XXXX AGREEMENT
Between
ELAMEX USA, INC.
A Delaware Corporation and Wholly-owned
Subsidiary of Elamex, S.A. de C.V.
"Elamex USA"
and
XXXX NUT COMPANY
A Delaware Corporation
"Xxxx"
June 28, 2002
Contents
Page
----
1. Date ................................................................... 1
2. Parties ................................................................ 1
2.1 Elamex USA, Corp. ................................................ 1
2.2 Xxxx Nut Company ................................................. 1
3. Defined Terms .......................................................... 1
3.1 "Accel" .......................................................... 1
3.2 "Agreement" ...................................................... 1
3.3 "Xxxx'x Interests in Mt. Franklin Holdings" ...................... 1
3.4 "Xxxx Shareholders" .............................................. 2
3.5 "Closing" ........................................................ 2
3.6 "Effective Date and Time" ........................................ 2
3.7 "Escrow Agent" ................................................... 2
3.8 "Escrow Agreement" ............................................... 2
3.9 "Escrowed Shares" ................................................ 3
3.10 "Franklin Connections" ........................................... 3
3.11 "Franklin Food Products" ......................................... 3
3.12 "Franklin Inmobiliarios" ......................................... 3
3.13 "Franklin Inmobiliarios Agreements" .............................. 3
3.14 "Kids Holding Agreement" ......................................... 3
3.15 "Mt. Franklin Holdings" .......................................... 3
3.16 "Mt. Franklin Options" ........................................... 3
3.17 "Parties" ........................................................ 3
3.18 "Reprop Merger" .................................................. 3
4. Recitals ............................................................... 3
5. Agreements ............................................................. 4
5.1 Sale and Purchase of Xxxx'x Interests in Mt. Franklin Holdings ... 5
5.2 Purchase Price; Payment of the Purchase Price .................... 5
(a) Shares Not Subject to Escrow ............................... 5
(b) Escrowed Shares ............................................ 5
5.3 Permitted Transfer of the Elamex Restricted Shares Portion of
the Purchase Price from Xxxx to the Xxxx Shareholders ............ 5
(a) Shares Not Subject to Escrow ............................... 5
(b) Escrowed Shares ............................................ 6
5.4 Mt. Franklin Options; Elamex Options ............................. 6
(a) Agreement Regarding Management Options - Pre-2000 .......... 6
(b) Agreement Regarding Non-management Options - Pre-2000 ...... 6
(c) Agreement Regarding Mt. Franklin Time Options @ $12.87
in Names of Xxxx Shareholders .............................. 6
(d) Agreement Regarding Mt. Franklin Performance Options @
$12.87 in Names of Xxxx Shareholders ....................... 6
5.5 Rights of First Refusal to Acquire Shares of Elamex, S.A. de
C.V. ............................................................. 7
5.6 Agreement to Keep Non-public Information Confidential ............ 7
5.7 Representations and Warranties of Elamex USA ..................... 7
Xxxx Agreement between
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx") June 28, 2002
Contents Page i of ii
(a) Organization of Elamex USA ................................. 7
(b) Authorization of Transaction; Restricted Shares of Elamex,
S.A. de C.V. ............................................... 7
(c) Noncontravention ........................................... 8
(d) No Pending or Threatened Litigation or Claims .............. 8
(e) Access to Information ...................................... 8
(f) No Representations ......................................... 8
5.8 Representations and Warranties of Xxxx ........................... 8
(a) Organization of Xxxx ....................................... 8
(b) Authorization of Transaction ............................... 9
(c) No Lien or Other Encumbrance Relating to Xxxx'x Interests
in Mt. Franklin Holdings ................................... 9
(d) Noncontravention ........................................... 9
(e) No Pending or Threatened Litigation or Claims .............. 9
(f) Mt. Franklin Options ....................................... 9
(g) Information About Elamex, S.A. de C.V. ..................... 9
(h) Investment ................................................. 9
(i) Manner of Offering ........................................ 10
(j) Restricted Shares; Not Registered with SEC or Any State ... 10
(k) Disclosure of Information Concerning Mt. Franklin
Holdings .................................................. 10
5.9 Conditions Precedent to Closing ................................. 10
(a) Conditions Precedent to the Obligations of Elamex USA ..... 10
(b) Conditions Precedent to the Obligations of Xxxx ........... 12
5.10 Miscellaneous ................................................... 12
(a) Entire Agreement; Integration ............................. 12
(b) Survival of Representations and Warranties ................ 13
(c) Binding Nature; No Assignments ............................ 13
(d) Further Action ............................................ 13
(e) Time is of the Essence .................................... 13
(f) Amendments, Modifications, Approvals, and Consents ........ 13
(g) Parties in Interest; No Third-Party Beneficiaries ......... 13
(h) Notices ................................................... 14
(i) Costs and Expenses ........................................ 14
(j) No Brokerage Commissions, Finders Fees, or Similar Costs .. 14
(k) Attorneys Fees ............................................ 14
(l) Governing Law ............................................. 14
(m) Construction .............................................. 15
(n) Rights and Remedies ....................................... 15
(o) Arbitration ............................................... 15
(p) No Waiver ................................................. 16
(q) Severability .............................................. 16
(r) Covenant of Good Faith .................................... 16
(s) Force Majeure ............................................. 16
(t) Titles and Captions ....................................... 16
(u) Pronouns and Plurals ...................................... 17
(v) Counterparts .............................................. 17
Exhibit A - Form of Escrow Agreement ......................................... A
Exhibit B - Mt. Franklin Options ............................................. B
Xxxx Agreement between
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx") June 28, 2002
Contents Page ii of ii
XXXX AGREEMENT
1. DATE: June 28, 2002
2. PARTIES:
2.1 Elamex USA, Corp., a Delaware corporation and wholly-owned subsidiary
of Elamex, S.A. de C.V., having a mailing address of Attention:
Xxxxxxx X. Xxxxxxx, Elamex Third Floor, 0000 X. Xxxx, Xxxxxxxx X, Xx
Xxxx, Xxxxx 00000, and a facsimile (fax) number of (000) 000-0000
(herein "Elamex USA").
2.2 Xxxx Nut Company, a Delaware corporation, having a mailing address of
Attention: Xxxxx X. Xxxxxx, c/x Xxxxxxxx Connections, 0000
Xxxxxxxxxxxx Xxxxx, Xx Xxxx, Xxxxx 00000, and a facsimile (fax) number
of (000) 000-0000 (herein "Xxxx").
3. DEFINED TERMS: The terms defined in this Part 3 shall have the meanings
herein specified for all purposes of this Agreement, unless the context
clearly otherwise requires:
3.1 "Accel" means Accel, S.A. de C.V., a Mexican corporation.
3.2 "Agreement" or "Xxxx Agreement" means this Xxxx Agreement together
with and including any and all attachments, appendices, or exhibits
referred to herein and any and all modifications, alterations,
amendments, and supplements hereto--all of which shall be deemed for
all purposes of this Agreement to have been incorporated in this
Agreement by this reference as if separately spelled out in this
Agreement. The words "hereby," "herein," "hereof," "hereto,"
"hereunder," and "herewith" when used in this Agreement shall refer to
and mean a reference to this entire Agreement unless restricted to a
reference in context to a particular portion of this Agreement.
3.3 "Xxxx'x Interests in Mt. Franklin Holdings" means all of Xxxx'x
ownership in Mt. Franklin Holdings including all of Xxxx'x 34.262%
member, profit, and capital interests in Mt. Franklin Holdings
together with all other rights, interests, or claims relating to Mt.
Franklin Holdings, Franklin Connections, and its two partners, or in
any other way relating to the assets or operations of such entities.
Mt. Franklin Options rights of Xxxx Shareholders shall not be included
within the definition of Xxxx'x Interests in Mt. Franklin Holdings.
Xxxx Agreement between
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx") June 28, 2002
Page 1 of 17
3.4 "Xxxx Shareholders" means the following shareholders of Xxxx:
Xxxx
Shares
Name of Xxxx Shareholder Owned
------------------------ -------
Estate of Xxxxxx X. Xxxxxx 31,355
Xxxxxxx X. Xxxxxxxx 20,115
Xxxxx X. Xxxxxx 12,423
Xxxxxxx X. Xxxxxx 129,973
Xxxxxx X. Xxxxxx 20,000
C. Xxxxx XxXxxxx 21,050
Xxxx X. Xxxx 6,258
Xxxxxx X. Xxxxxxxxxxx 10,068
F. Xxxxxx Xxxxx 21,513
Xxxxxxxxx X. Xxxxxxxxxx 10,000
Xxxxxxxx X. van den Broek 13,617
Xxxx Xxxxxxx 3,885
Xxxxxx X. Xxxxxx 18,320
Xxxxxxx X. Xxxxxx 32,804
Xxxxxxx X. Xxxxxx 794
Xxxxxxx Xxxxxxx 12,939
Xxxxxx Xxxxxxxx 10,000
Xxxx X. Xxxxxxx 349
Xxxx Xxxxxx 2,331
Xxxxx Xxxx 3,885
-------
Totals 381,679
=======
3.5 "Closing" means the completion and closing of all of the actions and
delivery of all of the documents and other items called for by this
Agreement, which shall occur on Friday, June 28, 2002, at 10:00 a.m.
local time, at the offices of Elamex USA, or such other day, date,
time, and place as shall be mutually agreed upon by the Parties.
3.6 "Effective Date and Time" means close of business on Friday, June 28,
2002.
3.7 "Escrow Agent" means that person or entity named as the escrow agent
in the Escrow Agreement.
3.8 "Escrow Agreement" means an escrow agreement in the form attached
hereto as Exhibit X.
Xxxx Agreement between
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx") June 28, 2002
Page 2 of 17
3.9 "Escrowed Shares" means those restricted shares of common stock of
Elamex, S.A. de C.V., to be delivered to the Escrow Agent (subject to
the Escrow Agreement) at Closing in accordance with subsection 5.2(b)
of this Agreement.
3.10 "Franklin Connections" means Franklin Connections, LP, a Delaware
limited partnership.
3.11 "Franklin Food Products" means Franklin Food Products LLC, a Delaware
limited liability company.
3.12 "Franklin Inmobiliarios" means Franklin Inmobiliarios, S.A. de C.V., a
Mexican corporation.
3.13 "Franklin Inmobiliarios Agreements" means those respective agreements
between the owners of Franklin Inmobiliarios and Elamex USA dated on
or as of June 28, 2002, which may include an option or options to
acquire all of the ownership of Franklin Inmobiliarios with a closing
thereon at a later date.
3.14 "Kids Holding Agreement" means that certain agreement between Elamex
USA and Kids Holding Corp., a Delaware corporation, dated on or as of
June 28, 2002.
3.15 "Mt. Franklin Holdings" means Mt. Franklin Holdings, LLC, a Delaware
limited liability company.
3.16 "Mt. Franklin Options" means those options to purchase ownership units
in Mt. Franklin Holdings listed in attached Exhibit B that were issued
by Mt. Franklin Holdings pursuant to the Mt. Franklin Holdings, LLC
Option and Bonus Plan or otherwise.
3.17 "Parties" means the entities named in Part 2 hereof; and "Party" means
either one of such Parties.
3.18 "Reprop Merger" means that merger or acquisition of Reprop
Corporation, a Delaware corporation, into or by Elamex USA pursuant to
that certain Plan and Agreement of Merger or other acquisition
agreement dated on or as of June 28, 2002, between Elamex USA and
Reprop Corporation or Accel.
4. RECITALS:
4.1 Mt. Franklin Holdings is a holding company whose only activity is the
ownership of 100% of Franklin Connections and its partners. Franklin
Connections operates a retail nut and foodservice nut packaging and
marketing company whose operations are
Xxxx Agreement between
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx") June 28, 2002
Page 3 of 17
located in El Paso, Texas, and a general line candy manufacturing
facility in Juarez, Mexico. The nut business operates under the trade
name "Xxxx Nuts" while the candy sector generally operates under the
"Sunrise" trade name. In addition to the nut and candy operations,
Franklin Connections has a small operation in El Paso involved in
providing contract warehousing and distribution to other food
companies.
4.2 Mt. Franklin Holdings is presently owned 34.262% by Azar and 65.738%
by Franklin Food Products. Franklin Food Products is presently owned
50.1% by Reprop Corporation and 49.9% by Kids Holding Corp. Reprop
Corporation is a wholly-owned subsidiary of Accel.
4.3 Franklin Inmobiliarios owns the candy manufacturing building located
in Juarez, Mexico. The process equipment and leasehold improvements
for this building are owned by Franklin Connections. Franklin
Inmobiliarios is owned 50% by Corporacion Chihuahua, a Mexican
corporation that is an affiliate of Accel and Elamex USA-including one
share owned by Xxxx X. Xxxxxxx, and 50% by Naiv, S.A. de C.V., a
Mexican corporation.
4.4 Elamex USA desires to acquire all of the ownership of Mt. Franklin
Holdings and thereby all of the ownership of Franklin Connections and
its two partners. The acquisition of all of the ownership of Mt.
Franklin Holdings will be accomplished pursuant to this Agreement, the
Reprop Merger, and the Kids Holding Agreement.
4.5 Elamex USA also desires to acquire all of the ownership of Franklin
Inmobiliarios. The acquisition of all of the ownership of Franklin
Inmobiliarios will be accomplished pursuant to the Franklin
Inmobiliarios Agreements.
4.6 Xxxx desires to sell all of Xxxx'x Interests in Mt. Franklin Holdings
to Elamex USA pursuant to the terms and provisions of this Agreement,
including the condition by Elamex USA that the Reprop Merger, the Kids
Holding Agreement, and the Franklin Inmobiliarios Agreements must all
close pursuant to their terms or as otherwise agreed by Elamex USA.
4.7 The Parties have agreed that the Escrowed Shares, representing a
portion of the consideration for the purchase of Xxxx'x Interests in
Mt. Franklin Holdings, shall be made subject to the terms and
provisions set forth in the Escrow Agreement.
5. AGREEMENTS: NOW, THEREFORE, in consideration of the mutual agreements,
representations, warranties, covenants, and provisions contained in this
Agreement, together with other good and valuable consideration the receipt
and sufficiency of which is hereby acknowledged, the Parties hereby adopt
the definitions set forth in Parts 2 and 3 hereof, acknowledge that the
recitals in Part 4 are substantially correct, and further agree as follows:
Xxxx Agreement between
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx") June 28, 2002
Page 4 of 17
5.1 Sale and Purchase of Xxxx'x Interests in Mt. Franklin Holdings.
Subject to the other provisions hereof, Xxxx hereby sells to Elamex
USA, and Elamex USA hereby purchases from Xxxx, all of Xxxx'x
Interests in Mt. Franklin Holdings. Such sale and purchase shall be
effective for accounting and tax purposes as of the Effective Date and
Time.
5.2 Purchase Price; Payment of the Purchase Price. The purchase price (the
"Purchase Price") for all of Xxxx'x Interests in Mt. Franklin Holdings
shall be One Million One Hundred Forty-five Thousand Forty US Dollars
and No Cents ($1,145,040.00) - herein referred to as the "Cash Portion
of the Purchase Price" - plus One Hundred Ninety Thousand Eight
Hundred Thirty-nine (190,839) restricted shares of the common stock of
Elamex, S.A. de C.V., a Mexican corporation that owns 100% of Elamex
USA -herein referred to as the "Elamex Restricted Shares Portion of
the Purchase Price."
The Cash Portion of the Purchase Price shall be paid by the delivery
to Xxxx at Closing of cash in the amount of One Million One Hundred
Forty-five Thousand Forty US Dollars and No Cents ($1,145,040.00) by
wire transfer in immediately available funds to the account designated
by Xxxx.
The Elamex Restricted Shares Portion of the Purchase Price shall be
paid as follows:
(a) Shares Not Subject to Escrow. By the delivery to Xxxx at Closing
of one certificate in the name of Xxxx representing Ninety-five
Thousand Four Hundred Twenty (95,420) restricted shares of the
common stock of Elamex, S.A. de C.V.; and
(b) Escrowed Shares. By the delivery to Escrow Agent (subject to the
Escrow Agreement) at Closing of one certificate in the name of
Xxxx representing Ninety-five Thousand Four Hundred Nineteen
(95,419) restricted shares of the common stock of Elamex, S.A. de
C.V.
5.3 Permitted Transfer of the Elamex Restricted Shares Portion of the
Purchase Price from Xxxx to the Xxxx Shareholders. Subject to the
other terms and provisions of this Agreement, Xxxx shall be permitted
to transfer after Closing the Elamex Restricted Shares Portion of the
Purchase Price into the record names of the respective Xxxx
Shareholders as follows:
(a) Shares Not Subject to Escrow. Xxxx may cause the transfer of the
Ninety-five Thousand Four Hundred Twenty (95,420) restricted
shares of the common stock of Elamex, S.A. de C.V., that are not
Escrowed Shares pursuant to subsection 5.2(a) of this Agreement
into the record names of the respective Xxxx Shareholders after
Closing and such restricted shares may be delivered to such
respective
Xxxx Agreement between
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx") June 28, 2002
Page 5 of 17
Xxxx Shareholders as their interests may appear - provided,
however, that each certificate representing such restricted
shares shall bear a restrictive legend that states that the
shares may not be further transferred without compliance with
applicable state and federal securities laws or exemptions
therefrom and that the resale of such restricted shares is
subject to a right of first refusal held by Elamex USA; and
(b) Escrowed Shares. Xxxx may cause the Escrow Agent to transfer the
Ninety-five Thousand Four Hundred Nineteen (95,419) restricted
shares of the common stock of Elamex, S.A. de C.V., that are
Escrowed Shares pursuant to subsection 5.2(b) of this Agreement
into the record names of the respective Xxxx Shareholders as
their interests may appear after Closing so long as such
transferred shares are delivered to the Escrow Agent together
with a blank power signed by each Xxxx Shareholder relating to
the certificate representing such Azar Shareholder's shares held
by the Escrow Agent - provided, however, that each certificate
representing such restricted shares shall bear a restrictive
legend that states that the shares may not be further transferred
without compliance with applicable state and federal securities
laws or exemptions therefrom and that the resale of such
restricted shares is subject to a right of first refusal held by
Elamex USA.
5.4 Mt. Franklin Options; Elamex Options.
(a) Agreement Regarding Management Options - Pre-2000. Xxxx agrees as
a condition to Closing to forfeit, cancel, and terminate the
70,730 Mt. Franklin Options listed under the heading "Management
Options - Pre-2002" in attached Exhibit B.
(b) Agreement Regarding Non-management Options - Pre-2000. Xxxx
agrees as a condition to Closing to forfeit, cancel, and
terminate the 32,600 Mt. Franklin Options listed under the
heading "Non-management Options - Pre-2002" in attached Exhibit
B.
(c) Agreement Regarding Mt. Franklin Time Options @ $12.87 in Names
of Xxxx Shareholders. Elamex USA requires as a condition to
Closing that Xxxx Shareholders Xxxxxx X. Xxxxxx, Xxxxxxx X.
Xxxxxx, Xxxxxxx Xxxxxxx, and Xxxxxx Xxxxxxxx each respectively
agree that those Mt. Franklin Options listed in their respective
names under the heading "Mt. Franklin Time Options @ $12.87" in
attached Exhibit B shall be deemed cancelled and terminated
effective the Closing.
(d) Agreement Regarding Mt. Franklin Performance Options @ $12.87 in
Names of Xxxx Shareholders. Elamex USA requires as a condition to
Closing
Xxxx Agreement between
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx") June 28, 2002
Page 6 of 17
that Xxxx Shareholders Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxx,
Xxxxxxx Xxxxxxx, and Xxxxxx Xxxxxxxx each respectively agree that
those Mt. Franklin Options listed in their respective names under
the heading "Mt. Franklin Performance Options @ $12.87" in
attached Exhibit B shall be cancelled and terminated effective
the Closing.
5.5 Rights of First Refusal to Acquire Shares of Elamex, S.A. de C.V.
Elamex USA requires a condition to Closing that each of the shares of
common stock of Elamex, S.A. de C.V., transferred to the Xxxx
Shareholders pursuant to section 5.3 of this Agreement shall be
subject to a one year right of first refusal (which shall be reflected
on the restrictive legend on each certificate representing such
shares) for Elamex USA or its assign to acquire such shares on the
same price per share and terms as any bona fide third-party offer.
5.6 Agreement to Keep Non-public Information Confidential. Xxxx expressly
agrees to keep confidential all non-public information concerning
Elamex, S.A. de C.V., and its subsidiaries (including Elamex USA), and
to not personally use such information in connection with the purchase
or sale of any shares of Elamex, S.A. de C.V., or any other public
company.
5.7 Representations and Warranties of Elamex USA. Elamex USA represents
and warrants to Xxxx that the following statements contained in this
section 5.7 are true, correct, and complete as of the date of this
Agreement and will be true, correct, and complete as of the date of
Closing:
(a) Organization of Elamex USA. Elamex USA is a corporation, duly
organized, validly existing, and in good standing under the laws
of the state of Delaware. Elamex, S.A. de C.V., is a corporation,
duly organized, validly existing, and in good standing under the
laws of Mexico.
(b) Authorization of Transaction; Restricted Shares of Elamex, S.A.
de C.V. Elamex USA has full power and authority to execute and
deliver this Agreement and to perform its obligations hereunder.
All corporate action on the part of Elamex USA that would be
necessary to execute and deliver this Agreement and to consummate
the transactions contemplated hereby, including without
limitation the approval of Elamex USA's board of directors, has
been duly taken. This Agreement constitutes the valid and legally
binding obligation of Elamex USA, enforceable in accordance with
its terms and conditions, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or
affecting creditors' rights generally and to general equity
principles.
Xxxx Agreement between
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx") June 28, 2002
Page 7 of 17
Elamex USA shall purchase for cash from Elamex, S.A. de C.V., all
of the shares of common stock of Elamex, S. A. de C.V., to be
delivered by Elamex USA at Closing pursuant to section 5.2
hereof, and at Closing all such shares shall be duly authorized,
validly issued, nonassessable, free of all liens or other
encumbrances, and restricted as herein set forth. Elamex USA
agrees that forthwith after Closing a minimum of $7.5 million of
new equity capital shall be contributed to Mt. Franklin Holdings
or its subsidiaries by Elamex, S.A. de C.V., or its subsidiaries.
(c) Noncontravention. Neither the execution and the delivery of this
Agreement nor the performance of the obligations hereunder will
violate any provision of any agreement to which Elamex USA is a
party.
(d) No Pending or Threatened Litigation or Claims. There is no
pending or threatened litigation or claim against Elamex USA.
(e) Access to Information. Elamex USA has had access to all
documents, records, books and other information pertaining to Mt.
Franklin Holdings and Xxxx'x Interests in Mt. Franklin Holdings
to be acquired pursuant to this Agreement that it has desired to
review, and there are no additional materials or documents that
have been sought by Elamex USA that have not been available to
Elamex USA. Elamex USA has had an opportunity to ask questions of
and receive answers from Xxxx'x representatives about Mt.
Franklin Holdings and Xxxx'x Interests in Mt. Franklin Holdings
to be acquired pursuant to this Agreement, and any decision not
to ask questions of Xxxx'x representatives was a conscious
decision on Elamex USA's part and reflects its belief that no
additional information is necessary in order to make an informed
decision about consummating the transactions contemplated by this
Agreement.
(f) No Representations. Except for the representations and warranties
expressly set forth in this Agreement, Elamex USA has not and
will not rely on any representation by Xxxx or any of the Xxxx
Shareholders regarding Mt. Franklin Holdings, its financial
condition or operations, or the Xxxx'x Interests in Mt. Franklin
Holdings to be acquired under this Agreement.
5.8 Representations and Warranties of Xxxx. Xxxx represents and warrants
to Elamex USA that the statements contained in this section 5.8 are
true, correct, and complete as of the date of this Agreement and will
be true, correct, and complete as of the date of Closing:
(a) Organization of Xxxx. Xxxx is corporation, duly organized,
validly existing, and in good standing under the laws of the
state of Delaware.
Xxxx Agreement between
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx") June 28, 2002
Page 8 of 17
(b) Authorization of Transaction. Xxxx has full power and authority
to execute and deliver this Agreement and to perform its
obligations hereunder. This Agreement constitutes the valid and
legally binding obligation of Xxxx, enforceable in accordance
with its terms and conditions, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or
affecting creditors' rights generally and to general equity
principles.
(c) No Lien or Other Encumbrance Relating to Xxxx'x Interests in Mt.
Franklin Holdings. There is no lien or other encumbrance relating
to Xxxx'x Interests in Mt. Franklin Holdings as of the date of
this Agreement, nor will there be any lien or other encumbrance
relating to Xxxx'x Interests in Mt. Franklin Holdings as of
Closing.
(d) Noncontravention. Neither the execution and the delivery of this
Agreement nor the performance of the obligations hereunder will
violate any provision of any agreement to which Xxxx is a party.
(e) No Pending or Threatened Litigation or Claims. There is no
pending or threatened litigation or claim against Xxxx.
(f) Mt. Franklin Options. The only issued and outstanding options to
purchase ownership units in Mt. Franklin Holdings held by Xxxx
are the Mt. Franklin Options listed in attached Exhibit B that
were issued by Mt. Franklin Holdings.
(g) Information About Elamex, S.A. de X.X. Xxxx hereby acknowledges
that it has had an opportunity to review all pertinent facts
concerning an investment in the shares of Elamex, S.A. de C.V.,
and to ask questions of and receive answers from Elamex USA or
Elamex, S.A. de C.V., concerning the terms and conditions of this
Agreement, the financial status and operations of Elamex, S.A. de
C.V., and to obtain any additional information it considered
necessary to verify the accuracy of any information publicly
available or provided to it by Elamex USA or Elamex, S.A. de C.V.
(h) Investment. To the extent Xxxx acquires restricted shares of
Elamex, S.A. de C.V., pursuant to this Agreement, Xxxx will
acquire all such shares for investment for its own account and
not with the view to, or for resale in connection with, any
distribution thereof, except for the permitted transfer to the
Xxxx Shareholders pursuant to section 5.3 hereof. Xxxx
understands that the restricted shares of Elamex, S.A. de C.V.,
have not been registered under the Securities Act of 1933, as
amended (the "`33 Act"), by reason of an exemption from the
registration provisions of the `33 Act which depends upon, among
other things, the bona fide nature of its investment intent as
expressed herein. Xxxx Agreement between
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx") June 28, 2002
Page 9 of 17
(i) Manner of Offering. At no time was Xxxx or any Azar Shareholder
presented with or solicited by or through any leaflet, public
promotional meeting, television advertisement, or any other form
of general solicitation or advertising.
(j) Restricted Shares; Not Registered with SEC or Any State. Xxxx
understands that the shares of Elamex, S.A. de C.V., have not
been registered under the `33 Act, or the securities laws of any
state, in reliance upon exemptions from registration thereunder,
and it understands and agrees that the shares of Elamex, S.A. de
C.V., may not be sold, offered for sale, transferred, pledged,
hypothecated, or otherwise disposed of except in compliance with
the `33 Act and any applicable state securities laws. Xxxx has
been advised that Elamex, S.A. de C.V., has no obligation and
does not intend to cause the shares of Elamex, S.A. de C.V., to
be registered under the `33 Act (or the securities laws of any
state). Xxxx understands that it may not be possible to liquidate
an investment in the shares of Elamex, S.A. de C.V., on an
emergency basis. Xxxx understands the legal consequences of the
foregoing to mean that it must bear the economic risk of its
investment in the shares of Elamex, S.A. de C.V., for an
indefinite period of time. Xxxx is aware (i) of the limitations
and applicability of SEC Rule 144, (ii) that Elamex, S.A. de
C.V., may intervene in the event of attempts to improperly
transfer any such shares, and (iii) that a restrictive legend
will be placed on certificate representing such shares.
(k) Disclosure of Information Concerning Mt. Franklin Holdings. Xxxx
has provided Elamex USA with all information requested by Elamex
USA regarding Xxxx'x Interests in Mt. Franklin Holdings as well
as the assets and operations of Xx. Xxxxxxxx Holdings. All such
information provided by Xxxx has been true and accurate to the
best knowledge and belief of Xxxx.
5.9 Conditions Precedent to Closing. The following conditions must be met
by the Parties at Closing.
(a) Conditions Precedent to the Obligations of Elamex USA. The
obligations of Elamex USA to consummate the transactions to be
performed by it in connection with the Closing of this Agreement
are subject to satisfaction of the following conditions or waiver
thereof by Elamex USA:
(1) Xxxx shall have signed and delivered an assignment of all of
Xxxx'x Interests in Mt. Franklin Holdings in form and
substance satisfactory to Elamex USA; and
(2) All steps necessary to cause the permitted transfers after
Closing of the Elamex Restricted Shares Portion of the
Purchase Price from Xxxx to the
Xxxx Agreement between
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx") June 28, 2002
Page 10 of 17
Xxxx Shareholders pursuant to section 5.3 of this Agreement
shall have been made in compliance with applicable state and
federal securities laws, or exemptions therefrom, and
subject to a one year right of first refusal (which shall be
reflected on the restrictive legend on each certificate
representing such shares) for Elamex USA or its assign to
acquire such shares on the same price per share and terms,
to the reasonable satisfaction of Elamex, S.A. de C.V., and
its counsel; and
(3) The Kids Holdings Agreement shall have closed to the
satisfaction of Elamex USA; and
(4) The Reprop Merger shall have closed to the satisfaction of
Elamex USA; and
(5) The Franklin Inmobiliarios Agreements shall have closed or
the closing thereunder shall have been set to the
satisfaction of Elamex USA; and
(6) JPMorgan Chase Bank shall have provided a commitment letter
to extend its $7,000,000 line of credit to Franklin
Connections through April 15, 2003, on terms substantially
unchanged; and
(7) Xxxx shall have signed and delivered an agreement, in form
and substance satisfactory to Elamex USA, providing for the
forfeiture, cancellation, and termination of the 70,730 Mt.
Franklin Options listed under the heading "Management
Options - Pre-2000" in attached Exhibit B; and
(8) Xxxx shall have signed and delivered an agreement, in form
and substance satisfactory to Elamex USA, providing for the
forfeiture, cancellation, and termination of the 32,600 Mt.
Franklin Options listed under the heading "Non-management
Options - Pre-2000" in attached Exhibit B; and
(9) Xxxx Shareholders Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxx,
Xxxxxxx Xxxxxxx, and Xxxxxx Xxxxxxxx shall have signed and
delivered a cancellation of option in form and substance
satisfactory to Elamex USA cancelling and terminating those
Mt. Franklin Options listed in their respective names under
the heading "Mt. Franklin Time Options @ $12.87" in attached
Exhibit B; and
(10) Elamex USA shall have entered into an agreement in form and
substance satisfactory to Elamex USA with Xxxx Shareholder
Xxxx Xxxxxxx regarding the Mt. Franklin Options listed in
his name under the heading "Mt. Franklin Time Options @
$12.87" in attached Exhibit B; and
Xxxx Agreement between
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx") June 28, 2002
Page 11 of 17
(11) Elamex USA shall have entered into an agreement in form and
substance satisfactory to Elamex USA with Xxxxx
Xxxxxxx-Morodo regarding the Mt. Franklin Option listed in
his name under the heading "Mt. Franklin Time Options @
$12.87" in attached Exhibit B; and
(12) Xxxx Shareholders Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxx,
Xxxxxxx Xxxxxxx, and Xxxxxx Xxxxxxxx shall have signed and
delivered a cancellation of option in form and substance
satisfactory to Elamex USA cancelling and terminating those
Mt. Franklin Options listed in their respective names under
the heading "Mt. Franklin Performance Options @ $12.87" in
attached Exhibit B.
(b) Conditions Precedent to the Obligations of Xxxx. The obligations
of Xxxx to consummate the transactions to be performed by it in
connection with the Closing of this Agreement are subject to
satisfaction of the following conditions or waiver thereof by
Xxxx:
(1) Elamex USA shall have paid the Cash Portion of the Purchase
Price by the delivery to Xxxx of cash (or the wiring thereof
into an account designated by Xxxx) in the amount of One
Million One Hundred Forty-five Thousand Forty US Dollars and
No Cents ($1,145,040.00), and
(2) Elamex USA shall have paid the Elamex Restricted Shares
Portion of the Purchase Price by:
(A) Shares Not Subject to Escrow. The delivery to Xxxx at
Closing of one certificate in the name of Xxxx
representing Ninety-five Thousand Four Hundred Twenty
(95,420) restricted shares of the common stock of
Elamex, S.A. de C.V.; and
(B) Escrowed Shares. The delivery to Escrow Agent (subject
to the Escrow Agreement) at Closing of one certificate
in the name of Xxxx representing Ninety-five Thousand
Four Hundred Nineteen (95,419) restricted shares of the
common stock of Elamex, S.A. de C.V.
5.10 Miscellaneous:
(a) Entire Agreement; Integration. This Agreement constitutes the
entire agreement between and among the Parties pertaining to the
subject matter hereof, and supersedes all written or oral, prior,
or contemporaneous agreements, representations, warranties, or
understandings of the Parties pertaining or with respect
Xxxx Agreement between
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx") June 28, 2002
Page 12 of 17
thereto. No covenant, representation, or condition not expressed
herein shall affect or be deemed to interpret, change, or
restrict the express provisions hereof.
(b) Survival of Representations and Warranties. All representations,
warranties, covenants, and agreements of the Parties contained in
this Agreement shall survive the execution and delivery of this
Agreement and shall not be deemed merged into any documents
delivered at the time of such execution and delivery of this
Agreement or the closing hereunder.
(c) Binding Nature; No Assignments. The covenants and agreements
contained herein shall bind and inure to the benefit of the
Parties hereto, their respective heirs, executors,
administrators, personal or legal representatives, successors, or
permitted assigns; provided, however, that nothing in this
subsection shall be deemed to permit the conveyance, transfer,
assignment, or delegation, expressly, by operation of law, or
otherwise, by any Party of any right or interest herein without
the prior written consent of the other Party. Anything herein to
the contrary notwithstanding, however, no permitted assignment or
other disposition of all or any part of a Party's interests
herein shall relieve such Party of its obligations hereunder.
(d) Further Action. The Parties each agree to execute and deliver all
documents, provide all information, and take or forebear from all
such action as may be necessary and appropriate to achieve the
purposes hereof.
(e) Time is of the Essence. Time is of the essence in this Agreement.
(f) Amendments, Modifications, Approvals, and Consents. Any
amendment, modification, alteration, or supplement hereto, or any
approval or consent requested of any Party, shall be ineffective
unless it is in writing and signed by the Party against whom
enforcement is sought.
(g) Parties in Interest; No Third-Party Beneficiaries. Except as
specifically set forth herein, nothing in this Agreement is
intended to confer any right or remedy under or by reason of this
Agreement on any person other than the Parties to this Agreement
and their respective heirs, executors, administrators, personal
or legal representatives, successors, or permitted assigns, nor
is anything in this Agreement intended to relieve or discharge
the obligation or liability of any third person to any Party to
this Agreement, nor shall any provision hereof give any third
person any right of subrogation or action over or against any
Party to this Agreement.
Xxxx Agreement between
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx") June 28, 2002
Page 13 of 17
(h) Notices. Any notice, consent, request, directive, demand, or
other communication made hereunder, pursuant hereto, or in
accordance herewith by any Party intended for any other Party
shall be in writing and shall be physically delivered, sent by
facsimile (fax) if a fax number is included for the other Party
in part 2 hereof, or sent by registered or certified mail,
properly addressed and return receipt requested with postage
prepaid, to such other Party at the address set forth in Part 2
hereof, unless such other Party shall have previously designated
a different address or fax number by due notice hereunder.
Notices hereunder that are physically delivered shall be deemed
effective and complete at the time of the delivery thereof with
written evidence of such delivery. Notices hereunder that are
given by facsimile (fax) shall be deemed effective and complete
at the time such facsimile (fax) is successfully sent with
printed or written evidence of such successful sending. Notices
hereunder that are given by mail shall be deemed effective and
complete as of the applicable delivery date set forth on the
requested return receipt.
(i) Costs and Expenses. Except as may be otherwise specifically set
forth herein or as otherwise agreed to by the Parties, each Party
shall bear its own costs and expenses (including attorneys and
accountants fees and costs) in connection herewith and in
connection with all things required to be done by such Party
hereunder.
(j) No Brokerage Commissions, Finders Fees, or Similar Costs. Each of
the Parties hereby represents and warrants that there is no claim
for brokerage commissions, finders fees, or similar costs or fees
in connection with the transactions contemplated by this
Agreement. Each of the Parties hereto will pay or discharge, and
will indemnify, defend, and hold harmless the other Party from
and against, any and all claims for any such brokerage
commissions, finders fees, or similar costs or fees incurred by
reason of any action taken by such indemnifying Party.
(k) Attorneys Fees. If any legal action or other proceeding is
brought or commenced by any Party to enforce any of the terms
hereof because of an alleged dispute, breach, default, or
misrepresentation in connection with any of the provisions
hereof, the successful or prevailing Party shall be entitled to
receive as additional compensation hereunder or as additional
damages under such action all necessary and reasonable attorneys
fees, expenses, and costs, both before and after judgment, in
addition to any other relief to which such Party may be entitled.
(l) Governing Law. This Agreement shall be governed in all respects
and construed according to the laws of the state of Texas applied
to contracts made
Xxxx Agreement between
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx") June 28, 2002
Page 14 of 17
and to be fully performed entirely within the state of Texas
between residents of the state of Texas without giving effect to
any choice or conflict of law provision or rule (whether of the
state of Texas any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the state
of Texas, unless any obligations hereunder shall be invalid or
unenforceable under such laws, in which event the laws of the
state whose laws can apply to and validate the obligations
hereunder shall apply. This Agreement shall be deemed executed in
El Paso, Texas.
(m) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the Parties
and no presumption or burden of proof shall arise favoring or
disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal,
state, local, or foreign statute or law shall be deemed also to
refer to all rules and regulations promulgated thereunder, unless
the context otherwise requires. Whenever used herein, the word
"or" shall mean "and/or," unless the context clearly otherwise
requires. Whenever used herein, the word "including" shall mean
"including without limitation," and the word "include" shall mean
"include without limitation."
(n) Rights and Remedies. The rights and remedies of the Parties
hereunder shall not be mutually exclusive, and the exercise of
one or more of the provisions hereof shall not preclude the
exercise of any other provisions. Each of the Parties confirms
that damages may be an inadequate remedy for a breach or
threatened breach of any provision hereof. The respective rights
and obligations hereunder shall be enforceable by specific
performance, injunction, or other equitable remedy, but nothing
herein contained is intended to or shall limit or affect any
rights at law or by statute or otherwise of any Party aggrieved
as against the other Party for a breach or threatened breach of
any provision hereof, it being the intention of this subsection
5.12(n) to make clear the agreement of the Parties that the
respective rights and obligations of the Parties hereunder shall
be enforceable in equity as well as at law or otherwise.
(o) Arbitration. Anything herein to the contrary notwithstanding, any
controversy or dispute arising out of or relating to this
Agreement or its subject matter which the Parties are unable to
resolve within thirty (30) days after written notice by one Party
to the other Party of the existence of such controversy or
dispute, may be submitted to binding arbitration by any Party. If
so submitted to arbitration, the matter shall be finally settled
by binding arbitration conducted in accordance with the then
current rules and procedures of the American Arbitration
Association. Such arbitration shall take place in El Paso, Texas.
The decision by the arbitrator
Xxxx Agreement between
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx") June 28, 2002
Page 15 of 17
on any matter submitted to arbitration shall be binding and
conclusive upon the Parties, their respective heirs, executors,
administrators, personal or legal representatives, successors, or
permitted assigns, as the case may be, and they shall comply with
such decision in good faith. Each Party hereby submits itself to
the jurisdiction of the state and federal courts within the state
of Texas for the entry of judgment with respect to the decision
of the arbitrator hereunder. Judgment upon the award may be
entered in any state or federal court within the state of Texas
or any other court having jurisdiction.
(p) No Waiver. No failure by any Party to insist upon the strict
performance of any covenant, duty, agreement, term, or condition
hereof or to exercise any right or remedy upon a breach thereof
shall constitute a waiver of any such breach or of such or any
other covenant, duty, agreement, term, or condition, whether or
not similar. Any Party by notice pursuant to the terms hereof
may, but shall be under no obligation, waive any of its rights or
any condition or conditions to its obligations hereunder, or any
covenant, duty, agreement, term, or condition of any other Party.
No waiver shall constitute a continuing waiver or affect or alter
the remainder hereof, and each and every other covenant, duty,
agreement, term, and condition hereof shall continue in full
force and effect with respect to any other then existing or
subsequently occurring breach.
(q) Severability. In the event that any condition, covenant, term, or
other provision contained herein is held to be invalid or void by
any court of competent jurisdiction, the same shall be deemed
severable from the remainder hereof and shall in no way affect
any other condition, covenant, term, or provision contained
herein. If such condition, covenant, term, or other provision
shall be deemed invalid due to its scope and breadth, such
provision shall be deemed valid to the extent of the scope or
breadth permitted by law.
(r) Covenant of Good Faith. Each Party agrees to act reasonably and
in good faith in the performance of any acts required of such
Party hereunder.
(s) Force Majeure. No Party shall be responsible for delays or
failure in performance resulting from acts beyond the reasonable
control of such Party. Such acts shall include acts of God,
strikes, lockouts, riots, acts of war or terrorism, epidemics,
governmental regulation imposed after the fact, fires,
communication line failures, power failures, earthquakes, or
other disasters.
(t) Titles and Captions. All part, section, subsection, and other
titles, headings, and captions herein are included for purposes
of convenience only, and shall not be deemed a part hereof and
shall in no way define, limit, extend, or describe the scope or
intent of any of the provisions hereof.
Xxxx Agreement between
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx") June 28, 2002
Page 16 of 17
(u) Pronouns and Plurals. Whenever the context may require, any
pronoun used herein shall include the corresponding masculine,
feminine, or neuter forms, and the singular form of nouns,
pronouns, and verbs shall include the plural and vice versa.
(v) Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one
Agreement binding on the executing Parties if each Party named in
Part 2 hereof shall have executed at least one counterpart
signature page of this Agreement notwithstanding that all of the
Parties are not signatories of the same full copy of this
Agreement or the same counterpart signature page of this
Agreement.
IN WITNESS WHEREOF, each of the Parties hereto has executed this Agreement on or
as of the date first set forth above.
"Elamex USA" ELAMEX USA, CORP.
A Delaware Corporation
By /s/ Xxxxxxx X. Xxxxxxx
----------------------
Xxxxxxx X. Xxxxxxx
President
"Xxxx" XXXX NUT COMPANY
A Delaware Corporation
By /s/ Xxxxx X. Xxxxxx
-------------------
Xxxxx X. Xxxxxx
Chairman of the Board
Xxxx Agreement between
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx") June 28, 2002
Page 17 of 17
Exhibit A - Form of Escrow Agreement
Xxxx Agreement between
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx") June 28, 2002
Exhibit A
Exhibit B - Mt. Franklin Options
Management Options - Pre-2000:
Representing 70,730 Options held by Xxxx in Mt. Franklin Holdings that were
exercisable only to the extent that the following "mirror options" held by
the individuals named below in Xxxx were exercised:
Xxxxxx X. Xxxxxx ....................... 17,520
Xxxxxxx X. Xxxxxx ...................... 38,210
Xxxxxxx Xxxxxxx ........................ 7,500
Xxxxxx Xxxxxxxx ........................ 7,500
----------
Total .............................. 70,730
==========
Non-management Options - Pre-2000:
Representing 32,600 Options held by Xxxx in Mt. Franklin Holdings that were
exercisable only to the extent that the following "mirror options" held by
the individuals named below in Xxxx were exercised:
Estate of Xxxxxx X. Xxxxxx ............. 4,680
Xxxxxxx X. Xxxxxxxx .................... 5,160
Xxxxx X. Xxxxxx ........................ 20,360
F. Xxxxxx Xxxxx ........................ 1,200
Xxxxxxxx X. van den Broek .............. 1,200
----------
Total .............................. 32,600
xxxxxxxxxx
Xx. Xxxxxxxx Time Options @ $12.87:
Xxxxxx X. Xxxxxx 18,000
Xxxxxxx X. Xxxxxx 32,000
Xxxxxxx Xxxxxxx 12,000
Xxxxxx Xxxxxxxx 12,000
Xxxx Xxxxxxx 3,000
Xxxxx Xxxxxxx-Morodo 50,000
----------
Total 127,000
xxxxxxxxxx
Xx. Xxxxxxxx Performance Options @ $12.87:
Xxxxxx X. Xxxxxx ....................... 25,000
Xxxxxxx X. Xxxxxx ...................... 43,000
Xxxxxxx X. Xxxxxx ...................... 1,000
Xxxxxxx Xxxxxxx ........................ 18,000
Xxxxxx Xxxxxxxx ........................ 18,000
Xxxx X. Xxxxxxx ........................ 5,000
Xxxx Xxxxxxx ........................... 1,800
Xxxx Xxxxxx ............................ 3,000
Xxxxx Xxxx ............................. 8,000
Xxxxxxx Xxxxx .......................... 1,000
Xxxxx Xxxxxx ........................... 2,000
Xxx Xxxxxxxx ........................... 000
Xxxxxxxx Xxxxxxxxx ..................... 4,000
Xxxx Xxxxxx ............................ 2,000
Xxxx Xxxxxx ............................ 2,000
Grant Basset ........................... 2,000
Xxxxx Xxxxxxx .......................... 2,000
Xxxxxxx Xxxxxx ......................... 1,000
Xxxx Xxxxxx ............................ 1,000
Xxx Xxxxxx ............................. 200
Xxx Xxxx ............................... 2,000
Xxxx Xxxxxxx ........................... 1,500
Xxxx Xxxxxxx ........................... 1,500
Xxxxx Xxxxxxx .......................... 1,500
Xxx Xxxxx .............................. 1,500
----------
Total .............................. 148,500
==========
Xxxx Agreement between
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx") June 28, 2002
Exhibit B
ESCROW AGREEMENT-XXXX
Between and Among
ELAMEX USA, INC.
A Delaware Corporation and Wholly-owned
Subsidiary of Elamex, S.A. de C.V.
"Elamex USA"
XXXX NUT COMPANY
A Delaware Corporation
"Xxxx"
and
XXXXX X. XXXXXXXXXXX
Attorney at Law
"Escrow Agent"
June 28, 2002
Contents
Page
----
1. Date ................................................................... 1
2. Parties ................................................................ 1
2.1 Elamex USA, Corp. ................................................ 1
2.2 Xxxx Nut Company ................................................. 1
2.3 Xxxxx X. Xxxxxxxxxxx ............................................. 1
3. Defined Terms .......................................................... 1
3.1 "Agreement" ...................................................... 1
3.2 "Xxxx Agreement" ................................................. 1
3.3 "Xxxx Shareholders" .............................................. 2
3.4 "Escrowed Shares" ................................................ 2
3.5 "Parties" ........................................................ 2
4. Recitals ............................................................... 3
5. Agreements ............................................................. 3
5.1 Deposit of Escrow Items .......................................... 3
(a) Escrowed Shares ............................................ 3
(b) Transfer of Escrowed Shares Into Record Names of Xxxx
Shareholders ............................................... 3
5.2 Terms of Escrow .................................................. 4
(a) Holding of Escrowed Shares by Escrow Agent ................. 4
(b) Delivery of Escrowed Shares by Escrow Agent ................ 4
(1) Additional Defined Terms ............................. 4
(A) "Franklin Audited Net Income (Loss) for 2002" .. 4
(B) "Franklin Audited Net Income for 2003" ......... 5
(C) "Franklin Base Net Loss for 2002" .............. 5
(D) "Xxxxxxxx Xxxxx Loss for 2002" ................. 5
(E) "Franklin Claw-Back Loss" ...................... 5
(2) Determination of Franklin Audited Net Income (Loss)
for 2002 ............................................. 6
(3) Delivery of Escrowed Shares IF Franklin Audited Net
Income (Loss) for 2002 is ($1,220,000) or Less ....... 6
(4) Delivery of Escrowed Shares IF Franklin Audited Net
Income (Loss) for 2002 is Greater Than ($1,220,000) .. 6
(A) Determination of Franklin Audited Net Income
for 2003 ....................................... 7
(B) Determination of Franklin Claw-Back Loss ....... 7
(C) IF Franklin Claw-Back Loss is ($3,341,976.53)
or Greater ..................................... 7
(D) IF Franklin Claw-Back Loss is Greater than
$0.00 But Less Than ($3,341,976.53) ............ 7
Escrow Agreement-Xxxx between and among
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx")
Xxxxx X. Xxxxxxxxxxx, Attorney at Law ("Escrow Agent") June 28, 2002
Contents Page i of ii
(c) Right of Xxxx Shareholders to Purchase Escrowed Shares ..... 9
(d) Additional Understandings Between Elamex USA and Xxxx ...... 9
5.3 Duties and Obligations of Escrow Agent .......................... 10
(a) Specifically Provided Duties and Obligations .............. 10
(b) Advice of Counsel 10
(c) Not Bound by Other Agreements; Amendment to this
Agreement ................................................. 10
(d) Uncertain or Conflicting Demands .......................... 11
(e) Reliance Upon Written Documents ........................... 11
(f) No Required Legal Proceedings ............................. 11
(g) Resignation of Escrow Agent ............................... 11
(h) No Fiduciary Duty by Escrow Agent to Elamex USA or Xxxx ... 12
(i) Dissolution of Xxxx ....................................... 12
5.4 Escrow Agent Compensation and Expenses .......................... 12
5.5 Indemnification ................................................. 12
5.6 Miscellaneous ................................................... 12
(a) Entire Agreement; Integration ............................. 12
(b) Survival of Representations and Warranties ................ 13
(c) Binding Nature; No Assignments ............................ 13
(d) Further Action ............................................ 13
(e) Time is of the Essence .................................... 13
(f) Amendments, Modifications, Approvals, and Consents ........ 13
(g) Parties in Interest; No Third-Party Beneficiaries ......... 13
(h) Notices ................................................... 13
(i) Costs and Expenses ........................................ 14
(j) No Brokerage Commissions, Finders Fees, or Similar Costs .. 14
(k) Attorneys Fees ............................................ 14
(l) Governing Law ............................................. 14
(m) Construction .............................................. 15
(n) Rights and Remedies ....................................... 15
(o) Arbitration ............................................... 15
(p) No Waiver ................................................. 16
(q) Severability .............................................. 16
(r) Covenant of Good Faith .................................... 16
(s) Force Majeure ............................................. 16
(t) Titles and Captions ....................................... 16
(u) Pronouns and Plurals ...................................... 17
(v) Counterparts .............................................. 17
Escrow Agreement-Xxxx between and among
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx")
Xxxxx X. Xxxxxxxxxxx, Attorney at Law ("Escrow Agent") June 28, 2002
Contents Page ii of ii
ESCROW AGREEMENT-XXXX
1. DATE: June 28, 2002
2. PARTIES:
2.1 Elamex USA, Corp., a Delaware corporation and wholly-owned subsidiary
of Elamex, S.A. de C.V., having a mailing address of Attention:
Xxxxxxx X. Xxxxxxx, Elamex Third Floor, 0000 X. Xxxx, Xxxxxxxx X, Xx
Xxxx, Xxxxx 00000, and a facsimile (fax) number of (000) 000-0000
(herein "Elamex USA").
2.2 Xxxx Nut Company, a Delaware corporation, having a mailing address of
Attention: Xxxxx X. Xxxxxx, c/x Xxxxxxxx Connections, 0000
Xxxxxxxxxxxx Xxxxx, Xx Xxxx, Xxxxx 00000, and a facsimile (fax) number
of (000) 000-0000 (herein "Xxxx").
2.3 Xxxxx X. Xxxxxxxxxxx, Attorney at Law, having a mailing address of
0000 Xxxxx 0000 Xxxx, Xxxxx Xxxxx, Xxxx 00000, and a facsimile (fax)
number of (000) 000-0000 (herein "Escrow Agent").
3. DEFINED TERMS: The terms defined in this Part 3 shall have the meanings
herein specified for all purposes of this Agreement, unless the context
clearly otherwise requires:
3.1 "Agreement" or "Escrow Agreement-Xxxx" means this Escrow
Agreement-Xxxx together with and including any and all attachments,
appendices, or exhibits referred to herein and any and all
modifications, alterations, amendments, and supplements hereto--all of
which shall be deemed for all purposes of this Agreement to have been
incorporated in this Agreement by this reference as if separately
spelled out in this Agreement. The words "hereby," "herein," "hereof,"
"hereto," "hereunder," and "herewith" when used in this Agreement
shall refer to and mean a reference to this entire Agreement unless
restricted to a reference in context to a particular portion of this
Agreement.
3.2 "Xxxx Agreement" means that certain agreement between Elamex USA and
Xxxx dated on or as of June 28, 2002. Capitalized terms that are used
and not defined in this Agreement but that are defined in the Xxxx
Agreement shall have the meanings set forth in the Xxxx Agreement.
Escrow Agreement-Xxxx between and among
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx")
Xxxxx X. Xxxxxxxxxxx, Attorney at Law ("Escrow Agent") June 28, 2002
Page 1 of 17
3.3 "Xxxx Shareholders" means the following shareholders of Xxxx:
Beneficial
Xxxx Ownership of
Shares Escrowed
Name of Xxxx Shareholder Owned Shares
------------------------ ------- ------------
Estate of Xxxxxx X. Xxxxxx 31,355 7,839
Xxxxxxx X. Xxxxxxxx 20,115 5,029
Xxxxx X. Xxxxxx 12,423 3,106
Xxxxxxx X. Xxxxxx 129,973 32,493
Xxxxxx X. Xxxxxx 20,000 5,000
C. Xxxxx XxXxxxx 21,050 5,262
Xxxx X. Xxxx 6,258 1,564
Xxxxxx X. Xxxxxxxxxxx 10,068 2,517
F. Xxxxxx Xxxxx 21,513 5,378
Xxxxxxxxx X. Xxxxxxxxxx 10,000 2,500
Xxxxxxxx X. van den Broek 13,617 3,404
Xxxx Xxxxxxx 3,885 971
Xxxxxx X. Xxxxxx 18,320 4,580
Xxxxxxx X. Xxxxxx 32,804 8,201
Xxxxxxx X. Xxxxxx 794 199
Xxxxxxx Xxxxxxx 12,939 3,235
Xxxxxx Xxxxxxxx 10,000 2,500
Xxxx X. Xxxxxxx 349 87
Xxxx Xxxxxx 2,331 583
Xxxxx Xxxx 3,885 971
------- ------
Totals 381,679 95,419
======= ======
3.4 "Escrowed Shares" means those 95,419 restricted shares of common stock
of Elamex, S.A. de C.V., delivered to Escrow Agent and subject to this
Agreement pursuant to subsections 5.2(b) and 5.3(b) of the Xxxx
Agreement, together with and including any related stock powers and
any stock dividends or other distributions relating thereto.
3.5 "Parties" means the entities or individuals named in Part 2 hereof;
and "Party" means any one of such Parties.
Escrow Agreement-Xxxx between and among
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx")
Xxxxx X. Xxxxxxxxxxx, Attorney at Law ("Escrow Agent") June 28, 2002
Page 2 of 17
4. RECITALS:
4.1 Elamex USA and Xxxx have entered into the Xxxx Agreement for the
purpose of Elamex USA acquiring all of Xxxx'x Interests in Mt.
Franklin Holdings.
4.2 Elamex USA and Xxxx have agreed in the Xxxx Agreement that the
Escrowed Shares (representing approximately 25% of the Purchase Price
of all of Xxxx'x Interests in Mt. Franklin Holdings) shall be made
subject to the terms and provisions of this Agreement.
4.3 Elamex USA and Xxxx desire to provide herein a mechanism for the
holdback of the Escrowed Shares and for the delivery of all or part of
the Escrowed Shares to the Xxxx Shareholders or for the delivery of
all or part of the Escrowed Shares back to Elamex USA conditioned upon
the events described herein.
4.4 Escrow Agent is willing to act as Escrow Agent with respect to the
receipt, holding, and delivery of the Escrowed Shares, all in
accordance with the terms, provisions, and conditions of this
Agreement.
5. AGREEMENTS: NOW, THEREFORE, in consideration of the mutual agreements,
covenants, and provisions contained in this Agreement, together with other
good and valuable consideration the receipt and sufficiency of which is
hereby acknowledged, the Parties hereby adopt the definitions set forth in
Parts 2 and 3 hereof, acknowledge that the recitals in Part 4 are
substantially correct, and further agree as follows:
5.1 Deposit of Escrow Items.
(a) Escrowed Shares. Concurrently with the execution hereof and
pursuant to subsections 5.2(b) and 5.9(b)(2)(B) of the Xxxx
Agreement, Elamex USA and Xxxx shall deliver and deposit with
Escrow Agent the Escrowed Shares (i.e., one certificate in the
name of Xxxx representing Ninety-five Thousand Four Hundred
Nineteen (95,419) restricted shares of the common stock of
Elamex, S.A. de C.V., together with a duly executed stock power
relating thereto).
(b) Transfer of Escrowed Shares Into Record Names of Xxxx
Shareholders. Concurrently with the execution hereof and pursuant
to subsections 5.3(b) and 5.9(a)(2) of the Xxxx Agreement, Xxxx
shall deliver and deposit with Escrow Agent separate stock powers
duly executed by each of the Xxxx Shareholders listing the
respective numbers of shares of the common stock of Elamex, S.A.
de C.V., beneficially owned by each such Xxxx Shareholders as set
forth in subsection 3.3 hereof. Xxxx by executing this Agreement
does hereby direct and
Escrow Agreement-Xxxx between and among
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx")
Xxxxx X. Xxxxxxxxxxx, Attorney at Law ("Escrow Agent") June 28, 2002
Page 3 of 17
authorize Escrow Agent, upon receipt of such stock powers, to
cause the record ownership of the Escrowed Shares to be changed
from Xxxx into the respective names of the Xxxx Shareholders and
in the respective amounts set forth in subsection 3.3 hereof;
and, further, Azar authorizes and directs Escrow Agent to
physically attach the respective separate stock powers duly
executed by each of the Xxxx Shareholders to the applicable new
certificates representing the Escrowed Shares in the record names
of the respective Xxxx Shareholders and to write in the
applicable certificate numbers on such respective separate stock
powers. Anything herein to the contrary notwithstanding, such new
certificates representing the Ninety-five Thousand Four Hundred
Nineteen (95,419) restricted shares of the common stock of
Elamex, S.A. de C.V., together with the duly executed stock
powers relating thereto, shall thereupon be deemed to be included
within the definition of "Escrowed Shares" for all purposes
hereof. Upon the request of Escrow Agent, Xxxx agrees to execute
any document necessary to effect the transfer of the Escrowed
Shares into the respective names of the Xxxx Shareholders.
5.2 Terms of Escrow.
(a) Holding of Escrowed Shares by Escrow Agent. Escrow Agent shall
hold the Escrowed Shares in escrow until the Escrowed Shares are
delivered out of escrow pursuant to this section 5.2 or as
otherwise set forth in the Agreement.
(b) Delivery of Escrowed Shares by Escrow Agent.
(1) Additional Defined Terms. The terms defined in this
subsection 5.2(b)(1) shall have the meanings herein
specified for all purposes of this Agreement, unless the
context clearly otherwise requires:
(A) "Franklin Audited Net Income (Loss) for 2002" means the
audited net income (loss) before taxes of Mt. Franklin
Holdings and its subsidiaries for calendar year 2002
calculated using generally accepted accounting
principles consistently applied and consistent with
accounting principles used in the audited financial
statements of Mt. Franklin Holdings and its
subsidiaries for the year ended December 31, 2001;
provided, however, that there shall be appropriate
adjustments in arriving at the Franklin Audited Net
Income (Loss) for 2002 to eliminate the incremental
effects of any asset write-ups, depreciation thereon,
liability accruals, or similar items that are the
result of the transactions contemplated by this
Agreement and the Kids Holding Agreement, the Reprop
Merger, and the Franklin Inmobiliarios Agreements.
Escrow Agreement-Xxxx between and among
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx")
Xxxxx X. Xxxxxxxxxxx, Attorney at Law ("Escrow Agent") June 28, 2002
Page 4 of 17
(B) "Franklin Audited Net Income for 2003" means the
audited net income before taxes of Mt. Franklin
Holdings and its subsidiaries for calendar year 2003
calculated using generally accepted accounting
principles consistently applied and consistent with
accounting principles used in the audited financial
statements of Mt. Franklin Holdings and its
subsidiaries for the years ended December 31, 2001, and
December 31, 2002; provided, however, that there shall
be appropriate adjustments in arriving at the Franklin
Audited Net Income for 2003 to eliminate the
incremental effects of any asset write-up, depreciation
thereon, liability accruals, and similar items that are
the result of the transactions contemplated by this
Agreement and the Kids Holding Agreement, the Reprop
Merger, and the Franklin Inmobiliarios Agreements; and
provided further, however, that if the audited net
income (loss) before taxes of Mt. Franklin Holdings and
its subsidiaries for calendar year 2003 shall be a net
loss, then and in such event the Franklin Audited Net
Income for 2003 shall be deemed to be zero ($0.00) for
all purposes of this Agreement.
(C) "Franklin Base Net Loss for 2002" means the positive
amount of one million two hundred twenty thousand
dollars ($1,220,000).
(D) "Xxxxxxxx Xxxxx Loss for 2002" means the sum of the
Franklin Audited Net Income (Loss) for 2002 plus the
Franklin Base Net Loss for 2002.
By way of example only: if the Franklin Audited Net
Income (Loss) for 2002 were a net (loss) of
($1,970,000), then the Xxxxxxxx Xxxxx Loss for 2002
would be ($750,000) - i.e., ($1,970,000) plus
$1,220,000.
By way of example only: if the Franklin Audited Net
Income (Loss) for 2002 were a net (loss) of
($5,000,000), then the Xxxxxxxx Xxxxx Loss for 2002
would be ($3,780,000) - i.e., ($5,000,000) plus
$1,220,000.
(E) "Franklin Claw-Back Loss" means the sum of the Xxxxxxxx
Xxxxx Loss for 2002 plus the Franklin Audited Net
Income for 2003.
By way of example only and using the same numbers as
used in the first example in subsection 5.2(b)(1)(D)
above: if the Xxxxxxxx Xxxxx Loss for 2002 were
($750,000) and the Franklin Audited Net Income for 2003
were a net income of $3,000,000, then the Franklin
Claw-
Escrow Agreement-Xxxx between and among
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx")
Xxxxx X. Xxxxxxxxxxx, Attorney at Law ("Escrow Agent") June 28, 2002
Page 5 of 17
Back Loss would be $2,250,000 - i.e., the ($750,000)
plus $3,000,000. In this example the Franklin Claw-Back
Loss is a positive number and the effect is that the
Franklin Claw-Back Loss is zero.
By way of example only and using the same numbers as
used in the second example in subsection 5.2(b)(1)(D)
above: if the Xxxxxxxx Xxxxx Loss for 2002 were
($3,780,000) and the Franklin Audited Net Income for
2003 were a net income of $3,000,000, then the Franklin
Claw-Back Loss would be ($780,000) - i.e., the
($3,780,000) plus $3,000,000.
(2) Determination of Franklin Audited Net Income (Loss) for
2002. Notice of the Franklin Audited Net Income (Loss) for
2002 shall be given Escrow Agent by Elamex USA and Xxxx as
soon as practicable, including a complete copy of such
financial statements with the auditors report manually
signed.
(3) Delivery of Escrowed Shares IF Franklin Audited Net Income
(Loss) for 2002 is ($1,220,000) or Less. If the Franklin
Audited Net Income (Loss) for 2002 is ($1,220,000) or less -
i.e., if it is not a loss of greater than such amount, then
and in such event Escrow Agent shall forthwith deliver all
certificates representing the Escrowed Shares out of escrow
to the Xxxx Shareholders as their respective interests may
appear. For the purposes hereof, Xxxx shall have the duty to
give notice to Escrow Agent of the respective addresses of
the Azar Shareholders. Anything herein to the contrary
notwithstanding, upon such delivery of the certificates
representing the Escrowed Shares to the Xxxx Shareholders
pursuant to this subsection 5.2(b)(3), Escrow Agent shall be
discharged from any and all responsibility or liability with
respect to the Escrowed Shares or this Agreement, Elamex USA
shall promptly pay to Escrow Agent all monies which may be
owed Escrow Agent for Escrow Agent's services and expenses
hereunder, and this Agreement shall be deemed terminated and
of no further force or effect, and subsection 5.2(b)(4)
hereof shall not apply.
(4) Delivery of Escrowed Shares IF Franklin Audited Net Income
(Loss) for 2002 is Greater Than ($1,220,000). If the
Franklin Audited Net Income (Loss) for 2002 is greater than
($1,220,000) - i.e., if it is a loss of greater than such
amount), then and in such event Escrow Agent shall continue
to hold the Escrowed Shares until a reasonable time after
Escrow Agent has received notice in 2004 of the Franklin
Audited Net Income for 2003.
Escrow Agreement-Xxxx between and among
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx")
Xxxxx X. Xxxxxxxxxxx, Attorney at Law ("Escrow Agent") June 28, 2002
Page 6 of 17
(A) Determination of Franklin Audited Net Income for 2003.
Notice of the Franklin Audited Net Income for 2003
shall be given Escrow Agent by Elamex USA and Xxxx as
soon as practicable, including a complete copy of such
financial statements with the auditors report manually
signed.
(B) Determination of Franklin Claw-Back Loss. As soon as
practicable after the Franklin Audited Net Income for
2003 shall have been determined and notice thereof
given to Escrow Agent, Elamex USA and Xxxx shall
determine the Franklin Claw-Back Loss and shall give
notice thereof to Escrow Agent.
(C) IF Franklin Claw-Back Loss is ($3,341,976.53) or
Greater. If the Franklin Claw-Back Loss is
($3,341,976.53)(1) or greater and subject to right of
the Xxxx Shareholders set forth in subsection 5.2(c),
then and in such event Escrow Agent shall deliver all
certificates representing the Escrowed Shares out of
escrow to Elamex USA. Escrow Agent shall give notice to
Xxxx and each of the Xxxx Shareholders of Escrow
Agent's intent to deliver such certificates to Elamex
USA, and each of the Xxxx Shareholders shall have
twenty (20) days after such notice to exercise their
respective right set forth in subsection 5.2(c) and pay
for such respective Escrowed Shares. For the purposes
hereof, Xxxx shall have the duty to give notice to
Escrow Agent of the respective addresses of the Azar
Shareholders. Anything herein to the contrary
notwithstanding, upon such delivery of the certificates
representing the Escrowed Shares to the Xxxx
Shareholders pursuant to this subsection 5.2(b)(4)(C),
Escrow Agent shall be discharged from any and all
responsibility or liability with respect to the
Escrowed Shares or this Agreement, Elamex USA shall
promptly pay to Escrow Agent all monies which may be
owed Escrow Agent for Escrow Agent's services and
expenses hereunder, and this Agreement shall be deemed
terminated and of no further force or effect, and
subsection 5.2(b)(4)(D) hereof shall not apply.
(D) IF Franklin Claw-Back Loss is Greater than $0.00 But
Less Than ($3,341,976.53). If the Franklin Claw-Back
Loss is greater than zero dollars but less than
($3,341,976.53) and subject to right of the Xxxx
Shareholders set forth in subsection 5.2(c), then and
in such event
----------
(1)$3,341,976.53 times 50% times 34.262% equals $572,514. $572,514 divided
by $6 equals 95,419.
Escrow Agreement-Xxxx between and among
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx")
Xxxxx X. Xxxxxxxxxxx, Attorney at Law ("Escrow Agent") June 28, 2002
Page 7 of 17
Escrow Agent shall deliver the Escrowed Shares out of
escrow as follows:
(1) Escrowed Shares to Elamex USA. The number of
Escrowed Shares that shall be delivered by Escrow
Agent out of escrow to Elamex USA shall be
determined by multiplying the Franklin Claw-Back
Loss by 17.131%(2) and dividing the product thus
derived by $6.00.
By way of example only: if the Franklin Claw-Back
Loss were ($780,000), then the number of Escrowed
Shares that Escrow Agent would deliver out of
escrow to Elamex USA would be 22,270 Escrowed
Shares - i.e., ($780,000) times 17.131% divided by
$6.00.
Escrow Agent shall give notice to Xxxx and each of
the Xxxx Shareholders of Escrow Agent's intent to
deliver such certificates to Elamex USA, and each
of the Xxxx Shareholders shall have twenty (20)
days after such notice to exercise their
respective right set forth in subsection 5.2(c)
and pay for such respective Escrowed Shares. For
the purposes hereof, Xxxx shall have the duty to
give notice to Escrow Agent of the respective
addresses of the Azar Shareholders.
(2) Escrowed Shares to Xxxx Shareholders.
The remaining Escrowed Shares, after the delivery
out of escrow to Elamex USA pursuant to subsection
5.2(b)(4)(D)(1), shall be delivered by Escrow
Agent out of escrow to each of the Xxxx
Shareholders in the same proportion as each such
Xxxx Shareholder's beneficial ownership of
Escrowed Shares set forth in section 3.3 compares
to the total number of Escrowed Shares set forth
therein.
By way of example only: if the number of Escrowed
Shares otherwise delivered out of escrow to Elamex
USA were 22,270, then the total number of Escrowed
Shares to be delivered out of escrow to the Xxxx
Shareholders would be 73,149 - i.e., 95,419 minus
22,270; and Xxxxxx X. Xxxxxx would be entitled to
receive 3,833 of such total number of Escrowed
Escrowed
----------
(2)50% times 34.262% equals 17.131%.
Escrow Agreement-Xxxx between and among
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx")
Xxxxx X. Xxxxxxxxxxx, Attorney at Law ("Escrow Agent") June 28, 2002
Page 8 of 17
Shares to be delivered out of escrow to the Xxxx
Shareholders -i.e., 5,000 divided by 95,419 times
73,149.
Anything herein to the contrary notwithstanding, upon
such delivery of all of the Escrowed Shares to Elamex
USA and the Xxxx Shareholders pursuant to this
subsection 5.2(b)(4)(D), Escrow Agent shall be
discharged from any and all responsibility or liability
with respect to the Escrowed Shares or this Agreement,
Elamex USA shall promptly pay to Escrow Agent all
monies which may be owed Escrow Agent for Escrow
Agent's services and expenses hereunder, and this
Agreement shall be deemed terminated and of no further
force or effect.
(c) Right of Xxxx Shareholders to Purchase Escrowed Shares. Anything
to the contrary herein notwithstanding, if pursuant to the terms
and provisions of this Agreement any Escrowed Shares would
otherwise be delivered back to Elamex USA, then and in such event
each Azar Shareholder shall have the right (which may be assigned
to any other Xxxx Shareholder) to purchase the number of Escrowed
Shares pertaining to such Xxxx Shareholder for the payment to
Elamex USA of six dollars ($6.00) per share.
(d) Additional Understandings Between Elamex USA and Xxxx. For
purposes of determining net income (loss) before taxes of Mt.
Franklin Holdings and its subsidiaries for any period described
herein, the following shall apply:
(1) The shelter agreement between Franklin Connections and
Elamex, S.A. de C.V., or its subsidiary, will remain in
effect under its current terms and conditions.
(2) The Xxxxxx xxxxx building lease or guaranty between Franklin
Connections and Confecciones xx Xxxxxx, X.X. de C.V., will
remain in effect under no less favorable terms and
conditions, except that it will be treated as a capital
lease.
(3) Except for direct expenses incurred on behalf of Mt.
Franklin Holdings and its subsidiaries, Elamex, S.A. de
C.V., and its subsidiaries will not make any charges to Mt.
Franklin Holdings and its subsidiaries for any general
corporate overhead.
(4) In the case that the current CFO of Mt. Franklin Holdings
and its subsidiaries provides CFO services to Elamex, S.A.
de C.V., and its subsidiaries, his
Escrow Agreement-Xxxx between and among
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx")
Xxxxx X. Xxxxxxxxxxx, Attorney at Law ("Escrow Agent") June 28, 2002
Page 9 of 17
salary including benefits shall be prorated between Elamex,
S.A. de C.V., and its subsidiaries, and Mt. Franklin
Holdings and its subsidiaries.
(5) At its option, Elamex USA can continue to keep in place the
$3,000,000 subordinated loan made to Franklin Connections
accruing interest at 12% per annum.
(6) To the extent Elamex, S.A. de C.V., and its subsidiaries are
required to make funds available to Mt. Franklin Holdings
and its subsidiaries to fund short term working capital
requirements in addition to the minimum of $7.5 million of
new equity already contemplated, Elamex, S.A. de C.V., and
its subsidiaries shall be entitled to receive interest on
such funds based on commercial lending rates not to exceed
the same rate charged by JPMorgan Chase Bank on its line of
credit.
(7) In the event that Elamex, S.A. de C.V., and its subsidiaries
are required to make additional funds available to Mt.
Franklin Holdings and its subsidiaries in order to maintain
financial covenants required by any lender to Mt. Franklin
Holdings and its subsidiaries or to fund capital
expenditures for Phase I or II or to fund payments for long
term slotting arrangements, Elamex, S.A. de C.V., and its
subsidiaries may do so by making subordinated loans with
interest not to exceed twelve percent (12%) per annum.
5.3 Duties and Obligations of Escrow Agent.
(a) Specifically Provided Duties and Obligations. The Parties agree
that the duties and obligations of the Escrow Agent are only such
as are herein specifically provided and no other. Escrow Agent's
duties are as a depositary only, and the Escrow Agent shall incur
no liability whatsoever, except as a direct result of Escrow
Agent's willful misconduct.
(b) Advice of Counsel. Escrow Agent may consult with counsel of
Escrow Agent's choice, and shall not be liable for any action
taken, suffered, or omitted by Escrow Agent in accordance with
the advice of such counsel.
(c) Not Bound by Other Agreements; Amendment to this Agreement.
Escrow Agent shall not be bound in any way by the terms of any
other agreement to which Elamex USA and Xxxx are parties, whether
or not Escrow Agent has knowledge thereof, and the Escrow Agent
shall not in any way be required to determine whether or not any
other agreement has been complied with by Elamex USA or Xxxx, or
any other party thereto. Escrow Agent shall not be bound by any
modification, amendment, termination, cancellation, or rescission
of this
Escrow Agreement-Xxxx between and among
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx")
Xxxxx X. Xxxxxxxxxxx, Attorney at Law ("Escrow Agent") June 28, 2002
Page 10 of 17
Agreement unless the same shall be in writing and signed by each
of Elamex USA and Xxxx, and agreed to in writing by Escrow Agent.
(d) Uncertain or Conflicting Demands. In the event that Escrow Agent
shall be uncertain as to Escrow Agent's duties or rights
hereunder or shall receive instructions, claims, or demands
which, in Escrow Agent's opinion, are in conflict with any of the
provision of this Agreement, Escrow Agent shall be entitled to
refrain from taking any action, other than to keep safely all
Escrowed Shares held in escrow, until Escrow Agent shall jointly
be directed otherwise in writing by Elamex USA and Xxxx or by a
final judgment of a court of competent jurisdiction.
(e) Reliance Upon Written Documents. Escrow Agent shall be fully
protected in relying upon any written notice, demand,
certificate, or document which Escrow Agent, in good faith,
believes to be genuine. Escrow Agent shall not be responsible for
the sufficiency or accuracy of the form, execution, validity, or
genuineness of documents or securities now or hereafter deposited
hereunder, or of any endorsement thereon, or for any lack of
endorsement thereon, or for any description therein; nor shall
Escrow Agent be responsible or liable in any respect on account
of the identity, authority, or rights of the persons executing or
delivering or purporting to execute or deliver any such
documents, security, or endorsement.
(f) No Required Legal Proceedings. Escrow Agent shall not be required
to institute legal proceedings of any kind and shall not be
required to defend any legal proceedings that may be instituted
against Escrow Agent or with respect to the Escrowed Shares.
(g) Resignation of Escrow Agent. If Escrow Agent at any time, in
Escrow Agent's sole discretion, deems it necessary or advisable
to relinquish custody of the Escrowed Shares, Escrow Agent may do
so by giving at least 30 days written notice to the other Parties
of Escrow Agent's intention and thereafter delivering the
Escrowed Shares to any other escrow agent mutually agreeable to
Elamex USA and Xxxx, or, if no such escrow agent shall be
selected within 20 days of Escrow Agent's notification to Elamex
USA and Xxxx of Escrow Agent's desire to so relinquish custody of
the Escrowed Shares, then and in such event Escrow Agent may
choose a replacement Escrow Agent hereunder. Upon delivery of the
Escrowed Shares to the replacement Escrow Agent, the Escrow Agent
shall be discharged from any and all responsibility or liability
with respect to the Escrowed Shares or this Agreement and Elamex
USA shall promptly pay to Escrow Agent all monies which may be
owed Escrow Agent for Escrow Agent's services and expenses
hereunder.
Escrow Agreement-Xxxx between and among
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx")
Xxxxx X. Xxxxxxxxxxx, Attorney at Law ("Escrow Agent") June 28, 2002
Page 11 of 17
(h) No Fiduciary Duty by Escrow Agent to Elamex USA or Xxxx. This
Agreement shall not create any fiduciary duty on Escrow Agent's
part to Elamex USA or Xxxx, nor disqualify Escrow Agent from
representing any Party in any dispute with any other Party,
including any dispute with respect to the Escrowed Shares. Xxxx
understands, acknowledges, and agrees that Escrow Agent has acted
and will continue to act as counsel to Elamex USA.
(i) Dissolution of Xxxx. The Parties agree that in the event Xxxx is
dissolved Escrow Agent shall be entitled to rely solely upon
notices hereunder from Xxxxx X. Xxxxxx, the current Chairman of
the Board of Xxxx, or Xxxxxx X. Xxxxxx, current Chief Financial
Officer of Xxxx, unless or until Escrow Agent shall have received
notice signed by Azar Shareholders holding a majority of the
Escrowed Shares designating one of the Azar Shareholders to give
notices to Escrow Agent on behalf of Xxxx for purposes of this
Agreement. Except as otherwise set forth herein, individual Xxxx
Shareholders shall have no right or authority to direct or give
notices to Escrow Agent for any purpose of or in connection with
this Agreement.
5.4 Escrow Agent Compensation and Expenses. Escrow Agent shall be entitled
to reasonable compensation for serving as Escrow Agent, as well as
reimbursement of all costs and expenses incurred in connection
herewith. Elamex USA shall pay all Escrow Agent compensation and
expenses hereunder.
5.5 Indemnification. Elamex USA and Xxxx, jointly and severally, hereby
indemnify and hold the Escrow Agent harmless from and against any and
all losses, damages, taxes, liabilities, and expenses that may be
incurred, directly or indirectly, by the Escrow Agent, arising out of
or in connection with Escrow Agent's acceptance of appointment as the
Escrow Agent hereunder or the performance of Escrow Agent's duties
pursuant to this Agreement, including all legal costs and expenses of
the Escrow Agent incurred defending itself against any claim or
liability in connection with Escrow Agent's performances hereunder and
the costs of recovery of amounts pursuant to this section 5.5.
5.6 Miscellaneous:
(a) Entire Agreement; Integration. This Agreement constitutes the
entire agreement between and among the Parties pertaining to the
subject matter hereof, and supersedes all written or oral, prior,
or contemporaneous agreements, representations, warranties, or
understandings of the Parties pertaining or with respect thereto.
No covenant, representation, or condition not expressed herein
shall affect or be deemed to interpret, change, or restrict the
express provisions hereof.
Escrow Agreement-Xxxx between and among
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx")
Xxxxx X. Xxxxxxxxxxx, Attorney at Law ("Escrow Agent") June 28, 2002
Page 12 of 17
(b) Survival of Representations and Warranties. All representations,
warranties, covenants, and agreements of the Parties contained in
this Agreement shall survive the execution and delivery of this
Agreement and shall not be deemed merged into any documents
delivered at the time of such execution and delivery of this
Agreement or the closing hereunder.
(c) Binding Nature; No Assignments. The covenants and agreements
contained herein shall bind and inure to the benefit of the
Parties hereto, their respective heirs, executors,
administrators, personal or legal representatives, successors, or
permitted assigns; provided, however, that nothing in this
subsection shall be deemed to permit the conveyance, transfer,
assignment, or delegation, expressly, by operation of law, or
otherwise, by any Party of any right or interest herein without
the prior written consent of the other Party. Anything herein to
the contrary notwithstanding, however, no permitted assignment or
other disposition of all or any part of a Party's interests
herein shall relieve such Party of its obligations hereunder.
(d) Further Action. The Parties each agree to execute and deliver all
documents, provide all information, and take or forebear from all
such action as may be necessary and appropriate to achieve the
purposes hereof.
(e) Time is of the Essence. Time is of the essence in this Agreement.
(f) Amendments, Modifications, Approvals, and Consents. Any
amendment, modification, alteration, or supplement hereto, or any
approval or consent requested of any Party, shall be ineffective
unless it is in writing and signed by the Party against whom
enforcement is sought.
(g) Parties in Interest; No Third-Party Beneficiaries. Except as
specifically set forth herein, nothing in this Agreement is
intended to confer any right or remedy under or by reason of this
Agreement on any person other than the Parties to this Agreement
and their respective heirs, executors, administrators, personal
or legal representatives, successors, or permitted assigns, nor
is anything in this Agreement intended to relieve or discharge
the obligation or liability of any third person to any Party to
this Agreement, nor shall any provision hereof give any third
person any right of subrogation or action over or against any
Party to this Agreement.
(h) Notices. Any notice, consent, request, directive, demand, or
other communication made hereunder, pursuant hereto, or in
accordance herewith by any Party intended for any other Party
shall be in writing and shall be physically delivered, sent by
facsimile (fax) if a fax number is included for the other Party
in part 2
Escrow Agreement-Xxxx between and among
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx")
Xxxxx X. Xxxxxxxxxxx, Attorney at Law ("Escrow Agent") June 28, 2002
Page 13 of 17
hereof, sent by nationally recognized overnight delivery service
(with receipt requested), or sent by registered or certified
mail, properly addressed and return receipt requested with
postage prepaid, to such other Party at the address set forth in
Part 2 hereof, unless such other Party shall have previously
designated a different address or fax number by due notice
hereunder. The Escrow Agent shall be given copies of all notices
given by any Party under this Agreement.
Notices hereunder that are physically delivered shall be deemed
effective and complete at the time of the delivery thereof with
written evidence of such delivery. Notices hereunder that are
given by facsimile (fax) shall be deemed effective and complete
at the time such facsimile (fax) is successfully sent with
printed or written evidence of such successful sending. Notices
hereunder that are given by nationally recognized overnight
delivery service shall be deemed effective and complete the next
business day. Notices hereunder that are given by mail shall be
deemed effective and complete as of the applicable delivery date
set forth on the requested return receipt.
(i) Costs and Expenses. Except as may be otherwise specifically set
forth herein or as otherwise agreed to by the Parties, each Party
shall bear its own costs and expenses (including attorneys and
accountants fees and costs) in connection herewith and in
connection with all things required to be done by such Party
hereunder.
(j) No Brokerage Commissions, Finders Fees, or Similar Costs. Each of
the Parties hereby represents and warrants that there is no claim
for brokerage commissions, finders fees, or similar costs or fees
in connection with the transactions contemplated by this
Agreement. Each of the Parties hereto will pay or discharge, and
will indemnify, defend, and hold harmless the other Party from
and against, any and all claims for any such brokerage
commissions, finders fees, or similar costs or fees incurred by
reason of any action taken by such indemnifying Party.
(k) Attorneys Fees. If any legal action or other proceeding is
brought or commenced by any Party to enforce any of the terms
hereof because of an alleged dispute, breach, default, or
misrepresentation in connection with any of the provisions
hereof, the successful or prevailing Party shall be entitled to
receive as additional compensation hereunder or as additional
damages under such action all necessary and reasonable attorneys
fees, expenses, and costs, both before and after judgment, in
addition to any other relief to which such Party may be entitled.
(l) Governing Law. This Agreement shall be governed in all respects
and construed according to the laws of the state of Texas applied
to contracts made
Escrow Agreement-Xxxx between and among
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx")
Xxxxx X. Xxxxxxxxxxx, Attorney at Law ("Escrow Agent") June 28, 2002
Page 14 of 17
and to be fully performed entirely within the state of Texas
between residents of the state of Texas without giving effect to
any choice or conflict of law provision or rule (whether of the
state of Texas any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the state
of Texas, unless any obligations hereunder shall be invalid or
unenforceable under such laws, in which event the laws of the
state whose laws can apply to and validate the obligations
hereunder shall apply. This Agreement shall be deemed executed in
El Paso, Texas.
(m) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the Parties
and no presumption or burden of proof shall arise favoring or
disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal,
state, local, or foreign statute or law shall be deemed also to
refer to all rules and regulations promulgated thereunder, unless
the context otherwise requires. Whenever used herein, the word
"or" shall mean "and/or," unless the context clearly otherwise
requires. Whenever used herein, the word "including" shall mean
"including without limitation," and the word "include" shall mean
"include without limitation."
(n) Rights and Remedies. The rights and remedies of the Parties
hereunder shall not be mutually exclusive, and the exercise of
one or more of the provisions hereof shall not preclude the
exercise of any other provisions. Each of the Parties confirms
that damages may be an inadequate remedy for a breach or
threatened breach of any provision hereof. The respective rights
and obligations hereunder shall be enforceable by specific
performance, injunction, or other equitable remedy, but nothing
herein contained is intended to or shall limit or affect any
rights at law or by statute or otherwise of any Party aggrieved
as against the other Party for a breach or threatened breach of
any provision hereof, it being the intention of this subsection
5.12(n) to make clear the agreement of the Parties that the
respective rights and obligations of the Parties hereunder shall
be enforceable in equity as well as at law or otherwise.
(o) Arbitration. Anything herein to the contrary notwithstanding, any
controversy or dispute arising out of or relating to this
Agreement or its subject matter which the Parties are unable to
resolve within thirty (30) days after written notice by one Party
to the other Party of the existence of such controversy or
dispute, may be submitted to binding arbitration by any Party. If
so submitted to arbitration, the matter shall be finally settled
by binding arbitration conducted in accordance with the then
current rules and procedures of the American Arbitration
Association. Such arbitration shall take place in El Paso, Texas.
The decision by the arbitrator
Escrow Agreement-Xxxx between and among
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx")
Xxxxx X. Xxxxxxxxxxx, Attorney at Law ("Escrow Agent") June 28, 2002
Page 15 of 17
on any matter submitted to arbitration shall be binding and
conclusive upon the Parties, their respective heirs, executors,
administrators, personal or legal representatives, successors, or
permitted assigns, as the case may be, and they shall comply with
such decision in good faith. Each Party hereby submits itself to
the jurisdiction of the state and federal courts within the state
of Texas for the entry of judgment with respect to the decision
of the arbitrator hereunder. Judgment upon the award may be
entered in any state or federal court within the state of Texas
or any other court having jurisdiction.
(p) No Waiver. No failure by any Party to insist upon the strict
performance of any covenant, duty, agreement, term, or condition
hereof or to exercise any right or remedy upon a breach thereof
shall constitute a waiver of any such breach or of such or any
other covenant, duty, agreement, term, or condition, whether or
not similar. Any Party by notice pursuant to the terms hereof
may, but shall be under no obligation, waive any of its rights or
any condition or conditions to its obligations hereunder, or any
covenant, duty, agreement, term, or condition of any other Party.
No waiver shall constitute a continuing waiver or affect or alter
the remainder hereof, and each and every other covenant, duty,
agreement, term, and condition hereof shall continue in full
force and effect with respect to any other then existing or
subsequently occurring breach.
(q) Severability. In the event that any condition, covenant, term, or
other provision contained herein is held to be invalid or void by
any court of competent jurisdiction, the same shall be deemed
severable from the remainder hereof and shall in no way affect
any other condition, covenant, term, or provision contained
herein. If such condition, covenant, term, or other provision
shall be deemed invalid due to its scope and breadth, such
provision shall be deemed valid to the extent of the scope or
breadth permitted by law.
(r) Covenant of Good Faith. Each Party agrees to act reasonably and
in good faith in the performance of any acts required of such
Party hereunder.
(s) Force Majeure. No Party shall be responsible for delays or
failure in performance resulting from acts beyond the reasonable
control of such Party. Such acts shall include acts of God,
strikes, lockouts, riots, acts of war or terrorism, epidemics,
governmental regulation imposed after the fact, fires,
communication line failures, power failures, earthquakes, or
other disasters.
(t) Titles and Captions. All part, section, subsection, and other
titles, headings, and captions herein are included for purposes
of convenience only, and shall not be deemed a part hereof and
shall in no way define, limit, extend, or describe the scope or
intent of any of the provisions hereof.
Escrow Agreement-Xxxx between and among
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx")
Xxxxx X. Xxxxxxxxxxx, Attorney at Law ("Escrow Agent") June 28, 2002
Page 16 of 17
(u) Pronouns and Plurals. Whenever the context may require, any
pronoun used herein shall include the corresponding masculine,
feminine, or neuter forms, and the singular form of nouns,
pronouns, and verbs shall include the plural and vice versa.
(v) Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one
Agreement binding on the executing Parties if each Party named in
Part 2 hereof shall have executed at least one counterpart
signature page of this Agreement notwithstanding that all of the
Parties are not signatories of the same full copy of this
Agreement or the same counterpart signature page of this
Agreement.
IN WITNESS WHEREOF, each of the Parties hereto has executed this Agreement on or
as of the date first set forth above.
"Elamex USA" ELAMEX USA, CORP.
A Delaware Corporation
By /s/ Xxxxxxx X. Xxxxxxx
----------------------
Xxxxxxx X. Xxxxxxx
President
"Xxxx" XXXX NUT COMPANY
A Delaware Corporation
By /s/ Xxxxx X. Xxxxxx
-------------------
Xxxxx X. Xxxxxx
Chairman of the Board
"Escrow Agent" /s/ Xxxxx X. Xxxxxxxxxxx
------------------------
Xxxxx X. Xxxxxxxxxxx
Attorney at Law
Escrow Agreement-Xxxx between and among
Elamex USA, Inc., a Delaware Corporation ("Elamex USA")
Xxxx Nut Company, a Delaware Corporation ("Xxxx")
Xxxxx X. Xxxxxxxxxxx, Attorney at Law ("Escrow Agent") June 28, 2002
Page 17 of 17
