EXHIBIT 10.1
QUOTA PURCHASE AND SALE AGREEMENT
This QUOTA PURCHASE AND SALE AGREEMENT made and entered into as of February
22, 2006, by and among,
(a) XxxxXx xxxxxxx xx xxxxx, Brazilian, single, businessman, bearer of Identity
Card RG No. 10.256.785-2-SSP/SP, enrolled with the CPF under no.
000.000.000-00, resident and domiciled in the City of Sao Paulo, State of
Sao Paulo, at Xxx Xxxxxxx, Xx. 000, xxx. 00, Xxx Xxxx 00000-000
(hereinafter referred to as "XXXXXX");
(b) Marcio archimedes pissardo, Brazilian, married, businessman, bearer of
Identity Card RG No. 8.034.988-SSP/SP, enrolled with the CPF under No.
000.000.000-00, resident and domiciled in the City of Xxxxxxx de Parnaiba,
State of Sao Paulo, at Alameda das Castanheiras, Xx. 000, Xxx Xxxx
00000-000 (hereinafter referred to as "Marcio");
(c) MIND INFORMATION SERVICES LTDA., company duly organized and existing in
accordance with the laws of Brazil, with head office at Xxxxxxx xxx Xxxxx,
000-X, xxxxx 000, XXX Xxxx 00000-000, enrolled with the CNPJ under No.
74.326.745/0001-81, herein represented by its partners, Xx. Xxxxxx Xxxxxxx
xx Xxxxx and Xxxxxx Archimedes Pissardo, above identified (hereinafter
referred to as "MIND");
(d) XXXXX XXXXX XXXXXXXX, Brazilian, married, businessman, bearer of Identity
Card RG No. 18.158.587-X-SSP/SP, enrolled with the CPF under No.
000.000.000-00, resident and domiciled in the City of Sao Paulo, State of
Sao Paulo, at Xxx Xxxxxxxx xxx Xxxxxx, Xx. 000, xxx. 00, Xxxx Xxxxxxxxxx,
Zip Code 04635-021 (hereinafter referred to as "XXXXX");
(e) XXXXXXXXX XXXX XXXXX, Brazilian, married, businessman, bearer of Identity
Card RG No. 19.842.029-SSP/SP, enrolled with the CPF under No.
000.000.000-00, resident and domiciled in the City of Sao Paulo, State of
Sao Paulo, at Xxx Xxxxxxxx, Xx. 000, xxx. 00, Xxx Xxxx 00000-000
(hereinafter referred to as "Alexandre"); AND
(f) NEWMARKET TECHNOLOGY INC., a corporation organized under the laws of the
State of Nevada, United States of America, with corporate headquarters at
00000 Xxxxxxx Xx., xxxxx 000, Xxxxxx, Xxxxx, 00000, Xxxxxx Xxxxxx of
America, herein represented by Xx. Xxxxxx Xxxxxxx Xxxxxx, a citizen of
United States of America, bearer of the passport No. 000000000, CEO of
NewMarket Technology Inc., married, resident at 0000 Xxxx Xx., Xxxxxx,
Xxxxx, 00000, Xxxxxx Xxxxxx of America, (hereinafter referred to as
"Buyer")
Flavio, Marcio, MIND, Xxxxx and Alexandre are hereinafter jointly referred
to as the "Sellers" and individually as "Seller", as the context dictates;
WITNESSETH THAT:
WHEREAS the Sellers hold directly or will hold directly at the Date of
Closing, as discriminated below, one hundred per cent (100%) of the equity of
Unione Consulting Ltda., a Brazilian limited liability company with head office
in the City of Barueri, State of Sao Paulo, at Alameda Xxx Xxxxx, Xx. 000,
Xxxxxxxx Xxxxxxxx, 0xx floor, suite 701, Alphaville, Zip Code 06454-000,
enrolled with the CNPJ under No. 04.706.267/0001-50
1
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QUOTAHOLDER QUOTAS PERCENTUAL
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Xxxxxx 212,952 22.80%
Marcio 212,952 22.80%
MIND 134,496 14.40%
Xxxxx 186,800 20.00%
Alexandre 186,800 20.00%
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TOTAL 934,000 100%
WHEREAS the Sellers wish to sell and transfer to the Buyer, the nine
hundred and thirty-four thousand (934,000) quotas ("Quotas"), representing one
hundred percent (100%) of the equity of the Company, consisting substantially of
the operations described in SCHEDULE 1.2 to this Agreement.
WHEREAS the Buyer wishes to acquire one hundred percent (100%) of the
Capital Stock of the Company in conformity with the terms and conditions of this
Agreement.
NOW THEREFORE, the Parties hereto intending to be bound hereby, agree as
follows:
SECTION ONE - DEFINITIONS.
Capitalized terms used in this Agreement and in the attachments hereto have
the meanings set forth in this Agreement:
1.1. "Affiliate" will mean, with respect to any Person, any other Person that
alone or together with any other Person, directly or indirectly through one
or more intermediaries controls, or is controlled by or is under common
control with, such Person. Without limiting the generality of the
foregoing, quotaholders, members, partners, officers and directors of any
Person shall be deemed, to be Affiliates of any such Person, including, in
the case of quotaholders that are individuals relatives up to the second
degree.
1.2. "After Tax Net Profit" will mean, for any given fiscal year, the accounting
value obtained by the application of the formula contained in SCHEDULE 3.1;
1.3. "Agreement" will mean this "Quota Purchase and Sale Agreement", its
Enclosures and Amendments;
1.4. "Amendment to the Contrato Social" will mean the text substantially
consistent with the content of SCHEDULE 2.1;
1.5. "Buyer's Indemnities" will have the meaning assigned to it by Sub-Section
12.1.;
1.6. "Capital Stock" will mean one hundred percent (100%) of the quotas, and the
fully paid equity of the Company, at any point in time;
1.7. "Closing" will have the meaning assigned to it by Sub-Section 2.1.;
1.8. "Company" will mean Unione Consulting Ltda., as defined in the first
Whereas and described in SCHEDULE 1.2;
2
1.9. "Condition Precedent" will have the meaning assigned to "Condicao
Suspensiva" by article 125 Of the Brazilian Civil Code;
1.10. "Date of Closing" will have the meaning assigned to it by Sub-Section 2.2;
1.11."Denominated Accounts" will mean the accounts designated by each of the
Seller in SCHEDULE 3.2;
1.12."Equity Interest" will mean the Company's equity corresponding and
represented by one hundred percent (100%) of the outstanding quotas of the
Company;
1.13."Exchange Rate" will mean the rates divulged by the Central Bank of
Brazil, SISBACEN system; quotation PTAX 800 - Option Screen 5, applicable,
as determined by Regulation, to the operations closed on the day
immediately preceding the relevant payment;
1.14."Financial Statements" will have the meaning assigned to it by Sub-Section
5.5;
1.15."Intellectual Property" will have the meaning assigned to it by
Sub-Section 5.10;
1.16."Labor Agreements" will mean all Labor Agreements inscribed in the
Carteira de Trabalho e Previdencia Social, agreements to compensate
officers and agreements with individual contractors and other contracts for
the supply of workmanship;
1.17."Payment Date (s)" - will have the meaning assigned to it by Section Four
and its Sub-sections;
1.18."Person" will mean an individual, corporation, partnership, limited
liability company, limited liability partnership, government, governmental
agency;
1.19. "Pledge" will mean the pledge of quotas mentioned in Section 13.
1.20."Purchase Price" will have the meaning assigned to it by Section Three and
its Sub-sections;
1.21."Sellers Indemnities" will have the meaning assigned to it by Sub-Section
12.2.;
1.22."Tax or Taxes" will mean all taxes, charges, fees, levies or other
assessments including, without limitation Income Tax, Capital Gains Tax,
IPI, Social PIS and COFINS contributions, Social Security Contributions,
CIDE, CPMF, ICMS, ISS, IPTU, withholding taxes, transfer taxes, municipal,
state and federal rates, and tariffs or any other form of taxation imposed
or required to be withheld by the Brazilian tax authorities or foreign
government or subdivision or agency thereof, and such term shall include
interest, penalties or additions to tax, and any liability for taxes;
1.23."Buyer's Assignee" will mean the new Brazilian company ("Newco") to be
formed by the Buyer.
SECTION TWO - PURCHASE AND SALE OF QUOTAS
2.1. Delivery - Subject to the terms, conditions of this Agreement, the Sellers
will sell, assign, deliver, and transfer, at the Closing all of the Equity
Interest to the Buyer, or its designee by means of executing the Amendment
to the Contrato Social (alteracao do Contrato Social) of the Company
substantially in the form of the draft contained in SCHEDULE 2.1.
2.2. The Closing will take place on or before March 10, 2006 (Date of CLOSING),
but not later then 10:30 A.M. Brasilia time, at Xxx Xxxxxxxxx Xxxxx, 0000,
5(0) andar, na cidade e Estado de Sao Paulo. The transfer of the Equity
Interest will be made free and clear of any and all encumbrances. Upon such
sale and transfer, the Buyer shall be the owner, directly or indirectly, of
all quotas of the Company, including the Equity Interest, free and clear of
any liens, guarantees, pledges, claims, and/or other encumbrances, except
for the Pledge.
3
SECTION THREE- PURCHASE PRICE
3.1. The Buyer will pay or cause to be paid to the Sellers, the Purchase Price,
consisting of a fixed part in the amount of US$ 6,460,320.00 (six million,
four hundred and sixty thousand, three hundred and twenty United States
dollars), subject to a variable part to be determined in accordance with
the criteria and parameters established in SCHEDULE 3.1, and not to exceed
US$ 8,539,680.00 (eight million, five hundred and thirty nine thousand and
six hundred and eighty United States dollars).
3.2. All payments will be made in Brazilian Reais at the applicable Exchange
Rate, for the credit of each of the Denominated Accounts, as designated by
each of the Sellers, and established in SCHEDULE 3.2.
SECTION FOUR - PAYMENT OF THE PURCHASE PRICE.
The Purchase Price will be paid by the Buyer to the Sellers in tranches on
each of the following Payments Dates:
4.1. Tranche One - in the Brazilian Reais equivalent to one million United
States dollars (US$ 1,000,000.00), at the applicable Exchange Rate on the
date of the payment of the first tranche, distributed as follows:
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SELLER
-------------------------------------------------------------
Xxxxxx US$ 228,000.00
Marcio US$ 228,000.00
MIND US$ 144,000.00
Xxxxx US$ 200,000.00
Alexandre US$ 200,000.00
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Total US$1,000,000.00
4.2. Tranche Two - in the Brazilian Reais equivalent to one million, eighty-four
thousand United States dollars (US$ 1,084,000.00) at the applicable
Exchange Rate, on August 22, 2006, distributed as follows:
-------------------------------------------------------------
SELLER
-------------------------------------------------------------
Xxxxxx US$ 247,152.00
Marcio US$ 247,152.00
MIND US$ 156,096.00
Xxxxx US$ 216,800.00
Alexandre US$ 216,800.00
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Total US$1,084,000.00
4
4.3. Tranche Three - in the Brazilian Reais equivalent to one million,
eighty-four thousand United States dollars (US$ 1,084,000.00), at the
applicable Exchange Rate, on February 22, 2007, distributed as follows:
-------------------------------------------------------------
SELLER
-------------------------------------------------------------
Xxxxxx US$ 247,152.00
Marcio US$ 247,152.00
MIND US$ 156,096.00
Xxxxx US$ 216,800.00
Alexandre US$ 216,800.00
-------------------------------------------------------------
Total US$1,084,000.00
4.4. Tranche Four - The Buyer will pay for the fourth tranche, in Brazilian
Reais calculated at the applicable Exchange Rate, on August 22, 2007, as
follows:
4.4.1. - Tranche Four (1) - US$ 823,840.00 (eight hundred and twenty three
thousand, eight hundred and forty United States dollars), distributed
as follows:
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SELLER
-------------------------------------------------------------
Xxxxxx US$ 187,835.52
Marcio US$ 187,835.52
MIND US$ 118,632.96
Xxxxx US$ 164,768.00
Alexandre US$ 164,768.00
-------------------------------------------------------------
Total US$823,840,00
4.4.2. - Tranche Four (2) - Exclusively to MIND (tranche 4.4.2), US$
0.13008 for each one United States dollar that exceeds US$ 912,000,00
(nine hundred and twelve thousand United States dollars) of After Tax
Net Profit as verified in the fiscal year of 2006, limited such
variable part of the Purchase Price (tranche 4.4.2.) to a ceiling of
US$ 37,463,04 (thirty-seven thousand, four hundred and sixty three
United States dollars and four cents).
4.4.3. - Tranche Four (3)- To the remaining Sellers (tranche 4.4.3), US$
0.773253333333 for each one United States dollar that exceeds US$ US$
912,000,00 (nine hundred and twelve thousand United States dollars),
but does not exceed US$ 1,200,000.00 (one million and two hundred
thousand United States dollars) of After Tax Net Profit as verified in
the fiscal year of 2006, limited such variable part of the Purchase
5
Price (tranche 4.4.3.) to an aggregate ceiling of US$ 222,696.96 (two
hundred and twenty two thousand, six hundred and ninety-six United
States dollars and ninety six cents), as follows:
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SELLER ADDITIONAL PRICE FOR EVERY ADDITIONAL
US$ 1 OF ATNP ABOVE US$ 912,000.00
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Xxxxxx US$ 0,20596
Marcio US$ 0,20596
Xxxxx US$ 0,180666666667
Alexandre US$ 0,180666666667
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4.4.4. - Tranche Four (4)- To the remaining Sellers (tranche 4.4.4), US$
0.491053227633 for each one United States dollar that exceeds US$
1,200,000.00 (one million and two hundred thousand United States
dollars) of After Tax Net Profit as verified in the fiscal year of
2006, limited such variable part of the Purchase Price (tranche
4.4.4.) to an aggregate ceiling of US$ 260,160.00 (two hundred and
sixty thousand, one hundred and sixty United States dollars), as
follows:
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SELLER ADDITIONAL PRICE FOR EVERY ADDITIONAL
US$ 1 OF ATNP ABOVE US$ 912,000.00
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Xxxxxx US$ 0,14731596829
Marcio US$ 0,14731596829
Xxxxx US$ 0,098210645527
Alexandre US$ 0,098210645527
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4.5. Tranche Five - The Buyer will pay for the fifth tranche, in Brazilian Reais
calculated at the applicable Exchange Rate, on February 22, 2008, as
follows:
4.5.1. - Tranche Five (1) US$ 823,840.00 (eight hundred and twenty three
thousand, eight hundred and forty United States dollars) distributed
as follows:
-------------------------------------------------------------
SELLER
-------------------------------------------------------------
Xxxxxx US$ 187,835.52
Marcio US$ 187,835.52
MIND US$ 118,632.96
Xxxxx US$ 164,768.00
Alexandre US$ 164,768.00
-------------------------------------------------------------
Total US$823,840,00
6
4.5.2. - Tranche Five (2) - Exclusively to MIND (tranche 4.5.2), US$
0.13008 for each one United States dollar that exceeds US$ 912,000,00
(nine hundred and twelve thousand United States dollars) of After Tax
Net Profit as verified in the fiscal year of 2006, limited such
variable part of the Purchase Price (tranche 4.5.2.) to a ceiling of
US$ 37,463,04 (thirty-seven thousand, four hundred and sixty three
United States dollars and four cents).
4.5.3. - Tranche Five (3)- To the remaining Sellers (tranche 4.5.3), US$
0.773253333333 for each one United States dollar that exceeds US$ US$
912,000,00 (nine hundred and twelve thousand United States dollars),
but does not exceed US$ 1,200,000.00 (one million and two hundred
thousand United States dollars) of After Tax Net Profit as verified in
the fiscal year of 2006, limited such variable part of the Purchase
Price (tranche 4.5.3.) to an aggregate ceiling of US$ 222,696.96 (two
hundred and twenty two thousand, six hundred and ninety-six United
States dollars and ninety six cents), as follows:
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SELLER ADDITIONAL PRICE FOR EVERY ADDITIONAL
US$ 1 OF ATNP ABOVE US$ 912,000.00
-------------------------------------------------------------
Xxxxxx US$ 0,20596
Marcio US$ 0,20596
Xxxxx US$ 0,180666666667
Alexandre US$ 0,180666666667
-------------------------------------------------------------
4.5.4. - Tranche Five (4)- To the remaining Sellers (tranche 4.5.4), US$
0.491053227633 for each one United States dollar that exceeds US$
1,200,000.00 (one million and two hundred thousand United States
dollars) of After Tax Net Profit as verified in the fiscal year of
2006, limited such variable part of the Purchase Price (tranche
4.5.4.) to an aggregate ceiling of US$ 260,160.00 (two hundred and
sixty thousand, one hundred and sixty United States dollars), as
follows:
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SELLER ADDITIONAL PRICE FOR EVERY ADDITIONAL
US$ 1 OF ATNP ABOVE US$ 912,000.00
-------------------------------------------------------------
-------------------------------------------------------------
Xxxxxx US$ 0,14731596829
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-------------------------------------------------------------
Marcio US$ 0,14731596829
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Xxxxx US$ 0,098210645527
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-------------------------------------------------------------
Alexandre US$ 0,098210645527
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4.6. Tranche Six - The Buyer will pay for the sixth tranche, in Brazilian Reais
calculated at the applicable Exchange Rate, on August 22, 2008, as follows:
7
4.6.1. - Tranche Six (1) US$ 823,840.00 (eight hundred and twenty three
thousand, eight hundred and forty United States dollars) distributed
as follows:
-------------------------------------------------------------
SELLER
-------------------------------------------------------------
Xxxxxx US$ 187,835.52
Marcio US$ 187,835.52
MIND US$ 118,632.96
Xxxxx US$ 164,768.00
Alexandre US$ 164,768.00
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Total US$ 823,840,00
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4.6.2. - Tranche Six (2) - Exclusively to MIND (tranche 4.6.2), US$ 0.13008
for each one United States dollar that exceeds US$ 912,000,00 (nine
hundred and twelve thousand United States dollars) of After Tax Net
Profit as verified in the fiscal year of 2007, limited such variable
part of the Purchase Price (tranche 4.6.2.) to a ceiling of US$
37,463,04 (thirty-seven thousand, four hundred and sixty three United
States dollars and four cents).
4.6.3. - Tranche Six (3)- To the remaining Sellers (tranche 4.6.3), US$
0.773253333333 for each one United States dollar that exceeds US$
912,000,00 (nine hundred and twelve thousand United States dollars),
but does not exceed US$ 1,200,000.00 (one million and two hundred
thousand United States dollars) of After Tax Net Profit as verified in
the fiscal year of 2007, limited such variable part of the Purchase
Price (tranche 4.6.3.) to an aggregate ceiling of US$ 222,696.96 (two
hundred and twenty two thousand, six hundred and ninety-six United
States dollars and ninety six cents), as follows:
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SELLER ADDITIONAL PRICE FOR EVERY ADDITIONAL
US$ 1 OF ATNP ABOVE US$ 912,000.00
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XXXXXX US$ 0,20596
MARCIO US$ 0,20596
XXXXX US$ 0,180666666667
ALEXANDRE US$ 0,180666666667
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4.6.4. - Tranche Six (4)- To the remaining Sellers (tranche 4.6.4), US$
0.491053227633 for each one United States dollar that exceeds US$
1,200,000.00 (one million and two hundred thousand United States
dollars) of After Tax Net Profit as verified in the fiscal year of
2007, limited such variable part of the Purchase Price (tranche
4.6.4.) to an aggregate ceiling of US$ 260,160.00 (two hundred and
sixty thousand, one hundred and sixty United States dollars), as
follows:
--------------------------------------------------------------------------------
SELLER ADDITIONAL PRICE FOR EVERY ADDITIONAL
US$ 1 OF ATNP ABOVE US$ 912,000.00
--------------------------------------------------------------------------------
XXXXXX US$ 0,14731596829
MARCIO US$ 0,14731596829
XXXXX US$ 0,098210645527
ALEXANDRE US$ 0,098210645527
--------------------------------------------------------------------------------
4.7. Tranche Seven - The Buyer will pay for the seventh tranche, in Brazilian
Reais calculated at the applicable Exchange Rate, on December 22, 2008, as
follows:
4.7.1. - Tranche Seven (1) US$ 820,800.00 (eight hundred and twenty
thousand, eight hundred United States dollars) distributed as follows:
-------------------------------------------------------------------
SELLER
-------------------------------------------------------------------
Xxxxxx US$ 187,142,40
Marcio US$ 187,142,40
MIND US$ 118,195.20
Xxxxx US$ 164,160.00
Alexandre US$ 164,160.00
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Total US$ 820,800,00
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4.7.2. - Tranche Seven (2) - Exclusively to MIND (tranche 4.7.2), US$
0.1296 for each one United States dollar that exceeds US$ 912,000,00
(nine hundred and twelve thousand United States dollars) of After Tax
Net Profit as verified in the fiscal year of 2007, limited such
variable part of the Purchase Price (tranche 4.7.2.) to a ceiling of
US$ 37,324.80 (thirty-seven thousand, three hundred and twenty four
United States dollars and eighty cents).
4.7.3. - Tranche Seven (3)- To the remaining Sellers (tranche 4.7.3), US$
0.7704 for each one United States dollar that exceeds US$ US$
912,000,00 (nine hundred and twelve thousand United States dollars),
but does not exceed US$ 1,200,000.00 (one million and two hundred
9
thousand United States dollars) of After Tax Net Profit as verified in
the fiscal year of 2007, limited such variable part of the Purchase
Price (tranche 4.7.3.) to an aggregate ceiling of US$ 221,875.20 (two
hundred and twenty one thousand, eight hundred and seventy-five United
States dollars and twenty cents), as follows:
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SELLER ADDITIONAL PRICE FOR EVERY ADDITIONAL
US$ 1 OF ATNP ABOVE US$ 912,000.00
-----------------------------------------------------------------
Xxxxxx US$ 0,2052
Marcio US$ 0,2052
Xxxxx US$ 0,18
Alexandre US$ 0,18
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4.7.4. - Tranche Seven (4)- To the remaining Sellers (tranche 4.7.4), US$
0.489241223103 for each one United States dollar that exceeds US$
1,200,000.00 (one million and two hundred thousand United States
dollars) of After Tax Net Profit as verified in the fiscal year of
2007, limited such variable part of the Purchase Price (tranche
4.7.4.) to an aggregate ceiling of US$ 259,200.00 (two hundred and
fifty nine thousand and two hundred United States dollars), as
follows:
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SELLER ADDITIONAL PRICE FOR EVERY ADDITIONAL
US$ 1 OF ATNP ABOVE US$ 912,000.00
------------------------------------------------------------------
Xxxxxx US$ 0,146772366931
Marcio US$ 0,146772366931
Xxxxx US$ 0,097848244621
Alexandre US$ 0,097848244621
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4.8. Failure to perform payment on any of the Payment Dates will impose on the
Buyer a interest of one percent (1%) per month, calculated pro rata die and
a penalty equal to two percent (2%) on the corresponding payment. The
penalty will apply on the thirtieth continuous day of default. Any delay in
any of the scheduled payments that exceeds ninety (90) calendar days will
precipitate the maturity of the unpaid fixed portions for the Purchase
Price. The parties agree that to the extent a state of default continues,
the right of the Buyer as the controlling quotaholder or that of the
Company, to terminate the management mandate of Flavio, Marcio, Alexandre
and Xxxxx will be suspended until the payments are resumed and made
current.
4.9. In case one or more of the Sellers mentioned in Section 14 decide to
withdraw from the management of the Company, the following rule will apply:
10
(a) if any such withdrawal occurs before January 1, 2007, the withdrawing
Seller or Sellers will receive the portions of the Purchase Price
under Sub-Sections 4.4 (1), 4.5 (1), 4.6 (1) and 4.7 (1);
(b) if any such withdrawal occurs after January 1, 2007 and before January
1, 2008, the withdrawing Seller or Sellers will receive the portions
of the Purchase Price under Sub-Sections 4.4 (3), 4.5 (3) in
accordance with its terms; the portions of the Purchase Price under
Sub-Sections 4.6 (3) and 4.7 (3) in accordance with its terms but at a
discount of 50%.
The Buyer may, at any time and at its sole discretion, anticipate in full
for one or more Sellers the payments corresponding to the unpaid tranches of the
Purchase Price. At a discount of 4% per annun, accumulated on a pro-rata
temporis, accumulated basis calculated upon the unpaid amounts. Relatively to
Sub Sections 4.4, 4.5, 4.6 and 4.7, the pre-payment and its rules will apply
upon the following mid-points:
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TRANCHES MIDPOINT
-----------------------------------------------------------
4.4. $1084,000.00
4.5 $1084,000.00
4.6 $1084,000.00
4.7 $1080,000.00
--------------------------------------------------
SECTION 5 - REPRESENTATIONS AND WARRANTIES OF THE SELLERS
In order to induce the Buyer to enter into this Agreement and consummate
the transactions contemplated hereby, each of the Sellers jointly and severally
hereby make to the Buyer the representations, warranties and covenants contained
in this Section 5, as of the date hereof and as of the Date of Closing.
5.1. Qualification and Authority of the Company.
(a) The Company is a corporation duly organized, validly existing and in
good standing under the laws of Brazil. The Company has full corporate
power and authority to conduct its business in the manner such
business is currently conducted or proposed to be conducted.
(b) The Company's Articles (Contrato Social), as amended in the form of
Exhibit 5.1.(b) hereof, are fully effective, complete and correct, and
no amendments thereto are pending.
(c) The Company is duly licensed and qualified to do business and in good
standing in each jurisdiction in which operation of its business makes
such licensing or qualification to do business necessary and the
failure so to qualify to do business would have a material adverse
effect on the business or prospects (financial or otherwise) of the
Company.
(d) Subsidiaries and Affiliates - Except for Unione Consulting Chile S.A.,
the Company does not presently own or control, directly or indirectly,
any equity interest in any corporation, association or business
entity. The Company is not, directly or indirectly, a participant in
any joint venture or partnership.
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5.2. Capitalization.
(a) As of the date hereof, and on the Date of Closing, the total capital
stock of the Company consists of nine hundred and thirty-four thousand
(934,000) quotas, all of which are outstanding, paid-up in full and
non-assessable, are owned by the Sellers and have not been issued in
violation of any preemptive rights or transferred in violation of any
rights of first refusal.
(b) As of the Closing, upon consummation of the transactions contemplated
herein, the total authorized capital stock of the Company will consist
of nine hundred and thirty-four thousand (934,000) quotas, all of
which will be duly and validly outstanding, fully paid and
non-assessable, will have not been issued, offered and sold in
violation of any preemptive rights, rights of first refusal or any
Applicable Law and will be owned on a fully diluted bases by the Buyer
or its designees.
(c) The Sellers are not a party to any option, warrant, and purchase
right, or other contract or commitment that could require them to
sell, transfer, or otherwise dispose of any capital stock of the
Company.
(d) There are no outstanding options, warrants, calls, purchase rights,
subscription rights, preemptive rights or other contracts or
commitments that could require, or commitments by the Company to
issue, sell, or otherwise cause to become outstanding any of its
capital stock, or to pay any dividends on such quotas, or to purchase,
redeem, or retire any outstanding quotas of its capital stock, nor are
there outstanding any obligations which are convertible into or
exchangeable for any portion of capital stock of the Company.
(e) There are no voting trusts, proxies, or other agreements or
understandings with respect to the voting of the capital stock of the
Company or the management of the business and affairs of the Company.
(f) There are no agreements among the Company and any of the Company's
quotaholders or among any of the Company's quotaholders, which in any
way affect any quotaholder's ability or right freely to alienate the
quotas.
(g) The Sellers hold of record and own beneficially all of the quotas,
free and clear of any and all security interests, Liens, claims,
pledges, assessments, equities, charges, Taxes, agreements,
restrictions and encumbrances whatsoever and free of all options,
warrants, calls, purchase rights or other contracts or commitments
that could require such quotaholder to sell such quotas and with no
proxies or restrictions on the voting or other rights pertaining
thereto.
(h) The Sellers have complete and unrestricted power and authority and the
unqualified right to sell, assign, transfer and deliver the quotas to
the Buyer, and upon such sale, assignment, the Buyer will acquire
good, valid and marketable title to the quotas.
5.3. Qualification and Authority of Sellers
(a) MIND is a limited liability company duly organized, validly existing
and in good standing under the laws of Brazil with full corporate
power and authority to conduct its business in the manner and in the
places where such business is conducted.
(b) The Sellers have full right, power and authority to enter into this
Agreement and the other documents to be executed and delivered by them
pursuant to this Agreement and to carry out the transactions
contemplated hereby. The execution and delivery of this Agreement and
12
the performance of the Sellers' obligations hereunder have been duly
authorized by all necessary action of the Sellers' board of directors
or shareholders (where applicable) and no other action is required and
no consent or notice is required by any other Person.
(c) This Agreement constitutes valid and binding obligations of the
Sellers, enforceable in accordance with their respective terms,
subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights.
5.4. Consents - No consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with, any
Person is required in connection with the offer, sale or issuance of the
Shares, or the consummation of any other transaction contemplated hereby.
5.5. Financial Statements; No Undisclosed Liabilities.
(a) The Sellers have delivered to the Buyers an unaudited balance sheet of
the Company dated December 31, 2005 and statements of operations and
cash flows for the an one (1) year period then ended, with all
footnotes thereto, certified by the Company's chief financial officer
(the "Financial Statements"), a copy of which are incorporated herein
as SCHEDULE 5.5.
(b) The Financial Statements (A) have been prepared in accordance with
Brazilian GAAP applied consistently during the periods covered
thereby; (B) are complete and correct in all material respects and
present fairly the financial condition of the Company at the dates of
said Financial Statements and the results of its operations and cash
flows for the periods covered thereby; (C) were prepared in accordance
with the books and records of the Company; (D) present fairly the
revenues, direct operating expenses actually incurred during the
periods covered thereby and the cash position, borrowings, customer
advances, inventories, accounts receivable and accounts payable
actually held or incurred as of the relevant dates thereof; and (E) do
not contain any items of special or nonrecurring income.
(c) Since the date of the Financial Statements, the Company has had no
material liabilities or obligations of any nature, whether accrued,
absolute, direct, contingent or otherwise, except liabilities or
obligations stated or adequately reserved against on the Financial
Statements or reflected in SCHEDULE 5.5. For purposes of this Section
5.5 an amount shall conclusively be deemed "material" if it is greater
than or equal to three thousand United States dollars (US$ 3,000.00).
The Company has no additional liabilities of any nature (whether fixed
or contingent) not required to be disclosed under Brazilian accounting
principles in an aggregate amount greater than three thousand United
States dollars (US$ 3,000.00). The reserves and provisions reflected
in the Financial Statements are, as of the date thereof and hereof,
adequate, appropriate and reasonable and have been calculated in a
consistent manner. No reserves or provisions in addition to those
reflected in the Financial Statements are currently required or
appropriate.
(d) All Tax Returns required to be filed with respect to the Company for
all Taxable Periods ending on or before the date hereof have been
timely filed with the appropriate Tax Authority in the manner
prescribed by Applicable Law. All such Tax Returns (i) were prepared
in the manner required by Applicable Law, (ii) are true, correct and
complete in all respects, and (iii) reflect the liability for Taxes of
13
the Company. All Taxes shown to be payable on such Tax Returns, and
all assessments of Tax made against the Company with respect to such
Tax Returns, have been paid when due. No adjustment relating to any
such Tax Return has been proposed or threatened formally or informally
by any Taxing authority and to the best knowledge of Sellers, no basis
exists for any such adjustment.
(e) All monies required to be withheld by the Company for services tax,
income taxes, social security and other payroll taxes have been
collected or withheld and either paid to the respective Tax
Authorities, set aside in accounts for such purpose, or accrued,
reserved against and entered upon the books of the Company.
(f) No material claim has ever been made by an authority with respect to
the Company in a jurisdiction where the Company does not file reports
and returns that the Company is or may be subject to taxation by that
jurisdiction. There are no security interests on any of the assets of
the Company that arose in connection with any failure (or alleged
failure) to pay any Taxes and there are no Liens for any Tax upon any
asset of the Company. The Company is not a party to any agreement
relating to the sharing of liability for, or payment of, Taxes and the
Company is not otherwise obligated to indemnify any party for any
Taxes.
(g) No extension of time with respect to any date on which a Tax Return
was or is to be filed by the Company is in force, and no waiver or
agreement by the Company is in force for the extension of time for the
assessment or payment of any Taxes.
(h) No audit or other administrative proceeding or court proceeding has
formally commenced or is presently pending with regard to any Taxes or
Tax Returns of the Company and no notification has been received by
the Company that such an audit or other proceeding is pending or
threatened with respect to any Taxes due from or with respect to the
Company or any Tax Return filed (or required to have been filed) by or
with respect to the Company.
(i) All material amounts required to be collected or withheld by the
Company have been collected and withheld by the Company and any such
amounts that are required to be remitted to any Taxing authority have
been duly remitted.
5.6. Accounts Receivable - The Company does not have any accounts or loans
receivable from any Person which is an Affiliate of the Company, including,
without limitation, any quotaholders, director or officer of the Company.
All of the accounts receivable of the Company are valid and enforceable
claims, fully collectible in the ordinary course and subject to no set-off
or counterclaim other than set-offs and counterclaims arising in the
ordinary course of business consistent with prudent business practice. The
Company has not, since the date of the Financial Statements, changed its
normal credit and collection practices.
5.7. Absence of Certain Changes - Since December 31, 2005 there has not been:
(a) Any change in the properties, assets, liabilities, business,
operations, condition (financial or other) or prospects of the
Company, which change by itself or in conjunction with all other such
changes, whether or not arising in the ordinary course of business,
has been materially adverse with respect to the assets, business,
operations, conditions (financial or other) or prospects of the
Company;
(b) Any obligation or liability of any nature incurred by the Company,
whether accrued, absolute, contingent or otherwise, known or unknown,
in excess of three thousand United States dollars (US$ 3,000.00) in
the aggregate, other than obligations and liabilities incurred in the
ordinary course of business consistent with the terms of this
Agreement;
14
(c) Any purchase, sale or other disposition, or any agreement or other
arrangement for the purchase, sale or other disposition, of any
capital asset of the Company having a purchase price or other
replacement cost of more than three thousand United States dollars
(US$ 3,000.00) or except in the ordinary course of business in an
aggregate amount not material to the Company, any other asset of the
Company having a purchase price or other replacement cost of more than
three thousand United States dollars (US$ 3,000.00);
(d) Any damage, destruction or loss in excess of three thousand United
States dollars (US$ 3,000.00), in the aggregate, to any assets or
property of the Company, whether or not covered by insurance;
(e) any change in the compensation (whether in the form of salaries,
wages, incentive arrangements, employee benefits or otherwise) payable
or to become payable by the Company to any of its officers, employees,
agents or independent, such changes which are not, in the aggregate,
material to the Company and are made in the ordinary course consistent
with prior practices, or (B) any bonus payment or arrangement made to
or with any of such officers, employees, agents or independent
contractors, or (C) the entering into of any employment, deferred
compensation or other similar agreement (or any amendment to any such
existing agreement) with any officer, director, employee or
independent contractor of the Company;
(f) Any change with respect to the officers or senior management of the
Company, any grant of any severance or termination pay to any
individual officer or employee of the Company or any increase in
benefits payable under any existing severance or termination pay
policies or employment agreements;
(g) Any obligation or liability incurred by the Company to any of its
officers, directors or quotaholders, or any loans or advances made by
the Company to any of its officers, directors or quotaholders, except
normal compensation and expense allowances payable to officers or
employees;
(h) Any material change in accounting methods or practices, credit,
policies or practices with respect to the payment of accounts payable
or collection policies or practices used by the Company;
(i) Any other transaction or series of related transactions involving the
payment of three thousand United States dollars (US$ 3,000.00) or more
in the aggregate or otherwise material to the Company, entered into by
the Company other than transactions in the ordinary course of business
consistent with past practice;
(j) Any event, occurrence, development, state of facts or change in the
business which has had, either alone or together with all such events,
occurrences, developments, states of facts or changes, a material
adverse effect on the assets, business, results of operations,
affairs, prospects or financial condition of the Company.
5.8. Ordinary Course - Since December 31, 2005, the Company has conducted its
business only in the ordinary course and consistently with its prior
practices. From and after the date of this Agreement through and including
the Date of Closing, the Company shall have conducted its business only in
the ordinary course and consistently with prior business practices.
5.9. Tangible Personal Property - The Company has good, marketable and valid
title to all of the items of tangible personal property used in its
operations; all such items reflected on the Company's Financial Statements,
and owned free and clear of all Liens. The tangible personal property of
the Company is in good repair and working order, reasonable wear and tear
excepted, as listed in EXHIBIT 5.9.
15
5.10.Intellectual Property - The Company has exclusive ownership of, or
exclusive and unrestricted license to use, free and clear of all Liens, all
Brazilian and foreign copyrights, trade secrets, trademarks, service marks,
trade names, trade secrets (including, without limitation, customer lists,
designs, manufacturing or other processes), computer software, systems,
data compilations, research results and proprietary rights, used or to be
used in the business of the Company as presently conducted or contemplated
to be conducted or which are necessary or desirable for such business as so
conducted. There are no actual or threatened claims or demands of any other
Person pertaining to any of the Intellectual Property. The present
business, activities and products of the Company do not infringe any
Intellectual Property of any other Person.
0.00.Xxxxx Secrets and Customer List - The Company has the right to use in the
ordinary course of its business as presently conducted or contemplated all
trade secrets, inventions, customer lists and processes required for or
incident to the marketing of all services presently sold, licensed or under
development by the Company, including products licensed from others. No
payment is required to be made by the Company for the use of any such trade
secret, invention, customer list or process.
5.12.Contracts - Except for contracts, commitments, plans, agreements and
licenses listed on SCHEDULE 5.12 (true and complete copies of which
documents have been made available to the Buyer), the Company is not a
party to or subject to, whether written or oral,
(a) any plan or contract providing for bonuses, pensions, options, stock
purchases, deferred compensation, retirement payments, profit sharing,
collective bargaining or the like, or any contract or agreement with
any labor union;
(b) any employment contract, or any contract for services which is not
terminable upon thirty (30) days' prior notice by the Company without
liability for any penalty or severance or other payment or other
consideration or penalty;
(c) any contract or agreement for the purchase of any commodity, material
or equipment except purchase orders in the ordinary course of
business;
(d) any contract containing covenants limiting the freedom of the Company
to compete in any line of business or with any Person or entity;
(e) any contract or agreement with a quotaholder or any of their
Affiliates which will survive the Closing; or
(f) any contract or agreement which is out of the ordinary course of
business, or has a term which will expire more than one year from the
date of this Agreement.
All contracts, agreements, licenses and instruments to which the Company is
a party or by which the Company is obligated are valid and are in full force and
effect and constitute legal, valid and binding obligations of the Company. The
Company is not in default in complying with any material provisions thereof, and
no condition or event exists which would constitute a default thereunder on the
part of the Company.
5.13.Litigation - SCHEDULE 5.13 lists all currently outstanding or pending
litigation and governmental or administrative proceedings or investigations
to which the Company is a party, including the forum, names of parties and
type and amount of relief sought. Except for matters described on SCHEDULE
5.13, there are no, actions, suits, judgments, investigations or
proceedings outstanding or pending or threatened, against or affecting the
16
Company or its assets or properties, before any federal, state, municipal
or other governmental department, commission, court, board, bureau or
agency, foreign or domestic, or seeking to enjoin, or seeking changes in
connection with, the consummation of the transactions contemplated hereby.
5.14. Compliance -
(a) The Company is in compliance with all applicable statutes, ordinances,
orders, rules and regulations promulgated by any federal, state,
municipal or other authority, and all orders, writs, injunctions or
decrees of any court, administrative agency or arbitration tribunal
which apply to the conduct of its business.
(b) Neither the Company nor the Sellers has received notice of any
violation or alleged violation which could individually or in the
aggregate with others have a material adverse effect on the Company's
business, operation, conditions or prospects (financial or otherwise).
0.00.Xxxxxxxxx - SCHEDULE 5.15 is a complete and correct list (including the
name of the carrier, summary description of coverage, premium, deductible
and expiration date) of all policies of insurance maintained by the
Company. True and correct copies of all such policies have previously been
provided to the Buyers by or on behalf of the Company. There is no claim by
the Company pending under any such policies. Such policies are in full
force and effect; all premiums with respect thereto are currently paid.
5.16.Warranty Related Matters - Each service sold or delivered by the Company
has been in conformity with all applicable contractual commitments and all
express and implied warranties, and the Company has no liability for
damages in connection therewith. No service sold or delivered by the
Company is subject to any guaranty, warranty or other indemnity beyond the
applicable standard terms and conditions of sale.
5.17.Finder's Fees - No broker or finder has acted for the Sellers in
connection with this Agreement, and no broker or finder is entitled to any
brokerage or finder's fee or other commission based in any way on any
agreement, arrangement or understanding made by the Sellers or the Company,
all of the fees and expenses of which shall be the responsibility of the
Sellers.
5.18.Corporate Records - The corporate record of the Company, including the
Contrato Social and its amendments, the Book of Resolutions of
quotaholders, the Ledger and the tax books accurately record all material
corporate action taken by the quotaholders and officers thereof. The copies
of the corporate records of the Company, as delivered or furnished by the
Company to the Buyer, are true and complete copies of the originals of such
documents.
5.19.Employees - Labor Matters - SCHEDULE 5.19 sets forth all the Labor
Agreements to which the Company is a party. The Company is not delinquent
in payments to any of its employees, officers or contractors for any wages,
salaries, commissions, bonuses, severance, termination pay or other direct
compensation for any services performed for it to the date hereof or
amounts required to be reimbursed to such employees. The Company is in
compliance with all Applicable Law and regulations respecting labor,
employment, labor and union relations, fair employment practices, safety
and health, terms and conditions of employment, and wages and hours.
17
5.20.Banks - SCHEDULE 5.20 sets forth a complete list of the names and
locations of all and other financial institutions at which the Company has
an account, a safe deposit box or maintains a banking, custodial, trading
or other similar relationship, indicating in each case the account number
and the names of the representatives of the Company having signatory power
with respect thereto.
5.21.Powers of Attorney - Except as set forth in SCHEDULE 5.21, neither the
Company nor any of the Sellers in relation to the Company has any power of
attorney or comparable delegations of authority outstanding.
5.22.Disputed Accounts Payable - There are no unpaid invoices or bills
representing amounts alleged to be owed by the Company, or alleged
obligations of the Company.
5.23.Accuracy of Statements - No representation or warranty made by the Sellers
in this Agreement or in any Schedule, written statement or certificate
furnished to the Buyer, its Affiliates or its agents in connection with the
transactions contemplated by this Agreement contains or will contain any
untrue statement of a material fact or omits or will omit to state a
material fact necessary to make the statements contained herein or therein
not false or misleading.
0.00.Xx Illegal or Improper Transactions - The Company has not, nor has any
director, officer or quotaholder of he Company, (a) taken any action in
violation of any anti-bribery, or anti-corruption or criminal laws of
Brazil or of any other jurisdiction to which the Company is subject, (b)
paid, offered or promised to pay, or authorized the payment of any monies
to any Person or firm employed by or acting for or on behalf of any Person,
whether private or governmental, for the purpose of illegally or improperly
inducing or rewarding any action by any official favorable to the Company
or any other Person in connection with the business of the Company.
SECTION SIX - COVENANTS OF THE SELLERS
The Company and the Sellers warrant, covenant and agree as set forth in
this Section 6.
6.1. Conduct of Business - Between the date of this Agreement and the Date of
Closing Date, the Sellers will cause the Company to do and the Company will
do the following:
(a) conduct its business only in the ordinary course consistent with prior
business practices and refrain from changing or introducing any method
of management or operations except in the ordinary course of business
and on a basis consistent with prudent business practices, including,
without limitation, maintaining its assets in good working order and
condition, ordinary wear and tear excepted;
(b) refrain from making any purchase, sale or disposition of any asset or
property used or held for use in the conduct of the Company's
business, other than inventory in the ordinary course of business
consistent with prudent business practices, and from selling any
capital asset or create or incur any Lien on any of the Company's
assets;
(c) refrain from entering into, amending or modifying in any material
respect, terminate (partially or completely), granting any waiver
under or giving any consent with respect to any contract or any
material license used in connection with the Company's business;
18
(d) refrain from engaging in any transaction with respect to its business
with any officer, director or Affiliate of the Company;
(e) refrain from incurring or modifying any Indebtedness, except in the
ordinary course of business on a basis consistent with prudent
business practices;
(f) refrain from (i) making any change or obligating itself to make any
change in its Articles, or in its authorized or issued capital stock,
or (ii) acquiring any securities issued by any other business
organization other than short-term investments in the ordinary course
of business;
(g) refrain from making any change in the compensation payable or to
become payable to any of its officers, employees, independent
contractors or agents, or granting any severance or termination pay
to, or entering into, amending or terminating any employment,
severance or other agreement or arrangement with, any director,
officer, employee or independent contractor of the Company other than
in the ordinary course of business;
(h) refrain from establishing, adopting or entering into or amending any
collective bargaining, bonus, incentive, deferred compensation, profit
sharing, stock option or purchase, insurance, pension, retirement or
other employee benefit plan;
(i) refrain from making any payment or reimbursing any expense (other than
Ordinary Expenses) or engaging in any other transaction outside of the
ordinary course with, any employee, officer or quotaholder of the
Company, or any of its Affiliates, except for the payment and
distribution of the dividends determined by the Financial Statements
closed on December 31, 2005 and those retained from previous fiscal
years;
(j) pay all accounts payable, regardless of when incurred, in the ordinary
course of business;
(k) refrain from changing accounting policies or procedures (including,
without limitation, procedures with respect to the payment or
forgiveness of accounts payable and collection of accounts receivable)
or from making any Tax election;
(l) except to the extent required by Applicable Law, (A) cause its
business books and records to be maintained in the usual, regular and
ordinary manner consistent with past practice, and (B) not permit any
material change in any pricing, investment, accounting, financial
reporting, inventory, credit, allowance or tax practice or policy of
the Company that would adversely affect their respective businesses;
(m) comply, in all material respects, with all Applicable Law applicable
to its business and promptly following receipt thereof to give the
Buyer any violation of any such Applicable Law;
(n) refrain from purchasing any capital stock, partnership interest or
other equity security, or warrants or option therefor, of any other
business enterprise, or entering into any joint venture or similar
business arrangement, or make any capital investment in any other
Person;
(o) refrain from entering into any executory agreement, commitment or
undertaking to do any of the activities prohibited by the foregoing
provisions;
(p) refrain from granting any powers of attorney or comparable delegations
of authority;
19
(q) notify the Buyer in writing of any action, event, condition or
circumstance, relating to the Company that is out of the ordinary
course of its business or threatens to result in, a material adverse
effect on the Company; and
(r) notify Buyer in writing of any transaction, liability or obligations
involving the Company, the Sellers or any of their respective
Affiliates.
6.2. Breach of Representations and Warranties. Promptly upon the occurrence of
any event which would constitute a breach, of any of the representations
and warranties or covenants of the Sellers contained in or referred to in
this Agreement or in any Schedule, the Sellers shall give detailed written
notice thereof to the Buyer.
SECTION 7 - REPRESENTATION AND WARRANTIES OF BUYER
In order to induce the Sellers to enter into this Agreement and consummate
the transactions contemplated hereby, the Buyer hereby make to each of the
Sellers the representations and warranties contained in this Section 7, as of
the date hereof and as of the Date of Closing.
7.1. Organization of the Buyer.
(a) Newmarket Technology Inc. is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada
with full corporate power and authority to conduct its business in the
manner and in the places where such business is conducted.
(b) The Buyer is duly licensed and qualified to do business and in good
standing in each jurisdiction in which the operation of its business
makes such licensing or qualification to do business necessary and the
failure to qualify to do business would have a material adverse effect
on the Buyer.
(c) The execution, delivery and performance by the Buyer of this
Agreement, and the consummation of the transactions contemplated
hereby, do not violate, accelerate any obligation under or give rise
to a right of termination or cancellation of any agreement to which
the Buyer is a party.
7.2. Authority - All necessary corporate and limited liability company action,
as applicable, has been taken by the Buyer to authorize the execution,
delivery and performance of this Agreement. This Agreement constitutes, or
when executed and delivered will constitute, valid and binding obligations
of the Buyer enforceable in accordance with their respective terms. The
execution, delivery and performance by the Buyer of this Agreement:
(a) do not and will not violate any provisions of the articles of organization,
the by-laws of the Buyer; do not and will not violate any United States
laws or laws of the jurisdiction of incorporation of the Buyer or of any
jurisdiction in which the Buyer engages in business; and
(b) will not constitute a default under, any loan or credit agreement or any
other agreement, lien or judgment, to which the Buyer is a party.
7.3. Finder's Fees - No broker or finder has acted for the Buyer in connection
with this Agreement, and no broker or finder is entitled to any brokerage
or finder's fee or other commission based in any way on any agreement,
arrangement or understanding made by the Buyer, all of the fees and
expenses of which shall be the responsibility of the Buyer.
20
7.4. Accuracy of Statements - No representation or warranty made by the Buyer in
this Agreement or any written statement or certificate furnished to the
Sellers, its Affiliates or its agents in connection with the transaction
contemplated by this Agreement contains or will contain any untrue
statement of a material fact necessary to make the statements contained
herein or therein not false or misleading.
SECTION EIGHT - COVENANTS OF THE BUYER
8. The Buyer makes the covenants and agreements set forth in this Section
8.1. Consents and Approvals - The Buyer will use its commercially reasonable
efforts to cause all conditions to the obligations of the parties hereunder
to be satisfied and will use its commercially reasonable efforts to obtain
all necessary consents and approvals to the performance of its obligations
under this Agreement and the transactions contemplated hereby. The Buyer
shall promptly inform the Sellers of any inquiries or communications from
any governmental agencies and provide copies of any written communication
relating thereto.
8.2. Breach of Representations and Warranties - Promptly upon the occurrence of
any event which would constitute a breach, the Buyer shall give detailed
written notice thereof to the Sellers.
8.3. Consummation of Agreement; Cooperation - The Buyer shall use its best
efforts to the end that the transactions contemplated by this Agreement
shall be fully carried out as soon as practicable after the date hereof,
subject to and in accordance with, and without limitation of, the terms and
conditions of this Agreement.
SECTION NINE - CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
The obligation of the Buyer to execute and deliver this Agreement is
subject to the fulfillment, prior to or at the date hereof, of the following
conditions:
(a) Amendment to the Contrato Social - The quotaholders shall have
executed the 6th amendment to the Contrato Social of the Company in
the form attached hereto as SCHEDULE 2.1.
(b) No Litigation - No litigation or proceeding shall have been instituted
by or against the Company or threatened, after the date of this
Agreement by any governmental agency or other Person or entity seeking
to restrain or prohibit the performance or to obtain damages or other
relief in conjunction with, this Agreement or any of the transactions
contemplated hereby;
(c) No Material Adverse Change - There shall have been no material adverse
change in the condition, assets, operations, Taxes or prospects
(financial or otherwise) of the Company or its business or assets
since December 31, 2005.
(d) Representations; Warranties; Covenants - Each of the representations
and warranties of the Sellers contained in this Agreement shall be
true and correct as of the date hereof and on the Date of Closing.
(e) Schedules - The Schedules to this Agreement will have been prepared,
and delivered to the Buyer, fully initialed by each of the Sellers.
21
SECTION TEN - CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS
The obligations of the Sellers to execute this Agreement are subject to the
fulfillment until the Closing Date of the following conditions:
(a) Representations; Warranties; Covenants -Each of the representations
and warranties of the Buyer contained in this Agreement shall be true
and correct on and as of the date hereof.
(b) Amendment to the Contrato Social - The Buyer and its designee shall
have executed the amendment to the Contrato Social of the Company in
the form attached hereto as Schedule 2.1., specifically containing the
Pledge of the quotas.
(c) Appointment letter for each of the Officers of the Company.
(d) By Laws of the Buyer.
(e) Document, which reflects the granting of powers to the legal
representative of Buyer in order to sign this Agreement.
SECTION ELEVEN - SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
The representations, warranties, covenants, indemnities and agreements
contained in this Agreement, and in any document furnished in connection
therewith, are and will be deemed and construed to be continuing
representations, warranties, covenants, indemnities and agreements and shall
survive the Closing to the extent of the respective statute of limitations
applicable to the corresponding rights to claim. Any investigation by or on
behalf of any party hereto shall not constitute a waiver as to enforcement of
any representation, warranty, covenant or agreement contained herein.
SECTION TWELVE - INDEMNIFICATION
12.1. Indemnification by the Sellers
(a) The Sellers shall jointly and severally indemnify, defend and hold
harmless, the Buyer, its shareholders, members, directors, officers,
employees, Affiliates, controlling persons, agents and representatives
and its successors and assigns (The Buyer's Indemnities) from and
against any and all losses, claims, damages, liabilities, obligations,
Taxes, judgments, awards, costs, expenses and disbursements (including
reasonable counsel fees and costs of any suit related thereto)
suffered or incurred by the Buyer or any of the Buyer's Indemnities as
a result of or in connection with any misrepresentation by, or breach
of any covenant or warranty of the Sellers contained in this
Agreement, or from any misrepresentation in or omissions by the
Sellers hereunder.
(b) The Sellers shall jointly and severally indemnify, defend and hold
harmless the Buyer and any of the Buyer's Indemnities from and against
any and all losses, suffered or incurred by the Buyer or any of the
Buyer's Indemnities as a result of a claim by a third party arising
out or in connection with any of the warranties, representations and
covenants of the Sellers;
(c) The Buyer shall promptly give notice of such claim to the Sellers, in
writing;
22
(d) The Sellers will have the right to assume the defense of the third
party claim with counsel of their choice reasonably satisfactory to
the Buyer at any time within thirty (30) days after the notice of the
third party claim;
(e) The Buyer may appoint counsel at its sole cost and expense and
participate in the defense of the claim;
(f) The Sellers will promptly seek an injunction and/or provide the court
deposits required to protect the Buyer and/or the Company from
collection procedures, pledge on assets or inscription on black lists
sponsored by governmental or private entities
(g) In case Sellers fail in any extent to diligently pursue the defense of
the claim, Buyer may appoint counsel, as mutually agreed by the Buyer
and the Sellers, at the cost of Sellers, in lieu of appointee of
Sellers. So long as the Sellers have assumed and are conducting the
defense to the claim in-accordance with subsection (d) above, the
Sellers may accept any judgment or enter settlement with respect to
the claim without the prior written consent of the Buyer, exclusively
when the judgment or settlement involves only the payment of money
damages by the Sellers.
12.2. Indemnification by the Buyer
(a) The Buyer shall indemnify, defend and hold harmless, the Sellers,
their shareholders, members, directors, officers, employees,
Affiliates, controlling persons, agents and representatives and their
successors and assigns (the "Sellers Indemnities") from and against
any and all losses suffered or incurred by the Sellers as a result of
or in connection with any misrepresentation by, or breach of any
covenant or warranty of the Buyer contained in this Agreement, or from
any misrepresentation in or omissions from any certificate or other
instrument furnished by the Buyer hereunder.
(b) The Buyer shall indemnify, defend and hold harmless the Sellers and
any of the Sellers' Indemnities from and against any and all losses,
suffered or incurred by the Sellers or any of the Sellers Indemnities
as a result of a claim by a third party arising out or in connection
with any of the warranties, representations and covenants of the
Buyer.
SECTION 13 - PLEDGE OF THE QUOTAS
The Amendment of the Contrato Social, in the form of SCHEDULE 2.1., as well
as the Pledge Agreement to be signed by all the Parties on this date, will
include a pledge of one hundred (100%) of the quotas of the Company, in the form
of "Caucao", for the benefit of the Sellers and to secure the payment of the
Purchase Price and which may be executed by any of the Sellers in the event of
the default of the payment of any of the installments by the Buyer within ninety
(90) days as the date of said payments. The execution will grant the Sellers the
devolution of all of the one hundred percent (100%) of the quotas. Except for
the merger by the Company with a Buyer's Assignee, the term of the Caucao will
secure to the pledgees the right to veto material changes to the Contrato Social
that may affect the organization, operations and prospects (financial and
otherwise) of the Company.
23
SECTION 14 - MANAGEMENT OF THE COMPANY
The parties agree that the business of the Company is totally dependent
upon its technical and administrative cadres. It is, therefore, essential to the
Company the retention of its present management and technical team, and
especially of Flavio, Marcio, Xxxxx and Alexandre for a period of management
term until December 31, 2008. The Amendment to the Contrato Social under
Schedule 2.1. will establish the referred management term, will nominate Flavio,
Marcio, Xxxxx and Alexandre as the officers of the Company for the initial term
and will establish their total compensation.
SECTION 15 - CONFIDENTIALITY
(a) The Sellers shall, and shall cause the Company and the officers,
directors, agents and representatives of each of them to, hold in
strict confidence and not use any confidential or proprietary data or
information obtained from the Buyer or their officers, directors,
agents or representatives with respect to its or their business or
financial condition except for the purpose of evaluating, negotiating
and completing the transaction contemplated hereby.
(b) Information generally known in the industry or which has been
disclosed to a party hereto by third parties which have a right to do
so shall not be deemed confidential or proprietary information for
purposes of this Agreement.
(c) From the date of this Agreement until the Closing, or for a period of
two (2) years from the date of this Agreement if Closing does not take
place, all confidential business and related information furnished to
the Buyer and its representatives by or on behalf of the Sellers shall
be kept confidential by the Buyer and their representatives; provided,
however, that the foregoing shall be inapplicable (i) with respect to
information which is or becomes available to the public without breach
of this confidentiality obligation, and (ii) to the extent disclosure
is required by any Applicable Law or regulation, by any authorized
administrative or governmental agency or in the opinion of counsel to
the Buyer; and provided, further, however, that the Buyer will provide
notice to the Sellers before disclosing any information pursuant to
this Section and will cooperate with the Company and the Sellers in
endeavoring to preserve, to the extent reasonably practicable and not
inconsistent with its legal obligations, the confidential nature
thereof.
SECTION 16 - NON COMPETITION -
For three (3) years from the Closing Date, the Quota Holders will not
compete with the Company in Brazil and Chile with respect to the
business currently undertaken by the Company with its current partners,
except for cases in which they are expressly and in writing authorized
by the Company or Newmarket to compete. For three (3) years following
the last day of the rendering of services to Unione by the Officers,
the Quota Holders will not circumvent the business, disclose the
condition of the business nor solicit any employees of the business.
This condition will apply in regard to both the Company and Newmarket
and all Newmarket subsidiaries.
SECTION 17 - MISCELANEOUS
17.1.Governing Law - This Agreement shall be construed under and governed by the
laws of Brazil.
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17.2.Governing Language - This Agreement has been prepared in the English
language and properly executed by the Parties.
17.3.Notices - Any notice, request, demand or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been
given if delivered or sent by facsimile transmission, upon receipt, or if
sent by registered or certified mail or recognized overnight courier, upon
receipt, or electronic message with answerback. All notices and payments to
a party will be sent to the addresses set forth below or on or to such
other address or Person as such party may designate by notice to each other
party hereunder (or in the case of payments, to the relevant payer):
For the Sellers:
Xxxxxx Xxxxxxx xx Xxxxx
Xxx Xxxxxxx, Xx. 000, xxx. 00, 00000-000, Xxx Xxxxx - SP
Telephone: + 00 (00) 0000-0000
Fax: + 00 (00) 0000-0000
E-mail: xxxxxx@xxxxxx.xxx.xx
Marcio Archimedes Pissardo
Alameda das Xxxxxxxxxxxx, Xx. 000, 00000-000, Xxxxxxx do Parnaiba - SP
Telephone: + 00 (00) 0000-0000
Fax: + 00 (00) 0000-0000
E-mail: xxxxxx@xxxxxx.xxx.xx
Xxxxx Xxxxx Xxxxxxxx
Xxx Xxxxxxxx xxx Xxxxxx, Xx. 000, xxx. 00, Vila Alexandria,
04635-021, Sao Paulo - SP
Telephone: + 00 (00) 0000-0000
Fax: + 00 (00) 0000-0000
E-mail: xxxxxxxx@xxxxxx.xxx.xx
Xxxxxxxxx Xxxx Xxxxx
Xxx Xxxxxxxx, Xx. 000, xxx. 00, 00000-000, Xxx Xxxxx - SP
Telephone: + 00 (00) 0000-0000
Fax: + 00 (00) 0000-0000
E-mail: xxxxxx@xxxxxx.xxx.xx
With a copy to:
Xxxxxxxxx Xxxxx Xxxxxxx xx Xxxxx
Gaia, Xxxxx, Rolim Associados - Advocacia e Consultoria Juridica
Xxx xx Xxxxxxxx, Xx. 000, Xxxxxx, 00000-000, Xxx Xxxxx - SP
Telephone: + 00(00) 0000-0000
Fax: + 00(00) 0000-0000
E-mail: xxxxx@xxxxxxxxxxxxxx.xxx.xx
MIND INFORMATION SERVICES LTDA
Xx. Xxxxxx Xxxxxxx xx Xxxxx and Xxxxxx Archimedes Pissardo
Xxxxxxx xxx Xxxxx, 000-X, xxxx 00 - XXX 00000-000
Telephone: + 00 (00) 0000-0000
Fax: + 00 (00) 0000-0000
E-mail: xxxxxx@xxxxxx.xxx.xx or xxxxxx@xxxxxx.xxx.xx
25
For the Buyer:
Xxxxxx Xxxxxxx Xxxxxx
00000 Xxxxxxxx Xx.
Xxxxx 000
Xxxxxx, XX 00000
Phone: 000 0000000
Fax: (000) 000-0000
email: xxxxxx@xxxxxxxxxxxxxxxxxxx.xxx
Any notice given hereunder may be given on behalf of any party by its counsel or
other authorized representative.
17.4.Execution in Counterparts - This Agreement will be signed simultaneously
in six counterparts, and each one of them will be considered the original,
but all of them together constitute a single and unique instrument. The
counterparts are being executed simultaneously in Sao Paulo.
17.5.Entire Agreement. This Agreement, including the Schedules referred to
herein and the other writings specifically identified herein, is complete,
reflects the entire agreement of the parties with respect to its subject
matter, and supersedes all previous written or oral negotiations,
commitments and writings.
17.6.Captions and Gender. The captions in this Agreement are for convenience
only and shall not affect the construction or interpretation of any term or
provision hereof. The use in this Agreement of the masculine pronoun in
reference to a party hereto shall be deemed to include the feminine or
neuter pronoun, as the context may require.
17.7.Binding Nature of Agreement - This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto, their
successors and permitted assigns, subject to the prior and written
authorization of the other parties.
17.8.Specific Performance - Without limiting the rights of each party to pursue
all other legal and equitable rights available to such party for any other
parties failure to perform their obligations under this Agreement, the
parties hereto acknowledge and agree that the remedy at law for any failure
to perform their obligations here; may be inadequate and that each of them
shall be entitled to specific performance, injunctive relief or other
equitable remedies in the event of any such failure.
17.9.Arbitration - Any dispute, controversy or claim arising out of or relating
to this Agreement, or the breach, termination or invalidity thereof, shall
be settled by the Arbitration Counsel of the Brazil - Canada Chamber of
Commerce in the City of Sao Paulo, State of Sao Paulo. The parties shall,
in mutual accordance, choose an arbitrator to decide upon the dispute. The
defeated party shall pay the arbitration costs, as well as the other
parties' counseling fees. 17.10. Severability - In the event that any one
or more of provisions herein contained, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable in any respect for
any reason, the parties shall negotiate in good faith with a view to the
substitution by a suitable and equitable solution.
26
17.11. Waivers - No delay on the part of any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall
any waiver on the part of any party of any such right, power or privilege,
or any single or partial exercise of any such right, power or privilege,
preclude any further exercise thereof or the exercise of any other such
right, power or privilege.
17.12. Expenses - Except as otherwise established herein, each of the parties
will be in charged for the payment of their own costs incurred under this
Agreement.
[Balance of this page intentionally left blank.]
27
IN WITNESS WHEREOF, the Sellers and the Buyer duly sign and formalize this
Agreement, on the date in the year designated herein in Sao Paulo.
/s/ Xxxxxx Xxxxxxx xx Xxxxx
-----------------------------------
XXXXXX XXXXXXX XX XXXXX
/s/ Marcio Archimedes Pissardo
-----------------------------------
MARCIO ARCHIMEDES PISSARDO
MIND INFORMATION SERVICES LTDA
By /s/Xxxxxx Xxxxxxx xx Xxxxx
-----------------------------------
Xxxxxx Xxxxxxx xx Xxxxx
By /s/Marcio Archimedes Pissardo
-----------------------------------
Marcio Archimedes Pissardo
/s/Xxxxx Xxxxx Xxxxxxxx
-----------------------------------
XXXXX XXXXX XXXXXXXX
/s/Xxxxxxxxx Xxxx Xxxxx
-----------------------------------
XXXXXXXXX XXXX XXXXX
NEWMARKET TECHNOLOGY INC.
By /s/Xxxxxx Xxxxxxx Xxxxxx
-----------------------------------
Xxxxxx Xxxxxxx Xxxxxx
WITNESSES:
1. /s/Xxxxx xx Xxxxx Xxxxx (Illegible)
-----------------------------------
Name:Xxxxx xx Xxxxx Xxxxx
XX No.: 40.634.529-7
2. /s/ Bandia Xxxx xx Xxxxx (Illegible)
-----------------------------------
Name:Bandia Avia da Xxxxx
XX No.: 18.266.416
28
