EXHIBIT 1
STOCK PURCHASE AGREEMENT
------------------------
This Stock Purchase Agreement ("Agreement") is made and entered into effective
as of April 6, 1999, between Xxxxxxx Xxxx Xxxxxxx ("Shareholder") and Xxxx X.
Xxxx ("Purchaser").
Recitations
-----------
Shareholder owns 1,445,481 shares ("Shares") of the common stock of H.D. Vest,
Inc., a Texas corporation ("the Company").
The Shareholder desires to sell and Purchaser desires to buy the Shares of the
Company.
NOW, THEREFORE, in consideration of the mutual representations, warranties,
conditions and covenants contained herein, the parties agree as follows:
1. Sale and Purchase. Subject to the terms and conditions of this Agreement,
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the Shareholder agrees to sell and Purchaser agrees to purchase the Shares for
the consideration specified in Section 2 of this Agreement.
2. Purchase Price. The purchase price for the Shares is $10,000,000 and
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assumption of Shareholder's Note with Frost National Bank with an approximate
remaining balance of $442,143 ("Frost Note") for a total consideration of
$10,442,143. The consideration for the purchase of the Shares shall be paid as
follows:
(a) A $10,000,000 promissory note ("Note") payable to the Shareholder as
described in Exhibit A.
(b) An assumption agreement for the Frost Note.
3. Price Adjustment. If Purchaser were to sell the Shares at a price
----------------
exceeding $10.543394 per share, such excess will be called the "Incremental
Increase". If the sale of the Shares should occur within 6 months of the Closing
as described in this Agreement, then Shareholder shall be entitled to receive
100% of such Incremental Increase. If such sale should occur between 6 months
and 1 year of the Closing, then Shareholder shall be entitled to receive 80% of
such Incremental Increase. If such sale should occur between year 1 and year 2
of the Closing, then Shareholder will be entitled to receive 50% of such
Incremental Increase. If the sale of the Shares should occur 2 years after
Closing, then Shareholder will not be entitled to any Incremental Increase. Any
payment pursuant to this Section 3. shall be made to Shareholder at the same
time and manner by which Purchaser shall receive payment of the purchase price
for the Shares.
4. Closing.
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(a) Closing of this purchase and sale of the Shares (the "Closing") shall
take place on or before April 6, 1999 at the offices of H.D. Vest,
Inc., 0000 X. Xxxxx Xxxxxxx
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161, Fourth Floor, Irving, Texas 75038, or at such other time, date
and place as may be mutually agreed to by the parties.
(b) At the Closing and upon delivery of the documents provided in Sections
4(c), Shareholder shall deliver to the Escrow Agent the following:
i. Certificates representing the Shares duly endorsed in blank
by Shareholder, or accompanied by a stock power duly
endorsed in blank;
(c) At the Closing and upon delivery of the documents provided in Sections
4(b), the Purchaser shall deliver to Shareholder the following:
i. The Note in the amount of $10,000,000;
ii. A Stock Pledge Agreement as described in Exhibit B securing
the $10,000,000 Note;
iii. An assumption agreement for the Frost Note.
(d) The Shares delivered in 4(b)(i) shall be held in escrow by the Escrow
Agent pursuant to the terms of the Security Agreement described in
4(c)(ii).
Upon final payment of the Note, the Escrow Agent will release the
stock to Purchaser.
The Escrow Agent shall be The Frost National Bank. Shareholder and
Purchaser indemnify and release Escrow Agent from any claims arising
pursuant to this Agreement. In the event of any dispute between any
party, Escrow Agent may (i) resign, (ii) take no further actions as
Escrow Agent, and (iii) deliver as instructed any items held in escrow
upon receipt of joint instructions by the parties or a judicial order.
Notwithstanding the indemnity and release of Escrow Agent, Escrow
Agent is liable for any act of gross negligence or intentional
misconduct.
5. Representations and Warranties of Shareholder. Shareholder represents and
---------------------------------------------
warrants to the Purchaser as follows:
(a) Shareholder is the lawful and beneficial owner of record of the
Shares, free and clear of all liens, encumbrances and claims except
for the Frost Note.
(b) Delivery of the Shares at the Closing in accordance with this
Agreement will vest good and marketable title to the Shares in the
Purchaser, free and clear of all liens, encumbrances and claims except
for the Frost Note.
(c) Shareholder has the full power and right to enter into and perform
this Agreement without the consent of any other person, entity or
governmental agency; this
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Agreement has been duly executed and delivered by Shareholder and
constitutes a valid and binding agreement of Shareholder in accordance
with its terms.
6. Governing Law. This Agreement is being executed and delivered and is
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intended to be performed in the State of Texas with venue in Dallas County,
Texas. The substantive laws of Texas shall govern the validity, construction,
enforcement and interpretation of this Agreement, unless otherwise specified
herein.
7. Invalid Provisions. If any provision of this Agreement is held to be
------------------
illegal, invalid or unenforceable under present or future laws effective during
the term hereof, such provision shall be fully severable; this Agreement shall
be construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part hereof, and the remaining provisions hereof shall
remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance herefrom. Furthermore,
in lieu of such illegal, invalid or unenforceable provision there shall be added
automatically as a part of this Agreement a provision as similar in terms to
such illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable.
8. Entirety and Amendments. This instrument and the instruments referred to
-----------------------
herein embody the entire agreement between the parties, supersedes all prior
agreements and understandings, if any, relating to the subject matter hereof,
and may be amended only by an instrument in writing executed jointly by the
Shareholder and Purchaser, and supplemented only by documents delivered or to be
delivered in accordance with the express terms hereof.
9. Multiple Counterparts. This Agreement may be executed in a number of
---------------------
identical counterparts, each of which constitute collectively, one agreement;
but in making proof of this Agreement, it shall not be necessary to produce or
account for more than one counterpart.
10. Notices. All notices, requests, demands and other communications required
-------
or permitted hereunder shall be in writing and shall be deemed to have been duly
given when delivered by hand or mailed, certified mail, return receipt
requested, with postage paid:
a. If to Shareholder, to:
Xxxxxxx Xxxx Xxxxxxx
0000 Xxxxxxx Xxxxx
Xxxxxx Xxxxx, Xxxxx 00000
or to such other person or address as Shareholder shall furnish to Purchaser in
writing.
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b. If to Purchaser, to:
Xxxx X. Xxxx
0000 X. Xxxxx Xxxxxxx 000
Xxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
or to such other person or address as Purchaser shall furnish to Shareholder in
writing.
11. Parties Bound. This Agreement shall be binding upon, and inure to the
-------------
benefit of, each of the parties hereto to the extent applicable to them and
their respective successors and assigns, heirs, beneficiaries and legal
representatives.
12. Survival Beyond Closing. All agreements set forth herein shall survive the
-----------------------
date of Closing.
IN WITNESS WHEREOF, the parties have executed this Agreement this 6th day
of April, 1999.
SHAREHOLDER:
/s/ Xxxxxxx Xxxx Xxxxxxx
------------------------------
XXXXXXX XXXX XXXXXXX
PURCHASER:
s/ Xxxx X. Xxxx
------------------------------
XXXX X. XXXX
ESCROW AGENT:
The Frost National Bank
By: /s/ Xxxxx Xxxxxxx
------------------------------
Its: SVP
----------------------
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EXHIBIT A
NOTE
(Secured by Stock Pledge Agreement)
Date: 6th day of April, 1999
Maker: Xxxx X. Xxxx
Maker's Mailing Address (including county):
0000 X. Xxxxx Xxxxxxx 161
Fourth Floor
Irving, Dallas County, Texas
Payee: Xxxxxxx Xxxx Xxxxxxx
Place for Payment (including county):
0000 Xxxxxxx Xxxxx
Xxxxxx Xxxxx, Xxxxxx Xxxxxx, Xxxxx
Principal Amount: $10,000,000
Annual Interest Rate on Unpaid Principal from Date:
The unpaid principal of this Note from time to time outstanding shall
bear interest prior to maturity at the rate of five and fifty-three
hundredths percent (5.53%) per annum for payments 1 through 36 as
described below and six percent (6.0%) per annum for payments 37
through 135.
Annual Interest Rate on Matured, Unpaid Amounts:
Twelve percent (12%) per annum.
Terms of Payment (principal and interest):
One hundred thirty-five (135) consecutive monthly payments beginning
on May 1, 1999 with payments one through thirty-six in the amount of
$46,083.33; with payments thirty-seven through seventy-two in the
amount of $100,000.00; with payments seventy-three through one hundred
thirty-four in the amount of
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$150,000.00; and payment one hundred thirty-five in the amount of
$73,396.73. Each monthly payment is due and payable the first day of
each month and shall be considered late and unpaid following the 15th
of such month. Principal and interest shall be allocated in accordance
with the amortization schedule attached as Attachment A.
Collateral:
1,445,481 shares of H.D. Vest, Inc. common stock represented by the
Certificates listed on Schedule 1.
Maker promises to pay to the order of Payee at the place for payment and
according to the terms of payment the principal amount plus interest at the
rates stated above. All unpaid amounts shall be due by the final scheduled
payment date.
Maker may at any time prepay this Note without penalty.
If Maker defaults in the payment of this Note or in performance of any
obligation in any instrument securing or collateral to it, including the Stock
Purchase Agreement, Stock Pledge Agreement, Assumption Agreement and Escrow
Agreement dated as of this date, and the default continues after Payee gives
Maker notice of the default and the default is not cured within ninety (90) days
that the notice is sent by certified return receipt mail, then Payee may declare
the unpaid principal balance and earned interest on this Note immediately due.
Except for the notice requirement, Maker waives all other demands for payment,
presentations for payment, notices of intention to accelerate maturity, notices
of acceleration of maturity, protests, and notices of protest, to the extent
permitted by law.
If this Note or any instrument securing or collateral to it is given to an
attorney for collection or enforcement, or if suit is brought for collection or
enforcement, or if it is collected or enforced through probate, bankruptcy or
other judicial proceeding, then Maker shall pay Payee all costs of collection
and enforcement, including reasonable attorney's fees and court costs, in
addition to other amounts due.
Interest on the debt evidenced by this Note shall not exceed the maximum
amount of nonusurious interest that may be contracted for, taken, reserved,
charged, or received under law; any interest in excess of that maximum amount
shall be credited on the principal of the debt or, if that has been paid,
refunded. On any acceleration or required or permitted prepayment, any such
excess shall be canceled automatically as of the acceleration or prepayment or,
if already paid, credited on the principal of the debt or, if the principal of
the debt has been paid, refunded. This provision overrides other provisions in
this and all other instruments concerning the debt.
Notwithstanding anything herein to the contrary, no recourse shall be had,
whether by levy or execution or otherwise, for the payment of any amount due or
the performance of any
2
obligations under this Note against Maker, and Payee shall not enforce any
deficiency judgment against Maker.
The Place of Payment may be changed by Payee giving Maker written notice of
such change. This Note is being executed and delivered and is intended to be
performed in the State of Texas with venue in Dallas County, Texas. The
substantive laws of Texas shall govern the validity, construction, enforcement
and interpretation of this Agreement, unless otherwise specified herein.
All notices, requests, demands and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given when delivered by hand or mailed, certified mail, return receipt
requested, with postage paid:
a. If to Payee, to:
Xxxxxxx Xxxx Xxxxxxx
0000 Xxxxxxx Xxxxx
Xxxxxx Xxxxx, Xxxxx 00000
or to such other person or address as Payee shall furnish to Maker in writing:
b. If to Maker, to:
Xxxx X. Xxxx
0000 X. Xxxxx Xxxxxxx 000
Xxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
or to such other person or address as Maker shall furnish to Payee in writing.
When the context requires, singular nouns and pronouns include the plural.
-------------------------------------
Xxxx X. Xxxx
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EXHIBIT B
STOCK PLEDGE AGREEMENT
----------------------
THIS STOCK PLEDGE AGREEMENT (this "Agreement") is made and entered into
this 6th day of April, 1999, by and between Xxxx X. Xxxx ("Pledgor"), Xxxxxxx
Xxxx Xxxxxxx ("Secured Party") and The Frost National Bank ("Escrow Agent").
1. Pledge. Pledgor hereby grants to Secured Party a security interest in the
------
following described corporate stock:
1,445,481 shares of the common stock, of H.D. Vest, Inc.
represented by Certificates described on the attached Schedule 1, together
with a stock power for each Certificate duly endorsed in blank and
herewith delivered to Escrow Agent ("Pledged Shares"). Escrow Agent shall
hold the Pledged Shares as security for payment of the Note as described in
this Agreement.
2. Secured Indebtedness. This Agreement shall secure all indebtedness
--------------------
incurred by Pledgor under the provisions of that certain promissory note
(the "Note") of even date herewith made by Pledgor to Secured Party in the
original principal amount of Ten Million and No/100 Dollars
($10,000,000.00), bearing interest at the rate of five and fifty-three
hundredths percent (5.53%) per annum for payments 1 through 36 and six
percent (6.0%) for payments 37 through 135 as described in the Note, with
the first such installment being due and payable on the first day of April
1999, and with an installment on the first of each succeeding month until
the Note is paid in full.
3. Release of Pledged Shares. After 36 months from the date of this Agreement
-------------------------
and each year for 3 years thereafter, Escrow Agent shall release each year
to Pledgor 50,000 shares of H.D. Vest, Inc. common stock which constitutes
part of the Pledged Shares. After 72 months from the date of this
Agreement and each year for 3 years thereafter, Escrow Agent shall release
each year from the Pledged Shares an additional 100,000 shares of H.D.
Vest, Inc. common stock. After 108 months from the date of this Agreement
until the Note is paid, Escrow Agent shall release each year from the
Pledged Shares an additional 150,000 shares of H.D. Vest, Inc. common
stock. Notwithstanding the provisions of paragraph 3 to the contrary,
Escrow Agent shall not release any Pledge Shares if Escrow Agent is
notified in writing that there exists an uncured Event of Default.
4. Dividends. During the term of this Agreement, all dividends and other
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amounts paid upon Pledged Shares shall belong to Pledgor. In the Event of
Default, any dividends will be
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paid to Secured Party with such payments applied to the payment deficiency
causing the Event of Default.
5. Voting Rights. During the term of this Agreement, and so long as Pledgor
-------------
is not in default in the performance of any of the terms of this Agreement
including the monthly installments, Pledgor shall have the right to vote
the Pledged Shares on all corporate questions, and Secured Party shall,
upon request, execute due and timely proxies and authorizations reasonably
required to confirm the voting rights of Pledgor.
6. Adjustments. In the event that, during the term of this Agreement,
-----------
reclassification, readjustment or other change is declared or made in the
capital structure of H.D. Vest, Inc., all new, substituted and additional
shares, or other securities, issued by reason of any such change shall be
held by Escrow Agent under the terms of this Agreement in the same manner
as the Pledged Shares.
7. Payment of the Note. Upon payment at maturity of the principal and
-------------------
interest of the Note, Escrow Agent shall transfer to Pledgor all the
remaining Pledged Shares and all rights received by Secured Party as a
result of this pledge to Secured Party of the Pledged Shares.
8. Events of Default. Occurrence of any of the following events (each such
-----------------
event referred to herein as an "Event of Default") shall, at the option of
Secured Party, constitute a default hereunder:
(a) Failure of Pledgor to pay after any cure period the indebtedness
secured by this Agreement;
(b) Default by Pledgor of the Note or this Agreement;
(c) Sale by Pledgor of the Pledged Shares;
(c) Any pledge by Pledgor of the Pledged Shares to any party other than
Secured Party without the prior written consent of the Secured Party;
(d) Any pledge by Pledgor of the Pledged Shares to any party other than
Secured Party.
(e) Pledgor making an assignment for the benefit of creditors, or
admitting in writing its inability to pay its debts; or having a
receiver or trustee for it or substantially all of its property
appointed and, if appointed without its consent, not to be discharged
within ninety (90) days; or having proceedings under any law relating
to bankruptcy, insolvency or the reorganization or relief of debtors
instituted by or against it and, if contested by it, not to be
dismissed or stayed within ninety (90) days; or having any writ of
attachment or execution of any similar process issued or levied
against it or any significant part of its property which is not
released, stayed, bonded or vacated within ninety (90) days after its
issue or levy.
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(f) Failure to pay when due all fees due to Escrow Agent.
(g) Default by Pledgor under the Assumption Agreement relating to a
$455,000 promissory note executed by Shareholder payable to The Frost
National Bank.
9. Rights of Secured Party Upon Event of Default. On an Event of Default, the
---------------------------------------------
Secured Party may foreclose the Pledged Shares after giving notice to
Pledgor and Escrow Agent and Pledgor fails to object within ten (10) days
of receipt of such notice. The Secured Party may then require Escrow Agent
to deliver the Pledged Shares in satisfaction of Pledgor's obligation.
10. Assignment. Secured Party may assign, sell or convey her interest in the
----------
Note and this Agreement.
11. Governing Law. This Agreement is being executed and delivered and is
-------------
intended to be performed in the State of Texas with venue in Dallas County,
Texas. The substantive laws of Texas shall govern the validity, construction,
enforcement and interpretation of this Agreement, unless otherwise specified
herein.
12. Notices. All notices, requests, demands and other communications required
-------
or permitted hereunder shall be in writing and shall be deemed to have been duly
given when delivered by hand or mailed, certified mail, return receipt
requested, with postage paid:
a. If to Secured Party, to:
Xxxxxxx Xxxx Xxxxxxx
0000 Xxxxxxx Xxxxx
Xxxxxx Xxxxx, Xxxxx 00000
or to such other person or address as Secured Party shall furnish to Pledgor in
writing.
b. If to Pledgor, to:
Xxxx X. Xxxx
0000 X. Xxxxx Xxxxxxx 000
Xxxxxx Xxxxx
Xxxxxx, Xxxxx00000
or to such other person or address as Pledgor shall furnish to Secured Party in
writing.
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c. If to Escrow Agent, to:
The Frost National Bank
0000 X. Xxxxx
Xxxx Xxxxx, Xxxxx 00000
or to such other person or address as Escrow Agent shall furnish to Pledgor and
Secured Party in writing.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
PLEDGOR:
-----------------------------------------
Xxxx X. Xxxx
SECURED PARTY:
-----------------------------------------
Xxxxxxx Xxxx Xxxxxxx
ESCROW AGENT
The Frost National Bank
By:
--------------------------------------
Its:
----------------------------------
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SCHEDULE 1
TO STOCK PLEDGE AGREEMENT
Cert. # # of Shares
------ -----------
1 50
64 79
88 50
151 575
153 79
268 400
1821 100,000
1901 117,198
1902 81,000
2011 266,666
2160 287,041
2161 111,858
2162 11,157
2325 186,340
2326 274,013
2447 8,012
2479 363
4667 600
1,445,481
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ASSUMPTION AGREEMENT
--------------------
This Assumption Agreement ("Agreement") is made and entered into effective as of
April 6, 1999, between Xxxxxxx Xxxx Xxxxxxx ("Shareholder") and Xxxx X. Xxxx
("Purchaser").
Recitations
-----------
Shareholder has executed a promissory note (the "Note") payable in the original
principal amount of $455,000 to The Frost National Bank (the "Bank"). The terms
of the Note are twenty-four (24) equal monthly payments of $10,000 per month,
with the final and unpaid balance of principal and interest due on December 10,
2000.
Purchaser has agreed to make payments on this Note pursuant to a Stock Purchase
Agreement ("Stock Purchase Agreement") between Purchaser and Shareholder dated
as of April 6, 1999.
NOW, THEREFORE, for good and valuable consideration, the parties agree as
follows:
1. Note Payments. Beginning with the installment payment due on April 10,
-------------
1999, Purchaser agrees to make all monthly payments due on the Note when due,
including but not limited to the final payment on the Note. Notwithstanding
anything herein to the contrary, no recourse shall be had, whether by levy or
execution or otherwise, for the payment of any amount due or the performance of
any obligations under this Agreement against Purchaser, and Shareholder shall
not enforce any deficiency judgment against Purchaser.
2. Security Agreement. Purchaser shall timely and fully perform all
------------------
obligations of Shareholder under each and every agreement between Shareholder
and The Frost National Bank, securing payment of the Note.
3. Shareholder Notification. Purchaser shall provide Shareholder a copy of
------------------------
each monthly payment sent to the Bank pursuant to the terms of this Agreement.
4. Payment Applications. The payments made pursuant to this Agreement are to
--------------------
discharge Purchaser's obligations pursuant to the Stock Purchase Agreement.
5. Additional Documents. The Stock Purchase Agreement and all documents
--------------------
referenced in the Stock Purchase Agreement are incorporated herein by reference.
6. Governing Law. This Agreement is being executed and delivered and is
-------------
intended to be performed in the State of Texas with venue in Dallas County,
Texas. The substantive laws of Texas shall govern the validity, construction,
enforcement and interpretation of this Agreement, unless otherwise specified
herein.
7. Invalid Provisions. If any provision of this Agreement is held to be
------------------
illegal, invalid or unenforceable under present or future laws effective during
the term hereof, such provision shall
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be fully severable; this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
and the remaining provisions hereof shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance herefrom. Furthermore, in lieu of such illegal, invalid or
unenforceable provision there shall be added automatically as a part of this
Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.
8. Entirety and Amendments. This instrument and the instruments referred to
-----------------------
herein embody the entire agreement between the parties, supersedes all prior
agreements and understandings, if any, relating to the subject matter hereof,
and may be amended only by an instrument in writing executed jointly by the
Shareholder and Purchaser, and supplemented only by documents delivered or to be
delivered in accordance with the express terms hereof.
9. Multiple Counterparts. This Agreement may be executed in a number of
---------------------
identical counterparts, each of which constitute collectively, one agreement;
but in making proof of this Agreement, it shall not be necessary to produce or
account for more than one counterpart.
10. Notices. All notices, requests, demands and other communications required
-------
or permitted hereunder shall be in writing and shall be deemed to have been duly
given when delivered by hand or mailed, certified mail, return receipt
requested, with postage paid:
a. If to Shareholder, to:
Xxxxxxx Xxxx Xxxxxxx
0000 Xxxxxxx Xxxxx
Xxxxxx Xxxxx, Xxxxx 00000
or to such other person or address as Shareholder shall furnish to Purchaser in
writing.
b. If to Purchaser, to:
Xxxx X. Xxxx
0000 X. Xxxxx Xxxxxxx 000
Xxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
or to such other person or address as Purchaser shall furnish to Shareholder in
writing.
11. Parties Bound. This Agreement shall be binding upon, and inure to the
-------------
benefit of, each of the parties hereto to the extent applicable to them and
their respective successors and assigns, heirs, beneficiaries and legal
representatives.
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IN WITNESS WHEREOF, the parties have executed this Agreement this _____ day
of April, 1999.
SHAREHOLDER:
--------------------------------------------
XXXXXXX XXXX XXXXXXX
PURCHASER:
--------------------------------------------
XXXX X. XXXX
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