EXHIBIT 2
STOCK PURCHASE AGREEMENT
The purchase by Elamex, S.A. de C.V.
of one hundred percent (100%) of the outstanding stock
of
Precision Tool, Die and Machine Company, Inc.
* * * * * * * * * *
July 15, 1999
* * * * * * * * * *
ARTICLE 1. DEFINITIONS 1
ARTICLE 2. TRANSFER AND DELIVERY OF SHARES 4
ARTICLE 3. CONDITIONS PRECEDENT TO CLOSING 4
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF ALL PARTIES 4
ARTICLE 5. SELLERS' REPRESENTATIONS AND WARRANTIES 8
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF ELAMEX 22
ARTICLE 7. COVENANTS OF BOTH PARTIES 23
ARTICLE 8. INDEMNITY 24
ARTICLE 9. NON-COMPETITION OF SHAREHOLDERS 29
ARTICLE 10.MISCELLANEOUS 30
1
THIS STOCK PURCHASE AGREEMENT is made as of the 15th day of July, 1999, by
and among PRECISION TOOL, DIE, AND MACHINE COMPANY, INC., a Kentucky
corporation, with its principal place of business at 0000 X. Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000 ("PRECISION"), Xxxxxx X. Xxxx, Xx. T/U/W-Trust B.,
Xxxxxx X. Xxxx, Xx., Xxxxxxx X. Xxxx, Xxxxxx X. Xxxx, Xx., Xxxxx X. Xxxx, and
the Xxxxxxx Xxxx, T/U/A fbo Xxxx Xxxx (collectively referred to herein as the
"SHAREHOLDERS") (PRECISION and the SHAREHOLDERS are sometimes collectively
referred to herein as the "SELLERS") and ELAMEX, S.A. de C.V., a Mexican
Corporation, whose principal place of business is Xxxxxxx Xxxxxxxxxxx 0000 Xxx.,
Xxxxxx Xxxxxx, Xxxxxx ("XXXXXX").
WITNESSETH
WHEREAS, SHAREHOLDERS will sell and ELAMEX will purchase 100% of the common
stock of PRECISION (the "Shares"), and PRECISION will continue to employ certain
officers currently engaged by PRECISION;
WHEREAS, the SHAREHOLDERS own 2,850 Shares, which represents 100% of the
issued and outstanding capital stock of PRECISION; and
WHEREAS, the parties have had previous discussions that are reflected in a
term sheet dated February 26, 1999 (the "Term Sheet");
NOW, THEREFORE, in consideration of the mutual agreements herein contained,
the parties hereby agree as follows:
ARTICLE 1. DEFINITIONS
Defined terms used in this Purchase Agreement will have, unless otherwise
specifically defined, the following meanings:
"Affiliate" means a corporation that is related to another corporation by
shareholdings or other means of control. It includes not only a parent or a
subsidiary but also corporations that are under common control.
"Ancillary Agreements" means each agreement in the form of an Exhibit to
the Transaction Agreement, including any annexes, attachments or exhibits to the
foregoing.
"Applicable Law" means, with respect to any Person, any domestic or
foreign, federal, state or local statute, law, ordinance, rule, administrative
action, regulation, order, writ, injunction, judgment, decree or other
requirement of any Governmental Authority, and any requirements imposed by
common law or case law, applicable to such Person or any of its Affiliates or
any of their respective properties, assets, officers, directors, employees,
consultants or agents (in connection with their activities on behalf of such
Person or any of its Affiliates).
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"Assets" means property of all kinds, real and personal, tangible and
intangible, including intellectual property and causes of action.
"Cleanup" means all actions required to: (1) cleanup, remove, treat or
remediate Hazardous Substances in the indoor or outdoor environment; (2) prevent
the Release of Hazardous Substances so that they do not migrate, endanger or
threaten to endanger public health or welfare or the indoor or outdoor
environment; (3) perform pre-remedial studies and investigations and
post-remedial monitoring and care; or (4) respond to any government requests for
information or documents in any way relating to cleanup, removal, treatment or
remediation or potential clean up, removal, treatment or remediation of
Hazardous Substances in the indoor or outdoor environment.
"Closing" shall have the meaning set forth in Section 3.01 hereof.
"Closing Date" means the date on which the Closing occurs.
"Code" means the United States Internal Revenue Code of 1986, as amended.
"Contract" means any contract, agreement, lease, license, commitment
(including an outstanding bid or proposal), sale or purchase order or other
binding instruments of any kind, whether written or oral.
"Employee" means a current employee of PRECISION.
"Environmental Laws" means all federal, state and local laws, regulations,
rules and ordinances relating to pollution or protection of the environment or
health and safety, including laws relating to Releases or threatened Releases of
Hazardous Substances into the indoor or outdoor environment (including, ambient
air, surface water, groundwater, land, surface and subsurface strata), noise,
odor, or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, Release, transport or handling of Hazardous Substances, all
laws and regulations with regard to recordkeeping, notification, training,
disclosure and reporting requirements respecting Hazardous Substances, and all
laws relating to endangered or threatened species of fish, wildlife and plants
and the management or use of natural resources.
"Environmental Liabilities and Costs" means all liabilities, obligations,
responsibilities, obligations to conduct Cleanup, losses, damages, deficiencies,
punitive damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, expert
and consulting fees and costs of investigations and feasibility studies and
responding to government requests for information or documents), fines,
penalties, restitution and monetary sanctions, interest, resulting from any
claim or demand, by any person or entity, whether based in contract, tort,
implied or express warranty, strict liability, joint and several liability,
criminal or civil statute, including any Environmental Law, or arising from
environmental, health or safety conditions, the Release or threatened Release of
Hazardous Substances into the environment, as a result of past or present
ownership, leasing or operation of the Real Property by SELLERS.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Excess Inventory" means any inventory present on the books of account or
in physical inventory on March 31, 1999 which is still on the books of account
or in physical inventory on September 30, 1999 and for which there is no firm
order from a Client. Excess Inventory shall also include the difference between
the value of any inventory as expressed on the books of account and the amount
actually received by Precision on or before September 30, 1999.
"Governmental Authority" means any domestic or foreign, federal,
territorial, state or local governmental authority, quasi-governmental
authority, instrumentality, court, commission or tribunal or any regulatory,
administrative or other agency, or any political or other subdivision,
department or branch of any of the foregoing.
"Hazardous Substances," means all substances defined as hazardous
substances, oils, pollutants or contaminants in the National Oil and Hazardous
Substances Pollution Contingency Plan, 40 C.F.R. ss. 300.5, or defined as such
by, or regulated as such under, any Environmental Law. "Indemnified Party" shall
have the meaning set forth in section 8.01.
"Indemnifying Party" shall have the meaning set forth in section 8.01.
"Knowledge" means the actual or constructive knowledge of the person making
such statement. As to PRECISION, Knowledge means the actual or constructive
knowledge of Xxxxxx X. Xxxx, Xx., Xxxxxxx X. Xxxx, Xxxxxx X. Xxxx, Xx., and
Xxxxx X. Xxxx.
"Law" means any regulation, code, plan, order, decree, judgment,
injunction, notice or demand letter issued, entered, promulgated or approved by
any Governmental Authority.
"Permitted Liens" means liens described in Section 5.04(b) of the
Transaction Agreement.
"Person" means any individual, corporation, partnership, limited liability
company, trust or unincorporated organization or any government or any agency or
political subdivision thereof.
"Pre-Closing Periods" means all Tax periods ending on or before the Closing
Date.
"Purchase Agreement" means this instrument.
"Real Property" shall have the meaning set forth in Section 5.11(a).
3
"Release" means, when used as a noun, any release, spill, emission,
discharge, leaking, pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration into the indoor or outdoor environment (including ambient
air, surface water, groundwater, and surface or subsurface strata) or into or
out of any Real Property, including the movement of Hazardous Substances through
or in the air, soil, surface water, groundwater or Real Property, and when used
as a verb, the occurrence of any Release.
"Representations and Warranties" means those representations and warranties
contained in Articles IV, V, and VI of the Purchase Agreement or any statement
made in a certificate or statement delivered pursuant to Articles IV, V and VI.
"Tax" or "Taxes" means all taxes, charges fees, imposts, levies or other
assessments, including all net income, franchise, profits, gross receipts,
capital, sales, use, ad valorem, value added, transfer, transfer gains,
inventory, capital stock, license, withholding, payroll, employment, social
security, unemployment, excise, severance, stamp, occupation, real or Personal
Real Property, and estimated taxes, customs, duties, fees, assessments and
charges of any kind whatsoever, together with any interest and any penalties,
fines, additions to tax or additional amounts thereon, imposed by any taxing
authority (federal, state, local or foreign) and will include any transferee
liability respecting any of the foregoing.
"Tax Return" means all returns, declarations, reports, estimates,
information, returns, and statements required to be filed respecting any Taxes.
"Term Sheet" means the Term Sheet signed by the parties.
"Transaction Documents" means the Purchase Agreement, any annexes,
attachments or exhibits thereto, any other Ancillary Agreements, and any
certificates or statements delivered pursuant to any of the foregoing.
"Transactions" means the transactions described in Section 2.01 of the
Purchase Agreement.
"U.S. GAAP" shall have the meaning set forth in Section 5.03.
ARTICLE 2. SIGNING
Section2.01 Transactions at Signing. The Signing of the Transaction Documents
("Signing") will take place at the offices of Xxxxxx & Xxxxxxxx at 1:00
p.m. local time on July 15,1999 ("Signing Date").
Section2.02 Parties' Approval. The senior management of ELAMEX and each of the
SHAREHOLDERS will have approved the Transactions contemplated hereby as
indicated by their written consent or signature hereon.
ARTICLE 3. CLOSING
4
Section 3.01 Transactions at Closing.
(a) The Closing of the Transactions ("Closing") will take place
as soon as practical after the earlier of:
(i) such time as each of the parties has received
telephonic notification from the Federal Trade
Commission of early termination of the
Xxxx-Xxxxx-Xxxxxx Premerger Notification Act waiting
period (the "HSR Waiting Period"), or
(ii) the expiration of the HSR Waiting Period without
objection or request for additional information from
the Federal Trade Commission or the Antitrust Division
of the U.S. Department of Justice.
(b) Each SHAREHOLDER, severally and not jointly, will convey,
assign, transfer and deliver to ELAMEX all of his or its right, title
and interest in and to 100% of his or its Shares free and clear of all
liens, claims and encumbrances. Such conveyance, assignment, transfer
or delivery will be effected by the delivery to ELAMEX by the
SHAREHOLDERS of stock certificates representing 100% of his or its
Shares, duly endorsed in blank (or with stock powers attached thereto
duly signed in blank) and other good and sufficient instruments of
conveyance and of transfer as ELAMEX may reasonably request to vest
more effectively in ELAMEX all of the SHAREHOLDERS' right, title and
interest in and to the conveyed Shares.
(c) ELAMEX will pay Twenty Million, three hundred forty-three
thousand, one hundred and two and 00/100 dollars ($20,343,102.00),
lawful money of the United States of America, payable by wire transfer
or other immediately available funds, in consideration for 100% of the
Shares (the "Purchase Price") at the Closing as follows:
i) $16,343,102.00 to the Shareholders in the amounts set
forth on Schedule 3.01(c); and
ii) $4,000,000.00 to the escrow account pursuant to that
certain Escrow Agreement attached hereto as Exhibit H.
(d) ELAMEX and the SHAREHOLDERS will execute and deliver the
Ancillary Agreements to which they are parties, substantially in the
form attached as Exhibits to the Purchase Agreement, including the
following:
Opinion Letter from Xxxxxx & Xxxxxxxx, Counsel for PRECISION
Opinion Letter from ELAMEX general counsel
Confidentiality Agreement
Consulting Agreement between PRECISION and Xxxxxx X. Xxxx, Xx.
Employment Agreement between PRECISION and Xxxxxx X. Xxxx, Xx.
Employment Agreement between PRECISION and Xxxxxxx Xxxx
Employment Agreement between PRECISION and Xxxxx Xxxx
Escrow Agreement among the Escrow Agent, ELAMEX and the Shareholders
5
(e) ELAMEX will also pay the SHAREHOLDERS, according to the
percentages set forth in Schedule 3.01(e), $2,800.00 lawful money of
the United States of America, for each day which elapses between the
signing of this Agreement and Closing.
Section 3.02 SELLERS' Conditions Precedent to Closing. SELLERS' shall not be
obliged to close the Transactions until
(a) it has received all consents of third parties, including
governmental authorities and non-governmental self-regulatory
agencies, and all filings with and notifications of governmental
authorities, regulatory agencies (including non-governmental
self-regulatory agencies) or other entities which regulate the
business of ELAMEX or PRECISION necessary on the part of the parties
to the execution and delivery of the Purchase Agreement and the
consummation of the Transactions contemplated hereby and
(b) it has received telephonic notification from the Federal
Trade Commission of the early termination of the HSR Waiting Period,
or the HSR Waiting Period has expired without objection or request for
additional information from the Federal Trade Commission or the
Antitrust Division of the U.S. Department of Justice.
Section 3.03 BUYER'S Conditions Precedent to Closing. BUYER shall not be obliged
to close the Transactions until it has received:
(a) all consents of third parties, including governmental
authorities and non-governmental self-regulatory agencies, and all
filings with and notifications of governmental authorities, regulatory
agencies (including non-governmental self-regulatory agencies) or
other entities which regulate the business of ELAMEX or PRECISION
necessary on the part of the parties to the execution and delivery of
the Purchase Agreement and the consummation of the Transactions
contemplated hereby and to permit the continued operation of their
respective businesses in substantially the same manner after the
Closing Date as theretofore conducted, other than routine post-closing
notifications or filings, will have been obtained or effected; and
(b) resignations of the directors of PRECISION.
Section 3.04 Conditions to the Obligations of Each Party. The obligations of
each party to consummate the Closing are subject to the satisfaction or
such party's waiver of the following conditions:
(a) The Transaction Documents will have been duly executed and
delivered by each Person indicated therein as party thereto.
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(b) No injunction or order of any Governmental Authority will be
in effect, and no statute, rule or regulation of any Governmental
Authority will have been promulgated or enacted prior to or on the
Closing Date, which restricts, prohibits or prevents the consummation
of the Transactions or would reasonably be expected to have a material
adverse effect on either party by reason of the Transactions.
(c) Each party will have performed and complied with each of his
or its agreements and conditions required by the Purchase Agreement to
be performed or complied with by them by or prior to the Closing Date.
(d) Each party will be deemed to have reasserted each and every
warranty, representation, covenant and promise contained in the Stock
Purchase Agreement.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF ALL PARTIES
Each party represents and warrants to the other as follows:
Section 4.01 Corporate Existence and Power. Such party is duly organized,
validly existing and in good standing under the laws of the jurisdiction of
its organization as set forth in the preamble to the Purchase Agreement and
has all corporate power and authority and all authorizations from
Governmental Authorities required to carry on its business, except where
the absence thereof would not materially adversely affect either party.
Section 4.02 Corporate Authorization and Validity. The execution, delivery and
performance by such party of each of the Transaction Documents to which it
is or will be a party are within its corporate powers and have been duly
authorized by all necessary corporate actions on its part. Each of the
Transaction Documents to which it is or will be a party constitutes a
legal, valid and binding agreement of such party enforceable against such
party in accordance with its terms.
Section 4.03 Non-Contravention. The execution, delivery and performance by such
party of the Transaction Documents to which he or it is or will be a party
do not and will not:
(a) contravene or conflict with such party's organizational
documents;
(b) assuming compliance with the matters referred to in paragraph
(c) below, contravene or conflict in any material respect with any
Applicable Law; or
(c) contravene or conflict with, constitute a default under, or
give rise to any right of termination, loss of benefit or other
adverse action under any material agreement, contract or other
instrument binding upon such party or by which any of its properties
or assets is or may be bound or any material license, permit or other
authorization held by such party.
7
Section 4.04 Governmental Authorization. The execution, delivery and performance
by such party of the Transaction Documents to which he or it is or will be
a party require no action by or respecting, or consent or approval of, or
filing with, any Governmental Authority other than:
(a) those which are expressly provided for in the Transaction
Documents; or
(b) those where the absence thereof would not, in the aggregate,
have a material adverse effect on such party.
Section 4.05 Finder's Fees. Except as set forth on Schedule 4.05, such party has
not engaged or authorized any broker, finder or other intermediary or
representative to act on its behalf who might be entitled to any fee or
commission from the other party in connection with the Transactions.
ARTICLE 5. SELLERS' REPRESENTATIONS AND WARRANTIES.
Each SHAREHOLDER hereby, severally and not jointly, represents and warrants to
ELAMEX as follows:
Section 5.01 Contracts and Commitments.
(a) Schedule 5.01 sets forth a list of all contracts and other
agreements (including purchase orders and commitments and options)
outstanding as of the date hereof to which PRECISION is a party and
which
(i) require PRECISION to make payments or deliver services
in excess of $20,000 in any twelve-month period and are
not cancelable without penalty by PRECISION on no more
than thirty (30) days' notice;
(ii) is a guarantee or indemnity respecting indebtedness of
any Person;
(iii)is an agreement or other instrument which contains
restrictions with respect to the payment of dividends
or any other distribution respecting the Shares;
(iv) imposes a right of first refusal, option, or other
restriction with respect to any Assets, including the
Shares;
(v) is a loan or advance to, or investment in, any Person
or any agreement relating to the making of such loan,
advance or investment in excess of $5,000.00;
(vi) is an agreement limiting the freedom of PRECISION to
engage in any line of business or to compete with any
Person; (vii) is a contract for the design,
development, assembly, delivery, or manufacture of
goods and is a contract with a Person who is a party to
another contract produced pursuant to paragraph 5.01(a)
(i);
8
(viii) is a contract not in the ordinary course of business,
including any contract related to financing or
capitalization or Shares.
(b) Except as set forth in Schedule 5.01(b):
(i) Each of the contracts disclosed in Schedule 5.01 and
the agreements or contracts disclosed in any other
Schedule (collectively, the "Material Contracts") was
entered into in a bona fide transaction in the ordinary
course of business and is in full force and effect.
(ii) Copies of all of the Material Contracts have been
delivered to ELAMEX.
(iii)There is not, with respect to any Material Contract,
any existing default by any party thereto, or any fact,
event or circumstances which, after notice of lapse of
time or both, could constitute a default by party
thereto, or result in a right to accelerate or
terminate or result in a loss of right of PRECISION.
(iv) No purchase contracts or commitments of PRECISION
continue for a period of more than 12 months or are in
excess of the normal, ordinary and usual requirements
of business or at an excessive price;
(v) There are no outstanding sales contracts, commitments
or proposals of PRECISION which continue for a period
of more than 12 months or will result in any loss to
PRECISION upon completion, nor are there any
outstanding contracts, bids, or sales or service
proposals quoting prices which will not result in a
normal profit; and
(vi) PRECISION is not under any liability or obligation with
respect to the return of inventory or merchandise in
the possession of customers or other Persons except in
the ordinary course of business consistent with past
practice.
Section 5.02 Employee Benefit Plans.
(a) Except as set forth on Schedule 5.02(a), PRECISION does not
maintain or make contributions to, nor is it obligated to, make
contributions to any "pension plan" within the meaning of Section 3(2)
of ERISA (a "Pension Plan") or any other benefit plan or arrangement
providing pension, retirement, deferred compensation, bonus, stock
purchase or stock option benefits, whether or not an "employee benefit
plan" within the meaning of Section 3(3) of ERISA and whether or not
funded or unfunded, written, or oral.
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(b) Except as set forth on Schedule 5.02(b), PRECISION does not,
with respect to the operation of the business or any of the Employees
related thereto, maintain or make contributions to, nor is it
obligated to make contributions to any plan, fund or other program
which is a "welfare plan" within the meaning of Section 3(l) of ERISA
(a "Welfare Plan"), or any other plan, fund or other arrangement
providing health, life insurance, disability, severance, change in
control or fringe benefits.
(c) PRECISION does not maintain and has not maintained within the
last three (3) plan years any Pension Plan that is a defined benefit
plan within the meaning of Section 414(j) of the Code or that is a
defined contribution plan within the meaning of Section 414(i) of the
Code that is subject to the provisions of Section 412 of the Code.
PRECISION has not taken any action or failed to take any action, nor
has any event occurred which has resulted or will likely result in
PRECISION's becoming subject to liability under Title IV of ERISA or
the minimum funding requirements of Section 412 of the Code or Part 3
of Title I of ERISA, including withdrawal liability with respect to
any multiemployer pension plan.
(d) Each Pension Plan set forth on Schedule 5.02(a) (and any
related trust agreement or annuity contract or any other funding
instrument) has received a favorable determination letter as to its
qualification under the Code and nothing has occurred which would
cause the loss of such qualification or which would result in material
costs to PRECISION under the Internal Revenue Service's Employee Plans
Compliance Resolution System. Each Pension Plan and Welfare Plan
substantially complies currently, and substantially has complied in
the past, both as to form and operation, with the provisions of all
laws, including but not limited to, ERISA and the Code applicable to
such Pension Plan or Welfare Plan.
(e) SELLERS have furnished or made available to ELAMEX or will
make available to ELAMEX prior to Closing, complete and accurate
copies of each of the plans or arrangements set forth on Schedule
5.02(a) and Schedule 5.02(b), including all amendments, the most
recent determination letter from the Internal Revenue Service for each
Plan intended to be qualified under the Code, the three (3) most
recent Form 5500s, the most recent plan actuarial reports, summary
plan descriptions, summary annual reports, summaries of material
modifications, employee manuals, material employee communications and
any other reports of such plans or arrangements required by ERISA or
any other applicable law and the regulations thereunder.
(f) SELLERS have made available to ELAMEX copies of any insurance
certificates or trust agreements through which any plan or arrangement
set forth on Schedule 5.02(a) or Schedule 5.02(b) is funded and notice
of any material adverse change occurring with respect to any such plan
or arrangement since the date of the most recently completed and filed
annual report.
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(g) All contributions and payments of insurance premiums for the
plans and other arrangements listed on Schedule 5.02(a) and Schedule
5.02(b) have been made when due.
Section 5.03 Financial Statements.
(a) Attached as Schedule 5.03 are the following financial
statements that have been prepared by PRECISION and delivered to
ELAMEX in connection with the Transactions contemplated by the
Purchase Agreement:
(i) Reviewed Financial Statements for the fiscal year ended
June 30, 1996;
(ii) Reviewed Financial Statements for the fiscal year ended
June 30, 1997;
(iii)Reviewed Financial Statements for the fiscal year
ended June 30, 1998; and
(iv) Provided that the audit by Deloitte and Touche is
complete before Closing, Audited Financial Statements
for the twelve month period ended March 31, 1999, (the
"Reference Balance Sheet Date"). If the audit is not
complete, the unaudited Financial Statements for the
twelve month period ended on the Reference Balance
Sheet Date.
(collectively, the "Financial Statements"). The Financial Statements
are complete and correct, and fairly represent, in all material
respects, the financial position of PRECISION as of their respective
dates, and the results of its operations and cash flows for the periods
then ended. Except as set forth on Schedule 5.03, all of the items
listed in Subparagraphs 5.03(a)(i) through 5.03(a)(v) have been
prepared in accordance with United States Generally Accepted Accounting
Principles ("U.S. GAAP") consistently applied throughout the periods
indicated therein.
(b) There are no material liabilities, debts, obligations or
claims against PRECISION of any nature, absolute or contingent,
on-balance sheet or off-balance sheet, direct indebtedness or
liabilities or guaranties or indemnification obligations, or
otherwise, except as
(i) and to the extent reflected or reserved against in the
Financial Statements;
(ii) specifically described and identified as an exception
in any of the Schedules delivered to ELAMEX pursuant to
the Purchase Agreement;
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(iii)incurred by PRECISION since the Reference Balance
Sheet Date in the ordinary course of business
consistent with prior practice and the terms of the
Purchase Agreement; or
(iv) they relate to open purchase or sales orders or
agreements for delivery of goods and services entered
into by PRECISION in the ordinary course of business
consistent with prior practice, provided that PRECISION
is not in default thereunder.
Section 5.04 Assets.
(a) Schedule 5.04(a) sets forth:
(i) the tangible physical assets of PRECISION including
Real Property, machinery, equipment, tools, dies,
furniture, furnishings, leasehold improvements,
vehicles, buildings and fixtures that have a
depreciated value in excess of $10,000 per item or per
category of items and the location of such items;
(ii) individual refundable deposits, prepaid expenses,
deferred charges and "other assets" in excess of
$1,000.00 individually or $5,000.00 in the aggregate;
and
(iii)all loans or advances made by PRECISION to any Person
in excess of $5,000.00.
(b) Except for assets, properties and rights disposed of by
PRECISION in the ordinary course of business and consistent with prior
practice since the Reference Balance Sheet Date, PRECISION has good
and marketable title to all of the Assets, properties and rights
(tangible or intangible) set forth on the Reference Balance Sheet, and
all Assets, properties and rights acquired since the Reference Balance
Sheet Date, free and clear of all pledges, liens, security interests,
mortgages, pledges, encumbrances, restrictions, options, easements,
defects or charges of any kind (collectively, "Encumbrances"), except
for:
(i) liens for taxes not yet due and payable;
(ii) mechanics and materialmen's liens
(iii) liens set forth in Schedule 5.04(b) hereto;
(iv) liens disclosed in the Financial Statements (which have
not been discharged) that secure liabilities reflected
in such Financial Statements;
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(v) defects of title and encumbrances, if any, which do not
materially detract from the value and do not interfere
with the current use of the Real Property affected by
them. Except as set forth in Schedule 5.04(b),
PRECISION owns, has valid leasehold interests in or
valid contractual rights to use all of the properties
and assets, tangible or intangible, used by, or
necessary for the conduct of its business as now being
conducted.
(c) Except for the items set forth in Schedule 5.04 (c), the
machinery, tools, equipment and other tangible physical Assets of
PRECISION (other than items of inventory) are in good working order,
are being used or are useful in the business of PRECISION at its
present level of activity, and are in an operating condition
sufficient to conduct the business of PRECISION as now being conducted
and as presently contemplated to be conducted.
Section 5.05 Patents, Trademarks and Copyrights.
(a) Schedule 5.05(a) sets forth all patents, registered
copyrights, trademarks and service marks, and all trade names and
common law marks used by, or necessary for the conduct of the business
of PRECISION ("Intellectual Property"), along with sufficient data to
identify each of them, and their expiration dates.
(b) Schedule 5.05(b) sets forth all Intellectual Property
licenses, assignments, grants, and contracts with others relating in
whole or in part to disclosure, assignment, registering, or patenting
of any Intellectual Property used by or necessary for the conduct of
PRECISION's business.
(c) Except as set forth in Schedule 5.05 (c), PRECISION owns the
Intellectual Property set forth in Schedules 5.05(a) and 5.05(b) free
of any encumbrances, assignments, or invalidity.
(d) Except as set forth in Schedule 5.05(d), PRECISION possesses
all necessary license agreements for the Intellectual Property it
uses, does not currently use any Intellectual Property in violation of
the rights of any other Person, nor has PRECISION received notice of a
threat of adverse claim with respect to Intellectual Property.
Section 5.06 Directors and Officers; Compensation. Schedule 5.06 hereto contains
a true and complete list of all directors and officers of PRECISION and the
salaries and all other compensation arrangements of the twenty most highly
compensated employees of PRECISION.
Section 5.07 Litigation. Except as set forth on Schedule 5.07 hereto, exclusive
of personal injury claims under $5,000 individually and $20,000 in the
aggregate with respect to which there is insurance, there are:
13
(a) no actions, disputes, suits or governmental, administrative,
arbitral, or regulatory proceedings pending or, to PRECISION's
Knowledge, threatened against PRECISION's directors, officers or
SHAREHOLDERS as such, or in which any of them might be a witness;
(b) to PRECISION's Knowledge, no basis for any cause of action in
tort or for breach of contract;
(c) no outstanding consents, orders, judgments, injunctions,
awards or decrees of any court, government or regulatory body or
arbitral tribunal against PRECISION's directors, officers or
SHAREHOLDERS as such, or in which any of them might be a witness; and
(d) to PRECISION's Knowledge, no investigations pending or
threatened against PRECISION, any of its officers or directors as such
or any of the SHAREHOLDERS in such capacity as a shareholder.
Section 5.08 Bank Accounts. Schedule 5.08 contains a complete list showing the
name of each bank in which PRECISION has an account or safety deposit box,
and the name of each Person authorized to draw thereon or have access
thereto.
Section 5.09 Labor and Employee Relations.
(a) Except as shown on Schedule 5.09(a) hereto, there are no
currently effective consulting or employment agreements or other
material agreements with individual consultants or employees to which
any of the SELLERS are bound.
(b) Except as shown on Schedule 5.09(b) hereto, none of the
Employees are covered by any collective bargaining agreement with any
trade or labor union, employees' association or similar association.
During the past three years, there have been no representation
elections, arbitration proceedings, labor strikes, slowdowns or
stoppages, material grievances or other labor troubles pending, or, to
the Knowledge of SELLERS, overtly threatened, with respect to the
Employees.
(c) There are no charges, administrative proceedings, or formal
complaints of discrimination of any nature whatsoever pending or, to
the SELLERS' Knowledge, threatened, or, to the SELLERS' Knowledge, any
investigation pending or threatened against or affecting PRECISION
before the Equal Employment Opportunity Commission or any federal,
state, or local agency or court. There have been no audits of the
equal employment opportunity practices of the Companies and, to
SELLERS' Knowledge, no basis for any such claim exists.
14
(d) No agreement, arbitration or court decision, decree or order
or governmental order which is binding on PRECISION in any way limits
or restricts PRECISION from relocating or closing any operations.
(e) PRECISION is in compliance in all material respects with all
Applicable Law respecting employment and employment practices, terms
and conditions of employment, wages and hours and occupational safety
and health, and is not engaged in any unfair labor practice within the
meaning of Section 8 of the National Labor Relations Act.
Section 5.10 Licenses and Registrations.
(a) Except as set forth in Schedule 5.10(a), the operations and
activities of PRECISION are in compliance in all material respects
with all Applicable Law, including health and safety statutes and
regulations of any Environmental Laws, including all conditions,
schedules and timetables contained in the Environmental Laws or
contained in any regulation, code, plan, order, notice, or demand
letter promulgated thereunder.
(b) Schedule 5.10(b) sets forth all federal, state, local and
foreign governmental licenses, permits and other authorizations
("Permits") applicable to the business of PRECISION. PRECISION has
heretofore delivered to ELAMEX complete and correct copies of all of
the foregoing in its possession.
(c) Except as set forth in Schedule 5.10(c), PRECISION has
obtained all Permits that are required under Applicable Law, including
Environmental Laws for the use and operation of each of the Real
Property or otherwise necessary in the conduct of its business except
to the extent the failure to hold or obtain such Permit would not have
a material adverse effect on PRECISION. Except as set forth in
Schedule 5.10(c), all such Permits are in effect, no appeal nor any
other action is pending to revoke any such Permit, and PRECISION is in
compliance in all material respects with all material terms and
conditions of all such Permits.
Section 5.11 Real Property.
(a) Schedule 5.11(a) sets forth a description of each and every
parcel of Real Property or interest in real estate leased or owned by
PRECISION (the "Real Property"). PRECISION owns no real property or
interests therein other than the Real Property. SELLERS have
heretofore delivered to ELAMEX:
(i) complete and correct copies of all documents of which
they have Knowledge with data affording information or
opinions with respect to, certifying to, or evidencing
the extent, current title, title history, title
marketability, use, possession, restriction or
regulation, if any (governmental or otherwise), and
compliance with Applicable Law, of the Real Property;
15
(ii) all deeds, evidence of title or trust agreements, if
any, under which any of the Real Property may have been
conveyed to PRECISION or under which the same may be
held for the benefit of PRECISION; and
(ii) leases, subleases, licenses or other agreements and all
documents relating thereto, under which PRECISION uses
or occupies or has the right to use or occupy, now or
in the future, any Real Property, including any
amendments and supplements thereto and any assignment
thereof (the "Real Property Leases").
(b) Except as set forth Schedule 5.11(b), PRECISION is in
peaceful and undisturbed possession of all of the Real Property, and
to the Knowledge of Sellers, has good and valid rights of ingress and
egress to and from all the Real Property from and to the public street
systems for all usual street, road and utility purposes and for all
purposes necessary or incidental to the business of PRECISION, and all
the Real Property is served by all utilities and sufficient water
rights incidental to the business of PRECISION.
(c) Except as set forth in Schedule 5.11(c), and to the Knowledge
of Sellers, all of the buildings, structures, improvements and
fixtures used by or useful in the business of PRECISION, and owned or
leased by PRECISION, are in a good state of repair, maintenance and
operating condition and, except as so disclosed there are no defects
with respect thereto which would impair the day-to-day use of any such
buildings, structures, improvements or fixtures or which would subject
PRECISION to liability under Applicable Law.
(d) Neither PRECISION nor any SELLER has received any notice of
any appropriation, condemnation, or like proceeding, or of any
violation of any Applicable Law or requirement relating to or
affecting the Real Property or any part thereof, or other similar
governmental action, and to SELLERS' Knowledge no such proceeding has
been threatened or commenced.
(e) Except as set forth in Schedule 5.11(e), and to the Knowledge
of Sellers, there are no restrictions of any nature on the ability of
PRECISION to assign its interest in any Real Property and there are no
consents of third parties necessary to assign any of the Real Property
to ELAMEX.
(f) Except as set forth in Schedule 5.11(f), PRECISION owns and
has good and marketable title in fee simple and is in peaceful and,
and to the Knowledge of Sellers, undisturbed possession of the Real
Property free and clear of all Encumbrances, except those Encumbrances
which are acceptable to ELAMEX and specifically set forth on Schedule
5.11(f)(i) as "Permitted Encumbrances";
(g) To the Knowledge of Sellers, the uses for which the Real
Property are zoned do not restrict, or in any manner impair, the use
of the Real Property for current purposes of the business of PRECISION
and the construction of the Real Property complies with all applicable
building and zoning codes, deed restrictions, ordinances and rules.
16
(h) To the Knowledge of Sellers, the buildings and other
improvements of each parcel included in the Real Property do not
encroach on any easements or on any land not included within the
boundary lines of such Real Property and there are no neighboring
improvements encroaching on such Real Property, except for such of the
foregoing as do not and will not individually or in the aggregate
interfere with the current uses of such Real Property in the business
of PRECISION.
(i) The current uses of any parcel included in the Real Property
do not in any material respect violate or conflict with (i) any
covenants, conditions or restrictions applicable thereto or (ii) the
terms and provisions of any contractual obligations relating thereto.
(j) Except for assessments occurring on a regular basis in
accordance with Applicable Law, there is no pending or, to the
knowledge of SELLERS, contemplated reassessment of any parcel included
in the Real Property that is reasonably expected to increase the real
estate tax assessment for such Real Property.
Section 5.12 Environmental Matters.
(a) PRECISION has heretofore delivered to ELAMEX true and
complete copies of all environmental studies and all inspection
reports made in the last ten years relating to the Real Property or
any other real property or facility previously owned, operated or
leased by PRECISION during such period or any Affiliate of PRECISION.
(b) Except as set forth in Schedule 5.12(b), there is no civil,
criminal or administrative action, suit, demand, claim, hearing,
notice of violation, investigation, proceeding, notice or demand
letter existing or pending, or to SELLERS' Knowledge threatened,
relating to PRECISION or the Real Property or any other real property
or facility formerly owned, operated or leased by PRECISION or any
Affiliate of PRECISION relating in any way to the Environmental Laws.
(c) Except as set forth in Schedule 5.12(c) PRECISION has not,
and to SELLERS' Knowledge, no other Person has, Released, placed,
stored, buried, or dumped any Hazardous Substances or any other wastes
produced by, or resulting from, any business, commercial, or
industrial activities, operations, or processes, on, beneath, or
adjacent to the Real Property (or any other real property or facility
formerly owned, operated or leased by PRECISION or any of its
Affiliates) except for inventories of such substances to be used, and
wastes generated therefrom, in the ordinary course of the business of
PRECISION (which inventories and wastes, if any, were and are stored
or disposed of in accordance with applicable laws and regulations).
17
(d) Except as set forth in Schedule 5.12(d), no employee of
PRECISION in the course of his or her employment with PRECISION, has
been exposed to any Hazardous Substances or other substance,
generated, produced or used by PRECISION which could give rise to any
material claim against PRECISION.
(e) Except as set forth in Schedule 5.12(e), the Real Property
does not contain any:
(i) underground storage tanks;
(ii) asbestos;
(iii) equipment using polychlorinated biphenyls;
(iv) underground injection xxxxx; or
(v) septic tanks in which processed wastewater or any
Hazardous Substances have been disposed.
(f) Except as set forth in Schedule 5.12(f), neither SELLERS nor
PRECISION have received any notice or order from any governmental
agency or private or public entity advising it that it is responsible
for or potentially responsible for Cleanup or payment for the cost of
Cleanup of any Hazardous Substances and neither SELLERS nor PRECISION
have entered into any agreements concerning such Cleanup, nor are
SELLERS or PRECISION aware of any facts which might reasonably give
rise to such notice, order or agreement.
(g) Except as set forth in Schedule 5.12(g), with regard to
PRECISION and the Real Property, there are no past or present (or, to
the Knowledge of SELLERS , future) events, conditions, circumstances,
activities, practices, incidents, actions or plans which may interfere
with or prevent compliance or continued compliance with the
Environmental Laws as in effect on the date hereof.
Section 5.13 Books and Records. SELLERS have made and will make available for
inspection by ELAMEX all the books of account relating to their business.
Such books of account of PRECISION reflect good bookkeeping practices and
properly evidence all the transactions and other matters normally reflected
in books of account which are necessary to produce audited financial
statements in accordance with U.S. GAAP.
Section 5.14 Inventory. Except as set forth in Schedule 5.14, the inventories of
raw materials, work in progress ("WIP"), and finished products of PRECISION
are in good condition, conform in all material respects with applicable
specifications and warranties, are not obsolete, are useable or saleable in
the ordinary course of business and, if saleable, are saleable at values
not less than the book value amounts thereof together with a normal markup.
All WIP and finished products in such inventories have been produced in
material compliance with each of PRECISION's applicable quality control
procedures. The value of all items of slow moving, excessive, redundant, or
obsolete inventory and inventory of below standard quality has been written
down to net realizable value or adequate reserves have been provided
thereof, and there is no Excess Inventory. Such inventories not written off
are valued at the lower of cost or market.
18
Section 5.15 Insurance
(a) All material assets, properties and risks of PRECISION
including, but not limited to the Real Property, are covered by valid
and currently effective insurance policies or binders of insurance.
Schedule 5.15(a) contains a list of all the policies of insurance
presently in force and, without restricting the generality of the
foregoing, those covering each of PRECISION's public and product
liability and their respective Employees, properties, buildings,
machinery, equipment, furniture, fixtures and operations, specifying
with respect to each such policy, the name of the insurer, type of
coverage, term of policy, limits of liability and annual premium.
(b) SELLERS have heretofore delivered to ELAMEX complete and
correct copies of all the policies and agreements set forth in
Schedule 5.15(a). They will remain in full force and effect through
the respective dates set forth in Schedule 5.15(a) without the payment
of additional premiums, and will not in any way be affected by, or
terminate or lapse by reason of, the transactions completed by the
Purchase Agreement.
(c) Schedule 5.15(c) sets forth each of PRECISION's premiums and
losses in excess of $25,000, by year and by type of coverage for the
past five years based on information received from any of PRECISION's
insurance carrier(s);
(d) Schedule 5.15(d) contains any and all agreements,
arrangements or commitments by or relating to PRECISION under which it
indemnifies any other Person or is required to carry insurance for the
benefit of any other Person;
(e) With respect to the policies in Schedule 5.15(a), they are in
full force and effect, all premiums with respect thereto covering all
periods up to and including the date of the Closing have been paid, no
notice of cancellation or termination has been received with respect
to any such policy, and such policies are sufficient for compliance in
all material respects with all requirements of Applicable Law and all
agreements to which PRECISION is a party, and provide adequate
insurance coverage for the assets and operations of PRECISION.
(f) Schedule 5.15(f) identifies all risks which have been
designated as being self insured.
Section 5.16 Contracts and Agreements. Each contract, agreement or arrangement
between PRECISION, on the one hand, and any SHAREHOLDER, director, officer,
or Affiliate of PRECISION, on the other hand ("Affiliate Agreements"), is
described in Schedule 5.16.
19
(a) Except as set forth in Schedule 5.16(a), each of the
Affiliate Agreements was entered into in the ordinary course of
business and on commercially reasonable terms and conditions no less
favorable to PRECISION than were available from Persons not affiliated
with PRECISION offering the best terms.
(b) Except as set forth in Schedule 5.16(b), no SHAREHOLDER,
officer or director of PRECISION has any material interest in any
property, real or personal, tangible or intangible, including
inventions, patents, trademarks or trade names, used in or pertaining
to the business of PRECISION.
Section 5.17 Disclosure. No Representations or Warranties made by SELLERS in the
Purchase Agreement contains any untrue statement of material fact or omits
any material fact necessary, in light of the circumstances under which it
was made, in order to make the statements herein or therein not misleading.
There is no fact known to SELLERS which has or could reasonably be expected
to have a material adverse effect, which has not been set forth in the
Purchase Agreement, including any Schedule, exhibit, or certificate
delivered in accordance with the terms hereof.
Section 5.18 Absence of Change or Event. Except as described in Schedule 5.18,
since the Reference Balance Sheet Date, PRECISION has conducted its
business only in the ordinary course and consistent with prior practice and
has not:
(a) purchased, agreed to purchase, redeemed or called for
redemption any outstanding Shares, issued any options, warrants,
Shares, bonds or other securities, interests or rights to acquire
securities or interests or declared or paid any dividend on, made any
other payment or distribution respecting, or authorized or effected
any split up or recapitalization of any Shares;
(b) made or authorized any changes in its charter, by-laws or
similar organizational document;
(c) canceled any debts or claims or waived, released or
compromised any debt, claim or right having a value, in the aggregate,
in excess of $5,000.00;
(d) instituted any litigation, action or proceeding before any
court, governmental body or arbitration tribunal relating to it or its
Real Property, except for litigation, actions or proceedings
instituted in the ordinary course of business and consistent with
prior practice;
(e) when considered as a whole, incurred any obligation or
liability, absolute, accrued, contingent or otherwise, whether due or
to become due, in excess of $5,000.00 in the aggregate, except
liabilities or obligations incurred in the ordinary course of business
and consistent with prior practice;
20
(f) mortgaged, pledged or subjected to lien, restriction or any
other Encumbrance any of the material property, businesses or assets,
tangible or intangible, of PRECISION;
(g) sold, transferred, leased to others or otherwise disposed of
any of its material assets (or committed to do any of the foregoing),
including the payment of any loans owed to any Affiliate (including
SELLERS), except for inventory sold to customers or returned to
vendors and payments to any non-Affiliates on account of accounts
payable or scheduled payments in respect of indebtedness for money
borrowed disclosed on the Reference Balance Sheet or in the Schedules,
in each case in the ordinary course of business and consistent with
prior practice, or canceled, waived, released or otherwise compromised
any debt or claim, or any right of significant value, except in the
ordinary course of business and consistent with prior practice;
(h) suffered any damage, destruction or loss (whether or not
covered by insurance) which has had or could reasonably be expected to
have a material adverse effect on PRECISION considered as a whole;
(i) when considered as a whole, made or committed to make any
capital expenditures or capital additions or betterments in excess of
an aggregate of $75,000.00 other than the current building expansion
and the parking lot improvements;
(j) encountered any labor union organizing activity or had any
actual or threatened employee strikes, work stoppages, slow-downs or
lock-outs;
(k) increased the compensation of any officer, employee or sales
representative of PRECISION, directly or indirectly, including by
means of any bonus, pension plan, profit sharing, deferred
compensation, savings, insurance, retirement, or any other employee
benefit plan, except in the ordinary course of business consistent
with prior practice; or
(l) made or changed any election concerning Taxes or Tax Returns,
changed an annual accounting period, adopted or materially changed any
accounting method, filed any amended return, entered into any closing
agreement with respect to Taxes, settled any Tax claim or assessment
or surrendered any right to claim a refund of Taxes or obtained or
entered into any Tax ruling, agreement, contract, understanding,
arrangement or plan.
Section 5.19 Taxes. Except as set forth on Schedule 5.19:
(a) All Tax Returns required to be filed for all Pre-Closing
Periods by or on behalf of PRECISION have been or will be timely filed
with the appropriate taxing authorities in accordance with all
Applicable Laws, and all such Tax Returns were, or will be, true,
correct and complete. All Pre-Closing Period Taxes have been or will
be fully and timely paid. The charges, accruals , and reserves for
Taxes due, or accrued but not yet due, relating to the income,
properties or operations of PRECISION for any Pre-Closing Period and
reflected on the books and records of PRECISION, including the
Financial Statements, are adequate under the circumstances and
consistent with prior practice.
21
(b) All Tax Returns of PRECISION with respect to taxable years
ending on or prior to the last day of the latest closed federal tax
year have been examined and closed, or are Tax Returns with respect to
which the applicable statute of limitations, after giving effect to
any extensions and waivers, has expired.
(c) No power of attorney is currently in effect, and no Tax
ruling has been requested of any governmental authority, with respect
to any Tax matter relating to PRECISION.
(d) There is no current controversy, investigation or audit
regarding Taxes of PRECISION or any Affiliate of PRECISION pending or,
to the Knowledge of SELLERS, threatened, and none of PRECISION or any
Affiliate of PRECISION has been requested to enter into any extension
of the statute of limitations regarding any Tax returns.
Section 5.20 Affiliates and Equity Investments. Except as set forth on Schedule
5.20 PRECISION has no Affiliates and is not a general partner in any
partnership or coventurer in any joint venture or other business
enterprise.
Section 5.21 Ownership of Shares. Each Seller is the lawful record and
beneficial owner of that number of Shares set forth by such Seller's name
on Schedule 5.21. Each Seller owns the Shares set forth by its name on
Schedule 5.21 free and clear of all Encumbrances except for restrictions on
transfer under federal and state securities laws. Upon the delivery of the
Shares in the manner contemplated under Section 2.01, ELAMEX will acquire
the beneficial, legal, valid and indefeasible title to such Shares, free
and clear of all Encumbrances except for restrictions on transfer under
federal and state securities laws.
Section 5.22 Accounts Receivable. The accounts receivable appearing on the
Reference Balance Sheet and all accounts receivable created since that date
through the Closing Date represent valid obligations owing to PRECISION and
except as set forth on Schedule 5.22, are collectible, net of returns and
reworked parts, by PRECISION, subject to the reserve for doubtful accounts
reflected in the Reference Balance Sheet and an appropriate reserve for
accounts receivable which have accrued since the date of the Reference
Balance Sheet. PRECISION for the past three years has been able to fully
collect at least approximately 99.8% of the accounts receivable created in
such year on.
Section 5.23 Customers, Suppliers, Distributors, Etc. Since the Reference
Balance Sheet Date and except as set forth in Schedule 5.23, no supplier,
customer, distributor or sales representative of PRECISION has canceled or
otherwise terminated, or made any written threat to PRECISION or to any of
its Affiliates to cancel or otherwise terminate, for any reason, including
the consummation of the transactions contemplated hereby, its relationship
with PRECISION. Except as set forth in Schedule 5.24, to PRECISION's
Knowledge no such supplier, customer, distributor or sales representative
intends to cancel or otherwise terminate its relationship with PRECISION or
to decrease materially its services or supplies to PRECISION or its usage
of the services or products of PRECISION, as the case may be.
22
Section 5.24 Products. Schedule 5.24 sets forth
(a) all claims asserted or, to PRECISION's Knowledge, threatened
at any time during the past five years against PRECISION in respect of
personal injury, wrongful death or property damage alleged to have
resulted from products or services provided by PRECISION, together
with a description of each such claim or action initiated with respect
thereto and the disposition thereof;
(b) all express warranties and disclaimers of warranty used by
PRECISION in connection with the products or services provided by
PRECISION; and
(c) any finding or statement with respect to the safety or
efficacy of the products or services provided by PRECISION by any
hospital, other medical institute, physician, health professional or
medical publication. PRECISION has not experienced product recall or
warranty claims in excess of one percent (1%) aggregate gross sales
for any of the past five years.
Section 5.25 Schedules. Notwithstanding any specific reference to the disclosure
of any matter pursuant to any section of this Article 5 or to any schedule,
all disclosures fairly made pursuant to any section hereunder or of the
schedules shall be deemed made for all other sections to which such
disclosure may fairly apply, and any headings or captions on any section
herein or therein are for convenience of reference only.
Section 5.26 Modification of Representations and Warranties. Each of the
foregoing representations and warranties shall be deemed modified by any
matter expressly set forth or expressly disclosed herein, listed on the
schedules hereto, or in the Financial Statements. Should there be any
conflict in any of the Transaction Documents, they shall take precedence
over each other in accordance with the following hierarchy:
(a) Schedules
(b) Stock Purchase Agreement
(c) Exhibits
Section 5.27 Trusts. Attached as Schedule 5.27 are the organizational documents
and any amendments to them of all of the artificial persons which are
SHAREHOLDERS as of the Closing Date.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF ELAMEX
ELAMEX hereby represents and warrants to SELLERS as follows:
23
Section 6.01 Applicable Law. ELAMEX has complied in all material respects with
Applicable Law regarding its entering into and delivering the Transaction
Documents.
Section 6.02 Third Party Claims. To the best of ELAMEX' knowledge, no third
party claims will result from ELAMEX' investment in PRECISION.
Section 6.03 Disclosure. No Representations or Warranties made by ELAMEX in the
Purchase Agreement contains any untrue statement of material fact or omits
any material fact necessary, in light of the circumstances under which it
was made, in order to make the statements herein or therein not misleading.
There is no fact known to ELAMEX which has or could reasonably be expected
to have a material adverse effect, which has not been set forth in the
Purchase Agreement, including any Schedule, exhibit, or certificate
delivered in accordance with the terms hereof.
ARTICLE 7. COVENANTS OF ALL PARTIES
Section 7.01 Further Assurances. Subject to the terms and conditions of the
Purchase Agreement, each party will use all reasonable efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary or desirable under Applicable Law and otherwise to consummate the
Transactions and will refrain from taking any action that would prevent or
delay such consummation. Each party will execute and deliver such other
documents, certificates, agreements and other writings and take such other
actions as may be reasonable and necessary or desirable in order to
consummate the Transactions expeditiously.
Section 7.02 Filings and Approvals. Without limiting the generality of Section
7.01, and subject to the terms and conditions of the Purchase Agreement,
each party will cooperate with the other in determining whether any action
by or respecting, or filing with, any Governmental Authority, or any
consent, waiver or other action, is required or convenient in connection
with the consummation of the Transactions, and in taking such actions or
making any such filings, furnishing information required in connection
therewith, and seeking timely to obtain any such consent, waiver, or other
appropriate action.
Section 7.03 Disclosure. The parties will consult with each other before issuing
any press release or making any public statement with respect to the
Purchase Agreement or the Transactions and, except as may be required by
Applicable Law or any national or international securities exchange, will
not issue any such press release or make any such public statement without
the consent of both parties. In no event will either party, except to the
extent so required, disclose publicly or to any competitor or customer of
the other party any details of any Transaction Document that are not
revealed in a public statement made with the consent of the other party,
provided that the foregoing will not prevent private disclosure appropriate
to facilitate exercise of a right under the Transaction Documents, if the
recipient of the disclosure executes a suitable confidentiality and nonuse
agreement. Notwithstanding the foregoing, no provision of the Purchase
Agreement will relieve either party from any of its obligations under
Section 7.04.
24
Section 7.04 Confidentiality. The Confidentiality Agreement attached hereto as
Exhibit C will remain in effect in accordance with its terms.
Section 7.05 Post-Closing Employee Arrangements.
(a) ELAMEX hereby agrees that effective as of the Closing Date it
will cause PRECISION to enter into employment agreements with each of
Xxxxx Xxxx, Xxxxxx Xxxx, Xx. and Xxxxxxx Xxxx in form and substance as
attached hereto as Exhibit D.
(b) ELAMEX hereby agrees that effective as of the Closing Date it
will cause PRECISION to enter into a consulting agreement with Xxxxxx
Xxxx, Xx. in form and substance as attached hereto as Exhibit E.
ARTICLE 8. INDEMNITY
Section 8.01 General Indemnity. SHAREHOLDERS and ELAMEX (as the case may be, the
"Indemnifying Party") will indemnify and hold harmless each other and each
other's Affiliates (the "Indemnified Parties"), without duplication, from
and against any loss, liability or expense, including cost of collection
under this general indemnity (collectively, "Damages"), arising out of or
related to:
(a) Breach of any Representation or Warranty made by the
Indemnifying Party in any Transaction Document;
(b) Breach of any covenant or obligation undertaken by the
Indemnifying Party, or failure to satisfy any liability assumed by the
Indemnifying Party, in any Transaction Document;
(c) Any liability of the Indemnifying Party asserted against, but
not assumed by, the Indemnified Party by reason of the Transactions;
Section 8.02 Manufacturing, Accounts Receivable, and Inventory Indemnity.
SHAREHOLDERS will indemnify ELAMEX for:
(a) any liability based on statute, negligence, breach of
warranty, strict liability, or any other theory caused by or resulting
from, directly or indirectly, the manufacture or sale of any product,
or the provision of any services, by PRECISION, before the Closing
Date, or
(b) any other claims asserted against PRECISION or ELAMEX arising
from any action or inaction of SHAREHOLDERS or PRECISION, occurring
before the Closing Date;
25
(c) any account receivable on March 31, 1999, net of returns and
reworked parts, not collected within 120 days after Closing that is in
excess of the reserves for doubtful accounts recorded as of March 31,
1999; or
(d) any amount of Excess Inventory,
Section 8.03 Environmental Indemnity. SHAREHOLDERS will indemnify ELAMEX, for
each and every item set forth in Schedules 5.13(a)-(g),
(a) the actual, alleged or threatened, Release, storage,
transportation, treatment or generation of Hazardous Substances
generated, stored, used, disposed of, treated, handled, Released or
shipped by PRECISION, any Affiliate of PRECISION, any Seller, or any
prior owner of the Real Property (or any other such on, under or from
the Real Property; real property or facility formerly owned, operated
or leased by any Seller on or before the Closing Date);
(b) loss of life, injury to persons or property, or damage to
natural resources caused by the actual, alleged or threatened Release,
storage, transportation, treatment or generation of Hazardous
Materials generated, stored, used, disposed of, treated, handled or
shipped by SELLERS on or before the Closing Date on, under or from the
Real Property;
(c) any Cleanup of Hazardous Substances on, beneath or adjacent
to the Real Property prior to or on the Closing Date; or
(d) the installation of any pollution control equipment or other
equipment to bring any facility of PRECISION into compliance with any
Environmental Law if such equipment is installed because the facility
was not in compliance with any Environmental Laws as of the Closing
Date.
Section 8.04 Tax Indemnity. SHAREHOLDERS will indemnify ELAMEX for any and all
(a) Taxes imposed on PRECISION for, or relating to, all
Pre-Closing Periods, including, but not limited to:
(i) any liability of PRECISION under any Tax sharing
agreement, whether or not written, and any Tax
liability resulting from the termination, as of the
Closing Date, of PRECISION as a member of any
consolidated, affiliated, combined, unitary or other
similar Tax group; and
(ii) liabilities of PRECISION for Taxes imposed under
Treasury Regulation Section 1.1502-6 or any analogous
state, local or foreign tax provision, as a result of
being a member of a consolidated, affiliated, combined,
unitary or other similar group for any taxable period
commencing before the Closing Date;
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(b) actions, suits, proceedings, claims, demands, incident to any
of the foregoing.
Section 8.05 Procedures.
(a) An Indemnified Party will give notice, as quickly as
practicable, to the Indemnifying Party of the assertion of any claim
or commencement of any suit, action or proceeding by a third party
respecting which the Indemnified Party may seek indemnity hereunder (a
"Third Party Claim"). The failure to provide such notice will not
forfeit the right to indemnity except to the extent that the
Indemnifying Party is prejudiced as a result.
(b) Upon receipt of notice under paragraph (a) above, the
Indemnifying Party may, by notice to the Indemnified Party, assume the
defense and control of such Third Party Claim, in which case the
Indemnified Party will be allowed a reasonable opportunity to
participate in the defense with its own counsel, the expenses of such
participation which will be borne by the Indemnified Party unless the
Indemnified Party reasonably will have concluded that there is a
conflict of interest between the Indemnifying Party and Indemnified
Party.
(c) Should there be a conflict of interest as described in
paragraph (b) above:
(i) such expenses will be borne by the Indemnifying Party,
provided that the Indemnifying Party will not be liable
for expenses of more than one separate firm in
connection with the same matter.
(ii) The Indemnifying Party will select counsel and other
significant agents of recognized standing and
competence after consultation with the Indemnified
Party, will at all times diligently pursue a favorable
resolution thereof, and comply with any reasonable
request from the Indemnified Party to keep it informed
with respect to the matter.
(iii)The Indemnified Party will cooperate with the
Indemnifying Party in the defense of the Third Party
Claim and will cause its Affiliates and their
respective directors, officers, employees and agents to
do so.
(iv) The Indemnifying Party will be authorized to consent to
a settlement of, or the entry of any judgment arising
from the Third Party Claim, without the consent of the
Indemnified Party (except in the case of a Third Party
Claim relating to Taxes, which shall require the
consent of the Indemnified Party, which consent shall
not be unreasonably withheld or delayed), provided that
the Indemnifying Party will
(aa) pay or cause to be paid all amounts arising out of such
settlement or judgment concurrently with the
effectiveness thereof,
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(bb) not encumber any of the assets of the Indemnified Party
or agree to any restriction or condition that would
apply to the Indemnified Party or to the conduct of its
business,
(cc) obtain, as a condition thereof, a complete release of
the Indemnified Party, and,
(dd) provide twenty (20) days' advance notice thereof to the
Indemnified Party.
(d) If the Indemnifying Party does not assume the defense and
control of such Third Party Claim, then as a condition to its right to
indemnity hereunder, the Indemnified Party will select counsel and
other significant agents of recognized standing and competence after
consultation with the Indemnifying Party, will at all times diligently
pursue a favorable resolution thereof, and comply with any reasonable
request from the Indemnifying Party to keep it informed with respect
to the matter.
(e) The Indemnified Party may consent to a settlement of, or the
entry of any judgment arising from, the Third Party Claim, without
forfeiture of its right to indemnity, provided that it will
(i) provide 30 days' advance notice thereof to the
Indemnifying Party and,
(ii) either obtain the Indemnifying Party's consent or, if
the Indemnifying party fails to consent, permit the
Indemnifying Party another opportunity to assume the
defense and control of such Third Party Claim.
Section 8.06 Waiver of Defenses. To the maximum extent permitted by law, each
Indemnifying Party waives:
(a) any claim or defense that the indemnity provided for herein
or any other provision of any Transaction Document is unenforceable
under any provision of Applicable Law; and
(b) any immunity respecting actions seeking to enforce any
Transaction Document in accordance with its terms that it may now or
hereafter be entitled to claim on grounds of sovereignty or an Act of
State.
Section 8.07 Certain Limitations on Remedies. The indemnity contemplated by this
Article 8 shall be governed by the following limitations.
(a) An Indemnified Party shall not be entitled to assert any
claim or claims for indemnification or reimbursement pursuant to
Article 8 hereof until Damages in total exceed $50,000 (the "Basket"),
and then only to the extent of aggregate Damages in excess of the
Basket.
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(b) For indemnity claims brought for breach of representations or
warranties regarding Environmental Matters (Section 5.13), Taxes
(Section 5.20) and Ownership of Shares (Section 5.22), liability shall
be limited to the Purchase Price. The indemnity claims brought under
this Section 8.07(b) may be brought until the end of the applicable
statute of limitations.
(c) For all other indemnity claims liability shall be limited to
4.0 million dollars during the first year after Closing, then 2.5
million dollars until the second anniversary after Closing, then 2.0
million dollars until the third anniversary after Closing, after which
time no such claims may be brought. These limits shall be raised by
any employment related claims brought by H. Xxxxxxx Xxxxx to the
extent that such a claim exceeds $500,000.
(d) The parties acknowledge that the indemnification provisions
set forth in Article 8 constitute the sole and exclusive recourse and
remedy of Indemnified Parties with respect to the breach of any
representation, warranty, covenant or agreement contained in this
Agreement or in any Transaction Document executed and delivered by the
parties in connection herewith or otherwise in connection with the
transactions contemplated hereby. No Indemnified Party shall be liable
with respect to, and the term "Damages" as used herein shall not
include under any circumstances, any exemplary or punitive damages.
The damages or other special damages or lost profits. Notwithstanding
anything to the contrary in this Agreement, ELAMEX acknowledges that
the representations and warranties made herein by Xxxxxx X. Xxxx, Xx.
T/U/W - Trust B and Xxxxxxx Xxxx T/U/A fbo Xxxx Xxxx are made in a
fiduciary capacity only, and said trusts shall be liable for Damages
only to the extent of the assets of each such trust in the hands of
its trustee at the time notice of any indemnify claim asserting such
Damages is given provided, however, that this paragraph shall not be
deemed to limit in any way the amount available through the escrow
account established in the Escrow Agreement among the Escrow Agent,
ELAMEX and the Shareholders.
(e) Claims for indemnification for a breach of any Representation
and Warranty will be made on or prior to the date, if any, on which
the survival period for such Representation or Warranty expires, it
being understood that claims made on or prior to such expiration date
will survive such expiration date.
(f) Except with respect to Damages in excess of the Escrow Fund
(defined in the Escrow Agreement), as set forth in Section 8.07(b)
above, the sole remedy and recourse of Purchaser or any Indemnified
Parties which are affiliates of Purchaser with respect to claims for
indemnification shall be to exercise their rights under the Escrow
Agreement among the Escrow Agent, ELAMEX and the Shareholders.
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Section 8.08 Amount of Damages. The amount of any Damages payable hereunder
shall be reduced by any insurance proceeds to which the Indemnified Party
may be entitled with respect to the event or occurrence giving rise to such
Damages, and shall be reduced by any amounts to which the Indemnified Party
may receive from third parties in connection with Losses for which
indemnification is sought under this Article. The Indemnified Party shall
use commercially reasonable efforts to pursue insurance claims or third
party claims that may reduce or eliminate Damages. If the Indemnified Party
both collects proceeds from any insurance company or third party and
receives a payment from the Indemnifying Party hereunder, and the sum of
such proceeds and payment is in excess of the amount payable with respect
to the matter that is the subject of the indemnity, then the Indemnified
Party shall promptly refund to the Indemnifying Party the amount of such
excess.
Section 8.09 Subrogation. After any indemnification payment is made to any
Indemnified Party pursuant to this Article 8, the Indemnifying Party shall,
to the extent of such payment, be subrogated to all rights (if any) of the
Indemnified Party against any third party in connection with the Damages to
which such payment is related. Without limiting the generality of the
preceding sentence, any Indemnified Party receiving an indemnification
payment pursuant to the preceding sentence shall execute, upon the written
request of the Indemnifying Party, any instrument reasonably necessary to
evidence such subrogation rights.
Section8.10 Actual Knowledge. If an Indemnified Party has actual knowledge on
the Closing Date of an existing breach of any representation, warranty,
covenant, statement or agreement of an Indemnifying Party contained in any
Transaction Document then, notwithstanding the provisions of Article 8, the
Indemnifying Party shall not be liable for, nor in any manner responsible
for, any Damages resulting from such breach, and the Indemnified Party
shall not be entitled to indemnification under Article 8 for such Damages
provided, however, that the indemnified party shall always have at least 10
days after acquiring actual knowledge of any existing breach in which to
notify the indemnifying party of a potential claim.
ARTICLE 9. NON-COMPETITION OF SHAREHOLDERS
Section 9.01 Scope. No SHAREHOLDER will, on or prior to the date which is three
(3) years after the Closing Date or one year after termination of the
SHAREHOLDER'S employment, whichever is later, without the prior written
consent of ELAMEX:
(a) directly or indirectly run, own, manage, operate, be a
director of, be employed by, have any consulting agreement whatsoever
with, or have any equity interest in any Person which competes with
PRECISION;
(b) directly or indirectly, hold himself or any Affiliate of his
as being in any business which competes with PRECISION;
30
(c) solicit, divert, or take away any of the clients as set forth
on Schedule 5.01(a)(i) (the "Clients"), or solicit, divert, take away,
or offer employment to or hire any of the Employees;
(d) furnish or offer to furnish services or materials to the
Clients similar to those furnished by PRECISION; or
(e) use on his own behalf or disclose to any party any
information concerning the Clients or any of PRECISION's methods of
operation, sales, cost or price information, number and location of
employees, and the nature and extent of the Assets or of any agreement
to which PRECISION is a party.
Section 9.02 Remedies. The parties agree that damages are an inadequate remedy
to ELAMEX and ELAMEX may, either with or without pursuing any potential
damage remedies, immediately obtain and enforce an injunction prohibiting
the SHAREHOLDERS from violating this Article 9 and the SHAREHOLDERS hereby
severally expressly waive any right to oppose any such action.
Section 9.03 Permitted Investments. No provision of this Purchase Agreement will
prevent any SHAREHOLDER from owning in the aggregate not more than 5% of
the outstanding stock of any class of a corporation which is in competition
with PRECISION and the stock of which is publicly traded.
Section 9.04 Severability. The restrictions and obligations imposed in this
Article 9 are deemed by the parties hereto to be reasonable and necessary
for the purpose of protecting ELAMEX' interests in the continuing
operations of PRECISION. However, the foregoing covenants will be deemed to
be severable; should any or all be held invalid by reason of length of time
or area or scope covered, the parties hereto agree that such length of time
or area or scope covered, will be reduced to the extent necessary to cure
such invalidity and the provisions hereof will be enforceable to the
fullest extent permitted by law.
ARTICLE 10. MISCELLANEOUS
Section 10.01 Notice. All notices, requests and other communications to either
party under any of the Transaction Documents will be in writing (including
telex, telecopy or similar writing), will be in English, and will be given
to the following address:
As to ELAMEX: 000 Xxxxx Xxxxxx, Xxxxx 000
Xx Xxxx, Xxxxx 00000
Attn: Xxxxxx Xxxxxx
With a copy to X. X. Xxxxxx, General Counsel
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As to SHAREHOLDERS:
With a copy to Xxxxxxx X. Xxxxxxxx, Esq.
Xxxxxx & Xxxxxxxx
000 Xxxx Xxxxxx Xxxxxx, Xxx. 0000
Xxxxxxxxxx, Xxxxxxxx 00000
Each such communication will be effective upon receipt, provided if the
day of receipt is not a business day at the destination then it will be
deemed to have been received on the next succeeding business day.
Section 10.02 Amendments, Waivers.
(a) Any Provision of any Transaction Document may be amended or
waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by the parties thereto, or in the
case of a waiver, by the party against whom the waiver is to be
effective.
(b) No failure or delay by any party in exercising any right or
remedy under any Transaction Document will operate as a waiver thereof
nor will any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right or remedy.
Section 10.03 Expenses. All costs and expenses incurred in connection with the
Transaction Documents and the Transactions will be paid by the party
incurring such cost or expense, except as otherwise provided in any
Transaction Document. If either the SELLERS or ELAMEX proposes to incur any
expenses for the account of PRECISION, it will first obtain the approval of
the other.
Section 10.04 Successors and Assigns. No party will assign any Transaction
Document or any of its rights in and to any Transaction Document, provided
that ELAMEX may assign its right to hold its interest in the conveyed stock
of PRECISION to an Affiliate of ELAMEX. Subject to the preceding, the
provisions of any Transaction Document will be binding upon and inure to
the benefit of the parties and their respective successors and permitted
assigns.
Section 10.05 Governing Law. The Transaction Documents will be construed in
accordance with and governed by the law of the State of Texas, without
regard to the choice of law provisions thereof.
Section 10.06 Severability. If application of any one or more of the provisions
of any Transaction Document will be unlawful under Applicable Law, then the
parties will attempt in good faith to make such alternative arrangements as
may be legally permissible and which carry out as nearly as practicable the
terms of such Transaction Document. Should any portion of any Transaction
Document be deemed unenforceable by a court or arbitral panel of competent
jurisdiction, the remaining portion thereof will remain unaffected and be
interpreted as if such unenforceable portions were initially deleted.
32
Section 10.07 Dispute Resolution. Any dispute, controversy or claim arising out
of or relating to this Agreement or any related document will be settled in
the following manner: (a) a senior executive representing ELAMEX and Xxx X.
Xxxx, Xx. will meet to discuss and attempt to resolve any such dispute,
controversy or claim; (b) if such dispute, controversy or claim is not
resolved as contemplated by clause (a) ELAMEX and Xxx X. Xxxx, Xx. will, by
mutual consent, select an independent third party to mediate such dispute,
controversy or claim, provided that such mediation will not be binding upon
any of the parties; and (c) if such dispute, controversy or claim is not
resolved as contemplated by clauses (a) or (b), the parties will have such
rights and remedies as may be available under the Arbitration Agreement set
forth in Exhibit F.
Section 10.08 Counterparts. Each Transaction Document may be signed in any
number of counterparts, each of which will be an original, with the same
effect as if the signatures to each were upon the same instrument. The
Purchase Agreement and each Ancillary Agreement will become effective when
each party thereto will have received a counterpart thereof signed by each
other party thereto.
Section 10.09 Captions. The captions in any Transaction Document are included
for convenience of reference only and will be ignored in the construction
or interpretation hereof.
Section 10.10 Entire Agreement. The Purchase Agreement and the other Transaction
Documents (and any other agreements contemplated hereby or thereby)
constitute the entire agreement between the parties with respect to the
subject matter of any Transaction Document and supersede all prior
agreements, understandings and negotiations, both written and oral, between
the parties with respect to the subject matter hereof or thereof. No
representation, warranty, inducement, promise or understanding not set
forth in any Transaction Document has been made or relied upon by any party
to any Transaction Document. The Transaction Documents are not intended to
confer upon any Person other than the parties any rights or remedies
thereunder. The Exhibits to any Transaction Document are and will be deemed
to be a part of such Transaction Document.
Section 10.11 Further Assurances. The parties hereto agree that they will from
time to time hereafter, without further consideration and at their own
expense, execute and deliver such other documents and instruments and take
such other action as may reasonably be requested in order to more
effectively consummate the transactions contemplated by the Purchase
Agreement, including each party making its employees available to the other
in connection with litigation matters, at reasonable times, upon reasonable
notice, and at the other party's sole cost and expense, and as long as it
does not interfere with a party's ongoing business operations. The
provisions hereof will survive the Closing Date.
33
Section 10.12 Third-Party Rights. None of the Transaction Documents is intended
to confer upon any Persons not a party thereto any rights or remedies
thereunder, except to the extent specifically and expressly provided.
Section 10.14 Indemnification of Officers and Directors. Notwithstanding any
provision to the contrary in Section 10.12 hereof, ELAMEX acknowledges that
each Person who served prior to the Closing as an officer or director of
PRECISION shall be entitled to all rights to indemnification existing in
favor of the directors and officers of PRECISION, as applicable, as
provided in its articles of incorporation and bylaws during the time any
such Person served as an officer or director.
Section 10.15 Access to Records after Closing. For a period of five years (or,
if greater, the period required by any applicable statute regarding
retention of records) after the Closing Date, SHAREHOLDERS shall have
reasonable access to all of the books and records of PRECISION to the
extent that such access may reasonably be required by SHAREHOLDERS in
connection with matters relating to or affected by the operations of
PRECISION prior to the Closing Date. Such access shall be afforded by
ELAMEX upon receipt of reasonable advance notice and during normal business
hours. SHAREHOLDERS shall be solely responsible for any costs or expenses
incurred by SHAREHOLDERS pursuant to this Section. If ELAMEX shall desire
to dispose of any of such books and records prior to the expiration of such
period, ELAMEX shall, prior to such disposition, give SHAREHOLDERS a
reasonable opportunity, at their expense, to segregate and remove such
books and records as SHAREHOLDERS may select.
Section 10.16 No Post-Closing Adjustment. Anything in this Agreement to the
contrary notwithstanding, there shall be no post closing adjustment to the
Purchase Price based upon information contained in the Audited Financial
Statements produced by Deloitte & Touche.
34
IN WITNESS WHEREOF, the parties to the Purchase Agreement have caused it
to be duly executed by their authorized representatives on the day and
year first above written
/s/ Xxxxxx X. Xxxxxxx
ELAMEX, S.A. de C.V.
By: Xxxxxx X. Xxxxxxx, Vice-President and Chief Financial Officer
/s/ Xxxxxx X. Xxxx Xx.
PRECISION TOOL, DIE, AND MACHINE COMPANY, INC.
By: Xxxxxx X. Xxxx Xx., President
/s/ Xxxxxx X. Xxxx, Xx.
XXXXXX X. XXXX, XX
/s/ Xxxxxxx X. Xxxx
XXXXXXX X. XXXX
/s/ Xxxxxx X. Xxxx, Xx.
XXXXXX X. XXXX, XX
/s/ Xxxxx X. Xxxx
XXXXX X. XXXX
XXXXXX X. XXXX, XX., T/U/W - TRUST B
By: /s/ Xxxxxx X. Xxxx Xx.
Xxxxxx X. Xxxx, Xx. Trustee
XXXXXXX XXXX, T/U/A FBO XXXX XXXX
By: /s/ Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx, Trustee
