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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT dated on February 3, 1998, by and among
CROWN GROUP, INC., a Texas corporation (the "Purchaser"), PRECISION IBC,
INCORPORATED, an Alabama corporation (the "Company"), and VAN P. FINGER, a
resident of Xxxxxxx County, Alabama, being the sole shareholder (the
"Shareholder"), of the Company.
W I T N E S S E T H:
WHEREAS, the Shareholder is the owner of one hundred (100%) percent of
the issued and outstanding shares of capital stock of the Company, such shares
being of the class and par value hereinafter set forth, and the Shareholder
desires to sell eighty (80%) percent of such shares to the Purchaser (all of
such shares of capital stock to be sold hereunder herein collectively referred
to as the "Shares"), and the Purchaser desires to purchase the Shares, all upon
the terms and conditions set forth herein; and
WHEREAS, this Agreement sets forth the terms and conditions to which the
parties have agreed and further contemplates the execution and delivery of
certain collateral agreements and the consummation of certain related
transactions hereinafter described;
NOW, THEREFORE, in consideration of the mutual promises and covenants of
the parties, and subject to the terms and conditions set forth herein, the
parties agree as follows:
1. Sale and Purchase of the Shares. The Shareholder agrees, subject
to the conditions to the Shareholder's obligations herein set forth, to sell,
assign and convey to the Purchaser on the Closing Date (as hereinafter
defined), free and clear of all security interests, pledges, liens, charges and
encumbrances, the Shares, and to transfer and deliver to the Purchaser the
certificates evidencing such Shares, duly endorsed in blank or accompanied by
stock powers duly executed in blank. The
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Purchaser agrees, subject to the conditions to its obligations herein set
forth, to purchase and accept the Shares for the consideration set forth in
Section 2(a) hereof.
2. Purchase and Payment; Payment of Shareholder Loans.
(a) Purchase Price. The total purchase price (the "Purchase
Price") for the Shares shall be TWO MILLION THREE HUNDRED EIGHTY-TWO
THOUSAND THREE HUNDRED EIGHTY-NINE ($2,382,389) DOLLARS, payable at
Closing (as hereinafter defined) by certified or cashier's checks or
wire transfer funds.
(b) Shareholder Loans. The loans from the Shareholder to the
Company in the aggregate principal amount of $292,894.31 shall be paid
in full by the Company at Closing.
(c) Further Assurances. The Shareholder hereby agrees to
execute and deliver from time to time at the request of the Purchaser
and without further consideration, such additional instruments of
conveyance and transfer and to take such other action as the Purchaser
may reasonably require more effectively to convey, assign, transfer and
deliver the Shares to the Purchaser.
3. Representations and Warranties of the Shareholder and the
Company. The Shareholder and the Company represent and warrant to and agree
with the Purchaser that:
(a) Organization and Standing of the Company. The Company is
a corporation duly organized, validly existing and in good standing
under the laws of the State of Alabama. The Company has full corporate
power and authority to conduct its business as it is now being conducted
and is not qualified to do business as a foreign corporation in any
other jurisdiction. The Shareholder has delivered to the Purchaser
complete and correct copies of the Articles of Incorporation (duly
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certified by the Secretary of State of the State of Alabama) and By-Laws
(certified by the Secretary of the Company) of the Company as in effect
on the date hereof.
(b) Subsidiaries. The Company has no subsidiaries. Further,
the Company does not (i) own, directly or indirectly, any of the
outstanding capital stock or securities convertible into capital stock
of any other corporation, or (ii) own, directly or indirectly, any
participating interest in any partnership, joint venture or other
business enterprise.
(c) Capital Stock. The authorized capital stock of the
Company consists of 2,000 shares of common stock, $1.00 par value, of
which, on the date hereof, 1,000 shares are validly issued and
outstanding, fully paid and nonassessable and one hundred (100%) percent
of which are owned by the Shareholder. The Company does not have any
treasury shares, outstanding subscriptions, options or other agreements
or commitments obligating it to issue shares of capital stock. Between
the date hereof and the Closing Date, the Shareholder will not, and will
not permit the Company to issue or enter into any subscriptions,
options, agreements or other commitments in respect of the issuance,
transfer, sale, repurchase or encumbrance of any shares of capital
stock.
(d) Financial Statements. The Shareholder has delivered to
the Purchaser (i) the compiled balance sheet of the Company at its
December 31, 1995 and its December 31, 1996 fiscal year ends and the
related compiled statement of earnings for the Company, as certified by
the President of the Company; and (ii) the compiled balance sheet of the
Company at December 31, 1997 and the related compiled statement of
earnings of the Company for the twelve month period then ended, as
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certified by the President of the Company (hereinafter referred to as
the "Company's Financial Statements"). All of the Company's Financial
Statements (x) are in accordance with the books of account and records
of the Company and fairly present the financial position and results of
operations of the Company as of the date and for the periods indicated,
(y) contain and reflect adequate reserves for all known material
liabilities and (z) were prepared in accordance with generally accepted
accounting principles applied on a basis consistent with prior
accounting periods ("GAAP"). Except to the extent reflected or reserved
against in the Company's Financial Statements, or any Schedule provided
for in this Section 3, the Company is not obligated for, nor are any of
its assets or properties subject to, any liabilities (whether accrued,
absolute, contingent or otherwise) or adverse obligations, whether or
not such liabilities or obligations are normally shown or reflected on a
balance sheet, other than liabilities and obligations arising in the
ordinary course of business since the date of the Company's Financial
Statements, none of which are material and adverse. The Company's
Financial Statements correctly reflect the liabilities of the Company at
December 31, 1997.
(e) Absence of Certain Changes or Events. Except as set forth
in any Schedule delivered to the Purchaser pursuant to this Section 3 or
except as contemplated by this Agreement, since December 31, 1997, the
Company has not:
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(i) issued, delivered or agreed to issue or deliver any
stock, bonds or other corporate securities (whether authorized
and unissued or held in the treasury) or granted or agreed to
grant any options, warrants or other rights calling for the
issuance thereof;
(ii) borrowed or agreed to borrow any funds or incurred,
or become subject to, any obligation or liability (absolute or
contingent) except in the ordinary course of business in
customary amounts;
(iii) paid any obligation or liability (absolute or
contingent) except in the ordinary course of business in
customary amounts;
(iv) paid any obligation or liability (absolute or
contingent) other than current liabilities reflected in or shown
on the Company's Financial Statements (or the notes thereto) and
obligations or liabilities incurred since the date thereof and
permitted to be so incurred by the foregoing clause (ii) of this
Section (e);
(v) except as otherwise permitted herein, declared or
made, or agreed to declare or make, any payment of dividends or
distribution of any assets of any kind whatsoever to the
Shareholder, or purchased or redeemed any shares of its capital
stock;
(vi) except as otherwise permitted herein, sold or
transferred, or agreed to sell or transfer, any of its assets,
properties or rights (except sales in the ordinary course of
business) or cancelled or agreed to cancel, any debts or claims;
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(vii) entered or agreed to enter into any agreement or
arrangement granting any preferential rights to purchase
substantially all of the assets, properties or rights of the
Company (including management and control thereof), or requiring
the consent of any party to the transfer and assignment of such
assets, properties or rights (or changes in management or control
thereof), or providing for the merger or consolidation of the
Company with or into another corporation;
(viii) to the best of the Shareholder's knowledge,
suffered any material losses or waived any rights of material
value;
(ix) to the best of the Shareholder's knowledge, except
in the ordinary course of business, made or permitted any
amendment or termination of any contract, agreement or license to
which it is a party;
(x) made any accrual or arrangement for the payment of
bonuses or special compensation of any kind or any severance or
termination pay to any present or former officer or employee;
(xi) increased the rate of compensation payable or to
become payable by it to any of its officers or key employees
compensated at a rate in excess of $20,000 per annum; or made any
increase in any profit sharing, bonus, incentive, deferred
compensation, insurance, pension, retirement or other employee
benefit plan, payment or arrangement made to, for or with any
such officers or key employees;
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(xii) committed to purchase inventories, parts, supplies
or other items in excess of its normal, ordinary and usual
requirements or at excessive prices, all computed based on
historical practices of the Company;
(xiii) experienced any significant labor trouble; or
(xiv) to the best of the Shareholder's knowledge, suffered
any damage, destruction or loss, whether or not covered by
insurance, which materially and adversely affects its assets or
business, or had any material adverse change in the business,
operations, financial condition or prospects of the Company.
Between the date hereof and the Closing Date, the Company shall not do
any of the things listed in Clauses (i) through (xii) of this Section (e)
without the prior written consent of the Purchaser, except as otherwise
permitted by this Agreement.
(f) Tax Matters.
(i) Except as provided in Section 3(f)(ii) hereof, (A) all
United States, state, county and local and other taxes, including
without limitation, income taxes, payroll taxes, corporate
franchise taxes, sales, excise and use taxes and ad valorem
taxes, due and payable by the Company for the periods ended prior
to the date hereof, have been paid or accrued and there is no
further liability (whether or not disclosed on its returns) for
any taxes relating to such periods, and no interest or penalties
have accrued or are accruing with respect thereto; (B) the
Company has timely filed in correct form all tax returns and
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reports required to be filed by it on or before the date of this
Agreement with all such taxing authorities; and (C) the
liability for Federal, state and local taxes reflected on the
Company's Financial Statements, if any, represents at the date
thereof, reasonable and adequate provision for the payment of all
accrued and unpaid Federal, state and local taxes of the Company.
No assessments of deficiencies have been made against the
Company, and no extensions of time are in effect for the filing
of any returns or the assessment of deficiencies. No
examinations by the Internal Revenue Service of the Federal
income tax returns of the Company for any taxable year are
presently pending. The Shareholder has delivered to the
Purchaser true and complete copies of all of the Company's
Federal and state Income Tax Returns and payroll tax returns of
the Company for each of its fiscal years from 1993 through 1996.
The Company is, and has been since its incorporation, on "S"
corporation for Federal income tax purposes.
(ii) The Company has not (A) qualified to do business (B)
filed tax returns of any kind or (C) paid any state taxes in any
state other than Alabama and, therefore, the Shareholder and the
Company make no representation or warranty that the Company (D)
has filed all required tax returns in any state except Alabama or
(E) paid all state taxes payable by the Company with respect to
the conduct of its operations in any state other than Alabama.
Notwithstanding the foregoing, if any such taxes are assessed to
the Company after the
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Closing Date, which taxes relate to periods prior to the Closing
Date, the Shareholder shall reimburse the Company for all such
taxes (and any interest and penalties due thereon) up to the
maximum amount of $50,000 in the aggregate, promptly upon receipt
of written notice that the Company has paid any such taxes,
interest and penalties. The Shareholder shall have the right to
contest in good faith the assessment of such taxes so long as the
contest thereof does not materially adversely affect the
Company's ability to do business in the jurisdiction in which the
taxes are being contested.
(g) Contracts and Container Leases. (i) Schedule 3(g)(i)
hereto is a complete and accurate listing of all mortgages, liens,
licenses, leases, sales representation agreements, purchase orders (with
unexpired terms of more than thirty (30) days) and all other executory
contracts, undertakings, commitments and agreements of the Company,
except Container Leases (as hereinafter defined), to which or by which
it is bound, whether written or oral, (x) entered into in the ordinary
course of business involving the payment by or to the Company of more
than $50,000 in the aggregate with respect to any such contract,
undertaking, commitment or agreement, (y) entered into other than in the
ordinary course of business, or (z) with any of Shareholders' Affiliates
(the "Contracts"). For the purposes of this Agreement, the term
"Shareholders" Affiliates" shall include all "affiliates" of the
Shareholders as such terms are defined in the rules and regulations
promulgated by the Securities and Exchange Commission under the
Securities Act of 1933, as amended. (ii) Schedule 3(g)(ii) lists (A)
all of the Company's bulk containers and related parts and
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accessories (collectively, the "Containers") which are leased to third
parties and (B) the respective names of such lessees (collectively, the
"Container Leases"). The total number of Containers subject to
Container Leases is, and will be at Closing, not less than 2,800.
Except as set forth on Schedule 3(g)(i), each and all of the Contracts
have been duly executed by, or assigned to, the Company, are currently
in effect, are valid and binding upon the parties thereto and are
enforceable in all material respects in accordance with their terms.
Neither the Company nor the Shareholder is aware of any facts that would
prevent the performance of any of the Contracts or the Container Leases.
Neither the Company nor to the best of the Shareholder's knowledge, any
other party is in default under any one or more of the Contracts or the
Container Leases, nor has any claim of default been asserted by the
Company or any such other party. The Company has committed no act and,
to the best of the Shareholder's knowledge, there has been no omission
which will result in the breach by it of any Container Lease.
(h) Title to Properties and Related Matters. Schedule 3(h)
hereto is a complete list of all personal property (including all
Containers and major items of furnishings and equipment) owned by the
Company. The assets reflected in Schedule 3(h) and in the Company's
Financial Statements, were at the date thereof, and, except for assets
consumed or disposed of in the ordinary course of business since the
date thereof (or distributed to the Shareholder as permitted hereunder),
are now owned by the Company by good title, free and clear from all
security interests, mortgages, liens, claims, defects and encumbrances
except liens, charges or encumbrances discussed or referred to in the
Company's Financial Statements, the related notes or schedules
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thereto or in Schedule 3(h) delivered to the Purchaser pursuant to this
Section 3. Except as disclosed in Schedule 3(h), to the best of the
Shareholder's knowledge, without any independent investigation, all such
assets are in good operating condition and repair, subject to ordinary
wear and tear. All of such assets have been properly maintained, with
no extraordinary maintenance planned or anticipated, and are adequate
and sufficient for the operation of the Company's business as
historically operated by the Company. There are no material capital
expenditures currently contemplated or necessary to maintain the current
operation of the Company's business.
(i) Consents and Approvals. Except as set forth in Schedule
3(i) hereof, no notification, authorization, permit, consent or approval
of, or notice to, or filing with, any governmental or regulatory
authority or other third party is required to be obtained, given or
made, or waiting period required to expire as a condition to the lawful
execution and delivery of this Agreement, the consummation by the
Shareholder and the Company of the transaction contemplated herein, or
the fulfillment of the terms and compliance with the provisions hereof.
(j) Receivables. All notes receivable, contracts receivable
and accounts receivable are properly reflected on the Company's books
and records, are valid, have arisen in the ordinary course of business,
and, less the bad debt reserve contained in the most recent Financial
Statements (December 31, 1997), are collectible and will be collected in
accordance with their terms at their recorded amounts. None of such
receivables have been the subject of any factoring by the Company.
Schedule 3(j) sets
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forth a complete and accurate list of all notes and accounts receivable
as of December 31, 1997, which list includes the aging of such notes and
accounts receivable.
(k) Litigation and Proceedings. Except as described in
Schedule 3(k), to the best of the Shareholder's knowledge, there are no
actions, suits or proceedings pending or, threatened against or
affecting the Company or the Shareholder, at law or in equity, or before
or by any governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, or before any arbitrator of any
kind, which involve the possibility of any judgment or liability not
fully covered by casualty or liability insurance; and the Company is not
in default with respect to any judgment, order, writ, injunction,
decree, award, or, to the best of the Shareholder's knowledge and
belief, in default with respect to any rule or regulation of an court,
arbitrator or governmental department, commission, board, bureau, agency
or instrumentality.
(l) Insurance Coverage. The Company maintains policies of
casualty, liability, use and occupancy, and workmen's compensation and
other forms of insurance, covering its properties and assets in amounts
and against such losses and risks as are generally maintained for
comparable businesses and properties, and valid policies for such
insurance are now duly in force. There have been no claims made on any
of the Company's currently existing or previously effective policies of
insurance.
(m) Employee Relations. Except as set forth in Schedule
3(m), and except for the Company's "Group Health Plan" (within the
meaning of Section 162(i)(3) of the Internal Revenue Code of 1986, as
amended), the Company has no bonus,
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incentive, compensation, disability pension, profit sharing, group
insurance or employee welfare plans of any nature whatsoever.
(i) To the best of the Shareholder's knowledge, the
Company is in compliance with all applicable laws respecting
employment and employment practices, terms and conditions of
employment and wages and hours of employees, and there is no
labor strike, dispute, slowdown or representation campaign or
work-stoppage pending or threatened with respect to employees of
the Company.
(ii) There is not, pending or threatened, any unfair
labor practice complaint against the Company pending before any
relevant authority or union representation petition respecting
the employees of the Company.
(iii) To the best of the Shareholder's knowledge, the
"Group Health Plan" maintained by the Company has been
administered in good faith compliance with the reasonable
interpretation of the continuation coverage requirements
contained in Title X of the Consolidated Omnibus Budget
Reconciliation Act of 1985 (COBRA), if applicable.
(n) Patents, Trademarks and Licenses. The Company has no
patents or patent applications pending. To the best of the
Shareholder's knowledge, the Company owns or has all rights necessary to
use all trademarks, trade names and copyrights necessary for the conduct
of its business as currently conducted, and to the best of the
Shareholder's knowledge and belief, the conduct of such business does not
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conflict with or infringe upon any trademark, trade name, trade secret
or copyright of others. The Company has received no notice of any
claim of infringement or other complaint that its operations conflict
with or infringe upon the patents, trade names, trademarks, trade
secrets or copyrights of others.
(o) Approvals, Authorizations and Regulations. Except for the
failure of the Company to qualify to do business in jurisdictions other
than the State of Alabama, to the best of the Shareholder's knowledge
and belief, the Company's business is being conducted in compliance with
all applicable laws, ordinances, rules and regulations of all
governmental authorities, and neither the Company nor any officer,
director, stockholder, agent or employee has violated, in any material
respect, any law, ordinance, rule or regulation in connection with the
Company's business. Further, the Company has not received any notice
(written or otherwise) from any governmental authority asserting or
investigating any alleged failure to comply with any applicable law,
ordinance or regulation.
(p) Inventory. None of the inventories of the Company are
obsolete, defective or otherwise not saleable or usable in the ordinary
course of business. The levels of inventories currently on hand are not
in excess of or less than that necessary for the operation of the
Company's business in the ordinary course of business consistent with
past practices of the Company.
(q) Guarantees, Etc. The Company has not given any guarantee,
indemnity, warranty or bond, or incurred any other similar obligation or
created any security for or in respect of, liabilities, actual or
contingent, of any other person.
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(r) OSHA. The Company has not received actual notice of any
violation by the Company, and to the best of the Shareholder's knowledge
and belief, the Company is not in violation of and has not been in
violation of, the Occupational Safety and Health Act of 1970, including
rules and regulations thereunder, or any other federal, state, local or
foreign laws, including rules and regulations thereunder, regulating or
otherwise affecting employee health and safety.
(s) Customers. The Shareholder does not have any knowledge or
information or reason to believe that any of the Company's customers has
ceased, or intends to cease, to acquire products or services from the
Company or has reduced, or intends to materially reduce, the use of the
products or services sold or leased by the Company (except for
cessations or reductions in the ordinary course of business) for any
reason or as a result of the transaction contemplated by this Agreement.
(t) Officers, Directors and Employees. Attached hereto as
Schedule 3(t) is a list of all officers, directors and employees of the
Company. There are no amounts owed to any officer, director or employee
of the Company other than as reflected in the Company's Financial
Statements. Except as set forth on Schedule 3(t), no officer, director
or employee of the Company, or any affiliate of the Company, owns,
directly or indirectly, beneficially or otherwise, any material interest
in, or is an employee, officer or director of, or a consultant, agent
for or representative of, any customer, competitor or supplier of the
Company.
(u) Absence of Adverse Agreements. The Company is not a party
to any instrument or agreement or subject to any charter or other
corporate restriction or any judgment, order, writ, injunction, decree,
award, rule or regulation which materially
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and adversely affects the business, properties, assets or condition,
financial or otherwise, of the Company.
(v) No Defaults. To the best of the Shareholder's knowledge,
the Company is not in default under, nor has any event occurred which
with notice or lapse of time or both, could result in a waiver (except
caused by the statute of limitations) of any material right or default
under, any outstanding indenture, mortgage, lease, contract or agreement
to which the Company is a party or by which the Company or its assets
may be bound, or under any provision of the Company's Articles of
Incorporation or By-Laws (or comparable instruments). All liabilities
of the Company are, and will be on the Closing Date, current and not in
default.
(w) Banks, Signatories. Schedule 3(w) is a list setting forth
the name of each bank, savings and loan or other financial institution
in which the Company has any account or safe deposit box, the style and
number of each such account or safe deposit box and the names of all
persons authorized to draw thereon or to have access thereto.
(x) No Conflicts. The execution and performance of this
Agreement and the transactions contemplated hereby will not violate any
provision of or result in a breach of or constitute a default under the
Articles of Incorporation or By-Laws of the Company, or under any order,
writ, injunction or decree of any court, governmental agency or
arbitration tribunal, or under any contract, agreement or instrument to
which the Company is a party or by which its properties may be bound,
or, to the best of the Shareholder's knowledge and belief, under any
law, statute or regulation.
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(y) Books and Records. The books and records of the Company
are in all material respects complete and correct and to the best of the
Shareholder's knowledge and belief, have been maintained in accordance
with good business practice and reflect a true record of all meetings or
proceedings of the Board of Directors and Shareholders of the Company.
(z) Brokers. Neither the Company nor the Shareholder is a
party to or in any way obligated under a contract or other agreement,
and there are no outstanding claims against any of them, for the payment
of any broker's or finder's fees in connection with the origin,
negotiation, execution or performance of this Agreement.
(aa) Environment and Health.
(i) To the best of the Shareholder's knowledge, without
any independent investigation, the third party contractors
retained by the Company currently handle, use, store, treat, ship
and dispose of all hazardous and toxic substances, petroleum
products and waste, in compliance with all applicable
environmental, health or safety statutes, ordinances, orders,
rules, regulations and requirements.
(ii) No employee of the Company has submitted a claim to
the Company or any third party alleging that such employee
suffers from injury or illness resulting from exposure to toxic
substances, hazardous substances or manufacturing processes used
in connection with the Company's business or present at the place
of business of the Company.
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(bb) Permits, Licenses, Etc. Except for any Material
Permits (as hereinafter defined) which the Company would be
required to obtain in order to do business in states other than
Alabama, the Company has all Permits that are required in order
to carry on the Company's business as presently conducted, the
absence of which would have a material adverse effect on the
Company (the "Material Permits"), and is not in material default
of any thereof. All Material Permits are in full force and
effect, and, to the best knowledge of the Shareholder, no
suspension, cancellation or non-renewal of any Material Permit is
threatened, nor, to the best of the Shareholder's knowledge, does
there exist any basis for such suspension, cancellation or
non-renewal.
(cc) Title to Shares and Authority. The Shareholder now
has and on the Closing Date will have valid title to the Shares
and on the Closing Date will have full right, power and authority
and due authorization to sell and transfer the Shares hereunder,
and upon the delivery of and payment for the Shares the
Shareholder will transfer to the Purchaser valid title thereto,
free and clear of any security interests, pledges, liens or
similar encumbrances. This Agreement constitutes the valid and
legally binding obligation of the Shareholder, enforceable in
accordance with its terms. The Shares are the sole and separate
property of the Shareholder, and his spouse has no interest,
community or otherwise, in and to the Shares.
(dd) Disclosure. To the best of the Shareholder's
knowledge, neither this Agreement, the Schedules attached hereto,
nor any other document furnished by the Company or the
Shareholder to Purchaser, taken as a whole, contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements contained herein and therein not
misleading, and except as disclosed herein
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or therein, there is no fact (other than matters of a general
economic or a political nature which do not effect the business
of the Company uniquely) known to the Shareholder which
materially adversely effects or in the future can be reasonably
expected to materially adversely effect the properties, business,
operations or financial condition or prospects of the Company.
4. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants to the Shareholder that:
(a) Organization, Standing and Authority of the Purchaser.
The Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of the State of Texas, and has full
corporate power and authority to conduct its business as it is now being
conducted, to enter into and carry out the provisions of this Agreement.
(b) No Violation. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated hereby,
will (i) violate any provision of the Articles of Incorporation or By-
Laws of the Purchaser, (ii) violate any provision of any agreement or
other obligation to which the Purchaser is a party or by which the
Purchaser is bound or to which its assets are subject, or (iii) violate
or result in a breach of, constitute a default under, any judgment,
order, decree, rule or regulation of any court or governmental agency to
which the Purchaser is subject.
(c) Corporate Proceedings of the Purchaser. The execution,
delivery and performance of this Agreement has been authorized by the
Board of Directors of the Purchaser, and this Agreement constitutes the
valid and legally binding obligation of the Purchaser, enforceable in
accordance with its terms.
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(d) Brokers. The Purchaser is not a party to or in any way
obligated under a contract or other agreement, and there are no
outstanding claims against it, for the payment of any broker's or
finder's fees in connection with the origin, negotiation, execution or
performance of this Agreement.
(e) Investment. The Shares will be acquired for investment
and not with a view to distribution thereof, nor with any intention of
distributing or selling or otherwise disposing of the Shares.
5. Additional Covenants and Agreements.
(a) Access to Records. At all reasonable times prior to
Closing, the Company shall give to the Purchaser, its counsel,
accountants, and other representatives, full and free access to all the
properties, books, contracts, commitments and records of the Company so
that the Purchaser may have full opportunity to make such investigation
as it shall desire to make of the business and affairs of the Company,
provided that such investigation shall not unreasonably interfere with
the operations of the Company. If this Agreement is terminated, the
Purchaser, its officers, directors, employees, agents and authorized
representatives shall keep confidential and shall not use in any manner
any information or documents obtained from the Company, unless such
information is readily ascertainable from public or published
information, or trade sources, or already known or subsequently
developed by the Purchaser independently of any investigation of the
Company, or received from a third party not under an obligation to the
Company to keep such information confidential. Further, if this
Agreement is terminated, the Purchaser shall immediately return to the
Company any documents obtained from the Company
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together with all copies thereof then in the Purchaser's possession or
under the Purchaser's control, and shall agree thereafter to keep the
contents thereof strictly confidential.
(b) Conduct of Business. Except as otherwise contemplated by
this Agreement, from the date hereof until the Closing Date, the
business of the Company will be conducted diligently and only in the
ordinary course. For purposes of this Paragraph 5(b), the phrase
"ordinary course" shall mean the conduct of the business of the Company
in the manner which the Company conducted its business in the last
twelve (12) months prior to the execution of this Agreement, following
its usual accounting practices, making ordinary accruals, incurring
ordinary liabilities or expenditures and making ordinary contracts and
commitments.
(c) Preservation of Goodwill. From the date hereof until the
Closing Date, subject to prudent business judgment, the Shareholder will
use his best efforts to preserve the business organization of the
Company, to keep available to the Company the services of the officers
and employees and to preserve for the Purchaser and the Company the
goodwill of all suppliers, customers and others having business
relations with them.
(d) Resignations. The Shareholder agrees to deliver to the
Purchaser at Closing (effective on the Closing Date) the resignations of
those officers and directors of the Company as may be requested by the
Purchaser.
(e) Delivery of Materials. At the Closing, the Shareholder
shall deliver to the Purchaser the minute books, stock certificate
books, corporate seals and other corporate books, records, data and
papers of the Company.
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(f) Tax Periods Ending on or before the Closing Date. The
Company shall prepare or cause to be prepared and file or cause to be
filed all tax returns for the Company for all periods ending on or prior
to the Closing Date which are filed after the Closing Date, including,
without limitation, a federal income tax return for the period ending on
the date immediately preceding the Closing Date. The Purchaser and the
Shareholder shall review and have the right to approve of each such tax
return described in the preceding sentence prior to filing. To the
extent permitted or required by applicable law, the Shareholder shall
include any income, gain, loss, deduction or other tax items for such
periods on his Tax Returns in a manner consistent with the all periods
prior to the Closing Date.
6. Conditions to Obligations of the Purchaser. The obligation of
the Purchaser to consummate the transaction contemplated hereby shall be
subject to the satisfaction, on or before the Closing Date, of all of the
following conditions unless expressly waived in writing by the Purchaser:
(a) Representations and Covenants. All representations and
warranties of the Shareholder and the Company contained in this
Agreement shall be true in all material respects on and as of the
Closing Date as if such representations and warranties were made on and
as of such date (except to the extent any such representation or
warranty is made as of a specified date), and the Shareholder and the
Company shall have performed all agreements and covenants to be
performed by the Shareholder and the Company on or prior to the Closing
Date, and the Purchaser shall have received a certificate dated the
Closing Date, signed by the Shareholder and the Company, to the effect
that such is the case.
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(b) Opinion of Counsel. The Purchaser shall have received the
opinion of Xxxx & Heard, P.C., counsel for the Shareholder and the
Company, dated the Closing Date, substantially in the form of Exhibit
"A" attached hereto.
(c) No Damage or Destruction. Prior to the Closing Date,
there shall not have occurred any casualty to any facility, property,
equipment or inventory owned or used by the Company as a result of which
either the monetary amount of damage or destruction aggregates five (5%)
percent or more of the aggregate book value shown on the books of
account of the entire facilities, properties, equipment and inventory of
the Company, or is more than $50,000, and such loss shall not be
substantially covered by valid, existing insurance underwritten by
responsible insurers.
(d) No Material Adverse Changes. The Shareholder shall have
delivered to the Purchaser his certificate stating that there has been
no material adverse change in the business, operations, financial
condition or properties of the Company since the date of the most recent
Company's Financial Statements (December 31, 1997).
(e) Absence of Litigation. No litigation, governmental
action, insolvency, receivership or other proceeding shall have been
threatened, asserted or commenced with respect to the transaction
contemplated herein.
(f) Employment Agreement. The Shareholder shall have entered
into an Employment Agreement with the Company in substantially the form
of Exhibit "B" hereto.
(g) Right of First Refusal and Put Agreement. The Purchaser
and the Shareholder shall have entered into a Right of First Refusal and
Put Agreement substantially in the form of Exhibit "C" hereto (the "Put
Agreement").
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(h) Consents. The Shareholder and the Company shall have
obtained all approvals and consents which must be obtained in order to
effectuate the transaction contemplated hereby and to satisfy the terms
and conditions of this Agreement.
(i) Southtrust Bank, N.A. Consent or Payoff. (A) Southtrust
Bank, N.A. ("Southtrust") shall have consented to the transaction
contemplated hereby on such terms as are satisfactory to the Purchaser,
and shall have released the Shareholder as a personal guarantor of the
Company's obligations to Southtrust, or (B) the Company's indebtedness
to Southtrust shall have been paid in full, and the Shareholder's
personal guarantee thereof shall have been released.
(j) Due Diligence. The Purchaser's due diligence
investigation of the Company as contemplated pursuant to Section 5(a)
hereof shall have been completed to the satisfaction of the Purchaser.
(k) Certified Resolutions. The Purchaser shall have received
resolutions of the Board of Directors of the Company, certified by the
Secretary or an Assistant Secretary of the Company, authorizing the
execution, delivery and performance of this Agreement.
7. Conditions to Obligations of the Shareholder. The obligation of
the Shareholder to consummate the transaction contemplated hereby shall be
subject to the satisfaction, on or before the Closing Date, of all of the
following conditions, unless expressly waived in writing by the Shareholder:
(a) Representations and Covenants. All representations and
warranties of the Purchaser contained in this Agreement shall be true in
all material respects on and as of the Closing Date as if such
representations and warranties were made on
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and as of such date and the Purchaser shall have performed all
agreements and covenants to be performed by it on or prior to the
Closing Date, and the Shareholder shall have received a certificate
dated the Closing Date, signed by the President or a Vice President of
the Purchaser, to the effect that such is the case.
(b) Opinion of Counsel. The Shareholder shall have received
the opinion of X. X. Xxxxxxx, III, General Counsel for the Purchaser,
dated the Closing Date, to the effect that:
(i) the Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Texas and has corporate power to carry on its business as it is
now being conducted;
(ii) each of this Agreement and the Put Agreement has been
duly authorized, executed and delivered by the Purchaser, and
(assuming valid execution and delivery by the other parties
hereto or thereto) is, or will be upon such execution, the valid
and binding obligation of the Purchaser in accordance with its
terms (except as otherwise limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors'
rights, and except that such counsel need not express an opinion
as to whether any covenant contained herein or therein is
specifically enforceable); and
(iii) to such counsel's knowledge, the consummation of the
transactions contemplated by this Agreement and the Put Agreement
will not result in the breach of or constitute a default under
the
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Articles of Incorporation or By-Laws of the Purchaser, or any
loan, credit or similar agreement or any court decree to which
the Purchaser is a party or by which the Purchaser or its
properties may be bound.
(c) Southtrust Bank, N.A. Consent or Payoff. (A) Southtrust
shall have consented to the transaction contemplated hereby on such
terms as are satisfactory to the Shareholder, and shall have released
the Shareholder as a personal guarantor of the Company's obligations to
Southtrust, or (B) the Company's indebtedness to Southtrust shall have
been paid in full, and the Shareholder's personal guarantee thereof
shall have been released.
(d) Employment Agreement. The Shareholder shall have entered
into an Employment Agreement with the Company in substantially the form
of Exhibit "B" hereto.
(e) Right of First Refusal and Put Agreement. The Purchaser
and the Shareholder shall have entered into the Put Agreement.
(f) Certified Resolutions. The Shareholder shall have received
resolutions of the Board of Directors of the Purchaser, certified by the
Secretary or an Assistant Secretary of the Purchaser, authorizing the
execution, delivery and performance of this Agreement.
8. The Closing. The execution and delivery of this Agreement and
the instruments, certificates and other documents required hereunder (the
"Closing") shall take place at the offices of Xxxx & Heard, 000 Xxxxxxxx
Xxxxxx, Xxxxxxxx, Xxxxxxx 00000, at 10:00 a.m. local time on February 3, 1998,
or at such other time and day or other location as may be mutually agreed by
the Purchaser and the Shareholder. The date and time of such execution and
delivery is herein called the "Closing
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Date". On the Closing Date, certificates representing the Shares shall be
delivered by the Shareholder against delivery of the Purchase Price pursuant to
Section 2 hereof, and Closing shall be deemed to have occurred when such
deliveries have been made by the Purchaser and the Shareholder in accordance
with the terms hereof.
9. Nature and Survival of Representations and Warranties.
(a) Nature of Statements. All statements contained in any
schedule or any certificate or other instrument delivered by or on
behalf of the Shareholder or the Purchaser pursuant to this Agreement or
in connection with the transactions contemplated hereby shall be deemed
representations and warranties made by the Shareholder or the Purchaser,
as the case may be.
(b) Survival of Representations and Warranties. All
representations, warranties, covenants, agreements and undertakings
contained herein or in any Schedule, certificate or other document shall
remain operative and in full force and effect, and shall survive the
Closing Date and the delivery of all consideration and documents
pursuant to this Agreement, and shall continue in effect for a period of
two (2) years after the Closing Date and, as to representations made by
the Shareholder concerning or affecting any tax liability of the
Company, until a date which is six (6) months after the statute of
limitations has run against the Federal, state and local government;
provided, however, that any such representation, warranty, covenant,
agreement or undertaking as to which a bona fide claim shall have been
asserted during such survival period shall continue in effect until such
time as such claim shall have been resolved in accordance with the terms
of this Agreement.
10. Indemnification by Shareholder and Related Matters.
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(a) Indemnification by Shareholder. Subject to Section 10(c)
hereof, the Shareholder agrees to defend, indemnify and hold harmless
the Purchaser and the Company, and their respective successors and
assigns, from, against and in respect of any and all loss or damage
resulting from:
(i) the breach by the Shareholder of any of the
warranties, representations, covenants, agreements or
undertakings contained herein;
(ii) any liability arising out of any and all actions,
suits, proceedings, claims, demands, judgments, costs and
expenses (including reasonable legal and accounting fees)
incident to any of the foregoing (collectively, the "Losses").
(b) Procedure for Making Claims. If and whenever the
Purchaser desires to claim indemnification by the Shareholder pursuant
to the provisions of this Section 10, the Purchaser shall promptly
deliver to the Shareholder a certificate signed by the Chairman of the
Board, President or Vice President of the Purchaser (the "Notice of
Claim") (i) stating that the Purchaser or the Company, their successors
and assigns, has paid or properly accrued losses, damages or expenses in
an aggregate stated amount to which the Purchaser is entitled to
indemnification pursuant to this Section 10, provided, however, such
notice shall be given prior to the payment of an indemnity item if
reasonable in light of the circumstances causing, or threatening to
cause, a loss, and (ii) specifying the individual items of loss, damage
or expense included in the amount so stated, the date each such item was
paid or properly accrued and the nature of the misrepresentation, breach
of warranty or claim to which
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such item is related, provided, however, failure to notify the
Shareholder shall relieve the Shareholder from liability only if he is
prejudiced thereby. The Shareholder shall have the right to defend any
claim by a third party at the expense of the Shareholder. The Purchaser
and the Company, as the case may be, shall provide to the Shareholder
prompt and complete disclosure of all pertinent information in the
possession of or available to the Purchaser or the Company and shall
extend full and timely assistance in the cooperation in the
investigation of the defense of the claim, suit or action, with respect
to which such indemnification is claimed. The Shareholder, in the
defense of any such suit, action or proceeding, shall not consent to the
entry of any judgment or decree except with the written consent of the
Purchaser and the Company, nor enter into any settlement (except the
written consent of the Purchaser and the Company) which does not include
as an unconditional term thereof the giving by the claimant or plaintiff
to the Purchaser and the Company of a release from every liability in
respect of such claim, suit, action or proceeding. In any defense of
any claim by a third party, the Purchaser and the Company shall have the
right (but shall not be obligated) to participate in such defense
through counsel of its own selection and at its own expense.
(c) Limitation on Indemnification. The Shareholder shall not
be required to indemnify the Purchaser or the Company against the
matters referred to in Section 10(a) hereof (except for the obligation
of the Shareholder to pay any tax liability pursuant to Section 4(f)(ii)
hereof) until the Losses incurred by the Company or the Purchaser with
respect to such matters exceed $20,000 in the aggregate, whereupon
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the Shareholder shall be required to indemnify the Purchaser and the
Company with respect to all such further matters in excess of such
$20,000 minimum.
11. Indemnification by the Purchaser and Related Matters.
(a) Indemnification by the Purchaser. The Purchaser agrees to
defend, indemnify and hold harmless the Shareholder, his respective
successors, assigns and personal representatives, from, against and in
respect of any and all loss or damage resulting from:
(i) the breach by the Purchaser of any of its warranties,
representations, covenants, agreements or undertakings contained
herein; and
(ii) any liability arising out of any and all actions,
suits, proceedings, claims, demands, judgments, costs and
expenses (including reasonable legal and accounting fees)
incident to any of the foregoing (collectively, the "Losses").
(b) Procedure for Making Claims. If and whenever the
Shareholder desires to claim indemnification by the Purchaser pursuant
to the provisions of this Section 11, the Shareholder shall promptly
deliver to the Purchaser a certificate signed by the Shareholder (the
"Notice of Claim") (i) stating that the Shareholder, his heirs, personal
representatives, successors or assigns, have paid or properly accrued
losses, damages or expenses in an aggregate stated amount to which the
Shareholder is entitled to indemnification pursuant to this Section 11,
and (ii) specifying the individual items of loss, damage or expense
included in the amount so stated, the date each such item was paid or
properly accrued and the nature of the misrepresentation,
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breach of warranty or claim to which such item is related, provided,
however, failure to notify the Purchaser shall relieve the Purchaser
from liability only if it is prejudiced thereby. The Purchaser shall
have the right to defend any claim by a third party at the expense of
the Purchaser. The Shareholder shall provide to the Purchaser prompt
and complete disclosure of all pertinent information in the possession
of or available to the Shareholder and shall extend full and timely
assistance in the cooperation in the investigation of the defense of the
claim, suit or action, with respect to which such indemnification is
claimed. The Purchaser, in the defense of any such suit, action or
proceeding, shall not consent to the entry of any judgment or decree
except with the written consent of the Shareholder nor enter into any
settlement (except the written consent of the Shareholder) which does
not include as an unconditional term thereof the giving by the claimant
or plaintiff to the Shareholder of a release from every liability in
respect of such claim, suit, action or proceeding. In any defense of
any claim by a third party, the Shareholder shall have the right (but
shall not be obligated) to participate in such defense through counsel
of his own selection and at his own expense.
12. Expenses. The Shareholder and the Purchaser shall pay his or its
own expenses (including without limitation counsel and accounting fees and
expenses) incident to the preparation and carrying out of this Agreement and
the consummation of the transactions contemplated hereby.
13. Notices. All notices, demands and requests which may be given or
which are required to be given by either party to the other, and any exercise
of a right of termination provided by this Agreement, shall be in writing and
shall be deemed effective when either: (1) personally delivered to the intended
recipient; (2) sent by certified or registered mail, return receipt requested,
addressed to
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the intended recipient at the address specified below; (3) delivered in person
to the address set forth below for the party to which the notice was given; (4)
deposited into the custody of a nationally recognized overnight delivery
service such as Federal Express Corporation, Xxxxx or Purolator, addressed to
such party at the address specified below; or (5) sent by facsimile, telegram
or telex, provided that receipt for such facsimile, telegram or telex is
verified by the sender and followed by a notice sent in accordance with one of
the other provisions set forth above. Notices shall be effective on the date
of delivery or receipt, of, if delivery is not accepted, on the earlier of the
date that delivery is refused or three (3) days after the date the notice is
mailed. For purposes of this Paragraph, the addresses of the parties for all
notices are as follows (unless changes by similar notice in writing are given
by the particular person whose address is to be changed):
(a) if to the Shareholder, to Van P. Finger, C/O Precision IBC,
Incorporated, XX Xxx 0000, Xxxxxxxx, Xxxxxxx 00000-0000; Fax 334-990-
6787;
With a copy to Xxx X. Xxxx, Xxxx & Heard, P.C., 000 Xxxxxxxx
Xxxxxx, XX Xxx 0000, Xxxxxxxx, Xxxxxxx 00000; Fax (000) 000-0000;
(b) if to the Company, to Precision IBC, Incorporated, XX Xxx
0000, Xxxxxxxx, Xxxxxxx 00000-0000; Fax 000-000-0000;
(c) or if to the Purchaser, to Crown Croup, Inc., 0000 Xxxxx
XxxXxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000; Attention: Xxxxxx
X. XxXxxxxx, President; Fax (000) 000-0000;
With a copy to X. X. Xxxxxxx, III, Executive Vice President and
General Counsel, Crown Croup, Inc., 0000 Xxxxx XxxXxxxxx Xxxxxxxxx,
Xxxxx 000, Xxxxxx, Xxxxx 00000; Fax (000) 000-0000.
Any party hereto may designate a different address by written notice given to
the other parties.
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14. Satisfaction of Conditions; Termination.
(a) Best Efforts to Satisfy Conditions. The Shareholder and
the Company agree to use their best efforts to bring about the
satisfaction of the conditions specified in Section 6 hereof, and the
Purchaser agrees to use its best efforts to bring about the satisfaction
of the conditions specified in Section 7 hereof.
(b) Termination. This Agreement may be terminated, without
liability on the part of any party hereto to any other party hereto, by:
(i) the Purchaser, if a material default shall be made by
the Shareholder or the Company in the observance or in the due
and timely performance by the Shareholder or the Company of any
of the covenants of the Shareholder or the Company herein
contained, or if there shall have been a material breach by the
Shareholder or the Company of any of the warranties and
representations of the Shareholder or the Company herein
contained, or if the conditions of this Agreement to be complied
with or performed at or before the Closing shall not have been
complied with or performed at the time required for such
compliance or performance and such non-compliance or non-
performance shall not have been waived by the Purchaser, or if
the Closing shall not have occurred on or before February 28,
1998; or
(ii) the Shareholder, if a material default shall be made
by the Purchaser in the observance or in the due and timely
performance by the Purchaser of any of the covenants of the
Purchaser herein
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contained, or if there shall have been a material breach by the
Purchaser of any of its warranties and representations herein
contained, or if the conditions of this Agreement to be complied
with or performed by the Purchaser at or before the Closing shall
not have been complied with or performed at the time required for
such compliance or performance and such non-compliance or non-
performance shall not have been waived by the Shareholder, or if
the Closing shall not have occurred on or before February 28,
1998.
In the event of termination by the Purchaser or the Shareholder as provided
above, written notice shall forthwith be given to the other parties.
15. Miscellaneous.
(a) Assignment. This Agreement may not be assigned by any
party hereto without the prior written consent of the other parties,
provided, however, the Purchaser shall have the right at any time prior
to Closing to assign this Agreement to a corporation wholly owned by the
Purchaser, so long as the Purchaser, by written agreement acceptable to
the Shareholder, agrees to guarantee the performance by such assignee of
the terms and provisions hereof. Subject to the foregoing, this
Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns and the
heirs, executors, administrators and personal representatives of the
Shareholder.
(b) Section and Paragraph Headings. The Section and Paragraph
headings of this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.
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(c) Amendment. This Agreement may be amended only by an
instrument in writing executed by the parties hereto.
(d) Entire Agreement. This Agreement and the exhibits,
Schedules, certificates and documents referred to herein constitute the
entire agreement of the parties, and supersede all understandings with
respect to the subject matter hereof.
(e) Knowledge. "Best knowledge" of a natural person means
actual knowledge of such natural person, and "best knowledge" of a
corporate person means actual knowledge of the directors, officers and
employees of such corporate person, in each case (unless otherwise
specifically set forth to the contrary) after reasonable inquiry and
investigation.
(f) Public Announcements. No publication and/or press release
of any nature shall be issued pertaining to this Agreement or the
transaction contemplated hereby without the prior written approval of
the Purchaser and the Shareholder, except as may be required by law.
(g) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
(h) Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS, AND
VENUE FOR ANY DISPUTE ARISING HEREUNDER SHALL BE IN DALLAS COUNTY,
TEXAS, AND THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE JURISDICTION OF
THE COURTS OF THE STATE OF TEXAS.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
as of the date and year first above written.
PURCHASER:
CROWN GROUP, INC.
By:
---------------------------
Xxxxxx X. XxXxxxxx, President
COMPANY:
PRECISION IBC, INCORPORATED
By:
---------------------------
Van P. Finger, President
SHAREHOLDER:
-------------------------------
VAN P. FINGER
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