EXHIBIT 10.20
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement is entered into as of October 11, 2000, between
MORCOB, CVA, a commanditaire vennootschap op aandelen organized under the laws
of Belgium ("Seller") and IVAX Corporation, a Florida corporation ("Buyer").
Preliminary Statements
A. Seller owns all of the outstanding shares of capital stock of
Maancirkel Holding, B.V., a corporation organized under the laws of the
Netherlands (the "Company").
B. The Company owns, or as of the Closing Date, will own, all but
one of the outstanding shares of capital stock of Laboratorios Fustery, S.A. de
C.V., a corporation organized under the laws of Mexico ("Fustery"), which one
share is, or as of the Closing Date will be, owned by the Seller.
C. Fustery has three wholly owned Subsidiaries and is engaged
principally in the business of manufacturing, distributing and marketing
pharmaceutical products (Fustery and its three Subsidiaries are referred to
herein as the "Company Subsidiaries").
D. Seller owns, or as of the Closing Date, will own, directly or
indirectly, all of the outstanding shares of capital stock of the Company and
the Company Subsidiaries, and desires to sell to Buyer, and Buyer desires to
acquire, on the terms and subject to the conditions set forth in the Agreement,
all of the shares of capital stock of the Company and, therefore, the Company
Subsidiaries.
Agreement
In consideration of the preliminary statements and the respective
mutual covenants, representations and warranties contained in this Agreement,
the parties agree as set forth below.
ARTICLE 1
DEFINITIONS
In addition to terms defined elsewhere in this Agreement, the following
terms when used in this Agreement shall have the meanings indicated below:
"Affiliate" of a specified Person means a Person who (at the time when
the determination is to be made) directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with
the specified Person; provided, however, that "Affiliate" does not include a
natural person solely by virtue of the ownership of less than 2% of an entity.
As used in the foregoing sentence, the term "control" (including, with
correlative meaning, the terms "controlling," "controlled by" and "under common
control with") means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise. In
the case of Seller, Affiliates does not include any entities which are not
related to this transaction or any other prior or simultaneous transaction in
connection herewith.
"Agreement" means this Stock Purchase Agreement together with all
disclosure schedules referred to herein.
"AMEX" means the American Stock Exchange, LLC.
"Buyer Material Adverse Effect" means any change in or effect on the
business of Buyer that is, or could reasonably be expected to be, materially
adverse to the business, assets (including intangible assets), liabilities
(contingent or otherwise), condition (financial or otherwise), prospects or
results of operations of Buyer; provided, however, that none of the following
shall constitute a Buyer Material Adverse Effect: changes in the market price of
Buyer's publicly-traded securities or events or conditions generally affecting
the pharmaceutical manufacturing, distribution and marketing industries,
including general changes in the market prices or interest rates.
"Cash Reserves" means cash and cash equivalents in each case as
reflected on the Closing Date Balance Sheet as finally determined in accordance
with Section 2.4 hereof.
"Company Material Adverse Effect" means any change in or effect on the
business of the Company and the Company Subsidiaries that is, or could
reasonably be expected to be, materially adverse to the business, assets
(including intangible assets), liabilities (contingent or otherwise), condition
(financial or otherwise), prospects or results of operations of the Company and
Company Subsidiaries taken as a whole; provided, however, that none of the
following shall constitute a Company Material Adverse Effect: events or
conditions generally affecting the pharmaceutical manufacturing, distribution
and marketing industries, including general changes in the market prices or
interest rates.
"Debt" means all debt excluding amounts payable to suppliers and other
liabilities incurred in the ordinary course of business, all as determined with
Mexican GAAP consistently applied.
"Environmental Laws" means any applicable domestic or foreign statute,
law, ordinance, regulation, rule, code or order and any enforceable judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, relating to pollution or protection of the
environment or natural resources, including, without limitation, those relating
to the use, handling, transportation, treatment, storage, disposal, release or
discharge of Hazardous Materials.
"Exchange Act" means the United States Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.
"Guaranty" means, as to any Person, any contract, agreement or
understanding of such Person pursuant to which such Person guarantees the
indebtedness, liabilities or obligations of others, directly or indirectly, in
any manner, including agreements to purchase such indebtedness, liabilities or
obligations, or to supply funds to or in any manner invest in others, or to
otherwise assure the holder of such indebtedness, liabilities or obligations
against loss.
"Hazardous Materials" means (a) any petroleum, petroleum products,
by-products or breakdown products, radioactive materials, asbestos-containing
materials or polychlorinated byphenyls or (b) any chemical, material or
substance defined or regulated as toxic or hazardous or as a pollutant or
contaminant or waste under any applicable Environmental Law.
"Including" means including, without limitation, or including, but not
limited to.
"Intellectual Property" means any or all of the following items which
are owned, used or controlled by the Company and/or the Company Subsidiaries:
(a) all trademarks, service marks, trade dress, and trade names, together with
all translations, adaptations, derivations, and combinations thereof and
including all goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith; and (b) all copyrights, and
all applications, registrations, and renewals in connection therewith.
"Knowledge" means, with respect to any representation or warranty or
other statement in this Agreement qualified by the knowledge of any party, the
actual knowledge of such party after reasonable investigation. Where reference
is made to the knowledge of the Company Subsidiaries, such reference shall mean
the actual knowledge after reasonable investigation of Xxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxx Xxxx Xxxxxx and Xxxxxxx Xxxxxxx.
"Law" means any applicable foreign or domestic law, statute, ordinance,
rule, regulation, order, writ, judgment or decree.
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"Liens" means any liens, pledges, security interests, mortgages,
options, title defects or other encumbrances, or similar claims.
"MP$" means currency of United Mexican States.
"Mexican GAAP" means Mexican generally accepted accounting principles.
"Person" means any natural person, corporation, limited liability
company, unincorporated organization, partnership, association, joint stock
company, joint venture, trust or government, or any agency or political
subdivision of any government, or any other entity.
"SEC" means the United States Securities and Exchange Commission.
"Securities" means all of the issued and outstanding stock of the
Company.
"Securities Act" means the United States Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Shares" means the common stock of Buyer, par value US$.10 per share.
"Subsidiary" of any Person means any Person, whether or not
capitalized, in which such Person owns, directly or indirectly, an equity
interest of 50% or more, or any Person which may be controlled, directly or
indirectly, by such Person, whether through the ownership of voting securities,
by contract, or otherwise.
"Tax" means any federal, state, local or foreign income, gross
receipts, franchise, estimated, alternative minimum, add-on minimum, sales, use,
transfer, registration, value added, excise, natural resources, severance,
stamp, occupation, premium, windfall profit, environmental, customs, duties,
real property, personal property, capital stock, social security, unemployment,
disability, payroll, license, employee or other withholding, or other tax or
governmental charge, of any kind whatsoever, including any interest, penalties
or additions to tax or additional amounts in respect of the foregoing; the
foregoing shall include any transferee or secondary liability for a Tax and any
liability assumed by agreement or arising as a result of being (or ceasing to
be) a member of any affiliated group (or being included, or required to be
included, in any tax return relating thereto).
"US GAAP" means United States generally accepted accounting principles.
"US$" means currency of the United States of America.
"Working Capital" means current assets less current liabilities,
excluding (i) Debt; (ii) cash and cash equivalents, and (iii) liabilities for
which Seller is obligated hereunder.
ARTICLE 2
PURCHASE OF SECURITIES; CONSIDERATION
2.1 Securities to be Purchased. Subject to the terms and
conditions set forth herein, on the Closing Date, Seller shall sell to Buyer,
and Buyer shall purchase from Seller, all of Seller's right, title and interest
in and to the Securities.
2.2 Consideration.
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(a) In consideration of the sale, assignment, transfer and delivery of
the Securities by Seller to Buyer, Buyer will pay the purchase price (the
"Purchase Price") of Xxx Xxxxxxx Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxx Dollars
(US$117,000,000) by delivery to
(i) Seller of One Million Three Hundred Twenty-Five Thousand
Five Hundred and Nineteen (1,325,519) Shares ("Exchange Shares"), which Shares
shall be dated as of the Closing Date provided that the actual certificates
therefore may be delivered within ten (10) business days after the Closing Date,
(ii) Seller of an amount equal to the sum of Thirty Million
United States Dollars (US$30,000,000) in immediately available funds on the
Closing Date, and
(iii) Custodial Trust Company, as escrow agent, or such other
independent escrow agent which shall be satisfactory to the parties hereto (the
"Escrow Agent"), Thirty Million Dollars (US$30,000,000) ("Escrowed Property") to
be held in escrow pursuant to the escrow agreement (the "Escrow Agreement").
(b) All Escrowed Property held in escrow shall be available for
distribution by the Escrow Agent, subject to the provisions of this Agreement
and the Escrow Agreement, to reimburse any Buyer Indemnified Party in respect of
any Liabilities that are indemnifiable pursuant to Section 6.4 of this
Agreement.
(c) All costs and expenses, including attorneys' fees, related to
or arising from the engagement or services of the Escrow Agent shall be paid by
Seller.
2.3 Adjustment of Exchange Shares.
(a) Option to Subject Exchange Shares to Adjustment.
(i) On the date hereof, the Seller shall have an option
(the "Option") to elect to deposit some or all of the Exchange Shares (the
number of Shares so deposited, hereinafter the "Initial Adjustment Shares") with
[Custodial Trust Company], or such other independent escrow agent which shall be
satisfactory to the parties (the "Adjustment Escrow Agent") for the purpose of
making such Initial Adjustment Shares subject to a Post-Closing Adjustment as
described in subsection (b) below, all in accordance with the terms of the
Adjustment Escrow Agreement set forth as Exhibit 7.2(n)-2. The Option may only
be exercised by the Seller by delivery of written notice to the Adjustment
Escrow Agent, the Escrow Agent, and the Buyer of the Seller's intent to exercise
the Option for the number of applicable Initial Adjustment Shares at the
Closing, and by the execution and delivery of the Adjustment Escrow Agreement
set forth as Exhibit 7.2(n)-2 hereto (and the stock powers and other agreements
and instruments contemplated therein). If the Option is not exercised in the
manner set forth above at the Closing, the Option shall expire at the Closing.
(ii) From the Closing Date until the date which is ninety
(90) days after the date hereof (the "Final Option Withdrawal Date"), Seller
shall have the option (the "Withdrawal Option") to withdraw some or all of the
Initial Adjustment Shares (but shall have no option to increase the amount of
Initial Adjustment Shares, nor to otherwise deposit additional Exchange Shares,
nor to redeliver to the Adjustment Escrow Agent any Exchange Shares withdrawn
pursuant to the exercise of a Withdrawal Option) from escrow (the Initial
Adjustment Shares less the number of Exchange Shares so withdrawn pursuant to
the exercise of Withdrawal Option shall be hereinafter referred to as the
"Adjustment Shares"). The Withdrawal Option may be exercised by the Seller at
any time and from time to time after the Closing Date but on or prior to the
Final Option Withdrawal Date, by delivery of written notice to the Adjustment
Escrow Agent and the Buyer of the Seller's intention to exercise such Withdrawal
Option for the specified number of applicable Initial Adjustment Shares. Upon
receipt of the Seller's written notice exercising a Withdrawal Option, the
Adjustment Escrow Agent shall deliver to the Seller the number of Initial
Adjustment Shares specified in such notice within 20 days of receipt of such
notice and the Adjustment Escrow Agent shall not have any requirement to seek
the consent of the Buyer prior to such delivery (provided that if the notice
specifies an amount of Exchange Shares greater than the amount held by the
Adjustment Escrow Agent such Withdrawal Option shall be deemed to be invalidly
exercised). The Withdrawal Option shall expire on the Final Option Withdrawal
Date.
(b) Post-Closing Adjustment of Exchange Shares.
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(i) If on the date which is One Hundred Eighty (180) days
following the date hereof (the "Adjustment Date"), the Price Guaranty Average
(as defined below) is less than US$43.00, then Buyer shall deliver either, at
its sole option, (1) an additional number of Shares to Seller or Escrow Agent,
as the case may be, equal to the aggregate number of Shares which when valued at
the Price Guaranty Average, are equal to the difference between the Price
Guaranty Average and US $43.00 multiplied by the number of Adjustment Shares, or
(2) cash to Seller in an amount equal to the difference between the Price
Guaranty Average and US$43.00 multiplied by the number of Adjustment Shares. In
addition, the parties shall provide written notice to the Adjustment Escrow
Agent certifying the calculations and the Adjustment Escrow Agent shall deliver
to Seller all the applicable number of Adjustment Shares.
(ii) For purposes hereof, the "Price Guaranty Average"
shall be equal to the average of the closing price per share of the Shares, as
reported by Bloomberg, for the twenty (20) trading days immediately preceding
the Adjustment Date (the "Price Guaranty Average"); provided, however, that if
the foregoing calculation results in a Price Guaranty Average of less than
US$25.80, the Price Guaranty Average shall be deemed to be US$25.80.
(iii) If on the Adjustment Date, the Price Guaranty Average
is greater than US$43.00, then the parties shall promptly give written notice to
the Adjustment Escrow Agent certifying the calculations thereof, and the
Adjustment Escrow Agent shall deliver to (1) Buyer a number of Shares equal to
the aggregate number of Shares which when valued at the Price Guaranty Average
are equal to fifty percent (50%) of the difference between the Price Guaranty
Average and US$43.00 multiplied by the number of Adjustment Shares, and (2) to
Seller the balance of the Adjustment Shares.
(iv) In the event that all of the outstanding Shares of
Buyer or all or substantially all of its assets are purchased by any Person at
any time prior to the Adjustment Date in a transaction (any such transaction
being referred to as a "Transaction") involving all cash consideration payable
on the effective date of the Transaction, the average price per share utilized
for calculating the Price Guaranty Average shall be the cash value per share
paid in such Transaction and the Adjustment Date shall be accelerated to the
date of the effectiveness of the Transaction. In the event that all of the
outstanding Shares of Buyer or all or substantially all of its assets are
purchased by another Person at any time prior to the Adjustment Date in a
Transaction involving other than all cash consideration, the obligations of
Buyer under this Section 2.3 shall be assumed by the purchaser in such
Transaction with the Seller's rights hereunder to be converted into commensurate
rights to receive securities of the purchaser in such Transaction based upon the
fair market value on the Adjustment Date (which with respect to the
publicly-traded securities shall be determined on the same basis as the Price
Guaranty Average) of the consideration which was received by the Seller in
exchange for the Adjustment Shares on the closing date of such Transaction.
(v) In determining the post-closing adjustment described
in subsection (b) above, the Adjustment Shares and the Exchange Shares and the
mechanics of such adjustment shall be adjusted for stock splits, stock dividends
and recapitalizations subsequent to the Closing Date. Prior to the Adjustment
Date, the Adjustment Shares may not be sold, assigned, transferred, conveyed,
pledged nor used as the basis for any hedging or other derivative transaction
which could serve to reduce the Seller's risk in the Adjustment Shares.
Notwithstanding the escrow of the Adjustment Shares, dividends and other
distributions declared and paid on the Adjustment Shares held in escrow shall
continue to be paid by Buyer to Seller, all voting rights with respect to such
shares shall inure to the benefit of and be enjoyed by Seller, and Seller shall
be the legal and beneficial owner of such Shares for all purposes, except that
the dividends paid in capital stock shall be escrowed pursuant to the Adjustment
Escrow Agreement and Escrow Agreement.
(vi) All costs and expenses, including attorney's fees,
related to or arising from the engagement or services of the Escrow Agent
pursuant to this Section 2.3 shall be paid by Seller.
2.4 Post Closing Audit; Purchase Price Adjustment. Buyer will
conduct a post-closing audit at its own expense within one hundred and eighty
(180) days of the Closing Date. Buyer shall, at its expense, cause a certified
public accountant to prepare, in accordance with Mexican GAAP, (i) a closing
balance sheet of the Company, on a consolidated basis, as of the Closing Date
(the "Closing Date Balance Sheet") and (ii) calculations of Working Capital,
Debt and Cash Reserves of the Company, on a consolidated basis, as of the
Closing Date and shall deliver such documents to Seller. If, as of the Closing
Date, the aggregate amount of Working Capital is less than Two Hundred Eighty
Four Million Mexican
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pesos (MP$284,000,000) (such difference, if any, being referred to as the
"Working Capital Deficiency"), or if aggregate amount of Cash Reserves is less
than Ten Million Two Hundred Thirty-One Thousand Six Hundred and Fifty Mexican
pesos (MP$10,231,650) (such difference, if any, being referred to as the "Cash
Deficiency"), then, the aggregate Purchase Price shall be adjusted downward
dollar-for-dollar in the amount of the sum of the Cash Deficiency and the
Working Capital Deficiency. In addition, if the United States denominated Debt
of the Company and the Company Subsidiaries on the Closing Date Balance Sheet is
greater than One Million Two Hundred Fifty Thousand Dollars (US$1,250,000), then
the aggregate Purchase Price shall be adjusted downward dollar for dollar for
each dollar the amount of United States Denominated Debt exceeds such amount. If
the Mexican peso denominated Debt of the Company and the Company Subsidiaries on
the Closing Date Balance Sheet is greater than One Hundred Thirty-Seven Million
One Hundred Ninety-Five Thousand One Hundred Twenty-Five Mexican pesos
(MP$137,195,125), then the aggregate Purchase Price shall be adjusted downward
dollar for dollar for each dollar the amount of Mexican peso denominated Debt
exceeds such amount ("Excessive Mexican Peso Debt"). Seller shall pay Buyer by
wire transfer of immediately available funds an amount equal to these Purchase
Price adjustments. At its option, and at any time or from time to time after the
determination of any such Purchase Price adjustments, Buyer shall be entitled to
recover from the Escrowed Property pursuant to the terms of the Escrow Agreement
all or any portion of such amount not theretofore paid by Seller. For the
purposes of making any dollar adjustments for Working Capital Deficiency, Cash
Deficiency and/or Excessive Mexican Peso Debt, the exchange rate shall be
calculated as of the date of payment.
2.5 Disputes. Notwithstanding anything in this Article 2 to the
contrary, if Seller disputes any item contained on the Closing Date Balance
Sheet, then Seller shall notify Buyer in writing of each disputed item
(collectively, the "Disputed Amounts") and specify the amount thereof in dispute
within thirty (30) business days after the delivery of the Closing Date Balance
Sheet. If Buyer and Seller cannot resolve any such dispute, then such dispute
shall be resolved by Pricewaterhouse Coopers LLP, or such other "big five"
accounting firm which is reasonably acceptable to the Buyer and Seller (the
"Independent Accounting Firm") considering ongoing and future engagements. The
determination of the Independent Accounting Firm shall be made as promptly as
practicable and shall be final and binding on the parties, absent manifest error
which error may only be corrected by such Independent Accounting Firm. Any
expenses relating to the engagement of the Independent Accounting Firm shall be
allocated between Buyer and Seller so that Seller's aggregate share of such
costs shall bear the same proportion to the total costs that the Disputed
Amounts unsuccessfully contested by Seller (as finally determined by the
Independent Accounting Firm) bear to the total of the Disputed Amounts so
submitted to the Independent Account Firm. Pending resolution of any such
dispute by the Independent Accounting Firm, no such Disputed Amount shall be due
to Buyer. Once any such Disputed Amount is finally determined to be due to
Buyer, Buyer may proceed to recover such amount in the manner set forth in
Section 2.4.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BUYER
In order to induce Seller to enter into this Agreement and to
consummate the transactions contemplated hereby, Buyer makes the representations
and warranties set forth below to Seller.
3.1 Organization. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida. Buyer is
duly qualified to do business, and is in good standing, in each jurisdiction
where the character of the properties owned, leased or operated by it or the
nature of its business makes such qualification necessary, except for failures
to be so qualified and in good standing that would not, individually or in the
aggregate, have a Buyer Material Adverse Effect.
3.2 Authorization; Enforceability. Buyer has all requisite right,
power and authority to execute, deliver and perform this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery and
performance of this Agreement by Buyer and the consummation by Buyer of the
transactions contemplated hereby have been duly authorized by all requisite
corporate action. This Agreement and all other agreements to be executed and
delivered by Buyer in connection with this Agreement have been or will be duly
executed and delivered by Buyer, and constitute or, upon execution, will
constitute, the legal, valid and binding obligation of Buyer, enforceable in
accordance with their terms, except to the extent that their enforcement is
limited by bankruptcy, insolvency, reorganization or other laws relating to or
affecting the enforcement of creditors' rights generally and by general
principles of equity.
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3.3 No Violation or Conflict. The execution, delivery and
performance of this Agreement and all other agreements to be executed and
delivered by Buyer in connection with this Agreement and the consummation by
Buyer of the transactions contemplated hereby: (a) do not and will not violate
or conflict with any provision of Law or any provision of Buyer's Articles of
Incorporation or Bylaws; and (b) do not and will not, with or without the
passage of time or the giving of notice, result in the breach of, or constitute
a default, cause the acceleration of performance, or require any consent under,
or result in the creation of any Lien upon any property or assets of Buyer
pursuant to any material instrument or agreement to which Buyer is a party or by
which Buyer or its properties may be bound or affected, other than instruments
or agreements as to which consent shall have been obtained at or prior to the
Closing.
3.4 Registration Statement. The Shares to be delivered under this
Agreement will be issued pursuant to Buyer's Registration Statement on Form S-4,
Reg. No. 33-60847 (the "Registration Statement"). Buyer has delivered to Seller
a copy of the prospectus, dated January 19, 2000, included in the Registration
Statement, and has made available to Seller a true and complete copy of all
documents incorporated by reference therein. As of the respective dates they
were filed with the SEC, none of such documents (including the Registration
Statement) contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. Buyer has filed, and will timely file, all requisite
amendments to the Registration Statement, and all documents required to be
incorporated therein, which may be required through the Closing Date and will
promptly provide Seller with a copy of any such amendments.
3.5 Validity of Shares; Listing. When issued and delivered in
accordance with this Agreement, the Shares to be delivered under this Agreement
shall (a) be duly and validly authorized, issued and outstanding, (b) be fully
paid and non-assessable, (c) be transferable in accordance with Rule 145 or any
other available exemption from registration, (d) be free and clear of any Liens,
including, claims or rights under any voting trust agreements, shareholder
agreements or other agreements, (d) be registered under the Securities Act and
listed for trading on the AMEX, and (e) not have been issued in violation of the
preemptive rights of any Person.
3.6 SEC Documents.
(a) Buyer has filed with the SEC all reports, schedules, forms,
statements and other documents required to be so filed by it since January 1,
1998 under the Securities Act or the Exchange Act including (i) annual reports
on Form 10-K for all fiscal years ending during such period, (ii) quarterly
reports on Form 10-Q for all fiscal quarters during such period, (iii) its proxy
or information statements relating to meetings of, or actions taken without a
meeting by, the shareholders of Buyer held during such period, and (iv) all of
its other reports, statements, schedules and registration statements, including
current reports on Form 8-K, filed by Buyer or required to be filed by Buyer
with the SEC during such period (collectively, the "SEC Documents").
(b) As of its respective date, or if amended as of the date of the
last such amendment, each SEC Document, including any financial statements or
schedules included therein (i) did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, and (ii) complied in all material
respects with the applicable requirements of the Securities Act and the Exchange
Act, as the case may be, and the applicable rules and regulations promulgated by
the SEC thereunder. None of Buyer's subsidiaries has any class of securities
registered under the Exchange Act.
3.7 Brokers. Buyer has not employed any financial advisor, broker
or finder and has not incurred and will not incur any broker's, finder's,
investment banking or similar fees, commissions or expenses, in connection with
the transactions contemplated by this Agreement.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLER
In order to induce Buyer to enter into this Agreement and to consummate
the transactions contemplated hereby, Seller makes the representations and
warranties set forth below to Buyer.
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4.1 Organization. Each of Seller, the Company and each Company
Subsidiary has been duly organized and is validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization, as the
case may be. Each of Seller, the Company and each Company Subsidiary is duly
qualified or licensed to do business, and is in good standing, in each
jurisdiction where the character of the properties owned, leased or operated by
it or the nature of its business makes such qualification or licensing
necessary, except for failures to be so qualified or licensed and in good
standing that would not, individually or in the aggregate, have a Company
Material Adverse Effect. Each of Seller, the Company and each Company Subsidiary
has all requisite right, power and authority to own or lease and operate its
properties and conduct its business as presently conducted.
4.2 Authorization; Enforceability. Seller, Company, each Company
Subsidiary and their respective Affiliates have all requisite right, power and
authority to execute, deliver and perform this Agreement and all agreements
contemplated hereby or in connection herewith. The execution, delivery and
performance of this Agreement and all agreements contemplated hereby or in
connection herewith by Seller, Company, each Company Subsidiary and their
respective Affiliates and the consummation by them of the transactions
contemplated hereby and in connection herewith have been duly authorized by all
requisite corporate action. This Agreement and all other agreements to be
executed and delivered by Seller, the Company, the Company Subsidiaries and
their respective Affiliates at or prior to the Closing in connection with (or in
contemplation of) this Agreement have been or will be duly executed and
delivered and constitute or, upon execution, will constitute, the legal, valid
and binding obligations of them, enforceable in accordance with their respective
terms, except to the extent that their enforcement is limited by bankruptcy,
insolvency, reorganization or other laws relating to or affecting the
enforcement of creditors' rights generally and by general principles of equity.
4.3 No Violation or Conflict. The execution, delivery and
performance of this Agreement and the agreements contemplated hereby or in
connection herewith by Seller, the Company, the Company Subsidiaries and their
respective Affiliates and the consummation by them of the transactions
contemplated hereby or in connection herewith: (a) do not and will not violate
or conflict with any provision of Law or any provision of their respective
Articles of Association or other corporate or equivalent organizational
documents; and (b) do not and will not, with or without the passage of time or
the giving of notice, result in the breach of, or constitute a default, cause
the acceleration of performance or require any consent or notice under, or
result in the creation of any Lien upon any property or assets of Seller,
Company or any Company Subsidiary pursuant to any material instrument or
agreement to which Seller, the Company or any Company Subsidiary is a party or
by which Seller, the Company or any Company Subsidiary or their respective
properties may be bound or affected, other than instruments or agreements as to
which consent shall have been obtained at or prior to the Closing, each of which
instruments or agreements is listed on Schedule 4.3 hereto.
4.4 Consent of Governmental Authorities. Except as may be required
by the Mexican Federal Economic Competition Law or the Mexican Foreign
Investment Law, no consent, approval or authorization of, or registration,
qualification or filing with any domestic or foreign federal, state or local
governmental or regulatory authority is required to be made by Seller, the
Company, any Company Subsidiary or any of their respective Affiliates in
connection with the execution, delivery or performance of this Agreement by the
Seller or the consummation by Seller, Company, the Company Subsidiaries and
their Affiliates of the transactions contemplated hereby or in connection
herewith.
4.5 Brokers. Except for Violy, Byorum & Partners Holdings, LLC,
whose fees are to be paid by Seller, none of the Company, the Company
Subsidiaries and/or Seller has employed any financial advisor, broker or finder.
The Company, the Company Subsidiaries and Seller have not incurred and will not
incur any broker's, finder's, investment banking or similar fees, commissions or
expenses in connection with the transactions contemplated by or in connection
with this Agreement, which would be payable by Buyer, Company or any Company
Subsidiary.
4.6 Organizational Documents and Corporate Records. A true and
complete copy of (a) the Articles of Association of Seller, the Company and the
Company Subsidiaries, as amended, (b) all other corporate organizational
documents of Seller, the Company and the Company Subsidiaries, and (c) the
minute books of the Company and each Company Subsidiary have been delivered to
Buyer or will be retained by the Company at the Closing. Such minute books
contain complete and accurate records of all meetings and other corporate
actions of the board of directors, committees of the board of directors, the
supervisory board, incorporators and shareholders of each of the Company and the
Company Subsidiaries since January 1, 1998 to the date hereof or since the date
of incorporation if the same are reasonably material.
8
4.7 Capitalization. The authorized share capital of the Company is
as set forth on Schedule 4.7. The authorized share capital of the Company
Subsidiaries is as set forth on Schedule 4.7 ("Company Subsidiary Securities").
Schedule 4.7 sets forth all Securities and Company Subsidiary Securities which
are issued and outstanding, all of which have been duly authorized, are validly
issued and are fully paid and nonassessable. All outstanding Securities and
Company Subsidiary Securities are owned by Seller or the Company or another
Company Subsidiary, free and clear of all Liens, rights of first refusal
agreements, limitations on the Company's or such other Company Subsidiary's
voting rights, shareholders' agreement, charges and other encumbrances of any
nature whatsoever, except as set forth on Schedule 4.7. Schedule 4.7 lists all
Company Subsidiaries, their jurisdiction of incorporation or organization, and
the record and beneficial owners and the amounts and percentage of ownership of
such shares of capital stock or equity interests. Except as set forth on
Schedule 4.7, neither the Company nor any Company Subsidiary has any investment
or equity interest in any other Person. None of the Securities or Company
Subsidiary Securities was issued in violation of any Law, preemptive right or
agreement. At the Closing, Buyer or its designee(s) will acquire good and valid
title to the Securities and all of the legal and beneficial interest in the
Company Subsidiary Securities, free and clear of all Liens. No written or oral
agreement or understanding with respect to the disposition of the Securities or
any rights therein, other than this Agreement, exists. Except as set forth on
Schedule 4.7, Seller has full right, power and authority to transfer the
Securities. Neither the Seller, the Buyer, the Company nor any Company
Subsidiary has, or shall or may have, any liability or obligation of any nature
whatsoever under or in connection with any change in ownership of any of them
occurring prior to the Closing. Neither the Company nor any Company Subsidiary
has, or shall or may have, any liability or obligation of any nature whatsoever
to any former shareholder.
4.8 Rights, Warrants, Options. There are no warrants or similar
rights to which the Company or any Company Subsidiary is a party or by which the
Company or any Company Subsidiary is bound relating to the issued or unissued
capital stock of the Company or any Company Subsidiary or obligating the Company
or any Company Subsidiary to issue or sell any shares of capital stock of, or
other equity interests in, the Company or any Company Subsidiary. There are no
outstanding obligations of the Company or any Company Subsidiary to redeem or
otherwise acquire any of the Securities or Company Subsidiary Securities. There
are no outstanding contractual obligations of the Company or any Company
Subsidiary to provide funds to, or make any investment (in the form of a loan,
capital contribution or otherwise) in, any Company Subsidiary or any other
Person, other than Guarantees by the Company of any indebtedness of any Company
Subsidiary.
4.9 Financial Statements. Seller has previously delivered to Buyer
a true and complete copy of the consolidated balance sheet of the Company
Subsidiaries for the fiscal years ended on December 31, 1999 and 1998, and the
consolidated profit and loss statement for the fiscal years ended on December
31, 1999 and 1998, including any related notes and the consolidated supplement,
certified by the Company Subsidiaries' independent certified public accountants
pursuant to their audit of the financial records of the Company Subsidiaries and
will deliver the consolidated balance sheet of the Company Subsidiaries as of
the Closing Date, and the consolidated profit and loss statement of the Company
Subsidiaries for the period ending on that date, certified by the Company's
chief financial officer (collectively the "Financial Statements"). The Financial
Statements: (a) have in all material respects been prepared in accordance with
the books of account and records of the Company Subsidiaries; (b) fairly
present, and are true, correct and complete statements in all material respects
of the consolidated financial condition of the Company Subsidiaries and the
results of their operations at the dates and for the periods specified in those
statements; and (c) have been prepared in accordance with Mexican GAAP,
consistently applied with prior periods (subject, in the case of the unaudited
statements, to the absence of notes).
4.10 Absence of Undisclosed Liabilities. Neither the Company nor
any of the Company Subsidiaries has or will have on the Closing Date (a) any
liabilities, commitments or obligations or any nature whatsoever, whether
accrued, absolute, contingent or otherwise that would be required to be
reflected on a balance sheet or in notes thereto prepared in accordance with
Mexican GAAP; or (b) any material unrealized or anticipated losses from any
commitments of the Company or any Company Subsidiary, except (i) for the items
set forth on Schedule 4.10, (ii) for nonmaterial liabilities, commitments or
obligations (including, without limitation, liabilities for Taxes) incurred in
the ordinary course of business consistent with past practices since the date of
the Financial Statements, and (iii) as disclosed by the Financial Statements
dated June 30, 2000. To Seller's Knowledge, there is no basis for assertion
against the Company or any Company Subsidiary of any such liability, commitment,
obligation or loss. Neither the Company nor any Company
9
Subsidiary has incurred any Tax liability in connection with the transactions
contemplated hereby or in connection herewith which are not disclosed in such
Financial Statements.
4.11 No Operations. Since its incorporation, the Company has not
engaged in any operations, owned, leased, bought or sold any assets, incurred
any liabilities which are outstanding as of the date hereof, entered into any
agreements or otherwise engaged in any business activities, except in connection
with its acquisition of the capital stock of Fustery. Seller has provided Buyer
with a true and complete copy of the Company's acquisition agreement with
respect to the securities of Fustery, under which the Company and the Company
Subsidiaries have absolutely no liability or obligations of any nature
whatsoever which shall survive the Closing.
4.12 Compliance with Laws. Each of the Company and the Company
Subsidiaries (and each Person for whose conduct any of them may be liable) is in
compliance with all Laws applicable to it or its properties, including without
limitation those relating to (a) the development, testing, manufacture,
packaging, labeling, distribution and marketing of products or the provision of
services and (b) employment, safety and health. Neither the Seller, the Company,
any of the Company Subsidiaries nor any of their respective Affiliates has
received any written notification from any governmental or regulatory authority
asserting that the Company or any Company Subsidiary (or any Person for whose
conduct it may be liable) is not in material compliance with or has violated any
of the Laws which such governmental or regulatory authority enforces, or
threatening to revoke any material authorization, consent, approval, franchise,
license, or permit, and neither the Company nor any of the Company Subsidiaries
is subject to any material agreement or consent decree with any governmental or
regulatory authority arising out of previously asserted violations.
4.13 Legal Proceedings. Except as set forth in Schedule 4.13, (a)
neither Seller, the Company nor any of the Company Subsidiaries is a party to
any pending or, to Seller's Knowledge, threatened, legal, administrative or
other proceeding, arbitration or investigation, (b) no Affiliate of Seller is a
party to any pending, or, to Seller's Knowledge, threatened, legal,
administrative or other proceeding, arbitration or investigation relating to the
Company or any Company Subsidiary and (c) no Person who is or was a director or
officer of the Company or any Company Subsidiary is a party to any pending or,
to Seller's Knowledge, threatened, legal, administrative or other proceeding,
arbitration or investigation in their capacity as directors or officers of the
Company or such Company Subsidiary. Neither Seller, the Company nor any of the
Company Subsidiaries is subject to any order, writ, injunction, decree or other
judgment of any court or governmental or regulatory authority and no Affiliate
of any of them is subject to any order, writ, injunction, decree or other
judgment of any court or governmental or regulatory authority relating to
Seller, Company or any Company Subsidiary. There are no suits or proceedings
pending or threatened before any court or by or before any governmental or
regulatory authority, commission, bureau or agency or public regulatory body
which, if adversely determined, would interfere with Seller's or any of its
Affiliates' ability to consummate the transactions contemplated hereby or in
connection herewith.
4.14 Absence of Material Adverse Effects. Except as disclosed in
Schedule 4.14, since December 31, 1999, each of the Company and the Company
Subsidiaries has conducted its businesses only in the ordinary and usual course
and in a manner consistent with past practices and, since such date: (a) there
has been no Company Material Adverse Effect; and (b) except as set forth in
Schedule 4.14, neither the Company nor any Company Subsidiary has engaged or
agreed to engage in any of the actions described in Section 5.1(b)(i)-(xxiii).
4.15 Properties.
(a) Except as set forth on Schedule 4.15(a), the Company or one of
the Company Subsidiaries has good and valid title to all assets reflected as
owned by the Company or one or more of the Company Subsidiaries in the
consolidated balance sheet of the Company Subsidiaries dated as of the Closing
Date and good and valid title or leasehold interest in all other assets used in
their business (except assets sold or otherwise disposed of since December 31,
1999, in the ordinary course of business to Persons other than any Affiliates of
the Company), free and clear of all Liens, including, but not limited to, the
real estate in Mexico City and Xxxxx Xxxxxx on which the offices and
manufacturing facilities of the Company Subsidiaries are located (the "Owned
Real Estate").
10
(b) Except as set forth in Schedule 4.15(b), all of the immovable
buildings, structures, appurtenances, leasehold improvements, equipment,
machinery, rolling stock and other tangible properties of the Company and the
Company Subsidiaries reflected in the consolidated balance sheets of the Company
Subsidiaries dated as of the Closing Date and the Owned Real Estate are, taken
as a whole: (a) in reasonable operating condition and repair, ordinary wear and
tear excepted, (b) not in need of substantial maintenance or repairs (except for
ordinary or routine maintenance or repairs), and (c) free of structural or
non-structural defects to the buildings on such properties and all of such
buildings have access to adequate water, sewer, gas, telephone and electric
utilities, which are in good working order; in each instance as is sufficient to
conduct the business of the Company and the Company Subsidiaries as currently
conducted.
(c) Except as set forth in Schedule 4.15(c), the Company or one of
the Company Subsidiaries owns or possesses adequate licenses or other legal
rights to use the Intellectual Property, which is material to the Company or any
Company Subsidiary and used or held for use in connection with the business of
the Company and the Company Subsidiaries. The Intellectual Property is owned or
possessed free and clear of all Liens, except for such Liens which would not,
individually or in the aggregate, materially impair the use or market value of
the Intellectual Property. No claims have been made, or to Seller's Knowledge,
threatened (i) asserting the invalidity, abuse, misuse, or unenforceability, or
seeking the cancellation, of any of the Intellectual Property of the Company or
any Company Subsidiary, or (ii) asserting that the Company's or any Company
Subsidiary's ownership or use of the Intellectual Property infringes or violates
the rights of any other Person. To Seller's Knowledge, the conduct of the
business of the Company and the Company Subsidiaries as conducted and as
currently conducted or as contemplated to be conducted did not and does not
infringe in any way any Intellectual Property of any third party. Furthermore,
to Seller's Knowledge, there are no infringements of any Intellectual Property
owned by or licensed by or to the Company or any Company Subsidiary.
4.16 Governmental Authorizations. The Company and the Company
Subsidiaries have all authorizations, consents, approvals, franchises, licenses
and permits required under applicable Law for the ownership of the Company's and
the Company Subsidiaries' properties and operation of their businesses as
presently operated (the "Permits"). No suspension or cancellation of any of the
Permits is pending or threatened, and to Seller's Knowledge, there is no
reasonable basis therefor. Neither the Company nor any Company Subsidiary is in
conflict with, or in default or violation of any Permits.
4.17 Employment Matters.
(a) Except as set forth on Schedule 4.17(a), there are no
employment, consulting, severance or indemnification arrangements, arrangements
which contain change of control provisions, agreements, or understandings
between the Company or any Company Subsidiary and any officer, director,
consultant or employee. Schedule 4.17(a) contains the names, job descriptions
and annual salary rates and other compensation of all officers, directors and
consultants of the Company and the Company Subsidiaries (including compensation
paid or payable by the Company or any Company Subsidiary under the Plans (as
hereafter defined)), and a list of all employee policies (written or otherwise),
employee manuals or other written statements of rules or policies concerning
employment, including working conditions, vacation and sick leave, a complete
copy of each of which (or a description, if unwritten) has been delivered to
Buyer.
(b) The Company and each of the Company Subsidiaries has complied
with all applicable employment Laws, including payroll and related obligations,
benefits, Social Security, Housing Fund and Retirement Savings Fund, and does
not have any obligation in respect of any amount due to employees of the Company
or the Company Subsidiaries or government agencies, other than normal salary,
other fringe benefits and contributions accrued but not payable on the date
hereof.
(c) Schedule 4.17(c) sets forth a complete list of all material
pension, retirement, stock purchase, stock bonus, stock ownership, stock option,
profit sharing, savings, medical, disability, hospitalization, insurance,
deferred compensation, bonus, incentive, welfare or any other material employee
benefit plan, policy, agreement, commitment, arrangement or practice currently
or previously maintained by the Company or the Company Subsidiaries for any of
their directors, officers, consultants, employees or former employees (the
"Plans") since January 1, 1995; and neither the Company nor any Company
Subsidiary has or may have any liability under any other Plan which existed on
or prior to such date. None of the Plans are subject to United States Law.
11
(d) Without limiting the generality of Section 4.12, each Plan has
been administered in all material respects in accordance with its terms and
applicable Law. Except as set forth in Schedule 4.17(d), with respect to the
Plans, (i) no event has occurred and there exists no condition, facts or
circumstances, which could give rise to any liability of the Company or any
Company Subsidiary under the terms of such Plans or any applicable Law, (ii) the
Company or a Company Subsidiary has paid or accrued in accordance with normal
accounting practices all amounts required under applicable Law and any Plan to
be paid as a contribution to each Plan through the date hereof, (iii) the
Company or a Company Subsidiary has set aside adequate reserves in their
accounting records for seniority payments (prima de antiguedad), as provided by
Mexican Law, for which funding in a separate account has not been made, and (iv)
each Plan required to be registered has been registered and has been maintained
in good standing with applicable regulatory authorities.
(e) On or after the date hereof, no Plan has been, (i) terminated,
(ii) amended in any manner which would directly or indirectly increase the
benefits accrued, or which may be accrued, by any participant thereunder or
(iii) amended in any manner which would materially increase the cost to the
Company, any Company Subsidiary or Buyer of maintaining such Plan. Except as
identified on Schedule 4.17(e), no Plan provides retiree medical or retiree
insurance benefits to any Person. Except as disclosed or noted in the Financial
Statements dated December 31, 1999 or except as set forth in Schedule 4.17(e),
there are no material amounts due or owing to any employee of the Company or any
Company Subsidiary for any accrued salary, remuneration, compensation and/or
benefit, including, without limitation, amounts due for accrued vacation, sick
leave or commissions.
4.18 Company Agreements. Schedule 4.18 sets forth a list (all such
contracts, agreements, arrangements or commitments as are required to be set
forth on Schedule 4.18 being referred to herein collectively as the "Company
Contracts") of all of the following written and oral agreements, arrangements or
commitments to which either the Company or any Company Subsidiary is a party
(excluding those which are no longer in effect and for which neither the Company
nor any Company Subsidiary has any liability) or by which either of them or any
of their respective assets is bound or affected:
(a) each partnership, joint venture or similar agreement of the
Company or any of the Company Subsidiaries with another Person.
(b) each contract or agreement under which the Company or the
Company Subsidiaries have created, incurred, assumed or guaranteed (or may
create, incur, assume or guarantee) any indebtedness in any amount or under
which the Company or the Company Subsidiaries have imposed (or may impose) a
Lien on any of their respective assets, whether tangible or intangible securing
indebtedness;
(c) each contract or agreement which involves an aggregate payment
or commitment per contract or agreement on the part of the Company or any of the
Company Subsidiaries of more than US$25,000 per year, which is not terminable
upon 30 days notice by the Company or any of the Company Subsidiaries without
penalty or other adverse consequence, or which is otherwise material;
(d) each contract or agreement which involves or contributes to
the Company or the Company Subsidiaries, aggregate annual remuneration which
exceeds 5% of the Company's and the Company Subsidiaries' consolidated annual
net revenues for the twelve months ended December 31, 1999;
(e) all leases and subleases from any third Person to the Company
or any of the Company Subsidiaries, in each case requiring annual lease payments
from the Company or any Company Subsidiary in excess of US$25,000;
(f) each contract or agreement to which the Company or any of the
Company Subsidiaries or any of their Affiliates is a party limiting, in any
material respect, the right of the Company or any of the Company Subsidiaries
(i) to engage in, or to compete with any person in, any business, including each
contract or agreement containing exclusivity provisions restricting the
geographical area in which, or the method by which, any business may be
conducted by the Company or any of the Company Subsidiaries or (ii) to solicit
any customer or client;
12
(g) fire, casualty, liability, title, worker's compensation and
other insurance policies and binders maintained by the Company or any of the
Company Subsidiaries;
(h) all collective bargaining or other labor union contracts or
agreements to which the Company or any of the Company Subsidiaries is a party or
applicable to persons employed by the Company or any Company Subsidiary; and/or
(i) All licenses, licensing agreements and other agreements
providing in whole or in part for the use of any Intellectual Property of the
Company or any Company Subsidiary.
Schedule 4.18 further identifies each of the Company Contracts which
contains anti-assignment, change of control or notice of assignment provisions.
The Company Contracts are each in full force and effect and are the valid and
legally binding obligations of the Company or the applicable Company Subsidiary
which is a party thereto and, to Seller's Knowledge, are valid and binding
obligations of the other parties thereto, except to the extent that the
enforcement of such Company Contracts shall be limited by bankruptcy,
insolvency, reorganization or other laws relating to or affecting the
enforcement of creditors' rights generally and by general principles of equity.
Each contract relating to the transfer of any Securities or any Company
Subsidiary Securities has been delivered to Buyer, was duly executed by the
parties thereto, is accurate and complete and will not be amended, modified or
terminated. Neither the Company nor any Company Subsidiary is in default under
any Company Contract to which it is a party, and no event has occurred which
with the giving of notice or lapse of time or both would constitute such a
default, which such default, individually or together with all other under any
Company Contract, could be reasonably expected to have a Company Material
Adverse Effect.
4.19 Significant Customers. Since December 31, 1999, no Significant
Customer (as defined below) of the Company or any Company Subsidiary has (a)
canceled, suspended or otherwise terminated its written contractual relationship
with the Company or any Company Subsidiary, or (b) advised Seller, the Company
or any Company Subsidiary of its intention to cancel, suspend or terminate its
relationship or to materially decrease its purchases from the Company or any
Company Subsidiary or to materially and adversely change the terms upon which it
purchases products from the Company or any Company Subsidiary, and, to Seller's
knowledge, none of its Affiliates has been advised thereof. Except as indicated
on Schedule 4.19, all supplies and services necessary for the conduct of the
Company's and the Company Subsidiaries' business as presently conducted are
reasonably readily obtainable by the Company or the Company Subsidiaries from
alternate sources on reasonably comparable terms and conditions as those
presently available to the Company or the Company Subsidiaries. Except as
disclosed in Schedule 4.19, at no time during the last two years prior to the
date hereof have the sales, manufacturing or other business operations of the
Company and the Company Subsidiaries taken as a whole been materially and
adversely affected by shortages or availability of products or raw materials
necessary to sell or manufacture the products presently sold by the Company or
the Company Subsidiaries. For purposes of this Section 4.19, "Significant
Customers" shall mean customers whose actual purchases for the year ended
December 31, 1999 total US$500,000 (each such customer referred to as a
"Significant Customer") of the Company and the Company Subsidiaries taken as a
whole, during each of (i) the fiscal year ended December 31, 1999 and (ii) as
annualized based on the nine (9) months which ended September 30, 2000.
4.20 Tax Matters.
(a) All Tax returns and other similar documents required to be
filed with respect to the Company and/or any Company Subsidiary (and/or any of
their former owners and/or Affiliates to the extent the same could adversely
affect the Company or any Company Subsidiary or Buyer) have been timely filed
with the appropriate governmental authorities in all jurisdictions in which such
returns and documents are required to be filed, all of the foregoing as filed
are true, correct and complete in all material respects and reflect accurately
all material liabilities for Taxes of the Company and the Company Subsidiaries
(and/or any of their former owners and/or Affiliates to the extent the same
could adversely affect the Company or any Company Subsidiary or Buyer) for the
periods to which such returns and documents relate, and all amounts shown as
owing thereon have been paid or, as set forth on Schedule 4.20, are being
contested in accordance with all applicable legal requirements. Buyer
acknowledges that the external auditors for the Company and the Company
Subsidiaries (and their former owners to the extent the same would adversely
affect the Company or any Company
13
Subsidiary or Buyer) have certified that their tax provisions included in their
annual financial statements are in compliance with Mexican Law.
(b) All material Taxes, if any, collectible or payable by the
Company and/or any Company Subsidiary (and/or any of their former owners and/or
Affiliates to the extent the same could adversely affect the Company or any
Company Subsidiary or Buyer) or relating to or chargeable against any of their
assets, revenues or income through June 30, 2000 were fully collected and paid
by such date or provided for by adequate reserves in the Company Subsidiaries'
consolidated financial statements dated as June 30, 2000 and all material
similar items due through the Closing Date will have been fully paid by that
date or provided for by adequate reserves in the Company's financial statements
dated as of the Closing Date.
(c) No material claims or deficiencies have been asserted against
the Company or any Company Subsidiary (and/or any of their former owners and/or
Affiliates to the extent the same could adversely affect the Company or any
Company Subsidiary or Buyer) with respect to any Taxes which have not been paid
or otherwise satisfied or for which accruals or reserves have not been made in
the Company Subsidiaries' June 30, 2000 financial statements, and, there exists
no reasonable basis for the making of any such claims, whether in connection
herewith or otherwise. Any material claims or deficiencies that are asserted
between June 30, 2000 and the Closing Date with respect to any Taxes will be
paid, otherwise satisfied, accrued or reserved in the financial statements as of
the Closing Date. Neither the Company nor any of the Company Subsidiaries (nor
any of their former owners and/or Affiliates to the extent the same could
adversely affect the Company or any Company Subsidiary or Buyer) have waived any
restrictions on assessment or collection of material Taxes or consented to the
extension of any statute of limitations relating to taxation.
(d) Neither Seller, its shareholders, the Company nor any Company
Subsidiary has incurred or will incur any liability, contingent or otherwise,
relating to Taxes or otherwise, in connection with the transactions contemplated
in connection herewith or in contemplation hereof or any acquisition by Company
or any of the Company Subsidiaries or any other change in ownership thereof.
4.21 Related Parties. Except as set forth on Schedule 4.21, neither
Seller, the Company, the Company Subsidiary, any of their respective Affiliates,
to Seller's Knowledge after due inquiry, their current executive officers listed
on Schedule 4.21 hereto, nor their members of the Board of Directors: (a) own,
directly or indirectly, any significant interest in, or is a director, officer,
employee, consultant or agent of, any Person which is a competitor, supplier or
customer of the Company or any of the Company Subsidiaries; (b) own, directly or
indirectly, in whole or in part, any property, asset or right, real, personal or
mixed, tangible or intangible that is material to and used in the business,
financial condition, prospects or results of operations of the Company and the
Company Subsidiaries taken as a whole; or (c) has an interest in or is, directly
or indirectly, a party to any Company Contract, except for employment,
consulting or other personal service agreements which are listed on Schedule
4.17(a) hereto.
4.22 Insurance. Set forth on Schedule 4.22 is a list of all
insurance policies providing insurance coverage of any nature to the Company or
any Company Subsidiary. Such policies are sufficient for the compliance by the
Company and each of its Subsidiaries with all requirements of Law and all
Company Contracts in light of its current business and consistent with similarly
situated companies. All of such policies are (i) in full force and effect and
are valid and enforceable in accordance with their terms, and (ii) to Seller's
Knowledge, enforceable against the insurer thereunder, in accordance with their
terms. The Company and each of the Company Subsidiaries has complied with all
material terms and conditions of such policies, including the payment of premium
payments. To Seller's Knowledge, none of the insurance carriers has given any
written notice to cancel or not to renew any such policies. To Seller's
Knowledge, neither Company nor any Company Subsidiaries has any claim pending or
anticipated against any of the insurance carriers under any of such policies and
there has been no actual or alleged occurrence of any kind which may give rise
to any such claim.
4.23 Labor Relations. There is no strike or dispute pending or, to
Seller's Knowledge, threatened involving any employees of the Company or any
Company Subsidiary. None of the employees of the Company or any Company
14
Subsidiary is a member of any labor union (except as set forth in Schedule
4.23), and neither the Company nor any Company Subsidiary is a party to,
otherwise bound by, or, to Seller's Knowledge, threatened with any labor or
collective bargaining agreement (except as set forth in Schedule 4.23). To
Seller's Knowledge, none of the employees of the Company or any Company
Subsidiary are engaged in organizing any labor union or other employee group
that is seeking recognition as a bargaining unit. Without limiting the
generality of Section 4.12, (a) no unfair labor practice complaints are pending
or, to Seller's Knowledge, threatened against the Company or any Company
Subsidiary, and (b) no Person has made any claim, and there is no basis for any
claim, against the Company or any Company Subsidiary under any statute,
regulation or ordinance relating to employees or employment practices, including
without limitation those relating to age, sex and racial discrimination,
conditions of employment, and wages and hours.
4.24 Absence of Certain Business Practices. Neither the Company nor
any Company Subsidiary nor any director, officer, agent, employee or other
Person for whom the Company or any Company Subsidiary may be responsible nor any
Person acting on behalf of the Company or any Company Subsidiary, has used any
corporate or other funds for unlawful contributions, payments, gifts or
entertainment, or made any unlawful expenditures. Neither the Company nor any
Company Subsidiary nor any current director, officer, agent, employee or other
Person for whom the Company or any Company Subsidiary may be responsible nor any
Person acting on behalf of the Company or any Company Subsidiary has accepted or
received any unlawful contributions, payments gifts or expenditures.
4.25 Pharmaceutical Products.
(a) Schedule 4.25(a) lists each product currently developed,
manufactured, licensed, distributed or sold by the Company or any Company
Subsidiary (collectively, the "Products"). Each Product manufactured by the
Company or any Company Subsidiary has been manufactured in accordance with (i)
the product registration applicable to such Product, and (ii) the specifications
under which the Product is normally and has normally been manufactured.
(b) Schedule 4.25(b) lists all product registrations which are
pending or maintained by the Company or any Company Subsidiary, and with respect
to pending product registrations, the phase of clinical development of the
Products which are the subject thereof. A true and complete copy of each such
product registration has been previously delivered to Buyer.
(c) Schedule 4.25(c) lists all (i) Products which at any time have
been recalled, withdrawn or suspended by the Company or any Company Subsidiary,
since January 1, 1998, whether voluntarily or otherwise, (ii) without limiting
the generality of Section 4.12, completed or pending proceedings, since January
1, 1998, seeking the recall, withdrawal, suspension or seizure of any Product,
and (iii) regulatory letters, warning letters, and letters of adverse findings
from governmental authorities received, since January 1, 1998, by the Company,
any Company Subsidiary or, to the Seller's Knowledge, their respective
attorneys, copies of which have previously been delivered to Buyer.
(d) Except as set forth on Schedule 4.25(d), to Seller's
Knowledge, there exist no set of facts, as the business of the Company or the
Company Subsidiaries is currently conducted: (i) which could reasonably be
expected to furnish a basis for the recall, withdrawal or suspension of any
Product registration, Product license, manufacturing license, wholesale dealers
license, export license or other license, approval or consent of any currently
applicable domestic or foreign governmental or regulatory authority with respect
to the Company, any Company Subsidiary, or any of the Products; (ii) which could
reasonably be expected to furnish a basis for the recall, withdrawal or
suspension of any Product from the market, the termination or suspension of any
clinical testing of any Product, or the change in marketing classification of
any Product; or (iii) which could reasonably be expected to have a Company
Material Adverse Effect in connection with the continued operation of any
facility of the Company or any Company Subsidiary.
(e) Except as set forth in Schedule 4.25(e), all Products which
have been sold through the Company or the Company Subsidiaries have been
merchantable and free from defects in material or workmanship for the term of
any applicable warranties and under the conditions of any express or implied
specifications and warranties arising under Law. Except as disclosed in Schedule
4.25(e) hereto, during the last two years, none of the Company or any of the
Company Subsidiaries have received any claims based on alleged failure to meet
the specifications or breach of product warranty arising from any applicable
manufacture or sale of their Products.
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4.26 Compliance with Environmental Laws. Except as set forth in
Schedule 4.26, each of the Company and the Company Subsidiaries is in compliance
with all applicable Environmental Laws. Except as indicated in Schedule 4.26,
(a) there have been no governmental claims, citations, notices of violation,
judgements, decrees or orders received by Seller (with respect to the Company or
any Company Subsidiary), the Company or any of the Company Subsidiaries, or to
Seller's Knowledge, any of their Affiliates, for impairment or damage, injury or
adverse effect to the environment or public health relating to environmental
matters, and there have been no proceedings initiated by non-governmental
parties with respect to any such matters, (b) there is no condition relating to
any properties of the Company or any of the Company Subsidiaries that would
require any type of remediation, clean-up, response or other action under
applicable Environmental Laws, and (c) the Company and each of the Company
Subsidiaries has complied with all applicable Environmental Laws in the
generation, treatment, storage and disposal of toxic and hazardous substances,
as defined under any applicable Environmental Laws.
4.27 Inventories. Except as set forth on Schedule 4.27, the
Inventories of the Company and the Company Subsidiaries shown on the balance
sheets included in the Financial Statements and the Inventories of the Company
and each of the Company Subsidiaries as of the Closing Date are stated and will
be stated on a last cost basis in accordance with Mexican GAAP, are fit for
their particular use, do not and will not include any items below standard
quality, defective, damaged or spoiled, obsolete or of a quality or quantity not
usable or salable in the ordinary course of the business of the Company and the
Company Subsidiaries as currently conducted or any items whose expiration date
has passed or will pass within six (6) months of the date hereof and of Closing
(which, with respect to items which do not have an expiration date, shall in any
event not include quantities of items not usable or salable within three (3)
months from the date hereof), the value of which has not been fully written down
or reserved against in the Financial Statements.
4.28 [Intentionally Omitted]
4.29 List of Accounts. Set forth on Schedule 4.29 is: (a) the name
and address of each bank or other institution in which the Company and the
Company Subsidiaries maintains an account (cash, securities or other) or safe
deposit box; (b) the name and phone number of and Company's and the Company
Subsidiaries' contact person at such bank or institution; (c) the account number
of the relevant account and a description of the type of account; and (d) the
persons authorized to transact business in such accounts.
4.30 Disclosure. No representation or warranty by Seller contained
in this Agreement, the certificates delivered at Closing or in Seller's
disclosure schedules delivered in connection herewith, contains or will contain
on the Closing Date any untrue statement of a material fact or omits or will
omit on the Closing Date to state a material fact necessary in order to make the
statements contained herein or therein not misleading.
4.31 No United States Transactions. None of Seller, the Company, or
the Company Subsidiaries individually or in the aggregate, (i) hold assets
located in the United States having an aggregate book value of US$15 million or
more or (ii) during the year ended December 31, 1999, made aggregate sales in or
into the United States of US$25 million or more.
4.32 Supply and Product Purchase Agreements. All supply and product
purchase agreements entered into or being entered into in connection herewith
between the Company or any Company Subsidiary and Affiliates of Seller contain
prices and payment terms which are identical to those which previously existed
between these parties during 1999 and all other terms are no less favorable to
the Company and Company Subsidiaries than the supply and product purchase
arrangements which previously existed during 1999 with the same Affiliates of
Seller.
4.33 Transfer of Real Property. All real property transferred by
the Company or any Company Subsidiary within one year prior to the Closing, did
not generate any revenues during such period and was not adjacent to any Company
Subsidiary's facilities.
ARTICLE 5
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COVENANTS
During the period from the date of this Agreement to the Closing Date,
Seller and Buyer, as applicable, agree to perform the covenants set forth below.
5.1 Interim Operations of the Company.
(a) Except to the extent Buyer specifically gives its prior
written consent as requested exclusively by Seller's controller, Seller shall
and shall cause each of the Company and the Company Subsidiaries to operate
their respective businesses only in the ordinary and usual course consistent
with past practices and to (i) use commercially reasonable efforts to preserve
intact their respective business organizations and the goodwill of their
customers, suppliers and others having business relations with them, (ii) use
commercially reasonable efforts to retain the services of its present officers,
employees and agents; (iii) promptly furnish to Buyer a copy of any
correspondence received from or delivered to any governmental authority, which
is material, or regarding any matter that would result in liability to the
Company or any Company Subsidiary, (iv) maintain and keep its properties and
assets in as good a repair and condition as is consistent with past practices in
the ordinary and usual course of their businesses; and (v) continuously maintain
insurance coverage substantially equivalent to the insurance coverage in
existence on the date hereof.
(b) Additionally, during the period from the date of this
Agreement to the Closing Date, except with the prior consent of Buyer, as
requested exclusively by Seller's controller, or as contemplated by any other
provision of this Agreement, Seller shall cause the Company and each Company
Subsidiary not to, directly or indirectly,
(i) amend or otherwise change their respective Articles
of Association or equivalent organizational documents;
(ii) issue, sell or authorize for issuance or sale, shares
of any class of their respective securities (including, but not limited to, by
way of stock split or dividend) or any subscriptions, options, warrants, rights
or convertible securities, or enter into any agreements or commitments of any
character obligating them to issue or sell any such securities;
(iii) redeem, purchase or otherwise acquire, directly or
indirectly, any shares of their respective capital stock or any option, warrant
or other right to purchase or acquire any such shares;
(iv) declare or pay any dividend or other distribution
(whether in cash, stock or other property) with respect to their respective
capital stock other than the payments to shareholders declared in the February
and August Shareholders Meeting of Fustery for the year ended December 31, 1999
in an aggregate amount equal to MP$53,078,643.17;
(v) sell, transfer, or dispose of any of their respective
assets or property rights (tangible or intangible), other than in the ordinary
course of business consistent with past practices, at a price equal to the
greater of fair market value or book value;
(vi) grant or make any material Lien on any of their
respective properties or assets except any Lien that will be discharged prior to
the Closing Date;
(vii) disclose any proprietary or confidential information
to any third party, except to Buyer;
(viii) create, incur or assume any indebtedness in an
aggregate amount exceeding US$75,000, or any liability except in the ordinary
course of business consistent with past practices, but in no event in an
aggregate amount exceeding US$75,000;
(ix) make or commit to make any capital expenditures in
excess of US$25,000 for any one capital expenditure or US$100,000 in the
aggregate for all capital expenditures;
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(x) become subject to any Guaranty;
(xi) apply any of their respective assets to the direct or
indirect payment, discharge, satisfaction or reduction of any amount payable
directly or indirectly by, to or for the benefit of Seller or any Affiliate
thereof or to the prepayment of any such amounts or engage in any transactions
with any Affiliate which are not arms length and in the ordinary course of
business;
(xii) write off the value of any inventory or any accounts
receivable or increase, the reserves for obsolete, damaged, spoiled or otherwise
not usable inventory or doubtful or uncollectable receivables;
(xiii) increase the compensation payable or to become
payable to directors, officers or employees (including, without limitation, any
such increase pursuant to any Plan or otherwise), other than increases in the
ordinary course of business and consistent with past practice or grant any
rights to severance or termination pay to, or enter into any employment or
severance agreement with, any director, officer or other employee of the Company
or any Company Subsidiary or any Affiliate thereof, or establish, adopt, enter
into or materially amend any collective bargaining, bonus, profit sharing,
thrift, compensation, stock option, restricted stock, pension, retirement,
deferred compensation, employment, termination, severance or other plan,
agreement, trust, fund, policy or arrangement for the benefit of any director,
officer or employee, except to the extent required by applicable Law or the
terms of any existing collective bargaining agreement;
(xiv) enter into any agreement which would be a Company
Contract, or materially amend or terminate any existing Company Contract;
(xv) acquire (including, without limitation, by merger,
consolidation or acquisition of stock or assets) any interest in any
corporation, partnership, other business organization, Person or any division
thereof or any assets, other than acquisitions of assets in the ordinary course
of business consistent with past practice;
(xvi) alter in any adverse manner the manner of keeping its
books, accounts or records, or change in any manner the accounting practices
therein reflected, except in compliance with changes in Mexican GAAP subsequent
to the date hereof;
(xvii) agree to accelerate or delay collection of notes or
accounts receivable in advance of or beyond their regular dates or the date when
the same could have been collected in the ordinary course of business consistent
with past practices;
(xviii) waive, release, assign, settle or compromise any
claims or litigation involving a settlement in excess of US$25,000;
(xix) make any Tax election or settle or compromise any
material federal, state or local or federal income Tax liability;
(xx) allow levels of inventory to vary in any material
respect from the levels customarily maintained;
(xxi) take or omit to take any action which is intended to
render any of Seller's representations or warranties untrue or misleading, or
which would be a material breach of any of Seller's covenants;
(xxii) take any action which is intended to have a Company
Material Adverse Effect; or
(xxiii) agree, whether in writing or otherwise, to do any of
the foregoing.
5.2 Access. Seller shall afford to Buyer and its agents and
representatives access to the properties, books, records and other information
of the Company and the Company Subsidiaries, provided that such access shall be
granted
18
upon reasonable notice and at reasonable times during normal business hours in
such a manner as to not unreasonably interfere with normal business operations,
and will use their best efforts to cause the personnel of the Company and the
Company Subsidiaries to assist Buyer in its investigation of the Company. Seller
shall furnish promptly to Buyer all other information and documents concerning
its business, assets, liabilities, properties and personnel as Buyer may from
time to time reasonably request.
5.3 Confidentiality. Except as otherwise required by law or in the
performance of obligations under this Agreement, any non-public information
received by a party (including its Affiliates) or its advisors from the other
party shall be kept confidential and shall not be used or disclosed for any
purpose other than in furtherance of the transactions contemplated by this
Agreement. The obligation of confidentiality shall not extend to information
which (a) is or becomes generally available to the public other than as a result
of a disclosure by a party in violation of this Agreement, (b) was in the
possession of a party prior to its receipt from the other party, or (c) becomes
available to a party on a nonconfidential basis from a source other than a party
to this Agreement, provided such source is not in violation of a confidentiality
agreement with the party providing such information. Upon termination of this
Agreement, each party shall, upon request, promptly return or destroy any
confidential information (which, for purposes of this Section 5.3, shall include
any of the confidential information described in Section 6.5 hereof) received
from the other party. The covenants of the parties contained in this Section 5.3
shall survive any termination of this Agreement but shall terminate at the
Closing, if it occurs, with respect to information concerning the Company and
the Company Subsidiaries.
5.4 Consent of Governmental Authorities and Others. Each of Buyer
on the one hand and Seller, on the other, agree to file, submit or request, and
to cause its Affiliates to file, submit or request (or cause to be filed,
submitted or requested) promptly after the date of this Agreement and to
prosecute diligently any and all (a) applications or notices required to be
filed or submitted to any governmental or regulatory authorities, as specified
in Section 4.4 or in the case of Seller or its Affiliates as otherwise necessary
in connection with the transactions contemplated in contemplation hereof or in
connection herewith, and (b) in the case of Seller, requests for consents and
approvals of Persons required to be obtained by Seller, the Company, the Company
Subsidiaries or any of their Affiliates, as specified in Section 4.3 or, in
connection with the transactions contemplated by or in connection with this
Agreement; provided, however, Seller, the Company, the Company Subsidiaries and
their Affiliates shall not make any Agreement or arrangement relating thereto
which would adversely impact Company or any Company Subsidiary. Each of Buyer on
the one hand and Seller on the other, shall promptly make available to the other
such information as each of them may reasonably request relative to the
business, assets and property of Buyer, on the one hand, or Seller, the Company
the Company Subsidiaries and their Affiliates, on the other hand, as may be
required by each of them to prepare and file or submit such applications and
notices and any additional information requested by any governmental authority,
and shall update by amendment or supplement any such information given in
writing. Each of Buyer on the one hand and the Company and Seller on the other,
represent and warrant to the other that their (and their Affiliates') respective
filings, submissions, requests for consents and approvals, as amended or
supplemented, shall be true and not misleading to the extent that would give
rise to any liability.
5.5 Efforts. Subject to the terms and conditions provided in this
Agreement, each of the parties shall, and shall use their best efforts to cause
their Affiliates to, use commercially reasonable efforts in good faith to take
or cause to be taken as promptly as practicable all reasonable actions that are
within its power to cause to be fulfilled those conditions precedent to its
obligations or the obligations of the other parties to consummate the
transactions contemplated in connection with or by this Agreement that are
dependent upon his or its actions. Seller and Buyer further covenant and agree,
with respect to any threatened or pending preliminary or permanent injunction or
other order, decree, or ruling or statute, rule, regulation or executive order
that would adversely affect the ability of the parties hereto to consummate the
sale of the Securities contemplated hereunder, to use all commercially
reasonable efforts to prevent or lift the entry, enactment or promulgation
thereof, as the case may be.
5.6 Further Assurances. The parties shall, and shall use their
best efforts to cause their Affiliates to, deliver any and all other instruments
or documents required to be delivered pursuant to, or necessary or proper in
order to give effect to, the provisions of this Agreement, including all such
instruments of transfer as may be necessary to transfer ownership of the
Securities and the Shares and to consummate the other transactions contemplated
by or in connection with this Agreement.
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5.7 Publicity. The parties agree, and shall cause their
Affiliates, to cooperate in issuing any press release or other public
announcement concerning this Agreement or the transactions contemplated in
connection with or by this Agreement. Nothing contained herein shall prevent any
party from at any time furnishing any information to any governmental authority
which it is by law or otherwise so obligated to disclose or from making any
disclosure which its counsel deems necessary or advisable in order to fulfill
such party's disclosure obligations under applicable Law or the rules of the
AMEX. Subject to the foregoing, the disclosing party shall give the
non-disclosing party a copy of any such disclosure and the non-disclosing party
shall approve the same prior to its release, which consent shall not be
unreasonably withheld, delayed or conditioned.
5.8 Acquisition Proposals; Notices. Except for the transactions
contemplated by this Agreement, unless and until the earlier to occur of (a) the
Closing Date or (b) the date this Agreement shall have been terminated, neither
the Seller nor Company nor any Company Subsidiary nor any Affiliate thereof
shall: directly or indirectly (i) solicit, encourage, initiate or participate in
any negotiations or discussions with respect to any offer or proposal to acquire
all or substantially all of the business and properties of Company or any
Company Subsidiary, whether by merger, purchase of assets or otherwise, or (ii)
except as required by law, disclose any information not customarily disclosed to
any Person concerning the business and properties of Company or any Company
Subsidiaries, afford to any Person (other than the Buyer and its designees and
the agents of the Company or the Company Subsidiaries and their Affiliates and
solely for purposes of facilitating the transactions contemplated hereby) access
to the properties, books or records of Company and Company Subsidiaries or
otherwise assist or encourage any Person, in connection with any of the
foregoing. In the event Seller, Company or any Company Subsidiary or any
Affiliate thereof shall receive any offer of proposal of the type referred to in
clause (i) above, Seller shall promptly inform the Buyer as to any such offer.
Each party shall promptly notify the other of (i) any action, suit or proceeding
that shall be instituted or threatened against such party or its Affiliates to
restrain, prohibit or otherwise challenge the legality of any transaction
contemplated in connection with or by this Agreement, (ii) any occurrence which
could reasonably be expected to make any representation of such party or its
Affiliates untrue and (iii) any breach by such party or its Affiliates of any
covenant. Seller shall promptly notify the Buyer of any lawsuit, claim,
proceeding or investigation that may be threatened, brought, asserted or
commenced which would have been required to be listed in any schedule hereto if
such lawsuit, claim, proceeding or investigation had arisen prior to the date
hereof.
5.9 Employment Agreements. Seller shall cause the Xxxxxxx
Xxxxxxxxx Xxxxxxxxx and Fustery to execute and deliver the Employment Agreement
set forth in Exhibit 7.2(h), in the form attached, at the Closing.
5.10 Non-Competition and General Release Agreements. Seller shall
cause the Persons listed as parties to the non-competition agreements and
general releases set forth in Exhibit 7.2(j) to execute and deliver them, in the
form attached, at the Closing.
5.11 Escrow Agreements. Seller shall cause the Persons, other than
the Buyer, listed as parties to the Escrow and the Adjustment Escrow Agreements
set forth in Exhibit 7.2(n)-1 and -2 to execute and deliver them, in the forms
attached at the Closing, and Buyer shall execute and deliver same at Closing.
5.12 Guaranties. The Buyer shall cause the condition set forth in
Section 7.3(e) with respect to Guaranties to be satisfied at or prior to
Closing. The Seller shall cause the condition set forth in Section 7.2(o) with
respect to Guaranties to be satisfied at or prior to Closing.
5.13 Real Estate. Seller shall cause the owner of the Mexico City
Real Estate to transfer such real estate to Fustery free and clear of all Liens
for nominal consideration on or prior to the Closing Date.
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ARTICLE 6
ADDITIONAL AGREEMENTS
6.1 Investigation; Notices. The representations, warranties and
covenants set forth in this Agreement shall not be affected or diminished in any
way by any investigation (or failure to investigate) at any time by or on behalf
of the party for whose benefit such representations, warranties and covenants
were made.
6.2 Survival. Sections 2.2, 2.3, 2.4, 2.5, 5.4, 5.6, 5.7, 6.1,
6.2, 6.3, 6.4, 6.5, 6.6, 6.7 and 6.8, Articles 8 and the representations and
warranties of Seller and Buyer set forth in this Agreement shall survive the
Closing Date for five (5) years after the Closing Date.
6.3 General Release. Seller, on behalf of itself and its
Affiliates, hereby unconditionally and irrevocably releases and forever
discharges, effective as of the Closing Date, each of the Company and the
Company Subsidiaries and its officers, directors, employees and agents, from any
and all rights, claims, demands, judgments, obligations, liabilities and
damages, whether accrued or unaccrued, asserted or unasserted, and whether known
or unknown, which ever existed, now exist, or may hereafter exist, by reason of
any tort, breach of contract, violation of law or other act or failure to act
which shall have occurred at or prior to the Closing Date, or in relation to any
other liabilities of the Company or any Company Subsidiary to Seller and/or its
Affiliates; provided that in no event shall the foregoing limit or bar any such
rights, claims, demands or judgments against or obligations, liabilities or
damages from Buyer that the Seller may have pursuant to this Agreement. Seller
expressly intends that the foregoing release shall be effective regardless of
whether the basis for any claim or right hereby released shall have been known
to or anticipated by Seller.
6.4 Indemnification.
(a) Indemnification.
Seller agrees to defend, indemnify and hold harmless Buyer and
its current and future Affiliates and their respective directors, officers,
employees and agents (collectively, the "Buyer Indemnified Parties") from,
against and in respect of, (i) any and all liabilities, damages, claims,
deficiencies, fines, assessments, losses, Taxes, penalties, interest, costs and
expenses, including, without limitation, reasonable fees and disbursements of
counsel (collectively, the "Liabilities"), arising from, in connection with, or
incident to any breach or violation of any of the representations, warranties,
covenants or agreements of Seller contained in this Agreement or in any
schedule, hereto, or any certificate delivered by Seller at the Closing pursuant
to this Agreement, (ii) any and all Liabilities and/or Taxes incurred through
the Closing Date (whether or not due until after the Closing Date) with respect
to the Company and the Company Subsidiaries or any affiliated group of which the
Company or a Company Subsidiaries was a member at any time prior to the Closing
Date and (iii) any and all capital or other Taxes related to or arising from the
transactions contemplated hereby, in connection herewith or in contemplation
hereof by reason of any Liability for Taxes of the Company or any Company
Subsidiary or any of their shareholders and assessed by any taxing authority
against Seller, its shareholders (or former shareholders), the Company, the
Company Subsidiaries and/or any of their respective Affiliates either before or
after the Closing Date.
(b) Indemnification by Buyer.
Buyer agrees to defend, indemnify and hold harmless Seller and
its Affiliates and their respective directors, officers, employees, shareholders
and agents (collectively, the "Seller Indemnified Parties") from, against, and
in respect of, any and all Liabilities arising from, in connection with or
incident to any breach or violation by Buyer of any of the representations,
warranties, covenants or agreements of Buyer contained in this Agreement or in
any schedule hereto, or any certificate delivered by Buyer at the Closing
pursuant to this Agreement.
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(c) Limitations on Indemnification.
(i) Notwithstanding anything to the contrary contained
herein, except for subsection (iv) below, (x) neither party shall be obligated
to indemnify and hold harmless the other under this Section 6.4 for breaches of
representations and warranties unless and until all Liabilities in respect of
which such party is obligated to provide indemnification (net of insurance
proceeds) exceed Five Hundred Thousand United States Dollars (US$500,000)
following which (subject to the provisions of this Section 6.4) such party shall
be obligated to indemnify and hold harmless, the other party for all such
Liabilities.
(ii) The aggregate amount of Liabilities for which a party
shall have liability under this Section 6.4 shall not exceed Thirty Million
United States Dollars (US$30,000,000) until the first anniversary of the Closing
Date, Twenty-Four Million United States Dollars (US$24,000,000) until the second
anniversary of the Closing Date, Eighteen Million United States Dollars
(US$18,000,000) until the third anniversary of the Closing Date, and Fifteen
Million United States Dollars (US$15,000,000) until the fifth anniversary of the
Closing Date.
(iii) Notwithstanding anything in this Agreement to the
contrary, except as provided in subsection (iv) below, the obligations of Seller
and Buyer, as applicable, to provide indemnification under this Agreement shall
terminate and be extinguished forever at the close of business on the fifth
anniversary of the Closing Date; provided, however, that the obligations of
Seller or Buyer, as applicable, to provide indemnification under this Agreement
shall not terminate at such time with respect to any claim that has been
asserted by delivering a notice of such claim to the indemnifying party in
accordance with the terms hereof and such claim has not been paid or otherwise
resolved as of the date on which such indemnity obligation would otherwise
terminate pursuant to this Section 6.4(c)(iii). If a claim has been asserted and
not paid or resolved as described above, the indemnity obligations of Seller or
Buyer, as applicable, shall continue beyond such fifth anniversary, but (1) the
indemnity obligation shall continue only with respect to the claim in question,
and only until such claim is paid or otherwise finally resolved, and (2) in the
case of Seller as the Indemnifying Party, any Escrowed Property in escrow not
reasonably determined by Buyer to be needed to cover the disputed claim shall be
released from escrow to Seller upon written instructions to the Escrow Agent in
connection therewith by Buyer upon which the Escrow Agent shall be entitled to
conclusively rely.
(iv) Notwithstanding anything to the contrary set forth
herein, none of the limitations on indemnification set forth in this subsection
(c) shall apply to matters relating to intentional or fraudulent breaches,
violations or misrepresentations.
(d) Indemnification Procedures.
(i) The indemnified party shall notify the indemnifying
party in writing of any claim that it reasonably believes is likely to result in
a Liability within 60 days of the date such party receives written notice of the
claim (and may otherwise at any time provide notice of a claim), describing in
reasonable detail the claim and, if known, the estimated amount of the claim;
provided, however, that the failure of an indemnified party so to notify the
indemnifying party of the claim shall not relieve the indemnifying party of its
obligations under this Agreement except and to the extent the indemnifying party
shall have been actually materially prejudiced as a result of such failure.
(ii) If any claim for indemnification arises out of or
involves a claim or demand made by a third party (a "Third Party Claim"), then
the indemnifying party shall, if such Third Party Claim does not involve a claim
for specific performance or other equitable relief, be entitled to control the
defense thereof at the indemnifying party's sole cost and expense if the
indemnifying party has clearly demonstrated (and continues to clearly
demonstrate) its ability to satisfy the entire claim, and irrevocably and
unconditionally (i) acknowledges in writing its obligation to indemnify the
indemnified party therefor for the full amount thereof, and (ii) promptly
assumes the defense thereof (and continues the defense thereof) at its own
expense in good faith and in a reasonably prudent manner with counsel selected
by the indemnifying party; provided, that such counsel is reasonably acceptable
to the indemnified party. In any such defense, the indemnified party may
participate with its own separate counsel; it being understood that for so long
as the indemnifying party is pursuing the defense as provided above, the legal
expenses subsequently incurred by the indemnified party in connection with the
defense thereof shall be paid by the indemnified party; provided, however, if
the
22
indemnified party reasonably believes in good faith that the interests of the
indemnified party and the indemnifying party may not be consistent, that there
may be defenses available to the indemnified party that are different from or in
addition to those available to the indemnifying party or the counsel
representing the indemnifying party has a conflict, then the indemnified party
shall have the right, but not the obligation, to control the defense thereof,
and in any such case the liability with respect to such claim shall include the
reasonable fees and costs of one law firm selected by the indemnified party. The
indemnified party shall deliver to the indemnifying party copies of all notices
and documents (including court papers) received by the indemnified party
relating the Third Party Claim along with the notice referred to above.
The indemnifying party and the indemnified party shall reasonably
cooperate with each other in connection with the defense or prosecution of any
Third Party Claim for so long as the indemnifying party is defending same as
provided above, and such cooperation of the indemnified party shall be at the
indemnifying party's sole cost and expense; and at all times the indemnifying
party shall reasonably cooperate with the indemnified party. Such cooperation
shall include the retention (after notice of the Third Party Claim) and (upon a
party's request) the provision of records and information which are reasonably
relevant to such Third Party Claim, and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder.
In the event that the indemnifying party fails to defend and continue
to defend the Third Party Claim as provided above, the indemnified party shall
have the right, but not the obligation, to defend the same and make any
compromise or settlement and be indemnified therefor in accordance with the
terms hereof, and the indemnified party shall not make any other compromise or
settlement of the Third Party Claim without the prior written consent of the
indemnifying party which shall not be unreasonably withheld.
If the indemnifying party shall have assumed the defense of a Third
Party Claim and for so long as such defense is prosecuted as provided above, the
indemnified party shall agree to any settlement, compromise or discharge of a
Third Party Claim which the indemnifying party may recommend and which by its
terms obligates the indemnifying party to pay the full amount of the liability
in connection with such Third Party Claim, which releases the indemnified party
completely in connection with such Third party Claim and which would not
otherwise adversely affect the indemnified party, by way of injunctive or
equitable relief against the indemnified party or its Affiliates or their
respective employees or businesses or otherwise.
(e) Indemnification Payments Net of Taxes.
All sums payable by an Indemnifying Party as indemnification
under this Section 6.4 shall be paid free and clear of all deductions or
withholdings (including any Taxes or governmental charges of any nature) unless
the deduction or withholding is required by law, in which event or in the event
the Indemnified Party shall incur any liability for Tax chargeable or assessable
in respect of any such payment, the Indemnifying Party shall pay such additional
amounts as shall be required to cause the net amount received by the Indemnified
Party to equal the full amount which would otherwise have been received by it
had no such deduction or withholding been made or no such liability for Taxes
been incurred.
6.5 Confidentiality. Seller acknowledges that the Intellectual
Property and all other confidential or proprietary information with respect to
the business and operations of the Company and the Company Subsidiaries are
valuable, special and unique. Seller shall not and shall cause its Affiliates
not to, at any time after the Closing Date, disclose, directly or indirectly, to
any Person, or use or purport to authorize any Person to use any confidential or
proprietary information with respect to the Company, the Company Subsidiaries or
Buyer, whether or not for Seller's own benefit, without the prior written
consent of Buyer, including without limitation, information as to the financial
condition, results of operations, customers, suppliers, products, products under
development, inventions, sources, leads or methods of obtaining new products or
business, Intellectual Property, pricing methods or formulas, cost of supplies,
marketing strategies or any other information relating to the Company, the
Company Subsidiaries, or Buyer which could reasonably be regarded as
confidential, but not including information which is or shall become generally
available to the public other than as a result of an unauthorized disclosure by
Seller (including its Affiliates) or a Person to whom Seller, Buyer, the Company
or any Company Subsidiary has provided such information. Seller acknowledges
that Buyer would not enter
23
into this Agreement without the assurance of the Seller that all such
confidential and proprietary information will be used for the exclusive benefit
of the Company and the Company Subsidiaries.
6.6 Continuing Obligations. The restrictions set forth in Section
6.5 are considered by the parties to be reasonable for the purposes of
protecting the value of the business and goodwill of the Company and Buyer.
Buyer and Seller acknowledge that Buyer would be irreparably harmed and that
monetary damages would not provide an adequate remedy to Buyer in the event the
covenants contained in Section 6.5 were not complied with in accordance with
their terms. Accordingly, Seller agrees that any breach or threatened breach by
it of any provision of Section 6.5 shall entitle Buyer to injunctive and other
equitable relief to secure the enforcement of these provisions, in addition to
any other remedies which may be available to Buyer as set forth herein. If any
provision of Section 6.5 is adjudicated to be invalid or unenforceable, the
invalid or unenforceable provisions shall be deemed amended (with respect only
to the jurisdiction in which such adjudication is made) in such manner as to
render them enforceable and to effectuate as nearly as possible the original
intentions and agreement of the parties.
6.7 Seller Restrictions on Sale. Seller understands and
acknowledges that the Exchange Shares have been registered with the SEC under
the Securities Act on a Registration Statement on Form S-4. However, Seller
further understands and acknowledges that any sale, transfer or disposition by
them of any of the Exchange Shares may, under current law, be made only (a) in
accordance with the provisions of paragraph (d) of Rule 145 under the Securities
Act, (b) pursuant to an effective registration statement under the Securities
Act, (c) upon receipt by Buyer of an opinion of counsel reasonably acceptable to
Buyer, or a "no-action" letter obtained by it from the SEC, to the effect that
such sale, transfer or disposition is otherwise exempt from registration under
the Securities Act, or (d) upon receipt by Buyer of a representation letter from
Seller reasonably acceptable to Buyer.
6.8 Guaranties. After the Closing Buyer shall use commercially
reasonable efforts to discharge the Guaranties set forth on Exhibit 7.3(e) which
were not discharged at Closing; provided, however, that such efforts shall not
require Buyer, Company or any Company Subsidiary to take any action which would
adversely impact it, including, but not limited to, modifying the underlying
obligations or providing additional or different collateral.
ARTICLE 7
CLOSING; CONDITIONS PRECEDENT; TERMINATION
7.1 Closing.
(a) The transfers and deliveries to be made pursuant to this
Agreement (the "Closing") shall take place at the offices of Buyer's counsel at
0 X.X. 0xx Xxxxxx, Xxxxx 0000, Xxxxx, Xxxxxxx 00000, on the date that is five
(5) business days after all conditions are satisfied (the "Closing Date"), or on
such other date and at such other place as may be agreed to by the parties. All
proceedings to be taken and all documents to be executed at the Closing shall be
deemed to have been taken, delivered and executed simultaneously, and no
proceeding shall be deemed taken nor documents deemed executed or delivered
until all have been taken, delivered and executed.
(b) At the Closing, Seller shall deliver to Buyer (i) all of the
certificates representing the Securities together with stock powers endorsed to
Seller sufficient to convey to Buyer or its permitted designee good and
marketable title to the Securities free and clear of all Liens, (ii) all of the
certificates representing the Company Subsidiary Securities, which Securities
will be owned by the Company or Buyer's designee at Closing, free and clear of
all Liens, (iii) the effective written resignations of each of the directors,
and members of the Supervisory Board of the Company and the Company
Subsidiaries, (iv) such other documents as may be specified, or required to
satisfy the conditions set forth in Sections 7.2 and 7.3, and (v) such other
documents and instruments necessary to effectuate the transfer of the Securities
as Buyer may reasonably request.
(c) At the Closing, Buyer shall deliver to Seller (i) evidence
that the Exchange Shares to be delivered to Seller pursuant to Section 2.2(a)
have been issued to Seller, it being understood that the certificates with
respect to such Exchange Shares will be delivered to Seller within ten (10)
business days after the Closing Date; (ii) all cash required
24
pursuant to Sections 2.2(a) and (b) hereof, to be paid by wire transfer of
immediately available funds to such account or accounts as may be designated by
Seller; and (iii) such documents as may be specified, or required to satisfy the
conditions set forth, in Sections 7.2 and 7.3.
7.2 Conditions Precedent to the Obligations of Buyer. The
obligations of Buyer to consummate the transactions contemplated by this
Agreement are subject to the satisfaction or written waiver at or prior to the
Closing of the following conditions.
(a) Representations and Warranties True. The representations and
warranties of Seller contained in this Agreement and in any certificate
delivered at Closing pursuant to this Agreement shall be true and correct in all
material respects (except for representations and warranties which are by their
terms qualified by materiality or Company Material Adverse Effect, which shall
be true and correct in all respects) as of the Closing Date with the same force
and effect as though made on and as of such date, except to the extent that any
representation or warranty is made as of a specified date, in which case such
representation or warranty shall be true in all material respects as of such
date, and except to the extent to changes expressly permitted by the terms of
this Agreement.
(b) Covenants Performed. The covenants of Seller, the Company and
each of the Company Subsidiaries contained in this Agreement to be performed or
complied with on or prior to the Closing Date shall have been duly performed or
complied with in all material respects.
(c) No Company Material Adverse Effect. There shall have not
occurred any Company Material Adverse Effect since December 31, 1999.
(d) Consents. Seller, the Company, the Company Subsidiaries and/or
their respective Affiliates, as the case may be, shall have obtained all
consents and approvals of Persons required to consummate the transactions
contemplated by or in connection with this Agreement, each of which shall have
been obtained without the imposition of any adverse terms or conditions.
(e) Opinions of Counsel. Buyer shall have received from Loyens &
Loeff, Loyens & Volkmars, and Xxxxxx Xxxxxxxxx Xxxxx, Belgian, Dutch and Mexican
legal counsel, respectively, to Seller, opinion letters, dated the Closing date,
in form and substance reasonably satisfactory to Buyer, with respect to the
matters set forth in Exhibit 7.2(e) to this Agreement.
(f) Company's Certificate. The Company shall have delivered to
Buyer a certificate executed by its President and Chief Executive Officer, dated
the Closing Date, certifying that the conditions specified in Sections 7.2(a),
(b) and (c) above have been fulfilled.
(g) No Litigation. No litigation, binding arbitration or other
proceeding shall be pending against any of the parties hereto by or before any
court, binding arbitration panel or governmental authority of competent
jurisdiction; no applicable Law or regulation shall have been enacted after the
date of this Agreement; and no binding applicable judicial or administrative
decision shall have been rendered; in each case, which enjoins or prohibits, or
seeks to enjoin or prohibit the consummation of the transactions contemplated by
or in connection with this Agreement.
(h) Employment Agreements. Each of the parties thereto shall have
entered into employment agreements substantially in the forms of Exhibits
7.2(h).
(i) Intercompany Agreements. Fustery shall have entered into a
supply agreement with Fersina Gist-Brocades and a product purchase agreement
with Farmacias Xxxxxxxxx in the forms of Exhibits 7.2(i)-1 and -2.
(j) Noncompetition and General Release Agreements. Each of the
parties thereto shall have entered into noncompetition agreements and general
releases in the form of Exhibit 7.2(j) with those persons listed on Schedule
7.2(j).
25
(k) Organizational Documents. Seller shall have delivered to Buyer
certified organizational documents and Good Standing Certificates for Seller,
the Company and each Company Subsidiary.
(l) Sale of Company Securities. Seller shall have caused the sale
of the one or more outstanding shares of capital stock of the Company and the
Company Subsidiaries not owned by the Company to a Person or Persons designated
by Buyer for no additional consideration.
(m) Real Estate. Seller shall have acquired good and marketable
title to the real estate ("Mexico City Realty Estate") on which the Company's
Mexico City facility is located for nominal consideration (approximately
14,830.40 square meters), free and clear of all Liens.
(n) Escrow Agreements. Each of the parties thereto shall have
entered into the Escrow Agreement and Adjustment Escrow Agreement in the forms
of Exhibits 7.2(n)-1 and -2.
(o) Release of Guaranties. All Guaranties executed by the Company
or any of the Company Subsidiaries for the benefit of Seller or its Affiliates
or any other Person other than the Company or a Company Subsidiary shall have
been released prior to the Closing Date.
(p) Effective Registration Statement. Buyer's Registration
Statement on Form S-4 shall be effective on the Closing Date. Such Registration
Statement (including the documents incorporated by reference therein) shall not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not misleading.
7.3 Conditions Precedent to the Obligations of Seller. The
obligations of Seller to consummate the transactions contemplated by this
Agreement are subject to the satisfaction or written waiver at or prior to the
Closing of the following conditions.
(a) Representations and Warranties True. The representations and
warranties of Buyer contained in this Agreement and in any certificate delivered
at Closing pursuant to this Agreement shall be true and correct in all material
respects (except for representations and warranties which are by their terms
qualified by materiality, which shall be true and correct in all respects) as of
the Closing Date with the same force and effect as though made on and as of such
date, except to the extent that any representation or warranty is made as of a
specified date, in which case such representation or warranty shall be true in
all material respects as of such date, and except to the extent to changes
expressly permitted by the terms of this Agreement.
(b) Covenants Performed. The covenants of Buyer contained in this
Agreement to be performed or complied with on or prior to the Closing Date shall
have been duly performed or complied with in all material respects.
(c) Buyer's Certificate. Buyer shall have delivered to Seller a
certificate executed by its President or a Vice President, dated the Closing
Date, certifying in such detail as Seller may reasonably request, that the
conditions specified in Sections 7.3(a), (b) and (g) above have been fulfilled.
(d) Consents. All consents and approvals by governmental
authorities and other Persons necessary for the consummation of the transactions
contemplated by this Agreement shall have been obtained.
(e) Guaranties. The Guaranties set forth on Exhibit 7.3(e) shall
have been discharged or replaced by Buyer prior to the Closing Date, or Buyer
shall have indemnified the guarantor for such Guaranties not released or
replaced.
(f) No Litigation. No litigation, arbitration or other proceeding
shall be pending against any of the parties hereto before any court, binding
arbitration panel or governmental authority; no applicable Law or regulation
shall have been enacted after the date of this Agreement; and no judicial or
administrative decision shall have been rendered; in each case, which enjoins or
prohibits, or seeks to enjoin or prohibit, the consummation of the transactions
contemplated by this Agreement.
26
(g) Effective Registration Statement. Buyer's Registration
Statement on Form S-4 shall be effective on the Closing Date. Such Registration
Statement (including the documents incorporated by reference therein) shall not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not misleading.
7.4 Termination.
(a) This Agreement and the transactions contemplated hereby may be
terminated prior to the Closing: (i) at any time by mutual consent of the
parties; (ii) by either party if the Closing has not occurred on or prior to the
date which is ninety (90) days after the date hereof (such date as it may be
adjusted, pursuant to the terms hereof the "Termination Date"), provided the
failure of the Closing to occur by such date is not the result of the failure of
the party seeking to terminate this Agreement to perform or fulfill any of its
obligations hereunder and provided, further, that the Termination Date shall be
extended by ten (10) days in the event any necessary governmental approvals to
the consummation of the sale of the Securities contemplated hereunder have not
been obtained; (iii) by Buyer at any time in its sole discretion if any of the
representations or warranties of Seller in this Agreement are not in all
material respects true, accurate and complete or if Seller breaches in any
material respect any covenant contained in this Agreement; or (iv) by Seller at
any time in its sole discretion if any of the representations or warranties of
Buyer in this Agreement are not in all material respects true, accurate and
complete or if Buyer breaches in any material respect any covenant contained in
this Agreement.
(b) Buyer or Seller, as the case may be, shall give the other
party written notice of its intent to terminate this Agreement pursuant to
clauses (iii) or (iv) above, as the case may be, and the other party shall have
forty-five (45) days from its receipt of such notice, but in no event later than
the Termination Date, to cure such breach.
(c) If this Agreement is terminated pursuant to this Section 7.4,
written notice thereof shall promptly be given by the party electing such
termination to the other party and, subject to the cure periods set forth in (b)
above, this Agreement shall terminate without further actions by the parties and
no party shall have any further obligations under this Agreement.
Notwithstanding the foregoing, any termination of this Agreement pursuant to
this Section shall not relieve any party from any liability for the intentional,
willful or bad faith breach of any representation, warranty or covenant
contained in this Agreement or be deemed to constitute a waiver of any remedy
available for such breach (except that the actual delivery of the schedules
shall not be deemed to be intentional for such purpose). Notwithstanding the
termination of this Agreement, the respective obligations of the parties under
Sections 5.3, 5.7, 6.1, 6.2, 6.4 and 7.4 and Article 8 shall survive the
termination of this Agreement.
ARTICLE 8
MISCELLANEOUS
8.1 Notices. Any notice or other communication under this
Agreement shall be in writing and shall be delivered personally or sent by
certified mail, return receipt requested, postage prepaid, or sent by facsimile
or prepaid overnight courier to the parties at the addresses set forth below
their names on the signature pages of this Agreement (or at such other addresses
as shall be specified by the parties by like notice). Such notices, demands,
claims and other communications shall be deemed given when actually received or
(a) in the case of delivery by overnight or similar service with guaranteed next
day delivery, the next day or the actual day designated for delivery, (b) in the
case of facsimile, the date upon which the transmitting party received
confirmation of receipt by facsimile, telephone or otherwise. A copy of any
notices delivered to Buyer shall also be sent to IVAX Corporation, 0000 Xxxxxxxx
Xxxxxxxxx, Xxxxx, Xxxxxxx 00000, Attention: General Counsel, Fax (000) 000-0000.
A copy of any notices delivered to Seller or the Company shall also be sent to
Xxxxx & Wood LLP, Xxx Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxxx X. Xxxxxxxxxx, Esq. And Xxxx Xxxx Xxxxxxx, Esq.
8.2 Entire Agreement. This Agreement, its schedules and exhibits
contain every obligation and understanding between the parties relating to the
subject matter hereof, merges all prior discussions, negotiations and
agreements, if any, between them, and none of the parties shall be bound by any
representations, warranties, covenants, or other understandings, other than as
expressly provided or referred to herein or therein.
27
8.3 Assignment. This Agreement may not be assigned by any party
without the written consent of the other party; provided that Buyer may assign
this Agreement to one of its wholly-owned Subsidiaries, whether such Subsidiary
currently exists or is formed in the future; provided that Buyer shall remain
liable for all of its obligations under this Agreement. Buyer may assign the
right to receive one or more of the Securities to any Person affiliated with
Buyer to comply with the obligation established by the Mexican Law on Business
Organizations that stock companies have a minimum of two stockholders, without
such written consent; and provided further that Buyer shall remain liable for
all of its obligations under this Agreement and any such assignee shall have no
rights against Seller. Subject to the above, this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors, heirs, personal representatives, legal representatives, and
permitted assigns.
8.4 Waiver and Amendment. Any representation, warranty, covenant,
term or condition of this Agreement which may legally be waived, may be waived,
or the time of performance thereof extended, at any time by the party hereto
entitled to the benefit thereof, and any term, condition or covenant hereof may
be amended by the parties hereto at any time. Any such waiver, extension or
amendment shall be evidenced by an instrument in writing executed on behalf of
the appropriate party by a person who, to the extent applicable, has been
authorized by its Board of Directors to execute waivers, extensions or
amendments on its behalf. No waiver by any party hereto, whether express or
implied, of its rights under any provision of this Agreement shall constitute a
waiver of such party's rights under such provisions at any other time or a
waiver of such party's rights under any other provision of this Agreement. No
failure by any party hereto to take any action against any breach of this
Agreement or default by another party shall constitute a waiver of the former
party's right to enforce any provision of this Agreement or to take action
against such breach or default or any subsequent breach or default by such other
party.
8.5 No Third Party Beneficiary. Nothing expressed or implied in
this Agreement is intended, or shall be construed, to confer upon or give any
Person other than the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and permitted assigns, any
rights or remedies under or by reason of this Agreement.
8.6 Severability. In the event that any one or more of the
provisions contained in this Agreement shall be declared invalid, void or
unenforceable, the remainder of the provisions of this Agreement shall remain in
full force and effect, and such invalid, void or unenforceable provision shall
be interpreted as closely as possible to the manner in which it was written.
8.7 Expenses. Each party agrees to pay, without right of
reimbursement from the other party, the costs (hereafter referred to as "Costs")
incurred by it, or in the case of Seller, the Company or Company Subsidiaries,
incident to the performance of its obligations under this Agreement and the
consummation of the transactions contemplated hereby, including, without
limitation, costs incident to the preparation of this Agreement, and the fees
and disbursements of counsel, accountants and consultants employed by such party
in connection herewith.
8.8 Headings. The section and other headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of any provisions of this Agreement.
8.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
8.10 Litigation; Prevailing Party. In the event of any litigation
with regard to this Agreement, the prevailing party shall be entitled to receive
from the non-prevailing party and the non-prevailing party shall pay upon demand
all reasonable fees and expenses of counsel for the prevailing party.
8.11 Injunctive Relief. It is possible that remedies at law may be
inadequate and, therefore, the parties hereto shall be entitled to equitable
relief including, without limitation, injunctive relief, specific performance or
other equitable remedies in addition to all other remedies provided hereunder or
available to the parties hereto at law or in equity.
28
8.12 Governing Law. This Agreement has been entered into and shall
be construed and enforced in accordance with the laws of the State of Florida
without reference to the choice of law principles thereof.
8.13 Arbitration. All disputes, controversies and claims directly
or indirectly arising out of or relating to this Agreement (including all of the
Exhibits to this Agreement), or the validity, interpretation, construction,
performance, breach, termination or enforceability of this Agreement (including
this clause and all of the Exhibits to this Agreement) (collectively,
"Disputes"), shall be resolved in accordance with the procedures set forth in
this Section. The parties shall initially attempt in good faith to resolve all
Disputes amicably between themselves. If a Dispute remains unresolved, either
Party may submit the matter to arbitration. All Disputes to be submitted to
arbitration shall be finally, exclusively and conclusively settled by binding
arbitration under the Rules of Conciliation and Arbitration of the International
Chamber of Commerce ("ICC"), which Rules shall be deemed to be incorporated by
reference into this Article. The place of arbitration shall be Miami, Florida
USA if the request for arbitration is made by Seller and Houston, Texas U.S.A.
if the request for arbitration is made by Buyer. The language of the arbitrators
shall be English and all documents not in English submitted by any party shall
be accompanied by a certified English translation thereof. Unless otherwise
agreed by the Parties, the number of arbitrators shall be three. Each party
shall appoint one arbitrator, and the third arbitrator shall be appointed by the
ICC. In the event that either party shall fail to appoint an arbitrator within
thirty (30) days after the commencement of the arbitration proceeding, such
arbitrator be appointed by the ICC in accordance with the Rules. Execution upon
the award of the arbitrators may be entered in any court having jurisdiction
thereof. The Parties acknowledge that the 1958 United Nations Convention on the
Recognition and Enforcement of Foreign Arbitral Awards (the "New York
Convention") applies to this Agreement and to any arbitral award or order
resulting from any arbitration concluded hereunder. The costs of any
arbitration, including without limitation administrative and arbitrators' fees,
shall be shared equally by the parties. Each party shall bear the cost of its
own attorneys' fees and expert witness fees, if any.
[signatures on following page]
29
IN WITNESS WHEREOF, the parties hereto have each executed and delivered
this Agreement as of the day and year first above written.
BUYER:
-----
IVAX CORPORATION
By:_________________________________
Xxxx Xxxxxxxxxx
Vice Chairman and President
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx, Xxxxxxx 00000
XXX
Facsimile: (000) 000-0000
SELLER
------
MORCOB, CVA
By TARIX HOLDING N.V., as its sole director,
By: X.X. xx Xxxxx, as its director
By:____________________________
Name: Xxxxxx xx Xxxxxx, power of attorney
Xxxxxxxxxxxx 00X
0000 Xxxxxxxx, Xxxxxxx
30
Exhibit 7.2(e)
Opinion Letters
31
Exhibit 7.2 (h)
Employment Agreement
32
Exhibit 7.2(i)-1
Supply Agreement
33
Exhibit 7.2(j)
Non-Competition Agreement
34
Schedule 7.2(j)
Xxxxxx Xxxxxxxxx Xxxxx
Xxxxxxx Xxxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxxxx xx Xxxxx
Xxxxxx Xxxxxxxxx Xxxxx
Xxxxxx Xxxxxxxxx xx Xxxxx
Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx Mouret Xxxxxxxxx
35
Exhibit 7.2(n) -1
Escrow Agreement
36
Exhibit 7.2(n)-2
Adjustment Escrow Agreement
37
Exhibit 7.3(e)
Guaranties
38
