Exhibit 10.96
ASSET PURCHASE AGREEMENT
This asset purchase agreement (the "Agreement") is made and entered into
this 16 day of April, 2001, by and among TENNESSEE TIRE RECYCLERS, INC., a
Tennessee corporation (the "Seller"), and TECHNICAL TIRE RECYCLING, INC., a
Tennessee corporation (the "Purchaser").
ARTICLE I
SALE OF ASSETS AND ASSUMPTION OF LIABILITIES
Section 1.1 Sale of Assets.
(a) Purchased Assets. Seller hereby sells, assigns, transfers,
conveys and delivers to Buyer, and Buyer hereby accepts and purchases, all
of Seller's right, title and interest in and to all of the assets,
properties and rights of Seller described on Schedule 1.1(a) attached
hereto as shall exist on the Closing Date (as hereinafter defined)
("Purchased Assets").
(b) Excluded Assets. The foregoing notwithstanding, Buyer is not
purchasing, and Seller shall not be deemed to sell, those assets which are
described on Schedule 1.1(b) attached hereto ("Excluded Assets").
(c) Certain Consents to Assignment. To the extent that the
assignment of any right or agreement the benefit of which is to be
acquired by Buyer pursuant to this Agreement requires the consent of any
Person not a Party to this Agreement or any of their Affiliates, this
Agreement shall not constitute a contract to assign or assume the same
until such consent is obtained. Seller and Buyer shall use reasonable
efforts to obtain any consent necessary to any such assignment. If any
such consent is not obtained (a) this Agreement shall not constitute or be
deemed to be a contract to assign or assume the same if an attempted
assignment without such consent, approval or waiver would constitute a
breach of such right or agreement or create in any party thereto the right
or power to cancel or terminate such right or agreement, and (b) Seller
will cooperate with Buyer, in any reasonable arrangement requested by
Buyer designed to provide to Buyer the benefit, monetary or otherwise, of
Seller's rights under such right or agreement, including enforcement of
any and all rights of Seller against the other party thereto arising out
of a breach or cancellation thereof by such other party.
Section 1.2 Assumption of Liabilities.
(a) Assumed Liabilities. Buyer hereby undertakes, assumes and agrees
to perform and otherwise pay, satisfy and discharge only those liabilities
expressly set forth on Schedule 1.2(a) attached hereto (the "Assumed
Liabilities").
(b) Excluded Liabilities. Buyer shall not assume, nor does Buyer
agree to pay, any debts, liabilities or obligations of any kind or nature
whatsoever not specifically set forth on Schedule 1.2(a), including,
without limitation, those items set forth on Schedule 1.2(b) attached
hereto (collectively, "Excluded Liabilities"). All Excluded Liabilities
shall be the responsibility of Seller, and Seller hereby covenants and
agrees to fully and timely pay and discharge all Excluded Liabilities.
Section 1.3 Closing. The closing of the purchase and sale of the Purchased
Assets (the "Closing") shall take place at the offices of XxxxxXxx Technologies
Inc., 0 Xxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxxxx, or at another mutually agreed
upon location on April 16, 2001 (the "Closing Date") and but shall be
considered effective as of April 1, 2001.
Section 1.4 Closing Obligations of Seller. At the Closing, Seller shall:
(a) Deliver to Buyer title to and possession of the Assets;
(b) Execute and deliver to Buyer, as appropriate, one or more bills
of sale, instruments of assignment, certificates of title, registrations,
licenses and other documents as may be reasonably necessary or appropriate
(a) to vest in Buyer title to all of the Assets, free and clear of any and
all Liens, and (b) to carry out the transactions contemplated by this
Agreement;
(c) Deliver to Buyer evidence, satisfactory to Buyer in its sole
discretion, of releases of any and all Liens relating to the Purchased
Assets; and
(d) Deliver to Buyer such other certificates and documents as may be
called for under this Agreement or as Buyer shall reasonably request.
Section 1.5 Closing Obligations of Buyer. At the Closing, Buyer shall
deliver to Seller the Purchase Price as described in Section 1.6 hereof.
Section 1.6 The Purchase Price. Subject to and upon the terms and
conditions set forth herein, as consideration for the Purchased Assets, the
Purchaser agrees to and will pay and deliver to the Seller at Closing the
following (the consideration to be paid and delivered are referred to,
collectively, as the "Purchase Price"):
(a) $75,000;
(b) $180,000 in the form of a Promissory Note in the form attached
hereto as Exhibit A, which shall bear interest at the rate of ten percent
(10%) per annum and be payable in thirty-six (36) monthly installments
(the "Purchase Money Note"); and
(c) A certificate representing two hundred thousand (200,000) shares
of the XxxxxXxx Technologies, Inc. Common Stock par value $.01 per share
(the "Common Stock"), which shall be subject to certain restrictions
described in Section 1.7.
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Section 1.7 Lock-Up Agreement. The Seller agrees not to sell, pledge,
transfer or otherwise dispose of the Common Stock, or grant any option or
purchase right with respect to the Common Stock or engage in any short sale,
hedging transaction or other derivative security transaction involving the
Common Stock of XxxxxXxx Technologies, Inc. held by him/her, for a period of two
(2) years from the date hereof. In the event that Seller desires to transfer any
of the shares of Common Stock to any of its stockholders, Buyer shall have the
right to require such stockholders to enter into an agreement containing the
terms of this Section 1.7 as a condition to such transfer.
Section 1.8 Further Cooperation. From time to time after the Closing,
Seller at Buyer's request and without further consideration, agrees to execute
and deliver or to cause to be executed and delivered such other instruments of
transfer as Buyer may reasonably request to transfer to Buyer more effectively
the right, title and interest in or to the Purchased Assets, to confirm that
Buyer has not assumed any of the Excluded Liabilities and to take or cause to be
taken such further or other action as may reasonably be necessary or appropriate
in order to effectuate the transactions contemplated by this Agreement.
Section 1.9 Right of First Offer. Purchaser grants to Seller a right of
first offer to purchase the Purchased Assets on the following terms and
conditions: If Purchaser determines to sell all or substantially all of the
Purchased Assets, Purchaser shall notify Seller in writing (the "Sale Offer") of
the terms on which Purchaser will be willing to sell such assets. If Seller,
within thirty (30) days after receipt of the Sale Offer indicates in writing its
agreement to purchase any or all of the Purchased Assets, on the terms stated in
the Sale Offer, Purchaser shall sell and convey all or any part of the Purchased
Assets, to Seller on the terms stated in the notice. If Seller does not send
Purchaser a binding legal acceptance to purchase the Purchased Assets on the
terms set forth in the Sale Offer within thirty (30) days, Purchaser thereafter
shall have the right to sell and convey all or any part of the Purchased Assets
to a third party on the same terms stated in the Sale Offer. If Seller agrees to
purchase the Purchased Assets, a closing shall occur within 90 days of
acceptance of the Sale Offer. If the Purchased Assets are so sold to a third
party, then all rights of Seller under this section shall promptly terminate. If
the Purchased Assets are not sold, then Purchaser shall give Seller the same
right to purchase the Purchased Assets on receiving any subsequent offer from
any third party that is acceptable to Purchaser; provided, however, that nothing
contained in this section shall in any way limit the right of Purchaser to
transfer or convey the demised assets on the dissolution or termination of
Purchaser or otherwise, for nominal or no consideration, and Seller shall have
no right to purchase the Purchased Assets in the event of such a transfer or
conveyance, but the rights set forth in this section shall survive such a
transfer.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of Seller. Seller hereby
represents and warrants to Buyer as follows:
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(a) Organization. Seller is a corporation duly organized, validly
existing and in good standing under the laws of its respective state of
incorporation.
(b) Binding Obligation. Seller has all requisite corporate power and
authority to enter into and perform its respective obligations under this
Agreement and the agreements, documents and instruments to be executed in
connection with this Agreement (the "Ancillary Agreements") and to carry
out the transactions contemplated hereby. The board of directors and
stockholders of Seller have duly authorized the execution and delivery of
this Agreement, and no other corporate proceedings on the part of Seller
are necessary to authorize this Agreement and the transactions
contemplated hereby. This Agreement has been duly executed and delivered
by Seller and constitutes a valid and binding obligation of Seller
enforceable in accordance with its terms. The execution, delivery and
performance by Seller of this Agreement does not and will not conflict
with, or result in any violation of or default under, any provision of
Seller's articles of incorporation or by-laws or any ordinance, rule,
regulation, judgment, order, decree, agreement, instrument or license
applicable to Seller or to any of its respective properties or assets or
any agreement or instrument to which it is subject. No consent, approval,
order or authorization of, or registration, declaration or filing with,
any court, administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign, is required by or with
respect to Seller in connection with their execution, delivery or
performance of this Agreement.
(c) Title to Personal Property. Except as set forth on Schedule
2.1(c), Seller has good and marketable title to all of the personal
property included in the Purchased Assets, in each case free and clear of
all mortgages, liens, security interests, pledges, charges or encumbrances
of any nature whatsoever ("Liens").
(d) No Broker's or Finder's Fees. No agent, broker, investment
banker, person or firm acting on behalf of Seller or Shareholder is or
will be entitled to any broker's or finder's fee or any other commission
or similar fee in connection with any of the transactions contemplated
herein.
(e) Consents and Approvals. No consent, approval, order or
authorization of, registration, declaration or filing with, or permit
from, any Governmental Authority is required by or with respect to Seller
in connection with the execution and delivery of this Agreement by Seller
or the consummation by Seller of the transactions contemplated hereby, and
no Third-Party Consent is required by or with respect to Seller in
connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
(f) Litigation. No litigation, arbitration, investigation or other
proceeding of any Governmental Authority is pending or, to the knowledge
of Seller, threatened against Seller, relating to the Business or the
Assets, with respect to any product liability or similar cause of action
or otherwise. Seller is not subject to any outstanding injunction,
judgment, order, decree or ruling relating to the Business or the Assets,
and Seller has not been notified that any of its products manufactured in
the Product Lines contains any
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actual or alleged defect of any nature or that any Person has suffered any
personal injury or damage to his, her or its property as a result of the
sale, use, distribution or existence of any such product. There is no
litigation, proceeding or investigation pending or, to the knowledge of
Seller, threatened against or affecting Seller that questions the validity
or enforceability of this Agreement or any other document, instrument or
agreement to be executed and delivered by Seller in connection with the
transactions contemplated hereby.
(g) Environmental Matters. Except as set forth in Section 4.14 of
the Disclosure Schedule, Seller has conducted the Business and owned and
operated the Assets, and is using and operating the Assets and conducting
the Business, in compliance with all applicable Environmental Laws.
(h) Taxes. There are no Liens on any of the Assets for unpaid Taxes
other than Liens for Taxes not yet due and payable.
(i) Absence of Certain Business Practices. Neither Seller nor any of
its partners, officers, directors, managers, employees or agents nor any
other Person acting on any of their behalf, has, directly or indirectly,
given or agreed to give any gift or similar benefit (other than with
respect to bona fide payments for which adequate consideration has been
given) to any customer, supplier, governmental employee or other Person
who is or may be in a position to help or hinder the business of Seller
(or assist Seller in connection with any actual or proposed transaction):
(a) which will result in Seller incurring any damage or penalty in any
civil, criminal or governmental litigation or proceeding; (b) which, if
not continued in the future, would have a Material Adverse Effect on the
Business or which will result in Seller paying any penalty in any private
or governmental litigation or proceeding; or (c) for establishment or
maintenance of any concealed fund or concealed bank account.
(j) Disclosure. No representation or warranty of Seller set forth in
this Agreement or in any of the Schedules or Exhibits hereto, or other
statement in writing or certificate furnished or to be furnished to
Purchaser by or on behalf of Seller in connection with the transactions
contemplated hereby, contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances
in which they are made.
Section 2.2 Representations and Warranties of Buyer. Buyer represents and
warrants to, and agrees with, Seller as follows:
(a) Organization. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Tennessee.
(b) Binding Obligation. Buyer has all requisite corporate power and
authority to enter into and perform its obligations under this Agreement.
All corporate acts and other proceedings required to be taken by Buyer to
authorize the execution, delivery and
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performance by Buyer of this Agreement and the transactions contemplated
hereby, have been duly and properly taken. This Agreement has been duly
executed and delivered by Buyer and constitutes the legal, valid and
binding obligation of Buyer, enforceable against Buyer in accordance with
its terms. The execution, delivery and performance by Buyer of this
Agreement does not and will not conflict with, or result in any violation
of, any provision of the Articles of Incorporation or By-Laws of Buyer, or
any provision of any law, ordinance, rule, regulation, judgment, order,
decree, agreement, instrument or license applicable to Buyer or to its
property or assets. No consent, approval, order or authorization of, or
registration, declaration or filing with, any court, administrative agency
or commission or other governmental authority or instrumentality, domestic
or foreign, is required by or with respect to Buyer in connection with its
execution, delivery or performance of this Agreement.
(c) No Broker's or Finder's Fees. No agent, broker, investment
banker, person or firm acting on behalf of Buyer is or will be entitled to
any broker's or finder's fee or other commission or similar fee in
connection with any of the transactions contemplated herein.
ARTICLE III
ADDITIONAL AGREEMENTS
Section 3.1 Expenses. All costs and expenses incurred by any party hereto
in connection with this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such costs. No such expenses of Seller shall in
any way constitute an Assumed Liability.
Section 3.2 Press Releases. None of the parties hereto shall issue a press
release or other publicity announcing the sale of the Purchased Assets or any
other aspect of the transactions contemplated hereby without the prior written
approval of the other parties, unless such disclosure is required by applicable
law.
ARTICLE IV
INDEMNIFICATION
Section 4.1 Buyer Claims. Except as hereinafter set forth, Seller shall
indemnify and hold harmless Buyer and its successors and assigns, and its and
their respective officers, directors, shareholders, employees and agents,
against, and in respect of, any and all loss, liability, demand, claim, action,
cause of action, cost, damage, deficiency, tax, penalty, fine or expense,
including, without limitation, reasonable legal, accounting, investigatory and
any other expenses (collectively "Claims"), which may arise out of (a) any
actual or alleged failure of Seller to discharge in a timely manner any of the
Excluded Liabilities; (b) any misrepresentation or other breach or violation by
Seller of the representations, warranties, covenants and agreements contained in
this Agreement or any schedule or exhibit hereto; (c) the operation of Seller's
business prior to Closing (except for Claims arising from the Assumed
Liabilities that
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arise after the Closing Date); (d) the failure of Seller to comply with
applicable bulk sale laws; (e) failure of Seller to pay or discharge any
liability with respect to Taxes; (g) any claim that any service performed or any
product manufactured, distributed or sold by Seller, or any of its predecessors,
or its or their subsidiaries or affiliates, was defective or noncompliant with
any express or implied warranty without regard to the legal theory under which
redress may be sought, i.e., tort, breach of contract or strict liability; or
(f) any of the following conditions or occurrences relating to the environment:
(i) any clean-up, corrective removal or remedial actions, or property damage
arising out of any condition existing on or prior to the Closing Date; (ii)
third party claims for personal injury where the exposure, incident or
occurrence out of which the Claim arises occurred in whole or in part, on or
prior to the Closing Date; (iii) any transportation or disposition commenced,
arranged or initiated on or before the Closing Date, by or on behalf of Seller
or any of its predecessors, or its or their subsidiaries or affiliates, of any
substance owned or controlled by Seller or any of its predecessors, or its or
their subsidiaries or affiliates, or any substance from any premises owned or
operated by Seller or any of its predecessors, or its or their subsidiaries or
affiliates, for any purpose, including, but not limited to, treatment, storage,
disposal or recycling; (iv) fines or penalties on account of the ownership, use,
condition or operation of any of the assets of Seller or of any of its
subsidiaries or affiliates, at any time on or prior to the Closing Date; (v) any
liability to modify, restore, change or improve any of the assets or real
property of Seller or any of its predecessors, or its or their subsidiaries or
affiliates, in order to effectuate compliance with any applicable law or order;
or (vi) the removal of any and all asbestos, asbestos containing materials or
other hazardous materials which existed on or before the Closing Date in any
premises owned, leased, operated or managed on or before the Closing Date by
Seller or any its predecessors, or its or their subsidiaries or affiliates.
Section 4.2 Seller Claims. Except as hereinafter set forth, Buyer shall
indemnify and hold harmless Seller and its successors and assigns and its and
their respective officers, directors, shareholders, employees and agents,
against and in respect of, any and all Claims, which may arise out of any
misrepresentation or other breach or violation of this Agreement by Buyer or the
failure of Buyer to discharge the Assumed Liabilities.
Section 4.3 Notice of Claim; Defense of Third Party Claims. If either
party becomes aware of or receives notice of any Claim of a third party or the
commencement of any third party action or proceeding with respect to which
another party (the "Indemnitor") is obligated to provide indemnification
pursuant hereto, the party entitled to indemnification (the "Indemnitee") shall
promptly give the Indemnitor notice thereof. Such notice shall not be a
condition precedent to any liability of the Indemnitor under the provisions for
indemnification contained in this Contract, unless (and only to the extent that)
failure to give such notice materially prejudices the rights of the Indemnitor
with respect to such claims, actions, or proceedings. The Indemnitor may
compromise or defend, at the Indemnitor's own expense, and by the Indemnitor's
own counsel, any such matter involving the asserted liability of the Indemnitee.
If the Indemnitor elects not to compromise or defend such matter, then the
Indemnitee, at the Indemnitor's expense and by the Indemnitee's own counsel, may
defend such matter. In any event, the Indemnitee, the Indemnitor and the
Indemnitor's counsel (and, if applicable, the Indemnitee's counsel) shall
cooperate in the compromise of, or the defense against, any such asserted
liability. If the Indemnitor chooses to defend any claim, the Indemnitee shall
make available to the Indemnitor
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any books, records, or other documents within its control that are reasonably
necessary or appropriate for such defense.
Section 4.4 Payment; Adjustment to Purchase Price. The Indemnitor shall
pay the Indemnee in immediately available funds promptly after the Indemnitee
provides the Indemnitor with written notice of a claim hereunder. Any
indemnification payments paid hereunder will be considered an adjustment to the
Purchase Price and shall include, without limitation, the right of Buyer to
offset amounts payable pursuant to the Purchase Money Note.
ARTICLE V
LABOR AND EMPLOYMENT MATTERS
Buyer shall have no severance, COBRA or other obligation relating to the
termination of such employees' employment with Seller, regardless of whether any
such employees accept employment with Buyer. Except for amounts expressly
identified in Exhibit A-1 to Schedule 1.2(a), Buyer shall have no liability or
obligation whatsoever with respect to such employees' employment with Seller
prior on or to the Closing Date, or the termination of such employment.
ARTICLE VI
GENERAL PROVISIONS; ADDITIONAL AGREEMENTS
Section 6.1 Accounts Receivable. With respect to any Accounts Receivable
which are not collected by Buyer within 120 days of the Closing Date, Buyer
shall have the option, exercisable at Buyer's sole discretion and upon written
notice to Seller at any time following such 120 day period, to cause Seller to
purchase from Buyer at face value any such uncollected Accounts Receivable. Such
notice shall specify the face value of any such uncollected Accounts Receivable.
Within 15 days of Buyer's notice to Seller of Buyer's desire to exercise its
option hereunder, Seller shall remit payment to Buyer for the amount of the face
value of any such uncollected Accounts Receivable in the form of a certified
check, and Buyer shall assign such Accounts Receivable to Seller.
Section 6.2 Survival of Representations, Warranties and Agreements. All
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Closing.
Section 6.3 Dispute Resolution. Except as otherwise expressly provided
herein, any dispute or controversy arising under or in connection with this
Agreement will be settled by binding arbitration to be held in Boston,
Massachusetts, USA, in accordance with the Commercial Arbitration Rules of the
American Arbitration Association (the "AAA") then in effect, by a panel of three
arbitrators to be selected by the AAA. The arbitrators shall allow such
discovery as the arbitrators determine appropriate under the circumstances and
shall resolve the dispute as expeditiously as practicable and, if reasonably
practicable, within one hundred twenty (120) days after the arbitrators are
appointed. The arbitrators shall have authority to award relief
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under legal or equitable principles, including interim or preliminary relief,
and to allocate responsibility for the costs of the arbitration and to award
recovery of attorneys fees and expenses in such manner as is determined to be
appropriate by the arbitrators. Judgment upon the award rendered by the
arbitrators may be entered in any court of competent jurisdiction. The fact that
the dispute resolution procedures specified herein shall have been or may be
invoked shall not excuse any party from performing its obligations under this
Agreement, and during the pendency of any such procedure, all parties shall
continue to perform their respective obligations in good faith, subject to any
rights to terminate this Agreement that may be available to any party hereunder.
Section 6.4 Sales Taxes. All sales and use taxes, if any, due under the
laws of any state, any local government authority or the federal government of
the United States in connection with the purchase and sale of the Purchased
Assets shall be paid by Seller.
Section 6.5 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall constitute one in the same instrument.
Section 6.6 Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
Section 6.7 Entire Agreement. This Agreement constitutes the entire
agreement between the parties, and there are no agreements, understandings,
restrictions, warranties, or representations between the parties other than
those set forth or provided for in this Agreement relating to the subject matter
hereof.
Section 6.8 Governing Law. This Agreement shall be governed in all
respects, including validity, interpretation and effect, by the internal laws of
the State of Tennessee without regard to principles of conflicts of laws.
Section 6.9 Notices. All notices, requests, demands, claims and other
communications required or permitted to be given hereunder shall be in writing
and shall be sent by (a) personal delivery (effective upon delivery), (b)
facsimile (effective on the next day after transmission), (c) recognized
overnight delivery (effective on the next day after delivery to the service) or
(d) registered or certified mail, return receipt requested and postage prepaid
(effective on the third day after being so mailed), in each case addressed to
the intended recipient as set forth below:
If to Buyer:
Technical Tire Recycling, Inc.
c/x XxxxxXxx Technologies, Inc.
0 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx, CFO
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With a copy (which shall not constitute notice) to:
Xxxxxx, Hall & Xxxxxxx
Exchange Place
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxx X. Xxxxxx, Xx., Esq.
Facsimile: (000) 000-0000
If to Seller:
Tennessee Tire Recyclers, Inc.
0000 Xxxxxx Xxxx Xxxx
Xxxxxxxxxxx, XX 00000
Either Party may change its address for receiving notices by giving written
notice of such change to the other Party in accordance with this Section 6.9.
Section 6.10 Bulk Transfer Law. The Parties hereby waive compliance with
the bulk sales or bulk transfer provisions of any Uniform Commercial Code or any
other bulk sales or bulk transfer law which may apply to the transition
contemplated by this Agreement. Seller shall indemnify, defend and hold Buyer
harmless from and against any and all liabilities, claims, demands, damages,
losses, costs and expenses (including reasonable attorneys' fees) imposed on
Buyer by reason of the failure of the Parties to comply with such provisions.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal as of the date first written above.
TENNESSEE TIRE RECYCLERS, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
TECHNICAL TIRE RECYCLING, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxx
Title: Treasurer
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