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EXHIBIT 2
AGREEMENT FOR PURCHASE AND SALE OF STOCK
This agreement (the "Agreement") is entered into as of January
16, 1998, between ▇▇▇▇▇▇▇▇ Corporation, a Delaware corporation (the
"Buyer"), and the stockholders of Industrial Steel Treating Co., a
California corporation (the "Company") set forth on the signature
page(s) of this Agreement (the "Sellers").
The Sellers wish to sell all of the issued and outstanding
shares of capital stock (the "Stock") of the Company to Buyer and Buyer
is willing to buy the Stock on the terms and conditions set forth in
this Agreement.
The Buyer and the Sellers agree as set forth below.
1. Purchase and Sale; Purchase Price; Closing.
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(a) On the Closing Date (as hereinafter defined) the Sellers
will sell, transfer and assign to Buyer and Buyer will purchase all of
the Stock.
(b) The purchase price for the Stock to be paid at Closing
will be $11,250,000, less any interest-bearing debt of the Company
("Debt") on the Closing Date.
(c) On the Closing Date, the Sellers shall deliver to Buyer
certificates evidencing all of the Stock, endorsed in blank or
accompanied by executed stock powers, and Buyer shall deliver certified
or cashier's checks or wire transfers in payment of the purchase price,
payable to the order of the Sellers, in the amounts shown on the
signature page(s) of this Agreement (reduced proportionately for any
Debt). Upon such payment, Buyer shall be returned all sums held under
the Escrow Agreement dated December 2, 1997 to which Buyer and the
Company are parties. The closing shall be held at the office of ▇▇▇▇▇ &
▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m., local time, on January 16, 1998 (the
"Closing Date") but shall be effective as of January 5, 1998.
2. Representations and Warranties of Sellers.
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(a) ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, Ty ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ jointly and severally represent and warrant
to the Buyer that (i) the Company is a corporation duly organized and
validly existing under the laws of the State of California, with full
power and authority to own its assets and to operate its business as the
same is now being operated; (ii) the Company has no subsidiaries;
(iii) on the date hereof, the Company's authorized capital stock
consists of 10,000 shares of non-voting common stock and 100 shares of
voting common stock, of which 2,868 shares of non-voting and 10 shares
of voting common stock are issued and outstanding, and there are no
outstanding options, warrants or other rights to purchase any stock or
any other capital stock of the Company; and (iv) all shares constituting
the Stock have been validly authorized and issued and are fully paid and
non-assessable.
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(b) Each Seller severally represents and warrants to the
Buyer that (i) he, she or it is the owner of record and beneficially of
the number of shares of the Stock set forth opposite his, her or its
name on the signature page hereof and that delivery of certificates for
such Stock will vest in Buyer good and valid title to such Stock, free
and clear of any liens, claims, encumbrances or security interests; and
(ii) the execution and performance by such Seller of this Agreement will
not result in a breach of or constitute a default under any agreement or
instrument to which such Seller is a party or by which such Seller is
bound.
3. Representations and Warranties of Buyer. The Buyer
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represents and warrants as follows to the Sellers:
(a) The Buyer is a corporation duly organized and validly
existing under the laws of the State of Delaware.
(b) Prior to the Closing Date, this Agreement and the
transactions by the Buyer contemplated herein will have been duly and
validly authorized by all necessary corporate action on the part of the
Buyer.
(c) The execution and performance of this Agreement by the
Buyer will not result in a breach of or constitute a default under the
certificate of incorporation or bylaws of the Buyer, or any agreement or
instrument to which the Buyer is a party or by which it is bound.
4. Conditions of Buyer's Obligations. The obligations of
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the Buyer hereunder are subject to satisfaction on or prior to the
Closing Date of the following conditions:
(a) The Buyer shall have received a certificate signed by
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, Ty ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, which shall state (i) the amount of Debt, (ii) that since
October 31, 1997, the Company has not declared or paid any dividend or
made any other distribution on or with respect to its capital stock
except distributions to pay taxes not exceeding $60,000 in the aggregate
and the distribution of a life insurance policy and (iii) that since
October 31, 1997, the Company has not paid any bonus other than those
accrued through October 31, 1997 as reflected in the Company's financial
statements at that date, or increased the rate of compensation of any
employee (other than increases aggregating no more than $1,000 per
month) or entered into any employment contract.
(b) ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ shall have entered into a Consulting and
Non-Competition Agreement with the Buyer substantially in the form of
schedule 4(b) attached hereto.
(c) The spouses of the Sellers shall have signed and
delivered to Buyer a Spousal Consent, substantially in the form of
schedule 4(c) attached hereto, to the execution and delivery of this
Agreement.
(d) The Buyer shall have received an opinion of ▇▇▇▇▇ &
▇▇▇▇▇▇ LLP, counsel for the Company, to the effect that:
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(i) The Company is a corporation validly organized
and validly existing in good standing under the laws of the
State of California, with corporate power to own its assets
and conduct its business.
(ii) The number of authorized and issued shares of
capital stock of the Company is as represented in section 2(a)
of this Agreement and said shares have been validly authorized
and are validly issued, fully paid and non-assessable.
(iii) Such counsel is not aware, based in part
upon a factual certificate of an officer of the Company, of
any claim, action, suit or proceeding pending or threatened
against the Company before any court or governmental agency
other than as specified therein.
5. Conditions of Sellers' Obligations. The obligations of
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the Sellers are subject to the conditions that the representations and
warranties set forth in section 3 hereof shall be true and correct on
the Closing Date as though made on and as of such date, and that the
Buyer shall have performed all agreements required to be performed by it
on or prior to such date. The Sellers shall have received a certificate
to this effect signed by an officer of the Buyer.
6. Additional Agreements of Sellers.
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(a) Between the date hereof and the Closing Date, Sellers
shall use their reasonable efforts to preserve intact the business
organization of the Company, to keep available to Buyer the services of
the Company's present employees, and to preserve its business
relationships with suppliers, customers, and others with whom it has
business dealings.
(b) Between the date hereof and the Closing Date, the Seller
will cause the Company to afford to representatives of Buyer access,
after reasonable notice, at reasonable times during normal business
hours, to the Company's facilities, books and records.
7. Survival. The representations and warranties set forth
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in Sections 2, 3 and 8 shall survive the consummation of the
transactions herein contemplated.
8. Brokerage. Each party hereto represents that such party
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has incurred no liabilities for finders' or brokers' fees in connection
with the transactions provided for herein.
9. Expenses. Each of the parties to this Agreement shall
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pay the fees of such party's attorneys and such party's other expenses
in connection with this Agreement, except that the fees and costs of TG
Business Consulting and ▇▇▇▇▇ & ▇▇▇▇▇▇ LLP shall be paid by the Company
(not to exceed $130,000 in the aggregate).
10. Nondisclosure. Without the consent of all parties
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hereto, no party hereto will, prior to the Closing Date, disclose this
Agreement or any transaction contemplated hereby to the public or to any
third party except to such party's attorneys and accountants, and
officers, directors and employees of the Company and Buyer and except as
may be required by law.
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11. Entire Agreement; Binding Effect; etc. This Agreement
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(including any other agreements entered into pursuant to the terms
hereof) constitutes the final and complete agreement of the parties,
supersedes all prior oral or written agreements, and shall be binding
upon and inure to the benefit of the parties hereto and their respective
heirs, personal representatives, successors, and assigns. This
Agreement may be amended or modified only in a writing signed by the
parties. If any provision of this Agreement is invalidated, it shall
not operate to invalidate any other provision. This Agreement may be
signed in two or more counterparts, each of which shall constitute an
original hereof.
12. Notices. All notices given hereunder shall be in
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writing. Notices to Sellers shall be directed to them c/o ▇▇▇▇ ▇.
▇▇▇▇▇▇▇, Industrial Steel Treating Co., ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (phone, ▇▇▇-▇▇▇-▇▇▇▇; fax, ▇▇▇-▇▇▇-▇▇▇▇).
Notices to Buyer shall be directed to it at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention Chief Executive Officer
(phone, ▇▇▇-▇▇▇-▇▇▇▇; fax, ▇▇▇-▇▇▇-▇▇▇▇). Any party may designate a
new address by notice so given. Notices shall be effective when
delivered.
13. Governing Law. This Agreement shall be governed by and
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construed in accordance with the internal law of the State of Illinois
applicable to contracts made and to be performed in that state.
The parties are executing this Agreement as of the date shown
in the first paragraph hereof.
▇▇▇▇▇▇▇▇ CORPORATION
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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(Vice) President
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SELLERS
Name Signature No. of Shares Purchase Price
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▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇ 42.00 $ 164,175.94
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▇▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ 451.67 1,765,555.89
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 903.33 3,531,072.69
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▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ 13.00 50,816.36
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▇▇▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ 13.00 50,816.36
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▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇ ▇▇▇▇▇▇▇ 451.67 1,765,555.89
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▇▇▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ 13.00 50,816.36
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 451.67 1,765,555.89
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▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇ 13.00 50,816.36
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▇▇▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ 13.00 50,816.36
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Ty ▇▇▇▇▇ ▇▇▇▇▇▇▇ /s/ Ty ▇▇▇▇▇ ▇▇▇▇▇▇▇ 451.67 1,765,555.89
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▇▇▇▇ ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 42.00 164,175.94
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▇▇▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ 6.00 23,453.72
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▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ 13.00 50,816.36
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Total 2878.01 $11,250,000.00
