer will not purchase and the Sellers will not sell any
accounts receivable over 90 days old as of the Closing Date and the assets set
forth on Schedule 1.2 (collectively, the “Excluded Assets”).

 

1.3

Assumed Liabilities. On the terms and subject to the conditions of this
Agreement, the Buyer will assume only those liabilities of the Sellers which are
set forth on Schedule 1.3, as of and from after the Closing Date (collectively,
the “Assumed Liabilities”). The Seller is solely responsible and liable for
making all payments due under, and curing all defaults arising under or relating
to, the Assumed Liabilities prior to the Closing Date. The Assumed Liabilities
exclude all other claims, indebtedness, liabilities or warranty work of any
kind, whether known or unknown, whether asserted or unasserted, whether absolute
or contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
whether secured or not secured and whether due or to become due, including any
liability for taxes. Buyer will reduce the principal amount outstanding on the
Promissory Note defined in Section 1.4(b) (and the next scheduled annual payment
of principal) by the cost of parts and labor to service warranty claims, which
exceed an aggregate of $10,000, on products sold by Sellers prior to the
Closing.

In the event that the cost of parts and labor to service these warranty claims
exceed such $10,000 amount, the Buyer agrees to give Sellers 30 days to rectify
these warranty claims in a manner acceptable to the Buyer after notifying the
Sellers of the same in writing.

 

1.4

Purchase Price. Each of the Members acknowledges that all consideration due to
Sellers will be paid to Cass Creek. The Buyer agrees to pay to Cass Creek the
following (the “Purchase Price”):

 

(a)

$1,560,000.00, as adjusted pursuant to Section 1.4(d)(i), on the Closing Date in
cash by wire transfer or other immediately available funds (the “Closing
Payment”);

 

(b)

$500,000, as adjusted pursuant to Sections 1.3, 1.4(c)(iv), 1.4(d) and
Section 6.5, by a five year unsecured promissory note, which will be guaranteed
by an individual acceptable to the Sellers, payable in annual payments on the
first through fifth anniversaries of the Closing Date of $100,000 of principal
plus interest accrued at 8% per annum (the “Promissory Note”) in the form
attached hereto as Exhibit A. Payments

 

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will be made in cash by wire transfer or other immediately available funds; and

 

(c)

For purposes of this Agreement, the following capitalized terms will have the
meanings set forth, unless the context clearly implies otherwise:

 

(i)

“Estimated Working Capital” means the current assets less the current
liabilities of Cass Creek according to an estimated interim balance sheet as of
the Closing Date prepared by the Sellers seven- (7) days before the Closing
Date, estimating the Cass Creek balance sheet as of the Closing Date using
generally accepted accounting principles (“GAAP”) consistently applied in
comparison to Cass Creek’s most recent audited financial statements, except that
all accounts receivable older than 90 days as of the Closing Date and all stale
and obsolete inventory will be valued at zero dollars ($0).

 

(ii)

“Final Working Capital” means the current assets less the current liabilities of
Cass Creek according to a final interim balance sheet as of the Closing Date,
prepared by the Buyer within [60] days after the Closing Date using GAAP
consistently applied in comparison to Cass Creek’s most recent audited financial
statements, except that all accounts receivable older than 90 days as of the
Closing Date and all stale and obsolete inventory as determined by Buyer in its
sole discretion will be valued at zero dollars ($0).

 

(iii)

“Target Working Capital” means $505,000.00.

 

(iv)

“Working Capital Reconciliation” means the process by which Sellers may dispute
the Final Working Capital. If the Sellers dispute the amount determined as Final
Working Capital, and any changes to the Purchase Price and Promissory Note
arising from determination of the Final Working Capital, they must notify the
Buyer in writing on or before the 75th day following the Closing Date, and
Sellers and Buyer must attempt to resolve the dispute. If they cannot resolve
this dispute within 90 days after the Closing Date, the Buyer and the Sellers
will submit this dispute to an “Independent Accountant” as defined in
Section 1.4(c)(v) below. The Independent Accountant will render a decision
regarding the Final Working Capital, which decision will be final and binding on
the Buyer and the Sellers. The Independent Accountant will conduct such
arbitration by reviewing the Estimated Working Capital and Final Working Capital
calculations and their components with the understanding that the Estimated
Working Capital and Final Working Capital amounts were calculated in accordance
with this Section 1.4 applied on a consistent basis.

 

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Each of the Sellers and the Buyer will bear their own costs and expenses for
such arbitration (including legal and accounting fees and expenses). The fees
and expenses of the Independent Accountant will be borne 50% by the Buyer and
50% jointly and severally by the Sellers.

 

(v)

“Independent Accountant” means the mutually acceptable accounting firm in
Hennepin County, Minnesota to be appointed by Sellers and Buyer if they have not
agreed to the Final Working Capital amount within 90 days after the Closing
Date, to arbitrate the dispute and render a decision regarding the Final Working
Capital, which decision will be final and binding on the Buyer and the Sellers.
If no Independent Accountant is appointed within 110 days after the Closing
Date, then, either Buyer or Sellers may petition the Hennepin County District
Court to appoint the Independent Accountant.

 

(d)

The components of the Purchase Price will be adjusted as follows:

 

(i)

If the Estimated Working Capital is less than the Target Working Capital, the
amount of the Closing Payment will be reduced by the difference of Target
Working Capital less Estimated Working Capital and such adjustment will be a
decrease to the Purchase Price (“Closing Payment Adjustment”). If Estimated
Working Capital is greater than Target Working Capital, no change will be made
to the Purchase Price or Closing Payment.

 

(ii)

If the Final Working Capital is greater than the Estimated Working Capital,
Buyer will pay Sellers the difference of Final Working Capital less Estimated
Working Capital (but in no event more than the Closing Payment Adjustment)
within [10] days of Buyer’s receiving the Working Capital Reconciliation which
will be an increase to the Purchase Price.

 

(iii)

If the Final Working Capital is less than the Estimated Working Capital, Buyer
will reduce the amount of the Promissory Note (and the first payment of
principal under the Promissory Note) by the difference of Target Working Capital
less Final Working Capital within 10 days of Buyer’s receiving the amount of the
Final Working Capital, and such adjustment will be a decrease to the Purchase
Price.

 

1.5

Allocation of Purchase Price. The Parties agree to allocate the Purchase Price
and all other capitalizable costs among the Acquired Assets for all purposes,
including financial and tax purposes, in accordance with the allocation schedule
set forth on Schedule 1.5, which will be adjusted as necessary to agree with the
Final Working Capital determination.

 

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1.6

The Closing. The closing of the transactions contemplated by this Agreement (the
“Closing”) will be effective as of 12:01 a.m. on the date set forth in the
preface above (the “Closing Date”).

 

1.7

Buyer’s Deliveries at the Closing. The Buyer will make the following deliveries
at the Closing:

 

(a)

Executed and acknowledged (if appropriate) certificates, instruments and
documents that the Sellers and their counsel may reasonably request;

 

(b)

The Closing Payment to the Sellers;

 

(c)

The Promissory Note;

 

(d)

Executed Inventions Royalty Agreement (as defined in Section 2.1 below); and

 

(e)

Assignment and Assumption Agreement in the form attached as Exhibit B.

 

1.8

Sellers’ Deliveries at the Closing. The Sellers will make the following
deliveries at the Closing:

 

(a)

Executed and acknowledged (if appropriate) certificates, instruments and
documents that the Buyer and its counsel may reasonably request;

 

(b)

Executed Bill of Sale for the Acquired Assets in the form attached as Exhibit C.

 

(c)

Executed Inventions Royalty Agreement (as defined in Section 2.1 below);

 

(d)

Noncompetition Agreements from the Members and Todd E. Hallquist in the form
attached as Exhibit D;

 

(e)

Technology Transfer Agreement in the form attached as Exhibit E; and

 

(f)

Opinion of Sellers’ Counsel in substantially the form attached as Exhibit F.

2.

Related Parties.

 

2.1

Inventions Royalty Agreement. Each of the Members (and an entity to be formed by
them) (collectively “Inventors”) and Buyer will enter into an agreement
providing that the Inventors expect to invent products intended for sale in the
hunting, fishing and other outdoor recreation markets (“Invented Products”), for
which will Buyer will be granted a right of first purchase (“Inventions Royalty
Agreement”) in the form attached hereto as Exhibit G.

 

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The Inventions Royalty Agreement will have a term of five years and will provide
for Buyer to acquire any of the Invented Products for a 5% royalty on Buyer’s
net wholesale invoice amounts to be paid to Inventors.

 

2.2

Bergstue Agreement. For a period of one year following the Closing Date, Buyer
will make good faith efforts to enter into an agreement with Bergstue providing
that Bergstue will provide advertising and promotion to Buyer on matters related
to the products of the Business. The Buyer may ask Bergstue to attend trade
shows, assist in key account sales presentations and or interface with outside
designers on new products. Failure to finalize an agreement with Bergstue in
spite of Buyer’s good faith efforts is not a breach of this Agreement.

3.

Representations and Warranties of the Sellers. Sellers, jointly and severally,
represent and warrant to the Buyer that the statements contained in this
Section 3 are correct and complete as of the Closing Date, except as set forth
in the attached disclosure schedule accompanying this Agreement (the “Sellers’
Disclosure Schedule”). The Seller’s Disclosure Schedule will be arranged in
paragraphs corresponding to the sections contained in this Section 3. For the
purposes of this Section 3, “Knowledge” shall mean the actual knowledge of a
Member or what a Member reasonably should have known if such Member used due
care in the performance of his duties or could be expected to discover in the
course of conducting a reasonable investigation regarding the accuracy of a
representation or warranty.

 

3.1

Organization, Qualification and Power. Cass Creek is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of New York. Cass Creek is duly authorized to conduct business and is in
good standing under the laws of each jurisdiction where qualification is
required. Cass Creek has full organizational power and authority and all permits
and licenses necessary to carry on the businesses in which it is engaged and in
which it presently proposes to engage, and to own and use the properties owned
and used by it. Lynn, Bergstue, and Streib are the only members and holders of
issued and outstanding membership interests of Cass Creek.

 

3.2

Authorization of Transaction; Shareholders. Cass Creek has full power and
authority, corporate or otherwise, to enter into and perform its obligations
under this Agreement. In addition, the members, board of managers and managers
of Cass Creek have duly authorized the execution and performance of this
Agreement and the ancillary documents to which Cass Creek is a party. This
Agreement and the ancillary agreements to which any the Sellers is a party
constitute valid and legally binding obligations of the Sellers, as applicable,
enforceable in accordance with their respective terms and conditions.

 

3.3

Noncontravention. To Sellers’ Knowledge, neither the execution and the delivery
of this Agreement or the ancillary documents to which any of the Sellers is a
party, nor the consummation of the contemplated transactions will (a) violate
any law, order or regulation to which any of the Sellers is subject; (b) violate
any provision of the organizational documents of Cass Creek; or (c) conflict
with,

 

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result in a breach of, constitute a default under, result in the acceleration
of, create in any party the right to accelerate, terminate, modify or cancel, or
require any notice under any agreement, contract, lease, license, instrument or
other arrangement to which any of the Sellers is a party or is bound or to which
any of the Sellers’ assets are subject.

 

3.4

Broker Fees. To Sellers’ Knowledge, none of the Sellers has any liability or
obligation to pay any fees or commissions to any broker, finder or agent with
respect to the transactions contemplated by this Agreement for which the Buyer
could become liable or obligated.

 

3.5

Title to Assets; Sufficiency of Assets. On the Closing Date, the Acquired Assets
are free and clear of all security interests, liens, encumbrances of any nature,
infringements, licenses, liens or claims of third parties. Cass Creek or
Members, as applicable, have good and marketable title to, a valid license to or
a valid leasehold interest in the Acquired Assets. To Sellers’ Knowledge, the
Acquired Assets constitute all of the assets used in or necessary for the
operation of the Business as presently conducted.

 

3.6

Financial Statements. Attached to the Sellers’ Disclosure Schedule are the
following financial statements (collectively, the “Financial Statements”):
(a) audited consolidated and unaudited consolidating balance sheets and
statements of income, changes in members’ equity and cash flow as of and for the
fiscal years ended December 31, 2005, and December 31, 2006, (the “Most Recent
Fiscal Year End”) for the Seller and its Subsidiaries; and (b) unaudited
consolidated and consolidating balance sheets and statements of income, changes
in members’ equity and cash flow (the “Most Recent Financial Statements”) for
the seven months ended July 31, 2007, (the “Most Recent Fiscal Month End”) for
Cass Creek and its subsidiaries. To Sellers’ Knowledge, the Financial Statements
(including the notes) have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods covered, present fairly the financial
condition and the results of operations of Cass Creek and its Business for those
periods, are correct and complete and are consistent with the books and records
of Sellers related to the Business (which books and records are correct and
complete). The Most Recent Financial Statements, however, are subject to normal
year-end adjustments (which will not be material individually or in the
aggregate) and lack footnotes and other presentation items.

 

3.7

Events Subsequent to Most Recent Fiscal Year End; Undisclosed Liabilities. To
Sellers’ Knowledge, since January 1, 2007, there has been no material adverse
change in the business, financial condition, operations, and results of
operations or future prospects of Cass Creek. To Sellers’ Knowledge, except as
set forth on the Financial Statements, the Seller has no obligations or
liabilities of any kind that would have a material adverse effect upon the
Acquired Assets or to which the Acquired Assets are subject.

 

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3.8

Legal Compliance; Litigation. To Sellers’ Knowledge, the Sellers have complied
with all applicable laws related to the Business, and no action, suit,
proceeding, hearing, investigation, charge, complaint, claim, demand or notice
has been filed, commenced or, to the knowledge of the Sellers, alleged against
them in any way related to the Business. To Sellers’ Knowledge, there are no
pending or threatened claims, actions, suits, proceedings, hearings or
investigations affecting the Acquired Assets. To Sellers’ Knowledge, the Sellers
and the Business are not operating under or subject to, or in default with
respect to, any order, writ, injunction or decree of any court or governmental
agency.

 

3.9

Tax Matters. The Sellers have filed all tax returns that they were required to
file related to the Business. All such tax returns were correct and complete.
The Sellers have paid all federal, state, local or foreign taxes owed by the
Sellers, whether or not disputed.

 

3.10

Intellectual Property.

 

(a)

Sellers collectively own or have the right to use pursuant to license,
sublicense, agreement or permission all Intellectual Property necessary for the
operation of the Business of Sellers as presently conducted. Each item of
Intellectual Property owned or used by Sellers immediately before the Closing
will be owned or available for use by the Buyer on identical terms and
conditions immediately after the Closing.

 

(b)

To the Seller’s Knowledge, none of the Sellers has interfered with, infringed
upon or misappropriated any Intellectual Property rights of third parties. To
Sellers’ Knowledge, none of Sellers has received any charge, complaint, claim,
demand or notice alleging any such infringement or misappropriation (including
any claim that any of the Sellers must license or refrain from using any
Intellectual Property rights of any third party). As of the Closing Date, to the
Seller’s Knowledge, no third party is interfering or misappropriating any
Intellectual Property rights of the Sellers.

 

(c)

To Sellers’ Knowledge, Schedule 3.10(c) attached to this Agreement and
incorporated by reference, identifies the following: (i) each patent, copyright,
trademark or registration that has been issued to the Sellers for any
Intellectual Property; (ii) each pending patent, copyright or trademark
application or application for registration that Sellers has made for any of
their Intellectual Property; (iii) each license, agreement or other permission
that each of the Sellers has granted to any third party with respect to
Intellectual Property (together with any exceptions); (iv) each trade name or
unregistered trademark used by the Sellers in connection with the Business; and
(v) each trade secret used by the Sellers in connection with the Business.

 

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(d)

To Sellers’ Knowledge, Sellers have delivered to the Buyer correct and complete
copies of all such patents, trademarks, copyrights, registrations, applications,
licenses, agreements, permissions and trade secrets (as amended to date) listed
in Schedule 3.10(c) and has made available to the Buyer correct and complete
copies of all other written documentation evidencing ownership and prosecution
(if applicable) of each item. With respect to each item of Intellectual Property
required to be identified in Schedule 3.10(c): (i) the Sellers possess all
right, title and interest in and to the item, free and clear of any security
interest, license or other restriction not disclosed to Buyer; (ii) the item is
not subject to any outstanding injunction, judgment, order, decree, ruling or
charge of any governmental authority; (iii) no action, suit, proceeding,
hearing, investigation, charge, complaint, claim or demand is pending or, to the
Sellers Knowledge, is threatened that challenges the legality, validity,
enforceability, use or ownership of the item; and (iv) to Sellers’ Knowledge,
other than in the ordinary course of business, Sellers have never agreed to
indemnify any Person for or against any infringement or misappropriation with
respect to the item.

 

(e)

To Sellers’ Knowledge, Schedule 3.10(e) attached to this Agreement and
incorporated by reference, identifies each item of Intellectual Property that
any third party owns and that any of the Sellers uses pursuant to license,
sublicense, agreement or permission, in each case other than commercially
available software. Sellers have delivered to the Buyer correct and complete
copies of all such licenses, sublicenses, agreements and permissions (as amended
to date) identified in such Schedule.

 

(f)

To Sellers’ Knowledge, with respect to each item of Intellectual Property
required to be identified in Schedule 3.10(e) to the extent related to an
Acquired Asset: (i) the license, sublicense, agreement or permission covering
the item is a legal, valid, binding, enforceable obligation of Sellers and in
full force and effect; (ii) the license, sublicense, agreement or permission
will continue to be a legal, valid, binding, enforceable obligation of Buyer and
in full force and effect on identical terms following the consummation of the
contemplated transactions; (iii) Sellers are not party to a license, sublicense
or agreement that is in breach or default, and no event has occurred with
respect to Sellers, or with respect to any other party thereto that, with notice
or lapse of time, would constitute a breach or default or permit termination,
modification or acceleration.

 

(g)

None of the Members and the directors, managers and officers (and employees with
responsibility for Intellectual Property matters) of Cass Creek has any
Knowledge of any new products, inventions, procedures or methods of
manufacturing or processing that any competitors or other Persons have developed
that reasonably could be expected to supersede or make obsolete any product or
process of the Sellers.

 

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3.11

Tangible Assets. To Sellers’ Knowledge, the Sellers own or lease all machinery,
equipment and other tangible assets necessary for the conduct of the Business as
conducted and as presently proposed to be conducted. To Sellers’ Knowledge, each
such tangible asset is free from defects (patent and latent), has been
maintained in accordance with normal industry practice, is in good operating
condition and repair (subject to normal wear and tear), and is suitable for the
purposes for which it presently is used and presently is proposed to be used.

 

3.12

Inventory. The Inventory consists of raw materials and supplies, manufactured
and purchased parts, goods in process, and finished goods, all of which is
merchantable and fit for the purpose for which it was procured or manufactured,
and none of which is slow-moving, obsolete, past the expiration date, damaged or
defective.

 

3.13

Contracts. To Sellers’ Knowledge, Schedule 3.13 lists all material contracts and
other agreements, whether written or oral, to which any of the Sellers is a
party and that are Acquired Assets. Sellers have delivered to the Buyer a
correct and complete copy of each written agreement listed in Schedule 3.13 and
a written summary setting forth the terms and conditions of each oral agreement
referred to in Schedule 3.13. With respect to each such agreement (a) the
agreement is legal, valid, binding, enforceable obligation of the Sellers and in
full force and effect, (b) the agreement will continue to be legal, valid,
binding, enforceable and in full force and effect on identical terms following
the consummation of the transactions contemplated hereby, (c) no other party is
in breach or default, and (d) no event has occurred that, with notice or lapse
of time, would constitute a breach or default by Sellers, or permit termination,
modification, or acceleration, under the agreement as a result of an action or
inaction by the Sellers.

 

3.14

Product Warranty. To Sellers’ Knowledge, the Sellers have provided the Buyer
with copies of all the standard terms and conditions of sale or lease for Cass
Creek (containing applicable guaranty, warranty and indemnity provisions). To
Sellers’ Knowledge, each product manufactured, sold, leased or delivered by Cass
Creek: (a) has been in conformity with all applicable contractual commitments
and all express and implied warranties; (b) has presented no liability to the
Sellers (and there is no basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim or demand against
any of them giving rise to any liability) for replacement or repair or other
damages; and (c) is not subject to any guaranty, warranty or other indemnity
beyond the applicable standard terms and conditions of sale or lease.

 

3.15

Product Liability. To Sellers’ Knowledge, the Sellers have no liability (and
there is no basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand against any of them giving
rise to any liability) arising out of any injury to individuals or property as a
result of the ownership, possession or use of any product manufactured, sold,
leased or delivered by the Sellers.

 

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3.16

Employment Matters. To Sellers’ Knowledge, the Sellers have complied in all
respects with all laws relating to employment, equal employment opportunity,
nondiscrimination, immigration, wages, hours, benefits, collective bargaining,
the payment of social security and similar taxes, occupational safety and
health, and plant closing. The Sellers are not a party to or bound by any
collective bargaining agreement, nor has Cass Creek experienced any strikes,
grievances, claims of unfair labor practices or other collective bargaining
disputes. To Sellers’ Knowledge, the Sellers have not committed any unfair labor
practice. To Sellers’ Knowledge, none of the Sellers has any knowledge of any
organizational effort presently being made or threatened by or on behalf of any
labor union with respect to employees of Cass Creek.

 

3.17

Employee Benefits. To Sellers’ Knowledge, the Sellers are not and have not been
in violation in form and in operation of any provision of the Employee
Retirement Income Security Act of 1974, as amended or any other law or
regulation relating to any employee benefit plan.

 

3.18

Guaranties. To Sellers’ Knowledge, the Sellers are not guarantors or otherwise
responsible for any liability or obligation (including indebtedness) of any
other person or entity.

 

3.19

Environmental. To Sellers’ Knowledge, the Sellers have complied and are in
compliance with all environmental, health and safety laws, including all
federal, state, local and foreign laws, administrative orders, determinations
and regulations concerning public health and safety, workers health and safety,
and pollution or protection of the environment.

 

3.20

Business Relationships. To Sellers’ Knowledge, none of the Members or their
affiliates has been involved in any business arrangement or relationship with
Cass Creek within the past 12 months other than as member, officer/manager,
board member or employees of Seller, and none of Sellers’ Affiliates other than
the Sellers owns any asset, tangible or intangible, that is used in the
Business.

 

3.21

Consents. To Sellers’ Knowledge, no consent approval, authorization or order of
any court, governmental agency or body, or third party is required for the
Sellers to consummate the transactions contemplated by this Agreement.

 

3.22

Other Information. To Sellers’ Knowledge, the information concerning the Sellers
set forth in this Agreement and the schedules and exhibits attached to this
Agreement and any statement or certificate of the Sellers furnished or to be
furnished to the Buyer pursuant to this Agreement, does not and will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated herein or therein or necessary to make the statements and
facts contained herein or therein, in light of the circumstances in which they
are made, not false or misleading.

 

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4.

Representations and Warranties of the Buyer. The Buyer represents and warrants
to the Sellers that the statements contained in this Section 4 are correct and
complete as of the date of this Agreement.

 

4.1

Organization, Qualification and Power. The Buyer is a Minnesota corporation,
duly organized, validly existing and in good standing under the laws of the
State of Minnesota. The Buyer is duly authorized to conduct business and is in
good standing under the laws of each jurisdiction where qualification is
required. The Buyer has full corporate power and authority and all permits and
licenses necessary to carry on the businesses in which it is engaged and in
which it presently proposes to engage, and to own and use the properties owned
and used by it.

 

4.2

Authorization of Transaction. The Buyer has full power and authority, corporate
or otherwise, to enter into and perform its obligations under this Agreement. In
addition, the board of directors has duly authorized the execution and
performance of this Agreement and the ancillary documents to which the Buyer is
a party. This Agreement and the ancillary documents to which the Buyer is a
party constitute valid and legally binding obligations of the Buyer, enforceable
in accordance with their respective terms and conditions.

 

4.3

Cass Creek Bank Letter of Credit. The Buyer acknowledges that Cass Creek has a
bank letter of credit which is used to finance Cass Creek’s inventory. The
outstanding amount of the line of credit is a component of the Target Working
Capital. The bank has a lien on Cass Creek’s assets. In order for the bank to
release its lien on the assets, Buyer must pay off the line of credit at
Closing.

5.

Covenants. The Parties agree as follows with respect to the period following the
Closing:

 

5.1

General. Each of the Parties will use its reasonable best efforts to take all
action and to do all things necessary, proper or advisable in order to
consummate and make effective the transactions contemplated by this Agreement.

 

5.2

Notices and Consents. The Sellers will give any required notices to third
parties, and the Sellers will use their reasonable best efforts to obtain any
third party consents, that are necessary or that the Buyer reasonably may
request. Each of the Parties will give any notices to, make any filings with and
use its reasonable best efforts to obtain any authorizations, consents and
approvals of any governmental authority necessary in connection with the
transactions contemplated by this Agreement.

 

5.3

Further Assurances. In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement and its
contemplated transactions, each of the Parties will take such further action
(including the execution and delivery of further instruments and documents) as
any other Party reasonably may request, all at the sole cost and expense of the

 

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requesting Party (unless the requesting Party is entitled to indemnification
under Section 6 of this Agreement).

 

5.4

Litigation Support. In the event any Party is contesting or defending an action,
suit, proceeding, hearing, investigation, charge complaint or demand in
connection with (a) any transaction contemplated under this Agreement, or
(b) any fact, situation, transaction or failure to act on or prior to the
Closing Date involving the Sellers, each of the other Parties will cooperate
with the contesting or defending Party, including providing testimony and access
to books or records, all at the sole cost of the defending or contesting Party
(unless the defending or contesting Party is entitled to indemnification under
Section 5.5(a) of this Agreement).

 

5.5

Transition; Transfer of Assets.

 

(a)

None of the Sellers or their affiliates will take any action that is designed or
intended to have the effect of discouraging any lessor, licensor, customer,
supplier or other business associate of the Sellers from maintaining the same
business relationships with the Buyer after the Closing as it maintained with
the Sellers prior to the Closing. Each of the Sellers will refer all customer
inquiries relating to the Business to the Buyer from and after the Closing.

 

(b)

The Sellers shall assist the Buyer (i) in the transfer and set up of the
tangible Acquired Assets identified by the Buyer at the Buyer’s designated
facilities, and (ii) train the Buyer’s employees in the use of the Acquired
Assets and other aspects of the Business. Specifically, Lynn and Hallquist agree
to provide an aggregate of 200 hours service during the four month period
following the Closing Date (apportioned between Lynn and Hallquist at Buyer’s
sole discretion) without consideration beyond the Purchase Price. The Buyer
agrees to pay the Members’ pre-approved out of pocket costs related to such
transition assistance which will be provided at such locations as Buyer directs
(a Member’s travel costs will be reimbursed, but travel time will be
non-compensatory and will not count toward the 200 hours).

 

(c)

The Seller agrees to assist the Buyer after closing by providing the services of
Jim Streib (warehouse manager), Kay Streib (warehouse shipping department), Dene
Lindquist (part-time warehouse shipper), and Lee O’Brien (part-time warehouse
shipper), Helen Lynn (accountant), and Dave Rishell (controller) to provide
their normal services that were previously provided the Sellers to the new Buyer
for a period of up to 90 days. In addition, the Seller has the option of using
the services of Tom Bergstue and/or his agency, known as Bergstue and Associates
Advertising, Incorporated, either on a direct basis or through the Buyer for a
period of up to 90 days.

 

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The fees for such services, provided by or through the Buyer, will be cost plus
15% for overhead. Any billing for these services is subject to the approval of
the Buyer and these additional services may be terminated at any time at the
Buyer’s sole discretion.

 

(d)

Sellers agree to make available Cass Creek’s location for a period of [30] days
following the Closing Date to facilitate the transition, without additional cost
to the Buyer. Buyer may use the location for an additional 60 days in exchange
for payment to Cass Creek of its cost. Sellers also agree and will allow Buyer
to use Sellers’ personnel and equipment, during normal business hours at
Seller’s cost plus fifteen percent (15%) for overhead, to load Inventory for
shipment to Buyer’s location during the 90 day period, receive and ship orders,
and perform any normal business functions that are requested by the Buyer. The
Sellers’ employees, Jim Streib, Kay Streib, Dene Lindquist, Lee O’Brien, Tom
Bergstue, and Todd Hallquist have expressed an interest in being available to
attend trade shows for the Buyer. It shall be the Buyer’s sole responsibility to
negotiate any pay, benefits, or travel reimbursement if they desire them to
perform this service or any other service for them. Neither the Buyer nor the
Sellers shall be obligated to purchase or provide these services.

 

5.6

Confidentiality. Any information concerning the business and affairs of the
Sellers that is not already generally available to the public is considered to
be confidential information (the “Confidential Information”). The Parties will
treat and hold as such all of the Confidential Information and refrain from
using any of the Confidential Information except in connection with this
Agreement and the transactions contemplated by this Agreement or with the
written consent of the other Parties.

 

5.7

Covenant Not to Compete. For a period of five years from and after the Closing
Date, none of the Sellers, their affiliates or Todd E. Hallquist will engage
directly or indirectly (except having less than 1% ownership of the outstanding
stock in any publicly-traded corporation) in the manufacturing, development or
distribution of electronic game call devices worldwide. If the final judgment of
a court of competent jurisdiction declares that any term or provision of this
Section 5.7 is invalid or unenforceable, the Parties agree that the court making
the determination of invalidity or unenforceability shall have the power to
reduce the scope, duration, or area of the term or provision, to delete specific
words or phrases, or to replace any invalid or unenforceable term or provision
with a term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and
this Agreement will be enforceable as so modified after the expiration of the
time within which the judgment may be appealed.

 

5.8

Nonsolicitation; Non-Hire and Noninterference. For a period of five years from
and after the Closing Date, none of the Sellers and their affiliates will

 

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directly or indirectly: (a) induce or attempt to induce any person hired by the
Buyer or its affiliates (each, a “Hired Employee”) to leave the employ of the
Buyer and its affiliates, or in any way interfere adversely with the
relationship between any Hired Employee and the Buyer and its affiliates,
(b) induce or attempt to induce any Hired Employee to work for, render services
or provide advice to or supply confidential business information or trade
secrets of the Buyer and its affiliates to any person or entity, (c) employ, or
otherwise pay for services rendered by, any Hired Employee in any business
enterprise with which any of the Sellers and their affiliates may be associated,
connected or affiliated, or (d) induce or attempt to induce any customer,
supplier, licensee, licensor or other person or entity having a business
relationship with the Sellers or their affiliates to cease doing business with
the Buyer and its affiliates, or in any way interfere with the relationship
between any such customer, supplier, licensee, licensor or other such person or
entity and the Buyer and its affiliates. If the final judgment of a court of
competent jurisdiction declares that any term or provision of this Section 5.8
is invalid or unenforceable, the Parties agree that the court making the
determination of invalidity or unenforceability shall have the power to reduce
the scope, duration, or area of the term or provision, to delete specific words
or phrases, or to replace any invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and
this Agreement will be enforceable as so modified after the expiration of the
time within which the judgment may be appealed.

6.

Remedies for Breaches of this Agreement.

 

6.1

Survival of Representations, Warranties and Covenants. The representations,
warranties and covenants contained in this Agreement will be subject to the
following survival periods: (a) the representations and warranties of the
Sellers contained in Sections 3.1 through 3.5 and 3.9 and of the Buyer (each a
“Fundamental Representation,” and collectively the “Fundamental
Representations”) will survive the Closing and continue in full force and effect
indefinitely after the Closing; and (b) the other representations and warranties
of the Sellers contained in this Agreement (each, a “Standard Representation,”
and collectively, the “Standard Representations”)will survive the Closing and
continue in full force and effect for a period of two years after the Closing;
and (c) the covenants set forth in this Agreement shall survive for the
applicable statute of limitations, unless a longer or shorter period of survival
is specifically set forth in this Agreement.

 

6.2

Indemnification Provisions for Benefit of the Buyer. In the event any of the
Sellers breach (or in the event any third party alleges facts that, if true,
would mean any of the Sellers has breached) any representations, warranties or
covenants contained in this Agreement, and if there is an applicable survival
period pursuant to Section 6.1 (provided that the Buyer makes a written claim
for indemnification against any of the Sellers within the survival period), then
each of the Sellers agrees to indemnify the Buyer and its officers, directors,
employees,

 

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agents and affiliates (collectively, the “Buyer Parties”) from and against the
entirety of any actions, suits, proceedings, hearings, investigations, charges,
complaints, claims, demands, injunctions, judgments, orders, decrees, rulings,
damages, dues, penalties, fines, costs, amounts paid in settlement, Liabilities,
obligations, taxes, liens, losses, expenses and fees, including court costs and
reasonable attorney fees and expenses (collectively, “Adverse Consequences”) any
of the Buyer Parties may suffer through and after the date of the claim for
indemnification (including any Adverse Consequences the Buyer Parties may suffer
after the end of any applicable survival period) resulting from, arising out of,
relating to, in the nature of, or caused by such breach (or alleged breach),
including any Liability of the Sellers that becomes a Liability of the Buyer
under any bulk transfer law of any jurisdiction, under any common law doctrine
of de facto merger or successor liability, under environmental, health and
safety requirements, or otherwise by operation of law). Sellers’ indemnification
obligations for breach of the Standard Representations shall be limited to the
amount to be outstanding(including interest) under the Promissory Note in
accordance with its terms at the time a claim is made, whether or not scheduled
payments or prepayments have been made.

 

6.3

Indemnification Provisions for Benefit of the Sellers. In the event the Buyer
breaches (or in the event any third party alleges facts that, if true, would
mean the Buyer has breached) any representations, warranties or covenants
contained in this Agreement, and if there is an applicable survival period
pursuant to Section 6.1, provided that any of the Sellers makes a written claim
for indemnification against the Buyer within the survival period, then the Buyer
agrees to indemnify each of the Sellers from and against the entirety of any
Adverse Consequences the Sellers may suffer through and after the date of the
claim for indemnification (including any Adverse Consequences the Sellers may
suffer after the end of any applicable survival period) resulting from, arising
out of, relating to, in the nature of or caused by such breach (or alleged
breach).

 

6.4

Matters Involving Third Parties.

 

(a)

If any third party shall notify any Party (the “Indemnified Party”) with respect
to any matter (a “Third Party Claim”) that may give rise to a claim for
indemnification against any other Party (the “Indemnifying Party”) under this
Section 6, then the Indemnified Party shall promptly notify each Indemnifying
Party in writing. Delay on the part of the Indemnified Party in notifying any
Indemnifying Party shall not relieve the Indemnifying Party from their
obligation unless (and then solely to the extent) the Indemnifying Party is
prejudiced.

 

(b)

Any Indemnifying Party will have the right to defend the Indemnified Party
against the Third Party Claim with counsel of its choice reasonably satisfactory
to the Indemnified Party so long as (i) the Indemnifying Party notifies the
Indemnified Party in writing within 15 days after the Indemnified Party has
given notice of the Third Party Claim that the

 

17

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Indemnifying Party will indemnify the Indemnified Party from and against the
entirety of any Adverse Consequences the Indemnified Party may suffer resulting
from, arising out of, relating to, in the nature of or caused by the Third Party
Claim, (ii) the Indemnifying Party provides the Indemnified Party with evidence
reasonably acceptable to the Indemnified Party that the Indemnifying Party will
have the financial resources to defend against the Third Party Claim and fulfill
its indemnification obligations, (iii) the Third Party Claim involves only money
damages and does not seek an injunction or other equitable relief,
(iv) settlement of, or an adverse judgment with respect to, the Third Party
Claim is not, in the good faith judgment of the Indemnified Party, likely to
establish a precedential custom or practice materially adverse to the continuing
business interests of the Indemnified Party, and (v) the Indemnifying Party
conducts the defense of the Third Party Claim actively and diligently.

 

(c)

So long as the Indemnifying Party is conducting the defense of the Third Party
Claim in accordance with Section 6.4(b) above, (i) the Indemnified Party may
retain separate co-counsel at its sole cost and expense and participate in the
defense of the Third Party Claim, (ii) the Indemnified Party will not consent to
the entry of any judgment or enter into any settlement with respect to the Third
Party Claim without the prior written consent of the Indemnifying Party (not to
be withheld unreasonably), and (iii) the Indemnifying Party will not consent to
the entry of any judgment or enter into any settlement with respect to the Third
Party Claim without the prior written consent of the Indemnified Party (not to
be withheld unreasonably).

 

(d)

If any of the conditions in Section 6.4(b) above is not or is no longer
satisfied, (i) the Indemnified Party may defend against, and consent to the
entry of any judgment or enter into any settlement with respect to, the Third
Party Claim in any manner it reasonably may deem appropriate (and the
Indemnified Party need not consult with, or obtain any consent from, any
Indemnifying Party), (ii) the Indemnifying Parties will reimburse the
Indemnified Party promptly and periodically for the costs of defending against
the Third Party Claim (including reasonable attorneys’ fees and expenses), and
(iii) the Indemnifying Parties will remain responsible for any Adverse
Consequences the Indemnified Party may suffer resulting from, arising out of,
relating to, in the nature of, or caused by the Third Party Claim to the fullest
extent provided in this Section 6.

 

6.5

Adjustment to Purchase Price. All indemnification payments under this Section 6
will be deemed adjustments to the Purchase Price which may be offset against the
Promissory Note.

 

6.6

Rights of Offset. If the Buyer suffers any Adverse Consequences, the Buyer shall
be entitled to offset and deduct the amount of such Adverse Consequences

 

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from the Promissory Note and the next principal payment due under the Promissory
Note.

 

6.7

Other Indemnification Provisions. The above indemnification provisions are in
addition to, and not in derogation of, any statutory, equitable or common law
remedy (including without limitation any such remedy arising under
Environmental, Health and Safety Requirements) any Party may have with respect
to the Sellers or the transactions contemplated by this Agreement. Each of the
Sellers agrees that he or it will not make any claim for indemnification against
any of the Buyer by reason of the fact that he, she or it was a director,
officer, employee or agent of any of the Sellers or was serving at the request
of the entity as a partner, trustee, director, officer, employee or agent of
another entity (whether the claim is for judgments, damages, penalties, fines,
costs, amounts paid in settlement, losses, expenses or otherwise and whether the
claim is pursuant to any statute, charter document, bylaw, agreement or
otherwise) with respect to any action, suit, proceeding, complaint, claim or
demand brought by any of the Buyer Parties against the Sellers (whether the
action, suit, proceeding, complaint, claim or demand is pursuant to this
Agreement, applicable law or otherwise).

7.

Miscellaneous.

 

7.1

No Third-Party Beneficiaries. This Agreement will not confer any rights or
remedies upon any person other than the Parties and their respective successors
and permitted assigns.

 

7.2

Entire Agreement. This Agreement and any documents, certificates or other
instruments delivered pursuant to this Agreement constitute the entire agreement
between the Parties and supersede any prior understandings, agreements or
representations by or between the Parties, written or oral, to the extent they
related in any way to the subject matter of this Agreement.

 

7.3

Succession and Assignment. This Agreement will be binding upon and inure to the
benefit of the Parties and their respective successors and permitted assigns. No
Party may assign either this Agreement or any of its rights, interests or
obligations under this Agreement without the prior written approval of the other
Parties.

 

7.4

Counterparts and Facsimile Signatures. This Agreement may be executed in one or
more counterparts, each of which will be deemed an original but all of which
together will constitute one and the same instrument, and by facsimile.

 

7.5

Notices. All notices, requests, demands, claims and other communications under
this Agreement will be in writing. Any notice, request, demand, claim or other
communication under this Agreement will be deemed duly delivered and received
two business days after it is sent by facsimile, email, reputable overnight
delivery service (e.g., Federal Express®), registered or certified mail, return
receipt

 

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requested, postage prepaid and addressed to the intended recipient as set forth
below:

 

If to Sellers:

Copy to:

 

 

Cass Creek International, LLC

Sellstrom Law Firm, LLP

 

1881 Lyndon Blvd

9-11 East Fourth Street, P.O. Box 50

 

Falconer, NY 14733

Jamestown, NY 14702

 

Attn: Gary R. Lynn

Attn: Stephen E. Sellstrom

 

Facsimile: _________

Facsimile: (716) 484-2133

 

 

Email: sellstromlaw@prodigy.net

 

 

If to the Buyer:

Copy to:

 

 

Nature Vision, Inc.

Gray, Plant, Mooty, Mooty & Bennett, P.A.

 

1480 Northern Pacific Road

500 IDS Center

 

Brainerd, MN 56401

80 South Eighth Street

 

Attn: Jeffrey P. Zernov

Minneapolis, MN 55402

 

Facsimile: (218) 825-0721

Attn: Jeffrey C. Anderson, Esq.

 

Email: jzernov@naturevisioninc.com

Facsimile: (612) 632-4002

 

 

Email: jc.anderson@gpmlaw.com

 

Any Party may send any notice, request, demand, claim or other communication to
the intended recipient at the address set forth above using any other means
(including personal delivery, expedited courier, messenger service, ordinary
mail or electronic mail), but no such notice, request, demand, claim or other
communication will be deemed to have been duly given unless and until it
actually is received by the intended recipient. Any Party may change the address
to which notices, requests, demands, claims and other communications under this
Agreement are to be delivered by giving the other Parties notice in the manner
set forth in this Agreement.

 

7.6

Governing Law; Arbitration. This Agreement will be governed by and construed in
accordance with the domestic laws of the State of Minnesota without giving
effect to any choice or conflict of law provision or rule. Any dispute among the
Parties arising under, out of, or in connection with or in relation to this
Agreement or any ancillary documents will be submitted to binding arbitration
under the authority of the Federal Arbitration Act and will be arbitrated in
accordance with the then current Commercial Arbitration Rules of the American
Arbitration Association (the “AAA”); provided, that the Parties will be entitled
to conduct discovery as set forth in the Minnesota Rules of Civil Procedure and
the arbitrator will have the power to compel discovery. The arbitration will
take place before a single arbitrator in Minneapolis, Minnesota, or at such
other place as is mutually agreed to by the Parties. Arbitration will be
commenced by a Party giving written notice to the other Party stating the
grounds of the dispute, the relief sought and that the dispute is being
arbitrated under this Section 7.6. If the Parties cannot mutually select an
arbitrator and agree to administration of the arbitration within 30 days after
written notice is given, then the arbitration will be

 

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administered by the AAA. The decision of the arbitrator will be final and
binding on all the parties to the dispute; however, the arbitrator may not under
any circumstances assess punitive or exemplary damages. A judgment may be
entered upon the arbitration award by any state or federal court in Minnesota.
The prevailing Party will be entitled to its costs and expenses of arbitration
including, without limitation, reasonable attorney fees.

 

7.7

Amendments and Waivers. No amendment of any provision of this Agreement will be
valid unless the same is in writing and signed by the Parties. No waiver by any
Party of any default, misrepresentation or breach of warranty or covenant under
this Agreement, whether intentional or not, will be deemed to extend to any
prior or subsequent default, misrepresentation or breach of warranty or covenant
under this Agreement.

 

7.8

Severability. Any term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction will not affect the validity
or enforceability of the remaining terms and provisions of this Agreement or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.

 

7.9

Expenses. Whether or not the transactions under this Agreement are consummated,
the Buyer, the Sellers will bear his, her or its own costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and these transactions.

 

7.10

Press Releases and Public Announcements. No Party will issue any press release
or make any public announcement relating to the subject matter of this Agreement
prior to the Closing without the prior written approval of the other Party.

 

7.11

Specific Performance. Each of the Parties acknowledges and agrees that each
other Party would be damaged irreparably in the event any of the provisions of
this Agreement are not performed in accordance with their specific terms or
otherwise are breached. Accordingly, each of the Parties agrees that the other
Party is entitled to an injunction or injunctions to prevent breaches of the
provisions of this Agreement and to enforce specifically this Agreement by
applying to state or federal court in Hennepin County, Minnesota or other court
of general jurisdiction for injunctive relief only, together with recovery of
reasonable attorney fees and other costs incurred in obtaining injunctive
relief. The court will refer proceedings to the arbitrator to determine whether
any injunctive relief issued will be made permanent or be dissolved. The
arbitrator’s findings will be binding and conclusive upon the parties.

 

7.12

Tax Matters. The Sellers are responsible for and will pay all federal, state and
local taxes relating to the transactions contemplated by this Agreement,
including without limitation, any income, payroll, employment, excise, real
property,

 

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personal property, sales use or transfer tax, except those taxes based on
Buyer’s net income.

{REMAINDER OF THIS PAGE IS BLANK. SIGNATURE PAGE FOLLOWS.}

 

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            The Parties have executed this Asset Purchase Agreement to be made
effective as of the date first above written.

 

 

BUYER:

NATURE VISION, INC.

   

 

/s/ Jeffrey P. Zernov

 

Name:

Jeffrey P. Zernov

 

Title:

President

 

 

SELLERS:

CASS CREEK INTERNATIONAL, INC.

   

 

/s/ Gary R. Lynn

 

Name:

Gary R. Lynn

 

Title:

Managing Member

 

 

BERGSTUE

 

 

/s/ John T. Bergstue

 

John T. Bergstue, individually

   

 

STREIB

 

 

/s/ James G. Streib

 

James G. Streib, individually

   

 

LYNN

 

 

/s/ Gary R. Lynn

 

Gary R. Lynn, individually

 

 

[SIGNATURE PAGE TO NATURE VISION, INC. /CASS CREEK INTERNATIONAL ASSET PURCHASE
AGREEMENT]

 

 

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