EXHIBIT 10.1
PURCHASE AGREEMENT
among:
THE UNIMARK GROUP, INC.,
a Texas corporation;
UNIMARK FOODS, INC.,
a Texas corporation;
INDUSTRIAS CITRICOLAS DE MONTEMORELOS, S.A. DE C.V.,
a corporation organized under the laws of the United Mexican States;
XXXXXX XXXXXXX; XXXXXXX XXXXXXX; XXXXX XXXXXXX; XXXXX XXXXXXX; JAKES JORDAAN;
and
DEL MONTE CORPORATION,
a Delaware corporation.
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Dated as of August 30, 2004
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TABLE OF CONTENTS
PAGE
1. SALE AND PURCHASE OF ICMOSA SHARES AND SPECIFIED ASSETS............................................ 2
1.1 Sale of ICMOSA Shares..................................................................... 2
1.2 Sale of Specified Assets.................................................................. 2
1.3 Transfer Taxes; No Assumption of Liabilities.............................................. 3
1.4 Closing................................................................................... 3
2. REPRESENTATIONS AND WARRANTIES OF UNIMARK, ICMOSA AND FOODSSUB..................................... 6
2.1 Due Organization; No Subsidiaries; Etc.................................................... 6
2.2 Charter of Incorporation, Deed of Incorporation and By-laws; Records...................... 6
2.3 Capitalization............................................................................ 7
2.4 Financial Statements...................................................................... 8
2.5 SEC Filings; Disclosure Controls and Procedures; Internal Accounting Controls............. 9
2.6 Absence of Changes........................................................................ 10
2.7 Title to Assets........................................................................... 11
2.8 Bank Accounts............................................................................. 12
2.9 Receivables............................................................................... 12
2.10 Customers; Distributors................................................................... 12
2.11 Inventory................................................................................. 12
2.12 Real Property; IHMSA Facility; Equipment.................................................. 13
2.13 Intellectual Property..................................................................... 14
2.14 Contracts................................................................................. 14
2.15 Liabilities; Major Suppliers.............................................................. 17
2.16 Compliance with Legal Requirements........................................................ 18
2.17 Governmental Authorizations............................................................... 18
2.18 Tax Matters............................................................................... 19
2.19 Employee and Labor Matters................................................................ 20
2.20 Environmental Matters..................................................................... 24
2.21 Sale of Products.......................................................................... 25
2.22 Insurance................................................................................. 26
2.23 Related Party Transactions................................................................ 27
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TABLE OF CONTENTS
(CONTINUED)
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2.24 Certain Payments, Etc..................................................................... 27
2.25 Legal Proceedings; Orders................................................................. 27
2.27 Authority; Binding Nature of Agreements................................................... 29
2.28 Non-Contravention; Consents............................................................... 30
2.29 Fairness Opinion.......................................................................... 31
2.30 Financial Advisor......................................................................... 31
2.31 No Discussions............................................................................ 31
2.32 Full Disclosure........................................................................... 31
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER........................................................ 32
3.1 Due Incorporation......................................................................... 32
3.2 Acquisition of ICMOSA Shares.............................................................. 32
3.3 Authority; Binding Nature of Agreement.................................................... 32
3.4 Non-Contravention......................................................................... 32
4. PRE-CLOSING COVENANTS OF THE PARTIES............................................................... 32
4.1 Access and Investigation.................................................................. 32
4.2 Operation of ICMOSA and FoodsSub Businesses............................................... 33
4.3 Reimbursement or Payment by Purchaser of Certain Transaction-Related Expenses............. 36
4.4 No Solicitation........................................................................... 36
4.5 Filings and Consents...................................................................... 37
4.6 Notification; Updates to Disclosure Schedule.............................................. 38
4.7 No Transfer of ICMOSA Shares.............................................................. 39
4.8 Commercially Reasonable Efforts........................................................... 39
5. CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION TO CLOSE............................................ 39
5.1 Accuracy of Representations............................................................... 39
5.2 Performance of Obligations................................................................ 39
5.3 Consents.................................................................................. 39
5.4 No Material Adverse Effect................................................................ 39
5.5 No Material Adverse Market, Financial or Other Developments............................... 40
5.6 Noncompetition Agreements................................................................. 40
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TABLE OF CONTENTS
(CONTINUED)
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5.7 No Restraints............................................................................. 40
5.8 No Litigation............................................................................. 40
5.9 Solvency Assurances....................................................................... 40
5.10 Bank Assurances........................................................................... 40
5.11 IHMSA Assurances.......................................................................... 41
5.12 Continued Employment...................................................................... 41
5.13 Supply Agreement.......................................................................... 41
5.14 Additional Documents...................................................................... 41
6. CONDITIONS PRECEDENT TO UNIMARK'S AND FOODSSUB'S OBLIGATIONS TO CLOSE.............................. 41
6.1 Accuracy of Representations............................................................... 41
6.2 Performance of Obligations................................................................ 42
6.3 No Restraints............................................................................. 42
7. TERMINATION........................................................................................ 42
7.1 Right to Terminate........................................................................ 42
7.2 Effect of Termination..................................................................... 43
7.3 Payments to Purchaser..................................................................... 43
7.4 Nonexclusivity of Termination Rights...................................................... 44
8. INDEMNIFICATION, ETC............................................................................... 44
8.1 Survival of Representations and Covenants................................................. 44
8.2 Indemnification by UniMark and FoodsSub................................................... 45
8.3 Setoff.................................................................................... 47
8.4 Nonexclusivity of Indemnification Remedies................................................ 47
8.5 Defense of Third Party Claims............................................................. 47
8.6 Exercise of Remedies by Indemnitees Other Than Purchaser.................................. 47
9. CERTAIN POST-CLOSING COVENANTS..................................................................... 48
9.1 No Dissolution by UniMark................................................................. 48
9.2 Transition Services....................................................................... 48
9.3 Preparation of Closing Balance Sheet; Payments by UniMark................................. 48
9.4 Confidentiality........................................................................... 49
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(CONTINUED)
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9.5 Further Actions........................................................................... 49
9.6 Access.................................................................................... 50
10. MISCELLANEOUS PROVISIONS........................................................................... 50
10.1 Limitation on Liability................................................................... 50
10.2 Inapplicability of Sections 8.2(b) and 10.1............................................... 50
10.3 Joint and Several Liability of UniMark, ICMOSA and FoodsSub............................... 51
10.4 Setoff.................................................................................... 51
10.5 Further Assurances........................................................................ 51
10.6 Fees and Expenses......................................................................... 51
10.7 Attorneys' Fees........................................................................... 52
10.8 Notices................................................................................... 52
10.9 Time of the Essence....................................................................... 54
10.10 Headings.................................................................................. 54
10.11 Counterparts; Exchanges by Facsimile...................................................... 54
10.12 Governing Law; Venue...................................................................... 54
10.13 Successors and Assigns.................................................................... 55
10.14 Remedies Cumulative; Specific Performance................................................. 55
10.15 Waiver.................................................................................... 55
10.16 Amendments................................................................................ 56
10.17 Severability.............................................................................. 56
10.18 Parties in Interest....................................................................... 56
10.19 Entire Agreement.......................................................................... 56
10.20 Construction.............................................................................. 56
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PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT ("AGREEMENT") is made and entered into as of
August 30, 2004, by and among: THE UNIMARK GROUP, INC., a Texas corporation
("UNIMARK"); UNIMARK FOODS, INC., a Texas corporation ("FOODSSUB"); INDUSTRIAS
CITRICOLAS DE MONTEMORELOS, S.A. DE C.V., a corporation organized under the laws
of the United Mexican States ("ICMOSA"); XXXXXX XXXXXXX; XXXXXXX XXXXXXX; XXXXX
XXXXXXX; XXXXX XXXXXXX; JAKES JORDAAN; and DEL MONTE CORPORATION, a Delaware
corporation ("PURCHASER"). Certain other capitalized terms used in this
Agreement are defined in EXHIBIT A.
RECITALS
A. UniMark owns all of the outstanding capital stock of FoodsSub.
UniMark also owns all of the outstanding capital stock of ICMOSA, except for
certain Series "B" shares (representing less than 0.001% of ICMOSA's outstanding
capital stock) that are owned by Xxxxxx Xxxxxxx. (The outstanding shares of the
capital stock of ICMOSA are referred to in this Agreement as the "ICMOSA
SHARES.") Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxxx and Xxxxx Xxxxxxx are officers of
ICMOSA, and Xxxxx Xxxxxxx and Jakes Jordaan are officers of UniMark.
B. Purchaser, ICMOSA and FoodsSub are parties to a Supply Agreement
dated as of September 1, 2000 (the "SUPPLY AGREEMENT"), pursuant to which ICMOSA
and FoodsSub are required to supply certain processed food products to
Purchaser.
C. UniMark wishes to sell the ICMOSA Shares owned by UniMark to
Purchaser, Xxxxxx Xxxxxxx wishes to sell the ICMOSA Shares owned by him to an
affiliate of Purchaser and UniMark and FoodsSub wish to sell certain assets
relating to the business of FoodsSub to Purchaser, all on the terms and subject
to the conditions set forth in this Agreement.
D. Contemporaneously with the execution and delivery of this Agreement,
Xxxxxx Xxxxxxx and Xxxxxxx Xxxxxxx are entering into noncompetition agreements
in favor of Purchaser and ICMOSA (the "NONCOMPETITION AGREEMENTS"), which will
go into effect upon the sale of the ICMOSA Shares to Purchaser and its
affiliate.
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AGREEMENT
The parties to this Agreement, intending to be legally bound, agree as
follows:
1. SALE AND PURCHASE OF ICMOSA SHARES AND SPECIFIED ASSETS.
1.1 SALE OF ICMOSA SHARES.
(a) At the Closing (as defined in Section 1.4): (i) UniMark shall
sell, assign, transfer, convey and deliver to Purchaser good and valid title to
the ICMOSA Shares owned by UniMark, free of any Encumbrances, and Purchaser
shall purchase such ICMOSA Shares from UniMark, on the terms and subject to the
conditions set forth in this Agreement; and (ii) Xxxxxx Xxxxxxx shall sell,
assign, transfer, convey and deliver to an affiliate of Purchaser to be
designated by Purchaser at or prior to the Closing (the "DESIGNATED AFFILIATE")
good and valid title to the ICMOSA Shares owned by Xxxxxx Xxxxxxx, free of any
Encumbrances, and the Designated Affiliate shall purchase such ICMOSA Shares
from Xxxxxx Xxxxxxx, on the terms and subject to the conditions set forth in
this Agreement.
(b) Subject to Sections 4.3, 8.3, 9.3 and 10.4: (i) the aggregate
purchase price payable by Purchaser for the ICMOSA Shares owned by UniMark shall
be U.S.$350,000 (subject to reduction to reflect all applicable credits,
deductions and setoffs), and shall be paid by Purchaser to UniMark 65 days after
the Closing Date (as defined in Section 1.4); and (ii) the aggregate purchase
price payable by the Designated Affiliate for the ICMOSA Shares owned by Xxxxxx
Xxxxxxx shall be U.S.$0.53 (subject to reduction to reflect all applicable
credits, deductions and setoffs), and shall be paid by the Designated Affiliate
to Xxxxxx Xxxxxxx 65 days after the Closing Date.
(c) Each of UniMark and Xxxxxx Xxxxxxx waives any right of first
refusal or similar right it or he may have (under any applicable Legal
Requirements, under ICMOSA's by-laws or otherwise) with respect to the sale of
ICMOSA Shares to Purchaser and the Designated Affiliate or with respect to any
of the other Contemplated Transactions.
1.2 SALE OF SPECIFIED ASSETS.
(a) At the Closing, UniMark and FoodsSub shall cause to be sold,
assigned, transferred, conveyed and delivered to Purchaser good and valid title
to all assets referred to on Schedule 1.2A (the "SPECIFIED ASSETS"), free of any
Liens, and Purchaser shall purchase the Specified Assets, on the terms and
subject to the conditions set forth in this Agreement; provided, however, that
the "Specified Assets" shall not include any of the assets referred to on
Schedule 1.2B.
(b) Subject to Sections 8.3, 9.3 and 10.4, the aggregate purchase
price payable by Purchaser for the Specified Assets shall be U.S.$600,000
(subject to reduction to reflect all applicable credits, deductions and setoffs)
and shall be paid by Purchaser (together with any interest thereon as
contemplated by the final sentence of Section 1.2(c)) to FoodsSub 65 days after
the Closing Date. Said purchase price shall be allocated among the Specified
Assets in such manner as may be determined by Purchaser in good faith prior to
the Closing. Purchaser's determination of the allocation of said purchase price
among the Specified Assets shall be
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conclusive and binding upon all parties to this Agreement, and neither UniMark
nor FoodsSub shall cause or permit to be filed any Tax Return or other document,
or shall provide any Governmental Body with any statement or declaration, that
is inconsistent with such allocation.
(c) In recognition of Purchaser's obligation to pay the purchase
price referred to in Section 1.2(b), Purchaser shall, on the Closing Date, (i)
establish a separate account (in Purchaser's name) at a reputable financial
institution (the "SEGREGATED ACCOUNT"), (ii) deposit the sum of U.S.$600,000 in
the Segregated Account and (iii) deliver to FoodsSub written evidence of the
establishment of the Segregated Account and the deposit of U.S.$600,000 in the
Segregated Account. Subject to Section 8.3(b), Purchaser shall cause the funds
so deposited in the Segregated Account to be held in the Segregated Account
until the date that is 65 days after the Closing Date. Upon the payment to
FoodsSub of the purchase price referred to in Section 1.2(b), Purchaser shall
also pay to FoodsSub the amount of any interest actually earned on such purchase
price in the Segregated Account.
1.3 TRANSFER TAXES; NO ASSUMPTION OF LIABILITIES.
(a) UniMark and FoodsSub shall bear and pay, and shall reimburse
Purchaser and Purchaser's affiliates for, any sales taxes, use taxes, asset
taxes, transfer taxes, documentary charges, recording fees or similar Taxes,
charges, fees or expenses that may become payable in connection with the sale of
the Specified Assets to Purchaser or in connection with any of the other
Contemplated Transactions.
(b) Under no circumstances shall Purchaser be required to assume
any liability or obligation of UniMark or FoodsSub in connection with any of the
Contemplated Transactions.
1.4 CLOSING.
(a) The closing of the sale of the ICMOSA Shares to Purchaser and
the Designated Affiliate and the sale of the Specified Assets to Purchaser (the
"CLOSING") shall take place on a date to be designated by Purchaser, which shall
be no later than 15 days after the satisfaction or waiver of the last to be
satisfied or waived of the conditions set forth in Section 5 (other than the
condition set forth in Section 5.2(a), which by its nature is not to be
satisfied until the Closing) and Sections 6.1 and 6.3 (it being understood,
however, that Purchaser shall not be required to proceed with the Closing unless
each condition set forth in Section 5 shall be satisfied or shall have been
validly waived by Purchaser). For purposes of this Agreement, "SCHEDULED CLOSING
TIME" shall mean the time and date as of which the Closing is required to take
place pursuant to this Section 1.4(a); and "CLOSING DATE" shall mean the time
and date as of which the Closing actually takes place. If, at the Scheduled
Closing Time, any condition set forth in Section 5 or 6 has not been satisfied
or waived, Purchaser shall have the right, in its sole discretion, to extend and
delay the Scheduled Closing Time by up to 15 days.
(b) At the Closing:
(i) each of UniMark and Xxxxxx Xxxxxxx shall execute and
deliver to ICMOSA and Purchaser a writing evidencing the waiver of any
right of first refusal or
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similar right either of them may have with respect to the sale of ICMOSA
Shares to Purchaser and the Designated Affiliate;
(ii) UniMark shall cause to be delivered to Purchaser the
stock certificates representing the ICMOSA Shares owned by UniMark, duly
endorsed in property on behalf of UniMark;
(iii) Xxxxxx Xxxxxxx shall cause to be delivered to the
Designated Affiliate the stock certificate representing the ICMOSA Shares
owned by him, duly endorsed in property by him;
(iv) UniMark shall cause the Secretary of ICMOSA to deliver
to a Representative of ICMOSA designated by Purchaser: (A) the minute book
of meetings of ICMOSA's shareholders; (B) the ICMOSA shareholders'
register book; (C) the ICMOSA capital variations book; and (D) a list of
all corporate records, minutes and deeds of ICMOSA that are in the
possession of ICMOSA or any Representative of ICMOSA as of the Closing;
(v) UniMark and FoodsSub shall execute and deliver to
Purchaser such bills of sale, endorsements, assignments and other
documents as may (in the reasonable judgment of Purchaser or its counsel)
be necessary or appropriate to assign, convey, transfer and deliver to
Purchaser good and valid title to all of the Specified Assets free of any
Liens;
(vi) Purchaser shall cause to be delivered to FoodsSub
written evidence of the establishment of the Segregated Account and the
deposit of U.S.$600,000 therein;
(vii) UniMark and FoodsSub shall execute and deliver to
Purchaser a certificate (the "CLOSING CERTIFICATE") setting forth the
joint and several representations and warranties of UniMark and FoodsSub
that (A) each of the representations and warranties made by UniMark,
ICMOSA and FoodsSub in this Agreement was accurate and complete in all
material respects as of the date of this Agreement (provided, however,
that, for purposes of determining the accuracy of such representations and
warranties all materiality qualifications contained in such
representations and warranties shall be disregarded), (B) each of the
representations and warranties made by UniMark, ICMOSA and FoodsSub in
this Agreement is accurate and complete in all material respects as of the
Closing Date as if made on the Closing Date (provided, however, that, for
purposes of determining the accuracy of such representations and
warranties all materiality qualifications contained in such
representations and warranties shall be disregarded), (C) each of the
covenants and obligations that UniMark, FoodsSub, ICMOSA, Xxxxxx Xxxxxxx,
Xxxxxxx Xxxxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxxxx and Jakes Jordaan are
required to have complied with or performed pursuant to this Agreement at
or prior to the Closing has been duly complied with and performed in all
material respects and (D) each of the conditions set forth in Sections
5.1, 5.2, 5.3, 5.4, 5.7, 5.8 and 5.13 has been satisfied in all respects;
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(viii) UniMark shall execute and deliver to Purchaser and
ICMOSA a Release Agreement in the form of EXHIBIT B-1 and FoodsSub shall
execute and deliver to Purchaser and ICMOSA a Release Agreement in the
form of EXHIBIT B-2;
(ix) each of Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxxx and Xxxxx
Xxxxxxx shall execute and deliver to Purchaser and ICMOSA (A) a Release
Agreement in the form of EXHIBIT B-3 and (B) a certificate confirming that
(1) he has conducted a prudent investigation with respect to the accuracy
and completeness of the representations and warranties set forth in
Section 2, (2) he has read this Agreement (including the representations
and warranties set forth in Section 2) and the Disclosure Schedule and (3)
to the best of his knowledge, (I) each of the representations and
warranties set forth in Section 2 was accurate and complete in all
respects as of the date of this Agreement and is accurate and complete in
all respects as of the Closing Date as if made on the Closing Date and
(II) each of the conditions set forth in Sections 5.3, 5.4, 5.7, 5.8 and
5.13 has been satisfied in all respects;
(x) each of Xxxxx Xxxxxxx and Jakes Jordaan shall execute
and deliver to Purchaser and ICMOSA a certificate confirming that (A) he
has read the Agreement and the Disclosure Schedule, (B) he has engaged in
discussions with each of Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxxx and Xxxxx Xxxxxxx
relating to the accuracy and completeness of the representations and
warranties set forth in Section 2 and (C) to the best of his actual
knowledge, (1) each of the representations and warranties set forth in
Section 2 was accurate and complete in all respects as of the date of this
Agreement and is accurate and complete in all respects as of the Closing
Date as if made on the Closing Date and (2) each of the conditions set
forth in Sections 5.3, 5.4, 5.7, 5.8 and 5.13 has been satisfied in all
respects;
(xi) Xxxxxx Xxxxxxx and Xxxxxxx Xxxxxxx shall cause IHMSA to
execute and deliver to Purchaser and ICMOSA a Release Agreement in the
form of EXHIBIT B-4;
(xii) Xxxxxx Xxxxxxx shall execute and deliver to ICMOSA a
document evidencing his resignation from the position of Sole
Administrator of ICMOSA as of the Closing;
(xiii) UniMark, ICMOSA and FoodsSub shall cause to be
delivered to Purchaser (A) an unqualified opinion of Jordaan & Xxxxx PLLC
in the form of EXHIBIT C, dated as of the Closing Date and (B) an
unqualified opinion of Galicia y Xxxxxx, S.C. in the form of EXHIBIT D,
dated as of the Closing Date;
(xiv) Purchaser, ICMOSA and FoodsSub shall enter into an
amendment of the Supply Agreement, satisfactory in form and substance to
Purchaser, that has the effect of eliminating FoodsSub as a continuing
party to the Supply Agreement, terminating and extinguishing all of
FoodsSub's rights under the Supply Agreement and releasing FoodsSub from
all future obligations under the Supply Agreement;
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(xv) FoodsSub and Purchaser shall cause the Trademark License
Agreement dated as of September 1, 2000, between FoodsSub and Purchaser to
be terminated in its entirety;
(xvi) all accounts receivable of ICMOSA representing amounts
owed by UniMark or FoodsSub to ICMOSA that have arisen in the Ordinary
Course of Business under the Supply Agreement shall be canceled without
consideration; and
(xvii) all accounts receivable of FoodsSub representing
amounts owed by ICMOSA to FoodsSub and all accounts receivable of UniMark
representing amounts owed by ICMOSA to UniMark, including amounts
representing overhead and insurance charges, shall be canceled without
consideration.
2. REPRESENTATIONS AND WARRANTIES OF UNIMARK, ICMOSA AND FOODSSUB. UniMark,
ICMOSA and FoodsSub jointly and severally represent and warrant, to and for the
benefit of the Indemnitees, as follows:
2.1 DUE ORGANIZATION; NO SUBSIDIARIES; ETC.
(a) UniMark and FoodsSub are corporations duly incorporated,
validly existing and in good standing under the laws of the State of Texas.
ICMOSA is a corporation duly organized, validly existing and in good standing
under the laws of the United Mexican States.
(b) ICMOSA is in good standing as a foreign corporation in each of
the jurisdictions listed in Part 2.1(b) of the Disclosure Schedule. ICMOSA is
not required to be qualified, authorized, registered or licensed to do business
as a foreign corporation in any jurisdiction other than the jurisdictions listed
in Part 2.1(b) of the Disclosure Schedule. FoodsSub is not qualified,
authorized, registered or licensed to do business as a foreign corporation in
any jurisdiction.
(c) Except as set forth in Part 2.1(c) of the Disclosure Schedule,
ICMOSA has no Subsidiaries, and does not own, beneficially or otherwise, any
shares or other securities of, or any direct or indirect interest of any nature
in, any other Entity. FoodsSub has no Subsidiaries, and does not own,
beneficially or otherwise, any shares or other securities of, or any direct or
indirect interest of any nature in, any other Entity.
(d) ICMOSA has never conducted any business under or otherwise
used, for any purpose or in any jurisdiction, any fictitious name, assumed name,
trade name or other name.
2.2 CHARTER OF INCORPORATION, DEED OF INCORPORATION AND BY-LAWS;
RECORDS. UniMark and ICMOSA have caused to be delivered to Purchaser accurate
and complete copies of: (i) the charter of incorporation, deed of incorporation
and by-laws (estatutos) of ICMOSA, including all amendments thereto; (ii) the
corporate records of ICMOSA (including the minute book of shareholder meetings,
the minute book of board of directors meetings, the shareholders' register book
and the capital variations book); and (iii) the minutes and other records of the
meetings and other proceedings (including any actions taken by written consent
or otherwise without a meeting) of the shareholders of ICMOSA and the board of
directors of ICMOSA, and
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all notary public deeds, proxies, exhibits and other documentation relating to
such records. There have been no meetings or other proceedings of the
shareholders of ICMOSA or the board of directors of ICMOSA that are not fully
reflected in such minutes or other records. Except as set forth in the minutes
of meetings of ICMOSA's board of directors that have been provided to Purchaser,
ICMOSA's board of directors has never (1) delegated any authority to any Person
outside the Ordinary Course of Business or (2) formed any committee. The books
of account, stock records, minute books and other records of ICMOSA and FoodsSub
are accurate, up-to-date and complete, and have been maintained in accordance
with all material Legal Requirements. All of the records of ICMOSA are in the
actual possession and direct control of ICMOSA's Secretary.
2.3 CAPITALIZATION.
(a) The authorized capital stock of ICMOSA consists of:
(i) 9,120,000 shares of Series A (fixed capital) common
stock, having a par value of MX$0.05 per share, all of which are issued
and outstanding and are owned by UniMark, free of any Encumbrances; and
(ii) 2,668,325,940 shares of Series B (variable capital)
common stock, having a par value of MX$0.05 per share, all of which are
issued and outstanding and of which (A) 2,668,321,905 shares are owned by
UniMark free of any Encumbrances and (B) 4,035 shares are owned by Xxxxxx
Xxxxxxx free of any Encumbrances.
(b) All of the outstanding shares of capital stock of ICMOSA (i)
have been duly authorized and validly issued, (ii) are fully paid and (iii) have
been issued in full compliance with all applicable securities laws and other
applicable Legal Requirements.
(c) UniMark has, and will transfer to Purchaser at the Closing,
good and valid title to the ICMOSA Shares owned by UniMark, free of any
Encumbrances. Xxxxxx Xxxxxxx has, and will transfer to the Designated Affiliate
at the Closing, good and valid title to the ICMOSA Shares owned by him, free of
any Encumbrances.
(d) There is no: (i) outstanding subscription, option, call,
warrant or right (whether or not currently exercisable) to acquire any shares of
the capital stock or other securities of ICMOSA (other than rights of first
refusal of UniMark and Xxxxxx Xxxxxxx, which will be waived by UniMark and
Xxxxxx Xxxxxxx prior to the Closing); (ii) outstanding security, instrument or
obligation that is or may become convertible into or exchangeable for any shares
of the capital stock or other securities of ICMOSA; (iii) Contract under which
ICMOSA is or may become obligated to sell or otherwise issue any shares of its
capital stock or any other securities; (iv) Contract under which UniMark or
Xxxxxx Xxxxxxx is or may become obligated to sell, pledge or otherwise dispose
of any of the ICMOSA Shares or any interest in any of the ICMOSA Shares; or (v)
condition or circumstance that may directly or indirectly give rise to or
provide a basis for the assertion of a claim by any Person to the effect that
such Person is entitled to acquire or receive any shares of capital stock or
other securities of ICMOSA.
(e) ICMOSA has never repurchased, redeemed or otherwise reacquired
any shares of capital stock or other securities. All securities so reacquired by
ICMOSA were
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reacquired in full compliance with all applicable Legal Requirements and the
requirements of all applicable Contracts.
2.4 FINANCIAL STATEMENTS.
(a) ICMOSA has delivered to Purchaser the following financial
statements (collectively, the "ICMOSA FINANCIAL STATEMENTS"): (i) the audited
Mexican peso-denominated balance sheets of ICMOSA as of December 31, 2003,
December 31, 2002 and December 31, 2001, and the related statements of income
and retained earnings and cash flows for the years ended December 31, 2003,
December 31, 2002 and December 31, 2001, together with the notes thereto and the
reports of Xxxxxxx Xxxxx & Young with respect thereto; (ii) the audited U.S.
dollar-denominated balance sheet of ICMOSA as of December 31, 2003 and the
related statements of income and retained earnings and cash flows for the year
ended December 31, 2003, together with the notes thereto and the report of
Xxxxxxx Xxxxx & Xxxxx with respect thereto; (iii) the audited Mexican
peso-denominated balance sheet of ICMOSA as of May 29, 2004; (iv) the unaudited
Mexican peso-denominated statements of income and retained earnings and cash
flows of ICMOSA for the period commencing on January 1, 2004 and ending on May
29, 2004; (v) the unaudited Mexican peso-dominated balance sheet of ICMOSA as of
June 30, 2004 and the related statements of income and retained earnings and
cash flows for the six months ended June 30, 2004; and (vi) the unaudited U.S.
dollar-denominated balance sheet of ICMOSA as of July 31, 2004 and the related
statements of income and retained earnings and cash flows for the seven months
ended July 31, 2004. The ICMOSA Financial Statements are accurate and complete
in all material respects and present fairly the financial position of ICMOSA as
of the respective dates thereof and the results of operations and cash flows of
ICMOSA for the periods covered thereby. The U.S. dollar-denominated financial
statements included in the ICMOSA Financial Statements have been prepared in
accordance with U.S. GAAP applied on a consistent basis (except that the
financial statements referred to in clause "(vi)" of the first sentence of this
Section 2.4(a) do not have notes) and the Mexican peso-denominated financial
statements included in the ICMOSA Financial Statements have been prepared in
accordance with Mexican GAAP applied on a consistent basis (except that the
financial statements referred to in clauses "(iv)" and "(v)" of the first
sentence of this Section 2.4(a) do not have notes). The methods of accounting
and accounting practices employed by ICMOSA in preparation of the Mexican
peso-denominated financial statements included in the ICMOSA Financial
Statements are consistent with the methods and practices established by the
Mexican CPA Collegiate Board (Colegio de Contadores de Mexico).
(b) The Mexican peso-denominated financial statements of ICMOSA to
be delivered to Purchaser in accordance with clause "(i)" of the second sentence
of Section 4.1 (i) will be accurate and complete in all material respects, (ii)
will be prepared in accordance with Mexican GAAP applied on a basis consistent
with the basis on which the Mexican peso-denominated financial statements
included in the ICMOSA Financial Statements were prepared and (iii) will fairly
present the financial position of ICMOSA as of the respective dates thereof and
the results of operations and cash flows of ICMOSA for the periods covered
thereby.
(c) All of the financial and other information set forth in Part
2.4(c) of the Disclosure Schedule is accurate and complete in all material
respects, subject to normal and
8
recurring year-end audit and accounting adjustments made by Xxxxxxx Xxxxx &
Young as described in Part 2.4(c) of the Disclosure Schedule.
(d) Part 2.4(d) of the Disclosure Schedule sets forth (i) the
dollar amount of FoodsSub's revenues for 2003, determined in accordance with
U.S. GAAP, together with a breakdown of such revenues by customer, and (ii) the
dollar amount of FoodsSub's revenues for the five months ended May 29, 2004,
determined in accordance with U.S. GAAP, together with a breakdown of such
revenues by customer.
2.5 SEC FILINGS; DISCLOSURE CONTROLS AND PROCEDURES; INTERNAL ACCOUNTING
CONTROLS.
(a) UniMark has delivered to Purchaser accurate and complete
copies of all registration statements, proxy statements and other statements,
reports, schedules, forms and other documents filed by UniMark with the SEC
since January 1, 2001, and all amendments thereto (the "UNIMARK SEC DOCUMENTS")
by directing Purchaser to xxx.xxx.xxx. As of the time it was filed with the SEC
(or, if amended or superseded by a filing prior to the date of this Agreement,
then on the date of such filing): (i) each of the UniMark SEC Documents complied
in all material respects with the applicable requirements of the Securities Act
or the Exchange Act (as the case may be); and (ii) none of the UniMark SEC
Documents contained any untrue statement of a material fact relating directly or
indirectly to UniMark or FoodsSub or omitted to state a material fact relating
directly or indirectly to UniMark or FoodsSub that is or was required to be
stated therein or that is or was necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. As used in this Section 2, the term "FILE" and variations thereof
shall be broadly construed to include any manner in which a document or
information is furnished, supplied, submitted or otherwise made available to the
SEC.
(b) ICMOSA maintains disclosure controls and procedures that are
effective to ensure that all material information concerning ICMOSA is made
known on a timely basis to the individuals responsible for the preparation of
UniMark's filings with the SEC and other public disclosure documents.
(c) ICMOSA maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with U.S. and Mexican GAAP, and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with
management's general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. Part
2.5(c) of the Disclosure Schedule lists, and UniMark has caused to be delivered
to Purchaser accurate and complete copies of, all written descriptions of, and
all policies, manuals and other documents promulgating, such internal accounting
controls.
(d) Part 2.5(d) of the Disclosure Schedule lists, and UniMark,
ICMOSA and FoodsSub have caused to be delivered to Purchaser accurate and
complete copies of, all documents creating or governing all securitization
transactions and "off-balance sheet
9
arrangements" (as defined in Item 303(a)(4)(ii) of Regulation S-K under the
Exchange Act) relating to ICMOSA.
2.6 ABSENCE OF CHANGES. Except as set forth in Part 2.6 of the
Disclosure Schedule, since December 31, 2003:
(a) there has not been a Material Adverse Effect, and no event has
occurred or circumstance has arisen that, in combination with any other events
or circumstances, could reasonably be expected to have or result in a Material
Adverse Effect;
(b) there has not been any material loss, damage or destruction
to, or any interruption in the use of, any of the assets of ICMOSA (whether or
not covered by insurance);
(c) ICMOSA has not (i) declared, accrued, set aside or paid any
dividend or made any other distribution in respect of any shares of capital
stock or other securities or (ii) repurchased, redeemed or otherwise reacquired
any shares of capital stock or other securities;
(d) ICMOSA has not entered into a Contract to lease any asset from
any other Person providing for annual payments to such Person in excess of
U.S.$30,000 or MX$300,000;
(e) ICMOSA has not made any capital expenditure that exceeds
U.S.$50,000 or MX$500,000 or that, when aggregated with all other capital
expenditures made by or on behalf of ICMOSA since December 31, 2003, exceeds
U.S.$300,000 or MX$3,000,000;
(f) except for sales of inventory in the Ordinary Course of
Business, ICMOSA has not sold or otherwise transferred, or leased or licensed,
any asset or group of assets having an aggregate book value in excess of
U.S.$30,000 or MX$300,000;
(g) ICMOSA has not written off as uncollectible, or established
any extraordinary reserve with respect to, any account receivable or other
indebtedness;
(h) ICMOSA has not made any loan or advance to any other Person
outside the Ordinary Course of Business or in an amount exceeding U.S.$5,000 or
MX$50,000;
(i) ICMOSA has not established or adopted any ICMOSA Employee Plan
and, except as required by applicable law, (i) has not paid any bonus or made
any profit-sharing or similar payment to, or increased the amount of the wages,
salary, commissions, fees, fringe benefits or other compensation or remuneration
payable to, any of its employees or independent contractors outside the Ordinary
Course of Business and (ii) has not paid any bonus or made any profit-sharing or
similar payment to, or increased the amount of the wages, salary, commissions,
fees, fringe benefits or other compensation or remuneration payable to, any of
its directors or officers;
(j) ICMOSA has not entered into or renewed any Material Contract
(as defined in Section 2.14);
10
(k) no Contract by which ICMOSA or any of the assets owned or used
by ICMOSA is or was bound, or under which ICMOSA has or had any rights or
interest, has been amended or terminated;
(l) ICMOSA has not discharged any Encumbrance or Lien, or
discharged or paid any indebtedness or other Liability, except for accounts
payable that (i) are reflected as current liabilities in the "liabilities"
column of the audited balance sheet of ICMOSA dated as of December 31, 2003 (as
previously furnished to Purchaser), or have been incurred by ICMOSA since
December 31, 2003, in bona fide transactions entered into in the Ordinary Course
of Business and (ii) have been discharged or paid in the Ordinary Course of
Business;
(m) ICMOSA has not forgiven any debt or otherwise released or
waived any right or claim;
(n) ICMOSA has not changed any of its methods of accounting in any
respect, and has not changed any of its accounting practices in any material
respect;
(o) ICMOSA has not entered into any transaction or taken any other
action outside the Ordinary Course of Business;
(p) ICMOSA has not (i) made any payment with respect to, or
discharged (in whole or in part), any account payable owed to UniMark or
FoodsSub, (ii) made any other payment to, or entered into any Contract,
transaction or arrangement with, any Related Party or (iii) permitted any
Related Party to exercise any right of setoff or any similar right with the
effect of reducing any amount otherwise payable to ICMOSA; and
(q) ICMOSA has not agreed, committed or offered (in writing or
otherwise) to take any of the actions referred to in clauses "(c)" through "(p)"
above.
2.7 TITLE TO ASSETS.
(a) ICMOSA owns, and has good and valid title to, all assets
purported to be owned by ICMOSA, including: (i) all assets reflected on the
audited balance sheet referred to in clause "(iii)" of the first sentence of
Section 2.4(a) (except for inventory sold or otherwise disposed of in the
Ordinary Course of Business since May 29, 2004); and (ii) all other assets
reflected in the books and records of ICMOSA as being owned by ICMOSA. All of
said assets are owned by the ICMOSA clear of any Liens, except for (A) any lien
for current taxes not yet due and payable and (B) liens described in Part 2.7(a)
of the Disclosure Schedule. No Person, other than ICMOSA, is in possession of or
owns any asset that is necessary for or used in ICMOSA's business. At or
immediately following the Closing, each lien, security interest or other Lien
that affects any of ICMOSA's assets and that was held, or was created by or for
the benefit of, Union de Credito xx Xxxxxxx or either of the Mexican Banks will
be fully released and extinguished.
(b) FoodsSub owns, and has good and valid title to, the Specified
Assets. All of the Specified Assets are owned by FoodsSub free of any Lien,
except for (i) any lien for current taxes not yet due and payable and (ii) liens
described in Part 2.7(b) of the Disclosure Schedule. At the Closing, Purchaser
will acquire good and valid title to all of the Specified
11
Assets, free of any Lien. FoodsSub does not, and did not as of December 31,
2003, own or have any rights to, or interest in, any asset other than the
Specified Assets and the assets specified on Schedule 1.2B.
2.8 BANK ACCOUNTS. Part 2.8 of the Disclosure Schedule accurately sets
forth, with respect to each account maintained by or for the benefit of ICMOSA
at any bank or other financial institution: (a) the name and location of the
institution at which such account is maintained; (b) the name in which such
account is maintained and the account number of such account; (c) a description
of such account and the purpose for which such account is used; (d) the current
balance in such account; (e) the rate of interest being earned on the funds in
such account; and (f) the names of all individuals authorized to draw on or make
withdrawals from such account. To the best of the knowledge of UniMark and
ICMOSA, there are no safe deposit boxes or similar arrangements maintained by or
for the benefit of ICMOSA.
2.9 RECEIVABLES. Part 2.9 of the Disclosure Schedule provides an
accurate and complete breakdown and aging of (a) all accounts receivable, notes
receivable and other receivables of ICMOSA as of May 29, 2004 and (b) all
accounts receivable of FoodsSub, other than accounts receivable representing
amounts owed to FoodsSub by Purchaser, as of May 29, 2004. Except as set forth
in Part 2.9 of the Disclosure Schedule, all existing accounts receivable of
ICMOSA (including those accounts receivable of ICMOSA reflected on the audited
balance sheet referred to in clause "(iii)" of the first sentence of Section
2.4(a) that have not yet been collected and those accounts receivable of ICMOSA
that have arisen since May 29, 2004 and have not yet been collected) (i)
represent valid obligations of customers of ICMOSA arising from bona fide
transactions entered into in the Ordinary Course of Business and (ii) are
current and, to the best of the knowledge of UniMark and ICMOSA, will be
collected in full (without any counterclaim or setoff) within 60 days after the
Closing Date. Part 2.9 of the Disclosure Schedule identifies each unreturned
security deposit or other deposit made by, or held by any Person for the benefit
of, ICMOSA.
2.10 CUSTOMERS; DISTRIBUTORS. Part 2.10 of the Disclosure Schedule
accurately identifies, and provides an accurate and complete breakdown of the
revenues received from, each customer or other Person, other than Purchaser,
that (together which such customer's or other Person's affiliates) accounted for
(a) more than U.S.$100,000 or MX$1,000,000 of the gross revenues of ICMOSA or
FoodsSub in 2002 or 2003 or (b) more than U.S.$50,000 or MX$500,000 of the gross
revenues of ICMOSA or FoodsSub in the first five months of 2004. None of
UniMark, ICMOSA or FoodsSub has received any notice or other communication (in
writing or otherwise), or has received any other information, indicating that
any customer or other Person identified or required to be identified in Part
2.10 of the Disclosure Schedule may cease dealing with ICMOSA or FoodsSub or may
otherwise reduce the volume of business transacted by such Person with ICMOSA or
FoodsSub below historical levels. ICMOSA is not a party to any Contract relating
to the distribution by any other Person of any product of ICMOSA.
2.11 INVENTORY. Part 2.11 of the Disclosure Schedule provides an accurate
and complete breakdown of all inventory (including raw materials, work in
process and finished goods) of ICMOSA as of May 29, 2004. All existing inventory
of ICMOSA and FoodsSub (including, in the case of ICMOSA, all inventory that is
reflected on the audited balance sheet referred to in clause "(iii)" of the
first sentence of Section 2.4(a) and that has not been disposed
12
of by ICMOSA since May 29, 2004): (a) is of such quality and quantity as to be
usable and saleable by ICMOSA or FoodsSub in the Ordinary Course of Business;
(b) has been priced at the lower of cost or market value using the "first-in,
first-out" method; and (c) is free of any defect or deficiency. The inventory
levels maintained by ICMOSA (i) are not excessive in light of the normal
operating requirements of ICMOSA, (ii) are adequate for the conduct of the
operations of ICMOSA in the Ordinary Course of Business and (iii) are sufficient
to meet all obligations of ICMOSA under the Supply Agreement.
2.12 REAL PROPERTY; IHMSA FACILITY; EQUIPMENT.
(a) Part 2.12(a) of the Disclosure Schedule sets forth accurate
and complete legal descriptions of all real property owned or purported to be
owned by ICMOSA (the "OWNED REAL PROPERTY"), including all real property
reflected on the audited balance sheet referred to in clause "(iii)" of the
first sentence of Section 2.4(a). ICMOSA has good, marketable and indefeasible
fee title to the Owned Real Property. ICMOSA owns the Owned Real Property free
of any Liens, except for: (A) any lien for current taxes not yet due and
payable; and (B) the Liens identified in Part 2.12(a) of the Disclosure
Schedule. All water, sewer, gas, electricity, telephone and other utilities and
utility services required by applicable Legal Requirements to be provided with
respect to the Owned Real Property, and all such utilities and utility services
necessary for the conduct of the business of ICMOSA at or upon the Owned Real
Property, are being supplied to the Owned Real Property and are presently
installed and operating properly.
(b) Part 2.12(b) of the Disclosure Schedule sets forth an accurate
and complete description of each real property lease pursuant to which ICMOSA
leases real property from any other Person. (All real property leased to ICMOSA,
including all buildings, structures, fixtures and other improvements leased to
ICMOSA, is referred to as the "LEASED REAL PROPERTY," and, together with the
Owned Real Property, as the "ICMOSA REAL PROPERTY.") Except as set forth in Part
2.12(a) or 2.12(b) of the Disclosure Schedule, the present use and operation of
the ICMOSA Real Property are authorized by, and are in material compliance with,
all applicable zoning, land use, building, fire, health, labor, safety and
environmental laws and other material Legal Requirements. Except as set forth in
Part 2.12(a) or 2.12(b) of the Disclosure Schedule, there is no Legal Proceeding
pending or threatened that challenges or adversely affects, or would challenge
or adversely affect, the continuation of the present ownership, use or operation
of any ICMOSA Real Property. Except as set forth in Part 2.12(a) or 2.12(b) of
the Disclosure Schedule, there is no existing plan or study by any Governmental
Body or by any other Person that challenges or otherwise adversely affects the
continuation of the present ownership, use or operation of any ICMOSA Real
Property. There are no subleases, licenses, occupancy agreements or other
contractual obligations that grant the right of use or occupancy of any of the
ICMOSA Real Property to any Person other than ICMOSA, and no Person is in
possession of any of the ICMOSA Real Property other than ICMOSA.
(c) To the best of the knowledge of UniMark and ICMOSA, the IHMSA
Facility and related assets are suitable for the purposes for which they are
intended and are in material compliance with and have at all times since
December 31, 2000 been operated in material compliance with all applicable Legal
Requirements.
13
(d) Part 2.12(d) of the Disclosure Schedule accurately identifies
all material equipment, materials, prototypes, tools, supplies, vehicles,
furniture, fixtures, improvements and other tangible assets owned by ICMOSA, and
accurately sets forth the date of acquisition, original cost and book value of
each of said assets. Part 2.12(d) of the Disclosure Schedule also accurately
identifies each tangible asset leased to ICMOSA. Each asset identified or
required to be identified in Part 2.12(d) of the Disclosure Schedule: (i) is
structurally sound, free of material defects and deficiencies and in good
condition and repair (ordinary wear and tear excepted); (ii) complies in all
respects with, and is being operated and otherwise used in full compliance with,
all applicable Legal Requirements; and (iii) is adequate and appropriate for the
uses to which it is being put. The assets identified in Part 2.12(d) of the
Disclosure Schedule are adequate for the conduct of the business of ICMOSA in
the manner in which such business is currently being conducted. No Person other
than ICMOSA is in possession of any material asset of a type listed on Part
2.12(d) of the Disclosure Schedule that is necessary for or used in the business
of ICMOSA.
2.13 INTELLECTUAL PROPERTY. Except as set forth in Part 2.13 of the
Disclosure Schedule, neither ICMOSA nor FoodsSub has any rights with respect to
any registered trademark or service xxxx, and neither ICMOSA nor FoodsSub has
caused to be prepared or submitted any application for the registration of any
trademark or service xxxx. Except as set forth in Part 2.13 of the Disclosure
Schedule, no registered trademark or service xxxx, whether or not owned by
ICMOSA or FoodsSub, is necessary for the operation of the business of ICMOSA or
FoodsSub, as such business is now conducted. To the best of the knowledge of
UniMark and ICMOSA, ICMOSA has never infringed (directly, contributorily, by
inducement or otherwise), misappropriated or otherwise violated any Intellectual
Property or any right with respect to any Intellectual Property of any other
Person. Except as set forth in Part 2.13 of the Disclosure Schedule, no
infringement, misappropriation or similar claim has ever been asserted,
threatened or commenced against (a) UniMark with respect to any actual or
alleged action, activity or practice of ICMOSA or FoodsSub or (b) ICMOSA or
FoodsSub.
2.14 CONTRACTS.
(a) Part 2.14(a) of the Disclosure Schedule identifies and
provides an accurate and complete description of each ICMOSA Contract that
constitutes a Material Contract. UniMark and ICMOSA have allowed Purchaser to
review accurate and complete copies of all Contracts identified in Part 2.14(a)
of the Disclosure Schedule, including all amendments thereto. All FoodsSub
Contracts are listed on Schedule 1.2A or Schedule 1.2B. UniMark and FoodsSub
have allowed Purchaser to review accurate and complete copies of all FoodsSub
Contracts. Except for any specific disclosure in the Disclosure Schedule that
identifies a particular ICMOSA Contract or FoodsSub Contract by name and date
and that calls into question, on the face of such disclosure, the validity,
enforceability or effectiveness of such particular ICMOSA Contract or FoodsSub
Contract, each ICMOSA Contract, and each FoodsSub Contract, is valid and in full
force and effect. For purposes of this Agreement, each of the following shall be
deemed to constitute a "Material Contract":
(i) any Contract (A) relating to the employment of, or the
performance of services by, any employee, director or consultant, (B)
pursuant to which ICMOSA is or may become obligated to make any severance,
termination or similar
14
payment to any current or former employee or director (other than as
required by applicable law) or (C) pursuant to which ICMOSA is or may
become obligated to make any bonus or similar payment (other than payments
constituting base salary) in excess of U.S.$20,000 or MX$200,000 to any
current or former employee or director;
(ii) any Contract relating to the acquisition, transfer,
development, sharing or license of any Intellectual Property or any rights
with respect to Intellectual Property (except for any Contract pursuant to
which any Intellectual Property or any right with respect to Intellectual
Property is licensed to ICMOSA under any third party software license
generally available to the public);
(iii) any Contract that provides for indemnification of any
officer, director or other ICMOSA Associate;
(iv) any Contract, other than any Contract to which Purchaser
is a party, imposing any restriction on the right or ability of ICMOSA (A)
to compete with any other Person, (B) to acquire any product or other
asset or any services from any other Person, (C) to solicit, hire or
retain any Person as an employee, consultant or independent contractor,
(D) to develop, sell, supply, distribute, offer, support or service any
product or any technology or other asset to or for any other Person, (E)
to perform services for any other Person or (F) to transact business or
deal in any other manner with any other Person;
(v) any Contract (A) relating to the acquisition, issuance,
voting, registration, sale or transfer of any securities, (B) providing
any Person with any preemptive right, right of participation, right of
maintenance or similar right with respect to any securities, or (C)
providing ICMOSA with any right of first refusal with respect to, or right
to repurchase or redeem, any securities;
(vi) any Contract incorporating or relating to any guaranty,
any warranty or any indemnity or similar obligation;
(vii) any futures Contract or other derivative instrument;
(viii) any Contract relating to any currency hedging;
(ix) any Contract pursuant to which raw fruit or any food
product is supplied by any Person to ICMOSA and under which the aggregate
amount of the payments that have been or may be made by ICMOSA exceeds
U.S.$100,000 or MX$1,000,000;
(x) any Contract pursuant to which any processed food
product or other product is supplied or sold to any Person, other than
Purchaser, by ICMOSA and under which the aggregate amount of the payments
that have been or may be received by ICMOSA exceeds U.S.$50,000 or
MX$500,000;
15
(xi) any Contact relating to any loan or other indebtedness
(other than advances of less than U.S.$5,000 and less than MX$50,000 made
to ICMOSA employees in the Ordinary Course of business);
(xii) any collective bargaining agreement or Contract with any
labor union;
(xiii) any Contract (A) imposing any confidentiality
obligation on ICMOSA or on any other Person or (B) containing "standstill"
provisions;
(xiv) any Contract (A) to which any Governmental Body is a
party or under which any Governmental Body has any rights or obligations
or (B) directly or indirectly benefiting any Governmental Body (including
any subcontract or other Contract between ICMOSA and any contractor or
subcontractor to any Governmental Body);
(xv) any Contract requiring that ICMOSA give any notice or
provide any information to any Person prior to considering or accepting
any Acquisition Proposal or similar proposal, or prior to entering into
any discussions, agreement, arrangement or understanding relating to any
Acquisition Transaction or similar transaction;
(xvi) any Contract that contemplates or involves the payment
or delivery of cash or other consideration in an amount or having a value
in excess of U.S.$50,000 or MX$500,000 in the aggregate in any period of
12 consecutive months, or contemplates or involves the performance of
services having a value in excess of U.S.$50,000 or MX$500,000 in the
aggregate in any period of 12 consecutive months;
(xvii) any Contract that has had or would have a material
effect on (A) the business, condition, capitalization, assets,
liabilities, operations, financial performance or prospects of ICMOSA or
(B) the ability of ICMOSA to perform any of its obligations under any of
the Transactional Agreements or to consummate any of the Contemplated
Transactions; and
(xviii) any other Contract, if a breach of such Contract could
reasonably be expected to have a Material Adverse Effect.
(b) Except as set forth in Part 2.14(b) of the Disclosure
Schedule: (i) ICMOSA has not, and to the best of the knowledge of UniMark and
ICMOSA, no other Person has, violated or breached, or declared or committed any
default under, any ICMOSA Contract; (ii) no event has occurred, and no
circumstance or condition exists, that might (with or without notice or lapse of
time) (A) give any Person other than ICMOSA the right to declare a default or
exercise any remedy under any ICMOSA Contract, (B) give any Person other than
ICMOSA the right to accelerate the maturity or performance of any ICMOSA
Contract or (C) give any Person other than ICMOSA the right to cancel, terminate
or modify any ICMOSA Contract; (iii) to the best of the knowledge of UniMark and
ICMOSA, no event has occurred, and no circumstance or condition exists, that
might (with or without notice or lapse of time) (A) result in a violation or
breach by any party other than ICMOSA of any of the provisions of any ICMOSA
Contract, (B) give ICMOSA the right to declare a default or exercise any remedy
16
under any ICMOSA Contract, (C) give ICMOSA the right to accelerate the maturity
or performance of any ICMOSA Contract or (D) give ICMOSA the right to cancel,
terminate or modify any ICMOSA Contract; (iv) neither UniMark nor ICMOSA has
received any notice or other communication (in writing or otherwise) regarding
any actual, alleged, possible or potential violation or breach of, or default
under, any ICMOSA Contract; and (v) ICMOSA has not waived any right under any
ICMOSA Contract. Without limiting the generality of the foregoing, neither
UniMark nor FoodsSub has committed a breach of the Supply Agreement, other than
breaches disclosed or otherwise known to Purchaser as of the date of this
Agreement.
(c) To the best of the knowledge of UniMark, ICMOSA and FoodsSub,
each Person against which ICMOSA or FoodsSub has or may acquire any rights under
any ICMOSA Contract or FoodsSub Contract is solvent and is able to satisfy all
of such Person's current and future monetary obligations and other obligations
and Liabilities thereunder.
(d) ICMOSA has never guaranteed or otherwise agreed to cause,
insure or become liable for, and neither ICMOSA nor FoodsSub has ever pledged
any of its assets to secure, the performance or payment of any obligation or
other Liability of any Person except pursuant to any guarantee, agreement or
pledge that was made prior to January 1, 2003 and is no longer in effect.
(e) The performance of the ICMOSA Contracts will not result in any
violation of or failure to comply with any Legal Requirement.
(f) No Person is renegotiating or has the contractual right to
renegotiate (i) any amount paid or payable to ICMOSA under any ICMOSA Contract
or (ii) any other term or provision of any ICMOSA Contract.
(g) The Contracts identified in Part 2.14(a) of the Disclosure
Schedule collectively constitute all of the Contracts necessary to enable ICMOSA
to conduct its business in the manner in which its business is currently being
conducted and in the manner in which its business is proposed to be conducted.
(h) Part 2.14(h) of the Disclosure Schedule identifies and
provides an accurate and complete description of each proposed Contract as to
which any unexpired bid, offer, written proposal, term sheet or similar document
has been submitted or received by ICMOSA.
2.15 LIABILITIES; MAJOR SUPPLIERS.
(a) ICMOSA has no Liabilities, except for: (i) liabilities
identified as such in the "liabilities" column of the audited balance sheet
referred to in clause "(iii)" of the first sentence of Section 2.4(a); (ii)
accounts payable (of the type required to be reflected as current liabilities in
the "liabilities" column of a balance sheet prepared in accordance with Mexican
GAAP applied on a basis consistent with the basis on which the Mexican
peso-denominated financial statements included in the ICMOSA Financial
Statements were prepared) incurred by ICMOSA in bona fide transactions entered
into in the Ordinary Course of Business since May 29, 2004; (iii) obligations
under the Contracts listed in Part 2.14(a) of the Disclosure Schedule, to the
extent that the existence and amounts of such obligations are ascertainable
solely by
17
reference to such Contracts; and (iv) other Liabilities itemized in
Part 2.15(a) of the Disclosure Schedule.
(b) Part 2.15(b) of the Disclosure Schedule: (i) provides an
accurate and complete breakdown and aging of the accounts payable of ICMOSA as
of May 29, 2004; (ii) provides an accurate and complete breakdown of any
customer deposits or other deposits held by ICMOSA as of the date of this
Agreement; and (iii) provides an accurate and complete breakdown of all notes
payable and other indebtedness of ICMOSA as of the date of this Agreement.
(c) ICMOSA has not paid, and ICMOSA is not and will not become
liable for the payment of, any fees, costs or expenses of the type referred to
in Section 10.6.
(d) Part 2.15(d) of the Disclosure Schedule accurately identifies,
and provides an accurate and complete breakdown of the amounts paid to, each
supplier or other Person that (together which such Person's affiliates) received
(i) more than U.S.$100,000 or MX$1,000,000 in the aggregate from ICMOSA in 2003,
or (ii) more than U.S.$50,000 or MX$500,000 in the aggregate from ICMOSA in the
first five months of 2004.
2.16 COMPLIANCE WITH LEGAL REQUIREMENTS. Except as set forth in Part 2.16
of the Disclosure Schedule: (a) each of ICMOSA and FoodsSub is in material
compliance with each material Legal Requirement that is applicable to it or to
the conduct of its business or the ownership or use of any of its assets; (b)
each of ICMOSA and FoodsSub has at all times been in material compliance with
each Legal Requirement that is or was applicable to it or to the conduct of its
business or the ownership or use of any of its assets; (c) no event has
occurred, and no condition or circumstance exists, that might (with or without
notice or lapse of time) constitute or result directly or indirectly in a
violation by ICMOSA or FoodsSub of, or a failure on the part of ICMOSA or
FoodsSub, to comply with, any Legal Requirement; and (d) neither ICMOSA nor
FoodsSub has received, at any time, any notice or other communication (in
writing or otherwise) from any Governmental Body or any other Person regarding
(i) any actual, alleged, possible or potential violation of, or failure to
comply with, any Legal Requirement or (ii) any actual, alleged, possible or
potential obligation on the part of ICMOSA or FoodsSub to undertake, or to bear
all or any portion of the cost of, any cleanup or any remedial, corrective or
response action of any nature. UniMark, ICMOSA and FoodsSub have caused to be
delivered to Purchaser an accurate and complete copy of each report, study,
survey or other document (to which UniMark, ICMOSA or FoodsSub has access) that
addresses or otherwise relates to the compliance of ICMOSA or FoodsSub with, or
the applicability to ICMOSA or FoodsSub of, any Legal Requirement.
2.17 GOVERNMENTAL AUTHORIZATIONS.
(a) Part 2.17(a) of the Disclosure Schedule identifies: (i) each
Governmental Authorization that is held by ICMOSA; and (ii) each Governmental
Authorization that is held by UniMark or by any employee of ICMOSA and relates
to or is used in the business of ICMOSA. UniMark and ICMOSA have caused to be
delivered to Purchaser accurate and complete copies of all of the Governmental
Authorizations identified in Part 2.17(a) of the Disclosure Schedule, including
all renewals thereof and all amendments thereto.
18
(b) Each Governmental Authorization identified or required to be
identified in Part 2.17(a) of the Disclosure Schedule is valid and in full force
and effect. ICMOSA is and has at all times been in material compliance with all
of the terms and requirements of each Governmental Authorization identified or
required to be identified in Part 2.17(a) of the Disclosure Schedule. No event
has occurred, and no condition or circumstance exists, that might (with or
without notice or lapse of time) (i) constitute or result directly or indirectly
in a violation of or a failure to comply with any term or requirement of any
Governmental Authorization identified or required to be identified in Part
2.17(a) of the Disclosure Schedule or (ii) result directly or indirectly in the
revocation, withdrawal, suspension, cancellation, termination or modification of
any Governmental Authorization identified or required to be identified in Part
2.17(a) of the Disclosure Schedule. Neither UniMark nor ICMOSA has ever received
any notice or other communication (in writing or otherwise) from any
Governmental Body or any other Person regarding (i) any actual, alleged,
possible or potential violation of or failure to comply with any term or
requirement of any Governmental Authorization or (ii) any actual, proposed,
possible or potential revocation, withdrawal, suspension, cancellation,
termination or modification of any Governmental Authorization. All applications
required to have been filed for the renewal of the Governmental Authorizations
required to be identified in Part 2.17(a) of the Disclosure Schedule have been
duly filed on a timely basis with the appropriate Governmental Bodies, and each
other notice or filing required to have been given or made with respect to such
Governmental Authorizations has been duly given or made on a timely basis with
the appropriate Governmental Body. The Governmental Authorizations identified in
Part 2.17(a) of the Disclosure Schedule constitute all of the Governmental
Authorizations necessary (i) to enable ICMOSA to conduct its business in the
manner in which its business is currently being conducted and in the manner in
which its business is proposed to be conducted and (ii) to permit ICMOSA to own
and use its assets in the manner in which they are currently owned and used and
in the manner in which they are proposed to be owned and used.
(c) ICMOSA is the legal holder of the water rights granted by the
National Water Commission of Mexico to the concession titles that are described
in Part 2.17(c) of the Disclosure Schedule, as duly recorded in the National
Registry of Water Rights. Such water rights are current and not subject to any
Lien or adverse administrative procedure brought by or before the National Water
Commission of Mexico or any other Governmental Body.
2.18 TAX MATTERS.
(a) Except as set forth in Part 2.18(a) of the Disclosure
Schedule, each Tax required to have been paid, or claimed by any Governmental
Body to be payable, by ICMOSA has been duly paid in full on a timely basis. Any
Tax required to have been withheld or collected by ICMOSA has been duly withheld
and collected; and (to the extent required) each such Tax has been paid to the
appropriate Governmental Body.
(b) Part 2.18(b) of the Disclosure Schedule accurately identifies
each examination or audit of any Tax Return of ICMOSA that has been conducted
since December 31, 1998. UniMark and ICMOSA have caused to be delivered to
Purchaser accurate and complete copies of all audit reports and similar
documents (of which UniMark, ICMOSA or FoodsSub has possession) relating to such
Tax Returns.
19
(c) Except as set forth in Part 2.18(c) of the Disclosure
Schedule, no claim or other Legal Proceeding is pending or has been threatened
against or with respect to ICMOSA in respect of any Tax. There are no
unsatisfied Liabilities for Taxes (including liabilities for interest, additions
to tax and penalties thereon and related expenses) with respect to any notice of
deficiency or similar document received by ICMOSA.
(d) UniMark and ICMOSA have caused to be delivered to Purchaser
accurate and complete copies of all Tax Returns that have been filed on behalf
of or with respect to ICMOSA since December 31, 1998. The information contained
in such Tax Returns is accurate and complete in all respects.
(e) The information set forth in Part 2.18(e) of the Disclosure
Schedule regarding the tax credits and net operating loss carryforwards
available to ICMOSA is accurate and complete in all material respects.
2.19 EMPLOYEE AND LABOR MATTERS.
(a) Part 2.19(a)(1) of the Disclosure Schedule accurately sets
forth, with respect to each employee of ICMOSA who is at the level of plant
manager or above or whose base salary exceeds MX$350,000 (a "KEY EMPLOYEE"),
including any Key Employee who is on a leave of absence or on layoff status: (i)
the name of such Key Employee and the date as of which such Key Employee was
originally hired by ICMOSA; (ii) such Key Employee's title, and a description of
such Key Employee's duties and responsibilities; (iii) the aggregate dollar
amount of the compensation (including wages, salary, commissions, director's
fees, fringe benefits, bonuses, profit-sharing payments and other payments or
benefits of any type) received by such Key Employee from ICMOSA with respect to
services performed in 2003; (iv) such Key Employee's annualized compensation for
2004 as of the date of this Agreement; (v) each ICMOSA Employee Plan in which
such Key Employee participates or is eligible to participate; and (vi) any
Governmental Authorization that is held by such Key Employee and that relates to
or is useful in connection with ICMOSA's business. Part 2.19(a)(2) of the
Disclosure Schedule lists all employees of ICMOSA who report directly to Xxxxxx
Xxxxxxx. UniMark and ICMOSA have caused to be made available to Purchaser
accurate and complete copies of all records of ICMOSA relating to ICMOSA
Associates and otherwise relating to employment and labor matters.
(b) Part 2.19(b) of the Disclosure Schedule identifies each ICMOSA
Associate (i) who was at the level of plant manager or above or whose annualized
compensation for 2004 exceeded MX$350,000 and (ii) whose employment or other
relationship with ICMOSA was terminated at any time since December 31, 2003. To
the best of the knowledge of UniMark and ICMOSA, ICMOSA has terminated the
employment of fewer than 50 of its employees since December 31, 2003.
(c) Each employee of ICMOSA is duly registered before the Mexican
Social Security Institute (IMSS) and the National Fund for Worker's Housing
Division (INFONAVIT). ICMOSA has withheld from each ICMOSA Associate all Taxes
and contributions required to be withheld (under applicable Legal Requirements
or otherwise), and has paid on behalf of each
20
ICMOSA Associate all Taxes and other contributions required to be paid (under
applicable Legal Requirements or otherwise) on behalf of such ICMOSA Associate.
(d) Part 2.19(d) of the Disclosure Schedule accurately identifies
each former employee or director who is receiving or is scheduled to receive (or
whose spouse or other dependent is receiving or is scheduled to receive) any
benefits (whether from ICMOSA or otherwise) relating to such former employee's
or director's employment with or service to ICMOSA; and Part 2.19(d) of the
Disclosure Schedule accurately describes such benefits.
(e) The employment of each employee of ICMOSA is terminable by
ICMOSA at will, except as provided under Mexican law and under the terms of the
Collective Bargaining Agreements (as defined in Section 2.19(h)). UniMark and
ICMOSA have caused to be delivered to Purchaser accurate and complete copies of
all employee manuals and handbooks, disclosure materials, policy statements and
other materials relating to the employment of the current and former employees
of ICMOSA.
(f) To the best of the knowledge of UniMark and ICMOSA: (i) no Key
Employee intends to terminate his employment with ICMOSA; (ii) no Key Employee
has received an offer to join a business that may be competitive with ICMOSA's
business; and (iii) no Key Employee is a party to or is bound by any
confidentiality agreement, noncompetition agreement or other Contract (with any
Person) that may have an adverse effect on (A) the performance by such Key
Employee of any of his or her duties or responsibilities as an employee of
ICMOSA or (B) ICMOSA's business or operations.
(g) Part 2.19(g) of the Disclosure Schedule accurately sets forth,
with respect to each Person that is, or has at any time since December 31, 2002
been, an independent contractor of ICMOSA and that has received or is entitled
to receive payments from ICMOSA totaling more than MX$50,000 in the aggregate:
(i) the name of such Person and the date as of which such Person was originally
hired by ICMOSA; (ii) a description of such Person's duties and
responsibilities; (iii) the aggregate dollar amount of the compensation
(including all payments or benefits of any type) received by such Person from
ICMOSA with respect to services performed in 2003; (iv) such Person's annualized
compensation for 2004 as of the date of this Agreement; (v) the terms of
compensation of such Person; and (vi) any Governmental Authorization that is
held by such Person and that relates to or is useful in connection with ICMOSA's
business. No Person that is, or has been, an independent contractor of ICMOSA
and that has received or is entitled to receive payments from ICMOSA totaling
more than MX$50,000 in the aggregate could be reclassified as an employee.
Except as set forth in Part 2.19(g) of the Disclosure Schedule, there is not,
and at no time has there been, any independent contractor of ICMOSA who has
provided services to ICMOSA for a period of six consecutive months or longer. No
Person identified in Part 2.19(g) of the Disclosure Schedule is eligible to
participate in any ICMOSA Employee Plan.
(h) ICMOSA has executed (i) a Collective Bargaining Agreement
dated January 2, 2003, with the "Industrial Labor Union of Employees in General
of the State of Nuevo Xxxx C.T.M." and (ii) a Collective Bargaining Agreement
dated October 29, 2003, with the "National Labor Union of Rural and Agricultural
Industry Employees and Agricultural Machinery Operators" (collectively, the
"COLLECTIVE BARGAINING AGREEMENTS"). ICMOSA has
21
caused accurate and complete copies of the Collective Bargaining Agreements to
be provided to Purchaser. There have been no amendments to the Collective
Bargaining Agreements. ICMOSA has complied in all material respects with each of
the Collective Bargaining Agreements. Each of the Collective Bargaining
Agreements has been registered before the Local Labor Court of the State of
Nuevo Xxxx and the Federal Labor Court in Mexico City. ICMOSA has not entered
into any Contract with any labor union or similar organization, body or Entity,
other than the Collective Bargaining Agreements.
(i) ICMOSA is not engaged, and ICMOSA has never been engaged, in
any unfair labor practice of any nature, including any unfair wage or benefits
practice or practices in violation of any applicable Legal Requirements
involving unsanitary, unhealthy or unsafe labor conditions, the employment of
child, forced, indentured, involuntary, prison or uncompensated labor, the use
of corporal punishment, discrimination based on race, gender, national origin or
religious beliefs or similar employment activities and conditions. For purposes
of this Section 2.19(i), "CHILD" means any individual less than 15 years of age.
(j) Except as set forth in Part 2.19(j) of the Disclosure
Schedule: (i) there has never been any slowdown, work stoppage, labor dispute or
union organizing activity, or any similar activity or dispute, affecting ICMOSA;
(ii) there is not now pending, and no Person has threatened, any such slowdown,
work stoppage, labor dispute or union organizing activity or any similar
activity or dispute; (iii) no event has occurred, and no condition or
circumstance exists, that might directly or indirectly give rise to or provide a
basis for the commencement of any such slowdown, work stoppage, labor dispute or
union organizing activity or any similar activity or dispute; and (iv) there are
no actions, suits, claims, labor disputes or grievances pending or threatened or
reasonably anticipated relating to any labor, safety or discrimination matters
involving any ICMOSA Associate, including charges of unfair labor practices or
discrimination complaints.
(k) Part 2.19(k) of the Disclosure Schedule contains an accurate
and complete list of each ICMOSA Employee Plan and each ICMOSA Employee
Agreement. ICMOSA does not intend and has not committed to establish or enter
into any new ICMOSA Employee Plan or ICMOSA Employee Agreement, or to modify any
ICMOSA Employee Plan or ICMOSA Employee Agreement (except to conform any such
ICMOSA Employee Plan or ICMOSA Employee Agreement to the requirements of any
applicable Legal Requirements, as previously disclosed to Purchaser in writing).
(l) UniMark and ICMOSA have caused to be delivered to Purchaser:
(i) accurate and complete copies of all documents setting forth the terms of
each ICMOSA Employee Plan and each ICMOSA Employee Agreement, including all
amendments thereto and all related trust documents; (ii) all reports filed with
or submitted to any Governmental Body in connection with each ICMOSA Employee
Plan; (iii) the most recent summary plan description together with the summaries
of material modifications thereto, if any, required under all applicable Legal
Requirements with respect to each ICMOSA Employee Plan; (iv) all material
written Contracts relating to each ICMOSA Employee Plan, including
administrative service agreements and group insurance contracts; (v) all written
materials provided to any ICMOSA Associate relating to any ICMOSA Employee Plan
and any proposed ICMOSA Employee Plans, including any such materials relating to
any amendments, terminations, establishments, increases
22
or decreases in benefits, acceleration of payments or vesting or other events
that could result in any Liability to ICMOSA; (vi) all correspondence to or from
any Governmental Body relating to any ICMOSA Employee Plan; and (vii) all
insurance policies in the possession of ICMOSA or UniMark pertaining to
fiduciary liability insurance covering the fiduciaries for each ICMOSA Employee
Plan.
(m) ICMOSA and UniMark have performed all obligations required to
be performed by them under each ICMOSA Employee Plan and are not in material
default of, or materially violating, the terms of any ICMOSA Employee Plan.
ICMOSA has no knowledge of any default or violation by any other party to the
terms of any ICMOSA Employee Plan, and each ICMOSA Employee Plan has been
established and maintained substantially in accordance with its terms and in
substantial compliance with all applicable Legal Requirements. There are no
claims or Legal Proceedings pending, threatened or reasonably anticipated (other
than routine claims for benefits) against or with respect to any ICMOSA Employee
Plan or the assets of any ICMOSA Employee Plan. Each ICMOSA Employee Plan can be
amended, terminated or otherwise discontinued after the Closing in accordance
with its terms, without Liability to Purchaser or ICMOSA. There are no audits,
inquiries or Legal Proceedings pending or threatened by any Governmental Body
with respect to any ICMOSA Employee Plan. ICMOSA and UniMark have made all
contributions and other payments required by and due under the terms of each
ICMOSA Employee Plan.
(n) Each ICMOSA employee has established a retirement fund account
with a duly authorized Mexican AFORE (Administradora de Fondos para el Retiro).
ICMOSA has no Liability with respect to the establishment or contribution of
retirement funds of employees.
(o) No ICMOSA Employee Plan requires ICMOSA to provide retiree
life insurance, retiree health benefits or other retiree employee welfare
benefits to any Person for any reason, except as may be required by applicable
Legal Requirements. Neither ICMOSA nor UniMark has ever represented, promised or
contracted (whether in oral or written form) to any ICMOSA Associate (or to any
group of ICMOSA Associates) that any ICMOSA Associate would be provided with
retiree life insurance, retiree health benefits or other retiree employee
welfare benefits, except to the extent required by applicable Legal
Requirements.
(p) Neither the execution and delivery of any of the Transactional
Agreements nor the consummation or performance of any of the Contemplated
Transactions will (either alone or upon the occurrence of any additional or
subsequent events) directly or indirectly result in, or constitute an event
under any ICMOSA Employee Plan, ICMOSA Employee Agreement, trust or loan that
will or may result (either alone or in connection with any other circumstance or
event) in any payment (whether of severance pay or otherwise), acceleration,
forgiveness of indebtedness, vesting, distribution, increase in benefits or
obligation to fund benefits with respect to any ICMOSA Associate.
(q) ICMOSA and UniMark: (i) are, and at all times have been, in
substantial compliance with all material Legal Requirements respecting
employment, employment practices, terms and conditions of employment and wages
and hours with respect to ICMOSA Associates; (ii) have withheld and reported all
amounts required by all applicable Legal Requirements or by Contract to be
withheld and reported with respect to wages, salaries and other payments to
23
ICMOSA Associates; (iii) are not liable for any arrears of wages or any Tax or
penalty for failure to comply with the Legal Requirements applicable of the
foregoing; and (iv) are not liable for any payment to any trust or other fund
governed by or maintained by or on behalf of any Governmental Body with respect
to unemployment compensation benefits, social security or other benefits or
obligations for ICMOSA Associates. There is no pending or threatened or
reasonably anticipated claim or Legal Proceeding against ICMOSA or UniMark under
any worker's compensation policy or long-term disability policy with respect to
any ICMOSA Associate.
(r) No ICMOSA Associate has any obligation under any Contract, or
is or subject to any judgment, decree or order of any court or other
Governmental Body, that could interfere with such ICMOSA Associate's efforts to
promote the interests of ICMOSA or that could interfere with the business of
ICMOSA. Neither the execution, delivery or performance of any of the
Transactional Agreements or the conduct of the business of ICMOSA as presently
conducted, nor any activity of any ICMOSA Associate in connection with the
conduct of the business of ICMOSA as presently conducted, will, to the best of
the knowledge of UniMark and ICMOSA, conflict with, result in a breach of the
terms, conditions or provisions of or constitute a default under any Contract by
which any ICMOSA Associate is bound.
(s) Part 2.19(s) of the Disclosure Schedule accurately describes
all obligations, responsibilities and Liabilities of UniMark with respect to
ICMOSA Associates and ICMOSA Employee Plans.
2.20 ENVIRONMENTAL MATTERS.
(a) Except as set forth in Part 2.20(a) or 2.20(c) of the
Disclosure Schedule, ICMOSA is not liable or potentially liable for any response
cost or natural resource damages under any Legal Requirement, at or with respect
to any site.
(b) Except as set forth in Part 2.20(b) of the Disclosure
Schedule, ICMOSA has never received any notice or other communication (in
writing or otherwise) from any Governmental Body or other Person regarding any
actual, alleged, possible or potential Liability arising from or relating to the
presence, generation, manufacture, production, transportation, importation, use,
treatment, refinement, processing, handling, storage, discharge, release,
emission or disposal of any Hazardous Material or any other type of contaminant;
and UniMark has never received any such notice or other communication with
respect to any activity of, or any property ever owned, leased, controlled or
used by, ICMOSA. Except as set forth in Part 2.20(b) of the Disclosure Schedule,
no Person has ever commenced or threatened to commence any contribution action
or other Legal Proceeding against ICMOSA or UniMark in connection with any such
actual, alleged, possible or potential Liability; and no event has occurred, and
no condition or circumstance exists, that may directly or indirectly give rise
to, or result in ICMOSA becoming subject to, any such Liability. Except as set
forth in Part 2.20(b) of the Disclosure Schedule, no Governmental Body has
initiated an inspection visit or an administrative procedure against ICMOSA that
may result in the assessment of administrative sanctions (such as the
determination of measures of urgent application, fines, or partial, temporary or
total shut-down of any facility owned or operated by ICMOSA).
24
(c) Except as set forth in Part 2.20(c) of the Disclosure
Schedule, ICMOSA has never generated, manufactured, produced, transported,
imported, used, treated, refined, processed, handled, stored, discharged,
released or disposed of any Hazardous Material or any other type of contaminant
(whether lawfully or unlawfully). Except as set forth in Part 2.20(c) of the
Disclosure Schedule, ICMOSA has never permitted (knowingly or otherwise) any
Hazardous Material or any other type of contaminant to be generated,
manufactured, produced, used, treated, refined, processed, handled, stored,
discharged, released, spilled or disposed of (whether lawfully or unlawfully):
(i) on or beneath the surface of any real property that is, or that has at any
time been, owned by, leased to, controlled by or used by ICMOSA; (ii) in or into
any surface water, groundwater, soil or air associated with or adjacent to any
such real property; or (iii) in or into any well, pit, pond, lagoon,
impoundment, ditch, landfill, building, structure, facility, improvement,
installation, equipment, pipe, pipeline, vehicle or storage container that is or
was located on or beneath the surface of any such real property or that is or
has at any time been owned by, leased to, controlled by or used by ICMOSA.
(d) Except as specifically disclosed in the Disclosure Schedule,
all property that is owned by, leased to, controlled by or used by ICMOSA, and
all surface water, groundwater, soil and air associated with or adjacent to such
property: (i) is in clean and healthful condition; (ii) is free of any Hazardous
Material or any other type of contaminant and any harmful chemical or physical
conditions; (iii) is free of any environmental contamination of any nature; and
(iv) is and has at all times been in full compliance with the terms of all
applicable Legal Requirements, including the Mexican Ley General del Equilibrio
Ecologico y de la Proteccion al Ambiente and the Ley General para la Prevencion
y Gestion Integral de los Residuo .
(e) Except as specifically disclosed in the Disclosure Schedule,
each storage tank or other storage container that is or has been owned by,
leased to, controlled by or used by ICMOSA, or that is located on or beneath the
surface of any real property owned by, leased to, controlled by or used by
ICMOSA, is in reasonably sound condition.
(f) UniMark and ICMOSA have caused to be delivered to Purchaser
accurate and complete copies of all material environmental reports and studies
(in the possession of ICMOSA or UniMark) relating to ICMOSA, any activity
conducted by ICMOSA or any property ever owned by, leased to, controlled by or
used by ICMOSA. Neither UniMark nor ICMOSA makes any representation or warranty
as to the accuracy or completeness of the Phase I Environmental Site Assessments
commissioned by Purchaser and dated as of June 28, 2004 (the "PHASE I STUDIES").
UniMark shall be deemed to have disclosed in Part 2.20 of the Disclosure
Schedule: (i) all information expressly disclosed in the Phase I Studies; and
(ii) any additional information that should have been disclosed in the Phase I
Studies but that was omitted from the Phase I Studies as the result of
actionable professional negligence on behalf of the Person commissioned by
Purchaser to prepare the Phase I Studies.
2.21 SALE OF PRODUCTS. Each product that has been produced by or on
behalf of ICMOSA or that has been sold or distributed by or on behalf of ICMOSA
or FoodsSub to any Person (a) conformed and complied in all respects with the
terms and requirements of any applicable warranty or other Contract and with all
applicable Legal Requirements and (b) was free of defects. ICMOSA will not incur
or otherwise become subject to any Liability arising
25
directly or indirectly from any product produced, sold or distributed by or on
behalf of ICMOSA on or at any time prior to the Closing Date. Except as set
forth in Part 2.21 of the Disclosure Schedule, no product produced, sold or
distributed by or on behalf of ICMOSA or FoodsSub has been the subject of any
recall or other similar action, and no event has occurred, and no condition or
circumstance exists, that might (with or without notice or lapse of time)
directly or indirectly give rise to or serve as a basis for any such recall or
other similar action relating to any such product.
2.22 INSURANCE.
(a) Part 2.22(a) of the Disclosure Schedule accurately sets forth,
with respect to each insurance policy maintained by or at the expense of, or for
the direct or indirect benefit of, ICMOSA or FoodsSub: (i) the name of the
insurance carrier that issued such policy and the policy number of such policy;
(ii) whether such policy is a "claims made" or an "occurrences" policy; (iii) a
description of the coverage provided by such policy and the material terms and
provisions of such policy (including all applicable coverage limits, deductible
amounts and co-insurance arrangements and any non-customary exclusions from
coverage); (iv) the annual premium payable with respect to such policy, and the
cash value (if any) of such policy; and (v) a description of any claims pending,
and any claims that have been asserted in the past, with respect to such policy
or any predecessor insurance policy. Part 2.22(a) of the Disclosure Schedule
also identifies (1) each pending application for insurance that has been
submitted by, on behalf of or with respect to ICMOSA or FoodsSub, (2) each
self-insurance or risk-sharing arrangement affecting ICMOSA or any of the assets
of ICMOSA or FoodsSub, (3) all material risks for which ICMOSA and FoodsSub do
not maintain insurance coverage and (4) any insurance coverage maintained by
UniMark for the benefit of, or with respect to the business, operations, assets
or liabilities of, ICMOSA or FoodsSub. UniMark, ICMOSA and FoodsSub have caused
to be delivered to Purchaser accurate and complete copies of all of the
insurance policies identified in Part 2.22(a) of the Disclosure Schedule
(including all renewals thereof and endorsements thereto) and all of the pending
applications identified in Part 2.22(a) of the Disclosure Schedule. Each of the
policies identified in Part 2.22(a) of the Disclosure Schedule is valid,
enforceable and in full force and effect, and has been issued by an insurance
carrier that is solvent, financially sound and reputable. All of the information
contained in the applications submitted in connection with said policies was (at
the times said applications were submitted) accurate and complete, and all
premiums and other amounts owing with respect to said policies have been paid in
full on a timely basis.
(b) Part 2.22(b) of the Disclosure Schedule identifies each
insurance claim made by or on behalf of ICMOSA or FoodsSub, or by UniMark with
respect to the business, operations, assets or liabilities of ICMOSA or
FoodsSub, that has been communicated to any insurance carrier since December 31,
2002 or that is currently outstanding. No event has occurred, and no condition
or circumstance exists, that might (with or without notice or lapse of time)
directly or indirectly give rise to or serve as a basis for any such insurance
claim. To the best of the knowledge of UniMark and ICMOSA, none of UniMark,
ICMOSA or FoodsSub has received: (i) any notice or other communication (in
26
writing or otherwise) regarding the actual or possible cancellation or
invalidation of any of the policies identified in Part 2.22(a) of the Disclosure
Schedule or regarding any actual or possible adjustment in the amount of the
premiums payable with respect to any of said policies; (ii) any notice or other
communication (in writing or otherwise) regarding any actual or possible refusal
of coverage under, or any actual or possible rejection of any claim under, any
of the policies identified in Part 2.22(a) of the Disclosure Schedule; or (iii)
any indication that the issuer of any of the policies identified in Part 2.22(a)
of the Disclosure Schedule may be unwilling or unable to perform any of its
obligations under, or to renew, any of such policies.
2.23 RELATED PARTY TRANSACTIONS. Except as set forth in Part 2.23 of the
Disclosure Schedule: (a) no Related Party has any direct or indirect interest of
any nature in any of the assets of ICMOSA; (b) no Related Party is, or has at
any time since December 31, 2002 been, indebted to ICMOSA; (c) since December
31, 2002, no Related Party has entered into, or has had any direct or indirect
financial interest in, any Contract, transaction or business dealing of any
nature involving ICMOSA; (d) no Related Party is competing, or has at any time
since December 31, 2002 competed, directly or indirectly, with ICMOSA; (e) no
Related Party has any claim or right against ICMOSA; and (f) no event has
occurred, and no condition or circumstance exists, that might (with or without
notice or lapse of time) directly or indirectly give rise to or serve as a basis
for any claim or right in favor of any Related Party against ICMOSA. Part 2.23
of the Disclosure Schedule contains an accurate and complete list of all amounts
paid or deemed (by way of setoff or otherwise) to have been paid by ICMOSA to
any Related Party, and all amounts paid by or deemed (by way of setoff or
otherwise) to have been paid to any Related Party to ICMOSA, since December 31,
2003.
2.24 CERTAIN PAYMENTS, ETC. To the best of the knowledge of UniMark and
ICMOSA, except as set forth in Part 2.24 of the Disclosure Schedule, ICMOSA has
not, and no officer, employee, agent or other Person associated with or acting
or purporting to act for or on behalf of ICMOSA has, at any time since January
1, 1998, directly or indirectly: (a) used any corporate funds (i) to make any
unlawful political contribution or gift or for any other unlawful purpose
relating to any political activity, (ii) to make any unlawful payment to any
governmental official or employee or (iii) to establish or maintain any unlawful
or unrecorded fund or account of any nature; (b) made any false or fictitious
entry, or failed to make any entry that should have been made, in any of the
books of account or other records of ICMOSA; (c) made any payoff, influence
payment, bribe, rebate, kickback or unlawful payment to any Person; (d)
performed any favor or given any gift which was not deductible for income tax
purposes; (e) made any payment (whether or not lawful) to any Person, or
provided (whether lawfully or unlawfully) any favor or anything of value
(whether in the form of property or services, or in any other form) to any
Person, for the purpose of obtaining or paying for (i) favorable treatment in
securing business, or (ii) any other special concession; or (f) agreed,
committed or offered (in writing or otherwise) to take any of the actions
described in clauses "(a)" through "(e)" above.
2.25 LEGAL PROCEEDINGS; ORDERS.
(a) Except as set forth in Part 2.25(a) of the Disclosure
Schedule, there is no pending Legal Proceeding, and no Person has threatened to
commence any Legal Proceeding: (i) that involves ICMOSA or FoodsSub or that
otherwise relates to or might affect the business or any of the assets of ICMOSA
or FoodsSub (whether or not ICMOSA or FoodsSub is named as a party thereto); or
(ii) that challenges, or that may have the effect of preventing, delaying,
making illegal or otherwise interfering with, any of the Contemplated
Transactions. Except as set forth in Part 2.25(a) of the Disclosure Schedule, no
event has occurred, and no claim, dispute or other
27
condition or circumstance exists, that might directly or indirectly give rise to
or serve as a basis for the commencement of any such Legal Proceeding. Except as
set forth in Part 2.25(a) of the Disclosure Schedule, no Legal Proceeding has
ever been commenced by or against ICMOSA or FoodsSub, and no Legal Proceeding
has ever been commenced by or against UniMark with respect to ICMOSA or
FoodsSub. UniMark, ICMOSA and FoodsSub have caused to be delivered to Purchaser
accurate and complete copies of all pleadings, correspondence and other written
materials (to which UniMark, ICMOSA or FoodsSub has access) that relate to the
Legal Proceedings identified in Part 2.25(a) of the Disclosure Schedule.
(b) Except as set forth in Part 2.25(b) of the Disclosure
Schedule, there is no Order to which ICMOSA or FoodsSub, or any of the assets
owned or used by ICMOSA or FoodsSub, is subject; and no Related Party is subject
to any Order that relates to ICMOSA's or FoodsSub's business or to any of the
assets of ICMOSA or FoodsSub. To the best of the knowledge of UniMark and
ICMOSA, no employee of ICMOSA is subject to any Order that may materially
interfere with such employee's ability to engage in or continue any conduct,
activity or practice relating to the business of ICMOSA. To the best of the
knowledge of UniMark and ICMOSA, there is no proposed Order that, if issued or
otherwise put into effect, (i) would have a Material Adverse Effect or (ii)
would have the effect of preventing, delaying, making illegal or otherwise
interfering with any of the Contemplated Transactions.
2.26 ADVERSE ACTIONS AND CIRCUMSTANCES AFFECTING ICMOSA, FOODSSUB AND
UNIMARK; SOLVENCY OF FOODSSUB AND UNIMARK.
(a) Except as set forth in Part 2.26(a) of the Disclosure
Schedule, none of UniMark, ICMOSA or FoodsSub has, at any time, (i) made a
general assignment for the benefit of creditors, (ii) filed, or had filed
against it, any bankruptcy petition or similar filing, (iii) suffered the
attachment or other judicial seizure of all or any portion of its assets, (iv)
admitted in writing its inability to pay its debts as they become due, (v) been
convicted of, or pleaded guilty or no contest to, any felony or (vi) taken or
been the subject of any action that would have an adverse effect on its ability
to comply with or perform any of its covenants or obligations under any of the
Transactional Agreements.
(b) Except as set forth in Part 2.26(b) of the Disclosure
Schedule, no Order has been issued, no petition has been presented or made and
no resolution has been adopted for or relating to the dissolution, winding-up,
liquidation or administration of UniMark, ICMOSA or FoodsSub, and there is not
now outstanding nor has there ever been: (i) any petition or order for the
dissolution, winding-up, liquidation or administration of UniMark, ICMOSA or
FoodsSub; (ii) any appointment of a receiver over all or any portion of the
assets of UniMark, ICMOSA or FoodsSub; (iii) any voluntary arrangement between
UniMark, ICMOSA or FoodsSub and any creditor; (iv) any distress or execution or
other process levied in respect of UniMark, ICMOSA or FoodsSub which remains
undischarged; or (v) any unfulfilled or unsatisfied judgment or court order
against UniMark, ICMOSA or FoodsSub. UniMark has no current intent to propose,
authorize or effect any dissolution, winding-up, liquidation, administration or
other matter of the type referred to in the preceding sentence.
(c) To the best of the knowledge of UniMark, ICMOSA and FoodsSub,
except as set forth in Part 2.26(c) of the Disclosure Schedule, there are no
circumstances that
28
would entitle any Person to present a petition for the dissolution, winding-up,
liquidation or administration of UniMark, ICMOSA or FoodsSub or to appoint a
receiver over all or any portion of the assets of UniMark, ICMOSA or FoodsSub.
(d) Taking into account the amounts to be received by UniMark and
FoodsSub in connection with the Contemplated Transactions, and the timing of
receipt of such amounts, neither UniMark nor FoodsSub has incurred or intends to
incur, and, to the best of the knowledge of UniMark and FoodsSub, neither
UniMark nor FoodsSub will incur, "debts" (within the meaning of the Uniform
Fraudulent Transfer Act, the United States Bankruptcy Code or any other
applicable Legal Requirement) beyond its ability to pay such "debts" as they
become due.
(e) The value of UniMark's assets, at fair valuations, exceeds
UniMark's "debts" (within the meaning of the Uniform Fraudulent Transfer Act and
the United States Bankruptcy Code) and the value of FoodsSub's assets, at fair
valuations, exceeds FoodsSub's "debts." After giving effect to the Contemplated
Transactions, the value of UniMark's assets, at fair valuations, will exceed
UniMark's "debts" (within the meaning of the Uniform Fraudulent Transfer Act and
the United States Bankruptcy Code) and the value of FoodsSub's assets, at fair
valuations, will exceed FoodsSub's "debts."
(f) After giving effect to the Contemplated Transactions, UniMark
will have capital and assets that are not unreasonably small in relation to its
business or proposed transactions and FoodsSub will have capital and assets that
are not unreasonably small in relation to its business or proposed transactions.
2.27 AUTHORITY; BINDING NATURE OF AGREEMENTS.
(a) Each of UniMark, ICMOSA and FoodsSub has the absolute and
unrestricted right, power and authority to enter into and to perform its
obligations under each of the Transactional Agreements to which it is or may
become a party; and the execution, delivery and performance by each of UniMark,
ICMOSA and FoodsSub of each of the Transactional Agreements to which it is or
may become a party have been duly authorized by all necessary action on the part
of UniMark, ICMOSA and FoodsSub, the boards of directors and officers of
UniMark, ICMOSA and FoodsSub and the shareholders of ICMOSA and FoodsSub.
(b) No vote of the shareholders of UniMark is required (under the
Texas Business Corporation Act, under other applicable Legal Requirements, under
UniMark's articles of incorporation or otherwise) to authorize or permit the
consummation of any of the Contemplated Transactions. Without limiting the
generality of the foregoing, (i) the Contemplated Transactions (including the
sale of the ICMOSA Shares and the Specified Assets) do not constitute a sale,
lease, exchange or other disposition of all, or substantially all, the property
and assets of UniMark (within the meaning of Part Five of the Texas Business
Corporation Act), (ii) the Contemplated Transactions (including the sale of the
ICMOSA Shares and the Specified Assets) are not outside the usual and regular
course of UniMark's business (within the meaning of Section 5.9 of Part Five of
the Texas Business Corporation Act) and (iii) all or a portion of the
consideration received by UniMark in connection with the sale of the
29
ICMOSA Shares and Specified Assets will be applied to the conduct of a business
in which UniMark engages following the consummation of the Contemplated
Transactions.
(c) This Agreement constitutes the legal, valid and binding
obligation of UniMark, ICMOSA and FoodsSub, enforceable against each of UniMark,
ICMOSA and FoodsSub in accordance with its terms. Upon the execution of each of
the other Transactional Agreements, each of such other Transactional Agreements
to which UniMark, ICMOSA or FoodsSub is a party will constitute the legal, valid
and binding obligation of each of the parties thereto and will be enforceable
against such parties in accordance with its terms.
(d) Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxxx and Xxxxx Xxxxxxx are, and
since January 1, 2000 have been, the only Persons authorized to enter into
Contracts on behalf of ICMOSA.
2.28 NON-CONTRAVENTION; CONSENTS.
(a) Except as set forth in Part 2.28(a) of the Disclosure
Schedule, neither the execution and delivery of any of the Transactional
Agreements, nor the consummation or performance of any of the Contemplated
Transactions, will directly or indirectly (with or without notice or lapse of
time):
(i) violate the certificate of incorporation, charter of
incorporation, deed of incorporation, by-laws or other charter or
organizational documents of UniMark, ICMOSA or FoodsSub;
(ii) contravene, conflict with or result in a violation of,
or give any Governmental Body or other Person the right to challenge any
of the Contemplated Transactions or to exercise any remedy or obtain any
relief under, any Legal Requirement or any Order to which any of UniMark,
ICMOSA or FoodsSub, or any of their assets, is subject;
(iii) cause Purchaser or any affiliate of Purchaser to become
subject to, or to become liable for the payment of, any Tax;
(iv) cause any of ICMOSA's assets or any of the Specified
Assets to be reassessed or revalued by any taxing authority or other
Governmental Body;
(v) contravene, conflict with or result in a violation of
any of the terms or requirements of, or give any Governmental Body the
right to revoke, withdraw, suspend, cancel, terminate or modify, any
Governmental Authorization that is to be included in the Specified Assets
or is held by ICMOSA or any employee of ICMOSA;
(vi) contravene, conflict with or result in a violation or
breach of, or result in a default under, any provision of any ICMOSA
Contract, any FoodsSub Contract or any Contract to which UniMark is a
party or by which UniMark is bound;
(vii) give any Person the right to (A) declare a default or
exercise any remedy under any ICMOSA Contract, (B) accelerate the maturity
or performance of any
30
ICMOSA Contract, or (C) cancel, terminate or modify anyICMOSA Contract,
any FoodsSub Contract or any Contract to which UniMark is a party or by
which UniMark is bound; or
(viii) result in the imposition or creation of any Lien upon
or with respect to any of the Specified Assets or any of the assets of
ICMOSA.
(b) Except as set forth in Part 2.28(b) of the Disclosure
Schedule, none of UniMark, ICMOSA or FoodsSub was, is or will be required to
make any filing with or give any notice to, or to obtain any Consent from, any
Person, including the Mexican Federal Competition Commission, in connection with
the execution and delivery of any of the Transactional Agreements or the
consummation or performance of any of the Contemplated Transactions.
(c) There is no "control share" statute, anti-takeover statute or
other similar statute or Legal Requirement that is or will be applicable to any
of the Transactional Agreements or to any of the Contemplated Transactions.
2.29 FAIRNESS OPINION. UniMark's board of directors has received the
written opinion of Xxxxxxxx Valuation Advisors ("XXXXXXXX"), financial advisor
to UniMark, dated the date of this Agreement, to the effect that (a) the
purchase price payable by Purchaser pursuant to Section 1.1(b) for the ICMOSA
Shares owned by UniMark is fair to UniMark from a financial point of view and
(b) the purchase price payable by Purchaser pursuant to Section 1.2(b) for the
Specified Assets is fair to FoodsSub and UniMark from a financial point of view.
UniMark has furnished an accurate and complete copy of said written opinion to
Purchaser.
2.30 FINANCIAL ADVISOR. Except for Xxxxxxxx, no broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with any of the Contemplated Transactions based upon
arrangements made by or on behalf of UniMark, ICMOSA or FoodsSub.
2.31 NO DISCUSSIONS. None of UniMark, ICMOSA or FoodsSub, and no
Representative of UniMark, ICMOSA or FoodsSub, is engaged, directly or
indirectly, in any discussions or negotiations with any Person regarding any
Acquisition Proposal. There has been no breach of any provision of the letter
agreement dated April 3, 2004, among UniMark, ICMOSA and Purchaser, as amended.
2.32 FULL DISCLOSURE.
(a) None of the Transactional Agreements contains or will contain
any untrue statement of fact; and none of the Transactional Agreements omits or
will omit to state any fact (other than a fact set forth in the UniMark SEC
Documents filed with the SEC prior to the date of this Agreement) necessary to
make any of the representations, warranties or other statements or information
contained therein not misleading. All of the information set forth in the
Disclosure Schedule, and all other information regarding UniMark, ICMOSA and
FoodsSub and their businesses, condition, assets, liabilities, operations,
financial performance and prospects that has been furnished to Purchaser or any
of Purchaser's Representatives by or on behalf of UniMark, ICMOSA or FoodsSub or
by any Representative of UniMark, ICMOSA or FoodsSub, is accurate and complete
in all respects.
31
(b) Each of Jakes Jordaan and Xxxxx Xxxxxxx has (i) carefully
reviewed this Agreement (including the representations and warranties set forth
in Section 2), and the Disclosure Schedule, and has had sufficient opportunity
to make any modifications to the Agreement or the Disclosure Schedule as he
deemed to be necessary or appropriate and (ii) engaged in discussions with each
of Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxxx and Xxxxx Xxxxxxx relating to the accuracy
and completeness of the representations, warranties and other statements and
information contained in the Agreement and the Disclosure Schedule.
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser represents and warrants, to and for the benefit of UniMark,
ICMOSA and FoodsSub, as follows:
3.1 DUE INCORPORATION. Purchaser is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware.
3.2 ACQUISITION OF ICMOSA SHARES. Purchaser and the Designated Affiliate
are not acquiring the ICMOSA Shares with the current intention of making a
public distribution thereof.
3.3 AUTHORITY; BINDING NATURE OF AGREEMENT. Purchaser has the absolute
and unrestricted right, power and authority to enter into and perform its
obligations under this Agreement, and the execution, delivery and performance of
this Agreement by Purchaser have been duly authorized by all necessary action on
the part of Purchaser and its board of directors. This Agreement constitutes the
legal, valid and binding obligation of Purchaser, enforceable against Purchaser
in accordance with its terms.
3.4 NON-CONTRAVENTION. The execution and delivery of this Agreement by
Purchaser and the purchase by Purchaser of the ICMOSA Shares owned by UniMark
and the Specified Assets will not: (a) conflict with the certificate of
incorporation or bylaws of Purchaser; or (b) result in a violation by Purchaser
of any Legal Requirement or Order to which Purchaser is subject, except for any
violation that will not materially interfere with Purchaser's ability to perform
its material obligations under this Agreement.
4. PRE-CLOSING COVENANTS OF THE PARTIES.
4.1 ACCESS AND INVESTIGATION. UniMark, ICMOSA and FoodsSub shall ensure
that, at all times during the Pre-Closing Period, (a) UniMark, ICMOSA and
FoodsSub and their Representatives will provide Purchaser and its
Representatives with free and complete access to UniMark, ICMOSA and FoodsSub,
to all Representatives, personnel and assets of UniMark, ICMOSA and FoodsSub and
to all existing books, records, Tax Returns, work papers and other documents and
information relating to ICMOSA and FoodsSub, (b) UniMark, ICMOSA and FoodsSub
and their Representatives will provide Purchaser and its Representatives with
such copies of existing books, records, Tax Returns, work papers and other
documents and information relating to ICMOSA and FoodsSub as Purchaser may
request in good faith and (c) UniMark, ICMOSA and FoodsSub and their
Representatives will compile and provide Purchaser and its Representatives with
such additional financial, operating and other data and information regarding
ICMOSA and FoodsSub as Purchaser may request in good faith. Without limiting the
32
generality of any of the foregoing, during the Pre-Closing Period, UniMark,
ICMOSA and FoodsSub shall promptly provide Purchaser with copies of:
(i) all material operating and financial reports prepared by
or relating to ICMOSA and FoodsSub including (A) the unaudited monthly
balance sheets of ICMOSA and the related unaudited monthly statements of
income and retained earnings and cash flows and (B) any sales forecasts,
marketing plans, development plans, discount reports, write-off reports,
hiring reports or capital expenditure reports relating to the business of
ICMOSA or FoodsSub;
(ii) any material notice, document or other communication
sent by or on behalf of UniMark, ICMOSA or FoodsSub to any party to any
ICMOSA Contract or FoodsSub Contract or sent to UniMark, ICMOSA or
FoodsSub by any party to any ICMOSA Contract or FoodsSub Contract (other
than any communication that relates solely to routine commercial
transactions between ICMOSA or FoodsSub and the other party to any such
Contract and that is sent in the Ordinary Course of Business);
(iii) any notice, report or other document filed with or sent
to any Governmental Body on behalf of UniMark, ICMOSA or FoodsSub in
connection with any of the Contemplated Transactions; and
(iv) any material notice, report or other document (A)
received by ICMOSA or FoodsSub from any Governmental Body or (B) received
by UniMark from any Governmental Body in connection with any of the
Contemplated Transactions.
4.2 OPERATION OF ICMOSA AND FOODSSUB BUSINESSES.
(a) During the Pre-Closing Period, UniMark, ICMOSA and FoodsSub
shall ensure that: (i) ICMOSA and FoodsSub conduct their respective businesses
and operations in the Ordinary Course of Business and in compliance with all
material Legal Requirements and the requirements of all ICMOSA Contracts and
FoodsSub Contracts; (ii) ICMOSA and FoodsSub preserve intact their current
business organizations, keep available the services of their current officers
and employees and maintain their relations and goodwill with all suppliers,
growers, customers, landlords, creditors, employees and other Persons having
business relationships with either or both of them; (iii) ICMOSA and FoodsSub
keep in full force all insurance policies referred to in Section 2.22; (iv)
Purchaser receives prompt written notice of (A) any notice or other
communication from any Person alleging that the Consent of such Person is or may
be required in connection with any of the Contemplated Transactions and (B) any
Legal Proceeding commenced or threatened against, relating to or involving or
otherwise affecting ICMOSA or FoodsSub; and (v) the officers of UniMark, ICMOSA
and FoodsSub report regularly to Purchaser concerning the status of ICMOSA's
business and FoodsSub's business.
(b) During the Pre-Closing Period, ICMOSA shall not (without the
prior written consent of Purchaser):
(i) declare, accrue, set aside or pay any dividend or make
any other distribution in respect of any shares of capital stock, or
repurchase, redeem or otherwise reacquire any shares of capital stock or
other securities;
33
(ii) sell, issue, grant or authorize the issuance or grant of
(A) any capital stock or other security, (B) any option, call, warrant or
right to acquire any capital stock or other security or (C) any instrument
convertible into or exchangeable for any capital stock or other security;
(iii) amend or permit the adoption of any amendment to its
charter of incorporation, deed of incorporation or by-laws or other
charter or organizational documents, or effect or become a party to any
merger, consolidation, share exchange, business combination, amalgamation,
recapitalization, reclassification of shares, stock split, reverse stock
split, division or subdivision of shares, consolidation of shares or
similar transaction;
(iv) form any Subsidiary or acquire any equity interest or
other interest in any other Entity;
(v) make any capital expenditure in any calendar month that,
when aggregated with all other capital expenditures made by or on behalf
of ICMOSA in such calendar month, exceeds U.S.$25,000 or MX$250,000;
(vi) enter into or become bound by, or permit any of the
assets owned or used by it to become bound by, any Material Contract, or
amend or terminate, or waive or exercise any material right or remedy
under, any Material Contract;
(vii) acquire, lease or license any right or other asset from
any other Person or sell or otherwise dispose of, or lease or license, any
right or other asset to any other Person (except in each case for (A) raw
fruit acquired in the Ordinary Course of Business pursuant to existing
supply agreements and (B) immaterial assets acquired, leased, licensed or
disposed of by ICMOSA in the Ordinary Course of Business), or waive or
relinquish any material right;
(viii) write off as uncollectible, or establish any
extraordinary reserve with respect to, any receivable or other
indebtedness;
(ix) make any pledge of any of its assets or permit any of
its assets to become subject to any Lien, except for any Lien that does
not detract from the value of such assets or impair the operations of
ICMOSA;
(x) lend money to any Person, or incur or guarantee any
indebtedness;
(xi) establish, adopt or amend any ICMOSA Employee Benefit
Plan, pay any bonus or make any profit-sharing or similar payment to, or
increase the amount of the wages, salary, commissions, fringe benefits or
other compensation or remuneration payable to, any ICMOSA Associate
(except that ICMOSA (A) may make routine, reasonable salary increases in
the Ordinary Course of Business in connection with ICMOSA's customary
employee review process and (B) may make customary bonus payments and
profit sharing payments in the Ordinary Course of Business in accordance
with existing bonus and profit sharing plans referred to in Part 2.19(k)
of the Disclosure Schedule);
34
(xii) hire any employee with an annual base salary in excess
of MX$250,000, or promote any employee except in order to fill a position
vacated after the date of this Agreement;
(xiii) change any of its pricing policies, product return
policies, product maintenance polices, service policies, product
modification or upgrade policies, personnel policies or other business
policies, or any of its methods of accounting or accounting practices, in
any respect;
(xiv) make any Tax election;
(xv) commence or settle any Legal Proceeding;
(xvi) make any payment with respect to, or discharge (in whole
or in part), any account payable owed to UniMark or FoodsSub or make any
other payment to or enter into any Contract, transaction or arrangement
with any Related Party;
(xvii) enter into any material transaction or take any other
material action outside the Ordinary Course of Business; or
(xviii) agree, commit, offer or attempt to take any of the
actions described in clauses "(i)" through "(xvii)" of this Section
4.2(b).
(c) During the Pre-Closing Period, FoodsSub shall not (without the
prior written consent of Purchaser):
(i) directly or indirectly sell or otherwise transfer any of
the Specified Assets or any interest in or right relating to any of the
Specified Assets;
(ii) permit any of the Specified Assets to become subject,
directly or indirectly, to any Lien;
(iii) enter into or permit any of the assets owned or used by
FoodsSub to become bound by any Contract;
(iv) enter into any transaction or take any other action
outside the Ordinary Course of Business;
(v) change any of its pricing policies, product return
policies, product maintenance polices, service policies, product
modification or upgrade policies, personnel policies or other business
policies, or any of its methods of accounting or accounting practices, in
any respect; or
(vi) agree, commit, offer or attempt to take any of the
actions described in clauses "(i)" through "(v)" of this Section 4.2(c).
4.3 REIMBURSEMENT OR PAYMENT BY PURCHASER OF CERTAIN TRANSACTION-RELATED
EXPENSES.
35
(a) During the Pre-Closing Period, so long as none of UniMark,
ICMOSA or FoodsSub shall have committed a material uncured breach of any
provision of any of the Transactional Agreements or the Supply Agreement,
Purchaser shall (within ten business days after Purchaser's receipt of copies of
appropriate invoices accompanied by reasonable supporting documentation)
reimburse UniMark for, or (at Purchaser's sole election) pay on behalf of and
for the account of UniMark, any Reimbursable Transaction-Related Expenses (as
defined below) actually incurred by UniMark during the period from January 1,
2004 through the end of the Pre-Closing Period with respect to professional
services rendered to UniMark during such period. For purposes of this Section
4.3, "REIMBURSABLE TRANSACTION-RELATED EXPENSES" shall mean only those
reasonable out-of-pocket expenses paid or required to be paid by UniMark: (i) to
Xxxxxxx Xxxxx & Xxxxx for auditing ICMOSA's financial statements as of and for
the year ended December 31, 2003; (ii) to Jordaan & Xxxxx PLLC and Galicia y
Xxxxxx, S.C. for legal services relating directly to the sale by UniMark to
Purchaser of the ICMOSA Shares owned by UniMark and the sale by FoodsSub to
Purchaser of the Specified Assets; and (iii) to Xxxxxxxx for services related
directly to the provision of the fairness opinion referred to in Section 2.29.
(b) Purchaser's obligation to reimburse UniMark for Reimbursable
Transaction-Related Expenses pursuant to this Section 4.3 shall be limited to
U.S.$350,000 in the aggregate, and shall terminate upon any material breach on
the part of UniMark, ICMOSA or FoodsSub of any Transactional Agreement or the
Supply Agreement. For purposes of this Agreement, any interruption of supply
under the Supply Agreement shall be deemed a material breach of the Supply
Agreement by FoodsSub and ICMOSA.
(c) The aggregate amount of all reimbursements and other payments
made by Purchaser with respect to Reimbursable Transaction-Related Expenses
shall be credited against the purchase price payable by Purchaser pursuant to
Section 1.1(b) for the ICMOSA Shares owned by UniMark. UniMark shall be required
to refund to Purchaser the aggregate amount of all reimbursements and other
payments made by Purchaser with respect to Reimbursable Transaction Related
Expenses under the circumstances set forth in Section 7.3.
4.4 NO SOLICITATION.
(a) None of UniMark, ICMOSA or FoodsSub shall, directly or
indirectly, and UniMark, ICMOSA and FoodsSub shall ensure that none of their
Representatives will, directly or indirectly, (i) solicit, initiate, encourage,
induce or facilitate the making, submission or announcement of any Acquisition
Proposal or Acquisition Inquiry or take any action that could reasonably be
expected to lead to an Acquisition Proposal, (ii) furnish any information
regarding ICMOSA or FoodsSub to any Person in connection with or in response to
an Acquisition Proposal or Acquisition Inquiry, (iii) engage in discussions or
negotiations with any Person with respect to any Acquisition Proposal or
Acquisition Inquiry, (iv) approve, endorse or recommend any Acquisition Proposal
or (v) enter into any letter of intent or similar document or any Contract
contemplating or otherwise relating to any Acquisition Transaction. Without
limiting the generality of the foregoing, UniMark acknowledges and agrees that
any action inconsistent with any of the provisions set forth in the preceding
sentence taken by any Representative of UniMark, ICMOSA or FoodsSub, whether or
not such Representative is purporting to act on behalf of UniMark, ICMOSA or
FoodsSub, shall be deemed to constitute a breach of this Section 4.4 by UniMark.
36
(b) UniMark shall promptly (and in no event later than 24 hours
after receipt of any Acquisition Proposal, Acquisition Inquiry or request for
nonpublic information) advise Purchaser orally and in writing of any Acquisition
Proposal, Acquisition Inquiry or request for nonpublic information relating to
ICMOSA or FoodsSub (including the identity of the Person making or submitting
such Acquisition Proposal, Acquisition Inquiry or request, and the terms
thereof) that is made or submitted by any Person during the Pre-Closing Period.
UniMark shall keep Purchaser fully informed with respect to the status of any
such Acquisition Proposal, Acquisition Inquiry or request and any modification
or proposed modification thereto.
(c) UniMark, ICMOSA and FoodsSub shall immediately cease and cause
to be terminated any existing discussions with any Person that relate to any
Acquisition Proposal or Acquisition Inquiry.
(d) UniMark, ICMOSA and FoodsSub agree not to release or permit
the release of any Person from, and not to waive or permit the waiver of any
provision of, any confidentiality, "standstill" or similar agreement to which
ICMOSA or FoodsSub is a party or under which ICMOSA or FoodsSub has any rights
or that relates in any way to ICMOSA or FoodsSub or to any confidential
information of or regarding ICMOSA or FoodsSub. UniMark, ICMOSA and FoodsSub
shall cause each such agreement to be enforced, to the extent requested by
Purchaser. UniMark, ICMOSA and FoodsSub also shall promptly request each Person
that has executed, on or after January 1, 2001, a confidentiality agreement
under which UniMark, ICMOSA or FoodsSub has any rights to return all
confidential information ever furnished to such Person with respect to ICMOSA or
FoodsSub.
4.5 FILINGS AND CONSENTS.
(a) Each of UniMark, ICMOSA and FoodsSub shall use commercially
reasonable efforts to ensure that each Consent required to be obtained (pursuant
to any applicable Legal Requirement, Order or Contract, or otherwise) by
UniMark, ICMOSA or FoodsSub in connection with the execution and delivery of any
of the Transactional Agreements or in connection with any of the Contemplated
Transactions (including each of the Consents identified in Part 2.28(b) of the
Disclosure Schedule) is obtained as soon as possible after the date of this
Agreement and remains in full force and effect through the Closing Date.
(b) UniMark, ICMOSA and FoodsSub shall ensure that:
(i) each filing or notice required to be made or given
(pursuant to any applicable Legal Requirement, Order or Contract, or
otherwise) by UniMark, ICMOSA or FoodsSub in connection with the execution
and delivery of any of the Transactional Agreements or in connection with
any of the Contemplated Transactions (including each filing and notice
identified in Part 2.28(b) of the Disclosure Schedule) is made or given as
soon as possible after the date of this Agreement;
(ii) UniMark, ICMOSA and FoodsSub promptly cause to be
delivered to Purchaser a copy of each filing made, each notice given and
each Consent obtained by UniMark, ICMOSA or FoodsSub during the
Pre-Closing Period; and
37
(iii) UniMark, ICMOSA and FoodsSub and their Representatives
cooperate with Purchaser and with Purchaser's Representatives, and prepare
and make available such documents and take such other actions as Purchaser
may request in good faith, in connection with any filing, notice or
Consent that Purchaser is required or elects to make, give or obtain in
connection with any of the Contemplated Transactions.
4.6 NOTIFICATION; UPDATES TO DISCLOSURE SCHEDULE.
(a) During the Pre-Closing Period, UniMark, ICMOSA and FoodsSub
shall promptly notify Purchaser in writing of: (i) the discovery by UniMark,
ICMOSA or FoodsSub of any event, condition, fact or circumstance that occurred
or existed on or prior to the date of this Agreement and that caused or
constitutes a breach of any representation or warranty made by UniMark, ICMOSA
or FoodsSub in this Agreement; (ii) any event, condition, fact or circumstance
that occurs, arises or exists after the date of this Agreement and that would
cause or constitute a breach of any representation or warranty made by UniMark,
ICMOSA or FoodsSub in this Agreement if (A) such representation or warranty had
been made as of the time of the occurrence, existence or discovery of such
event, condition, fact or circumstance or (B) such event, condition, fact or
circumstance had occurred, arisen or existed on or prior to the date of this
Agreement; (iii) any breach of any covenant or obligation of UniMark, ICMOSA or
FoodsSub; and (iv) any event, condition, fact or circumstance that may interfere
with the timely satisfaction of any of the conditions set forth in Section 5.
Without limiting the generality of the foregoing, UniMark, ICMOSA and FoodsSub
shall promptly advise Purchaser in writing of any Legal Proceeding or material
claim threatened, commenced or asserted against or with respect to ICMOSA or
FoodsSub or any of the assets of ICMOSA or FoodsSub. No notification given to
Purchaser pursuant to this Section 4.6(a) shall limit or otherwise affect any of
the representations, warranties, covenants or obligations of the parties
contained in this Agreement.
(b) If any event, condition, fact or circumstance that is required
to be disclosed pursuant to Section 4.6(a) requires any change in the Disclosure
Schedule, or if any such event, condition, fact or circumstance would require
such a change assuming the Disclosure Schedule were dated as of the date of the
occurrence, existence or discovery of such event, condition, fact or
circumstance, then UniMark, ICMOSA and FoodsSub shall promptly cause to be
delivered to Purchaser an update to the Disclosure Schedule specifying such
change. No such update shall be deemed to supplement or amend the Disclosure
Schedule for the purpose of (i) determining the accuracy of any of the
representations and warranties made by UniMark, ICMOSA or FoodsSub in this
Agreement or in the Closing Certificate or (ii) determining whether any of the
conditions set forth in Section 5 have been satisfied.
4.7 NO TRANSFER OF ICMOSA SHARES. During the Pre-Closing Period, neither
UniMark nor Xxxxxx Xxxxxxx shall, directly or indirectly, cause or permit (a)
any sale, pledge or other disposition of any of the ICMOSA Shares or any
interest in any of the ICMOSA Shares, (b) any of the ICMOSA Shares to be
deposited into a voting trust or (c) the granting of a proxy or entry into of a
voting agreement or similar agreement with respect to any of the ICMOSA Shares.
4.8 COMMERCIALLY REASONABLE EFFORTS. During the Pre-Closing Period, each
of UniMark, ICMOSA, FoodsSub, Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxxx Xxxxxxx,
Xxxxx
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Xxxxxxx and Jakes Jordaan shall use commercially reasonable efforts to
cause the conditions set forth in Section 5 to be satisfied on a timely basis.
5. CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION TO CLOSE. Purchaser's
obligation to purchase the ICMOSA Shares owned by UniMark, to purchase the
Specified Assets and to take the other actions required to be taken by Purchaser
at the Closing is subject to the satisfaction, at or prior to the Closing, of
each of the following conditions (any of which may be waived by Purchaser, in
whole or in part, in accordance with Section 10.15):
5.1 ACCURACY OF REPRESENTATIONS. The representations and warranties of
UniMark, ICMOSA and FoodsSub contained in this Agreement shall have been
accurate in all material respects as of the date of this Agreement and shall be
accurate in all material respects as of the Scheduled Closing Time as if made at
and as of the Scheduled Closing Time; provided, however, that, for purposes of
determining the accuracy of such representations and warranties: (i) all
materiality qualifications contained in such representations and warranties
shall be disregarded; and (ii) any update of or modification to the Disclosure
Schedule made or purported to have been made on or after the date of this
Agreement shall be disregarded.
5.2 PERFORMANCE OF OBLIGATIONS.
(a) UniMark, ICMOSA, FoodsSub, Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxxx,
Xxxxx Xxxxxxx, Xxxxx Xxxxxxx and Jakes Jordaan shall have executed and delivered
each of the agreements and other documents required to be delivered pursuant to
Section 1.4(b).
(b) Each of the other covenants and obligations that UniMark,
ICMOSA, FoodsSub, Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxxxx
and Jakes Jordaan are required to comply with or to perform at or prior to the
Closing (including the covenants and obligations of UniMark, ICMOSA, FoodsSub,
Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxxxx and Jakes Jordaan
under the Transactional Agreements and the covenants and obligations of ICMOSA
and FoodsSub under the Supply Agreement) shall have been duly complied with and
performed in all material respects.
5.3 CONSENTS. All Consents required to be obtained in connection with
Contemplated Transactions, including each Consent identified in Part 2.28(b) of
the Disclosure Schedule, shall have been obtained and shall be in full force and
effect.
5.4 NO MATERIAL ADVERSE EFFECT. There shall have been no Material
Adverse Effect, and no event shall have occurred or circumstance shall exist
that, in combination with any other events or circumstances, could reasonably be
expected to have or result in a Material Adverse Effect.
5.5 NO MATERIAL ADVERSE MARKET, FINANCIAL OR OTHER DEVELOPMENTS. There
shall not have occurred (a) any general suspension of trading in securities on
the New York Stock Exchange, The Nasdaq Stock Market or any other United States
or Mexican securities market, (b) any declaration by a Governmental Body of a
banking moratorium in the United States or Mexico or any suspension of payments
in respect of banks or other financial institutions in the United States or
Mexico or (c) any war, armed hostilities, act of terrorism or other material
adverse development that directly or indirectly involves the United States or
Mexico or that has
39
had or could reasonably be expected to have an adverse impact on United States
or Mexican financial or agricultural markets, or on the business of Purchaser,
ICMOSA, FoodsSub or any significant customer of or supplier to Purchaser, ICMOSA
or FoodsSub.
5.6 NONCOMPETITION AGREEMENTS. The Noncompetition Agreements shall
remain in full force and effect.
5.7 NO RESTRAINTS. No temporary restraining order, preliminary or
permanent injunction or other order preventing the sale by UniMark or the
purchase by Purchaser of any of the ICMOSA Shares owned by UniMark, or
preventing the sale by FoodsSub or the purchase by Purchaser of any of the
Specified Assets, shall have been issued by any court of competent jurisdiction
or other Governmental Body and remain in effect.
5.8 NO LITIGATION. There shall not be pending, and there shall not have
been threatened, any Legal Proceeding: (a) challenging or seeking to restrain or
prohibit any of the Contemplated Transactions; (b) relating to any of the
Contemplated Transactions and seeking to obtain from Purchaser or ICMOSA any
damages or other relief that may be material to Purchaser or ICMOSA; (c) seeking
to prohibit or limit in any material respect Purchaser's ability to vote,
transfer, receive dividends with respect to or otherwise exercise ownership
rights with respect to any of the ICMOSA Shares; (d) that could materially and
adversely affect the right or ability of ICMOSA to own any of its assets or
operate its business or the right or ability of Purchaser to own or operate any
of the Specified Assets or the business of FoodsSub; or (e) seeking to compel
ICMOSA, FoodsSub, Purchaser or any affiliate of Purchaser to dispose of or hold
separate any material assets as a result of any of the Contemplated
Transactions.
5.9 SOLVENCY ASSURANCES. Purchaser shall have received written
assurances from UniMark and FoodsSub, satisfactory in form and substance to
Purchaser, as to the solvency of UniMark and FoodsSub.
5.10 BANK ASSURANCES. Purchaser shall have received binding written
assurances from each of the Mexican Banks, satisfactory in form and substance to
Purchaser, confirming that, at or immediately following the Closing, the Mexican
Banks will forgive the entire amount of ICMOSA's indebtedness (including
principal, interest and any other amounts owing) to the Mexican Banks, and will
release all Liens on ICMOSA's assets, in exchange for cash payments not to
exceed U.S.$4,650,000 in the aggregate.
5.11 IHMSA ASSURANCES. Purchaser shall have received binding written
assurances from IHMSA and Union de Credito xx Xxxxxxx, satisfactory in form and
substance to Purchaser, confirming that (a) at or immediately following the
Closing, ICMOSA will acquire good, valid and marketable title (free of any
security interest of Union de Credito xx Xxxxxxx, and free of any other Liens)
to the IHMSA Facility and all related assets upon payment to IHMSA of an amount
not to exceed MX$11,100,000 and (b) the IHMSA Facility and related assets are in
good condition and repair, comply with and are being operated in compliance with
all applicable Legal Requirements and otherwise conform to the descriptions and
requirements set forth in Schedule 5.11.
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5.12 CONTINUED EMPLOYMENT. Purchaser shall have received satisfactory
evidence that, following the Closing, (a) Xxxxxx Xxxxxxx and Xxxxx Xxxxxxx
intend to continue their employment with ICMOSA and (b) at least 75% of the
ICMOSA employees listed in Part 2.19(a)(2) of the Disclosure Schedule intend to
continue their employment with ICMOSA.
5.13 SUPPLY AGREEMENT. There shall have been no material uncured breach
of any covenant or obligation of ICMOSA or FoodsSub under the Supply Agreement.
5.14 ADDITIONAL DOCUMENTS. Purchaser and ICMOSA shall have received the
following documents, each of which shall remain in full force and effect: (a) an
estoppel certificate or similar certificate, satisfactory in form and substance
to Purchaser, from each Person listed on Schedule 5.14; (b) a Release Agreement
in the form of EXHIBIT B-5 executed on behalf of Cardinal-UniMark Partners,
L.P.; and (c) such other documents as Purchaser may request in good faith for
the purpose of (i) evidencing the accuracy of any representation or warranty
made by UniMark, ICMOSA or FoodsSub, (ii) evidencing the compliance by UniMark,
ICMOSA, FoodsSub, Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxxxx
or Jakes Jordaan with, or the performance by UniMark, ICMOSA, FoodsSub, Xxxxxx
Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxxxx or Jakes Jordaan of, any
covenant or obligation set forth in any of the Transactional Agreements or the
Supply Agreement, (iii) evidencing the satisfaction of any condition set forth
in this Section 5 or (iv) otherwise facilitating the consummation or performance
of any of the Contemplated Transactions.
6. CONDITIONS PRECEDENT TO UNIMARK'S AND FOODSSUB'S OBLIGATIONS TO CLOSE. The
obligations of UniMark and FoodsSub to sell the ICMOSA Shares owned by UniMark
and to sell the Specified Assets to Purchaser, and to take the other actions
required to be taken by UniMark and FoodsSub at the Closing, are subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived, in whole or in part, by UniMark in accordance with
Section 10.15):
6.1 ACCURACY OF REPRESENTATIONS. All of the representations and
warranties made by Purchaser in Section 3 shall have been accurate in all
material respects as of the date of this Agreement and shall be accurate in all
material respects as of the Scheduled Closing Time as if made at the Scheduled
Closing Time, disregarding any inaccuracies in such representations and
warranties that would not materially interfere with Purchaser's ability to
perform its material obligations under this Agreement.
6.2 PERFORMANCE OF OBLIGATIONS. All of the material covenants and
obligations that Purchaser is required to comply with or to perform pursuant to
this Agreement at or prior to the Closing shall have been complied with and
performed in all material respects.
6.3 NO RESTRAINTS. No temporary restraining order, preliminary or
permanent injunction or other order preventing the sale by UniMark, Xxxxxx
Xxxxxxx and FoodsSub of the ICMOSA Shares and the Specified Assets shall have
been issued by any court of competent jurisdiction and remain in effect.
6.4 NO UNIMARK LIABILITY UNDER BANORTE GUARANTEE. UniMark shall have
received assurances from Banco Mercantil del Norte, S.A. ("BANORTE") that, upon
the
41
extinguishing of ICMOSA's indebtedness to Banorte at or immediately following
the Closing, UniMark will be released from all liability under UniMark's
guarantee of ICMOSA's indebtedness to Banorte.
7. TERMINATION.
7.1 RIGHT TO TERMINATE. This Agreement may be terminated prior to the
Closing:
(a) by mutual written consent of Purchaser and UniMark;
(b) by Purchaser at or at any time after the Scheduled Closing
Time, if any of the conditions set forth in Section 5 shall not have been
satisfied or waived;
(c) by either Purchaser or UniMark if the Closing shall not have
occurred by September 13, 2004; provided, however, that (i) a party shall not be
permitted to terminate this Agreement pursuant to this Section 7.1(c) if the
failure of the Closing to take place by September 13, 2004 is attributable to a
failure on the part of such party to perform any covenant or obligation in this
Agreement required to be performed by such party at or prior to the Closing and
(ii) UniMark shall not be permitted to terminate this Agreement pursuant to this
Section 7.1(c) unless UniMark shall have made all payments required to be made
to Purchaser pursuant to Section 7.3;
(d) by either Purchaser or UniMark if a court of competent
jurisdiction or other Governmental Body shall have issued a final and
nonappealable Order, or shall have taken any other action, having the effect of
permanently restraining, enjoining or otherwise prohibiting the Contemplated
Transactions; provided, however, that UniMark shall not be permitted to
terminate this Agreement pursuant to this Section 7.1(d) unless UniMark shall
have made all payments required to be made to Purchaser pursuant to Section 7.3;
(e) by Purchaser if Purchaser determines in good faith that it
would be impossible for a condition set forth in Section 5 to be satisfied by
September 13, 2004;
(f) by Purchaser if there shall have been any material breach of
the Supply Agreement by ICMOSA or FoodsSub;
(g) by Purchaser if a Material Adverse Effect shall have occurred
or an event shall have occurred or circumstance shall exist that, in combination
with any other events or circumstances, could reasonably be expected to have or
result in a Material Adverse Effect;
(h) by Purchaser if (i) any of the representations and warranties
set forth in Section 2 shall have been inaccurate as of the date of this
Agreement, or shall have become inaccurate as of a date subsequent to the date
of this Agreement (as if made on such subsequent date), such that the condition
set forth in Section 5.1 would not be satisfied (it being understood that, for
purposes of determining the accuracy of such representations and warranties as
of the date of this Agreement or as of any subsequent date, (A) all materiality
qualifications, and any similar qualifications, contained in such
representations and warranties shall be disregarded and (B) any update of or
modification to the Disclosure Schedule made or purported to have been made on
or after the date of this Agreement shall be disregarded) or (ii) any covenant
or
42
obligation of UniMark, ICMOSA, FoodsSub, Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxxx
Xxxxxxx, Xxxxx Xxxxxxx or Jakes Jordaan contained in this Agreement shall have
been breached such that the condition set forth in Section 5.2(b) would not be
satisfied; provided, however, that if a breach of a covenant or obligation by
UniMark, ICMOSA, FoodsSub, Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxxx Xxxxxxx, Xxxxx
Xxxxxxx or Jakes Jordaan is curable by the breaching party and the breaching
party is continuing to exercise commercially reasonable efforts to cure such
breach, then Purchaser may not terminate this Agreement under this Section
7.1(h) on account of such breach unless such breach shall remain uncured for a
period of 10 days commencing on the date that Purchaser gives the breaching
party notice of such breach; or
(i) by UniMark if (i) any of Purchaser's representations and
warranties set forth in this Agreement shall be inaccurate as of the date
of this Agreement, or shall have become inaccurate as of a date subsequent
to the date of this Agreement (as if made on such subsequent date) such
that the condition set forth in Section 6.1 would not be satisfied or (ii)
any of Purchaser's covenants or obligations contained in this Agreement
shall have been breached such that the condition set forth in Section 6.2
would not be satisfied; provided, however, that if a breach of a covenant
or obligation by Purchaser is curable by Purchaser and Purchaser is
continuing to exercise commercially reasonable efforts to cure such
breach, then UniMark may not terminate this Agreement under this Section
7.1(i) on account of such breach unless such breach shall remain uncured
for a period of 10 days commencing on the date that UniMark gives
Purchaser notice of such breach.
7.2 EFFECT OF TERMINATION. In the event of the termination of this
Agreement as provided in Section 7.1, this Agreement shall be of no further
force or effect; provided, however, that (a) this Section 7.2 and Sections 7.3
and 10 shall survive the termination of this Agreement and shall remain in full
force and effect and (b) the termination of this Agreement shall not relieve any
party from any liability for any inaccuracy in or breach of any representation,
warranty, covenant, obligation or other provision contained in this Agreement.
7.3 PAYMENTS TO PURCHASER.
(a) Except as set forth in this Section 7.3 and in Sections
1.3(a), 4.3(b) and 10.6, all fees and expenses incurred in connection with the
Transactional Agreements and the Contemplated Transactions shall be paid by the
party incurring such fees and expenses, whether or not the Closing occurs;
provided, however, that:
(i) if (A) this Agreement is terminated by Purchaser
pursuant to Section 7.1(f), Section 7.1(g) or Section 7.1(h) or (B) this
Agreement is terminated by UniMark, then (without limiting any obligation
of UniMark to make any payment required to be made to Purchaser pursuant
to clause "(ii)" below) UniMark shall make a nonrefundable cash payment to
Purchaser, no later than two business days after the termination of this
Agreement, in an amount equal to the aggregate amount of all
reimbursements and other payments previously made by Purchaser pursuant to
Section 4.3; and
(ii) if this Agreement is terminated pursuant to Section
7.1(f) or Section 7.1(h), then (without limiting any obligation of UniMark
to make any payment
43
required to be made to Purchaser pursuant to clause "(i)" above), UniMark
shall make a nonrefundable cash payment to Purchaser, no later than two
business days after the termination of this Agreement, in an amount equal
to the aggregate amount of all fees and expenses (including all attorneys'
fees, accountants' fees, financial advisory fees and filing fees) that
have been paid or that may become payable by or on behalf of Purchaser and
its affiliates in connection with the preparation and negotiation of the
Transactional Agreements and otherwise in connection with any of the
Contemplated Transactions.
(b) If UniMark fails to pay when due any amount payable under this
Section 7.3, then (i) UniMark shall reimburse Purchaser for all costs and
expenses (including fees and disbursements of counsel) incurred in connection
with the collection of such overdue amount and the enforcement by Purchaser of
its rights under this Section 7.3 and (ii) UniMark shall pay to Purchaser
interest on such overdue amount (for the period commencing as of the date such
overdue amount was originally required to be paid and ending on the date such
overdue amount is actually paid to Purchaser in full) at a rate per annum 350
basis points over the "prime rate" (as announced by Bank of America or any
successor thereto) in effect on the date such overdue amount was originally
required to be paid.
7.4 NONEXCLUSIVITY OF TERMINATION RIGHTS. The termination rights
provided in Section 7.1 shall not be deemed to be exclusive. Accordingly, the
exercise by any party of its right to terminate this Agreement pursuant to
Section 7.1 shall not be deemed to be an election of remedies and shall not be
deemed to prejudice, or to constitute or operate as a waiver of, any other right
or remedy that such party may be entitled to exercise (whether under this
Agreement, under any other Contract, under any statute, rule or other Legal
Requirement, at common law, in equity or otherwise).
8. INDEMNIFICATION, ETC.
8.1 SURVIVAL OF REPRESENTATIONS AND COVENANTS.
(a) Except as set forth in Section 8.1(b), the representations,
warranties, covenants and obligations of each party to this Agreement shall
survive (without limitation): (i) the Closing and the sale of the Specified
Assets, and the ICMOSA Shares owned by UniMark, to Purchaser; (ii) any
subsequent sale or other disposition of any or all of the Specified Assets or
ICMOSA Shares by Purchaser; and (iii) the death, dissolution, winding-up or
liquidation of any party to this Agreement. The representations, warranties,
covenants and obligations of UniMark, ICMOSA and FoodsSub, and the rights and
remedies that may be exercised by the Indemnitees, shall not be limited or
otherwise affected by or as a result of any information furnished to, or any
investigation made by or any knowledge of, any of the Indemnitees or any of
their Representatives.
(b) The representations and warranties set forth in Sections 2 and
3 shall expire 65 days after the Closing Date; provided, however, that
(i) if a Claim Notice (as defined below) relating to any
representation or warranty set forth in Section 2 is given to UniMark on
or prior to the date 65 days after the Closing Date, then, notwithstanding
anything to the contrary contained in this Section
44
8.1, such representation or warranty shall not expire, but rather shall
remain in full force and effect until such time as each and every claim
(including any indemnification claim asserted by any Indemnitee under
Section 8.2) that is based directly or indirectly upon, or that relates
directly or indirectly to, any inaccuracy or alleged inaccuracy in such
representation or warranty has been fully and finally resolved, either by
means of a written settlement agreement executed on behalf of UniMark and
Purchaser or by means of a final, nonappealable judgment issued by a court
of competent jurisdiction, and
(ii) if, on or prior to the Closing Date, Xxxxx Xxxxxxx or
Jakes Jordaan has actual knowledge of any circumstance that constitutes or
that has given rise or could be expected to give rise, directly or
indirectly, to any inaccuracy in any representation or warranty set forth
in Section 2, then such representation or warranty shall not expire, but
rather shall remain in full force and effect for an unlimited period of
time (regardless of whether any Claim Notice relating to such
representation or warranty is ever given).
For purposes of this Agreement, a "CLAIM NOTICE" relating to a particular
representation or warranty shall be deemed to have been given if any Indemnitee,
acting in good faith, delivers to UniMark a written notice stating that such
Indemnitee believes that there is or has been an inaccuracy in such
representation or warranty and containing (1) a brief description of the
specific facts supporting such Indemnitee's good faith belief that there is or
has been such an inaccuracy and (2) a non-binding, preliminary estimate of the
aggregate dollar amount of the Damages that have arisen and may arise as a
direct or indirect result of such inaccuracy.
(c) For purposes of this Agreement, each statement or other item of
information set forth in the Disclosure Schedule or in any update to the
Disclosure Schedule shall be deemed to be a representation and warranty made
jointly and severally by UniMark, ICMOSA and FoodsSub in this Agreement.
8.2 INDEMNIFICATION BY UNIMARK AND FOODSSUB.
(a) UniMark and FoodsSub, jointly and severally, shall hold
harmless and indemnify each of the Indemnitees from and against, and shall
compensate and reimburse each of the Indemnitees for, any Damages that are
directly or indirectly suffered or incurred by any of the Indemnitees or to
which any of the Indemnitees may otherwise become subject at any time
(regardless of whether or not such Damages relate to any third-party claim) and
that arise directly or indirectly from or as a direct or indirect result of, or
are directly or indirectly connected with:
(i) any inaccuracy in any representation or warranty made by
UniMark, ICMOSA or FoodsSub in this Agreement as of the date of this
Agreement (without giving effect to any qualification as to materiality or
any similar qualification contained in such representation or warranty,
and without giving effect to any update to the Disclosure Schedule);
(ii) any inaccuracy in any representation or warranty made by
UniMark, ICMOSA or FoodsSub in this Agreement as if such representation
and warranty had been made on and as of the Closing Date (without giving
effect to any
45
qualification as to materiality or any similar qualification contained in
such representation or warranty, and without giving effect to any update
to the Disclosure Schedule);
(iii) any inaccuracy in any representation, warranty,
statement, information or provision contained or incorporated in the
Disclosure Schedule, in the Closing Certificate or in any other document
delivered or otherwise made available to Purchaser or any of its
Representatives by or on behalf of UniMark, ICMOSA or FoodsSub or any
Representative of UniMark, ICMOSA or FoodsSub;
(iv) any breach of any covenant or obligation of UniMark,
ICMOSA or FoodsSub contained in any of the Transactional Agreements;
(v) any Liability of UniMark or FoodsSub, or any failure on
the part of UniMark or FoodsSub to perform or discharge any of its
Liabilities;
(vi) any Liability to which Purchaser or any of the other
Indemnitees may become subject and that arises directly or indirectly from
or relates directly or indirectly to (A) any Taxes payable in connection
with any of the Contemplated Transactions or (B) any Contract that
provides for indemnification of any ICMOSA Associate;
(vii) any Legal Proceeding relating directly or indirectly to
any actual or alleged inaccuracy, breach, Liability or matter of the type
referred to in clause "(i)," "(ii)," "(iii)," "(iv)," "(v)" or "(vi)"
above (including any Legal Proceeding commenced by any Indemnitee for the
purpose of enforcing any of its rights under this Section 8).
(b) Subject to Section 10.2, neither UniMark nor FoodsSub shall be
required to make any indemnification payment pursuant to Sections 8.2(a)(i),
8.2(a)(ii) and 8.2(a)(iii) until such time as the total amount of all Damages
(including the Damages arising from all inaccuracies in the representations and
warranties of UniMark, ICMOSA and FoodsSub) that have been directly or
indirectly suffered or incurred by any one or more of the Indemnitees, or to
which any one or more of the Indemnitees has or have otherwise become subject,
exceeds U.S.$150,000. (If the total amount of such Damages exceeds U.S.$150,000,
then the Indemnitees shall be entitled to be indemnified against and compensated
and reimbursed for the entire amount of such Damages, and not merely the portion
of such Damages exceeding U.S.$150,000.)
8.3 SETOFF.
(a) Without limiting the generality of anything contained in
Section 10.4, and in addition to any rights of setoff or other rights that
Purchaser or any of the other Indemnitees may have at common law or otherwise,
Purchaser shall have the right to withhold and deduct any sum that may be owed
to any Indemnitee under this Section 8 from any amount otherwise payable (under
Section 1.1(b), under Section 1.2(b) or otherwise) by any Indemnitee to UniMark
or any affiliate of UniMark. The withholding and deduction of any such sum shall
operate for all purposes as a complete discharge (to the extent of such sum) of
the obligation to pay the amount from which such sum was withheld and deducted.
46
(b) If (i) Purchaser withholds and deducts any sum from the amount
payable to FoodsSub under Section 1.2(b) and (ii) within 15 days after the
withholding and deduction of such sum, UniMark disputes the withholding and
deduction of such sum by initiating a binding arbitration proceeding in
accordance with Section 10.12(b), then Purchaser shall cause such sum to remain
in the Segregated Account until such dispute is resolved in accordance with
Section 10.12(b).
8.4 NONEXCLUSIVITY OF INDEMNIFICATION REMEDIES. The indemnification
remedies and other remedies provided in this Section 8 shall not be deemed to be
exclusive. Accordingly, the exercise by any Person of any of its rights under
this Section 8 shall not be deemed to be an election of remedies and shall not
be deemed to prejudice, or to constitute or operate as a waiver of, any other
right or remedy that such Person may be entitled to exercise (whether under this
Agreement, under any other Contract, under any statute, rule or other Legal
Requirement, at common law, in equity or otherwise).
8.5 DEFENSE OF THIRD PARTY CLAIMS. In the event of the assertion or
commencement by any Person of any claim or Legal Proceeding (whether against
Purchaser, against any other Indemnitee or against any other Person) with
respect to which UniMark or FoodsSub may become obligated to indemnify, hold
harmless, compensate or reimburse any Indemnitee pursuant to this Section 8: (a)
Purchaser shall have the right to control the defense of such claim or Legal
Proceeding; (b) all expenses relating to the defense of such claim or Legal
Proceeding (whether or not incurred by Purchaser) shall be borne and paid
exclusively by UniMark and FoodsSub; (c) UniMark and FoodsSub shall make
available to Purchaser any documents and materials in the possession or control
of either of UniMark or FoodsSub that may be necessary to the defense of such
claim or Legal Proceeding; and (d) Purchaser shall have the right to settle,
adjust or compromise such claim or Legal Proceeding with the consent of UniMark,
which shall not be unreasonably withheld or delayed.
8.6 EXERCISE OF REMEDIES BY INDEMNITEES OTHER THAN PURCHASER. No
Indemnitee (other than Purchaser or any successor thereto or assign thereof)
shall be permitted to assert any indemnification claim or exercise any other
remedy under this Agreement unless Purchaser (or any successor thereto or assign
thereof) shall have consented to the assertion of such indemnification claim or
the exercise of such other remedy.
9. CERTAIN POST-CLOSING COVENANTS.
9.1 NO DISSOLUTION BY UNIMARK. UniMark shall not be entitled to commence
or effect any dissolution, winding-up or liquidation of any nature, and shall
not be entitled to authorize or make any liquidating or other distribution to
any of its shareholders, until the later of (a) 65 days after the Closing Date
or (b) the date as of which all obligations of UniMark under the Transactional
Agreements have been fully performed and discharged and any disputes relating
thereto have been settled or otherwise fully resolved.
9.2 TRANSITION SERVICES. During the 30-day period commencing on the
Closing Date, FoodsSub and UniMark shall provide to Purchaser, without charge,
the services described on Schedule 9.2.
47
9.3 PREPARATION OF CLOSING BALANCE SHEET; PAYMENTS BY UNIMARK.
(a) Following the Closing, Purchaser shall cause to be prepared a
U.S. dollar-denominated balance sheet of ICMOSA as of the time immediately
following the Closing, but before giving effect to (i) the extinguishment of
ICMOSA's indebtedness to the Mexican Banks, (ii) the purchase by ICMOSA of the
IHMSA Facility, (iii) the cancellation of the accounts receivable of ICMOSA
described in Section 1.4(b)(xvi) and (iv) the cancellation of the accounts
receivable of FoodsSub and UniMark described in Section 1.4(b)(xvii) (the
"CLOSING BALANCE SHEET"). Subject to Section 10.2(d), if UniMark so requests in
writing within ten days after the Closing, Purchaser shall arrange to have the
Closing Balance Sheet audited by an independent accounting firm selected by
Purchaser. On or before the date 65 days after the Closing Date, Purchaser shall
cause to be delivered to UniMark a copy of the Closing Balance Sheet.
(b) If the Adjusted Liability Amount (as defined below) exceeds
U.S.$3,600,000, then, within one business day following the delivery of a copy
of the Closing Balance Sheet to UniMark, UniMark shall pay to Purchaser, in
immediately available funds (and in addition to any amount payable by UniMark to
Purchaser pursuant to Section 9.3(c)), the amount by which the Adjusted
Liability Amount exceeds U.S.$3,600,000. For purposes of this Section 9.3,
"ADJUSTED LIABILITY AMOUNT" shall mean the aggregate dollar amount of ICMOSA's
liabilities as reflected on the Closing Balance Sheet, minus the sum of the
dollar amounts of the following liabilities of ICMOSA as determined by Purchaser
based on the information used to prepare the Closing Balance Sheet: (i) ICMOSA's
liability to the Mexican Banks; (ii) ICMOSA's accounts payable to UniMark and
FoodsSub; (iii) ICMOSA's liability to IHMSA for any unpaid rent due with respect
to the IHMSA Facility; and (iv) ICMOSA's liability for deferred taxes.
(c) If the Intercompany Receivable Amount (as defined below)
exceeds the Intercompany Payable Amount (as defined below) by more than
U.S.$200,000, then, within one business day following the delivery of a copy of
the Closing Balance Sheet to UniMark, UniMark shall pay to Purchaser, in
immediately available funds (and in addition to any amount payable by UniMark to
Purchaser pursuant to Section 9.3(b)), the amount by which the Intercompany
Receivable Amount exceeds the sum of the Intercompany Payable Amount plus
U.S.$200,000. For purposes of this Section 9.3, (i) "INTERCOMPANY RECEIVABLE
AMOUNT" shall mean the sum of all amounts owed by UniMark to ICMOSA and all
amounts owed by FoodsSub to ICMOSA, in each case immediately prior to the
Closing and before giving effect to the cancellation of the accounts receivable
of ICMOSA described in Section 1.4(b)(xvi), as determined by Purchaser based on
the information used to prepare the Closing Balance Sheet and (ii) "INTERCOMPANY
PAYABLE AMOUNT" shall mean the aggregate dollar amount of all accounts payable
of ICMOSA to UniMark and FoodsSub immediately prior to the Closing, as
determined by Purchaser based on the information used to prepare the Closing
Balance Sheet.
(d) Notwithstanding anything to the contrary contained in this
Section 9.3, if the Adjusted Liability Amount is less than U.S.$3,600,000, or if
Purchaser elects to waive its right to require payment from UniMark under this
Section 9.3, then Purchaser shall not be required to deliver a copy of the
Closing Balance Sheet to UniMark and shall not be required to arrange to have
the Closing Balance Sheet audited. Without limiting the generality of anything
contained in Section 10.4, in addition to any rights of setoff or other rights
that Purchaser may
48
have at common law or otherwise, Purchaser shall have the right to withhold and
deduct any sum that may be owed to Purchaser under this Section 9.3 from any
amount otherwise payable (under Section 1.1(b), under Section 1.2(b) or
otherwise) by Purchaser to UniMark or any affiliate of UniMark. The withholding
and deduction of any such sum shall operate for all purposes as a complete
discharge (to the extent of such sum) of the obligation to pay the amount from
which such sum was withheld and deducted.
9.4 CONFIDENTIALITY. UniMark and FoodsSub shall ensure that, prior to,
on and at all times after the Closing Date: (a) no press release or other
publicity concerning any of the Contemplated Transactions is issued or otherwise
disseminated by or on behalf of UniMark or FoodsSub without Purchaser's prior
review and written consent; and (b) UniMark, FoodsSub and their Representatives
keep strictly confidential, and neither UniMark nor FoodsSub, nor any
Representative of UniMark or FoodsSub, uses or discloses to any other Person,
any non-public document or other information (including any information obtained
by UniMark pursuant to Section 9.6) that relates directly or indirectly to any
of the Specified Assets or to the business of ICMOSA, Purchaser or any affiliate
of Purchaser.
9.5 FURTHER ACTIONS. From and after the Closing Date, UniMark, ICMOSA,
FoodsSub, Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxxxx and
Jakes Jordaan shall cooperate with Purchaser and Purchaser's affiliates and
Representatives, and shall execute and deliver such documents and take such
other actions as Purchaser may reasonably request, for the purpose of evidencing
the Contemplated Transactions, putting Purchaser and the Designated Affiliate in
possession and control of the ICMOSA Shares and putting Purchaser in control of
the Specified Assets. Without limiting the generality of the foregoing, from and
after the Closing Date, UniMark and FoodsSub shall promptly remit to Purchaser
any funds that are received by UniMark or FoodsSub and that are included in, or
that represent payment of receivables included in, the Specified Assets or any
of the assets of ICMOSA. UniMark, FoodsSub, Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxxx,
Xxxxx Xxxxxxx, Xxxxx Xxxxxxx and Jakes Jordaan: (a) hereby irrevocably authorize
Purchaser, at all times on and after the Closing Date, to endorse in the name of
UniMark or FoodsSub any check or other instrument that is made payable to
UniMark or FoodsSub and that represents funds included in, or that represents
the payment of any receivable included in, the Specified Assets or any of the
assets of ICMOSA; and (b) hereby irrevocably nominate, constitute and appoint
Purchaser as the true and lawful attorney-in-fact of UniMark and FoodsSub (with
full power of substitution) effective as of the Closing Date, and hereby
authorizes Purchaser, in the name of and on behalf of UniMark and FoodsSub, to
execute, deliver, acknowledge, certify, file and record any document, to
institute and prosecute any Legal Proceeding and to take any other action (on or
at any time after the Closing Date) that Purchaser may deem appropriate for the
purpose of (i) collecting, asserting, enforcing or perfecting any claim, right
or interest of any kind that is included in or relates to any of the Specified
Assets or the ICMOSA Shares or any of the assets of ICMOSA, (ii) defending or
compromising any claim or Legal Proceeding relating to any of the Specified
Assets or the ICMOSA Shares or any of the assets of ICMOSA or (iii) otherwise
carrying out or facilitating any of the Contemplated Transactions. The power of
attorney referred to in the preceding sentence is and shall be coupled with an
interest and shall be irrevocable, and shall survive the dissolution,
winding-up, liquidation or insolvency of UniMark or FoodsSub and the death or
insolvency of any of Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxxx Xxxxxxx, Xxxxx
Xxxxxxx and Jakes Jordaan.
49
9.6 ACCESS. Subject to Section 9.4(b), during the 180-day period
commencing on the Closing Date, ICMOSA shall provide an accounting
representative of UniMark satisfactory to Purchaser with reasonable access, upon
reasonable advance notice and during normal business hours, to the accounting
records of ICMOSA for the purpose of enabling UniMark to prepare its
consolidated financial statements as of and for the quarter ended September 30,
2004. In exercising the access rights provided to UniMark, UniMark shall not
interfere in any material respect with the conduct by ICMOSA of its business,
and all expenses incurred in connection with the exercise of the access rights
provided to UniMark shall be borne and paid exclusively by UniMark.
10. MISCELLANEOUS PROVISIONS.
10.1 LIMITATION ON LIABILITY. Notwithstanding anything to the contrary
contained in this Agreement, except as provided in Section 10.2, the liability
of UniMark, ICMOSA and FoodsSub to Purchaser under this Agreement (whether under
the terms of this Agreement, at common law, in equity or otherwise) shall be
limited to the actual amount of the aggregate purchase price received by UniMark
and FoodsSub from Purchaser pursuant to Sections 1.1(b) and 1.2(b) (plus all
interest payable to FoodsSub pursuant to the final sentence of Section 1.2(c)).
For purposes of the preceding sentence, any amount withheld or deducted (by way
of setoff) by Purchaser under this Agreement shall be deemed received (and, for
purposes of clarification, any such amount so withheld or deducted (by way of
setoff) by Purchaser under this Agreement shall be counted in determining
whether the liability cap referred to in the preceding sentence has been
reached).
10.2 INAPPLICABILITY OF SECTIONS 8.2(b) AND 10.1. Notwithstanding
anything to the contrary contained in this Agreement, the limitations set forth
in Sections 8.2(b) and 10.1 shall not apply to indemnification obligations,
liabilities or claims arising out of or relating to: (a) any inaccuracy in any
representation or warranty made by UniMark, ICMOSA or FoodsSub of which Xxxxx
Xxxxxxx or Jakes Jordaan had actual knowledge on or prior to the Closing Date;
(b) any breach of any covenant or obligation by UniMark, ICMOSA or FoodsSub of
which Xxxxx Xxxxxxx or Jakes Jordaan had actual knowledge on or prior to the
Closing Date; (c) any breach of any covenant or obligation of UniMark or
FoodsSub set forth in Section 9; or (d) any Liability of UniMark or FoodsSub or
any failure on the part of UniMark or FoodsSub to perform or discharge any of
its Liabilities (other than any Liabilities to Purchaser under this Agreement
arising from any inaccuracy in any representation or warranty made by UniMark,
ICMOSA or FoodsSub or any breach of any covenant by UniMark, ICMOSA or FoodsSub,
which are addressed above).
50
10.3 JOINT AND SEVERAL LIABILITY OF UNIMARK, ICMOSA AND FOODSSUB:
(a) Subject to Section 10.3(b), UniMark, ICMOSA and FoodsSub jointly
and severally agree that they shall be jointly and severally liable for the due
and timely compliance with and performance of each of their covenants and
obligations set forth in this Agreement; provided, however, that from and after
the Closing Date, ICMOSA shall cease to be jointly and severally or otherwise
liable for the compliance with or performance of any covenant or obligation of
UniMark or FoodsSub.
(b) Each of UniMark and FoodsSub waives, and acknowledges and agrees
that it shall not have and shall not exercise or assert or attempt to exercise
or assert, any right of contribution or right of indemnity or any other right or
remedy against ICMOSA in connection with any indemnification obligation or any
other Liability to which UniMark or FoodsSub may become subject under any of the
Transactional Agreements or otherwise in connection with any of the Contemplated
Transactions.
10.4 SETOFF.
(a) In addition to any rights of setoff or other rights that
Purchaser may have at common law or otherwise, and subject to Section 8.3(b),
Purchaser shall have the right to withhold and deduct any sum that may be owed
to Purchaser (under Section 8.2(a), under Section 9.3 or otherwise) from any
amount otherwise payable (under Section 1.1(b), under Section 1.2(b) or
otherwise) by Purchaser or any affiliate of Purchaser to UniMark or any
affiliate of UniMark. The withholding and deduction of any such sum shall
operate for all purposes as a complete discharge (to the extent of such sum) of
the obligation to pay the amount from which such sum was withheld and deducted.
(b) Purchaser shall be entitled to deduct and withhold from any
amount payable by Purchaser pursuant to any of the Transactional Agreements such
amounts as may be required to be deducted or withheld therefrom under any
provision of any state, local or foreign Tax law or under any other applicable
Legal Requirement. To the extent such amounts are so deducted or withheld, such
amounts shall be treated for all purposes under this Agreement as having been
paid to the Person to whom such amounts would otherwise have been paid.
10.5 FURTHER ASSURANCES. Each of UniMark, ICMOSA and FoodsSub shall
execute and cause to be delivered to Purchaser such instruments and other
documents, and shall take such other actions, as Purchaser may reasonably
request (prior to, at or after the Closing) for the purpose of carrying out or
evidencing any of the Contemplated Transactions.
10.6 FEES AND EXPENSES. Except as set forth in Section 7.3, UniMark and
FoodsSub shall bear and pay all fees, costs and expenses (including all legal
fees and expenses payable to counsel for ICMOSA and all audit and accounting
fees payable to ICMOSA's outside accountants) that have been incurred or that
are in the future incurred by, on behalf of or for the benefit of UniMark,
ICMOSA or FoodsSub in connection with: (i) the negotiation, preparation and
review of any term sheet or similar document relating to any of the Contemplated
Transactions; (ii) the investigation and review conducted by Purchaser and its
51
Representatives with respect to ICMOSA's business (and the furnishing of
information to Purchaser and its Representatives in connection with such
investigation and review); (iii) the negotiation, preparation and review of this
Agreement (including the Disclosure Schedule), the other Transactional
Agreements and all certificates, opinions and other instruments and documents
delivered or to be delivered in connection with any of the Contemplated
Transactions; (iv) the preparation and submission of any filing or notice
required to be made or given in connection with any of the Contemplated
Transactions, and the obtaining of any Consent required to be obtained in
connection with any of the Contemplated Transactions; and (v) the consummation
and performance of the Contemplated Transactions;. Under no circumstances shall
ICMOSA be permitted to bear or pay any such fees, costs and expenses.
Notwithstanding anything to the contrary contained in this Section 10.6, UniMark
shall not be required to bear and pay any fees for accounting services that are
rendered after the Closing by Xxxxxxx Xxxxx & Young at the request of Purchaser.
10.7 ATTORNEYS' FEES. If any legal action relating to any of the
Transactional Agreements or the enforcement of any provision of any of the
Transactional Agreements is brought against any party hereto, the prevailing
party shall be entitled to recover reasonable attorneys' fees, costs and
disbursements (in addition to any other relief to which the prevailing party may
be entitled).
10.8 NOTICES. Any notice or other communication required or permitted to
be delivered to any party under this Agreement shall be in writing and shall be
deemed properly delivered, given and received when delivered (by hand, by
registered mail, by courier or express delivery service or by facsimile) to the
address or facsimile number set forth beneath the name of such party below (or
to such other address or facsimile number as such party shall have specified in
a written notice given to the other parties hereto):
if to UniMark:
The UniMark Group, Inc.
UniMark House
000 XxXxxxx Xxxx
Xxxxxxxxxxx, Xxxxx 00000
Attention: Jakes Jordaan
Facsimile: (000) 000-0000
if to FoodsSub:
UniMark Foods, Inc.
c/o The UniMark Group, Inc.
UniMark House
000 XxXxxxx Xxxx
Xxxxxxxxxxx, Xxxxx 00000
Attention: Jakes Jordaan
Facsimile: (000) 000-0000
if to ICMOSA before the Closing:
Industrias Citricolas de Montemorelos, S.A. de C.V.
52
c/o The UniMark Group, Inc.
UniMark House
000 XxXxxxx Xxxx
Xxxxxxxxxxx, Xxxxx 00000
Attention: Jakes Jordaan
Facsimile: (000) 000-0000
if to ICMOSA after the Closing:
Industrias Citricolas de Montemorelos, S.A. de C.V.
c/o Del Monte Corporation
One Market @ The Landmark
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx, General Counsel
Xxxxxx Xxxxx, Associate General Counsel
Facsimile: (000) 000-0000
if to Xxxxxx Xxxxxxx:
x/x Xxxxxxxxxx Xxxxxxxxxx xx Xxxxxxxxxxxx, X.X. de X.X.
Xxxx. Gral. Xxxxx km1 XXXX. 00
Xxxxxxxxxxxx, X.X. MEXICO C.P. 67500
if to Xxxxxxx Xxxxxxx:
x/x Xxxxxxxxxx Xxxxxxxxxx xx Xxxxxxxxxxxx, X.X. de X.X.
Xxxx. Gral. Xxxxx km1 XXXX. 00
Xxxxxxxxxxxx, X.X. MEXICO C.P. 67500
if to Xxxxx Xxxxxxx:
x/x Xxxxxxxxxx Xxxxxxxxxx xx Xxxxxxxxxxxx, X.X. de X.X.
Xxxx. Gral. Xxxxx km1 XXXX. 00
Xxxxxxxxxxxx, X.X. MEXICO C.P. 67500
if to Xxxxx Xxxxxxx:
c/o The UniMark Group, Inc.
UniMark House
000 XxXxxxx Xxxx
Xxxxxxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
if to Jakes Jordaan:
c/o The UniMark Group, Inc.
UniMark House
000 XxXxxxx Xxxx
00
Xxxxxxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
if to Purchaser:
Del Monte Corporation
One Market @ The Landmark
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx, General Counsel
Xxxxxx Xxxxx, Associate General Counsel
Facsimile: (000) 000-0000
10.9 TIME OF THE ESSENCE. Time is of the essence of this Agreement.
10.10 HEADINGS. The bold-faced headings contained in this Agreement are
for convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the construction or
interpretation of this Agreement.
10.11 COUNTERPARTS; EXCHANGES BY FACSIMILE. This Agreement may be executed
in several counterparts, each of which shall constitute an original and all of
which, when taken together, shall constitute one agreement. The exchange of a
fully executed Agreement (in counterparts or otherwise) by facsimile shall be
sufficient to bind the parties to the terms and conditions of this Agreement.
10.12 GOVERNING LAW; VENUE.
(a) This Agreement shall be construed in accordance with, and
governed in all respects by, the internal laws of the State of Delaware (without
giving effect to principles of conflicts of laws).
(b) Any controversy, dispute or claim arising out of, or relating
to, this Agreement or the breach or alleged breach hereof, or affecting this
Agreement in any way, shall be adjudicated by binding arbitration administered
by the American Arbitration Association ("AAA") in accordance with its
International Arbitration Rules then in effect (the "IAR"). Any such arbitration
shall be conducted in Delaware by one arbitrator to be mutually selected by
Purchaser and UniMark in accordance with the IAR, and the language of the
arbitration shall be English. If Purchaser and UniMark fail to mutually select
an arbitrator within 15 business days after any such controversy, dispute or
claim is submitted to arbitration, then the arbitrator shall be selected by AAA
in accordance with the IAR. The parties will participate in the arbitration in
good faith and will share equally in its costs. Each party will bear its own
attorneys' fees relating to the arbitration unless the arbitrator decides
otherwise. By further agreement of the parties or direction of the arbitrator,
proceedings that, in the judgment of the arbitrator, are not dependent on the
credibility of a testifying witness may be held other than in person, such as
via telephone conference. The parties agree to use commercially reasonable
efforts to cause the arbitration hearing to be conducted within 120 days after
the appointment of the arbitrator, and to use commercially reasonable efforts to
cause the decision of the arbitrator to be furnished within 15 days after the
conclusion of the arbitration hearing. The final decision of the arbitrator
shall be furnished to the parties to this Agreement in writing and shall
constitute a conclusive
54
determination of the issues in question, binding upon the parties. If judicial
enforcement or review of such arbitrator's award is sought by any party,
judgment may be entered upon such award in any court of competent jurisdiction.
The provisions of this section may be enforced by any court of competent
jurisdiction, and the party seeking enforcement shall be entitled to an award of
all costs, fees and expenses, including attorneys' fees, relating to the
enforcement proceedings to be paid by the party against whom enforcement is
ordered.
(c) Each party to this Agreement agrees that the provisions of this
Section 10.12 shall not apply to resolution of any controversy, dispute or claim
arising out of, or relating to, any Transactional Agreement other than this
Agreement.
10.13 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon:
UniMark, ICMOSA, FoodsSub and their successors and assigns (if any); Xxxxxx
Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxxxx and Jakes Jordaan and
their respective heirs, estates, personal representatives, successors and
assigns (if any); and Purchaser and its successors and assigns (if any). This
Agreement shall inure to the benefit of: ICMOSA, UniMark and FoodsSub;
Purchaser; the other Indemnitees (subject to Section 8.6); and the respective
successors and assigns (if any) of the foregoing. None of ICMOSA (at any time
prior to the Closing), UniMark or FoodsSub may assign or delegate any of its
rights or obligations under this Agreement, in whole or in part, to any other
Person, and any attempted assignment or delegation of any of such rights or
obligations shall be void and of no force or effect. Purchaser may freely assign
any or all of its rights under this Agreement (including its indemnification
rights under Section 8), in whole or in part, to any other Person without
obtaining the consent or approval of any other party hereto or of any other
Person.
10.14 REMEDIES CUMULATIVE; SPECIFIC PERFORMANCE. The rights and remedies
of the parties hereto shall be cumulative (and not alternative). Each of
UniMark, ICMOSA and FoodsSub agrees that: (a) in the event of any breach or
threatened breach by UniMark, ICMOSA or FoodsSub of any covenant, obligation or
other provision set forth in this Agreement, Purchaser shall be entitled (in
addition to any other remedy that may be available to it) to (i) a decree or
order of specific performance or mandamus to enforce the observance and
performance of such covenant, obligation or other provision and (ii) an
injunction restraining such breach or threatened breach; and (b) neither
Purchaser nor any other Indemnitee shall be required to provide any bond or
other security in connection with any such decree, order or injunction or in
connection with any related action or Legal Proceeding.
10.15 WAIVER.
(a) No failure on the part of any Person to exercise any power,
right, privilege or remedy under this Agreement, and no delay on the part of any
Person in exercising any power, right, privilege or remedy under this Agreement,
shall operate as a waiver of such power, right, privilege or remedy; and no
single or partial exercise of any such power, right, privilege or remedy shall
preclude any other or further exercise thereof or of any other power, right,
privilege or remedy.
(b) No Person shall be deemed to have waived any claim arising out
of this Agreement, or any power, right, privilege or remedy under this
Agreement, unless the waiver of
55
such claim, power, right, privilege or remedy is expressly set forth in a
written instrument duly executed and delivered on behalf of such Person; and any
such waiver shall not be applicable or have any effect except in the specific
instance in which it is given.
10.16 AMENDMENTS. This Agreement may not be amended, modified, altered or
supplemented other than by means of a written instrument duly executed and
delivered on behalf of Purchaser and UniMark.
10.17 SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions of this
Agreement or the validity or enforceability of the offending term or provision
in any other situation or in any other jurisdiction. If a final judgment of a
court of competent jurisdiction declares that any term or provision of this
Agreement is invalid or unenforceable, the parties hereto agree (a) that the
court making such determination shall have the power to limit such term or
provision, to delete specific words or phrases from such term or provision or to
replace such term or provision with a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision and (b) that this Agreement shall be enforceable
as so modified. In the event such court does not exercise the power granted to
it in the prior sentence, the parties hereto agree to replace such invalid or
unenforceable term or provision with a valid and enforceable term or provision
that will achieve, to the extent possible, the economic, business and other
purposes of such invalid or unenforceable term.
10.18 PARTIES IN INTEREST. Except for the provisions of Section 8, none of
the provisions of this Agreement is intended to provide any rights or remedies
to any Person other than the parties hereto and their respective successors and
assigns (if any).
10.19 ENTIRE AGREEMENT. The Transactional Agreements set forth the entire
understanding of the parties relating to the subject matter thereof and
supersede all prior agreements and understandings among or between any of the
parties relating to the subject matter thereof.
10.20 CONSTRUCTION.
(a) For purposes of this Agreement, whenever the context requires:
the singular number shall include the plural, and vice versa; the masculine
gender shall include the feminine and neuter genders; the feminine gender shall
include the masculine and neuter genders; and the neuter gender shall include
the masculine and feminine genders.
(b) The parties hereto agree that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
be applied in the construction or interpretation of this Agreement.
(c) As used in this Agreement, the words "include" and "including,"
and variations thereof, shall not be deemed to be terms of limitation, but
rather shall be deemed to be followed by the words "without limitation."
56
(d) Except as otherwise indicated, all references in this Agreement
to "Sections," "Exhibits" and "Schedules" are intended to refer to Sections of
this Agreement and Exhibits and Schedules to this Agreement.
[SIGNATURE PAGE FOLLOWS]
57
The parties hereto have caused this Agreement to be executed and delivered
as of August 30, 2004.
THE UNIMARK GROUP, INC.,
a Texas corporation
By: /s/ Jakes Jordaan
----------------------------------------
UNIMARK FOODS, INC.,
a Texas corporation
By: /s/ Jakes Jordaan
----------------------------------------
INDUSTRIAS CITRICOLAS DE
MONTEMORELOS, S.A. DE C.V.,
a corporation organized under the laws of
the United Mexican States
By: /s/ Xxxxxx Xxxxxxx
----------------------------------------
/s/ Xxxxxx Xxxxxxx
-------------------------------------------
XXXXXX XXXXXXX
/s/ Xxxxxxx Xxxxxxx
-------------------------------------------
XXXXXXX XXXXXXX
/s/ Xxxxx Xxxxxxx
-------------------------------------------
XXXXX XXXXXXX
/s/ Xxxxx Xxxxxxx
-------------------------------------------
XXXXX XXXXXXX
/s/ Jakes Jordaan
-------------------------------------------
JAKES JORDAAN
DEL MONTE CORPORATION,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------
[SIGNATURE PAGE TO PURCHASE AGREEMENT]
EXHIBIT A
CERTAIN DEFINITIONS
For purposes of the Agreement (including this Exhibit A):
ACQUISITION INQUIRY. "Acquisition Inquiry" shall mean any inquiry,
indication of interest or request for information (other than an inquiry,
indication of interest or request for information made or submitted by
Purchaser) that could reasonably be expected to lead to an Acquisition Proposal.
ACQUISITION PROPOSAL. "Acquisition Proposal" shall mean any offer or
proposal (other than an offer or proposal made or submitted by Purchaser)
contemplating or otherwise relating to any Acquisition Transaction.
ACQUISITION TRANSACTION. "Acquisition Transaction" shall mean any
transaction or series of transactions involving, directly or indirectly: (a) any
merger, consolidation, amalgamation, share exchange, business combination,
issuance of securities, acquisition of securities, reorganization,
recapitalization, tender offer, exchange offer or other similar transaction (i)
in which ICMOSA or FoodsSub is a constituent corporation, (ii) in which a Person
or "group" (as defined in the Exchange Act and the rules promulgated thereunder)
of Persons directly or indirectly acquires beneficial or record ownership of
securities representing more than 5% of the outstanding securities of any class
of voting securities of ICMOSA or FoodsSub or (iii) in which ICMOSA or FoodsSub
issues securities representing more than 5% of the outstanding securities of any
class of its voting securities; or (b) any sale, lease, exchange, transfer,
license, acquisition or disposition of any business or businesses or assets that
constitute or account for 5% or more of the consolidated net revenues, net
income or assets of ICMOSA or FoodsSub. Without limiting the generality of the
foregoing, any transaction or series of transactions resulting in or involving a
change in control of UniMark will be deemed to be an "Acquisition Transaction,"
unless such transaction expressly includes and contemplates, and is in no way
inconsistent with, the sale of the ICMOSA Shares owned by UniMark and the
Specified Assets to Purchaser in accordance with the Agreement.
CONSENT. "Consent" shall mean any approval, consent, ratification,
permission, waiver or authorization (including any Governmental Authorization).
CONTEMPLATED TRANSACTIONS. "Contemplated Transactions" shall mean (a) the
execution, delivery and performance of the respective Transactional Agreements
and (b) all of the transactions contemplated by the respective Transactional
Agreements, including: (i) the sale of the ICMOSA Shares to Purchaser and the
Designated Affiliate in accordance with the Agreement; (ii) the sale of the
Specified Assets to Purchaser in accordance with the Agreement; (iii) the
performance by UniMark, ICMOSA, FoodsSub, Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxxx
Xxxxxxx, Xxxxx Xxxxxxx, Jakes Jordaan and Purchaser of their respective
covenants and obligations under the Transactional Agreements and the exercise by
UniMark, ICMOSA, FoodsSub and Purchaser of their respective rights under the
Transactional Agreements; (iv) the extinguishment of ICMOSA's indebtedness to
the Mexican Banks at or immediately following the Closing and the release by the
Mexican Banks of their security interests in and other Liens on
the assets of ICMOSA; and (v) the conveyance of the IHMSA Facility and related
assets by IHMSA to ICMOSA at or immediately following the Closing, and the
release by Union de Credito xx Xxxxxxx of its security interests in and other
Liens on the IHMSA Facility and related assets.
CONTRACT. "Contract" shall mean any written, oral, implied or other
agreement, contract, understanding, arrangement, instrument, note, guaranty,
indemnity, representation, warranty, deed, assignment, power of attorney,
certificate, purchase order, work order, insurance policy, benefit plan,
commitment, covenant, assurance or undertaking of any nature.
DAMAGES. "Damages" shall include any loss, damage, injury, decline in
value, lost opportunity, Liability, claim, demand, settlement, judgment, award,
fine, penalty, Tax, fee (including any legal fee, expert fee, accounting fee or
advisory fee), charge, cost (including any cost of investigation) or expense of
any nature.
DISCLOSURE SCHEDULE. "Disclosure Schedule" shall mean the schedule (dated
as of the date of the Agreement) delivered to Purchaser on behalf of UniMark,
ICMOSA and FoodsSub, a copy of which is attached to the Agreement and
incorporated in the Agreement by reference.
ENCUMBRANCE. "Encumbrance" shall mean any lien, pledge, hypothecation,
charge, mortgage, security interest, encumbrance, equity, trust, equitable
interest, adverse claim, proxy, option, right of first refusal, preemptive
right, community property interest, legend or restriction of any nature
(including any restriction on the voting or transfer of any security and any
restriction on the receipt of any dividend or other payment receivable by the
owner of any security, but excluding any restriction imposed under applicable
securities laws).
ENTITY. "Entity" shall mean any corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, cooperative, foundation, society,
political party, union, company (including any limited liability company or
joint stock company), firm or other enterprise, association, organization or
entity.
EXCHANGE ACT. "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
FOODSSUB CONTRACT. "FoodsSub Contract" shall mean any Contract: (a) to
which FoodsSub is a party; (b) by which FoodsSub or any of its assets is or may
become bound or under which FoodsSub has, or may become subject to, any
obligation; or (c) under which FoodsSub has or may acquire any right or
interest.
GAAP. "GAAP" shall mean generally accepted accounting principles.
GOVERNMENTAL AUTHORIZATION. "Governmental Authorization" shall mean any:
(a) permit, license, certificate, franchise, concession, allocation, award,
approval, consent, ratification, permission, clearance, confirmation,
endorsement, waiver, certification, designation, rating, registration,
qualification or authorization that is, has been or may in the future be issued,
granted, given or otherwise made available by or under the authority of any
Governmental Body or pursuant to any Legal Requirement; or (b) right under any
Contract with any Governmental Body.
GOVERNMENTAL BODY. "Governmental Body" shall mean any: (a) nation,
principality, state, commonwealth, province, territory, county, municipality,
district or other jurisdiction of any nature; (b) federal, state, local,
municipal, foreign or other government; (c) governmental or quasi-governmental
authority of any nature (including any governmental division, subdivision,
department, agency, bureau, branch, office, commission, council, board,
instrumentality, officer, official, representative, organization, unit, body or
Entity and any court or other tribunal); (d) multi-national organization or
body; or (e) individual, Entity or body exercising, or entitled to exercise, any
executive, legislative, judicial, administrative, regulatory, police, military
or taxing authority or power of any nature.
HAZARDOUS MATERIAL. "Hazardous Material" shall include: (a) any petroleum,
waste oil, crude oil, asbestos, urea formaldehyde or polychlorinated biphenyl;
(b) any waste, gas or other substance or material that is explosive or
radioactive; (c) any "hazardous substance," "pollutant," "contaminant,"
"hazardous waste," "regulated substance," "hazardous chemical" or "toxic
chemical" or similar substance, chemical or material as designated, listed or
defined (whether expressly or by reference) in any statute, regulation or other
Legal Requirement; (d) any other substance or material (regardless of physical
form) or form of energy that is subject to any Legal Requirement which regulates
or establishes standards of conduct in connection with, or which otherwise
relates to, the protection of human health, plant life, animal life, natural
resources, property or the enjoyment of life or property from the presence in
the environment of any solid, liquid, gas, odor, noise or form of energy; and
(e) any compound, mixture, solution, product or other substance or material that
contains any substance or material referred to in clause "(a)," "(b)," "(c)" or
"(d)" above.
ICMOSA ASSOCIATE. "ICMOSA Associate" shall mean any current or former
employee, independent contractor or director of ICMOSA.
ICMOSA CONTRACT. "ICMOSA Contract" shall mean any Contract: (a) to which
ICMOSA is a party; (b) by which ICMOSA or any of its assets is or may become
bound or under which ICMOSA has, or may become subject to, any obligation; or
(c) under which ICMOSA has or may acquire any right or interest.
ICMOSA EMPLOYEE AGREEMENT. "ICMOSA Employee Agreement" shall mean any
management, employment, severance, consulting, relocation, repatriation or
expatriation agreement or other Contract between ICMOSA and any ICMOSA
Associate, other than any such Contract with an ICMOSA Associate that is
terminable "at will" without any obligation on the part of ICMOSA to make any
payments or provide any benefits in connection with such termination or
otherwise.
ICMOSA EMPLOYEE PLAN. "ICMOSA Employee Plan" shall mean any plan, program,
policy, practice, Contract or other arrangement providing for compensation,
severance, termination pay, deferred compensation, performance awards, stock or
stock-related awards, vacation pay, fringe benefits or other employee benefits
or remuneration of any kind, whether written, unwritten or otherwise and whether
funded or unfunded, including each plan, program, policy, practice, Contract or
other arrangement that is or has been maintained, contributed to or required to
be contributed to by ICMOSA for the benefit of any ICMOSA Associate, or with
respect to which ICMOSA has or may have any liability or obligation; provided,
however, that an ICMOSA Employee Agreement shall not be considered an ICMOSA
Employee Plan.
IHMSA. "IHMSA" shall mean Industrias Horticolas Montemorelos, S.A de C.V.
IHMSA FACILITY. "IHMSA Facility" shall mean the property leased to ICMOSA
by IHMSA under that certain Lease Agreement dated July 10, 2001.
INDEMNITEES. "Indemnitees" shall mean the following Persons: (a)
Purchaser; (b) Purchaser's current and future affiliates (including ICMOSA); (c)
the respective Representatives of the Persons referred to in clauses "(a)" and
"(b)" above; and (d) the respective successors and assigns of the Persons
referred to in clauses "(a)," "(b)" and "(c)" above; provided, however, that (i)
ICMOSA shall not be entitled to exercise any rights as an Indemnitee prior to
the Closing, and (ii) none of UniMark, FoodsSub, Xxxxxx Xxxxxxx, Xxxxxxx
Xxxxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxxxx and Jakes Jordaan shall be deemed to be an
"Indemnitee."
INTELLECTUAL PROPERTY. "Intellectual Property" shall mean trademarks
(registered and unregistered), service marks (registered and unregistered),
brand names, product names, logos, slogans, trade dress, proprietary assets and
other intellectual property and any rights to any of the foregoing.
IRS. "IRS" shall mean the United States Internal Revenue Service.
LEGAL PROCEEDING. "Legal Proceeding" shall mean any action, suit,
litigation, arbitration, proceeding (including any civil, criminal,
administrative, investigative or appellate proceeding and any informal
proceeding), prosecution, contest, hearing, inquiry, inquest, audit, examination
or investigation that is, has been or may in the future be commenced, brought,
conducted or heard by or before, or that otherwise has involved or may involve,
any Governmental Body or any arbitrator or arbitration panel.
LEGAL REQUIREMENT. "Legal Requirement" shall mean any federal, state,
local, municipal, foreign or other law, statute, legislation, constitution,
principle of common law, resolution, ordinance, code, edict, decree,
proclamation, treaty, convention, rule, regulation, ruling, directive,
pronouncement, requirement, specification, determination, decision, opinion or
interpretation that is issued, enacted, adopted, passed, approved, promulgated,
made, implemented or otherwise put into effect by or under the authority of any
Governmental Body.
LIABILITY. "Liability" shall mean any debt, obligation, duty or liability
of any nature (including any unknown, undisclosed, unmatured, unaccrued,
unasserted, contingent, indirect, conditional, implied, vicarious, derivative,
joint, several or secondary liability), regardless of whether such debt,
obligation, duty or liability would be required to be disclosed on a balance
sheet prepared in accordance with U.S. GAAP and regardless of whether such debt,
obligation, duty or liability is immediately due and payable.
LIEN. "Lien" shall mean any lien, pledge, hypothecation, charge, mortgage,
security interest, encumbrance, right of possession, lease, tenancy, license,
encroachment, option, right of first refusal, community property interest,
imperfection of title, condition or restriction of any nature (including any
restriction on the transfer of any asset, any restriction on the receipt of any
income derived from any asset, any restriction on the use of any asset and any
restriction on the possession, exercise or transfer of any other attribute of
ownership of any asset).
MATERIAL ADVERSE EFFECT. "Material Adverse Effect" shall mean any effect,
change, claim, event or circumstance that, considered together with all other
effects, changes, claims, events or circumstances, is or could reasonably be
expected to be or to become materially adverse to, or has or could reasonably be
expected to have or result in a material adverse effect on, (a) the business,
condition (financial or otherwise), capitalization, assets (tangible or
intangible), Intellectual Property, liabilities (contingent or otherwise),
relationships, operations, financial performance or prospects of ICMOSA or
FoodsSub, (b) the ability of UniMark, ICMOSA or FoodsSub to consummate any of
the Contemplated Transactions or to perform any of its obligations under any of
the Transactional Agreements or (c) Purchaser's right or ability to vote,
transfer, receive dividends with respect to or otherwise exercise ownership
rights with respect to any of the ICMOSA Shares or to hold, transfer, operate or
otherwise exercise ownership rights with respect to any of the Specified Assets.
MEXICAN BANKS. "Mexican Banks" shall mean Banorte and Banco Nacional de
Comercia Exterior, National Banking Corporation.
ORDER. "Order" shall mean any: (a) order, judgment, injunction, edict,
decree, ruling, pronouncement, determination, decision, opinion, verdict,
sentence, subpoena, writ or award that is, has been or may in the future be
issued, made, entered, rendered or otherwise put into effect by or under the
authority of any court, administrative agency or other Governmental Body or any
arbitrator or arbitration panel; or (b) Contract with any Governmental Body that
is, has been or may in the future be entered into in connection with any Legal
Proceeding.
ORDINARY COURSE OF BUSINESS. An action taken by or on behalf an Entity
shall not be deemed to have been taken in the "Ordinary Course of Business"
unless: (a) such action is recurring in nature, is consistent with the past
practices of such Entity and is taken in the ordinary course of the normal
day-to-day operations of such Entity; (b) such action is taken in accordance
with sound and prudent business practices; (c) such action is not required to be
authorized by the shareholders, board of directors or any committee of the board
of directors of such Entity; and (d) such action is similar in nature and
magnitude to actions customarily taken, without any separate or special
authorization, in the ordinary course of the normal day-to-day operations of
other Entities that are engaged in businesses similar to the business conducted
by such Entity.
PERSON. "Person" shall mean any individual, Entity or Governmental Body.
PRE-CLOSING PERIOD. "Pre-Closing Period" shall mean the period commencing
as of the date of the Agreement and ending on the Closing Date.
RELATED PARTY. Each of the following shall be deemed to be a "Related
Party": (a) UniMark and each of its Subsidiaries (other than ICMOSA), officers,
directors and other affiliates; (b) each individual who is, or who has at any
time been, an officer or director of ICMOSA; (c) each member of the family of
each of the individuals referred to in clauses "(a)" and "(b)" above; and (d)
any other Entity in which any one of the individuals referred to in clauses
"(a)," "(b)" and "(c)" above holds (or in which more than one of such
individuals collectively hold), beneficially or otherwise, a material voting,
proprietary or equity interest.
REPRESENTATIVES. "Representatives" shall mean officers, directors,
employees, agents, attorneys, accountants, advisors and representatives.
SEC. "SEC" shall mean the United States Securities and Exchange Commission
SECURITIES ACT. "Securities Act" shall mean the Securities Act of 1933, as
amended.
SUBSIDIARY. An Entity shall be deemed to be a "Subsidiary" of another
Person if such Person directly or indirectly owns or purports to own,
beneficially or of record, (a) an amount of voting securities or other interests
in such Entity that is sufficient to enable such Person to elect at least a
majority of the members of such Entity's board of directors or other governing
body or (b) at least 50% of the outstanding equity, voting or financial
interests in such Entity.
TAX. "Tax" shall mean any tax (including any income tax, franchise tax,
capital gains tax, estimated tax, gross receipts tax, value-added tax, surtax,
excise tax, ad valorem tax, transfer tax, stamp tax, sales tax, use tax,
property tax, business tax, occupation tax, inventory tax, occupancy tax,
withholding tax or payroll tax), levy, assessment, tariff, impost, imposition,
toll, duty (including any customs duty), deficiency or fee, and any related
charge or amount (including any fine, penalty or interest), that is, has been or
may in the future be (a) imposed, assessed or collected by or under the
authority of any Governmental Body or (b) payable pursuant to any tax-sharing
agreement or similar Contract.
TAX RETURN. "Tax Return" shall mean any return (including any information
return), report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or information that
is, has been or may in the future be filed with or submitted to, or required to
be filed with or submitted to, any Governmental Body in connection with the
determination, assessment, collection or payment of any Tax or in connection
with the administration, implementation or enforcement of or compliance with any
Legal Requirement relating to any Tax.
TRANSACTIONAL AGREEMENTS. "Transactional Agreements" shall mean: (a) the
Agreement; (b) the Noncompetition Agreements; (c) the Closing Certificate; (d)
the bills of sale, assignments, Release Agreements and other agreements and
instruments referred to in Section 1.4(b); (e) each Contract evidencing or
otherwise relating to the extinguishment of ICMOSA's indebtedness to the Mexican
Banks or the release by the Mexican Banks of any Liens with respect to assets of
ICMOSA; and (f) each Contract evidencing or otherwise relating to the
transfer of the IHMSA Facility and related assets to ICMOSA or the release by
Union de Credito xx Xxxxxxx of any Liens with respect to the assets of ICMOSA.
