STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT ("Agreement"), dated October 30, 1997 by and
among American Custom Components, Inc., a Nevada corporation (hereinafter called
"ACC"), Caribbean Electronics, Ltd., a Saint Lucian corporation ("CEL" or the
"Company") and Xxxxxx Xxxxxx as representative of the holders of 100% of the
shares of common stock of CEL ("Xxxxxx", and collectively with such other
shareholders, the "Shareholders").
W I T N E S S E T H
WHEREAS, Xxxxxx and the other Shareholders of CEL desire to sell 100%
of the shares of the common stock (the "CEL Shares") of CEL to ACC, consisting
of 100% of the issued and outstanding common stock of CEL, on the terms and
conditions set forth in this Stock Purchase Agreement (hereinafter called
"Agreement"); and
WHEREAS, ACC desires to acquire the CEL Shares pursuant to the terms
and conditions set forth in this Stock Purchase Agreement.
NOW THEREFORE, in consideration of the premises and respective mutual
agreements, covenants, representations and warranties herein contained, it is
agreed between the parties hereto as follows:
ARTICLE 1
SALE AND PURCHASE OF THE SHARES
1.1 SALE OF THE CEL SHARES. At the date of the signing of this
Agreement as provided in Section 3.1 hereto (the "Closing"), subject to the
terms and conditions herein set forth, and on the basis of the representations,
warranties and agreements herein contained, the Shareholders shall sell to ACC
and ACC shall purchase from the Shareholders, the CEL Shares.
1.2 INSTRUMENTS OF CONVEYANCE AND TRANSFER. At the Closing, the
Shareholders shall deliver certificates representing the CEL Shares, or an
affidavit or other evidence from the CEL Stock Minutes with respect to lost or
missing shares, together with appropriate stock powers, sufficient to transfer
the CEL Shares into ACC's name, in form and substance satisfactory to ACC as
shall be effective to vest in ACC all right, title and interest in and to all of
the CEL Shares.
1.3 CASH CONSIDERATION. At the Closing, ACC shall pay to Xxxxxx on
behalf of the Shareholders an aggregate of $50,000 in immediately available
funds.
1.4 NOTE CONSIDERATION. At the Closing, ACC shall deliver to Xxxxxx on
behalf of the Shareholders a Secured 8% Note in the original aggregate principal
amount of $100,000 (the "Note"). The Note shall be in the form attached hereto
as Exhibit A and incorporated herein by reference. Without limitation to the
terms of the Note as set forth therein, the Note shall be payable
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quarterly over two and one-half years, shall be secured by all of the assets of
CEL, but subordinated to any loans or leases in CEL's interest, and shall be
offset by any amounts payable by ACC for liabilities of CEL other than those
previously disclosed herein and assumed hereunder by ACC.
1.5 STOCK CONSIDERATION. Within 30 days of the Closing, ACC shall
deliver to Xxxxxx an aggregate of 2% of the Stock of CEL (the "Initial Xxxxxx
Shares"), together with appropriate Medallion Guaranteed stock powers,
sufficient to transfer the Initial Xxxxxx Shares into Xxxxxx'x name, in form and
substance satisfactory to Xxxxxx as shall be effective to vest in Xxxxxx all
right, title and interest in and to all of the Initial Xxxxxx Shares. Within 6
months of the Closing, ACC shall deliver to Xxxxxx an aggregate of 3% of the
Stock of CEL (the "Subsequent Xxxxxx Shares"), together with appropriate
Medallion Guaranteed stock powers, sufficient to transfer the Subsequent Xxxxxx
Shares into Xxxxxx'x name, in form and substance satisfactory to Xxxxxx as shall
be effective to vest in Xxxxxx all right, title and interest in and to all of
the Subsequent Xxxxxx Shares. Xxxxxx shall receive an additional five percent
(5%) of the stock of CEL under the terms and conditions of a Sales Agency
Agreement by and between Xxxxxx Associates and CEL and ACC (collectively called
"Principal") dated October 15, 1997.
1.6 CONSULTING FEE CONSIDERATION. As additional consideration, Xxxxxx
shall receive a monthly fee of fifteen hundred dollars ($1,500.00) per month for
a period of three (3) years from the date of closing. Xxxxxx'x duties shall
include advising ACC and CEL on matters pertaining to doing business in St.
Lucia, contacts, customs and procedures in dealings with local and St. Lucian
government officials. In addition, all reasonable expenses of Xxxxxx to provide
these consulting services shall be paid by ACC and CEL, including, but not
limited to air fare, hotel and meals, and incidental expenses.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF CEL AND THE SHAREHOLDERS. To
induce ACC to enter into this Agreement and to consummate the transactions
contemplated hereby, ACC represents and warrants, as of the date hereof and as
of the Closing, as follows:
2.1.1 CORPORATE EXISTENCE AND AUTHORITY OF CEL. CEL is a
limited corporation duly organized, validly existing and in good
standing under the laws of St. Lucia. It has all requisite corporate
power, franchises, licenses, permits and authority to own its
properties and assets and to carry on its business as it has been and
is being conducted. It is in good standing in each state, nation or
other jurisdiction in each state, nation or other jurisdiction wherein
the character of the business transacted by it makes such qualification
necessary.
2.1.2 CAPITALIZATION OF CEL. The authorized equity securities
of CEL consists of 250,000 shares of common stock, all of which Xxxxxx
Xxxxxx has full power, control and voting rights. No other shares of
capital stock of CEL are issued and outstanding. All of the issued and
outstanding shares have been duly and validly issued in accordance and
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compliance with all applicable laws, rules and regulations and are
fully paid and nonassessable. There are no options, warrants, rights,
calls, commitments, plans, contracts or other agreements of any
character granted or issued by CEL which provide for the purchase,
issuance or transfer of any shares of the capital stock of CEL nor are
there any outstanding securities granted or issued by CEL that are
convertible into any shares of the equity securities of CEL, and none
is authorized. CEL is not obligated or committed to purchase, redeem or
otherwise acquire any of its equity. All presently exercisable voting
rights in CEL are vested exclusively in its outstanding shares of
common stock, each share of which is entitled to one vote on every
matter to come before it's shareholders, and other than as may be
contemplated by this Agreement, there are no voting trusts or other
voting arrangements with respect to any of CEL's equity securities.
2.1.3 SUBSIDIARIES. "Subsidiary" or "Subsidiaries" means all
corporations, trusts, partnerships, associations, joint ventures or
other Persons, as defined below, of which a corporation or any other
Subsidiary of such corporation owns not less than twenty percent
(20%)of the voting securities or other equity or of which such
corporation or any other Subsidiary of such corporation possesses,
directly or indirectly, the power to direct or cause the direction of
the management and policies, whether through ownership of voting
shares, management contracts or otherwise. "Person" means any
individual, corporation, trust, association, partnership,
proprietorship, joint venture or other entity. There are no
Subsidiaries of CEL.
2.1.4 EXECUTION OF AGREEMENT. The execution and delivery of
this Agreement does not, and the consummation of the transactions
contemplated hereby will not: (a) violate, conflict with, modify or
cause any default under or acceleration of (or give any party any right
to declare any default or acceleration upon notice or passage of time
or both), in whole or in part, any charter, article of incorporation,
bylaw, mortgage, lien, deed of trust, indenture, lease, agreement,
instrument, order, injunction, decree, judgment, law or any other
restriction of any kind to which either CEL or any of the Shareholders
is a party or by which either of them or any of their properties are
bound; (b) result in the creation of any security interest, lien,
encumbrance, adverse claim, proscription or restriction on any property
or asset (whether real, personal, mixed, tangible or intangible),
right, contract, agreement or business of CEL or any of such
Shareholders; (c) violate any law, rule or regulation of any federal or
state regulatory agency; or (d) permit any federal or state regulatory
agency to impose any restrictions or limitations of any nature on CEL
or any of the Shareholders or any of their respective actions.
2.1.5 TAXES.
2.1.5.1 No taxes, assessments, fees, penalties,
interest and other governmental charges with respect to CEL
have become due and payable as of the date hereof (including
without limitation, income, property, sales, use, franchise,
capital stock, excise, added value, employees' income
withholding, social security and unemployment taxes) in
accordance with the laws of St. Lucia. CEL is located in a tax
free, duty free zone.
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2.1.5.2 There are no agreements, waivers or other
arrangements providing for an extension of time with respect
to the assessment of any tax or deficiency against CEL, nor
are there any actions, suits, proceedings, investigations or
claims now pending against CEL, nor are there any actions,
suits, proceedings, investigations or claims now pending
against CEL in respect of any tax or assessment, or any
matters under discussion with any federal, state, local or
foreign authority relating to any taxes or assessments, or any
claims for additional taxes or assessments asserted by any
such authority, and there is no basis for the assertion of any
additional taxes or assessments against CEL, and
2.1.5.3 The consummation of the transactions
contemplated by this Agreement will not result in the
imposition of any additional taxes on or assessments against
CEL.
2.1.6 DISPUTES AND LITIGATION. There is no suit, action,
litigation, proceeding, investigation, claim, complaint, or accusation
pending, threatened against or affecting CEL or any of its properties,
assets or business or to which CEL is a party, in any court or before
any arbitrator of any kind or before or by any governmental agency
(including, without limitation, any federal, state, local, foreign or
other governmental department, commission, board, bureau, agency or
instrumentality), and there is no basis for such suit, action,
litigation, proceeding, investigation, claim, complaint, or accusation;
(b) there is no pending or threatened change in any environmental,
zoning or building laws, regulations or ordinances which affect or
could affect CEL or any of its properties, assets or businesses; and
(c) there is no outstanding order, writ, injunction, decree, judgment
or award by any court, arbitrator or governmental body against or
affecting CEL or any of its properties, assets or business. There is no
litigation, proceeding, investigation, claim, complaint or accusation,
formal or informal, or arbitration pending, or any of the aforesaid
threatened, or any contingent liability which would give rise to any
right of indemnification or similar right on the part of any director
or officer of CEL or any such person's heirs, executors or
administrators as against CEL.
2.1.7 COMPLIANCE WITH LAWS. CEL has at all times been, and
presently is, in full compliance with, and has not received notice of
any claimed violation of, any applicable federal, state, local, foreign
and other laws, rules and regulations. CEL has filed all returns,
reports and other documents and furnished all information required or
requested by any federal, state, local or foreign governmental agency
and all such returns, reports, documents and information are true and
complete in all respects. All permits, licenses, orders, franchises and
approvals of all federal, state, local or foreign governmental or
regulatory bodies required of CEL for the conduct of its business have
been obtained, no violations are or have been recorded in respect of
any such permits, licenses, orders, franchises and approvals, and there
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is no litigation, proceeding, investigation, arbitration, claim,
complaint or accusation, formal or informal, pending or threatened,
which may revoke, limit, or question the validity, sufficiency or
continuance of any such permit, license, order, franchise or approval.
Such permits, licenses, orders, franchises and approvals are valid and
sufficient for all activities presently carried on by CEL.
2.1.8 GUARANTIES. CEL has not guaranteed any dividend,
obligation or indebtedness of any Person; nor has any Person guaranteed
any dividend, obligation or indebtedness of CEL.
2.1.9 BOOKS AND RECORDS. CEL keeps its books, records and
accounts (including, without limitation, those kept for financial
reporting purposes and for tax purposes) in accordance with good
business practice and in sufficient detail to reflect the transactions
and dispositions of its assets, liabilities and equities. The minute
books of CEL contain records of its shareholders' and directors'
meetings and of action taken by such shareholders and directors. The
meeting of directors and shareholders referred to in such minute books
were duly called and held, and the resolutions appearing in such minute
books were duly adopted. The signatures appearing on all documents
contained in such minute books are the true signatures of the persons
purporting to have signed the same.
2.1.10 ABSENCE OF CERTAIN LIABILITIES. Since the date of the
financial statements of the CEL dated as of __________________, 1997,
and provided to ACC (the "Financial Statements"), CEL has incurred no
liabilities or obligations of any nature other than in the ordinary
course of business and consistent with past practice. CEL is not
directly or indirectly liable to (by discount, repurchase agreement or
otherwise), or obligated in any other way to provide funds in respect
of, or to guarantee or assume any debt or obligation of, any person in
any amount, except as arising in the normal course of business
subsequent to the Financial Statements date. All liabilities of CEL can
be prepaid in full without penalty at any time. CEL represents and
warrants that the only outstanding obligations of CEL as of the date
hereof are (i) $24,000 in outstanding rent, (ii) current utility
obligations and (iii) payroll for the period commencing
_______________, 1997. CEL hereby agrees to pay $12,000 towards the
rent obligation on or before the Closing hereunder. CEL acknowledges
and agrees that the balance of the rent will be paid by ACC to CEL's
present landlord in equal monthly installments over a 24 month period.
CEL represents and warrants that CEL's landlord has agreed to such
arrangement.
2.1.11 RECEIVABLES. All receivables on the books of CEL, to
and including the date of closing, shall be transferred to Xxxxxx at
the time of closing.
2.2 REPRESENTATIONS AND WARRANTIES OF ACC. To induce the Shareholders
to enter into this Agreement and to consummate the transactions contemplated
hereby, ACC represents and warrants, as of the date hereof and as of the
Closing, as follows:
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2.2.1 CORPORATE EXISTENCE AND AUTHORITY OF ACC. ACC is a
corporation duly organized, validly existing and in good standing under
the laws of the State of Nevada. It has all requisite corporate power,
franchises, licenses, permits and authority to own its properties and
assets and to carry on its business as it has been and is being
conducted. It is in good standing in each state, nation or other
jurisdiction in each state, nation or other jurisdiction wherein the
character of the business transacted by it makes such qualification
necessary.
2.2.2 EXECUTION OF AGREEMENT. The execution and delivery of
this Agreement does not, and the consummation of the transactions
contemplated hereby will not: (a) violate, conflict with, modify or
cause any default under or acceleration of (or give any party any right
to declare any default or acceleration upon notice or passage of time
or both), in whole or in part, any charter, article of incorporation,
bylaw, mortgage, lien, deed of trust, indenture, lease, agreement,
instrument, order, injunction, decree, judgment, law or any other
restriction of any kind to which ACC is a party or by which it or any
of its properties are bound; (b) result in the creation of any security
interest, lien, encumbrance, adverse claim, proscription or restriction
on any property or asset (whether real, personal, mixed, tangible or
intangible), right, contract, agreement or business of ACC; (c) violate
any law, rule or regulation of any federal or state regulatory agency;
or (d) permit any federal or state regulatory agency to impose any
restrictions or limitations of any nature on ACC or any of its actions.
ARTICLE 3
CLOSING AND DELIVERY OF DOCUMENTS
3.1 CLOSING. The Closing shall be deemed to have occurred as of the
date of signing of this Agreement. Subsequent to the signing, the following
shall occur as a single integrated transaction:
3.2 DELIVERY BY THE SHAREHOLDERS:
(a) The Shareholders shall deliver to ACC the stock
certificates and all instruments of conveyance and transfer required by
Section 1.1, except with respect to those shares of stock missing or
lost explained by affidavit or noted in the stock minute book (which
shall be canceled).
(b) Xxxxxx and the Shareholders shall deliver, or cause to be
delivered, to ACC such instruments, documents and certificates as are
required to be delivered by Xxxxxx and/or the Shareholders or their
representatives pursuant to the provisions of this Agreement.
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3.3 DELIVERY BY ACC:
(a) ACC shall deliver, or cause to be delivered, to Xxxxxx the
Cash Consideration and the Note as required by Section 1.3 and 1.4.
Within 30 days of the closing hereof, ACC shall deliver the Initial
Xxxxxx Shares and within 6 months of the closing hereof, ACC shall
deliver the Subsequent Xxxxxx Shares, all as required by Section 1.5.
(b) ACC shall deliver, or cause to be delivered, to the
Shareholders and/or Xxxxxx such instruments, documents and certificates
as are required to be delivered by ACC or its representatives pursuant
to the provisions of this Agreement, as well as the fee consideration
as set forth in paragraph 1.6 hereof.
ARTICLE 4
TERMINATION, AMENDMENT AND WAIVER
4.1 TERMINATION. Notwithstanding anything to the contrary contained in
this Agreement, this Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing by the
mutual consent of all of the parties;
4.2 WAIVER AND AMENDMENT. Any term, provision, covenant,
representation, warranty or condition of this Agreement may be waived, but only
by a written instrument signed by the party entitled to the benefits thereof.
The failure or delay of any party at any time or times to require performance of
any provision hereof or to exercise its rights with respect to any provision
hereof shall in no manner operate as a waiver of or affect such party's right at
a later time to enforce the same. No waiver by any party of any condition, or of
the breach of any term, provision, covenant, representation or warranty
contained in this Agreement, in any one or more instances, shall be deemed to be
or construed as a further or continuing waiver of any such condition or breach
or waiver of any other condition or of the breach of any other term, provision,
covenant, representation or warranty. No modification or amendment of this
Agreement shall be valid and binding unless it be in writing and signed by all
parties hereto.
ARTICLE 5
COVENANTS
5.1 To induce ACC to enter into this Agreement and to consummate the
transactions contemplated hereby, and without limiting any covenant, agreement,
representation or warranty made hereunder, Xxxxxx on behalf of the Shareholders
covenants and agrees as follows:
5.1.1 NOTICES AND APPROVALS. Xxxxxx agrees: (a) to give all
notices to third parties which may be necessary or deemed desirable by
ACC in connection with this Agreement and the consummation of the
transactions contemplated hereby; (b) to use its best efforts to
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obtain all federal and state governmental regulatory agency approvals,
consents, permit, authorizations, and orders necessary or deemed
desirable by ACC in connection with this Agreement and the consummation
of the transaction contemplated hereby; and (c) to use its best efforts
to obtain all consents and authorizations of any other third parties
necessary or deemed desirable by ACC in connection with this Agreement
and the consummation of the transactions contemplated hereby.
5.1.2 INFORMATION FOR ACC'S STATEMENTS AND APPLICATIONS.
Xxxxxx on behalf of the Shareholders and their employees, accountants
and attorneys shall cooperate fully with ACC in the preparation of any
statements or applications made by ACC to any federal or state
governmental regulatory agency in connection with this Agreement and
the transactions contemplated hereby and to furnish ACC with all
information concerning Xxxxxx and the Shareholders necessary or deemed
desirable by ACC for inclusion in such statements and applications,
including, without limitation, all requisite financial statements and
schedules.
ARTICLE 6
MISCELLANEOUS
6.1 EXPENSES. Except as otherwise specifically provided for herein,
whether or not the transactions contemplated hereby are consummated, each of the
parties hereto shall bear all taxes of any nature (including, without
limitation, income, franchise, transfer and sales taxes) and all fees and
expenses relating to or arising from its compliance with the various provisions
of this Agreement and such party's covenants to be performed hereunder, and
except as otherwise specifically provided for herein, each of the parties hereto
agrees to pay all of its own expenses (including, without limitation, attorneys
and accountants' fees and printing expenses) incurred in connection with this
Agreement, the transactions contemplated hereby, the negotiations leading to the
same and the preparations made for carrying the same into effect, and all such
taxes, fees and expenses of the parties hereto shall be paid prior to Closing.
6.2 NOTICES. Any notice, request, instruction or other document
required by the terms of this Agreement, or deemed by any of the parties hereto
to be desirable, to be given to any other party hereto shall be in writing and
shall be given by prepaid telegram or delivered or mailed by registered or
certified mail, postage prepaid, with return receipt requested, to the following
addresses:
TO ACC:
American Custom Components, Inc.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxx Xxxx Walk
Facsimile No.: 000-000-0000
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with a copy to:
Law offices of M. Xxxxxxx Xxxxxx
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attn: M. Xxxxxxx Xxxxxx, Esq.
Facsimile No.: 000-000-0000
TO CEL, XXXXXX OR THE SHAREHOLDERS:
Xxxxxx Xxxxxx
00 Xxxxxxx Xxxx
X.X. Xxx 000
Xxxxxxx, XX 00000
Facsimile No.: ______________________
The persons and addresses set forth above may be changed from time to
time by a notice sent as aforesaid. If notice is given by delivery in accordance
with the provisions of this Section, said notice shall be conclusively deemed
given at the time of such delivery. If notice is given by mail in accordance
with the provisions of this Section, such notice shall be conclusively deemed
given forty-eight (48) hours after deposit thereof in the United States mail. If
notice is given by telegraph in accordance with the provisions of this Section,
such notice shall be conclusively deemed given at the time that the telegraphic
agency shall confirm delivery thereof to the addressee.
6.3 ENTIRE AGREEMENT. This Agreement, together with the Schedule and
exhibits hereto, sets forth the entire agreement and understanding of the
parties hereto with respect to the transactions contemplated hereby, and
supersedes all prior agreements, arrangements and understandings related to the
subject matter hereof. No understanding, promise, inducement, statement of
intention, representation, warranty, covenant or condition, written or oral,
express or implied, whether by statute or otherwise, has been made by any party
hereto which is not embodied in this Agreement, or in the Schedule 1 or exhibits
hereto or the written statements, certificates, or other documents delivered
pursuant hereto or in connection with the transactions contemplated hereby, and
no party hereto shall be bound by or liable for any alleged understanding,
promise, inducement, statement, representation, warranty, covenant or condition
not so set forth.
6.4 SURVIVAL OF REPRESENTATIONS. All statements of fact (including
financial statements) contained in the Schedule, the exhibits, the certificates
or any other instrument delivered by or on behalf of the parties hereto, or in
connection with the transactions contemplated hereby, shall be deemed
representations and warranties by the respective party hereunder. All
representation, warranties agreements and covenants hereunder shall survive the
Closing and remain effective regardless of any investigation or audit at any
time made by or on behalf of the parties or of any information a party may have
in respect thereto. Consummation of the transactions contemplated hereby shall
not be deemed or construed to be a waiver of any right or remedy possessed by
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any party hereto, notwithstanding that such party knew or should have known at
the time of Closing that such right or remedy existed.
6.5 INCORPORATED BY REFERENCE. The Schedule, the exhibits and all
documents (including, without limitation, all financial statements) delivered as
part hereof or incident hereto are incorporated as a part of this Agreement by
reference.
6.6 REMEDIES CUMULATIVE. No remedy herein conferred upon Purchaser is
intended to be exclusive of any other remedy and each and every such remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
otherwise.
6.7 EXECUTION OF ADDITIONAL DOCUMENTS. Each party hereto shall make,
execute, acknowledge and deliver such other instruments and documents, and take
all such other actions as may be reasonably required in order to effectuate the
purposes of this Agreement and to consummate the transactions contemplated
hereby.
6.8 FINDERS' AND RELATED FEES. Each of the parties hereto is
responsible for, and shall indemnify the other against, any claim by any third
party to a fee, commission, bonus or other remuneration arising by reason of any
services alleged to have been rendered to or at the instance of said party to
this Agreement with respect to this Agreement or to any of the transactions
contemplated hereby.
6.9 GOVERNING LAW. This Agreement has been negotiated and executed in
the State of California and shall be construed and enforced in accordance with
the laws of such state.
6.10 FORUM. Each of the parties hereto agrees that any action or suit
which may be brought by any party hereto against any other party hereto in
connection with this Agreement or the transactions contemplated hereby may be
brought only in a federal or state court in Orange County, California.
6.11 BINDING EFFECT AND ASSIGNMENT. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective heirs,
executors, administrators, legal representatives and assigns.
6.12 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. In making proof of this Agreement, it shall not be
necessary to produce or account for more than one such counterpart.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as
of the date first written hereinabove.
AMERICAN CUSTOM COMPONENTS, INC.
By: /S/ XXXXXX XXXX WALK
--------------------------
Xxxxxx Xxxx Walk
Chief Executive Officer
CARIBBEAN ELECTRONICS, LTD.
By: /S/ XXXXXX XXXXXX
--------------------------
Name: Xxxxxx Xxxxxx
XXXXXX XXXXXX, INDIVIDUALLY, AND ON
BEHALF OF THE SHAREHOLDERS
/S/ XXXXXX XXXXXX
-----------------------------------
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