<PAGE>
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File No. 0-2733
AZTEC MANUFACTURING CO.
(Exact name of registrant as specified in its charter)
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): MARCH 13, 1996 AMENDMENT OF
FEBRUARY 21, 1996 FORM 8-K - ADDITION OF ITEM 7.
TEXAS 75-0948250
(State of incorporation) (I.R.S. Employer Identification Number)
400 NORTH TARRANT
CROWLEY, TEXAS 76036 76036
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (817) 297-4361
Not Applicable
---------------------------------------
(Former name or former address, if changes since last report)
===============================================================================
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) 1. Financial Statements of Arkansas Galvanizing, Inc.
Report of Independent Auditors
Balance Sheet as of October 31, 1995 and 1994
Statement of Income for the Years Ended
October 31, 1995 and 1994
Statement of Shareholders' Equity for the Years Ended
October 31, 1995 and 1994
Statement of Cash Flows for the Years Ended
October 31, 1995 and 1994
Notes to the Financial Statements
(b) 1. Pro forma financial information (unaudited)
Pro Forma Consolidated Balance Sheet as of November 30, 1995
Pro Forma Consolidated Statement of Income for the Nine Months
Ending November 30, 1995 and the Year Ending February 28, 1995
Notes to Pro Forma Consolidated Financial Statements
(c) Exhibits
The following exhibits are filed as part of this report:
10S Non-compete Agreement between Arkansas Galvanizing, Inc. and
Aztec Manufacturing Co.
10T Operating Agreement between Arkansas Galvanizing, Inc. and
Aztec Manufacturing Co.
10U Escrow Agreements between Charles W. Robertson, Stanley F.
Pielak, Wade Miller and Aztec Manufacturing Co.
<PAGE>
FINANCIAL STATEMENT INDEX
Sequentially
Financial Statement Numbered Page
------------------- -------------
1. Audited Financial Statements of Arkansas Galvanizing,
Inc. as of October 31, 1995 _____________
2. Unaudited Pro Forma Consolidated Financial Statements
of Aztec Manufacturing Co. as of November 30, 1995 _____________
and for the Nine Months Ended November 30, 1995 and
for the Year Ended February 28, 1995.
<PAGE>
ARKANSAS GALVANIZING, INC.
ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED OCTOBER 31, 1995
<PAGE>
ARKANSAS GALVANIZING, INC.
ANNUAL FINANCIAL REPORT
TABLE OF CONTENTS
Page
No.
Independent Auditor's Report........................................ 1
Financial Statements
Balance Sheet.................................................. 2-3
Statement of Income............................................ 4
Statement of Shareholders' Equity.............................. 5
Statement of Cash Flows........................................ 6
Notes to Financial Statements.................................. 7-11
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Shareholders of Arkansas Galvanizing, Inc.
We have audited the accompanying balance sheets of Arkansas Galvanizing, Inc. as
of October 31, 1995 and 1994, and the related statements of income,
shareholders' equity, and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Arkansas Galvanizing, Inc. as
of October 31, 1995 and 1994, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
CROWELL, PIPES & ASSOCIATES
Certified Public Accountants
January 3, 1996
1
<PAGE>
ARKANSAS GALVANIZING, INC.
BALANCE SHEET
OCTOBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
---------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash 71,146 359,818
Restricted cash 74,562 72,094
Accounts receivable 523,910 480,910
Notes receivable 257,417 110,000
Interest receivable 9,200 6,149
Prepaids and other current assets 60,149
---------------------
Total current assets 996,384 1,028,971
---------------------
PROPERTY, PLANT AND EQUIPMENT
Land 39,019 39,019
Buildings and improvements 526,258 508,364
Equipment and vehicles 908,556 988,698
Furniture and fixtures 3,515 3,990
Less accumulated depreciation (695,309) (650,208)
---------------------
Total property, plant and equipment 782,039 889,863
---------------------
OTHER ASSETS
Long-term notes receivable 301,300
Unamortized deferred costs 10,543 16,927
---------------------
Total other assets 311,843 16,927
---------------------
TOTAL ASSETS 2,090,266 1,935,761
=====================
</TABLE>
See accompanying notes to the financial statements.
2
<PAGE>
ARKANSAS GALVANIZING, INC.
BALANCE SHEET
OCTOBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
---------------------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable 7,943
Accrued taxes 1,394
Accrued interest 12,048 13,635
Income taxes payable 3,168 49,981
Current portion of long-term debt 80,000 75,000
---------------------
Total current liabilities 95,216 147,953
---------------------
LONG-TERM LIABILITIES
Deferred income taxes 211,248 158,171
Long-term debt 425,000 505,000
---------------------
Total long-term liabilities 636,248 663,171
---------------------
Total liabilities 731,464 811,124
---------------------
SHAREHOLDERS' EQUITY
Common Stock - par value $1 per share:
authorized 2000 shares; issued 1000 shares
including shares held in treasury 1,000 1,000
Additional paid-in capital 209,624 209,624
Retained earnings 1,198,178 964,013
---------------------
1,408,802 1,174,637
Cost of shares held in treasury: 250 shares (50,000) (50,000)
---------------------
Total shareholders' equity 1,358,802 1,124,637
---------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 2,090,266 1,935,761
=====================
</TABLE>
See accompanying notes to the financial statements.
3
<PAGE>
ARKANSAS GALVANIZING, INC.
STATEMENT OF INCOME
FOR THE YEARS ENDED OCTOBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
---------------------
<S> <C> <C>
REVENUES
Sales 3,445,726 3,238,556
COST OF SALES
Materials 909,235 754,570
Personnel costs 1,081,579 926,164
Maintenance 121,452 122,765
Depreciation 170,785 149,079
Other direct costs 230,533 251,015
---------------------
Total cost of sales 2,513,584 2,203,593
---------------------
Gross profit 932,142 1,034,963
---------------------
OPERATING EXPENSES
Personnel costs 271,547 237,676
Office expenses 56,828 83,295
Commissions and contract services 36,154 25,694
Other operating 115,312 99,482
---------------------
Total operating expenses 479,841 446,147
---------------------
Income from operations 452,301 588,816
OTHER INCOME (EXPENSE)
Interest and financing expenses (35,202) (43,033)
Amortization of deferred charges (6,384) (6,432)
Interest income 27,552 26,126
Other income (expense) - net (22,771) 5,324
---------------------
Total other expense (36,805) (18,015)
---------------------
INCOME BEFORE TAXES 415,496 570,801
Taxes on income 181,331 186,654
---------------------
NET INCOME 234,165 384,147
=====================
</TABLE>
See accompanying notes to the financial statements.
4
<PAGE>
ARKANSAS GALVANIZING, INC.
STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED OCTOBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
Common Additional Retained Treasury
Stock Paid-In Earnings Stock
Capital
---------------------------------------
<S> <C> <C> <C> <C>
Balance at October 31, 1993 1,000 209,624 579,866 50,000
Net income 384,147
---------------------------------------
Balance at October 31, 1994 1,000 209,624 964,013 50,000
Net income 234,165
---------------------------------------
Balance at October 31, 1995 1,000 209,624 1,198,178 50,000
=======================================
</TABLE>
See accompanying notes to the financial statements.
5
<PAGE>
ARKANSAS GALVANIZING, INC.
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED OCTOBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
--------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income 234,165 384,147
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 170,785 149,079
Amortization 6,384 6,432
Changes in assets and liabilities:
Accounts receivable (43,000) (100,771)
Notes receivable (448,717) (15,629)
Interest receivable (3,051) (2,882)
Prepaids and other current assets (60,149) 43,750
Accounts payable (7,943) (7,924)
Accrued expenses (2,981) (125)
Income taxes payable 6,264 82,720
--------------------------
Net cash provided by (used for) operating activities (148,243) 538,797
--------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of plant assets and equipment (90,801) (192,185)
Retirement of plant assets and equipment 27,840 58,008
--------------------------
Net cash used for investing activities (62,961) (134,177)
--------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt additions
Retirement of debt (75,000) (147,076)
--------------------------
Net cash used for financing activities (75,000) (147,076)
--------------------------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (286,204) 257,544
Cash and cash equivalents, beginning of year 431,912 174,368
--------------------------
CASH AND CASH EQUIVALENTS, END OF YEAR 145,708 431,912
==========================
Supplementary Data: 1995 1994
-------- -------
Interest paid 37,777 43,626
Income taxes paid 157,879 104,860
</TABLE>
See accompanying notes to the financial statements.
6
<PAGE>
ARKANSAS GALVANIZING, INC.
NOTES TO THE FINANCIAL STATEMENTS
OCTOBER 31, 1995
SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
DESCRIPTION OF BUSINESS
Arkansas Galvanizing, Inc. (the Corporation) is engaged principally in the
galvanizing of structural steel and finished steel products including trailers,
tanks and drums.
ACCOUNTING POLICIES
Arkansas Galvanizing, Inc.'s accounting policies conform to generally accepted
accounting principles. Significant policies followed are described below.
BAD DEBTS
The Corporation uses the direct write-off method for accounting for
uncollectible accounts receivable.
PROPERTY AND DEPRECIATION
Property, plant and equipment are stated at cost. Depreciable property is
generally depreciated on a straight-line method for financial and tax purposes.
The cost of properties sold or retired is credited to the asset account, and the
related depreciation is charged to the accumulated depreciation account. Profit
or loss resulting from the sale or retirement is included in income.
DEFERRED CHARGES
The costs related to organizing the corporation and debt issuance costs are
being amortized on a straight-line basis over a five year period.
INCOME TAXES
Deferred income taxes in the accompanying financial statements reflect temporary
differences in reporting results of operations for income tax purposes and
financial accounting purposes.
STATEMENT OF CASH FLOWS
Cash and cash equivalents are comprised of highly liquid instruments such as
demand deposits and money market funds with original maturities of three months
or less.
7
<PAGE>
ARKANSAS GALVANIZING, INC.
NOTES TO THE FINANCIAL STATEMENTS
OCTOBER 31, 1995
RESTRICTED CASH
At October 31, 1995 and 1994, cash in the amount of $74,562 and $72,094,
respectively, was restricted as to use. The amount represents balances held by
the trustee banks serving as paying agents for the Arkansas Development Finance
Authority (ADFA) economic development revenue bonds.
PREPAIDS AND OTHER CURRENT ASSETS
The components of prepaids and other current assets are summarized below at
October 31, 1995 and 1994:
<TABLE>
<CAPTION>
1995 1994
------------
<S> <C> <C>
Prepaid Income Tax 9,431 -
Prepaid operating supplies 25,251 -
Prepaid insurance 11,062 -
Other receivables 14,405 -
------------
Total 60,149 -
============
</TABLE>
PROPERTY, PLANT AND EQUIPMENT
Major classifications of property, plant and equipment and their respective
lives are summarized below as of October 31, 1995 and 1994:
<TABLE>
<CAPTION>
Depreciable
1995 1994 Lives
---------------------------------
<S> <C> <C> <C>
Land 39,019 39,019
Office and plant building 382,151 369,699 35-40 years
Building improvements 144,107 138,665 7-35 years
Equipment 815,171 901,231 3-12 years
Furniture and fixtures 3,515 3,990 7 years
Vehicles 93,385 87,467 5 years
--------------------
Total 1,477,348 1,540,071
====================
</TABLE>
8
<PAGE>
ARKANSAS GALVANIZING, INC.
NOTES TO THE FINANCIAL STATEMENTS
OCTOBER 31, 1995
NOTES RECEIVABLE
Notes receivable consist of amounts due from shareholders and entities owned or
controlled by shareholders. As of October 31, 1995 and 1994 the notes
receivable are as follows:
<TABLE>
<CAPTION>
1995 1994
----------------
<S> <C> <C>
Loan to shareholders at 4%, maturing 1996 85,500 25,000
Loan to related corporation at 13% maturing 1996 301,300
Loan to related corporation at 8.5%, maturing 1996 85,000 85,000
Loan to related partnership at 13%, maturing 1996 86,917
----------------
558,717 110,000
Less: Current portion 257,417 110,000
----------------
Long-term notes receivable 301,300
================
</TABLE>
Principal and interest received by the Corporation on the notes receivable for
the year ended October 31, 1995 and 1994 amounted to $15,546 and $54,068,
respectively.
The various notes due the Corporation are unsecured and have been renewed
without regard to stated maturities.
LONG-TERM DEBT
The Corporation's long-term debt consisted of the following:
<TABLE>
<CAPTION>
1995 1994
----------------
<S> <C> <C>
Promissory note at 5.50% - 8.10%, maturing 1998 160,000 205,000
Promissory note at 4.5% - 6.55%, maturing 2003 345,000 375,000
----------------
505,000 580,000
Less: current portion 80,000 75,000
----------------
Total long-term debt 425,000 505,000
================
</TABLE>
The Corporation's bank loans are secured by security interests in the equipment
financed and personal guaranty's from the Corporation's shareholders. Certain
plant equipment, buildings and land serve as collateral for the outstanding
promissory notes.
9
<PAGE>
ARKANSAS GALVANIZING, INC.
NOTES TO THE FINANCIAL STATEMENTS
OCTOBER 31, 1995
Maturities of the long-term debt are $80,000 in 1996, $85,000 in 1997, $90,000
in 1998, $35,000 in 1999, and $40,000 in 2000.
The promissory notes consist of funds loaned by the ADFA to finance the
Corporation's plant and subsequent expansion. The ADFA has issued Economic
Development Revenue Bonds to finance the loans to the Corporation. The
promissory notes are subject to the terms and conditions of the loan agreement
and bonds.
The Corporation and the individual shareholders of the Corporation have entered
into guaranty agreements for reimbursement of advanced funds with the ADFA,
whereby the Corporation and individual shareholders will unconditionality
guarantee to the ADFA for the benefit of the bond owners, the full and prompt
payment of the principal and interest on the bonds. The principal and interest
maturities for the promissory notes are payable to Simmons First National Bank
of Pine Bluff, Arkansas and First Commercial Trust Company of Little Rock,
Arkansas as trustees for the ADFA.
TAXES ON INCOME
Taxes on income consisted of the following:
<TABLE>
<CAPTION>
1995 1994
Current Deferred Current Deferred
----------------- -----------------
<S> <C> <C> <C> <C>
Federal 105,672 44,073 127,631 27,484
State 22,582 9,004 26,285 5,254
----------------- -----------------
Total 128,254 53,077 153,916 32,738
================= =================
</TABLE>
The provision for deferred income taxes reflects timing differences between
financial and tax reporting.
The differences arise since the Corporation's financial statements are prepared
on the accrual basis and the tax returns are prepared on the cash basis of
accounting and differences in depreciable lives on certain property and
equipment.
10
<PAGE>
ARKANSAS GALVANIZING, INC.
NOTES TO THE FINANCIAL STATEMENTS
OCTOBER 31, 1995
CONCENTRATION OF CREDIT RISK
The Corporation markets its galvanizing for sale to customers primarily in the
southern middle states which include Kansas, Oklahoma, Missouri, and Arkansas.
The Corporation grants credit to customers, with the greatest amount of credit
risk in the southern middle states. The Corporation's credit losses have been
within management expectations.
COMMITMENTS
As a provision of the promissory notes, the Corporation has agreed to special
covenants that require the Corporation to limit its debt to equity ratio to
4(four) to 1(one), maintain a minimum net worth of $250,000 and a current ratio
of 1.25 to 1.
SUBSEQUENT EVENTS
Subsequent to year end, the Corporation has been approached by a competitor
about the possibility of buying the Corporation. The Corporation's Board of
Director's has authorized negotiations for the sale. As of the date of this
report, no agreement has been reached.
11
<PAGE>
THIS PAGE LEFT BLANK INTENTIONALLY
<PAGE>
AZTEC MANUFACTURING CO.
Pro Forma Consolidated Statement Of Income
(Unaudited)
For Nine Months Ended November 30, 1995
<TABLE>
<CAPTION>
Arkansas
Aztec Galvanizing Pro Forma
Historical Historical Adjustments Pro Forma
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net Sales $36,376,044 $ 2,737,398 $ 0 $39,113,442
Cost and expenses:
Cost of sales 27,027,391 2,080,278 (7,453)(d) 29,100,216
Selling, general and administrative 5,461,153 294,282 (185,650)(e) 5,569,785
Interest expense 738,353 26,731 252,000 (f) 1,017,084
Other expense (income) 81,615 (11,589) 0 70,026
----------- ----------- ----------- -----------
Income before income taxes 3,067,532 347,696 (58,897) 3,356,331
Income tax expense 1,211,809 139,078 9,791 (g) 1,360,678
----------- ----------- ----------- -----------
Net Income $ 1,855,723 $ 208,618 $ (68,688) $ 1,995,653
=========== =========== ============ ===========
Net Income Per Share - Fully Diluted $ 0.33 $ 0.35
=========== ===========
</TABLE>
AZTEC MANUFACTURING CO.
Pro Forma Consolidated Statement Of Income
(Unaudited)
For Year Ended February 28, 1995
<TABLE>
<CAPTION>
Arkansas
Aztec Galvanizing Pro Forma
Historical Historical Adjustments Pro Forma
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net Sales $44,607,665 $ 3,393,034 $ 0 $48,000,699
Cost and expenses:
Cost of sales 34,129,695 2,355,028 40,661 (d) 36,525,384
Selling, general and administrative 6,566,317 464,926 (235,181)(e) 6,796,062
Gain on sales of property, plant and
equipment 3,040 0 0 3,040
Interest expense 822,627 40,477 336,000 (f) 1,199,104
Other expense 477,525 4,673 0 482,198
----------- ----------- ----------- -----------
Income before income taxes 2,608,461 527,930 (141,480) 2,994,911
Income tax expense 1,030,329 211,172 (12,127)(g) 1,229,374
----------- ----------- ----------- -----------
Net Income $ 1,578,132 $ 316,758 $ (129,353) $ 1,765,537
=========== =========== ============ ===========
Net Income Per Share - Fully Diluted $ 0.27 $ 0.31
=========== ===========
</TABLE>
See accompanying notes to pro forma consolidated financial statements.
<PAGE>
AZTEC MANUFACTURING CO.
Pro Forma Consolidated Balance Sheet
(Unaudited)
November 30, 1995
<TABLE>
<CAPTION>
Aztec Pro Forma
Historical Adjustments Pro Forma
----------- ----------- -----------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 52,961 $ 783,207(a) $ 836,168
Restricted Cash 63,208(a) 63,208
Accounts Receivable - Net of Allowances 9,941,558 618,723(a) 10,560,281
Inventories 6,723,923 371,761(a) 7,095,684
Prepaid Expenses & Other 34,465 11,061(a) 45,526
----------- ----------- -----------
Total Current Assets 16,752.907 1,847,960 18,600,867
Property Plant & Equipment - Net 15,870,888 617,125(a) 16,488,013
Property Held for Sale - Net 1,958,198 0 1,958,198
Intangible Assets - Net 4,561,451 2,779,087(b) 7,340,538
Other Assets 320,014 0 320,014
----------- ----------- -----------
TOTAL ASSETS $39,463,458 $ 5,244,172 $44,707,630
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 3,517,651 $ 154,928(a) $ 3,672,579
Accrued Liabilities 3,692,807 147,857(a) 3,840,664
Current Portion of Long Term Debt 1,515,593 50,000(a) 1,565,593
----------- ----------- -----------
Total Current Liabilities 8,726,051 352,785 9,078,836
Deferred Income Taxes 627,849 260,151(a) 888,000
Long-Term Debt 7,583,493 4,206,236(c) 11,789,729
Long-Term Debt - Assumed 425,000(a) 425,000
SHAREHOLDERS' EQUITY:
Common Stock 5,748,060 0 5,748,060
Capital in Excess of Par 9,233,598 0 9,233,598
Retained Earnings 8,270,538 0 8,270,538
Less - Treasury Stock (726,131) 0 (726,131)
----------- ----------- -----------
Total Shareholders' Equity 22,526,065 0 22,526,065
----------- ----------- -----------
TOTAL LIABILITIES & SHAREHOLDER'S EQUITY $39,463,458 $ 5,244,172 $44,707,630
=========== =========== ===========
</TABLE>
See accompanying notes to pro forma consolidated financial statements
<PAGE>
AZTEC MANUFACTURING CO.
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
On February 5, 1996, Aztec executed a Stock Purchase Agreement to acquire
all the issued and outstanding common stock of Arkansas Galvanizing, Inc., for
$4.2 million plus assumed liabilities. The pro forma adjustments included in
the pro forma consolidated balance sheet include Arkansas Galvanizing's balance
sheet amounts at January 31, 1996, adjusted for purchase accounting and
acquisition financing as described below in items (a) through (c). The pro
forma consolidated statements of income include the historical results of
operations of Arkansas Galvanizing, Inc. for the nine month period ended
November 30, 1995, and the year ended February 28, 1995 adjusted for purchase
accounting and other pro forma adjustments as described below in items (d)
through (g) as if the acquisition had occurred on March 1, 1995 and March 1,
1994.
These unaudited pro forma consolidated financial statements may not be
indicative of the financial position and operating results that actually would
have occurred if the consolidation had been in effect on the dates or periods
indicated or which may be obtained in the future. The unaudited interim pro
forma consolidated statement of income for the nine months ended November 30,
1995, in the opinion of management, reflects all material adjustments necessary
to present fairly the financial position and results of operations, for the
interim periods included herein. All such adjustments are of a normal and
recurring nature. Interim period results are not necessarily indicative of the
results to be achieved for the full year. The pro forma adjustments are based
upon certain estimates which may change as additional information becomes
available. The unaudited pro forma consolidated financial statements should be
read in conjunction with the February 28, 1995 audited financial statements of
Aztec Manufacturing Co. and the October 31, 1995 audited financial statements of
Arkansas Galvanizing, Inc.
(a) Represents the fair value of assets purchased and liabilities assumed.
(b) Represents the excess of the consideration paid over the estimated fair
value of the acquired net assets.
(c) Represents long-term debt used to fund the purchase of Arkansas
Galvanizing stock ($4,200,000).
(d) Includes adjustment in non-recurring miscellaneous expenses and
amortization expense applicable to acquired assets.
(e) Includes a reduction in salaries for non-recurring salary payments and
additional expense for non-compete agreements and profit sharing
expenses.
(f) Represents interest expense relating to long-term debt used to fund the
acquisition.
(g) Represents 40% of the pro forma adjustments exclusive of goodwill
amortization to income before income taxes for federal and state income
taxes.
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereto duly authorized.
AZTEC MANUFACTURING CO.
---------------------------------------
Vice President for Finance
Chief Financial Officer
DATE: March 13, 1996
<PAGE>
EXHIBIT 10S
NON-COMPETE AGREEMENT
---------------------
THIS NON-COMPETE AGREEMENT is entered into on this, the __________ day of
___________________, 1996, by and between AZTEC MANUFACTURING CO. ("Aztec"), a
Texas corporation, and _______________________ (the "Seller"), an individual
residing in ________________________, Texas.
On the date hereof, Aztec or its assigns purchased 100% of the issued and
outstanding stock of Arkgalv, Inc., d/b/a Arkansas Galvanizing (the "Company"),
pursuant to that certain Stock Purchase Agreement effective the 1st day of
February, 1996 (the "Stock Purchase Agreement") by and between Aztec and the
shareholders of the Company. The Seller and Aztec are entering into this Non-
Compete Agreement pursuant to, and as a condition precedent to, consummating the
transactions contemplated by the Stock Purchase Agreement.
Aztec and the Seller desire for the Seller to not compete with Aztec or any
of its subsidiaries from and after the date hereof, subject to the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the parties hereto agree as follows:
1. NON-COMPETITION COVENANT. Seller and each of his affiliates agree
------------------------
that for a period of five (5) years after execution of this Agreement, he will
not, directly or indirectly, own, manage, operate, join, control or participate
in the ownership, management, operation or control of any business, whether in
corporate, proprietorship or partnership form or otherwise, that owns or
operates a galvanizing plant, or any part thereof (a "Competing Business") where
1
<PAGE>
such Competing Business is within a three hundred (300) mile radius from any
galvanizing business which Aztec operates at the Closing Date. Galvanizing
businesses which Aztec will operate at Closing are listed on Exhibit "A"
attached hereto. The ownership of less than 5% of any publicly traded company
which would be a Competing Business shall not be a violation of this Agreement.
2. CONSIDERATION. As consideration for Seller entering into this
-------------
Agreement, Aztec shall pay to the Seller total cash consideration of $150,000.00
("Total Consideration"), payable in sixty (60) monthly installments of $2,500.00
each, commencing April 1, 1996 and continuing on the same day of each and every
month thereafter until March 1, 2001, when the final payment of $2,500.00 shall
be due and payable. If Aztec defaults in payment of the Total Consideration as
provided under the terms set forth in this Agreement and such default remains
uncured for a period of three (3) days after written notice of such default has
been delivered to Aztec, Seller, at Seller's option, may declare the entire
unpaid Total Consideration immediately due and payable.
3. ASSIGNMENT. The rights and obligations of Aztec and Seller under this
----------
Agreement shall inure to the benefit of, and be enforceable by and binding upon,
Aztec and the Seller, Aztec's successors and assigns, and the Seller's personal
representatives, heirs, successors and assigns.
4. NOTICES. All communications required or permitted to be given
-------
hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally, or sent by express mail service that provides for
confirmation of delivery, telecopy, telefax, or other
2
<PAGE>
electronic transmission to the extent receipt is confirmed, or mailed first-
class, postage-prepaid, registered or certified mail, addressed as follows:
(a) To Aztec:
Aztec Manufacturing Co.
400 N. Tarrant
P. O. Box 668
Crowley, Texas 76036
Attention: Dana Perry
(b) To the Seller:
______________________________
______________________________
______________________________
or to such other addresses as the parties shall from time to time designate by
like notice.
5. FULL AGREEMENT. This Agreement constitutes the full and complete
--------------
Agreement between the Seller and Aztec with respect to the subject matter hereof
and shall not be modified or amended except in a writing executed by both of
them.
6. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS (EXCEPT THE RULES REGARDING CONFLICTS OF LAW) OF THE
STATE OF TEXAS.
7. COUNTERPARTS. This Agreement may be executed in two (2)
------------
or more counterparts, all of which shall constitute one (1) and the same
Agreement, and each of which shall be deemed an original.
8. WAIVER. The terms, agreements, covenants, representations, warranties
------
and conditions of this Agreement may be waived only in a writing signed by the
party against whom such waiver is sought to be enforced. The failure of any
party, at any time or times, to require
3
<PAGE>
performance of any provision hereof shall in no manner affect the right to
enforce the same provision at a later time. No waiver by any party of any
condition, or the breach of any term, agreement, covenant, representation or
warranty in this Agreement, whether by conduct or otherwise, in any one (1) or
more instances, shall be construed as a further or continuing waiver of any such
condition or breach or waiver of any other condition or breach of any other
term, agreement, covenant, representation or warranty of this Agreement.
9. ENFORCEABILITY. If any of the provisions of this Agreement shall be
--------------
determined to be wholly or partially invalid or unenforceable, such
determination shall not affect the validity or enforceability of any other
provisions of this Agreement. Furthermore, in lieu of such invalid or
unenforceable provision, there shall be added automatically as part of this
Agreement, a provision as similar in its terms to such invalid or unenforceable
provision as may be possible and be valid and enforceable.
IN WITNESS WHEREOF, Aztec and the Seller have duly executed this Agreement
on the day and year first above written.
AZTEC MANUFACTURING CO.
By:____________________________________
SELLER:
______________________________________
4
<PAGE>
EXHIBIT "A"
TO
NON-COMPETE AGREEMENT
1. Aztec Manufacturing Partnership, Ltd.
400 N. Tarrant
Crowley, Texas 76036
2. Aztec Manufacturing-Waskom Partnership, Ltd.
Highway 80 East
Waskom, Texas 75692
3. Aztec Industries, Inc.
106 Aztec Road
Jackson, Mississippi 39218
4. Automatic Processing, Inc.
4212 Dutch Bayou Road
Drawer K
Moss Point, Mississippi 39563
5. Aztec Manufacturing Partnership. Ltd.
12433 Beaumont Highway
Houston, Texas 77228
6. Gulf Coast Galvanizing, Inc.
Industrial Drive
Celeste Road Industrial Park
Citronelle, Alabama 76522
7. Arizona Galvanizing, Inc.
15775 W. Elwood
Goodyear, Arizona 35338
8. Arkgalv, Inc., d/b/a Arkansas Galvanizing
998 Escve Drive
Prairie Grove, Arkansas 72753
5
<PAGE>
EXHIBIT 10T
OPERATING AGREEMENT
-------------------
THIS AGREEMENT is effective the 1st day of February, 1996, by and between
AZTEC MANUFACTURING CO., a Texas corporation ("Aztec"), and CHARLES W.
ROBERTSON, STANLEY F. PIELAK and WADE MILLER, being all of the Shareholders
(collectively "Sellers") of ARKGALV, INC., d/b/a ARKANSAS GALVANIZING, an
Arkansas corporation (the "Company").
R E C I T A L S:
----------------
Reference is made to the following:
(a) On the date hereof, Aztec purchased 100% of the issued and outstanding
stock of the Company pursuant to that certain Stock Purchase Agreement
effective the 1st day of February, 1996 (the "Stock Purchase
Agreement"), by and between Aztec and Sellers.
(b) The Sellers and Aztec are entering into this Operating Agreement
pursuant to, and as a condition precedent to, executing the Stock
Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and of the
respective covenants, representations, warranties and agreements herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. JOINT MANAGEMENT AND CONTROL OF THE COMPANY. The parties agree and
-------------------------------------------
stipulate that effective control and direction of the Company's operations will
transfer to Aztec
1
<PAGE>
on the date of execution of this Agreement, subject to the terms and conditions
set forth herein and the Stock Purchase Agreement.
2. Aztec and Sellers covenant and agree that, pending the Closing, and
except as otherwise agreed to in writing by Aztec and Sellers:
(a) BUSINESS IN THE ORDINARY COURSE. All aspects of the business of
-------------------------------
the Company (the "Business)" shall be conducted solely in the ordinary
course consistent with past practice. Aztec and Sellers shall use their
best efforts to cause the Business to be conducted in such a manner that on
the Closing Date, the representations and warranties of Sellers contained
in the Stock Purchase Agreement shall be true, as though such
representations and warranties are made on and as of such date.
(b) MAINTENANCE OF PHYSICAL ASSETS. Aztec and Seller shall cause the
------------------------------
Company to continue to maintain and service the physical assets used in the
conduct of the Business in the same manner as has been its consistent past
practice.
(c) EMPLOYEES' AND BUSINESS' RELATIONS. Aztec and Seller shall use
----------------------------------
their best efforts to keep available the services of the present employees
and agents of the Business and to maintain the relations and good will with
the suppliers, customers, distributors and any others having business
relations with the Company.
(d) MAINTENANCE OF INSURANCE. Aztec and Sellers shall use their best
------------------------
efforts to maintain the insurance policies of the Company in effect at the
date of execution of this Agreement. Aztec or Sellers, as appropriate,
shall notify the other of any changes in the terms of the insurance
policies maintained by the Company.
2
<PAGE>
(e) COMPLIANCE WITH LAWS, ETC. Aztec and Sellers shall cause the
-------------------------
Company to comply with all laws, ordinances, rules, regulations and orders
applicable to the Business, or the Company's operations, assets or
properties in respect thereof, such non-compliance with which might
materially affect the Business.
(f) SALE OF ASSETS; NEGOTIATIONS. Aztec, Sellers and the Company
----------------------------
shall not, directly or indirectly, sell or encumber all or any part of the
assets of the Company, other than in the ordinary course of the Business
consistent with past practice, or initiate or participate in any
discussions or negotiations or enter into any agreement to do any of the
foregoing.
(g) PRESS RELEASES. Except as required by applicable law, neither the
--------------
Company, Aztec, nor any of the Sellers shall give notice to third parties
or otherwise make any public statement or releases concerning the Stock
Purchase Agreement, this Agreement, or the transactions contemplated
hereby, except for such written information as shall be approved in writing
as to form and content by both Aztec and Sellers, which approval shall not
be unreasonably withheld.
(h) FUNDS OF THE COMPANY. All checks drawn or fund transfers by the
--------------------
Company will require the signature or written approval of both (i) an
officer of the Company, and (ii) L. C. Martin, Dana Perry or Fred Wright.
3. GOVERNING LAW. This Agreement shall be governed by and interpreted
-------------
and enforced in accordance with the laws (except for the rules regarding
conflicts of laws) of the State of Texas.
3
<PAGE>
4. SEVERABILITY. Any provision of this Agreement which is invalid or
------------
unenforceable in any jurisdiction shall be ineffective to the extent of such
invalidity or unenforceability without rendering unenforceable the remaining
provisions hereof.
5. COUNTERPARTS. This Agreement may be executed in any number of
------------
counterparts, and any party hereto may execute any such counterpart, each of
which, when executed and delivered, shall be deemed to be an original, and all
copies of which counterparts, taken together, shall constitute but one (1) and
the same instrument.
6. CAPITALIZED TERMS. Any capitalized term contained in this Agreement
-----------------
which is not defined herein shall have the meaning as set forth in the Stock
Purchase Agreement.
7. TERMINATION. This Agreement shall terminate on the Closing Date. If
-----------
the Stock Purchase Agreement terminates according to the terms provided for
therein, this Agreement shall automatically terminate as of the date the Stock
Purchase Agreement terminates.
AZTEC MANUFACTURING CO.
By:____________________________________
its ________________________________
SELLERS:
_______________________________________
CHARLES W. ROBERTSON
_______________________________________
STANLEY F. PIELAK
_______________________________________
WADE MILLER
4
<PAGE>
EXHIBIT 10U
ESCROW AGREEMENT
----------------
This Escrow Agreement ("Escrow Agreement") is made and entered into as of
_______________, 1996, by and among Charles W. Robertson, Stanley F. Pielak and
Wade Miller (collectively, "Sellers"), Aztec Manufacturing Co., a Texas
corporation ("Purchaser") and ________________, a ________________ ("Escrow
Agent").
R E C I T A L S:
- - - - - - - -
Reference is made to the following:
A. Sellers and Purchaser previously entered into a Stock Purchase
Agreement effective as of February 1, 1996 (the "Purchase Agreement")
pursuant to which Purchaser agreed to purchase and Sellers agreed to
sell all of the issued and outstanding capital stock of Arkgalv, Inc.,
d/b/a Arkansas Galvanizing (the "Company"). Except as otherwise
provided herein, all capitalized terms in this Escrow Agreement will
have the same meaning herein as in the Purchase Agreement.
B. Section 1.2.5 of the Purchase Agreement requires that Purchaser
deposit a portion of the Purchase Price with Escrow Agent at Closing
to secure Sellers' guarantee of certain of the Company's accounts
receivable as provided under Section 8.2 of the Purchase Agreement.
C. This Escrow Agreement sets forth the terms and conditions under which
these escrowed funds, together with any interest thereon, will be
held, managed and disbursed by Escrow Agent.
W I T N E S S E T H:
- - - - - - - - - -
NOW THEREFORE, in consideration of the foregoing premises, the mutual
covenants contained herein and for good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
Section 1. Escrow Deposit. Purchaser agrees to deliver to Escrow Agent on
--------- --------------
the Closing Date a certified check payable to the order of Escrow Agent in an
amount equal to ten percent (10%) of the Guaranteed Accounts Receivable as
defined in Section 8.2 of the Purchase Agreement ("Escrow Deposit"), to be held
in an escrow account ("Escrow Account") by Escrow Agent, together with any
interest earned thereon as a result of the investments made pursuant to Section
3, subject to the terms and conditions hereof, and to be disbursed in accordance
with the provisions of this Escrow Agreement. Escrow Agent shall acknowledge
receipt of said Escrow Deposit to Purchaser and Sellers.
1
<PAGE>
Section 2. Disbursement of Escrow Deposit. On the close of the fifth
--------- ------------------------------
(5th) business day after receipt by Escrow Agent of a certificate from Purchaser
to the effect that Purchaser is entitled to a distribution from the Escrow
Deposit pursuant to Sections 8.2 and 8.3 of the Purchase Agreement and the
amount to which Purchaser believes itself to be entitled ("Purchaser's
Disbursement Certificate"), Escrow Agent shall immediately pay to, or credit to
the account of, or otherwise transfer to Purchaser such amount (plus any
earnings thereon) unless the Escrow Agent shall have received a written
objection from the Sellers within such ten (10) business days after the date
upon which Escrow Agent received Purchaser's Disbursement Certificate; provided,
however, that the aggregate amount of funds which Escrow Agent disburses to
Purchaser pursuant to this Section 2 will not exceed the balance of the Escrow
Deposit as of the date Escrow Agent receives the Purchaser's Disbursement
Certificate. If Escrow Agent receives a written objection within the time period
specified above, Escrow Agent shall comply with the terms of Section 3 of this
Escrow Agreement.
Section 3. Disputes. If a controversy arises between Sellers and
--------- --------
Purchaser as evidenced by Sellers' written objection to a disbursement from the
Escrow Account in accordance with a Purchaser's Disbursement Certificate, Escrow
Agent will not be permitted or required to resolve such controversy or take any
action, including but not limited to, any disbursements to Purchaser, but shall
await resolution of the controversy by (a) a final non-appealable court order of
a court of competent jurisdiction directing delivery of funds from the Escrow
Account, or (b) a written agreement executed by the other parties hereto
directing delivery of funds from the Escrow Account, in which event the Escrow
Agent shall make such disbursements from the Escrow Account in accordance with
such order or agreement.
Section 4. Investment of Escrow Deposit. Escrow Agent shall, unless
--------- ----------------------------
otherwise directed by the other parties hereto in writing, promptly invest and
reinvest the funds held in the Escrow Account in (a) treasury bills issued by
the government of the United States of America or (b) certificates of deposit
guaranteed by the Federal Deposit Insurance Corporation or Federal Savings and
Loan Insurance Corporation or other agency of the United States of America.
Escrow Agent shall not be liable or be responsible for any losses incurred by
either Purchaser or Sellers, as the case may be, in connection with investments
made by Escrow Agent in accordance with this Section 4. Escrow Agent may from
time to time sell sufficient amounts of treasury bills or certificates of
deposit in order to disburse funds from the Escrow Account in accordance with
the provisions of Section 2 hereof. Except to the extent disbursed to Purchaser
as provided in Section 2, all earnings will be for the benefit of Sellers and
will be reported to the Internal Revenue Service under Taxpayer Identification
Numbers _____________________,________________________, and
_________________________.
Section 5. Limitation of Escrow Agent's Liability.
--------- --------------------------------------
(a) Escrow Agent will not be under any duty to give the property held
by it hereunder any greater degree of care than it gives its own similar
property and will not be required to invest any funds held hereunder except as
directed in this Escrow Agreement. Uninvested funds held hereunder will not
earn or accrue interest.
2
<PAGE>
(b) This Escrow Agreement expressly sets forth all the duties of
Escrow Agent with respect to any and all matters pertinent hereto. No implied
duties or obligations will be read into this Escrow Agreement against the Escrow
Agent. Escrow Agent will not be bound by the provisions of any agreement among
the other parties hereto except this Escrow Agreement.
(c) Escrow Agent, as part of the consideration for its acceptance of
this escrow, will not be liable for any acts or omissions nor for any claims,
demands or losses, nor for any damages made or suffered by any party to this
Escrow Agreement except such as may arise through or be caused by Escrow Agent's
willful or gross negligence. WITHOUT LIMITING THE FOREGOING, ESCROW AGENT WILL
IN NO EVENT BE LIABLE IN CONNECTION WITH ITS INVESTMENT OR REINVESTMENT OF ANY
CASH HELD BY IT HEREUNDER IN GOOD FAITH, IN ACCORDANCE WITH THE TERMS HEREOF,
INCLUDING WITHOUT LIMITATION ANY LIABILITY FOR ANY DELAYS (NOT RESULTING FROM
ITS GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) IN THE INVESTMENT OR REINVESTMENT OF
THE PROCEEDS OF THE ESCROW DEPOSIT, OR ANY LOSS OR INTEREST INCIDENT TO ANY SUCH
DELAYS.
(d) THE PARTIES ARE AWARE THAT FEDERAL DEPOSIT INSURANCE CORPORATION
(FDIC) COVERAGE APPLIES ONLY TO A CUMULATIVE MAXIMUM AMOUNT OF $100,000.00 FOR
EACH INDIVIDUAL DEPOSITOR FOR ALL OF DEPOSITOR'S ACCOUNTS AT THE SAME OR RELATED
INSTITUTION. THE PARTIES FURTHER UNDERSTAND THAT CERTAIN BANKING INSTRUMENTS
SUCH AS, BUT NOT LIMITED TO, REPURCHASE AGREEMENTS AND LETTERS OF CREDIT ARE NOT
COVERED AT ALL BY FDIC INSURANCE. ESCROW AGENT ASSUMES NO RESPONSIBILITY FOR,
NOR WILL THE OTHER PARTIES HOLD IT LIABLE FOR, ANY LOSS WHICH MAY OCCUR IF THE
AMOUNT OF THE DEPOSIT CAUSES THE AGGREGATE AMOUNT OF ANY INDIVIDUAL DEPOSITOR'S
ACCOUNTS IN THE FINANCIAL INSTITUTION LISTED ABOVE TO EXCEED $100,000.00.
(e) Escrow Agent does not have any interest in the Escrow Deposit
deposited hereunder but is serving as escrow holder only and having only
possession thereof. Any payments of income from this Escrow Account will be
subject to withholding regulations then in force with respect to United States
taxes. The parties hereto will provide the Escrow Agent with appropriate W-9
forms for tax identification number certification or non-resident alien
certifications.
(f) Escrow Agent (and any successor Escrow Agent) may at any time
resign as such by delivering the Escrow Account to any successor Escrow Agent
jointly designated by the other parties hereto in writing, or to any court of
competent jurisdiction, whereupon Escrow Agent will be discharged of and from
any and all further obligations arising in connection with this Escrow
Agreement. The resignation of Escrow Agent will take effect on the earlier of
(i) the appointment of a successor (including a court of competent jurisdiction)
or (ii) the day which is 30 days after the date of delivery of its written
notice of resignation to the other parties
3
<PAGE>
hereto. If at that time the Escrow Agent has not received a designation of a
successor Escrow Agent, Escrow Agent's sole responsibility after that time shall
be to safekeep the Escrow Deposit until receipt of a designation of successor
Escrow Agent or a joint written disposition, instruction by the other parties
hereto or a final order of a court of competent jurisdiction.
(g) Escrow Agent will not in any way be bound or affected by a notice
of modification or cancellation of this Escrow Agreement unless notice thereof
is given to the Escrow Agent jointly by Sellers and Purchaser, nor shall Escrow
Agent be bound by any modification of its obligations hereunder unless the same
shall be consented to by Escrow Agent in writing.
(h) Escrow Agent will not be required to institute or defend any
action involving any matters referred to herein or which affect it or its duties
or liabilities hereunder, unless or until requested to do so by any party to
this Escrow Agreement and then only upon receiving full indemnity, in character
reasonably satisfactory to Escrow Agent, against any and all claims, liabilities
and expenses, including reasonable attorneys' fees, in relation thereto.
Section 6. Termination of Escrow. This Escrow Agreement will terminate on
--------- ---------------------
the earlier of (a) six (6) months from the date hereof or (b) the date upon
which all of the funds in the Escrow Account will have been paid pursuant to the
provisions hereof; provided that this Escrow Agreement will continue in effect
with respect to the Escrow Deposit in an amount at least equal to the aggregate
amount set forth in any disputed Purchaser's Disbursement Certificate(s) (plus
any earnings thereon) until the final resolution of any such dispute in
accordance with Section 3. Any difference between the amount in dispute and the
amount of the Escrow Deposit will be paid to Sellers. Upon termination of this
Escrow Agreement pursuant to Section 6(a), any remaining balance in the Escrow
Account, together with all interest earned thereon, shall be paid to Sellers.
Section 7. Compensation of Escrow Agent. Escrow Agent will be entitled to
--------- ----------------------------
its published fee as compensation for its services under this Escrow Agreement.
Such compensation will be paid one-half by Purchaser and one-half by Sellers.
Any fees of Escrow Agent which are not paid as provided for herein may be
withdrawn from the Escrow Account by Escrow Agent.
Section 8. Miscellaneous.
--------- -------------
(a) All notices, demands, requests, and other communications required
or permitted under this Escrow Agreement must be in writing, and will be deemed
to be delivered on receipt if delivered by hand delivery, or whether actually
received or not, upon the deposit of both the original and the copy, as provided
below, in a regularly maintained receptacle for the United States mail,
registered or certified, return receipt requested, postage prepaid, addressed as
follows:
4
<PAGE>
If to Sellers: Charles W. Robertson,
Stanley F. Pielak and
Wade Miller
Arkgalv, Inc. d/b/a Arkansas Galvanizing
P.O. Box 630008
Nacogdoches, Texas 75963-0008
Copies to: Thomas L. Belanger
Adams, Belanger, Atherton & O'Keefe, P.C.
P.O. Box 631248
Nacogdoches, Texas 75963
If to Purchaser: Dana Perry
Aztec Manufacturing Co.
400 North Tarrant
P.O. Box 668
Crowley, Texas 76036
Copies to: Robert C. Donohoo
David K. Menefee
Shannon, Gracey, Ratliff & Miller, L.L.P.
1600 Bank One Tower
500 Throckmorton Street
Fort Worth, Texas 76102-3899
If to Escrow Agent:
or at such other address as may be designated by written notice hereunder in the
manner herein provided.
(b) This Escrow Agreement constitutes the entire understanding among
the parties hereto with respect to the subject matter hereof (except as set
forth in the Purchase Agreement as between the Sellers and Purchaser only) and
no waiver or modification of the terms hereof shall be valid unless in writing
and signed by each of the parties hereto.
(c) THIS ESCROW AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
(d) This Escrow Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
5
<PAGE>
(e) This Escrow Agreement may be executed in one or more
counterparts, each of which shall be deemed an original.
IN WITNESS WHEREOF, each of the parties hereto has executed this Escrow
Agreement as of the day and year first above written.
SELLERS:
____________________________________
Charles W. Robertson
____________________________________
Stanley F. Pielak
____________________________________
Wade Miller
PURCHASER:
Aztec Manufacturing Co.
By:_________________________________
Name:
Title:
ESCROW AGENT:
[To Be Determined]
By:_________________________________
Name: ___________________________
Title: _________________________
6
<PAGE>
ESCROW AGREEMENT
----------------
This Escrow Agreement ("Escrow Agreement") is made and entered into as of
_______________, 1996, by and among Charles W. Robertson, Stanley F. Pielak and
Wade Miller (collectively, "Sellers"), Aztec Manufacturing Co., a Texas
corporation ("Purchaser") and ________________, a ________________ ("Escrow
Agent").
R E C I T A L S:
- - - - - - - -
Reference is made to the following:
A. Sellers and Purchaser previously entered into a Stock Purchase
Agreement effective February 1, 1996 (the "Purchase Agreement")
pursuant to which Purchaser agreed to purchase and Sellers agreed to
sell all of the issued and outstanding capital stock of Arkgalv, Inc.,
d/b/a Arkansas Galvanizing (the "Company"). Except as otherwise
provided herein, all capitalized terms in this Escrow Agreement will
have the same meaning herein as in the Purchase Agreement.
B. Section 1.2.5 of the Purchase Agreement requires that Purchaser
deposit the sum of $52,500.00 with Escrow Agent at Closing. This
amount is to secure potential tax liabilities of the Company incurred
prior to January 31, 1996 as set forth in Section 8.3 of the Purchase
Agreement.
C. This Escrow Agreement sets forth the terms and conditions under which
these escrowed funds, together with any interest thereon, will be
held, managed and disbursed by Escrow Agent.
W I T N E S S E T H:
- - - - - - - - - -
NOW THEREFORE, in consideration of the foregoing premises, the mutual
covenants contained herein and for good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
Section 1. Escrow Deposit. Purchaser agrees to deliver to Escrow Agent on
--------- --------------
the Closing Date a certified check payable to the order of Escrow Agent in the
amount of $52,500.00 ("Escrow Deposit"), to be held in an escrow account
("Escrow Account") by Escrow Agent, together with any interest earned thereon as
a result of the investments made pursuant to Section 3, subject to the terms and
conditions hereof, and to be disbursed in accordance with the provisions of this
Escrow Agreement. Escrow Agent shall acknowledge receipt of said Escrow Deposit
to Purchaser and Sellers.
Section 2. Disbursement of Escrow Deposit. On the close of the fifth
--------- ------------------------------
(5th) business day after receipt by Escrow Agent of a certificate from Purchaser
to the effect that Purchaser is
1
<PAGE>
entitled to a distribution from the Escrow Deposit and the amount to which
Purchaser believes itself to be entitled ("Purchaser's Disbursement
Certificate"), Escrow Agent shall immediately pay to, or credit to the account
of, or otherwise transfer to Purchaser such amount (plus any earnings thereon)
unless the Escrow Agent shall have received a written objection from the Sellers
within such ten (10) business days after the date upon which Escrow Agent
received Purchaser's Disbursement Certificate; provided, however, that the
aggregate amount of funds which Escrow Agent disburses to Purchaser pursuant to
this Section 2 will not exceed the balance of the Escrow Deposit as of the date
Escrow Agent receives the Purchaser's Disbursement Certificate. If Escrow Agent
receives a written objection within the time period specified above, Escrow
Agent shall comply with the terms of Section 3 of this Escrow Agreement.
Section 3. Disputes. If a controversy arises between Sellers and
--------- --------
Purchaser as evidenced by Sellers' written objection to a disbursement from the
Escrow Account in accordance with a Purchaser's Disbursement Certificate, Escrow
Agent will not be permitted or required to resolve such controversy or take any
action, including but not limited to, any disbursements to Purchaser, but shall
await resolution of the controversy by (a) a final non-appealable court order of
a court of competent jurisdiction directing delivery of funds from the Escrow
Account, or (b) a written agreement executed by the other parties hereto
directing delivery of funds from the Escrow Account, in which event the Escrow
Agent shall make such disbursements from the Escrow Account in accordance with
such order or agreement.
Section 4. Investment of Escrow Deposit. Escrow Agent shall, unless
--------- ----------------------------
otherwise directed by the other parties hereto in writing, promptly invest and
reinvest the funds held in the Escrow Account in (a) treasury bills issued by
the government of the United States of America or (b) certificates of deposit
guaranteed by the Federal Deposit Insurance Corporation or Federal Savings and
Loan Insurance Corporation or other agency of the United States of America.
Escrow Agent shall not be liable or be responsible for any losses incurred by
either Purchaser or Sellers, as the case may be, in connection with investments
made by Escrow Agent in accordance with this Section 4. Escrow Agent may from
time to time sell sufficient amounts of treasury bills or certificates of
deposit in order to disburse funds from the Escrow Account in accordance with
the provisions of Section 2 hereof. Except to the extent disbursed to Purchaser
as provided in Section 2, all earnings will be for the benefit of Sellers and
will be reported to the Internal Revenue Service under Taxpayer Identification
Numbers _____________________,________________________, and
_________________________.
Section 5. Limitation of Escrow Agent's Liability.
--------- --------------------------------------
(a) Escrow Agent will not be under any duty to give the property held
by it hereunder any greater degree of care than it gives its own similar
property and will not be required to invest any funds held hereunder except as
directed in this Escrow Agreement. Uninvested funds held hereunder will not
earn or accrue interest.
2
<PAGE>
(b) This Escrow Agreement expressly sets forth all the duties of
Escrow Agent with respect to any and all matters pertinent hereto. No implied
duties or obligations will be read into this Escrow Agreement against the Escrow
Agent. Escrow Agent will not be bound by the provisions of any agreement among
the other parties hereto except this Escrow Agreement.
(c) Escrow Agent, as part of the consideration for its acceptance of
this escrow, will not be liable for any acts or omissions nor for any claims,
demands or losses, nor for any damages made or suffered by any party to this
Escrow Agreement except such as may arise through or be caused by Escrow Agent's
willful or gross negligence. WITHOUT LIMITING THE FOREGOING, ESCROW AGENT WILL
IN NO EVENT BE LIABLE IN CONNECTION WITH ITS INVESTMENT OR REINVESTMENT OF ANY
CASH HELD BY IT HEREUNDER IN GOOD FAITH, IN ACCORDANCE WITH THE TERMS HEREOF,
INCLUDING WITHOUT LIMITATION ANY LIABILITY FOR ANY DELAYS (NOT RESULTING FROM
ITS GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) IN THE INVESTMENT OR REINVESTMENT OF
THE PROCEEDS OF THE ESCROW DEPOSIT, OR ANY LOSS OR INTEREST INCIDENT TO ANY SUCH
DELAYS.
(d) THE PARTIES ARE AWARE THAT FEDERAL DEPOSIT INSURANCE CORPORATION
(FDIC) COVERAGE APPLIES ONLY TO A CUMULATIVE MAXIMUM AMOUNT OF $100,000.00 FOR
EACH INDIVIDUAL DEPOSITOR FOR ALL OF DEPOSITOR'S ACCOUNTS AT THE SAME OR RELATED
INSTITUTION. THE PARTIES FURTHER UNDERSTAND THAT CERTAIN BANKING INSTRUMENTS
SUCH AS, BUT NOT LIMITED TO, REPURCHASE AGREEMENTS AND LETTERS OF CREDIT ARE NOT
COVERED AT ALL BY FDIC INSURANCE. ESCROW AGENT ASSUMES NO RESPONSIBILITY FOR,
NOR WILL THE OTHER PARTIES HOLD IT LIABLE FOR, ANY LOSS WHICH MAY OCCUR IF THE
AMOUNT OF THE DEPOSIT CAUSES THE AGGREGATE AMOUNT OF ANY INDIVIDUAL DEPOSITOR'S
ACCOUNTS IN THE FINANCIAL INSTITUTION LISTED ABOVE TO EXCEED $100,000.00.
(e) Escrow Agent does not have any interest in the Escrow Deposit
deposited hereunder but is serving as escrow holder only and having only
possession thereof. Any payments of income from this Escrow Account will be
subject to withholding regulations then in force with respect to United States
taxes. The parties hereto will provide the Escrow Agent with appropriate W-9
forms for tax identification number certification or non-resident alien
certifications.
(f) Escrow Agent (and any successor Escrow Agent) may at any time
resign as such by delivering the Escrow Account to any successor Escrow Agent
jointly designated by the other parties hereto in writing, or to any court of
competent jurisdiction, whereupon Escrow Agent will be discharged of and from
any and all further obligations arising in connection with this Escrow
Agreement. The resignation of Escrow Agent will take effect on the earlier of
(i) the appointment of a successor (including a court of competent jurisdiction)
or (ii) the day which is 30 days after the date of delivery of its written
notice of resignation to the other parties
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hereto. If at that time the Escrow Agent has not received a designation of a
successor Escrow Agent, Escrow Agent's sole responsibility after that time shall
be to safekeep the Escrow Deposit until receipt of a designation of successor
Escrow Agent or a joint written disposition, instruction by the other parties
hereto or a final order of a court of competent jurisdiction.
(g) Escrow Agent will not in any way be bound or affected by a notice
of modification or cancellation of this Escrow Agreement unless notice thereof
is given to the Escrow Agent jointly by Sellers and Purchaser, nor shall Escrow
Agent be bound by any modification of its obligations hereunder unless the same
shall be consented to by Escrow Agent in writing.
(h) Escrow Agent will not be required to institute or defend any
action involving any matters referred to herein or which affect it or its duties
or liabilities hereunder, unless or until requested to do so by any party to
this Escrow Agreement and then only upon receiving full indemnity, in character
reasonably satisfactory to Escrow Agent, against any and all claims, liabilities
and expenses, including reasonable attorneys' fees, in relation thereto.
Section 6. Termination of Escrow. This Escrow Agreement will terminate on
--------- ---------------------
the earlier of (a) three (3) years from the date hereof or (b) the date upon
which all of the funds in the Escrow Account will have been paid pursuant to the
provisions hereof; provided that this Escrow Agreement will continue in effect
with respect to the Escrow Deposit in an amount at least equal to the aggregate
amount set forth in any disputed Purchaser's Disbursement Certificate(s) (plus
any earnings thereon) until the final resolution of any such dispute in
accordance with Section 3. Any difference between the amount in dispute and the
amount of the Escrow Deposit will be paid to Sellers. Upon termination of this
Escrow Agreement pursuant to Section 6(a), any remaining balance in the Escrow
Account, together with all interest earned thereon, shall be paid to Sellers.
Section 7. Compensation of Escrow Agent. Escrow Agent will be entitled to
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its published fee as compensation for its services under this Escrow Agreement.
Such compensation will be paid one-half by Purchaser and one-half by Sellers.
Any fees of Escrow Agent which are not paid as provided for herein may be
withdrawn from the Escrow Account by Escrow Agent.
Section 8. Miscellaneous.
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(a) All notices, demands, requests, and other communications required
or permitted under this Escrow Agreement must be in writing, and will be deemed
to be delivered on receipt if delivered by hand delivery, or whether actually
received or not, upon the deposit of both the original and the copy, as provided
below, in a regularly maintained receptacle for the United States mail,
registered or certified, return receipt requested, postage prepaid, addressed as
follows:
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If to Sellers: Charles W. Robertson,
Stanley F. Pielak and
Wade Miller
Arkgalv, Inc. d/b/a Arkansas Galvanizing
P.O. Box 630008
Nacogdoches, Texas 75963-0008
Copies to: Thomas L. Belanger
Adams, Belanger, Atherton & O'Keefe, P.C.
P.O. Box 631248
Nacogdoches, Texas 75963
If to Purchaser: Dana Perry
Aztec Manufacturing Co.
400 North Tarrant
P.O. Box 668
Crowley, Texas 76036
Copies to: Robert C. Donohoo
David K. Menefee
Shannon, Gracey, Ratliff & Miller, L.L.P.
1600 Bank One Tower
500 Throckmorton Street
Fort Worth, Texas 76102-3899
If to Escrow Agent:
or at such other address as may be designated by written notice hereunder in the
manner herein provided.
(b) This Escrow Agreement constitutes the entire understanding among
the parties hereto with respect to the subject matter hereof (except as set
forth in the Purchase Agreement as between the Sellers and Purchaser only) and
no waiver or modification of the terms hereof shall be valid unless in writing
and signed by each of the parties hereto.
(c) THIS ESCROW AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
(d) This Escrow Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
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(e) This Escrow Agreement may be executed in one or more
counterparts, each of which shall be deemed an original.
IN WITNESS WHEREOF, each of the parties hereto has executed this Escrow
Agreement as of the day and year first above written.
SELLERS:
____________________________________
Charles W. Robertson
____________________________________
Stanley F. Pielak
____________________________________
Wade Miller
PURCHASER:
Aztec Manufacturing Co.
By:_________________________________
Name:
Title:
ESCROW AGENT:
[To Be Determined]
By:_________________________________
Name: ___________________________
Title: _________________________
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