Contract
EXECUTION COPY
_________________________________________________________________
_______________________________________________________
STOCK PURCHASE AGREEMENT
BY AND AMONG
NEXEO SOLUTIONS, LLC
NEXEO SOLUTIONS MEXICO HOLDINGS, LLC
AND,
[SHAREHOLDER A],
[SHAREHOLDER B],
[SHAREHOLDER C],
[SHAREHOLDER D],
[SHAREHOLDER E],
[SHAREHOLDER F]
AND
[SHAREHOLDER G]
______________________________________________________________________________
_______________________________________________________________
Exhibit 2.1
EXECUTION COPY
ii
INDEX
RECITALS....................................................... 1
ARTICLE I DEFINITIONS.......................................... 2
Section 1.1 Certain Defined Terms .......................... 2
ARTICLE II PURCHASE AND SALE.................................. 16
Section 2.1 Purchase Price and Sale of Equity Interests ... 16
Section 2.2 Closing ....................................... 17
Section 2.3 Purchase Price Adjustments .................... 22
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLERS..... 26
Section 3.1 Authority And Solvency ........................ 27
Section 3.2 No Conflict; Required Filings and Consents .... 27
Section 3.3 Equity Interests .............................. 28
Section 3.4 Litigation .................................... 29
Section 3.5 Marital Status. ............................... 29
Section 3.6 No Reliance. .................................. 29
ARTICLE IV REPRESENTATIONS AND WARRANTIES RELATED TO THE
COMPANIES .......................................... 29
Section 4.1 Organization and Qualification ................ 30
Section 4.2 No Conflict; Required Filings and Consents .... 30
Section 4.3 Capitalization ................................ 31
Section 4.4 Investments ................................... 33
Section 4.5 Financial Statements; No Undisclosed
Liabilities ................................... 33
Section 4.6 Absence of Certain Changes or Events .......... 34
Section 4.7 Compliance with Law; Permits .................. 35
Section 4.8 Litigation .................................... 36
Section 4.9 Employees. .................................... 36
Section 4.10 Personal Property ............................ 38
Section 4.11 Leased Real Property. ........................ 39
Section 4.12 Intellectual Property. ....................... 39
Section 4.13 Taxes ........................................ 41
Section 4.14 Material Contracts ........................... 43
Section 4.15 Environmental Matters. ....................... 45
Section 4.16 Accounts Receivable. ......................... 46
Section 4.17 Customers, Vendors and Suppliers. ............ 46
Section 4.18 Insurance. ................................... 47
Section 4.19 Relationship with Related Persons. ........... 48
Section 4.20 Brokers. ..................................... 49
Section 4.21 Certain Payments, Trade Controls. ............ 49
Section 4.22 Assets Necessary to the Business. ............ 50
Section 4.23 Inventory. ................................... 51
Section 4.24 Product and Service Warranty. ................ 51
Exhibit 2.1
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Section 4.25 Bank Accounts. ............................... 51
Section 4.26 Powers of Attorney ........................... 52
Section 4.27 Disclosures. ................................. 52
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE BUYERS........ 52
Section 5.1 Organization and Qualification ................ 52
Section 5.2 Authority ..................................... 52
Section 5.3 No Conflict; Required Filings and Consents .... 53
Section 5.4 Brokers. ...................................... 54
Section 5.5 Non-Solicitation. ............................. 54
ARTICLE VI COVENANTS.......................................... 54
Section 6.1 Conduct of Business Prior to the Closing. ..... 54
Section 6.2 Covenants Regarding Information and Keeping of
Records ....................................... 57
Section 6.3 Notification of Certain Matters ............... 58
Section 6.4 Intercompany Arrangements ..................... 58
Section 6.5 Intentionally Omitted ......................... 58
Section 6.6 Employees Related Matters ..................... 58
Section 6.7 Confidentiality ............................... 59
Section 6.8 Consents and Filings; Further Assurances ...... 59
Section 6.9 Public Announcements .......................... 61
Section 6.10 Non-Compete and Non-Solicitation ............. 61
Section 6.11 Additional Financial Statements. ............. 63
Section 6.12 Additional Financial Information. ............ 64
Section 6.13 Access to Customers and Suppliers. ........... 65
Section 6.14 Tax Returns. ................................. 66
Section 6.15 Sellers’ Releases and Termination. ........... 67
Section 6.16 Permits. ..................................... 68
Section 6.17 Termination of Trebol 22 Lease. .............. 69
ARTICLE VII CONDITIONS TO CLOSING............................. 69
Section 7.1 General Conditions ............................ 69
Section 7.2 Conditions to Obligations of the Sellers ...... 70
Section 7.3 Conditions to Obligations of the Buyers ....... 70
ARTICLE VII INDEMNIFICATION................................... 72
Section 8.1 Survival ...................................... 73
Section 8.2 Indemnification by the Sellers ................ 73
Section 8.3 Specified Items Indemnity. .................... 75
Section 8.4 Limits on Indemnification ..................... 75
Section 8.5 Indemnities of the Buyers. .................... 76
Section 8.6 Procedures, Payment, Tax Treatment and
Effects of Investigation ...................... 77
ARTICLE IX TERMINATION........................................ 79
Exhibit 2.1
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iv
Section 9.1 Termination ................................... 79
Section 9.2 Effect of Termination ......................... 80
ARTICLE X GENERAL PROVISIONS.................................. 81
Section 10.1 Transfer Taxes. .............................. 81
Section 10.2 Fees and Expenses ............................ 81
Section 10.3 Amendment and Modification ................... 81
Section 10.4 Waiver ....................................... 82
Section 10.5 Notices ...................................... 82
Section 10.6 Entire Agreement ............................. 83
Section 10.7 Parties in Interest .......................... 84
Section 10.8 Governing Law ................................ 84
Section 10.9 Discussion. .................................. 84
Section 10.10 Arbitration ................................. 85
Section 10.11 Assignment; Successors ...................... 89
Section 10.12 Currency .................................... 90
Section 10.13 Severability ................................ 90
Section 10.14 Counterparts ................................ 90
Section 10.15 Time of Essence ............................. 90
Section 10.16 No Presumption Against Drafting Party ....... 91
Section 10.17 Sellers’ Representative ..................... 91
Section 10.18 Good Faith. ................................. 93
Section 10.19 Annexes, Exhibits and Schedules; Disclosure. 93
Exhibit 2.1
EXECUTION COPY
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of March 9, 2017 (this
“Agreement”), by and among on the one hand by Nexeo Solutions,
LLC, a company organized and existing under the laws of the
State of Delaware, U.S.A. (“Nexeo LLC”) and Nexeo Solutions
Mexico Holdings, LLC, a company organized and existing under the
laws of the State of Delaware, U.S.A. (“Nexeo Mexico” and,
collectively with Nexeo LLC, the “Buyers”), and on the other by
[Shareholder A], [Shareholder B], [Shareholder C], [Shareholder
D], [Shareholder E], [Shareholder F] and [Shareholder G] who are
individuals of Mexican citizenship (jointly the “Sellers”)(the
Buyers and Sellers are each sometimes referred to as “Party” and
collectively referred to as the “Parties”). This Agreement has
also been signed by [Sellers Representative], in his capacity as
the Sellers representative (the “Sellers Representative”) and by
[Wife 1] and [Wife 2] for purposes set forth in Section 3.5
herein.
RECITALS
WHEREAS, Sellers own 100% of the issued and outstanding
equity interests (partes sociales) that represent the capital of
Ultrachem, Global Chem and Chem Servicios (as such terms are
defined below).
WHEREAS, Ultrachem owns 99.9% of the shares (acciones) of
Ultrachem Guatemala and 100% of the equity interests (cuotas) of
Ultrachem Costa Rica (as such terms are defined below).
WHEREAS, Sellers wish to sell to Buyers, and Buyers wish to
purchase from Sellers, all the outstanding equity interests
representing 100% of the capital of Ultrachem, Global Chem and
Chem Servicios in the terms and conditions set forth herein.
In consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally
bound hereby, the Parties agree as follows:
Exhibit 2.1
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2.
ARTICLE I
DEFINITIONS
Section 1.1 Certain Defined Terms. For purposes of this
Agreement:
“AAA Rules”, has the meaning set forth in Section 10.10
(b)(i) of this Agreement.
“Action”, means any claim, action, cause of action, demand,
suit, arbitration inquiry, audit, notice of violation,
proceeding, litigation, citation, summons, subpoena or
investigation of any nature, civil, criminal, administrative,
regulatory or otherwise, whether at law or in equity by or
before any Governmental Authority.
“Additional Interim Financials”, has the meaning set forth
in Section 6.12(a) of this Agreement.
“Affiliate”, means, with respect to any Person, any other
Person that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common
control with, such first Person.
“Agreement”, has the meaning set forth in the preamble of
this Agreement.
“Ancillary Agreements”, means the Escrow Agreement, the
Consulting Agreements, the Seller Employment Agreements and the
Powers of Attorney.
“[Shareholder D] Consulting Agreement”, means the agreement
by which [Shareholder D] will render consulting services to the
Companies and/or to its Affiliates, substantially in the terms
of the form attached hereto as Exhibit “A”.
“Applicable Accounting Principles”, has the meaning set
forth in Section 2.3(a) of this Agreement.
“Applicable GAAP”, means Mexican GAAP, Guatemalan GAAP or
Costa Rican GAAP as it may correspond.
“Arbitrators”, has the meaning set forth in Section 10.10
(b)(i) of this Agreement.
“Auditor”, has the meaning set forth in Section 6.12(a)(ii)
of this Agreement.
Exhibit 2.1
EXECUTION COPY
3.
“Basket Amount”, has the meaning set forth in Section 8.4
(a) of this Agreement.
“Business Day”, means any day that is not a Saturday, a
Sunday or other day on which the principal commercial banks
located in Mexico City, Mexico or New York, United States of
America are authorized or obligated to close under applicable
Laws.
“Buyers Indemnified Parties”, has the meaning set forth in
Sections 8.2(a) of this Agreement.
“Buyer Released Parties”, has the meaning set forth in
Section 6.15 of this Agreement.
“Buyers”, has the meaning set forth in the preamble of this
Agreement.
“Buyers Auditor”, means the independent auditor as selected
by Buyers.
“Cap”, has the meaning set forth in Section 8.4(b) of this
Agreement.
“Cash”, means, as of the close of business on the day
immediately preceding the Closing Date, the aggregate amount of
all cash, cash equivalents and marketable securities held by the
Companies, as determined in accordance with the Applicable
Accounting Principles.
“Cedros Warehouse”, means the real estate property leased by
Ultrachem, identified as building Cedros 1B within Prologis Park
Cedros, located at Xx. 00 xx xx Xxxxxxxxx Xxxxxx-Xxxxxxxxx, Col.
Barrio Texcacoa, Tepotzotlan, State of Mexico, Mexico.
“Chem Servicios”, means Chem Servicios, S. de X.X. de C.V. a
Sociedad de Responsabilidad Limitada de Capital Variable, duly
organized and existing under the laws of Mexico.
“Closing”, has the meaning set forth in Section 2.2(a) of
this Agreement.
“Closing Cash”, has the meaning set forth in Section 2.3(c)
of this Agreement.
Exhibit 2.1
EXECUTION COPY
4.
“Closing Date”, has the meaning set forth in Section 2.2(a)
of this Agreement.
“Closing Indebtedness”, has the meaning set forth in Section
2.3(c) of this Agreement.
“Closing Inventory”, has the meaning set forth in Section
2.3 (b) of this Agreement.
“Closing Net Working Capital”, has the meaning set forth in
Section 2.3(c) of this Agreement.
“Closing Purchase Price”, means (i) the Purchase Price,
plus, (ii) the Closing Cash, plus (iii) the Closing Working
Capital Excess, if any, minus (iv) the Closing Indebtedness,
minus (v) the Closing Working Capital Deficit, if any.
“Closing Working Capital Deficit”, shall exist when (and
shall be equal to the amount by which) the Closing Net Working
Capital falls short the Target Net Working Capital.
“Closing Working Capital Excess”, shall exist when (and
shall be equal to the amount by which) the Closing Net Working
Capital exceeds the Target Net Working Capital.
“Colones” means the lawful currency of Costa Rica.
“Companies”, means jointly, Ultrachem, Global Chem, Chem
Servicios, Ultrachem Guatemala and Ultrachem Costa Rica.
“Companies Leased Real Property”, has the meaning set forth
in Section 4.11 of this Agreement.
“Competing Business”, has the meaning set forth in Section
4.19 (a) of this Agreement.
“Competitive Business”, has the meaning set forth in Section
6.10(a) of this Agreement.
“Confidentiality Agreement”, has the meaning set forth in
Section 6.7 of this Agreement.
“Contract”, means any legally binding contract, agreement,
understanding, option, right to acquire, preferential purchase
right, preemptive right, warrant, indenture, debenture, note,
bond, loan, loan agreement, collective bargaining agreement,
lease, mortgage, franchise, license, purchase order, bid,
Exhibit 2.1
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5.
commitment, letter of credit, guaranty, surety or any other
legally binding arrangement, whether oral or written.
“Consulting Agreements”, means jointly the [Shareholder D]
Consulting Agreement and the [Shareholder A] Consulting
Agreement.
“Control”, including the terms “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 a Person, whether through the
ownership of voting securities, as trustee or executor, as
general partner or managing member, by contract or otherwise.
“Copyrights”, means all copyright registrations and
applications therefor.
“Costa Rica”, means the Republic of Costa Rica.
“Costa Rican GAAP”, means generally accepted accounting
principles in Costa Rica.
“Demand For Payment”, has the meaning set forth in Section
2.2(b)(iv) of this Agreement.
“Disclosure Schedules”, means the disclosure schedules
prepared by the Sellers and attached hereto.
“Discussion Period”, has the meaning set forth in Section
10.9 of this Agreement.
“Dispute”, means any dispute, claim, controversy or
disagreement.
“Disputing Party”, has the meaning set forth in Section
10.10 (b) of this Agreement.
“Distribution Date”, has the meanings set forth throughout
Section 2.2(b) of this Agreement.
“Dollar” or “U.S. $”, means the lawful currency of the
United States of America.
“Employee Plans”, has the meaning set forth in Section
4.9(g) of this Agreement.
Exhibit 2.1
EXECUTION COPY
6.
“Encumbrance”, means any charge, claim, mortgage, lien,
option, pledge or security interest.
“Equity Interests”, means all the issued and outstanding
equity interests of Ultrachem, Global Chem and Chem Servicios,
representing 100% of the capital of Ultrachem, Global Chem and
Chem Servicios.
“Escrow Agent”, has the meaning set forth in Section
2.2(b)(i) of this Agreement.
“Escrow Agreement”, has the meaning set forth in Section
2.2(b)(i) of this Agreement.
“Escrow Amount”, means jointly the Target Net Working
Capital Holdback Amount, the Specified Escrow Amount and the
Transaction Escrow Amount.
“Estimated Cash”, has the meaning set forth in Section
2.3(a) of this Agreement.
“Estimated Indebtedness”, has the meaning set forth in
Section 2.3(a) of this Agreement.
“Estimated Net Working Capital”, has the meaning set forth
in Section 2.3(a) of this Agreement.
“Estimated Purchase Price”, means (i) the Purchase Price,
plus (ii) the Estimated Cash, plus (iii) the Estimated Working
Capital Excess, if any, minus (iv) the Estimated Indebtedness,
minus (v) the Estimated Working Capital Deficit, if any.
“Estimated Working Capital Deficit”, shall exist when (and
shall be equal to the amount by which) the Estimated Net Working
Capital falls short the Target Net Working Capital.
“Estimated Working Capital Excess”, shall exist when (and
shall be equal to the amount by which) the Estimated Net Working
Capital exceeds the Target Net Working Capital.
“Environmental Laws”, has the meaning set forth in Section
4.15(a) of this Agreement.
“Exchange Rate”, means the exchange rate for payment of
obligations contracted in U.S. Dollars and payable within
Mexican territory, published by Banco de México (Tipo de cambio
para solventar obligaciones denominadas en Dólares de los
Exhibit 2.1
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7.
EE.UU.A pagaderas en la República Mexicana, según la publicación
del Banco de México).
“Excluded Products”, has the meaning set forth in Section
6.10(b) of this Agreement.
“Filings”, has the meaning set forth in Section 6.12(a)(i)
of this Agreement.
“Final Closing Statement”, has the meaning set forth in
Section 2.3(c) of this Agreement.
“Financial Statements”, has the meaning set forth in Section
4.5(a) of this Agreement.
“Fundamental Representations”, has the meaning set forth in
Section 8.1 of this Agreement.
“Global Chem”, means Global Chem, S. de X.X. de C.V. a
Sociedad de Responsabilidad Limitada de Capital Variable, duly
organized and existing under the laws of Mexico.
“Global Chem Audited Financial Statements”, has the meaning
set forth in Section 6.11(d) of this Agreement.
“Governmental Authority”, means any national, federal, state
or local governmental, regulatory or administrative authority,
agency or commission or any judicial or arbitral body.
“Guatemala”, means the Republic of Guatemala.
“Guatemalan GAAP”, means generally accepted accounting
principles in Guatemala.
“Hazardous Substances”, has the meaning set forth in Section
4.15(b) of this Agreement.
“Indebtedness”, means, for a particular Person without
duplication any: (a) indebtedness of such Person for borrowed
money, including the face amount of any letter of credit
supporting the repayment of indebtedness for borrowed money
issued for the account of such Person and obligations under
letters of credit and agreements relating to the issuance of
letters of credit or acceptance financing; (b) obligations of
such Person evidenced by bonds, debentures, notes or other
similar instruments; (c) obligations of such Person to pay the
deferred purchase price of property or services (including
Exhibit 2.1
EXECUTION COPY
8.
obligations that are non-recourse to the credit of such Person
but are secured by the assets of such Person, but excluding
trade accounts payable); (d) obligations of such Person as
lessee under capital leases and obligations of such Person in
respect of synthetic leases; (e) obligations of such Person
under any hedging arrangement; (f) obligations of such Person
under direct or indirect guaranties in respect of, and
obligations (contingent or otherwise) of such Person to purchase
or otherwise acquire, or otherwise to assure a creditor against
loss in respect of, indebtedness or obligations of others of the
kinds referred to in clauses (a) through (e) above; (g) any
negative cash balances; (h) indebtedness or obligations of
others of the kinds referred to in clauses (a) through (g)
secured by any Encumbrance on or in respect of any property
owned by such Person and (i) those line items specifically set
forth in the Sample Statement under the heading “Indebtedness.”
“Indemnified Party”, has the meaning set forth in Section
8.6 (a) of this Agreement.
“Indemnifying Party”, has the meaning set forth in Section
8.6(a) of this Agreement.
“Independent Accounting Firm”, has the meaning set forth in
Section 2.3(e) of this Agreement.
“Intellectual Property”, means all intellectual property
rights arising under the laws of any jurisdiction with respect
to Marks, Patents, Copyrights, and Trade Secrets.
“Interim Financial Statements”, has the meaning set forth in
Section 4.5(a) of this Agreement.
“Joint Obligors”, has the meaning set forth in Section 6.10
(e) of this Agreement.
“[Shareholder A] Consulting Agreement”, means the agreement
by which [Shareholder A] will render consulting services to the
Companies and/or to its Affiliates, substantially in the terms
of the form attached hereto as Exhibit “A”.
“Knowledge of the Sellers”, means the actual and
constructive or imputed knowledge of the individuals listed on
Schedule 1.1(a) of the Disclosure Schedules, including any facts
or circumstances that such individuals should have known, after
reasonable investigation and interviews with managers and
supervisory personnel of any of the Companies.
Exhibit 2.1
EXECUTION COPY
9.
“Law”, means any statute, law, ordinance, regulation, rule,
code, injunction, judgment, decree or order of any Governmental
Authority.
“Letter of Intent”, has the meaning set forth in Section
10.6 of this Agreement.
“Losses”, has the meaning set forth in Section 8.2(a) of
this Agreement.
“Marks”, means all trade names, trademarks and service marks
(registered and unregistered), domain names and similar rights
and applications to register any of the foregoing.
“Material Adverse Effect”, means any event, change,
occurrence or effect that (a) is or would reasonably be expected
to have a material adverse effect on the business, financial
condition or results of operations of the Companies, taken as a
whole, or (b) would prevent, materially delay or materially
impede the performance by the Sellers of their obligations under
this Agreement or the consummation of the transactions
contemplated hereby.
“Material Contracts”, has the meaning set forth in Section
4.14(a) of this Agreement.
“Material Customer”, means one of the top 15 (fifteen)
customers of each Company, measured by the total gross profit
earned by such Company from sales to each such customer over (i)
the twelve-month period ended December 31, 2015 or (ii) the
twelve-month period ended December 31, 2016.
“Material Supplier”, means one of the top 15 (fifteen)
suppliers of each Company, measured by the total gross profit
earned by such Company from sales of products acquired from each
such supplier over (i) the twelve-month period ended
December 31, 2015 or (ii) the twelve-month period ended December
31, 2016.
“Material Vendor”, means one of the top 10 (ten) vendors of
each Company, measured by the total gross profit earned by such
Company from sales of products acquired from each such vendor
over (i) the twelve-month period ended December 31, 2015 or (ii)
the twelve-month period ended December 31, 2016.
Exhibit 2.1
EXECUTION COPY
10.
“Mexican Antitrust Commission”, has the meaning set forth in
Section 6.8(b) of this Agreement.
“Mexican Antitrust Law”, has the meaning set forth in
Section 3.2(b) of this Agreement.
“Mexican GAAP”, means the Mexican financial reporting
standards (Normas de Información Financiera), as issued from
time to time by the Mexican Financial Reporting Standards Board
(Consejo Mexicano para la Investigación y Desarrollo de Normas
de Información Financiera, A.C.) or any succeeding generally
accepted accounting principles as in effect from time to time in
Mexico, consistently applied throughout the periods involved.
“Mexico”, means the United Mexican States.
“Monterrey Warehouse”, means the real estate property leased
by Ultrachem, located at Carretera Xxxxxxx- Santa Rosa Km. 3 No.
964, bodega 2, Apodaca, Nuevo Xxxx, Mexico.
“Monthly Financial Statements”, has the meaning set forth in
Section 6.11(a).
“Net Adjustment Amount”, has the meaning set forth in
Section 2.3(h)(i) of this Agreement.
“Net Working Capital”, means, as of the close of business on
the day immediately preceding the Closing Date and without
duplication, an amount (which may be positive or negative) equal
to (i) the current assets of the Companies minus (ii) the
current liabilities of the Companies, in each case calculated in
accordance with the Applicable Accounting Principles, and
including those line items, and only those line items
specifically set forth in the Sample Statement under the heading
“Net Working Capital.”
“Nexeo Inc.”, has the meaning set forth in Section 6.12
(a)(i) of this Agreement.
“Non-Solicitation Agreement”, has the meaning set forth in
Section 5.5 of this Agreement.
“Notice of Disagreement”, has the meaning set forth in
Section 2.3(d) of this Agreement.
“Objection To Payment”, has the meaning set forth in Section
2.2(b)(iv) of this Agreement.
Exhibit 2.1
EXECUTION COPY
11.
“OFAC”, means the Office of Foreign Assets Control of the
U.S. Treasury Department.
“Partners Resolutions”, means the partners’ resolutions of
Ultrachem, Global Chem and Chem Servicios, substantially in the
terms of Exhibit “B” herein, by which, among others: (i) the
bylaws of Ultrachem, Global Chem and Chem Servicios are amended
as set forth in “Exhibit A” therein; (ii) the sale of the Equity
Interests to the Buyers hereunder is authorized; (iii) the
Sellers waive their right of first refusal to acquire the Equity
Interests transferred hereunder; (iv) the resignation and
appointment of managers and officers is approved, and (v)
certain powers of attorney are revoked and granted.
“Party”, has the meaning set forth in the preamble of this
Agreement.
“Patents”, means all patents and patent applications and
rights in respect of utility models or industrial designs.
“PCBs”, has the meaning set forth in Section 4.15(d) of this
Agreement.
“Permits”, has the meaning set forth in Section 4.7(b) of
this Agreement.
“Person”, means an individual, corporation, partnership,
limited liability company, limited liability partnership,
syndicate, trust, association, organization or other entity,
including any Governmental Authority, and including any
successor, by merger or otherwise, of any of the foregoing.
“Personal Property”, has the meaning set forth in Section
4.10 of this Agreement.
“Pesos” or “MXP$”, means the lawful currency of Mexico.
“Powers of Attorney”, means the powers of attorney in the
form attached as Annex A that the Sellers have executed and
delivered to the Buyers.
“Preliminary Closing Statement”, has the meaning set forth
in Section 2.3(a) of this Agreement.
Exhibit 2.1
EXECUTION COPY
12.
“Pro Rata Share”, means the percentage specified as such
Seller’s pro rata share on Schedule 2.2(b)(i) of the Disclosure
Schedules.
“Purchase Price”, has the meaning set forth in Section 2.1
of this Agreement.
“Queretaro Warehouse”, means the real estate property leased
by Ultrachem, located at calle 2 número 5-C interior 3 (and 3
parking spaces), zona industrial Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx
xx Xxxxxxxxx, Xxxxxx.
“Quetzales” means the lawful currency of Guatemala.
“Reference Date”, has the meaning set forth in Section
4.5(a) of this Agreement.
“Related Person”, has the meaning set forth in Section 4.19
(a) of this Agreement.
“Representatives”, means, with respect to any Person, the
officers, managers, directors, principals, employees, agents,
auditors, advisors, attorneys, bankers and other representatives
of such Person.
“Retention Amount”, has the meaning set forth in Section
2.2(b)(iv) of this Agreement.
“Sample Statement”, has the meaning set forth in Section
2.3(a) of this Agreement.
“SEC”, has the meaning set forth in Section 6.9 of this
Agreement.
“Securities Act”, has the meaning set forth in Section
6.12(a)(i) of this Agreement.
“Securities Laws”, has the meaning set forth in Section
6.12(a)(i) of this Agreement.
“Seller Financial Statements”, has the meaning set forth in
Section 6.12(a)(i) of this Agreement.
“Sellers”, has the meaning set forth in the preamble of this
Agreement.
Exhibit 2.1
EXECUTION COPY
13.
“Sellers Indemnified Parties”, has the meaning set forth in
Section 8.5 of this Agreement.
“Seller Representative”, has the meaning set forth in the
preamble and Section 10.17 of this Agreement.
“Seller Employment Agreements”, has the meaning set forth in
Section 2.2(c)(vi) of this Agreement.
“Seller Resignations and Releases”, has the meaning set
forth in Section 2.2(c)(v) of this Agreement.
“Shareholders Resolutions”, means the equity interest
holders resolutions of Ultrachem Costa Rica and the shareholders
resolutions of Ultrachem Guatemala by which, among others: (i)
the bylaws of Ultrachem Costa Rica and Ultrachem Guatemala are
amended; (ii) the resignation and appointment of directors,
officers and managers is approved, and (iii) certain powers of
attorney are revoked and granted.
“Solvent” means, with respect to any Person on a particular
date, that on such date: (a) the fair value of the property of
such Person is greater than the total amount of its liabilities,
including contingent liabilities, and (b) the present fair value
of the assets of such Person is not less than the amount that
will be required to pay the probable liability of such Person on
its debts as they become absolute and matured.
“Specified Escrow Amount”, has the meaning set forth in
Section 2.2(b)(ii) of this Agreement.
“Subsidiaries”, has the meaning set forth in Section 4.4 of
this Agreement.
“Supplier Contact Plan”, has the meaning set forth in
Section 6.13 of this Agreement.
“Target Net Working Capital”, means U.S. $10,850,000.00 (ten
million eight hundred fifty thousand 00/100 Dollars).
“Target Net Working Capital Holdback Amount”, has the
meaning set forth in Section 2.2(b)(iv) of this Agreement.
“Tax” or “Taxes”, means (i) any and all taxes, assessments,
fees and other governmental charges of any kind imposed by any
Governmental Authority, including income, profits, minimum, ad
valorem, real property (including assessments, fees or other
Exhibit 2.1
EXECUTION COPY
14.
charges imposed by any Governmental Authority that are based on
the use or ownership of real property) personal property
(tangible and intangible), value added, sales, use,
environmental, stamp, withholding, social security (or similar),
housing, retirement fund, payroll, or other similar charge of
any kind whatsoever, including any interest, penalty, or
addition thereto, whether disputed or not; and (ii) any
liability for the payment of any amounts of the type described
in clause (i) as a result of the operation of law or any express
or implied obligation to indemnify any other Person.
“Tax Return”, means all returns, declarations of estimated
or advanced tax payments, statutory tax reports or “Dictámenes
Fiscales”, information returns and statements, including any
amendments of, or related or supporting information with respect
to, any of the foregoing, filed or to be filed with any Tax
authority in connection with the determinations, assessment,
collection or administration of any Taxes considering any
electronic filing obligation for tax purposes (i.e. electronic
accounting records, informative returns, among others).
“Termination Date”, has the meaning set forth in Section
9.1(c) of this Agreement.
“Third Party Intellectual Property Rights”, has the meaning
set forth in Section 4.12(b) of this Agreement.
“Trade Secrets”, means all know-how, inventions,
discoveries, methods, processes, technical data, specifications,
research and development information, technology, data bases and
other proprietary or confidential information, including
customer lists, in each case that derives economic value from
not being generally known to other Persons who can obtain
economic value from its disclosure, but excluding any Copyrights
or Patents that cover or protect any of the foregoing.
“Transaction Escrow Amount”, has the meaning set forth in
Section 2.2 (b)(i) of this Agreement.
“Trebol 22 Lease”, means the lease agreement dated August 1,
2016, entered into by and among Inmobiliaria Xxxxxxx Xxxxxxx,
S.A. de C.V., as lessor, Global Chem, as lessee, and Ultrachem
as guarantor (fiador), with respect to the real estate property
identified as Bodega Uno de la Xxxxxxx Xxxxxxxxx Xx. 00 xxx
Xxxxxxxxxxxxxxx Industrial El Trébol, Tepotzotlán, Estado de
Mexico, Mexico.
Exhibit 2.1
EXECUTION COPY
15.
“Trebol 22 Warehouse”, means the real estate property leased
by Global Chem, identified as Bodega Uno de la Xxxxxxx Xxxxxxxxx
Xx. 00 xxx Xxxxxxxxxxxxxxx Industrial El Trébol, Tepotzotlán,
Estado de Mexico, Mexico.
“Trebol 23 Warehouse”, means the real estate property
leased by Global Chem, identified as Bodega 3 de la Xxxxxxx
Xxxxxxxxx Xx. 00 xxx Xxxxxxxxxxxxxxx Industrial El Trébol,
Tepotzotlán, Estado de Mexico, Mexico.
“US GAAP”, means generally accepted accounting principles in
the United States of America.
“US GAAP Financial Statements”, has the meaning set forth in
Section 6.11(b) of this Agreement.
“US GAAP 2017 Stub Period Financial Statements”, has the
meaning set forth in Section 6.11(c) of this Agreement.
“Ultrachem”, means Ultra Chem, S. de X.X. de C.V. a Sociedad
de Responsabilidad Limitada de Capital Variable, duly organized
and existing under the laws of Mexico.
“Ultrachem Costa Rica”, means Ultra Chem Costa Rica, S.R.L.
a Sociedad de Responsabilidad Limitada, duly organized and
existing under the laws of Costa Rica, corporate identification
number 0-000-000000.
“Ultrachem Costa Rica Equity Interests”, has the meaning set
forth in Section 4.3(a) of this Agreement.
“Ultrachem Guatemala”, means Ultra-Chem de Centroamérica,
S.A. a Sociedad Anónima, duly organized and existing under the
laws of Guatemala.
“Ultrachem Guatemala Shares”, has the meaning set forth in
Section 4.3(a) of this Agreement.
Section 1.2 Rules of Construction.
In this Agreement (including its exhibits and schedules):
(a) words denoting the singular include the plural and vice
versa, and words denoting any gender include all genders;
Exhibit 2.1
EXECUTION COPY
16.
(b) the words “include,” “includes” or “including” as used in
this Agreement shall be deemed to be followed by the words
“without limitation”;
(c) when calculating the period of time within which or
following which any act is to be done or step taken, the date
that is the reference day in calculating such period shall be
excluded and, if the last day of such period is not a Business
Day, the period shall end on the next day that is a Business
Day;
(d) unless otherwise expressly provided, references herein to
articles, sections, exhibits and schedules mean the articles and
sections of, and the exhibits and schedules attached to, this
Agreement;
(e) the words “hereof”, “hereby”, “herein”, “hereunder” and
similar terms in this Agreement refer to this Agreement as a
whole and not only to a particular section in which such words
appear;
(f) the term “or” is not exclusive and the word “will” shall
be construed to have the same meaning and effect as the word
“shall”;
(g) references to days mean calendar days unless otherwise
specified, and
(h) if in this Agreement a Spanish term is placed in italics,
then the meaning of such term under the Laws or corporate
governance practice in Mexico, as the context requires, shall
control.
ARTICLE II
PURCHASE AND SALE
Section 2.1 Purchase Price and Sale of Equity Interests.
Upon the terms and subject to the conditions of this
Agreement, at Closing, the Sellers shall sell, assign, transfer,
convey and deliver the Equity Interests to the Buyers and the
Buyers shall purchase the Equity Interests from the Sellers, in
the proportions set forth in Schedule 2.1 of the Disclosure
Schedules, in exchange of an aggregate purchase price of U.S.
Exhibit 2.1
EXECUTION COPY
17.
$58,000,000.00 (Fifty-eight Million 00/100 Dollars) (the
“Purchase Price”), subject to the Net Adjustment Amount and
withholdings as set forth herein below.
Section 2.2 Closing.
(a) The sale and purchase of the Equity Interests shall
take place at a closing (the “Closing”) to be held at the
offices of Xxxx Xxxxx, Xxxxxxx Xxxxxx y Xxxxx located at
Prolongación Xxxxx xx xx Xxxxxxx 0000, Xxxxx X, Xxxx 0, Colonia
Desarrollo Santa Fe, 00000, Xxxxxx xx Xxxxxx, Xxxxxx, at 7:00
a.m., Mexico Central time on a date that is the first Business
Day of the calendar month immediately following the calendar
month in which all the conditions set forth in Article VII are
satisfied (or, to the extent permitted, waived by the Parties
entitled to the benefits thereof), or at such other place or at
such other time as the Sellers and the Buyers mutually agree in
writing; provided, however, that the Closing shall only occur on
the first Business Day of the first two months in a calendar
quarter. For the avoidance of doubt, this means that Closing
will only occur on the first Business Day of January, February,
April, May, July, August, October or November in a given
calendar year. The day on which the Closing takes place is
referred to as the “Closing Date.”
(b) Closing Payments. At or prior to the Closing:
(i) Nexeo LLC shall pay its portion of the Estimated
Purchase Price and Nexeo Mexico shall pay its
portion of the Estimated Purchase Price to Sellers
by wire transfer of immediately available funds,
less the following deductions: (A) the Transaction
Escrow Amount, (B) the Specified Escrow Amount, and
(C) the Target Net Working Capital Holdback Amount
(the “Closing Payment”). The amount of the Closing
Payment that shall be paid by each Buyer shall be
equal to the amount of the Closing Payment
multiplied by the respective percentages as set
forth in Schedule 2.2(b)(i) of the Disclosure
Schedules next to such Buyer’s name. The amount of
the Closing Payment that shall be paid to each
Seller shall be equal to the Closing Payment
multiplied by the respective Pro Rata Share as set
forth in Schedule 2.2(b)(i) of the Disclosure
Schedules next to such Seller’s name.
Exhibit 2.1
EXECUTION COPY
18.
An amount equal to U.S. $7,700,000 (Seven Million,
Seven Hundred Thousand 00/100 Dollars) (the
“Transaction Escrow Amount”) shall be deposited by
Buyers with Xxxxx Fargo Bank, National Association,
as escrow agent (the “Escrow Agent”) in accordance
with the terms of an escrow agreement to be entered
into substantially in the form attached hereto as
Exhibit “C” (the “Escrow Agreement”). The
Transaction Escrow Amount shall be used to pay the
claims that may be made by Buyers following the
Closing in accordance with the terms and conditions
of this Agreement, except for those matters covered
by the Specified Escrow Amount and the Target Net
Working Capital Holdback Escrow Amount. The
Transaction Escrow Amount shall be released by the
Escrow Agent to the Sellers within five (5)
Business Days from the second anniversary of the
Closing Date (the “Distribution Date”), by wire
transfer to the Sellers of an aggregate principal
amount equal to the Transaction Escrow Amount, plus
all the interest or gains earned by the Transaction
Escrow Amount, minus (A) the amount of any previous
claim deducted from the Transaction Escrow Amount
and (B) the amount indicated in any Demand for
Payment required to be paid out of the Transaction
Escrow Amount provided by Buyers to the Seller
Representative.
(ii) An amount equal to U.S. $2,000,000 (Two Million and
00/100 Dollars) (the “Specified Escrow Amount”)
shall be deposited by Buyers with the Escrow Agent
in accordance with the terms of the Escrow
Agreement. The Specified Escrow Amount shall be
used to pay only those liabilities related to
Section 8.3 of this Agreement and shall be released
to the Sellers according to the following terms:
1. Within five (5) Business Days from each of
the first, second, third and fourth
anniversaries of the Closing Date (each a
“Distribution Date”), the Escrow Agent shall
wire transfer to the Sellers an aggregate
principal amount equal to U.S.$400,000.00
(Four Hundred Thousand and 00/100 Dollars)
of the Specified Escrow Amount, representing
twenty percent (20%) of the Specified Escrow
Exhibit 2.1
EXECUTION COPY
19.
Amount, minus (A) the amount of any previous
claim deducted from the Specified Escrow
Amount and (B) the amount indicated in any
Demand for Payment required to be paid out
of the Specified Escrow Amount provided by
Buyers to the Seller Representative within
the previous twelve (12) month period.
2. Within five (5) Business Days from the fifth
anniversary of the Closing Date (the
“Distribution Date”), the Escrow Agent shall
wire transfer to the Sellers an aggregate
principal amount equal to U.S.$400,000.00
(Four Hundred Thousand and 00/100 Dollars)
of the Specified Escrow Amount, representing
twenty percent (20%) of the Specified Escrow
Amount, plus all the interests or gains
earned by the Specified Escrow Amount, minus
(A) the amount of any previous claim
deducted from the Specified Escrow Amount
and (B) the amount indicated in any Demand
for Payment required to be paid out of the
Specified Escrow Amount provided by Buyers
to the Sellers Representative within the
previous twelve (12) month period.
(iii) An amount equal to U.S. $1,000,000 (One Million and
00/100 Dollars (the “Target Net Working Capital
Holdback Amount”) shall be deposited by Buyers with
the Escrow Agent in accordance with the terms of
the Escrow Agreement. The Target Net Working
Capital Holdback Amount shall be used to settle any
payments in connection with the determination of
the Final Closing Statement in connection with
Section 2.3(c). The Target Net Working Capital
Holdback Amount shall be released by the Escrow
Agent to the Sellers immediately upon agreement or
final determination by the Independent Accounting
Firm of the Net Adjustment Amount (the
“Distribution Date”), by wire transfer to the
Sellers of an aggregate principal amount equal to
the Target Net Working Capital Holdback Amount,
plus all the interests or gains earned by the
Target Net Working Capital Holdback Amount, minus
any amounts due to cover any negative the Net
Adjustment Amount, if any.
Exhibit 2.1
EXECUTION COPY
20.
(iv) If, at any time prior to the respective anniversary
dates set forth in paragraphs (i) or (ii) above,
the Buyers give written notice to the Seller
Representative (with a copy to the Escrow Agent)
that the Buyers are entitled to indemnification
hereunder with respect to the Transaction Escrow
Amount or the Specified Escrow Amount (specifying
to a reasonable extent the basis and amount thereof
together with all of the supporting documents)
(“Demand For Payment”), and the Sellers
Representative does not provide a written objection
to the Buyers (with a copy to the Escrow Agent)
within ten (10) Business Days of delivery of Demand
for Payment (“Objection to Payment”), the Demand
for Payment shall be deemed to be accepted by the
Sellers and the Buyers shall be entitled to the
amount set forth in the Demand for Payment, by
receiving it from the Escrow Agent from the
Transaction Escrow Amount or the Specified Escrow
Amount, as applicable. If the Sellers
Representative provides a timely Objection to
Payment to the Buyers, the amount claimed in the
Demand for Payment shall be retained by the Escrow
Agent (a “Retention Amount”) until the earlier of
(A) written notice from the Sellers Representative
authorizing the distribution of the Retention
Amount to Buyers, (B) written notice from the
Buyers and Seller Representative authorizing a
portion of the Retention Amount to be distributed
to either Buyers or Sellers, or (C) an order of the
Arbitrators specified in Sections 10.10(b)(vii) and
(viii) of this Agreement directing the distribution
of the Retention Amount to either Sellers or
Buyers, upon which the Escrow Agent shall
distribute the Retention Amount as so authorized or
as so ordered to the Buyers or to the Sellers, as
the case may be.
(c) Closing Deliveries. At or prior to the Closing, the
Sellers shall deliver to the Buyers the following:
(i) The Partners Resolutions shall be executed by all
the parties thereto and a notarized copy thereof
shall be delivered to the Buyers;
(ii) The Shareholders Resolutions shall be executed by
all the parties thereto in form and substance
Exhibit 2.1
EXECUTION COPY
21.
reasonably acceptable to Buyer’s counsel and a copy
thereof shall be delivered to the Buyers;
(iii) The Sellers shall cause an authorized officer of
Ultrachem, Global Chem and Chem Servicios to
register the transfer of the Equity Interests owned
by the Sellers to the Buyers in their respective
partners’ registry books (libros de registro de
socios);
(iv) The Sellers shall deliver to Buyers the original
partners’ and board of managers’ meetings minutes
books, as well as the partners’ registry book and
the capital variations book of each of Ultrachem,
Global Chem and Chem Servicios and the corporate
books and all other corporate records and original
equity interests or share certificates, as
applicable, covering the Ultrachem Costa Rica
Equity Interests and the Ultrachem Guatemala
Shares;
(v) Resignation and Release Agreements in the form
attached hereto as Exhibit “D” (the “Seller
Resignation and Releases”) from each Seller and in
the case of [Shareholder A], [Shareholder B],
[Shareholder D], [Shareholder E] and [Shareholder
F], termination letters evidencing that their
employment with Chem Servicios has terminated on or
prior to Closing and that Chem Servicios does not
owe them any amount or benefit in connection
thereof, in form and substance reasonably
acceptable to Buyers´ counsel;
(vi) Employment Agreements in the form attached hereto
as Exhibit “E” (the “Seller Employment Agreements”)
from [Shareholder B], [Shareholder E] and
[Shareholder F].
(vii) Payoff letters from the holders of any and all
Indebtedness of the Companies as are identified in
Schedule 2.2(c)(vii) of the Disclosure Schedules.
Such payoff letter shall indicate (i) the amount
required to discharge in full such indebtedness,
(ii) an undertaking by such holder upon receipt of
such amount to terminate any and all Contracts
evidencing such indebtedness and, (iii) if such
indebtedness is secured, an undertaking by such
Exhibit 2.1
EXECUTION COPY
22.
holder to discharge at Closing any Encumbrances
securing such indebtedness;
(viii) an updated Schedule 4.9(a) of the Disclosure
Schedules, updated to be accurate, true and
complete as of the Closing Date;
(ix) The stock purchase agreement under which Ultrachem
Guatemala Shares held by Guatemalan qualifying
shareholder are transferred to Buyers’ nominee in
form and substance reasonably acceptable to Buyers,
and
(x) Such other instruments and documents shall be
prepared, executed and delivered, in form and
substance reasonably acceptable to Buyers, as may
be reasonably necessary to effect the Closing.
(d) All payments hereunder shall be made by wire transfer
of immediately available funds in Dollars to such account as may
be designated to the payor by the payee.
Section 2.3 Purchase Price Adjustments
(a) At least 5 (five) Business Days prior to the Closing
Date, Seller Representative shall prepare, or cause to be
prepared, and deliver to Buyers a statement (the “Preliminary
Closing Statement”) setting forth (i) a good-faith estimate of
the Companies’ (A) Net Working Capital (the “Estimated Net
Working Capital”), (B) Indebtedness (the “Estimated
Indebtedness”), and (C) Cash (the “Estimated Cash”) (calculated
without giving effect to the transactions contemplated herein),
based on the Companies’ books and records and other information
available immediately prior to the delivery of such statement
and (ii) on the basis of the foregoing, the Estimated Purchase
Price. Estimated Net Working Capital, Estimated Indebtedness
and Estimated Cash shall be calculated on a basis consistent
with the agreed accounting principles set forth in Schedule
2.3(a) of the Disclosure Schedules and the accounting
principles, practices, assumptions, conventions and policies
referred to therein (the “Applicable Accounting Principles”).
An illustrative example of a Preliminary Closing Statement and
calculation of Net Working Capital, Indebtedness and Cash is set
forth as Schedule 2.3(a) of the Disclosure Schedules (the
“Sample Statement”).
Exhibit 2.1
EXECUTION COPY
23.
(b) The Sellers and Buyer shall cause the Companies to
conduct a physical count of its inventory (the “Closing
Inventory”) within one (1) Business Day prior to the Closing
Date (or on such other date as may be agreed by the Parties),
which shall be jointly supervised by the Seller Representative,
Buyers and latter’s representatives and conducted according to
the inventory methods and procedures included in the Applicable
Accounting Principles.
(c) Within 90 (ninety) days after the Closing Date,
Buyers shall cause to be prepared and delivered to Sellers a
written statement (the “Final Closing Statement”) that shall
include and set forth (i) a consolidated balance sheet of the
Companies as of the close of business on the date immediately
preceding the Closing Date, including a calculation in
reasonable detail of the Companies’ actual (A) Net Working
Capital (“Closing Net Working Capital”), (B) Indebtedness
(“Closing Indebtedness”) and (C) Cash (“Closing
Cash”)(calculated without giving effect to the transactions
contemplated herein), and (ii) on the basis of the foregoing,
the Closing Purchase Price and a calculation of the Net
Adjustment Amount. The Final Closing Statement shall be
prepared on a basis consistent with the Applicable Accounting
Principles and the Sample Statement, including with respect to
the calculation of the Closing Inventory.
(d) The Final Closing Statement shall become final and
binding on the 30th day following delivery thereof, unless prior
to the end of such period, Seller Representative delivers to
Buyers written notice of their disagreement (a “Notice of
Disagreement”) specifying the nature and amount of any dispute
as to the Closing Net Working Capital, Closing Indebtedness,
Closing Cash and Closing Purchase Price, as set forth in the
Final Closing Statement. Sellers shall be deemed to have agreed
with all items and amounts of Closing Net Working Capital,
Closing Indebtedness, Closing Cash and Closing Purchase Price
not specifically referenced in the Notice of Disagreement, and
such items and amounts shall not be subject to review in
accordance with Section 2.3(d).
(e) During the 20 day period following delivery of a
Notice of Disagreement by Sellers to Buyers, the Parties in good
faith shall seek to resolve in writing any differences that they
may have with respect to the calculation of the Closing Net
Working Capital, Closing Indebtedness, Closing Cash and Closing
Purchase Price as specified therein. Any disputed items
resolved in writing among Sellers and Buyers within such twenty
Exhibit 2.1
EXECUTION COPY
24.
(20) day period shall be final and binding with respect to such
items, and if Sellers and Buyers agree in writing on the
resolution of each disputed item specified by Sellers in the
Notice of Disagreement and the amount of the Closing Net Working
Capital, Closing Indebtedness, Closing Cash and Closing Purchase
Price, the amounts so determined shall be final and binding on
the Parties for all purposes hereunder. If Sellers and Buyers
have not resolved all such differences by the end of such twenty
(20) day period, Sellers and Buyers shall submit, in writing, to
an independent public accounting firm (the “Independent
Accounting Firm”), their briefs detailing their views as to the
correct nature and amount of each item remaining in dispute and
the amounts of the Closing Net Working Capital, Closing
Indebtedness, Closing Cash and Closing Purchase Price, as
applicable, and the Independent Accounting Firm shall promptly
make a written determination as to each such disputed item and
the amount of the Closing Net Working Capital, Closing
Indebtedness, Closing Cash and Closing Purchase Price, as
applicable. The Independent Accounting Firm shall be KPMG
Mexico City office (KPMG Xxxxxxxx Xxxxx, S.C.) or, if such firm
is unable or unwilling to act, such other independent public
accounting firm as shall be agreed in writing by Sellers and
Buyers. Sellers and Buyers shall use their commercially
reasonable efforts to cause the Independent Accounting Firm to
render a written decision resolving the matters submitted to it
within thirty (30) days following the submission thereof. The
Independent Accounting Firm shall consider only those items and
amounts in Buyers’ and Sellers’ respective calculations of the
Closing Net Working Capital, Closing Indebtedness, Closing Cash
and Closing Purchase Price that are identified as being items
and amounts to which Sellers and Buyers have been unable to
agree. The scope of the disputes to be resolved by the
Independent Accounting Firm shall be limited to correcting
mathematical errors and determining whether the items and
amounts in dispute were determined in accordance with this
Agreement, as set forth in the Applicable Accounting Principles
and the Sample Statement, and the Independent Accounting Firm is
not to make any other determination, including any determination
as to whether any estimates on the Preliminary Closing Statement
are correct, adequate or sufficient. In resolving any disputed
item, the Independent Accounting Firm may not assign a value to
any item greater than the highest value for such item claimed by
either Party or less than the lowest value for such item claimed
by either Party. The Independent Accounting Firm’s
determination of the Closing Net Working Capital, Closing
Indebtedness, Closing Cash and Closing Purchase Price shall be
based solely on written materials submitted by Sellers and
Exhibit 2.1
EXECUTION COPY
25.
Buyers (i.e., not on independent review). The determination of
the Independent Accounting Firm shall be conclusive and binding
upon the Parties hereto and shall not be subject to appeal or
further review. Judgment may be entered upon the written
determination of the Independent Accounting Firm. In acting
under this Agreement, the Independent Accounting Firm will be
entitled to the privileges and immunities of an arbitrator.
(f) The costs of any dispute resolution pursuant to this
Section 2.3, including the fees and expenses of the Independent
Accounting Firm and of any enforcement of the determination
thereof, shall be borne by Sellers and Buyers in inverse
proportion as they may prevail on the matters resolved by the
Independent Accounting Firm, which proportionate allocation
shall be calculated on an aggregate basis based on the relative
Dollar values of the amounts in dispute and shall be determined
by the Independent Accounting Firm at the time the determination
of such firm is rendered on the merits of the matters submitted.
The fees and disbursements of the Representatives of each Party
incurred in connection with the preparation or review of the
Final Closing Statement and preparation or review of any Notice
of Disagreement, as applicable, shall be borne by such Party.
(g) Buyers will, and will cause the Companies following
the Closing, to afford Sellers and their Representatives
reasonable access, during normal business hours and upon
reasonable prior notice, to the personnel, properties, books and
records of the Companies and to any other information reasonably
requested for purposes of preparing and reviewing the
calculations contemplated by this Section 2.3. Buyers shall
authorize their accountants to disclose work papers generated by
such accountants in connection with preparing and reviewing the
calculations specified in this Section 2.3, provided that such
accountants shall make any work papers available to Sellers and
their Representatives in accordance with such accountant’s
disclosure procedures and, to the extent required by such
accountants, upon Sellers signing an agreement relating to
access to such work papers in form and substance reasonably
acceptable to the parties thereto.
(h) The Purchase Price shall be adjusted, upwards or
downwards, as follows:
(i) For the purposes of this Agreement, the “Net
Adjustment Amount” means an amount, which may be
positive or negative, equal to the Closing
Purchase Price minus the Estimated Purchase Price;
Exhibit 2.1
EXECUTION COPY
26.
(ii) if the Net Adjustment Amount is positive, the
Purchase Price shall be adjusted upwards in an
amount equal to the Net Adjustment Amount, and
Buyers shall pay the Net Adjustment Amount to
Sellers no later than five (5) days after its
agreement or the final determination by the
Independent Accounting Firm and, in all cases,
concurrently with the release by the Escrow Agent
of the Target Net Working Capital Holdback Amount,
by wire transfer of immediately available funds to
an account designated in writing by Sellers; and
(iii) if the Net Adjustment Amount is negative, the
Purchase Price shall be adjusted downwards in an
amount equal to the Net Adjustment Amount, and
Sellers shall pay the Net Adjustment Amount out of
the Target Net Working Capital Holdback Amount;
provided however, that in the event the amount of
the adjustment exceeds the amount of the Target
Net Working Capital Holdback Amount, then the
Sellers shall pay based upon their respective Pro
Rata Share the remaining amount of the Net
Adjustment Amount to Buyers within five (5) days
after its agreement or the final determination by
the Independent Accounting Firm by wire transfer
of immediately available funds to an account
designated in writing by Buyers; provided that if
any of the Sellers does not pay its Pro Rata Share
in full within the abovementioned term, the other
Sellers shall jointly and severally pay any unpaid
amount immediately upon demand from Buyers; and
provided further, that the Buyers may elect, in
their sole discretion, to have payment made by the
Sellers to Buyers from the Transaction Escrow
Amount pursuant to the terms of the Escrow
Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE SELLERS
Each Seller severally, but not jointly, represents and
warrants to Buyers, as to himself and not as to any other
Exhibit 2.1
EXECUTION COPY
27.
Seller, as follows. Each Seller acknowledges that Buyers are
relying on the following representations and warranties in
entering into this Agreement.
Section 3.1 Authority And Solvency
(a) Subject to the execution of the Partners Resolutions by
all the parties thereto; in the case of [Shareholder E], the
consent of his wife [Wife 1] and in the case of [Shareholder D]
the consent of his wife [Wife 2], which consents are granted in
Section 3.5 herein, Seller has all requisite power and authority
to enter into this Agreement and each Ancillary Agreement to
which the Seller will be a party, to perform his obligations
hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby; and this Agreement and each
Ancillary Agreement to which the Seller will be a party has
been or will be duly and validly executed and delivered by the
Seller and (assuming the due authorization, execution and
delivery by the other parties hereto and thereto) this Agreement
and each Ancillary Agreement to which the Seller will be a party
constitute or will constitute the legal, valid and binding
obligations of the Seller, enforceable against the Seller in
accordance with their terms, except to the extent that the
enforcement of remedies may be limited by bankruptcy, concurso
mercantil, insolvency, reorganization, moratorium or other
similar Laws affecting the enforcement of creditors' rights
generally.
(b) Seller is Solvent as of the date hereof and has been
Solvent at least six (6) months prior to the signing of this
Agreement.
Section 3.2 No Conflict; Required Filings and Consents.
(a) The execution, delivery and performance by Seller of
this Agreement and each of the Ancillary Agreements to which
such Seller will be a party, and the consummation of the
transactions contemplated hereby and thereby, do not and will
not:
(i) Subject to the execution of the Partners
Resolutions by all the parties thereto, conflict
with or violate the bylaws (estatutos sociales) or
equivalent organizational documents of any
Company;
Exhibit 2.1
EXECUTION COPY
28.
(ii) conflict with or violate any Law applicable to
such Seller or any Company or by which any
property or asset of such Seller or any Company is
bound or affected; or
(iii) except as set forth in Schedule 3.2(a)(iii) of the
Disclosure Schedules, conflict with, result in any
breach of, constitute a default (or an event that,
with notice or lapse of time or both, would become
a default) under, require any consent of any
Person pursuant to, or give to others any rights
of termination, acceleration or cancellation of,
any Contract;
(b) The Seller is not required to file, seek or obtain any
notice, authorization, approval, order, permit or consent of or
with any Governmental Authority or any Person in connection with
the execution, delivery and performance by Seller of this
Agreement and each of the Ancillary Agreements to which such
Seller will be a party or the consummation of the transactions
contemplated hereby or thereby or in order to prevent the
termination of any right, privilege, license, permit or
qualification of the Companies, except for (i) any filings as
may be required to be made under the Ley Federal de Competencia
Económica (the “Mexican Antitrust Law”), (ii) in the case of
[Shareholder E], the consent of his wife [Wife 1]), which is
granted in Section 3.5 herein; (iii) in the case of [Shareholder
D], the consent of his wife [Wife 2] which is granted in Section
3.5 herein, and (iv) the approvals or consents required under
Sections 3.2(a)(i) and (iii) hereof.
Section 3.3 Equity Interests
Seller owns the Equity Interests of Ultrachem, Global Chem
and Chem Servicios, as applicable, set forth opposite Seller’s
name on Schedule 2.2(b)(i) of the Disclosure Schedules, free and
clear of any Encumbrance. Subject to the execution of the
Partners Resolutions by all the parties thereto; in the case of
[Shareholder E], the consent of his wife [Wife 1] and in the
case of [Shareholder D] the consent of his wife [Wife 2], which
consents are granted in Section 3.5 herein, the Seller has the
right, authority and power to sell, assign and transfer such
Equity Interests to the Buyers and at the Closing, Seller will
transfer valid title to the Equity Interests of Ultrachem,
Global Chem and Chem Servicios set forth opposite Seller’s name
Exhibit 2.1
EXECUTION COPY
29.
on Schedule 2.2(b)(i) of the Disclosure Schedules to Buyers,
free and clear of any Encumbrance.
Section 3.4 Litigation.
There are no Actions in progress, pending or threatened
against or relating to the Seller or any of his properties,
rights or liabilities that would have, individually or in the
aggregate, an adverse effect on the ability of the Seller to
consummate the transactions contemplated by this Agreement.
Section 3.5 Marital Status.
(a) Each of [Shareholder A], [Shareholder B], [Shareholder
C], [Shareholder F] and [Shareholder G] is an unmarried
(xxxxxxx) natural person or married under a separate property
regime (regimen de separación de bienes) and no former, or
current, spouse has any rights or interests in, to or under the
Equity Interests.
(b) Mr. [Shareholder D] is married with Mrs. [Wife 2] and
Mr. [Shareholder E] is married with Mrs. [Wife 1] under a
community property regime (regimen de sociedad conyugal). Mrs.
[Wife 2] and Mrs. [Wife 1] sign this Agreement to evidence their
approval with the terms and conditions hereof.
Section 3.6 No Reliance.
Except for the representations and warranties of Buyers set
forth in Article V, Seller acknowledges that Buyer has not made,
and Seller has not relied on, any representations or warranties
whatsoever, express or implied, regarding the subject matter of
this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES RELATED
TO THE COMPANIES
The Sellers, jointly and severally, hereby represent and
warrant as follows to Buyers, and acknowledge and confirm that
Buyers are relying upon the following representations and
warranties in entering into this Agreement and purchasing the
Equity Interests:
Exhibit 2.1
EXECUTION COPY
30.
Section 4.1 Organization and Qualification.
(a) Each of Ultrachem, Global Chem and Chem Servicios is a
sociedad de responsabilidad limitada de capital variable duly
organized and validly existing under the laws of Mexico.
Ultrachem Guatemala is a sociedad anónima duly organized and
validly existing under the laws of Guatemala. Ultrachem Costa
Rica is a sociedad de responsabilidad limitada duly organized
and validly existing under the laws of Costa Rica. Each Company
has all necessary corporate power and authority to own, lease
and operate its properties and to carry on its business as it is
now being conducted and is duly qualified to do business 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.
(b) Sellers have heretofore furnished to the Buyers a
complete and correct copy of the public deeds that contain the
acta constitutiva and current bylaws (estatutos sociales) of
each Company. Such organizational documents are in full force
and effect.
Section 4.2 No Conflict; Required Filings and Consents.
(a) The execution, delivery and performance of this
Agreement and the Ancillary Agreements and the consummation of
the transactions contemplated hereby and thereby, do not and
will not:
(i) Subject to the execution of the Partners
Resolutions by all the parties thereto, conflict
with or violate the bylaws (estatutos sociales) or
equivalent organizational documents of any
Company;
(ii) conflict with or violate any Law applicable to any
Company or by which any property or asset of such
Company is bound or affected; or
(iii) except as set forth in Schedule 3.2(a)(iii) of the
Disclosure Schedules, conflict with, result in any
breach of, constitute a default (or an event that,
with notice or lapse of time or both, would become
a default) under, require any consent of any
Person pursuant to, or give to others any rights
of termination, acceleration or cancellation of,
any Contract;
Exhibit 2.1
EXECUTION COPY
31.
(b) None the Companies is required to file, seek or obtain
any notice, authorization, approval, order, permit or consent of
or with any Governmental Authority in connection with the
execution, delivery and performance of this Agreement and each
of the Ancillary Agreements or the consummation of the
transactions contemplated hereby or thereby or in order to
prevent the termination of any right, privilege, license, permit
or qualification of the Companies, except for any filings as may
be required to be made under Mexican Antitrust Law.
Section 4.3 Capitalization.
(a) The authorized capital of Chem Servicios consists of
six (6) equity interests, all of which are issued and
outstanding. The authorized capital of Global Chem consists of
six (6) equity interests, all of which are issued and
outstanding. The authorized capital of Ultrachem consists of
seven (7) equity interests, all of which are issued and
outstanding. The authorized capital of Ultrachem Guatemala
consists of one thousand (1,000) shares with a value of five (5)
Quetzales each, all of which are issued and outstanding (the
“Ultrachem Guatemala Shares”). The authorized capital of
Ultrachem Costa Rica consists of one hundred (100) equity
interests (cuotas) with a value of one thousand (1,000) Colones
each, all of which are issued and outstanding (the “Ultrachem
Costa Rica Equity Interests”). All of the Equity Interests,
Ultra Chem Guatemala Shares and Ultrachem Costa Rica Equity
Interests are duly authorized, validly issued, fully paid and
non-assessable and were not issued in violation of any
preemptive or similar rights. Schedule 4.3(a) of the Disclosure
Schedules hereto accurately reflects all of the issued and
outstanding equity interests or shares, as applicable, of the
capital of the Companies, and the record and beneficial owners
thereof. The Companies do not have outstanding any bonds,
debentures, notes or other obligations the holders of which have
the right to vote (or are convertible into or exercisable for
securities having the right to vote) with the partners or
shareholders, as applicable, of the Companies. All of the
capital of the Companies has been issued in compliance with all
applicable Laws.
(b) No subscription, warrant, option, call, demand,
Contract, convertible security or other right (contingent or
otherwise) to purchase or acquire or relating to any equity
interests or shares, as applicable, of capital or other equity
securities of the Companies is authorized or outstanding.
Exhibit 2.1
EXECUTION COPY
32.
Neither of the Companies has any obligation (contingent or
otherwise) to issue, deliver, sell or distribute any equity
interests or shares, as applicable, of its capital or other
equity securities or any subscription, warrant, option,
convertible security or other similar right, or to issue,
deliver, sell or distribute to holders of any equity interests
or shares, as applicable, of its capital or other equity
securities any evidences of Indebtedness or assets of such
Company. Except for the payment of any dividends approved under
Section 6.1 (c) herein and the dividends set forth in Schedule
6.1 herein, neither of the Companies has any obligation
(contingent or otherwise) to purchase, redeem or otherwise
acquire any equity interest or shares, as applicable, of its
capital or other equity securities or any interest therein or to
pay any dividend or to make any other distribution or payment in
respect thereof. There are no outstanding or authorized stock
appreciation, phantom stock or similar rights with respect to
any of the Companies.
(c) Except as provided for in the Companies’ by-laws or as
required under applicable Law, there is no agreement, written or
oral, between any of the Companies and any holder of its equity
interests or shares, as applicable, or among any holders of its
equity interests or shares, as applicable, relating to the sale
or transfer (including agreements relating to rights of first
refusal, co sale rights or “drag along” rights), or voting, of
the capital or other equity securities of any of the Companies.
(d) The Equity Interests represent 100% of the issued and
outstanding equity interests of capital of Ultrachem, Global
Chem and Chem Servicios. The Ultrachem Costa Rica Equity
Interests and the Ultrachem Guatemala Shares represent 100% of
the issued and outstanding cuotas of Ultrachem Costa Rica and
shares of Ultrachem Guatemala, respectively.
(e) Except for Buyers’ rights under this Agreement, and
Sellers’ rights of first refusal under applicable Law and the
by-laws of Ultrachem, Global Chem and Chem Servicios, all of
which will be waived at the Partners Resolutions, no Person has
any written or oral agreement, option, understanding or
commitment or any right or privilege (whether by law,
contractual or otherwise) capable of becoming such for (i) the
purchase or acquisition from the Sellers of any equity interests
of any of Ultrachem, Global Chem and Chem Servicios; or (ii) the
purchase, subscription, allotment or issuance of any of the
unissued equity interests or other securities of any of
Ultrachem, Global Chem and Chem Servicios.
Exhibit 2.1
EXECUTION COPY
33.
(f) Except for Buyers’ rights under this Agreement, no
Person has any written or oral agreement, option, understanding
or commitment or any right or privilege (whether by law,
contractual or otherwise) capable of becoming such for (i) the
purchase or acquisition of any equity interest or cuota of
Ultrachem Costa Rica or share of Ultrachem Guatemala; or (ii)
the purchase, subscription, allotment or issuance of any of the
unissued equity interests or other securities of any of
Ultrachem Costa Rica or Ultrachem Guatemala.
Section 4.4 Investments.
Except for the shares in the companies set forth in Schedule
4.4 of the Disclosure Schedules (the “Subsidiaries”), none of
the Companies directly or indirectly owns any equity,
partnership, membership or similar interest in, or any interest
convertible into, exercisable for the purchase of or
exchangeable for any such equity, partnership, membership or
similar interest in, any Person.
Section 4.5 Financial Statements; No Undisclosed
Liabilities.
(a) Complete copies of (i) the audited financial statements
consisting of the balance sheet of each of Ultrachem and Chem
Servicios as of December 31, 2013, 2014 and 2015, and the
related statements of income, changes in the net worth and cash
flow for the years then ended, and (ii) the non-audited
financial statements consisting of the balance sheet of Global
Chem as of December 31, 2014 and 2015, and the related
statements of income, changes in the net worth and cash flow for
the years then ended (the “Annual Financial Statements”), and
unaudited financial statements consisting of the balance sheet
of each of the Companies as of December 31, 2016, and the
related statements of income, changes in the net worth and cash
flow for the twelve (12)-month period then ended (the “Interim
Financial Statements” and together with the Annual Financial
Statements, the “Financial Statements”) have been delivered to
Buyers. The Annual Financial Statements shall be accompanied by
an unqualified opinion from the applicable auditor for each of
the fiscal years then ended, except for Chem Servicios, which
opinions mention the non-application of NIF D-3 of Mexican GAAP.
The “Reference Date” shall refer to January 1, 2017. The
Financial Statements of the Companies have been prepared in
accordance with Applicable GAAP (except for Chem Servicios,
Exhibit 2.1
EXECUTION COPY
34.
which do not apply NIF D-3 of Mexican GAAP), applied on a
consistent basis throughout the period involved. The Financial
Statements are based on the books and records of the business of
the Companies, and fairly present in all material respects the
financial condition of the business (except for the Financial
Statements of Chem Servicios due to the non-application of NIF
D-3 of Mexican GAAP), as of the respective dates they were
prepared and the results of the operations of the business for
the periods indicated. Each of the Companies maintains a
standard system of accounting for the business established and
administered in accordance with Applicable GAAP.
(b) Except as set forth in Schedule 4.5(b) of the
Disclosure Schedules, the Companies have no liabilities, fixed,
contingent or otherwise, except (1) those which are adequately
reflected or reserved against in the Financial Statements, and
(2) those which have been incurred in the ordinary course of
business consistent with past practice since the Reference Date
and which do not exceed, individually or in the aggregate, the
amount of U.S. $50,000 (fifty thousand 00/100 Dollars).
(c) Except for the corporate books of the Companies which
are in located at the Companies’ outside counsel’s offices and
certain documents and records which were lost on July 18, 2006
which are listed in the document attached hereto as Schedule
4.5(c), all books and records relating to the ownership and
operation of the business and the Companies’ assets are located
at the premises of the Companies, have been maintained in
accordance with applicable Laws, and comprise all of the books
and records relating to the ownership and operation of the
Companies.
Section 4.6 Absence of Certain Changes or Events.
Except as set forth in Schedule 4.6 of the Disclosure
Schedule, since the Reference Date each of the Companies has
conducted its business only in, and has not engaged in any
transaction other than according to, the ordinary course of
business, and there has not occurred (a) any Material Adverse
Effect; (b) any change in the Companies’ accounting practices;
(c) any capital expenditures by any of the Companies in excess
of U.S. $25,000 (twenty five thousand 00/100 Dollars)
individually; (d) any cancellation of any debts or claims owed
to any of the Companies or amendment, termination or waiver of
Exhibit 2.1
EXECUTION COPY
35.
any rights of value to such Company; (e) any write down of the
value of any Personal Property or other assets owned by any of
the Companies; (f) any change by any of the Companies in any tax
election or tax accounting method, or any settlement or
compromise of any tax liability; (g) any change or modification
of any of the credit, collection or payment policies, procedures
or practices of any of the Companies; (h) any discount activity
with customers of any of the Companies or any other activity by
any of the Companies that has accelerated or would accelerate to
pre-Closing periods sales that would otherwise in the ordinary
course of business be expected to occur in post-Closing periods;
(i) any settlement or compromise of any action by any of the
Companies; (j) any supplier or Material Customer losses; or
(k) any agreement or commitment by any of the Companies or the
Sellers to take any of the actions referred to in clauses (b)
through (i) above. Since January 1, 2017, except as set forth
in Schedule 4.6 of the Disclosure Schedules hereto, there has
not been any increase in the compensation payable or that could
become payable by any of the Companies other than in the
ordinary course of business to any officers, employees or
consultants of any of the Companies, nor has there occurred any
amendment of any of its compensation and benefit plans. Except
as set forth in Schedule 4.6 of the Disclosure Schedules and
salaries paid and loans granted to Sellers in the ordinary
course of business, neither of the Companies has, directly or
indirectly, distributed cash or cash equivalents to any of the
Sellers at any time since December 31, 2012, whether in the form
of dividend distribution or otherwise.
Section 4.7 Compliance with Law; Permits.
(a) Except as set forth in Schedule 4.7(a) of the
Disclosure Schedules, since its inception, each of the Companies
has conducted its operations in compliance in all material
respects with all requirements of all applicable Law, and
neither of the Companies has received any notification of
noncompliance which is pending or outstanding.
(b) Schedule 4.7(b) of the Disclosure Schedules sets forth
a complete list of all approvals, authorizations, certificates,
filings, franchises, licenses, consents, exemptions, variances,
notices and permits and applications thereof, including cargo
permits of or with all Governmental Authorities (“Permits”)
required by each of the Companies. The Companies are in
compliance with the terms of all such Permits in all material
respects and all such Permits are valid and in full force and
Exhibit 2.1
EXECUTION COPY
36.
effect, except as set forth in Schedule 4.7(b) of the Disclosure
Schedules. No Action is pending or threatened, the object of
which is to revoke, limit or otherwise affect any such Permits.
Except as set forth in Schedule 4.7(b) of the Disclosure
Schedules, the Companies have all necessary Permits for them to
own, lease or operate its properties and other assets and to
carry on its business and operations as presently conducted and
as it will be conducted through the Closing Date, provided
however, that upon Closing the cargo permits of Ultrachem will
be subject to the restrictions set forth in article 6 of the
Mexican Foreign Investment Law. No notices, transfers, consents
or approvals are required by the Companies to continue to use
the Permits used by the Companies after the Closing.
Section 4.8 Litigation.
(a) Except as set forth in Schedule 4.8(a) of the
Disclosure Schedules, there is no Action, in progress, pending
or threatened against or relating to any of the Companies or
their business since January 1, 2007.
(b) There are no Actions in progress, pending or threatened
against or relating to the Sellers or any of their properties,
rights or liabilities that would have, individually or in the
aggregate, an adverse effect on the ability of the Sellers to
consummate the transactions contemplated by this Agreement.
(c) Schedule 4.8(c) of the Disclosure Schedules includes
true, complete and correct copies of all settlement agreements
related to the Companies entered into in connection with any
Actions since January 1, 2013.
Section 4.9 Employees.
(a) Schedule 4.9(a) of the Disclosure Schedules, sets forth
the name, office location, current annual compensation
(including each employee’s actual bonus amounts for the twelve
month period ended December 31, 2016 and anticipated target
bonus amounts for the twelve-month period ending December 31,
2017), title, year of birth, date of hire, employment status
(full time or part time, exempt or non-exempt), leave status
(type and duration), accrued bonus, accrued sick leave, accrued
vacation benefits and accrued severance pay of each present
Exhibit 2.1
EXECUTION COPY
37.
employee and, to the extent applicable, consultant of the
Company. Notwithstanding any data contained in the employment or
consulting agreements of the employees or consultants of Chem
Servicios to the contrary, all the information contained in
Schedule 4.9(a) is accurate and complete in all respects, except
for typographical errors. Except as set forth in Schedule 4.9(a)
of the Disclosure Schedules, no such employee or consultant is
absent from work on long term disability leave, extended leave
of absence or receiving workers’ compensation benefits. To the
knowledge of the Companies, there is no intention of any
employee to terminate his or her employment with the Companies.
(b) Schedule 4.9(b) of the Disclosure Schedules, further
lists all such employees, as well as consultants, agents and
independent contractors, covered by an employment, non-
competition, consulting or severance agreement (providing for
payments beyond those mandated under applicable Law) with each
of the Companies. Except as set forth in Schedule 4.9(b) of the
Disclosure Schedules, each such employees, consultants, agents
and independent contractors, covered has duly executed such
employment, non-competition, consulting or severance agreement.
(c) Schedule 4.9(c) of the Disclosure Schedules includes a
true, complete and correct copy of the form of employment
agreement used by the Companies since January 1, 2013. All the
employees of the Companies have executed such employment
agreement in substantially the forms as attached to Schedule
4.9(c) of the Disclosure Schedules.
(d) Except as set forth in Schedule 4.9(d) of the
Disclosure Schedules, none of the Companies is a party to or
otherwise bound by any collective bargaining agreement, Contract
or other agreement or understanding with a labor union or labor
organization, nor any of the Companies is subject to an
application or election regarding the acquiring of bargaining
rights by any labor union or labor organization, nor any of the
Companies is the subject of any Action asserting that it has
committed an unfair labor practice or seeking to compel it to
bargain with any labor union or labor organization, nor is there
pending or threatened, any labor strike, dispute, walkout, work
stoppage, slowdown or lockout involving any Company. The
consummation of the transactions contemplated by this Agreement
and each other Ancillary Agreement will not result in any change
in the rights or obligations of any party under any Contract
with any labor union or association representing any employee or
contractor of any of the Companies. Each of the Companies has
been and is in compliance with all applicable Laws respecting
Exhibit 2.1
EXECUTION COPY
38.
employment and employment practices, independent contractor
arrangements, terms and conditions of employment, workers’
compensation, worker classification, immigration, wages, hours
of work, occupational safety and health and tax reporting and
withholding, and there is no pending or threatened charge,
grievance proceeding or other Action by any of the Companies’
employees or any other Person against or affecting any of the
Companies or relating to the alleged violation of any labor law
applicable to the Companies. No employee has been
mischaracterized as an independent contractor by any of the
Companies.
(e) Each Company is in compliance in all material respects
with all applicable labor and social security Laws (including,
as applicable, any requirements of the Instituto Mexicano del
Seguro Social, Instituto del Fondo Nacional de la Vivienda para
los Trabajadores, Sistema de Ahorro para el Retiro and the rules
and regulations thereunder).
(f) There is no Action, pending or threatened against any
of the Companies relating to its employment practices. The
employees and consultants of the Companies listed on
Schedule 4.9(a) of the Disclosure Schedules are sufficient for
the conduct of its business as presently conducted.
(g) Schedule 4.9 (g) of the Disclosure Schedules sets forth
a list of all employee benefit plans and all bonus, stock
option, stock purchase, restricted stock, incentive, deferred
compensation, retiree medical or life insurance, supplemental
retirement, severance or other benefit plans, programs or
arrangements that are maintained, contributed to or sponsored by
the Companies for the benefit of any current or former employee,
officer or manager of the Companies (collectively, the “Employee
Plans”). The Sellers have made available to the Buyers a true
and complete copy of each Employee Plan and all current summary
plan descriptions with respect to any Employee Plan.
Section 4.10 Personal Property.
Except as set forth in Schedule 4.10 of the Disclosure
Schedules, the Companies (a) have good and valid title to all of
the tangible personal property that they purport to own
(including all tangible personal property reflected in the
Interim Financial Statements or acquired by the Companies after
the Reference Date, other than de minims assets disposed of in
the ordinary course of business since such date), and (b) hold
by valid and existing lease or license all of the tangible
Exhibit 2.1
EXECUTION COPY
39.
personal property that they purport to lease or license, in each
case (with respect to both clauses (a) and (b) above) free and
clear of any Encumbrances created by, under or on behalf of the
Companies or that would prevent or restrict the use of it in any
manner whatsoever. The tangible personal property owned or
leased by the Companies (“Personal Property”) is sufficient for
the conduct of its business as presently conducted, constitutes
all of the material tangible personal property used in the
conduct of its business as presently conducted. Schedule 4.10
of the Disclosure Schedules lists all Personal Property with a
book value of U.S. $300.00 (three hundred 00/100 Dollars) or
more. Each item constituting Personal Property is free from
material defects, has been maintained in accordance with normal
industry practice, is in good operating condition and repair
(subject to normal wear and tear), is suitable for the purposes
for which it presently is used and is performing the functions
for which it was intended.
Section 4.11 Leased Real Property.
Schedule 4.11 of the Disclosure Schedules sets forth a
complete and correct list of all real property leased,
subleased, licensed, utilized, operated or occupied by the
Companies and all leases, subleases and other Contracts related
thereto (collectively, the “Companies Leases”), the location of
such premises and a brief description of the activities carried
out thereon. The Companies are in compliance with all material
obligations under the Companies Leases and all applicable laws
and regulations in connection thereof. The premises subject to
the Company Leases are hereinafter referred to as “Companies
Leased Real Property”. The Companies Leased Real Property is
sufficient for the operation of the Companies’ business and
constitutes all of the real property used in the operation of
their businesses as presently conducted. Except as set forth in
Schedule 4.11 of the Disclosure Schedules, the Companies have
never at any time owned any real property.
Section 4.12 Intellectual Property.
(a) The Companies own, license or otherwise possess
legally enforceable rights to use all Intellectual Property
currently used in the business or as the business is proposed to
be conducted and such Intellectual Property constitutes all of
the Intellectual Property necessary for the business of the
Companies as currently conducted and as it is intended to be
conducted in the future. Schedule 4.12(a) of the Disclosure
Exhibit 2.1
EXECUTION COPY
40.
Schedules contains a true, correct and complete list of (i) all
Intellectual Property and licenses that are owned, used or
licensed by the Companies, provided, however, that Schedule
4.12(a) does not list any authorizations granted to the
Companies by any third parties to use Third Party Intellectual
Property Rights (as defined below) pursuant to agreements
entered in the ordinary course of business such as lease,
agency, distribution agreements or the like; (ii) the
registration number, date of registration and jurisdiction of
registration thereof; (iii) the name of the registered owner
and, if different, the user or users thereof; and (iv) any
applications for any of the foregoing.
(b) The Companies have provided to Buyers (i) all
material documents, relative to Patents and Patent applications,
if any, and all registered and unregistered Marks, registered
and unregistered Copyrights, owned by the Companies, including
the jurisdictions in which each such Intellectual Property right
has been issued or registered or in which any application for
such issuance and registration has been filed; (ii) all
licenses, sublicenses and other agreements as to which the
Companies are a party and pursuant to which any Person is
granted a license to use any of the Companies’ Intellectual
Property; and (iii) all licenses, sublicenses and other
agreements as to which the Companies are a party and pursuant to
which the Companies are granted a license to use any third party
Intellectual Property, including software, or any other third
party Intellectual Property (“Third Party Intellectual Property
Rights”).
(c) There is no and there has not been since January 1,
2014, any unauthorized use, disclosure, infringement or
misappropriation of any Intellectual Property of the Companies,
any Trade Secret material to the Companies or, to the best of
Sellers knowledge, any Third Party Intellectual Property Right
to the extent licensed by or through the Companies, by any third
party. The Companies have not entered into any agreement to
indemnify any other Person against any charge of infringement of
any Intellectual Property, other than indemnification provisions
arising in the ordinary course of business, such as those in
lease agreements, distribution agreements, confidentiality
agreements, purchase orders, invoices or similar sales-related
documents.
(d) The Companies are not, nor will they be as a result
of the consummation of the transactions contemplated by this
Agreement, in breach of any license, sublicense or other
Exhibit 2.1
EXECUTION COPY
41.
agreement currently used in, or material to, the Intellectual
Property of the Companies or Third Party Intellectual Property
Rights.
(e) All Intellectual Property held by the Companies are
validly issued and presently subsisting. The Companies (i) have
not been subjected to any Action which involves a claim of
infringement of any Intellectual Property rights of any third
party; and (ii) has not brought any action, suit or proceeding
for infringement of Intellectual Property or breach of any
license or agreement involving Intellectual Property against any
third party. The services and the conduct of the business of
the Companies as currently conducted and proposed to be
conducted by the Companies does not infringe any Intellectual
Property or other proprietary right of any third party. Each of
the Companies has taken reasonable steps to maintain the
confidentiality of all material Trade Secrets of such Company.
(f) The Companies have taken steps which they believe to
be sufficient to protect and preserve the confidentiality of all
material Intellectual Property owned by the Companies or of
which the Companies are beneficial owners. All use, disclosure
or appropriation by a third party of such Intellectual Property
owned by each of the Companies has been pursuant to written
agreements between such Company and such third party. All use,
disclosure or appropriation of Intellectual Property not owned
by the Companies has been pursuant to and in accordance with
binding agreements between the Companies and the owner of such
Intellectual Property, or is otherwise lawful.
(g) The Companies’ Intellectual Property is currently in
material compliance with all applicable legal requirements and
no such Intellectual Property has been or is now involved in any
proceeding challenging or seeking to invalidate or narrow, such
Intellectual Property, including, without limitation, an
interference, reissue, reexamination or opposition proceeding or
any Action under applicable industrial property law and
regulations.
(h) Neither of the Companies is in breach of, or default
under, any term of any license or sublicense with respect to any
of its Intellectual Property and no other party to such license
or sublicense is in breach thereof or default thereunder, and
such license is valid and enforceable.
Section 4.13 Taxes.
Exhibit 2.1
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(a) The Companies have paid all Taxes and filed all Tax
Returns for all Taxes, of any kind of nature whatsoever, that
were due and payable up to and including the date hereof. All
Tax Returns required to have been filed by or with respect to
the Companies have been filed, and such Tax Returns have been
duly and accurately prepared in all material respects, except
for mistakes or omissions amended pursuant to complementary Tax
Returns. All Taxes shown to be payable on such Tax Returns have
been paid, except for Taxes being contested in good faith by
appropriate proceedings. No deficiency for any material amount
of Tax has been asserted or assessed by a Governmental Authority
in writing against any Company that has not been satisfied by
payment, settled or withdrawn. There are no Tax liens on the
assets of any Company. There are no outstanding waivers or
agreements extending the statute of limitations for any period
with respect to any Tax to which any Company may be subject.
All Taxes not yet due and payable by the Companies have been, in
all material respects, properly accrued on the books of account
of the Companies in accordance with Applicable GAAP.
(b) The Companies have maintained all Tax Returns and
related documents (including contemporaneous transfer pricing
documentation, any electronic filing obligation for tax
purposes, among others) filed and/or issued by the Companies
according to article 30 of the Federal Fiscal Code of Mexico,
applicable Law in Costa Rica and Guatemala and any related
provision, and correct and complete copies of all rulings,
revenue agent reports, information, document requests, tax
favorable balance requests, notices of proposed deficiencies,
petitions, pending ruling requests, and any similar documents
submitted by, received by or agreed to by or on behalf of the
Companies.
(c) All Taxes that the Companies have been required to
deduct, collect or withhold have been duly collected or withheld
and, to the extent required when due, have been duly paid to the
competent Governmental Authority, and the Companies have duly
complied with all reporting and recordkeeping requirements
according to the corresponding Tax Law. No event, transaction,
act or omission has occurred which could result in the Companies
becoming liable to pay or to bear any Taxes as a transferee,
successor, joint and several obligor, or otherwise which is
primarily or directly chargeable or attributable to any other
Person (other than the Companies), nor do the Companies have any
actual or contingent liability to any other Person (other than
the Companies) in respect of any actual, contingent, or deferred
liability of such Person for Taxes.
Exhibit 2.1
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(d) Except as set forth in Schedule 4.13 (d), all
intercompany and related party transactions have been conducted
on an arm’s-length basis in accordance with applicable Law and
the Companies have maintained appropriate documentation for
transfer pricing purposes.
Section 4.14 Material Contracts.
(a) Schedule 4.14 (a) of the Disclosure Schedules sets
forth a complete list of Contracts that are material or
necessary for the business as conducted as of the date hereof
and contemplated to be conducted by the Companies as of the
Closing Date (the “Material Contracts”). Material Contracts
include, without limitation, any of the following categories of
agreements, whether written or verbal (if verbal, Schedule 4.14
(a) of the Disclosure Schedules should include a written
description of the terms of such agreement):
(i) any Contract with the Companies’ suppliers or
manufacturers (of any goods, materials or services
relating to the Companies’ business);
(ii) any Contract pursuant to which the Companies
undertake to distribute the products of their
suppliers;
(iii) any Contract under which freight transportation
services are rendered to the Companies;
(iv) any Contract that has “take or pay,” “meet or
release,” right of first refusal or right of first
option provisions applicable to the Companies;
(v) any Contract that provides for exclusive rights of
distribution or marketing for the Companies;
(vi) any Contract that includes “most favored nation”
pricing;
(vii) any sub-Contract for the Companies’ services;
(viii) any Contract with any Person which provides
personnel (including sales promoters, sales
agents, and/or consultants) to the Company;
Exhibit 2.1
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(ix) any union Contract or collective bargaining
agreement to which any Company is a party or by
which it is bound;
(x) any Contract pursuant to which any Company leases
real or Personal Property;
(xi) any agreement with any customer of the Companies,
other than sales/distribution agreements referred
to in paragraph (ii) above;
(xii) any Contract which commits any Company to future
pricing for the Company’s services;
(xiii) any Contract which places limits on any Company’s
business or its ability to compete with others
(including limitations on distribution of certain
products in certain areas or to certain markets);
(xiv) any employment Contract or other agreement which
commits any of the Companies to pay compensation
or provide benefits to employees or independent
contractors, other than those attached to Schedule
4.9(c) of the Disclosure Schedules;
(xv) any Contract with any Affiliates of the Companies
or relatives of any of the Sellers, including
Related Persons;
(xvi) any loan agreement, guaranty or other similar
Contract to which any of the Companies is a party,
including any agreement for credit support;
(xvii) any Contract pursuant to which there is an
Encumbrance of any of the Companies’ owned assets;
(xviii) any Contract to lease equipment or vehicles used
in the business;
(xix) any Contract related to any Intellectual Property,
hardware or software used in the business; and
(xx) any Contract requiring any of the Companies to pay
royalties to a third party or requiring a third
party to pay royalties to the Company.
Exhibit 2.1
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(b) Except for those Material Contracts specifically
referred to in Schedule 4.14 (a) of the Disclosure Schedules,
each Material Contract is valid and binding on the Companies in
accordance with its terms and is in full force and effect. None
of the Companies or any other party thereto is in material
breach of or default under (or is alleged to be in breach of or
default under), or has provided or received any notice of any
intention to terminate, any Material Contract. Except as set
forth on Schedule 4.14(b) of the Disclosure Schedules, no
Material Contract requires consent of the Companies’ counter-
party to the sale of the Equity Interests to Buyers. Complete
and correct copies of each Material Contract (including all
modifications, amendments and supplements thereto and waivers
thereunder) have been made available to Buyers. There are no
material disputes pending or threatened under any Material
Contract. To the Knowledge of the Companies, there is no
intention of any of the Companies’ counter-parties to any
Material Contract to cease doing business with the Companies or
reduce their level of business with any of the Companies post-
Closing.
Section 4.15 Environmental Matters.
(a) Each of the Companies is and has been in compliance, in
all material respects, with all laws, regulations, permits, or
other applicable requirements relating to (i) releases or
threatened releases of Hazardous Substances; (ii) pollution or
protection of employee health or safety, public health or
environment; or (iii) the handling, transport, use, treatment,
storage or disposal of Hazardous Substances (“Environmental
Laws”);
(b) There has been no release or threatened release by any
of the Companies of any pollutant, contaminant or toxic or
hazardous material, substance or waste, or petroleum product or
byproduct, or any fraction thereof (each a “Hazardous
Substance”) on, upon, into or from any site currently or
heretofore owned, leased or otherwise used by any of the
Companies, except for de minims amounts while performing washing
activities, which washing activities do not violate
Environmental Laws or are reportable to Governmental
Authorities;
(c) There have been no Hazardous Substances generated,
handled or stored by any of the Companies that have been
Exhibit 2.1
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disposed of or come to rest other than as required under
Environmental Laws; and
(d) Except as set forth in Schedule 4.15 of the Disclosure
Schedules, there are no underground storage tanks of any kind
located on, no asbestos, no polychlorinated biphenyls (“PCBs”)
or PCB-containing equipment used or stored on, and no hazardous
waste stored on, any site owned or operated by any of the
Companies, except for the storage of hazardous waste in
compliance with Environmental Laws. The Company has made
available to Buyers true and complete copies of all material
environmental permits and pending permit applications, a general
description of such items being attached hereto as Schedule 4.15
of the Disclosure Schedules.
Section 4.16 Accounts Receivable.
All existing accounts receivable of the Companies: (a) have
arisen from bona fide transactions entered into by the Companies
involving the sale or resale of products or the rendering of
services in the ordinary course of business consistent with past
practice; and (b) constitute only valid, undisputed claims of
the Companies not subject to claims of set-off or other defenses
or counterclaims other than normal cash discounts accrued in the
ordinary course of business consistent with past practice; and
(c) are fully collectible, except as set forth in Schedule 4.16.
Schedule 4.16 of the Disclosure Schedules also sets forth all
credit support, including bonds, letters of credit and
guarantees, issued in favor of the Companies in connection with
their business that are currently outstanding.
Section 4.17 Customers, Vendors and Suppliers.
(a) Schedule 4.17(a) of the Disclosure Schedules includes a
list of all Material Customers, Material Suppliers and Material
Vendors of the Companies. Neither of the Companies has:
(i) received any notice, and has no reason to believe,
that any of their Material Customers has ceased,
or intends to cease, to purchase the products or
use the services of such Company or to otherwise
terminate or reduce its relationship with such
Company.
(ii) received any notice, and has no reason to believe,
that any of their Material Suppliers has ceased,
or intends to cease, to supply goods or services
Exhibit 2.1
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to such Company or to otherwise terminate or
reduce its relationship with such Company.
(iii) received any notice, and has no reason to believe,
that any of their Material Vendors has ceased, or
intends to cease, to supply goods or services to
such Company or to otherwise terminate or reduce
its relationship with such Company.
(b) Except as set forth in Schedule 4.17(b) of the
Disclosure Schedules, as of the date of this Agreement, no
Material Customer, Material Supplier or Material Vendor has
substantially altered in an adverse manner its relationship with
either Company in the past two (2) fiscal years.
(c) Schedule 4.17(c) of the Disclosure Schedules contains a
true, complete and correct copy of the Companies’ standard terms
and conditions for (i) sale of products; (ii) purchase of
products and (iii) services.
Section 4.18 Insurance.
(a) Schedule 4.18(a) of the Disclosure Schedules sets
forth (i) the policies of insurance presently in force covering
the Companies, their assets or any of the assets leased to the
Companies including, without restricting the generality of the
foregoing, those covering personnel, properties, buildings,
machinery, equipment, furniture, fixtures, transportation of
products and operations, specifying with respect to each such
policy, the name of the insurer, type of coverage, term of
policy, limits of liability and annual premium; (ii) the
Companies’ premiums and losses by year, by type of coverage,
since December 31, 2013, under their insurance policies;
(iii) all outstanding insurance claims by the Companies, or any
of its Affiliates (relating to assets utilized by the Company in
its business) for damage to or loss of property or income which
have been referred to insurers or which the Companies believe to
be covered by commercial insurance; (iv) general comprehensive
liability policies carried by the Companies, or any of their
Affiliates (relating to assets utilized by each of the Companies
in its business), since December 31, 2013, including excess
liability policies; and (v) any agreements, arrangements or
commitments by or relating to the Companies under which any of
the Companies is required to carry insurance for the benefit of
any other Person. The Companies have provided to Buyers
complete and correct copies of the policies and agreements set
forth in Schedule 4.18(a) of the Disclosure Schedules.
Exhibit 2.1
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(b) The insurance policies set forth in Schedule 4.18(a)
of the Disclosure Schedules are in full force and effect, all
premiums with respect thereto covering all periods up to and
including the date hereof have been paid, and no notice of
cancellation or termination has been received with respect to
any such policy. The Companies have otherwise performed in all
material respects all of their obligations under such policies.
Such policies (i) are sufficient for material compliance with
all requirements of applicable Law and all Contracts relating to
the Companies or their business, including any real estate
leases; (ii) are valid, outstanding and enforceable policies;
(iii) will remain in full force and effect through the
respective dates set forth in Schedule 4.18(a) of the Disclosure
Schedules without the payment of additional premiums; (iv) will
not in any way be affected by, or terminate or lapse by reason
of, the transactions contemplated by this Agreement, and (v) do
not provide for any retrospective premium adjustment or other
experienced based liability on the part of any of the Companies,
except as set forth in Schedule 4.18(a). Neither the Companies,
nor their Affiliates has been refused any insurance, nor has any
such coverage been limited or a notice that a defense will be
afforded with reservation of rights otherwise been provided, by
any insurance carrier to which any of the Companies has applied
for any such insurance or with which such Company, or any of its
Affiliates has carried insurance during the last five (5) years.
The insurance policies set forth in Schedule 4.18(a) of the
Disclosure Schedules are in such amounts, with such deductibles
and against such risks and losses, as are reasonable for the
business, assets and properties of the Companies and are
consistent with the types and levels of coverage of similarly
situated companies and good industry practice and such coverage
has not changed in any material respect between the fiscal year
ended December 31, 2015 and the fiscal year ended December 31,
2016, except as disclosed in such Schedule 4.18(a).
Section 4.19 Relationship with Related Persons.
(a) Except as set forth on Schedule 4.19(a) of the
Disclosure Schedules, no Seller, relative of any Seller (i.e.
any Person connected with a Seller by blood or affinity to the
fourth degree), or Affiliate of any of the Companies (each, a
“Related Person”) has, or has had, any interest in any property
(whether real, personal, or mixed and whether tangible or
intangible), used in or pertaining to any of the Companies.
Exhibit 2.1
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Except as set forth on Schedule 4.19(a) of the Disclosure
Schedules, no Related Person has, or has had, an equity interest
or any other financial or profit interest in, a Person that has
(i) had business dealings or a material financial interest in
any transaction with any of Companies; or (ii) engaged in
competition with any of the Companies with respect to any of the
services of such Company (a “Competing Business”) in any market
presently served by such Company. Except as set forth on
Schedule 4.19(a) of the Disclosure Schedules, and other than in
respect of employment or acting as managers or officers, no
Related Person is a party to any Contract or arrangement with,
or has any claim or right against, any of the Companies or any
of its assets.
(b) Except as set forth on Schedule 4.19(b) of the
Disclosure Schedules, no Seller has any current claim or Action
against the Companies nor is aware of any facts upon which such
a claim or Action could be based. Upon the Closing, no Seller
shall have any claim or Action against the Companies nor is
aware of any facts upon which such a claim or Action could be
based.
Section 4.20 Brokers.
Except as set forth in Schedule 4.20 of the Disclosure
Schedules, no broker, finder or investment banker is entitled to
any brokerage, finder’s or other fee or commission in connection
with the transactions contemplated hereby based upon
arrangements made by or on behalf of the Sellers or the
Companies and no Person other than those set forth on Schedule
4.20 of the Disclosure Schedules is entitled to any fee or
commission or like payment in connection with this Agreement or
the transactions contemplated herein.
Section 4.21 Certain Payments, Trade Controls.
(a) Each of the Companies has been and is in compliance
with all applicable Laws and regulations of all jurisdictions in
which such Company conducts business pertaining to improper
payments to government officials or other Persons and the
related books and records provisions of such laws and
regulations.
Exhibit 2.1
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(b) None of the Companies nor any of their Affiliates,
directors, officers, agents, employees or other persons acting
on behalf the Companies (including without limitation any of the
Sellers), has used any funds of the Companies for any unlawful
contribution, gift, entertainment or other unlawful expense
relating to political activity, made any direct or indirect
unlawful payment to any foreign or domestic governmental
official or employee, violated or is in violation of any
provision of the U.S. Foreign Corrupt Practices Act of 1977 or
other applicable Law or made any illegal bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
(c) None of the Companies (nor any of their employees,
agents or representatives, or to the Company’s knowledge, any
contractors or customers, in the conduct of activities
authorized by or taken on behalf of or at the direction of any
of the Companies), has taken any action that would violate, in
any material respect, any sanctions or trade control laws
administered by any United States Governmental Authority or
other applicable Law.
(d) Neither of the Companies (i) is a Person described
or designated in the Specially Designated Nationals and Blocked
Persons List of OFAC or (ii) engages in any dealings or
transactions with any such Person. No Action against any of the
Companies with respect to OFAC is pending or has been threatened
in writing.
(e) Except as set forth on Schedule 4.21(e) of the
Disclosure Schedules, neither of the Companies (nor any of their
agents or representatives, in the conduct of activities
authorized by or taken on behalf of or at the direction of any
of the Companies) has made any sales to customers outside of
Mexico and the U.S. during the past three (3) calendar years.
Schedule 4.21(e) of the Disclosure Schedules also sets forth the
amount and country location of any sales made to customers
outside of Mexico and the U.S. in the past three (3) calendar
years.
Section 4.22 Assets Necessary to the Business.
Upon the Closing of the transactions contemplated by this
Agreement, the Buyers shall acquire through the acquisition of
the Companies good and valid title to all of the assets of the
business owned by the Companies free and clear of all
Encumbrances and such assets, along with all the assets then
leased by the Companies, shall constitute all the property
Exhibit 2.1
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required for the Companies to continue the business as presently
conducted.
Section 4.23 Inventory.
Each Company owns its own inventory free and clear of all
Encumbrances. Except as disclosed on Schedule 4.23 of the
Disclosure Schedules, such inventory was acquired for sale in
the ordinary course of business and is in good and saleable
condition and is not obsolete or damaged, except with respect to
the inventory owned by any of the Companies to the extent
reflected in reserves set forth in the Interim Financial
Statements. As of February 1, 2017 such inventory was located
at the locations as noted on Schedule 4.23 of the Disclosure
Schedules and none of such inventory is subject to any
consignment, bailment, warehousing or similar arrangement.
Section 4.24 Product and Service Warranty.
(a) Except as set forth on the Schedule 4.24 (a) of the
Disclosure Schedules, since January 1, 2013, all products sold
by the Companies have been delivered by the Companies in such
product’s original manufacturer’s packaging, and the Companies
have not distributed any products in any other form or
container.
(b) The Companies have not given any warranty in respect
of goods or services of the Companies supplied or agreed to be
supplied by them, other than Ultrachem’s standard warranty as
set forth in Schedule 4.17 (c) of the Disclosure Schedules, and
other warranties that are not, in the aggregate, material to the
Companies. Neither of the Companies has sold any products or
delivered any services that included a warranty for a period of
longer than one year.
(c) Schedule 4.24 (c) of the Disclosure Schedules
identifies (i) any warranty claim asserted during the three year
period prior to the date hereof from which the Companies have
incurred costs in excess of U.S. $25,000, or (ii) any warranty
claims by any one customer during the three-year period prior to
the date hereof that are, in the aggregate, in excess of
U.S.$45,000.
Section 4.25 Bank Accounts.
Exhibit 2.1
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Schedule 4.25 of the Disclosure Schedules sets forth each
bank, savings institution and other financial institution with
which any Company has an account or safe deposit box and the
names of all persons authorized to draw thereon or to have
access thereto.
Section 4.26 Powers of Attorney.
Schedule 4.26 of the Disclosure Schedules lists all
revocable or irrevocable powers of attorney or similar grant of
authority granted by the Companies to any Person relating to its
business for any purpose whatsoever.
Section 4.27 Disclosures.
No representation or warranty of the Sellers in this
Agreement, no statement in the Disclosure Schedules and no other
information, document or certificate furnished by the Sellers to
Buyers in connection with this Agreement and the transactions
contemplated hereby contains any material untrue statement of
fact or omits to state a material fact necessary to make the
statements herein or therein, in light of the circumstances in
which they were made, not misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE BUYERS
The Buyers, jointly and severally, hereby represent and
warrant to the Sellers as follows:
Section 5.1 Organization and Qualification.
Each Buyer is a limited liability company duly organized,
validly existing and in good standing under the laws of the
State of Delaware, U.S.A.
Section 5.2 Authority.
Each Buyer has full corporate power and authority to
execute and deliver this Agreement and each of the Ancillary
Agreements to which it will be a party, to perform its
obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution,
delivery and performance by such Buyer of this Agreement and
Exhibit 2.1
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each of the Ancillary Agreements to which it will be a party and
the consummation by such Buyer of the transactions contemplated
hereby and thereby have been duly and validly authorized by all
necessary corporate action. This Agreement has been, and upon
their execution, each of the Ancillary Agreements to which such
Buyer will be a party will have been, duly executed and
delivered by such Buyer and, assuming due execution and delivery
by each of the other Parties hereto and thereto, this Agreement
constitutes, and upon their execution each of the Ancillary
Agreements to which such Buyer will be a party will constitute,
the legal, valid and binding obligations of such Buyer,
enforceable against such Buyer in accordance with their
respective terms.
Section 5.3 No Conflict; Required Filings and Consents.
(a) The execution, delivery and performance by each Buyer
of this Agreement and each of the Ancillary Agreements to which
such Buyer will be a party, and the consummation of the
transactions contemplated hereby and thereby, do not and will
not:
(i) conflict with or violate the certificate of
incorporation or bylaws of such Buyer;
(ii) conflict with or violate any Law applicable to
such Buyer or by which any property or asset of
such Buyer is bound or affected; or
(iii) conflict with, result in any breach of, constitute
a default (or an event that, with notice or lapse
of time or both, would become a default) under,
require any consent of any Person pursuant to, or
give to others any rights of termination,
acceleration or cancellation of, any material
Contract or agreement to which such Buyer is a
party;
(b) Neither Buyer is required to file, seek or obtain any
notice, authorization, approval, order, permit or consent of or
with any Governmental Authority in connection with the
execution, delivery and performance by such Buyer of this
Agreement and each of the Ancillary Agreements to which it will
be party or the consummation of the transactions contemplated
hereby or thereby or in order to prevent the termination of any
right, privilege, license or qualification of such Buyer, except
(i) for any filings as may be required to be made under the
Exhibit 2.1
EXECUTION COPY
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Mexican Antitrust Law, and (ii) for such filings as may be
required by any applicable securities Laws.
Section 5.4 Brokers.
No broker, finder or investment banker is entitled to any
brokerage, finder’s or other fee or commission in connection
with the transactions contemplated hereby based upon
arrangements made by or on behalf of the Buyers and no Person is
entitled to any fee or commission or like payment in connection
with this Agreement or the transactions contemplated herein.
Section 5.5 Non-Solicitation.
Nexeo Mexico hereby acknowledges and agrees that it is
bound by all terms, conditions and provisions of that certain
non-solicitation agreement dated as of October 19, 2016 (the
“Non-Solicitation Agreement”) entered into by and between Nexeo
LLC and Ultrachem.
ARTICLE VI
COVENANTS
Section 6.1 Conduct of Business Prior to the Closing.
Unless Buyers shall otherwise provide their prior written
consent, which consent shall not be unreasonably denied, delayed
or withheld, the business of the Companies shall be conducted
only in the ordinary course of business and in compliance with
all applicable Laws, and the Sellers shall cause each Company to
use its commercially reasonable efforts to preserve intact their
business organization, including the preservation of the
Companies’ current business operations, goodwill and their
relationships with customers and suppliers. Except as otherwise
contemplated by this Agreement, as required by applicable Law or
as set forth on Schedule 6.1 of the Disclosure Schedules,
between the date of this Agreement and the Closing Date, without
the prior consent of Buyers, which consent shall not be
unreasonably denied, delayed or withheld, none of the Companies
shall:
(a) amend its certificate of incorporation or bylaws or
equivalent organizational documents;
Exhibit 2.1
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(b) issue, transfer, pledge, encumber, or sell any shares
of its capital, or any options, warrants, convertible securities
or other rights of any kind to acquire any such shares;
(c) declare, set aside, make or pay any cash or non-cash
dividends or other non-cash distributions with respect to any of
its capital;
(d) reclassify, recapitalize, combine, split, subdivide or
redeem, or purchase or otherwise acquire, directly or
indirectly, any of its capital or make any other change with
respect to its capital structure;
(e) acquire any corporation, partnership, limited
liability company, other business organization or division
thereof or any assets other than in the ordinary course of
business or enter into any partnership with any other entity for
any of the above items;
(f) sell, assign, license, transfer, convey, lease to or
otherwise dispose of any of the properties or assets owned by,
or used by, the Companies, other than product sales in the
ordinary course of business or assets with a market value
individually or in the aggregate not exceeding U.S. $3,000.00
(three thousand 00/100 Dollars);
(g) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation or recapitalization;
(h) incur any Indebtedness for borrowed money (excluding
trade account payables in the ordinary course of business),
issue any debt securities in excess of U.S.$10,000.00 (ten
thousand 00/100 Dollars) individually or in the aggregate or
guarantee any Indebtedness of any kind;
(i) subject to any Encumbrance or, allow or suffer to be
encumbered, any of the properties or assets (whether tangible or
intangible) owned by the Companies;
(j) make or commit to make capital expenditures in an
amount that exceeds U.S. $25,000.00 (twenty five thousand 00/100
Dollars) individually or U.S. $100,000.00 (one hundred thousand
00/100 Dollars) in the aggregate;
(k) grant or announce any increase or decrease in the
salaries, bonuses or other benefits payable by any Company to
any of its employees, or enter into any other type of employment
Exhibit 2.1
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agreement or benefit plan, other than (i) as required by Law;
(ii) pursuant to any plans, programs or agreements existing on
the date hereof; or (iii) other ordinary increases not
inconsistent with the past practices of the Companies; provided
that in any of the above mentioned cases the Sellers provide
prior notice of such change to the Buyers;
(l) enter into any Material Contract involving payments or
services in excess of U.S. $350,000.00 (three hundred and fifty
thousand 00/100 Dollars) or that would otherwise make such
counterparty a Material Customer, a supplier or Material Vendor;
(m) make any change in any method of accounting or
accounting practice or policy, except as required by applicable
Law or the Applicable GAAP;
(n) alter any of the insurance coverage applicable to the
Companies and/or its business other than renewals in the
ordinary course of business or as required by applicable Law or
pursuant to automatic adjustments set forth in Material
Contracts;
(o) cancel or compromise any debt or claim or waive or
release any material right of the Companies;
(p) settle or compromise any pending or threatened Action
or legal proceeding in an amount greater than U.S. $50,000.00
(fifty thousand 00/100 Dollars) but in the aggregate no more
than U.S. $100,000 (one hundred thousand and 00/100 Dollars),
with the understanding, that if the amount is greater than
either U.S. $50,000.00 (fifty thousand 00/100 Dollars) or an
aggregate of U.S. $100,0000 (one hundred thousand 00/100
Dollars) the release will be in a form and substance reasonably
acceptable to Buyers and the Company shall provide Buyers copy
of the release (with supporting papers) at least three (3)
Business Days prior to signing for Buyers to review;
(q) except for transfers of cash pursuant to normal cash
management practices in the ordinary course of business
(including labor obligations), make any investments in or loans
to, or pay any fees or expenses to, or enter into or modify any
Contract with any Related Persons;
(r) change or modify its credit, collection or payment
policies, procedures or practices (including with respect to
maintenance of properties), including acceleration of
Exhibit 2.1
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collections or receivables (whether or not past due) or fail to
pay or delay payment of payables or other liabilities;
(s) except as required by applicable Law or Applicable
GAAP (i) make a change in its accounting or Tax reporting
principles, methods or policies, Tax elections, or settle or
compromise any Tax claim or liability or (ii) prepare or file
any Tax Return (or any amendment thereof) unless such Tax Return
shall have been prepared in a manner consistent with past
practice and the Company shall have consulted with Buyers with
respect to such Tax Return reasonably in advance to the due date
thereof; or
(t) agree or commit to do any of the foregoing.
Section 6.2 Covenants Regarding Information and
Keeping of Records
(a) From the date hereof until the Closing Date, upon
reasonable prior notice, the Sellers shall, and shall cause the
Companies to, afford the Buyers and their Representatives
reasonable access during normal business hours to the
properties, offices, plants and other facilities, accounting and
corporate books and records of the Companies, and shall cause
each Company to furnish the Buyers with such financial,
operating, accounting and other data and information as the
Buyers may reasonably request; provided, however, that any such
access or furnishing of information shall be conducted at the
Buyers’ expense and in such a manner as not unreasonably to
interfere with the normal operations of the Companies.
(b) In order to facilitate the resolution of any claims
made against or incurred by the Sellers and their Affiliates, on
the one hand, or the Buyers or the Companies, on the other hand,
following the Closing Date, the Parties hereto shall cooperate
in good faith and reasonably assist the other Parties in
obtaining access to information, books and records relating to
the Companies to the extent such information, books or records
are within such Party’s possession or control.
(c) Subject to any retention requirements relating to the
preservation of Tax records, the Sellers and Buyers agree that
each of them shall (and shall cause the Companies to) preserve
and keep the records held by them relating to the respective
businesses of the Companies for a period of seven (7) years from
the Closing Date and shall make such records and personnel
available to the other as may be reasonably required by such
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Party in connection with, among other things, any insurance
claims by, legal proceedings against or governmental
investigations of the Sellers, the Companies or Buyers or any of
their Affiliates or in order to enable the Sellers or Buyers to
comply with their respective obligations under this Agreement
and each other agreement, document or instrument contemplated
hereby or thereby. In the event the Sellers or Buyers wish to
destroy (or permit to be destroyed) such records after that
time, such Party shall first give ninety (90) days prior written
notice to the other and such other Party shall have the right at
its option and expense, upon prior written notice given to such
Party within that ninety (90) day period, to take possession of
the records within one hundred and eighty (180) days after the
date of such notice.
Section 6.3 Notification of Certain Matters.
Until the Closing, each Party hereto shall promptly notify
the other Party in writing of any fact, change, condition,
circumstance or occurrence or nonoccurrence of any event of
which it is aware that will or is reasonably likely to result in
(i) any of the representations and warranties in Article III,
Article IV or Article V becoming untrue in any material respect;
(ii) failure to comply any of the obligations and covenants set
forth in Article VI herein; (iii) the conditions set forth in
Article VII of this Agreement becoming incapable of being
satisfied or (iv) a Material Adverse Effect.
Section 6.4 Intercompany Arrangements.
Except as set forth in Schedule 6.4 of the Disclosure
Schedules and except for this Agreement, the Ancillary
Agreements and any ordinary course transactions, including
intercompany trade payables and receivables included in the
calculation of Net Working Capital, the Sellers shall settle all
intercompany accounts or Contracts between any Company, on the
one hand, and the Sellers and their Affiliates (other than the
Companies), on the other hand, immediately prior to the Closing.
Section 6.5 Intentionally Omitted
Section 6.6 Employees Related Matters.
(a) The Sellers shall use their best efforts to cause the
key employees listed in Schedule 6.6(a)(i) of the Disclosure
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Schedules to continue their employment with Chem Servicios and
to enter into the non-competition and non-solicitation
provisions set forth in Schedule 6.6(a)(ii) of the Disclosure
Schedules upon Closing.
(b) Upon execution of this Agreement, Sellers shall grant
the Buyers reasonable access to the employees identified in
Schedule 6.6(b) hereof, in an effort to facilitate the closing
of the transactions contemplated by this Agreement.
Section 6.7 Confidentiality.
Each of the Parties shall hold, and shall cause its
Representatives to hold, in strict confidence all documents and
information furnished to it by or on behalf of the other Party
(including their Representatives) in connection with the
transactions contemplated hereby pursuant to the terms of the
confidentiality agreement dated July 22, 2016 between Nexeo LLC
and Ultrachem (as amended, the “Confidentiality Agreement”),
which shall continue in full force and effect until the Closing
Date, at which time such Confidentiality Agreement and the
obligations of the parties under this Section 6.7 shall
terminate. If for any reason this Agreement is terminated prior
to the Closing Date, the Confidentiality Agreement shall
nonetheless continue in full force and effect in accordance with
its terms.
Section 6.8 Consents and Filings; Further Assurances.
(a) Each of the Parties shall use all commercially
reasonable efforts to take, or cause to be taken, all
appropriate action to do, or cause to be done, all things
necessary, proper or advisable under applicable Law or otherwise
to consummate and make effective the transactions contemplated
by this Agreement and the Ancillary Agreements as promptly as
practicable.
(b) All information provided in connection with the
analysis of whether any governmental filings are required shall
be true, complete and correct. Without limiting the generality
of the Parties’ undertaking pursuant to Section 6.8(a), if
required, the Buyers shall promptly after the date of this
Agreement prepare and file with the Mexican Antitrust Commission
(Comisión Federal de Competencia Económica) (the “Mexican
Antitrust Commission”) the notification required under Mexican
Antitrust Law. To such end, Sellers shall promptly provide and
shall cause the Companies to provide to Buyers all the documents
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and information reasonably required for such filing. In
addition, Sellers shall promptly sign and cause the Companies to
sign the abovementioned notification and any letters to Mexican
Antitrust Commission that may be reasonably required, designate
Buyers’ counsel as common representative for such process and
cooperate with Buyers to obtain the required approval from
Mexican Antitrust Commission and consummate and make effective
the transactions contemplated by this Agreement and the
Ancillary Agreements as promptly as practicable. Buyers shall
assure that the notification to the Mexican Antitrust Commission
is accurate and complete and contains all required information
under Mexican Antitrust Law and that any request for additional
information that may be required or otherwise requested by the
Mexican Antitrust Commission is complied with on a timely basis
in order to obtain the required approval from Mexican Antitrust
Commission and consummate and make effective the transactions
contemplated by this Agreement and the Ancillary Agreements as
promptly as practicable. For the avoidance of doubt, the
Parties acknowledge and agree that under current Exchange Rate,
filing with Mexican Antitrust Commission is not required.
However, in case of a substantial devaluation of Mexican Peso
against U.S. Dollar, such filing may be needed.
(c) Notwithstanding anything herein to the contrary:
(i) Buyers shall not be required (but may in their
sole discretion elect) to take, or agree to
undertake, any action, including entering into
any consent decree, hold separate order or
other arrangement, that would require (x) the
divestiture of any assets of Buyer, the
Companies or any of their respective
Affiliates or (y) taking any action that would
reasonably be expected to diminish the
benefits reasonably expected to be derived by
Buyers on the date hereof from the
transactions contemplated by this Agreement in
such a manner that the Buyers would not have
entered into this Agreement in the face of
such diminished benefits; and
(ii) the Sellers and the Companies shall not,
without Buyer’s consent, which consent shall
not be unreasonably denied, delayed or
withheld, be permitted to take, or agree to
undertake, any action, including entering into
any consent decree, hold separate order or
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other arrangement, that would require (x) the
divestiture of any assets of any of the
Companies or any of their respective
Affiliates or (y) taking any action that would
reasonably be expected to diminish the
benefits reasonably expected to be derived by
Buyers on the date hereof from the
transactions contemplated by this Agreement in
such a manner that Buyers would not have
entered into this Agreement in the face of
such diminished benefits.
Section 6.9 Public Announcements.
On and after the date hereof and through the Closing Date,
the Parties shall consult with each other before issuing any
press release or otherwise making any public statements with
respect to this Agreement or the transactions contemplated
hereby, and neither Party shall issue any press release or make
any public statement prior to obtaining the other Party’s
written approval, except that no such approval shall be
necessary to the extent disclosure may be required by applicable
Law or any listing agreement of either Party hereto, provided
that the Party required to disclose shall deliver a prior
written notice to the other Party informing in reasonable detail
the disclosure to be made. The Parties acknowledge that the
terms of this Agreement (but excluding, to the extent permitted
by applicable Law, any information related to the Purchase Price
and similar sensitive information) and the transactions
contemplated herein shall be disclosed in certain filings made
with the U.S. Securities and Exchange Commission (the “SEC”) by
the Buyer and/or Buyer’s Affiliates, including Nexeo Inc. and
Sellers consent to such disclosure.
Section 6.10 Non-Compete and Non-Solicitation.
(a) Sellers agree and undertake that as of the Closing Date
and until the three (3) year anniversary of the Closing, they
shall not, directly or indirectly, either as a principal, agent,
employee, employer, consultant, advisor, partner, stockholder
(except for investments in publicly traded companies in which
case Sellers may own up to 3%), corporate officer or director,
manager, or in any other individual or representative capacity,
engage, work or otherwise participate in any manner or fashion
in any Competitive Business. “Competitive Business” means any
business that renders any services or activities provided or
commercialized by the Companies, Buyers or any of their
Exhibit 2.1
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Affiliates in the countries listed in Schedule 6.10 (a), except
for the payroll services rendered by Chem Servicios. The Parties
hereto acknowledge and agree that the foregoing covenant not to
compete complies with the current guidelines of the Mexican
Antitrust Commission to be enforceable under Mexican Law.
(b) The non-compete obligation described in Section 6.10
(a) above shall not in any manner restrict [Shareholder A] from
engaging in; (i) the manufacturing of: (A) polyurethane foam;
(B) food, pharmaceutical or cosmetic grade aluminium lacquers,
or (C) vitamin-pre-mixtures, or (ii) polymer reprocessing and
recycling (jointly the “Excluded Products”); provided,
[Shareholder A] grants to Nexeo, Inc. or any of its Affiliates
the right of first refusal to be the exclusive sales channel for
the Excluded Products in terms and conditions acceptable to the
parties thereof. If Nexeo Inc. does not exercise such right
within thirty (30) Business Days after receipt of all
documentation reasonably requested thereof from [Shareholder A],
then, [Shareholder A] will be entitled to commercialize the
Excluded Products at his discretion; provided, however that in
no event will he enter into an agreement with another party to
be a sales channel for the Excluded Products on better terms and
conditions than were offered to Nexeo Inc.
(c) In addition, until the three (3) year anniversary of
the Closing, Sellers shall not solicit or hire, directly or
indirectly, any customer or prospective customer of the
Companies for the purpose of engaging in a Competitive Business,
nor persuade, induce or attempt, directly or indirectly, any
employee of the Companies to terminate his or her employment
with the Companies in order to enter into any employment
relationship with, or perform services in any capacity for any
Competitive Business. The foregoing shall not preclude Sellers
from soliciting or hiring any person who (i) has terminated its
relationship with the Companies, (ii) initiates discussions with
the Sellers regarding such employment without any direct or
indirect prohibited solicitation by the Sellers, or (iii)
responds to a general solicitation placed by Sellers, including,
without limitation, any recruitment efforts conducted by any
recruitment agency, provided, Sellers have not directed such
recruitment effort at such persons or any of the Companies.
(d) Notwithstanding the above, due to the information that
[Shareholder A] and [Shareholder D] will be provided under the
Consulting Agreements and the relationship that will be
established thereunder, the Parties acknowledge and agree that
the duration of the non-compete and non-solicitation obligations
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described in paragraphs (a) and (c) of this Section 6.10 for
such individuals will be extended, as applicable, for a time
period equal to the effective duration of the respective
Consulting Agreement.
(e) If a Seller fails to comply with the obligations
provided in this Section 6.10 Buyers shall be entitled to claim
damages for losses incurred and to pursue any other right or
remedy available to them under applicable Law, severally against
the defaulting Seller; provided, however, that if any of
[Shareholder A], [Shareholder C] or [Shareholder B] (the “Joint
Obligors”) breaches any of these obligations, Buyers shall be
entitled to claim damages for losses incurred and to pursue any
other right or remedy available under applicable Law, jointly or
severally against the Joint Obligors.
Section 6.11 Additional Financial Statements.
(a) Monthly Financial Statements: The Sellers agree and
undertake to provide Buyers within fifteen (15) Business Days of
the execution hereof or the period then ended, as applicable,
unaudited financial statements consisting of the balance sheet
of each of the Companies as of January 31, 2017, February 28,
2017, March 31, 2017 and for each full month completed prior to
the Closing Date (except for such month immediately preceding
the Closing Date) and the related statements of income, changes
in net worth and cash flow for applicable month period then
ended, prepared on a consistent basis with the Interim Financial
Statements referred to in Section 4.5 (a) (collectively, such
financial statements the “Monthly Financial Statements”).
Notwithstanding the above, Sellers will be required to provide
Buyers before Closing, the Monthly Financial Statements for each
month completed prior to Closing Date (except for such month
immediately preceding the Closing Date).
(b) US GAAP Audited Financials: The Sellers agree and
undertake to provide Buyers, at Buyers’ sole cost and expense,
on or prior to Closing audited financial statements (the “US
GAAP Financial Statements”) consisting of the balance sheet of
each of the Companies for fiscal years ended December 31, 2014,
December 31, 2015, and December 31, 2016, and the related
statements of income, changes in net worth and cash flow for the
applicable years then ended, prepared on a combined basis in
Dollars and in accordance with US GAAP by Buyers Auditor. The US
GAAP Financial Statements shall include all assets acquired by
Buyers hereunder and shall be accompanied by an unqualified
opinion from Buyers Auditor for each of the periods then ended.
Exhibit 2.1
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(c) US GAAP 2017 Stub Period Financials: The Sellers agree
to reasonably cooperate with Buyers, at Buyers’ sole cost and
expense, in connection with the preparation of the SAS 100
reviewed financial statements (the “US GAAP 2017 Stub Period
Financial Statements”) consisting of the balance sheet of each
of the Companies for the period beginning January 1, 2017 and
ending the last day of the month prior to Closing, and the
related statements of income, changes in net worth and cash flow
for the period then ended, prepared on a combined basis in
Dollars and in accordance with US GAAP by Buyers Auditor.
(d) Global Chem Audited Financial Statements: The Sellers
agree and undertake to provide Buyers on or prior to Closing
audited financial statements consisting of the balance sheet of
Global Chem as of December 31, 2014 and 2015, and the related
statements of income, changes in net worth and cash flow for the
years then ended (the “Global Chem Audited Financial
Statements”), which shall be accompanied by an unqualified
opinion from the applicable auditor for each of the fiscal years
then ended.
Section 6.12 Additional Financial Information.
(a) Cooperation for Additional Financial Information:
(i) In connection with this Section 6.12, Sellers also
agree to reasonably cooperate with Buyers, at
Buyers’ sole cost and expense, in connection with
the preparation of (1) any additional interim
period historical financial statements (“Additional
Interim Financials”, together with the Financial
Statements, the “Seller Financial Statements”) for
the Companies that are required to be filed by the
SEC, under securities laws applicable to Buyers and
its Affiliates, including the filing by Nexeo
Solutions Inc., a Delaware limited liability
company (“Nexeo Inc.”), with the SEC of one or more
registration statements to register any securities
of Nexeo Inc. or its Affiliates under the
Securities Act of 1933 (the “Securities Act”) or of
any report required to be filed by Nexeo Inc. or
its Affiliates under the Securities Exchange Act of
1934 (together with the Securities Act and the
rules and regulations promulgated under such acts,
the “Securities Laws”) (collectively, the
“Filings”) and cause Seller´s Auditor to review
Exhibit 2.1
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such Additional Interim Financials pursuant to
Statement of Auditing Standards 100 (Interim
Financial Information) and (2) any pro forma
financial statements of Buyers or its Affiliates
that are derived in part from the Seller Financial
Statements, within 30 (thirty) days of the Closing
Date or such date as has been otherwise requested.
Sellers also agree to reasonably cooperate with
Buyers and its Affiliates, at their sole cost and
expense, in connection with the filing of the
Seller Financial Statements or Additional Interim
Financial Statements in connection with any
Filings.
(ii) Sellers’ cooperation will include (1) full access
to Sellers agents and representatives who were
responsible for preparing or maintaining the
financial records and work papers and other
supporting documents used in the preparation of
such financial statements as may be required by an
independent auditor (such auditor together with the
Sellers’ Auditor, the “Auditor”) to conduct a
review of the Additional Interim Financial
Statements in accordance with generally accepted
auditing standards or to otherwise verify such
financial statements and (2) cooperation on a
timely basis with the Auditor and delivery of one
or more customary representation letters from each
Seller to the Auditor that are reasonably requested
(A) to obtain the consent of the Auditor to be
named as an expert in any Filings or (B) to obtain
a comfort letter from the Auditor with respect to
the Seller Financial Statements in connection with
any offering of securities by Buyers or its
Affiliates.
(b) Expense Reimbursement: Buyers will fully reimburse the
Sellers, within five (5) Business Days after demand in writing
therefor, for all reasonable costs and expenses incurred by such
Sellers in complying with the provisions of Section 6.12(a),
Section 6.11(b) and Section 6.11(c).
Section 6.13 Access to Customers and Suppliers.
From the date hereof until the Closing Date, upon reasonable
notice, the Sellers shall, and shall cause the Companies to,
Exhibit 2.1
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afford the Buyers and their representatives reasonable access to
customers and suppliers to contact such customers and suppliers
in accordance with the agreed upon plan set forth in Schedule
6.13 (i) of the Disclosure Schedules (the “Supplier Contact
Plan”); with the understanding that customer confidential
information will only be provided to the Buyers representatives
listed in Schedule 6.13 (ii).
Section 6.14 Tax Returns.
(a) Buyers shall prepare and file all Tax Returns required
to be filed by or with respect to the Companies that are
required to be filed after the Closing Date (including any Tax
Returns related to periods prior to the Closing Date) and may
file such Tax Returns in its sole discretion.
(b) To the extent any Tax Returns relate to any period
prior to the Closing Date and for which the Sellers may be
required to provide indemnification pursuant to Article VIII,
the Buyers shall (i) timely prepare in good faith and in
accordance with applicable Law and file any such Tax
Returns;(ii) consult with the Sellers Representative with
respect to any such Tax Returns reasonably in advance of filing;
and (iii) use its commercially reasonable efforts to promptly
resolve any disputes related to such Tax Returns with the
Sellers; provided however that in all cases, the Buyers shall
have the sole authority and discretion with respect to any such
Tax Returns. In addition, with respect to such Tax Returns, the
Sellers shall promptly provide the Buyers with all information
in their possession that is reasonably necessary to complete any
such Tax Returns or any matters relating to such Tax Returns.
(c) In the case of Taxes that are payable with respect to
any period on or prior to the Closing Date, the portion of any
such Taxes that is attributable to the portion of the period
ending on the Closing Date shall be:
(i) in the case of Taxes that are either (A) based
upon or related to income or receipts, or (B)
imposed in connection with any sale or other
transfer or assignment of property (real or
personal, tangible or intangible), deemed equal to
the amount that would be payable if the Tax period
of the Company ended with (and included) the
Closing Date; provided that exemptions, allowances
or deductions that are calculated on an annual
Exhibit 2.1
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basis (including depreciation and amortization
deductions) shall be allocated between the period
ending on and including the Closing Date and the
period beginning after the Closing Date in
proportion to the number of days in each period;
and
(ii) in the case of Taxes that are imposed on a
periodic basis with respect to the assets or
capital of the Company, deemed to be the amount of
such Taxes for the entire period on or prior to
the Closing Date (or, in the case of such Taxes
determined on an arrears basis, the amount of such
Taxes for the immediately preceding period),
multiplied by a fraction the numerator of which is
the number of calendar days in the portion of the
period ending on and including the Closing Date
and the denominator of which is the number of
calendar days in the entire period.
Section 6.15 Sellers’ Releases and Termination.
Each of the Sellers, as of the Closing, hereby releases and
discharges each of the Companies and Buyer and each of their
respective Affiliates, successors, and assigns (collectively,
the “Buyer Released Parties”) from any and all obligations
(including indemnification obligations) and Actions, known and
unknown, that have accrued or may accrue and solely to the
extent that such obligations relate to acts or omissions prior
to the Closing Date, including any and all Losses, whether such
obligations, Actions or Losses arise in tort, contract or
statute, including obligations, Actions or Losses (a) arising
under any of the Companies’ organizational documents, any
Contract (including the right to receive any compensation or
profit sharing owed to such Seller or rights under any Related
Persons agreement) or Law or legal requirement, as applicable,
(b) arising from or relating to such Seller’s employment or
termination of employment with the Company and (c) arising from
or relating to actions or omissions of any Buyer Released Party,
or any acts or omissions of the directors, officers, partners,
members, equity holders or employees (former or present)
including those committed while serving in their capacity as
directors, officers, partners, members, equity holders,
employees or similar capacities of each Buyer Released Party and
including in each case any and all Claims that such Seller does
not know or suspect to exist in such Seller’s favor as of the
Closing Date, other than rights, Actions and remedies derived
Exhibit 2.1
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from, related to or arising under this Agreement, any Ancillary
Agreement, the Confidentiality Agreement and the Non-
Solicitation Agreement, all of which are hereby expressly
reserved by Sellers. Each Seller hereby waives any preferential
purchase right, right of first refusal, right of first offer,
buy-sell right, tag-along right, drag-along right, preemptive
right, registration right or other similar right that would
interfere with the consummation of the transactions contemplated
hereby or any future transfers of any interest in the Companies,
including all such rights arising under any provision of the
organizational documents of the Companies, except for dividend
payments paid in accordance with Section 6.1 (c) and Schedule
6.1 herein. Notwithstanding the foregoing, the Parties hereby
expressly agree that the releases contained in this Section 6.15
shall not apply to any Actions, rights or remedies arising from
the breach of any of its representations, warranties, covenants,
agreements and obligations set forth in this Agreement, any
Ancillary Agreement, the Confidentiality Agreement and the Non-
Solicitation Agreement, including without limitation those
contained in Article VIII. EXCEPT AS EXPRESSLY LIMITED IN THIS
SECTION 6.15, THE RELEASES CONTAINED IN THIS SECTION 6.15 APPLY
TO ALL ACTIONS, AND EACH OF THE SELLERS AGREES TO WAIVE, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, THE BENEFITS OF ANY LAW
(INCLUDING PRINCIPLES OF COMMON LAW) OF ANY STATE OR TERRITORY
OR OTHER JURISDICTION OF THE UNITED STATES OR OF ANY
JURISDICTION OUTSIDE OF THE UNITED STATES THAT PROVIDES THAT A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT A CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN THE CREDITOR’S FAVOR AT THE TIME
OF EXECUTING THE RELEASE, WHICH IF KNOWN BY THE CREDITOR MUST
HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH A DEBTOR.
Section 6.16 Permits.
The Sellers shall cause Ultrachem and Global Chem, as
applicable, to file with the competent Governmental Authority
within twenty (20) Business Days from the date hereof the
applications to: (i) obtain all the Permits marked as missing in
Schedule 4.7(b) of the Disclosure Schedules, except for the
corresponding to Trebol 22 Warehouse, which obtainment will not
be required due to the termination of Trebol 22 Lease as set
forth in Section 6.17 below; (ii) secure approval for the
assignment from Ultrachem to Global Chem of the Permit
identified as requiring approval for assignment under Schedule
4.7(b) of the Disclosure Schedules, and (iii) confirm the right
name of Permit holder for each of the Permits identified as
Exhibit 2.1
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requiring name change clarification in accordance with Schedule
4.7(b) of the Disclosure Schedules.
Section 6.17 Termination of Trebol 22 Lease.
The Sellers shall cause Global Chem to terminate the Trebol
22 Lease and provide Buyers a copy of the termination agreement
duly signed by the parties thereof prior to Closing. In this
connection, Sellers will have the following obligations: (i)
clean and pack any Personal Property located within the Trebol
22 Warehouse before its relocation as set out in (iii) below;
(ii) to the extent possible, keep production up and running
before termination of Trebol 22 Lease to deplete the raw
materials as much as possible; (iii) except as set out in (iv)
below, move the referred Personal Property and any raw
materials, including all electrical devices and ancillary
equipment that would be needed to restart production, to Trebol
23 Warehouse; and (iv) move any finished inventory to Cedros
Warehouse. All costs and expenses and liability in connection
with the termination of Trebol 22 Lease, including the expenses
for moving the items referred to above and any penalties for
early termination will be borne exclusively by Sellers.
ARTICLE VII
CONDITIONS TO CLOSING
Section 7.1 General Conditions.
The respective obligations of the Buyers and the Sellers to
consummate the transactions contemplated by this Agreement shall
be subject to the fulfillment, at or prior to the Closing, of
each of the following conditions, any of which may, to the
extent permitted by applicable Law, be waived in writing by
either Party in its sole discretion, provided that such waiver
shall only be effective as to the obligations of such Party:
(a) The Parties will have obtained all material consents
and approvals from Governmental Authorities necessary for the
completion of the transactions contemplated by this Agreement or
any Ancillary Agreement, including, to the extent required under
Mexican Antitrust Law, approval from Mexican Antitrust Commission
(Comisión Federal de Competencia Económica) in terms and
conditions reasonably acceptable to the Parties hereto and
Exhibit 2.1
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written evidence thereof shall have been delivered to the
Parties.
(b) No Governmental Authority shall have enacted, issued,
promulgated, enforced or entered any Law (whether temporary,
preliminary or permanent) that is then in effect and that
enjoins, restrains, makes illegal or otherwise prohibits the
consummation of the transactions contemplated by this Agreement.
Section 7.2 Conditions to Obligations of the
Sellers.
The obligations of the Sellers to consummate the
transactions contemplated by this Agreement shall be subject to
the fulfillment, at or prior to the Closing, of each of the
following conditions, any of which may be waived in writing by
the Sellers in their sole discretion:
(a) The representations and warranties of the Buyers
contained in Article V shall be true and correct in all material
respects both when made and as of the Closing Date.
(b) The Buyers shall have performed in all material
respects all obligations and agreements and complied with all
covenants and conditions required by this Agreement to be
performed or complied with by them prior to or at the Closing.
(c) The Sellers shall have received from the Buyers a
certificate to the effect set forth in Sections 7.2(a) and (b),
signed by a duly authorized officer thereof.
(d) The Sellers shall have received a duly executed
counterpart of signature of each Buyer and each other party to
the Ancillary Agreements, except for the [Shareholder D]
Consulting Agreement, the execution of which shall not be a
condition for Closing.
(e) All the guarantees granted by Sellers, any Related
Person or any other Person for the benefit of the Companies set
forth in Schedule 7.2 (e) of the Disclosure Schedules shall have
been released.
Section 7.3 Conditions to Obligations of the Buyers.
Exhibit 2.1
EXECUTION COPY
71.
The obligations of the Buyers to consummate the
transactions contemplated by this Agreement shall be subject to
the fulfillment, at or prior to the Closing, of each of the
following conditions, any of which may be waived in writing by
Buyers in their sole discretion:
(a) The representations and warranties of the Sellers
contained in Article III and Article IV shall be true and
correct in all material respects both when made and as of the
Closing Date as though then made.
(b) The third party consents and waivers required to permit
the consummation of the transactions contemplated hereby set
forth in Schedule 7.3(b) of the Disclosure Schedules shall have
been obtained and be in full force and effect.
(c) There will have occurred no event which has had a
Material Adverse Effect on the businesses or assets of the
Companies.
(d) The Sellers shall have performed in all material
respects all obligations and agreements and complied with all
covenants and conditions required by this Agreement to be
performed or complied with by them prior to or at the Closing.
(e) Buyers shall have received from the Sellers a
certificate to the effect set forth in Sections 7.3(a) and (d),
signed by the Sellers Representative.
(f) Buyers shall have received a duly executed counterpart
of signature of each Seller and each other party to the
Ancillary Agreements, except for the [Shareholder D] Consulting
Agreement, the execution of which shall not be a condition for
Closing.
(g) Buyers shall have received a resignation and release
letter in a form reasonably acceptable to Buyers from each
director, officer and examiner of each Company, other than the
Sellers.
(h) Buyers shall have received from the Sellers the
Financial Statements, the US GAAP Financial Statements, the
Global Chem Audited Financial Statements and, as applicable, the
Monthly Financial Statements.
(i) Buyers shall have received to their reasonable
satisfaction confirmation (either oral or in writing) that each
Exhibit 2.1
EXECUTION COPY
72.
of the Material Customers and Material Suppliers will continue
their relationships with the Companies following the completion
of the transactions contemplated by this Agreement at a same or
similar level.
(j) The key employees listed in Schedule 6.6(a)(i) of the
Disclosure Schedules shall have agreed to continue their
employment with Chem Servicios after Closing and shall have
entered into the documentation referred to in Section 6.6 (a)
herein.
(k) A new lease agreement between the company named
[Company 1] on the one hand and Ultrachem and Chem Servicios on
the other hand, under which the former will lease Personal
Property to the latter, shall have been entered into in form and
substance satisfactory to the Parties.
(l) A new lease agreement between the company named
[Company 1] and Ultrachem, under which the former will lease to
the latter certain warehouse located at Xx. Xxxxxxxxxxx
Xxxxxxxxxxxxxx 0000, Xxx. Las Pintitas Xx Xxxxx, Xxxxxxx, 00000,
Xxxxxx, shall have been entered into in form and substance
satisfactory to the Parties.
(m) A new agreement between [Company 2] on the one hand and
Ultrachem on the other hand, under which the former will
purchase from the latter certain chemical products shall have
been entered into in form and substance satisfactory to the
Parties.
(n) Buyers shall have received from Sellers the transfer
pricing studies in connection with the sale of chemical products
from Ultrachem to Ultrachem Costa Rica and Ultrachem Guatemala
in form and substance reasonably acceptable to Sellers.
(o) Sellers or Companies shall have paid in full the fees
of the advisors set forth in Schedule 4.20 and Sellers shall
have provided to Buyers evidence of payment thereof.
(p) Sellers shall have obtained operating licenses
(licencias de funcionamiento u operación) for the Monterrey
Warehouse and the Queretaro Warehouse.
ARTICLE VIII
INDEMNIFICATION
Exhibit 2.1
EXECUTION COPY
73.
Section 8.1 Survival.
Subject to the limitations and other provisions of this
Agreement, the respective representations and warranties of the
Sellers contained herein shall survive the Closing and shall
remain in full force and effect until the date that is two (2)
years after the Closing Date; provided, that the representations
and warranties in Section 3.1, Section 3.2, Section 3.3, Section
4.1, Section 4.2, Section 4.3, Section 4.19 and Section 4.20
(the “Fundamental Representations”) shall survive indefinitely
and the representations and warranties in Section 4.9, Section
4.13 and Section 4.15 shall survive the Closing and shall
continue in effect until 90 (ninety) days past the expiration of
the applicable statute of limitations. All covenants and
agreements of the Sellers contained herein shall survive the
Closing in accordance with their respective terms.
Notwithstanding the foregoing, any claims asserted in good faith
with reasonable specificity (to the extent known at such time)
and in writing by notice from Buyers to the Sellers prior to the
expiration date of the applicable survival period shall not
thereafter be barred by the expiration of the relevant
representation or warranty and such claims shall survive until
finally resolved.
Section 8.2 Indemnification by the Sellers.
(a) Subject to Section 8.4 hereof, the Sellers, jointly and
severally, shall indemnify and defend each Buyer and each Buyer’s
Affiliates and their respective directors, officers, employees
and managers (collectively, the “Buyers Indemnified Parties”)
against, and shall hold each of them harmless from and against,
and shall pay and reimburse each of them for, any and all actual
direct losses and damages (xxxxx y perjuicios) (except for any
incidental or indirect, exemplary, special or punitive damages),
liabilities, deficiencies, Actions, judgments, interest, awards,
penalties, fines, costs or expenses of whatever kind, including
reasonable attorneys’ and/or advisor fees and the cost of
enforcing any right to indemnification hereunder (“Losses”)
incurred or sustained by, or imposed upon, the Buyers Indemnified
Parties based upon, arising out of, with respect to or by reason
of:
(i) any inaccuracy in or breach of any of the
representations or warranties of any Seller
contained in this Agreement or in any certificate
or instrument delivered by or on behalf of the
Sellers pursuant to this Agreement;
Exhibit 2.1
EXECUTION COPY
74.
(ii) any breach or non-fulfillment of any covenant,
agreement or obligation to be performed by the
Sellers pursuant to this Agreement or any
certificate or instrument delivered by or on behalf
of the Sellers pursuant to this Agreement;
(iii) any claim or Action in connection with title,
ownership or any other right of any Seller to the
Equity Interests or Ultrachem Costa Rica Equity
Interests or Ultrachem Guatemala Shares from any
family member or third party;
(iv) any claim related to or deriving form a Related
Person Contract relating to the periods ending on
or prior to the Closing Date;
(v) all undisclosed liabilities for Taxes of any kind
or nature related to the Companies for all Tax
periods (or portions thereof) ending on or prior to
the Closing Date, notwithstanding Tax Returns have
been filed by Buyers hereunder, unless exclusively
attributable to negligence, error or omission of
Buyers;
(vi) all undisclosed employee liabilities, including any
liabilities under any employee benefit plans or
arrangements of any nature, employment agreements,
payroll practices, collective bargaining
agreements, or any employee health and safety laws
or employment practices laws relating to the
periods ending on or prior to the Closing Date;
(vii) all undisclosed liabilities or claims resulting
from or arising out of the business, operations,
properties, assets, Taxes or obligations of the
Companies, existing or arising on or prior to the
Closing Date, and
(viii) the Companies having conducted the business on or
prior to the Closing Date without all necessary
regulatory consents, licenses, or approvals or
otherwise not in full compliance with all legal
obligations, including any reasonable and
documented cost or expense incurred by the Company
in connection with obtaining any such necessary
regulatory consents, licenses, or approvals.
Exhibit 2.1
EXECUTION COPY
75.
(b) For purposes of this Section 8.2, any inaccuracy in or
breach of any representation or warranty made by the Sellers in
this Agreement shall be determined without regard to any
materiality, Material Adverse Effect or other similar
qualification contained in or otherwise applicable to such
representation and warranty.
(c) For the avoidance of doubt, subject to Sections 8.1 and
8.4 hereof, Seller’s obligations pursuant to Section 8.2 (a)
shall (i) not expire in connection with the Fundamental
Representations, (ii) expire 90 (ninety) days past the expiration
of the applicable statute of limitations with respect to the
representations and warranties contained in Section 4.9, Section
4.13 and Section 4.15 hereof, and (iii) expire two (2) years
after the Closing Date for all other Seller’s representations and
warranties; provided, however, that there shall be no duplication
of recovery from Buyers Indemnified Parties under this Section
8.2 and Section 8.3.
Section 8.3 Specified Items Indemnity.
The Sellers jointly and severally, shall indemnify and
defend each Buyer Indemnified Party against, and shall hold each
of them harmless from and against, and shall pay and reimburse
each of them for, any and all Losses incurred or sustained by,
or imposed upon, the Buyer Indemnified Parties which are based
upon, arising out of, with respect to or by reason of solely and
exclusively any of the matters described on Schedule 8.3 of the
Disclosure Schedules, inclusive of any expenses associated with
such liabilities (i.e., reasonable consultant or advisor costs,
penalties, interest and settlement amounts). For the avoidance
of doubt, notwithstanding any term or provision set forth in
this Agreement to the contrary, each Seller’s obligations
pursuant to this Section 8.3 shall continue in effect until 90
(ninety) days past the expiration of the statute of limitations
date applicable to the each of the matters subject to this
Specified Items Indemnity as identified in Schedule 8.3, shall
not be subject to the limitations set forth in Section 8.4 and
shall be in addition to any indemnification provision under
Section 8.2; provided however, that there shall be no
duplication of recovery from Buyers Indemnified Parties under
this Section 8.3 and Section 8.2.
Section 8.4 Limits on Indemnification.
Exhibit 2.1
EXECUTION COPY
76.
(a) No monetary amount shall be payable to the Buyers with
respect to any claim for indemnification pursuant to Article
VIII (other than claims of fraud or claims with respect to the
Fundamental Representations or under the Specified Items
Indemnity set forth in Section 8.3 hereinabove or other specific
indemnities set forth in Section 8.2(a)(iii), Section
8.2(a)(iv), Section 8.2(a)(v) and Section 8.2(a)(viii), with
respect to which all Losses in connection therewith shall be
recoverable from the first dollar but shall not be counted in
determining whether the Basket Amount (as defined below) has
been exceeded) until the aggregate amount of Losses actually
incurred by the Buyers with respect to all such claims exceeds
U.S. $500,000.00 (five hundred thousand 00/100 Dollars) in the
aggregate (the “Basket Amount”), in which event the Buyers shall
be indemnified in full for all Losses, including the Basket
Amount.
(b) The maximum aggregate amount of the Sellers
indemnification obligations under Section 8.2(a) (other than for
claims or Losses resulting from or with respect to (i) fraud;
(ii) breaches of the Fundamental Representations; (iii) the
Specified Items Indemnity set out in Section 8.3 or other
specific indemnities set forth in Section 8.2(a)(iii), Section
8.2(a)(iv), Section 8.2(a)(v) and Section 8.2(a)(viii), for
which there shall be no indemnification cap) shall not exceed an
amount equal to 50% (fifty percent) of the Purchase Price (the
“Cap”).
Section 8.5 Indemnities of the Buyers.
a) The Buyers, jointly and severally, shall indemnify and
defend each Seller and each Seller’s Affiliates and their
respective directors, officers, employees, managers and Seller
Representative (collectively, the “Sellers Indemnified Parties”)
against, and shall hold each of them harmless from and against,
and shall pay and reimburse each of them for, any and all Losses
incurred or sustained by, or imposed upon, the Sellers
Indemnified Parties based upon, arising out of, with respect to
or by reason of:
(i) any inaccuracy in or breach of any of the
representations or warranties of any Buyer
contained in this Agreement or in any certificate
Exhibit 2.1
EXECUTION COPY
77.
or instrument delivered by or on behalf of the
Buyers pursuant to this Agreement;
(ii) any breach or non-fulfillment of any covenant,
agreement or obligation to be performed by the
Buyers pursuant to this Agreement or any
certificate or instrument delivered by or on behalf
of the Buyers pursuant to this Agreement;
b) Notwithstanding anything to the contrary in this
Agreement in no event shall any of the Seller Indemnified
Parties be permitted to make any claim under this Section 8.5
unless such claim is first made on or prior to the second
anniversary of the Closing Date, provided however, that the time
limitation of indemnification obligations of Buyers hereunder,
will not preclude Sellers in any manner to bring any claim under
the Escrow Agreement in connection with the Specified Escrow
Amount or the Transaction Escrow Amount thereunder.
Section 8.6 Procedures, Payment, Tax Treatment and
Effects of Investigation.
(a) If any Party (the “Indemnified Party”) receives notice
of the assertion or commencement of any Action made or brought
against such Indemnified Party with respect to which the other
Party (the “Indemnifying Party”) is obligated to provide
indemnification under this Agreement, the Indemnified Party
shall give the Indemnifying Party reasonably prompt written
notice thereof. The delay or failure to give such prompt
written notice shall not, however, relieve the Indemnifying
Party of their indemnification obligations, except and only to
the extent the Indemnifying Party is unable to adequately and
timely prepare a defense for such Action or forfeits rights or
defenses by reason of such delay or failure. Such notice by the
Indemnified Party shall describe the claim in reasonable detail.
(b) The Indemnified Party shall direct, control and settle
any defense related to any claim in its sole discretion, using
reputable counsel that adequately represents the Indemnified
Party without any conflicts of interest in connection with the
specific claim, with the understanding that the fact that such
counsel represents or has represented the Indemnified Party or
any of its Affiliates, in connection with this Agreement or any
other matter, will not give rise to a conflict of interest for
purposes of this Section, provided however that: (i) the
Indemnified Party agrees to consult with the Indemnifying Party
to the extent reasonably practicable; (ii) Indemnified Party
Exhibit 2.1
EXECUTION COPY
78.
shall not consent to or enter into any compromise or settlement
that involves monetary damages payable by the Indemnifying Party
without the consent of the Indemnifying Party, which consent
shall not be unreasonably withheld or delayed; and (iii) the
Indemnifying Party shall have the right to participate in, or by
giving written notice to the Indemnified Party, obtain counsel
with respect to any claim at the Indemnifying Party´s expense,
with the understanding that the Indemnified Part shall keep
direction and control of the defense.
(c) The Indemnified Party agrees to diligently prosecute
the defense of such claim. Subject to Section 8.6(b), the
Indemnified Party may pay, compromise, defend such claim and
seek indemnification for any and all Losses based upon, arising
from or relating to such claim. The fees and disbursements of any
counsel or advisors related to any such claim shall be at the
expense of the Indemnifying Party, provided that the Indemnified
Party shall use its commercially reasonably efforts to utilize
counsel and advisors as may be appropriate for the pending
matter and the value of such claim.
(d) Notwithstanding any other provision of this Agreement,
the Indemnified Party may, at its sole discretion, permit the
Indemnifying Party to direct and control the defense of any such
claim at the Indemnifying Party’s expense and by Indemnifying
Party’s own reputable counsel that adequately represents the
Indemnified Party without conflict of interest and whose fees
shall be borne by the Indemnifying Party and the Indemnified
Party shall cooperate in good faith in such defense. In the
event that the Indemnifying Party has assumed the defense of any
claim as provided herein, the Indemnifying Party shall not
consent to, or enter into, any compromise or settlement of which
settlement (i) commits the Indemnified Party to take, or to
forbear to take, any action or (ii) does not provide for a full
and complete written release by such third party of the
Indemnified Party, or consent to the entry of any judgment that
does not relate solely to monetary damages arising from, any
such claim or action by a third party without the Indemnified
Party’s prior written consent, which consent shall not be
unreasonably denied, delayed or withheld.
(e) The Indemnifying Party and the Indemnified Party shall
cooperate fully in all aspects of any investigation, defense,
pre-trial activities, guarantees (with the understanding that
the Indemnifying Party shall be solely responsible for obtaining
such guarantees and payment of the expenses thereof), trial,
compromise, settlement or discharge of any claim in respect of
Exhibit 2.1
EXECUTION COPY
79.
which indemnity is sought pursuant to this including, but not
limited to, by providing the other Party with reasonable access
to employees and officers (including as witnesses) and other
information at the Indemnifying Party’s expense. So long as the
Indemnifying Party is in good faith defending such claim or
Action, the Indemnified Party shall not compromise or settle
such claim without the Indemnifying Party’s prior written
consent, which consent shall not be unreasonably delayed or
withheld.
(f) Once a Loss is agreed to by the Indemnifying Party or
finally adjudicated to be payable pursuant to this Article VIII,
the Indemnifying Party shall satisfy their obligations within
five (5) Business Days of such agreement or final, non-
appealable adjudication by wire transfer of immediately
available funds provided that if the Sellers are the
Indemnifying Party, the Loss shall be paid out of the
Transaction Escrow Amount or the Specified Escrow Amount, as
applicable, and if the amount of the Loss exceeds the referred
Transaction Escrow Amount or the Specified Escrow Amount, as
applicable, then Sellers shall pay the remaining amount to
Buyers, subject to Section 8.4 hereof.
(g) All indemnification payments made under this Agreement
shall be treated by the Parties as an adjustment to the Purchase
Price for tax purposes, unless otherwise required by Law.
(h) The representations, warranties and covenants of the
Sellers and the Buyers Indemnified Parties’ right to
indemnification with respect thereto, shall not be affected or
deemed waived by reason of any investigation made by or on
behalf of the Buyers Indemnified Parties or by reason of the
fact that the Buyers Indemnified Parties knew or should have
known that any such representation or warranty is, was or might
be inaccurate, as the case may be.
ARTICLE IX
TERMINATION
Section 9.1 Termination.
This Agreement may be terminated at any time prior to the
Closing:
(a) by mutual written consent of Buyers and Sellers;
Exhibit 2.1
EXECUTION COPY
80.
(b) (i) by Sellers, if either Buyer breaches or fails to
perform in any material respect any of its representations,
warranties or covenants contained in this Agreement or any
Ancillary Agreement and such breach or failure to perform cannot
be or has not been cured within thirty (30) days following
delivery of written notice of such breach or failure to perform
or (ii) by Buyers, if either Seller breaches or fails to perform
in any material respect any of its representations, warranties
or covenants contained in this Agreement or any Ancillary
Agreement and such breach or failure to perform cannot be or has
not been cured within thirty (30) days following delivery of
written notice of such breach or failure to perform;
(c) by the Sellers or Buyers if the Closing shall not have
occurred by July 15, 2017 (the “Termination Date”); except if
the prior approval of Mexican Antitrust Commission is required
for Closing, case in which, the Termination Date shall be
extended to November 15, 2017, with the understanding that in
that case, Closing shall take place on the first Business Day of
the calendar month immediately following the calendar month in
which the Mexican Antitrust Commission approval has been
obtained in terms and conditions reasonably acceptable to the
Parties hereto; provided, that the right to terminate this
Agreement under this Section 9.1(c) shall not be available if
the failure of the Party so requesting termination to fulfill
any obligation under this Agreement shall have been the cause of
the failure of the Closing to occur on or prior to such date; or
(d) by the Sellers or Buyers in the event that any
Governmental Authority shall have issued an order, decree or
ruling or taken any other action restraining, enjoining or
otherwise prohibiting the transactions contemplated by this
Agreement.
The Party seeking to terminate this Agreement pursuant to
this Section 9.1 (other than Section 9.1(a)) shall give prompt
written notice of such termination to the other Party.
Section 9.2 Effect of Termination.
In the event of termination of this Agreement as provided
in Section 9.1, this Agreement shall forthwith become void and
there shall be no liability on the part of either Party except
(a) for the provisions of Sections 4.20 and 5.4 relating to
broker’s fees and finder’s fees, Section 5.5 relating to Buyers’
obligations under the Non-Solicitation Agreement, Section 6.7
Exhibit 2.1
EXECUTION COPY
81.
relating to confidentiality, Section 6.9 relating to public
announcements, Section 10.2 relating to fees and expenses,
Section 10.5 relating to notices, Section 10.8 relating to
governing law, Section 10.10 relating to submission to
arbitration and this Section 9.2 and (b) that nothing herein
shall relieve either Party from liability for any breach of this
Agreement or any agreement made as of the date hereof or
subsequent thereto pursuant to this Agreement.
ARTICLE X
GENERAL PROVISIONS
Section 10.1 Transfer Taxes.
The Sellers shall be responsible for the payment of all Taxes
and governmental fees of whatever kind or nature whatsoever in
connection with the Sellers’ transfer of the Shares to Buyers
pursuant to this Agreement, except for filing fee to Mexican
Antitrust Commission, which will be paid by Buyers. If required
under applicable Law, Buyers will be obliged to withhold Taxes
on the Purchase Price. If no withholding is required to be made
by Buyers, Sellers will provide a copy of the statutory report
issued by the Sellers’ tax advisor for the Companies’ files in
addition to proof of the income tax due and paid to Mexican tax
authorities as a result of the sale of the Equity Interests
(i.e., the Tax on the gain realized by the Sellers) within forty
five (45) Business Days from Closing Date and payment of any Net
Adjustment Amount, if any.
Section 10.2 Fees and Expenses.
Except as otherwise provided herein, all fees and expenses
incurred in connection with or related to this Agreement and the
Ancillary Agreements and the transactions contemplated hereby
and thereby shall be paid by the Party incurring such fees or
expenses, whether or not such transactions are consummated. In
the event of termination of this Agreement, the obligation of
each Party to pay its own expenses will be subject to any rights
of such Party arising from a breach of this Agreement by the
other. The Parties agree that the Buyers (as a group) and the
Sellers (as a group) shall split the expenses of the Escrow
Agent.
Section 10.3 Amendment and Modification.
Exhibit 2.1
EXECUTION COPY
82.
This Agreement may not be amended, modified or supplemented
in any manner, whether by course of conduct or otherwise, except
by an instrument in writing specifically designated as an
amendment hereto, signed on behalf of each Party.
Section 10.4 Waiver.
No failure or delay of either Party in exercising any right
or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such right
or power, or any course of conduct, preclude any other or
further exercise thereof or the exercise of any other right or
power. Any agreement on the part of either Party to any such
waiver shall be valid only if set forth in a written instrument
executed and delivered by a duly authorized officer on behalf of
such Party.
Section 10.5 Notices.
All notices and other communications hereunder shall be in
writing and shall be deemed duly given (a) on the date of
delivery if delivered personally, or if by e-mail in portable
document format (.pdf), provided written confirmation of receipt
is received promptly after such delivery and such email is
followed by personal delivery of such notice or a delivery by a
next-day service provider is made, or (b) on the first Business
Day following the date of dispatch if delivered utilizing a
next-day service by a recognized next-day courier. All notices
hereunder shall be delivered to the addresses set forth below,
or pursuant to such other instructions as may be designated in
writing by the Party to receive such notice:
(a) if to the Sellers, Seller Representative or (prior to
the Closing) the Companies, to:
[Sellers Representative]
[**]
[**]
[**]
Ciudad de México
México
E-mail: [**]
With copy to (without constituting notice):
Exhibit 2.1
EXECUTION COPY
83.
Lic. [Shareholder A]
[**]
[**]
[**]
México
E-mail: [**]
(b) if to the Buyers or (following the Closing) the
Companies, to:
Nexeo Solutions, LLC
0 Xxxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
The Xxxxxxxxx, Xxxxx 00000 XXX
Attention: Chief Legal Officer
E-mail: xxxxx@xxxxxxxxxxxxxx.xxx
With copy to (without constituting notice):
Nexeo Solutions Mexico SRL
Xxxxxxx Xxxxx Xx #000 Xxxxx 0-0-00
Xxxxx xx Xxxxx Xx
Xxxxxx Xxxxxxx
Xxxxxx xx Xxxxxx 00000 Xxxxxx
Attention: Chief Legal Officer
E-mail: xxxxx@xxxxxxxxxxxxxx.xxx
And
Xxxx Xxxxx, Xxxxxxx Xxxxxx y Xxxxx, S.C.
Prol. Xxxxx xx xx Xxxxxxx 0000 Xxxxx X Xxxx 0
Col. Desarrollo Xxxxx Xx
00000 Xxxxxx xx Xxxxxx, Xxxxxx
Section 10.6 Entire Agreement.
This Agreement (including the Exhibits and Schedules hereto),
the Ancillary Agreements, the Confidentiality Agreement and the
Non-Solicitation Agreement constitute the entire agreement, and
supersede all prior written agreements, arrangements,
communications and understandings and all prior and
contemporaneous oral agreements, arrangements, communications
and understandings between the Parties with respect to the
subject matter hereof and thereof, including the letter of
intent dated September 16, 2016 by and among Nexeo LLC and
Ultrachem, Global Chem and Chem Servicios (the “Letter of
Intent”). Neither this Agreement nor any Ancillary Agreement
Exhibit 2.1
EXECUTION COPY
84.
shall be deemed to contain or imply any restriction, covenant,
representation, warranty, agreement or undertaking of any Party
with respect to the transactions contemplated hereby or thereby
other than those expressly set forth herein or therein or in any
document required to be delivered hereunder or thereunder, and
none shall be deemed to exist or be inferred with respect to the
subject matter hereof.
Section 10.7 Parties in Interest.
This Agreement shall be binding upon and inure solely to the
benefit of each Party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any
Person other than the Parties and their respective heirs,
successors and permitted assigns any legal right, benefit or
remedy of any nature whatsoever under or by reason of this
Agreement, except with respect to the provisions of Article
VIII, which shall inure to the benefit of the Persons benefiting
therefrom who are intended to be third-party beneficiaries
thereof.
Section 10.8 Governing Law.
This Agreement and all disputes or controversies arising out
of or relating to this Agreement or the transactions
contemplated hereby shall be governed by, and construed in
accordance with, the federal laws of Mexico, without regard to
the laws of any other jurisdiction that might be applied because
of the conflicts of laws principles.
Section 10.9 Discussion.
Except as provided in Section 2.3 herein, the Parties shall
use their best efforts to resolve any Dispute among them
promptly and amicably and without resort to any legal process,
unless any of the Parties lose its rights, within sixty (60)
days, after a Party has delivered the other Party a written
request for such negotiation stating specifically the nature of
the Dispute (the “Discussion Period”). Upon receipt of such
request, representatives of Buyers and Sellers Representative
shall promptly meet in good faith to discuss the Dispute. If
the Parties do not resolve the Dispute during the Discussion
Period, any such Party may commence arbitration proceedings as
provided below; provided, however, that if the Parties have
failed to make meaningful progress towards settling the Dispute
within thirty (30) days after the date of the receipt of the
Exhibit 2.1
EXECUTION COPY
85.
request, then, any of the Parties will be entitled to terminate
the Discussion Period early upon written notice to the other and
submit the Dispute to arbitration under Section 10.10 below.
Section 10.10 Arbitration
(a) Any Dispute between the Parties hereto that arises out
of or relates to this Agreement or the Ancillary Agreements,
shall be finally resolved as provided in this Section 10.10;
provided, however, that; (i) any Dispute under Section 2.3 shall
not be subject to the arbitration set forth in this Section
10.10, as specific procedures are specified in Section 2.3 to
resolve such Dispute, and (ii) by agreeing to arbitration, the
Parties do not intend to deprive any court of competent
jurisdiction of its ability to issue any form of provisional
remedy, including but not limited to a preliminary injunction or
attachment in aid of the arbitration, or order any interim or
conservatory measure or from enforcing the terms of any legal or
equitable arbitration award, including any award for specific
performance. A request for such provisional remedy or interim
or conservatory measure by a Party to a court shall not be
deemed a waiver of the agreement to arbitration as set out
herein.
(b) Arbitration. If the Parties are unable to resolve any
Dispute arising under this Agreement as provided in Section 10.9
herein, then such Dispute shall be submitted to mandatory and
binding arbitration at the election of any Party (the “Disputing
Party”) pursuant to the following conditions:
(i) Procedures. Any arbitration under this Section
10.10(b) shall be conducted under the Commercial
Arbitration Rules of the American Arbitration
Association as they may be amended from time to
time (the “AAA Rules”), except as expressly
provided in this Section 10.10. The Parties also
agree that the AAA Optional Rules for Emergency
Measures of Protection shall apply to the
proceedings. The law of the arbitration shall be
the Federal Arbitration Act, 9 U.S.C. §1-16 to the
exclusion of state laws inconsistent therewith.
The arbitrator(s) shall be selected pursuant to the
procedures set forth in Section 10.10(b)(iii) or
(b)(iv) below (the “Arbitrator(s)”). In resolving
the substance of the Dispute, the
Arbitrator(s) shall apply substantive Federal
Mexican Law.
Exhibit 2.1
EXECUTION COPY
86.
(ii) Initiation of Arbitration. The Disputing Party
shall notify the other Parties that it is
submitting the Dispute to final and binding
arbitration to be conducted privately and
confidentially in accordance with the terms of this
Section 10.10 and shall initiate the Arbitration by
the process set forth in the AAA Rules.
(iii) Selection of Arbitrator(s).
A. If the stated amount of claim is less than U.S.
$3,000,000.00 (three Million Dollars) or if the
stated claim shall seek declaratory or injunctive
relief or specific performance, such Dispute
shall be resolved by a single Arbitrator mutually
acceptable to the Parties. If Buyer and the
Sellers are unable to agree upon a mutually
acceptable Arbitrator within 30 (thirty) days of
the submission of the Dispute to arbitration,
then such Arbitrator shall be appointed in
accordance with the AAA Rules.
B. If the amount in dispute is U.S.$3,000,000 (three
Million Dollars) or more (including by way of
claim or counterclaim), within 30 (thirty) days
after the initiation of the arbitration
procedure, Buyers, on the one hand, and the
Sellers, on the other hand, shall each nominate
one (1) Arbitrator. If any Party fails or
refuses to timely nominate an Arbitrator, such
Arbitrator shall be appointed in accordance with
the AAA Rules. Upon selection of the 2 (two)
Arbitrators by the Parties or otherwise, the 2
(two) shall select a third Arbitrator within 15
(fifteen) days after their appointment, failing
agreement on which such third Arbitrator shall be
appointed in accordance with the AAA Rules. The
Arbitrators, acting by majority vote, shall
resolve all Disputes between the Parties. If one
of the Party-appointed Arbitrators refuses to
participate in the proceedings or refuses to
vote, the unanimous decision of the other 2 (two)
Arbitrators shall be binding.
(iv) Replacement of Arbitrator. Should any Arbitrator
refuse or be unable to proceed with arbitration
Exhibit 2.1
EXECUTION COPY
87.
proceedings as called for by this Section 10.10(b),
such Arbitrator shall be replaced in the same
manner by which he or she was appointed (e.g., if a
Party appointed the departing Arbitrator, that
Party would appoint his or her replacement, and if
the two Party-appointed Arbitrators appointed the
departing Arbitrator, then they would appoint his
or her replacement).
(v) Place of Arbitration. The place of arbitration
shall be Houston, Texas, USA. The Arbitrators
shall determine the dates and times when hearings
shall be held taking into account the convenience
of the Parties, the witnesses and the location of
the evidence to be presented at the particular
hearing. Any action to enforce the terms of this
arbitration clause or to enforce and enter judgment
upon an arbitration award may be brought in any
court of competent jurisdiction. With regards to
any action to enforce the terms of this arbitration
clause or to enforce and enter judgment upon an
arbitration award, each of the Parties (A) consents
to the exclusive jurisdiction of such courts in any
such suit, action or proceeding, (B) irrevocably
waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the
laying of the venue of any such suit, action or
proceeding in any such court or that any such suit,
action or proceeding which is brought in any such
court has been brought in an inconvenient forum,
(C) will not attempt to deny or defeat such
personal jurisdiction by motion or other request
for leave from any such court and (D) will not
bring any action relating to this Agreement or any
of the transactions contemplated hereby in any
other court. Process in any such suit, action or
proceeding may be served on any Party anywhere in
the world, whether within or without the
jurisdiction of any such court. Without limiting
the foregoing, each Party agrees that service of
process on such Party as provided in Section 10.5
will be deemed effective service of process on such
Party. The parties acknowledge and failure to
appear in connection with any arbitration may be
deemed to be an action not in good faith.
Exhibit 2.1
EXECUTION COPY
88.
(vi) Conduct of Arbitration. Consistent with the
expedited nature of arbitration, each Party will,
upon the written request of any other Party,
promptly provide the other Party with copies of
documents on which the producing Party may rely on
in support of or in opposition to any claim or
defense. Any dispute regarding discovery, or the
relevance or scope thereof, shall be determined by
the Arbitrator(s), which determination shall be
conclusive. At the request of a Party, the
Arbitrator(s) shall have the discretion to order
examination by deposition of witnesses to the
extent the Arbitrator(s) deem such additional
discovery relevant and appropriate. The
Arbitrator(s) shall have the authority to impose
appropriate sanctions, including an award of
reasonable attorneys’ fees, against any Party that
fails to cooperate in good faith in discovery
permitted by this Section 10.10(b)(vi) or ordered
by the Arbitrator(s). Unless otherwise agreed by
the Parties, the arbitration hearing shall be
conducted on consecutive days. There shall be no
transcript of the arbitration hearing. The
Arbitrator(s) must give effect to legal privileges
including the attorney-client privilege and work-
product immunity.
(vii) Arbitration Award. The Arbitrator(s) shall render
a binding decision within 20 (twenty) days
following the closing of the hearing . The award
of the Arbitrator(s) shall be reasoned and in
writing unless the Parties otherwise agree. The
Arbitrator(s) must certify in the award that such
award conforms to the terms and conditions set
forth in this Agreement.
(viii) Conclusive and Binding Nature of the Arbitration
Award. The arbitration award shall be reasoned,
conclusive, final, non-appealable and binding on
the Parties, and judgment thereon may be entered in
any court of competent jurisdiction.
(ix) Time of the Essence. The Arbitrator(s) shall be
instructed that time is of the essence in the
arbitration proceeding, and that the
Arbitrator(s) shall have the right and authority to
issue reasonable monetary sanctions against any
Party if, upon a showing of good cause, that Party
Exhibit 2.1
EXECUTION COPY
89.
is unreasonably delaying the proceeding. The
amount of such sanction shall be related to the
additional harm, if any, caused by the delay.
(x) Expenses. The Arbitrator(s) shall have the
authority to assess the costs and expenses of the
arbitration proceeding (including the
Arbitrator(s)’ fees and expenses) against any or
all of the Parties. The Arbitrator(s) shall also
have the authority to award attorneys’ fees and
expenses to the prevailing Party.
(c) Confidentiality. To the fullest extent permitted by
Law, the arbitration proceedings and award shall be maintained
in confidence by the Parties.
(d) Severability. The provisions of this Section 10.10 are
independent of the remaining provisions of this Agreement and
the Parties intend that the provisions of this Section 10.10
will continue in effect even though one or more provisions of
this Agreement (including, for the avoidance of doubt, any
provision of this Section 10.10) may be determined to be invalid
or unenforceable by a court of competent jurisdiction. This
agreement to arbitrate will also survive the termination or
expiration of this Agreement.
(e) Each of the Parties acknowledges and agrees that the
other Parties would be damaged irreparably in the event any of
the provisions of this Agreement are not performed in accordance
with their specific terms or otherwise are breached.
Notwithstanding anything to the foregoing in this Agreement, in
the event of a breach or threatened breach by any Party this
Agreement, including Section 4.12 of this Agreement, the Parties
shall be entitled to immediate injunctive relief, and any Party
hereto shall be entitled to seek specific performance against
any other Party hereto pursuant to this Section 10.10(e).
Section 10.11 SectAssignment; Successors
Neither this Agreement nor any of the rights, interests or
obligations under this Agreement may be assigned or delegated,
in whole or in part, by operation of law or otherwise, by either
Party without the prior written consent of the other Party, and
any such assignment without such prior written consent shall be
null and void. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of, and be
Exhibit 2.1
EXECUTION COPY
90.
enforceable by, the Parties and their respective heirs,
successors and assigns.
Section 10.12 Currency
The conversion of any amounts expressed in Mexican Pesos to
U.S. Dollars with respect to the calculation of the amount of
the Net Adjustment Amount in accordance with Section 2.3 and the
Estimated or Closing Net Working Capital, Estimated or Closing
Indebtedness and Estimated or Closing Cash pursuant to Section
2.3, shall be calculated applying the Exchange Rate in effect on
the date that it may correspond.
Section 10.13 Severability
Whenever possible, each provision or portion of any provision
of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable Law, but if any provision
or portion of any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any
applicable Law or rule in any jurisdiction, such invalidity,
illegality or unenforceability shall not affect any other
provision or portion of any provision in such jurisdiction, and
this Agreement shall be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable
provision or portion of any provision had never been contained
herein.
Section 10.14 Counterparts
This Agreement may be executed in two or more counterparts,
including through portable document format (.pdf), all of which
shall be considered one and the same instrument and shall become
effective when one or more counterparts have been signed by each
of the Parties and delivered to the other Party.
Section 10.15 Time of Essence
Time is of the essence with regard to all dates and time
periods set forth or referred to in this Agreement.
Exhibit 2.1
EXECUTION COPY
91.
Section 10.16 No Presumption Against Drafting Party
Each of the Buyers and the Sellers acknowledges that each
Party to this Agreement has been represented by legal counsel in
connection with this Agreement and the transactions contemplated
by this Agreement. Accordingly, any rule of law or any legal
decision that would require interpretation of any claimed
ambiguities in this Agreement against the drafting party has no
application and is expressly waived.
Section 10.17 Sellers’ Representative
(a) Each Seller, by executing this Agreement, irrevocably
constitutes and appoints [Sellers Representative] as the Seller
Representative and his successors, acting as hereinafter
provided, as such Seller’s attorney-in-fact and agent in name,
place and stead in connection with the authority granted to such
Seller Representative pursuant to this Section 10.17, and
acknowledges that such appointment is coupled with an interest.
Each Seller has executed and delivered a limited durable power
of attorney in the form of Annex A to this Agreement granting to
the Seller Representative the powers set forth in this Section
10.17. By executing this Agreement under the heading Seller
Representative, the Seller Representative hereby (i) accepts his
appointment and authorization to act as Seller Representative as
attorney-in-fact and agent on behalf of the Sellers in
accordance with the terms of this Agreement, and (ii) agrees to
perform his obligations under, and otherwise comply with, this
Section 10.17.
(b) Each Seller by such appointment (i) authorizes the
Seller Representative subsequent to the date hereof (A) to give
and receive notices and communications to or from Buyer relating
to this Agreement; (B) to act on such Seller’s behalf with
respect to any and all matters affecting such Seller hereunder,
including under Article II, Article VII, Article VIII, Article
IX and Article X, including giving and receiving all notices and
communications to be given or received with respect to any such
matters, (C) to deliver, and object any amounts reflected in,
the Preliminary Closing Statement and the Final Closing
Statement, (D) to authorize deliveries to Buyer of cash in
satisfaction of claims for indemnification pursuant to
Article VIII; (E) to initiate or to refrain from initiating, or
to dispute or to refrain from disputing, any indemnity or other
claim under this Agreement; (F) to negotiate, compromise and
resolve any Dispute that may arise under this Agreement; (G) to
exercise or refrain from exercising remedies available under
Exhibit 2.1
EXECUTION COPY
92.
this Agreement and to sign any release or other document with
respect to such Dispute or remedy; (H) to execute the Escrow
Agreement and to take any and all actions in connection thereof;
(I) to consent or agree to any amendment to this Agreement; and
(J) to take all actions necessary or appropriate in the judgment
of the Seller Representative for the accomplishment of the
foregoing, in each case without having to seek or obtain the
consent of any Seller, and (ii) agrees to be bound by all
agreements and determinations made by and documents executed and
delivered by the Seller Representative pursuant to the authority
granted to the Seller Representative hereunder.
(c) Each Seller by the execution of this Agreement
expressly acknowledges and agrees that (i) the Seller
Representative is authorized to act on its behalf,
notwithstanding any dispute or disagreement between any Seller
and the Seller Representative, and (ii) each Buyer and each
Buyer Released Party and any other Person shall be entitled to
solely interact with, and rely on any and all actions taken by,
the Seller Representative under this Agreement without any
liability to, or obligation to inquire of, any of the Sellers.
Any notice or communication given or received by, and any
decision, action, failure to act within a designated period of
time, agreement, consent, settlement, resolution or instruction
of, the Seller Representative that is within the scope of the
Seller Representative’s authority under this Section 10.17 shall
constitute a notice or communication to or by, or a decision,
action, failure to act within a designated period of time,
agreement, consent, settlement, resolution or instruction of all
the Sellers and shall be final, binding and conclusive upon each
such Seller. Each Buyer and any other Person shall be entitled
to rely upon any such notice, communication, decision, action,
failure to act within a designated period of time, agreement,
consent, settlement, resolution or instruction as being a notice
or communication to or by, or a decision, action, failure to act
within a designated period of time, agreement, consent,
settlement, resolution or instruction of, each and every such
Seller.
(d) The Sellers shall jointly and severally indemnify and
defend the Seller Representative and hold the Seller
Representative harmless from and against any Losses incurred or
sustained by, or imposed upon the Seller Representative and
arising out of or in connection with any act or omission by the
Seller Representative relating to the services to be performed
pursuant to the Seller Representative’s appointment. This right
of indemnification will survive the termination of this
Exhibit 2.1
EXECUTION COPY
93.
Agreement. Any Person dealing with the Seller Representative is
entitled to rely on the actions taken by, and consents and
approvals given by, the Seller Representative without the need
for further investigation. A Person shall be entitled to rely
on the Seller Representative’s actions, consents and approvals
notwithstanding any knowledge of the relying Person. No Person
shall have any liability for relying on the Seller
Representative in the foregoing manner.
(e) The Seller Representative shall have the authority, in
its sole and absolute discretion, to incur out-of-pocket fees,
costs and expenses in connection with the performance of the
Seller Representative’s duties pursuant to this Section 10.17,
including reasonable fees and expenses of legal counsel,
accountants, investment bankers or other advisors. The Sellers
shall be jointly and severally responsible for reimbursing the
Seller Representative for such out-of-pocket fees, costs and
expenses.
(f) The authorizations of the Seller Representative shall
be effective and may not be cancelled or suspended by any Seller
until all of the Sellers’ rights and obligations under this
Agreement terminate by virtue of the termination of any and all
obligations of the Sellers and Buyers under this Agreement.
(g) If the Seller Representative becomes unable (due to
illness or incapacity) to serve as the Seller Representative,
Sellers shall hereby appoint [Shareholder A] to serve as the
Seller Representative. And if such replacement becomes unable
(due to illness or incapacity) to serve as the Seller
Representative, then the Sellers shall appoint another Seller to
act as the Seller Representative by a majority vote of the
Sellers, based on their respective Pro Rata Share, within thirty
(30) calendar days.
Section 10.18 Good Faith.
Each of the Parties agrees to negotiate and act in good
faith to consummate the transactions and perform their
obligations outlined in this Agreement.
Section 10.19 Annexes, Exhibits and Schedules;
Disclosure.
a) All Annexes, Exhibits and Schedules attached hereto,
are hereby incorporated in and made a part of this Agreement as
if set forth in full herein. Capitalized terms used in the
Exhibit 2.1
EXECUTION COPY
94.
Annexes, Exhibits and Schedules, but not otherwise defined
therein, will have the respective meanings assigned to such
terms in this Agreement.
(b) The following is the list of Annexes, Exhibits and
Disclosures of this Agreement:
Annexes
Annex “A” Powers of Attorney
Exhibits
Exhibit “A” Form of Consulting Agreements
Exhibit “B” Form of Partners Resolutions
Exhibit “C” Form of Escrow Agreement
Exhibit “D” Form of Seller Resignation and Release
Exhibit “E” Form of Seller Employment Agreements
Schedules
Schedule 1.1(a) Knowledge of the Sellers
Schedule 2.1 Proportion of Equity Interests Acquired
Schedule 2.2(b)(i) Seller’s Pro Rata Share
Schedule 2.2(c)(vii) Payoff Letters
Schedule 2.3(a) Agreed Accounting Principles
Schedule 3.2(a)(iii) Required Consents
Schedule 4.3(a) Equity Interests or Shares of the
Companies
Schedule 4.4 Subsidiaries
Schedule 4.5(b) Other Liabilities
Schedule 4.5(c) Lost Documents and Records
Schedule 4.6 Certain Changes or Events
Schedule 4.7(a) Compliance with Law
Schedule 4.7(b) Permits
Schedule 4.8(a) Pending Actions
Schedule 4.8(c) Settlement Agreements
Schedule 4.9(a) Employees and Consultants
Schedule 4.9(b) Employment and Consulting Agreements
Schedule 4.9(c) Form of Employment Agreement
Schedule 4.9(d) Unions
Schedule 4.9(g) Employee Plans
Schedule 4.10 Personal Property
Schedule 4.11 Leased Real Property
Schedule 4.12(a) Intellectual Property
Schedule 4.13(d) Intercompany Transactions
Schedule 4.14(a) Material Contracts
Exhibit 2.1
EXECUTION COPY
95.
Schedule 4.14(b) Consents to Material Contracts
Schedule 4.15 Environmental Permits
Schedule 4.16 Accounts Receivable
Schedule 4.17(a) Material Customers, Suppliers and
Vendors
Schedule 4.17(b) Changes of Material Customers,
Suppliers or Vendors
Schedule 4.17(c) Terms and Conditions, Standard Purchase
Order and Standard Sale Terms and
Conditions
Schedule 4.18(a) Insurance Policies
Schedule 4.19(a) Related Persons
Schedule 4.19(b) Seller’s Actions
Schedule 4.20 Seller’s Advisors
Schedule 4.21(e) Sales to Customers Outside Mexico and
the United States
Schedule 4.23 Inventory
Schedule 4.24(a) Products
Schedule 4.24(c) Warranty Claims
Schedule 4.25 Bank Accounts
Schedule 4.26 Powers of Attorney
Schedule 6.1 Conduct of Business Prior to Closing
Schedule 6.4 Intercompany Arrangements
Schedule 6.6(a)(i) Key Employees
Schedule 6.6(a)(ii) Non-competition, Non-Solicitation [and
Confidentiality] Provisions
Schedule 6.6(b) Access to Employees
Schedule 6.10(a) Countries of Operations
Schedule 6.13(i) Supplier Contact Plan
Schedule 6.13(ii) Buyer’s Representatives Accessing
Confidential Information of Companies’
Customers
Schedule 7.2(e) Guarantees to be Released
Schedule 7.3 Consents and Waivers
Schedule 8.3 Matters Subject to the Specified Items
Indemnity
[The remainder of this page is intentionally left blank.
Signature pages to follow.]
Exhibit 2.1
EXECUTION COPY
[Signature Page to Stock Purchase Agreement]
IN WITNESS WHEREOF, the Sellers, the Buyers and the Seller
Representative have caused this Stock Purchase Agreement to be
executed as of the date first written above by their respective
officers thereunto duly authorized.
NEXEO SOLUTIONS, LLC
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: Executive Vice President
and Chief Administrative Officer
NEXEO SOLUTIONS MEXICO HOLDINGS,
LLC.
By: /s/ Xxxx Xxxxx
Name: Xxxx Xxxxx
Title: Executive Vice President
and Chief Financial Officer
Exhibit 2.1
EXECUTION COPY
[Signature Page to Stock Purchase Agreement]
_____/s/ Shareholder A________
[SHAREHOLDER A]
______ /s/ Shareholder B________
[SHAREHOLDER B]
_______/s/ Shareholder C_______
[SHAREHOLDER C]
______/s/ Shareholder D________
[SHAREHOLDER D]
_____/s/ Wife 2____
[WIFE 2]
____/s/ Shareholder E__________
[SHAREHOLDER E]
______/s/ Wife 1__
[WIFE 1]
________/s/ Shareholder F_______
[SHAREHOLDER F]
_______/s/ Shareholder G_______
[SHAREHOLDER G]
________/s/ Sellers Representative__________
[SELLERS REPRESENTATIVE]
Exhibit 2.1
ANNEX A
POWER OF ATTORNEY TO BE
GRANTED BY SELLERS BEFORE A
MEXICAN NOTARY PUBLIC
[PREAMBLE TO BE INSERTED BY
NOTARY PUBLIC]
Exhibit 2.1
Special Power of Attorney
Messrs. [Shareholder A], [Shareholder B],
[Shareholder C], [Shareholder D], with his
wife´s consent Mrs. [Wife 2], [Shareholder
E], with his wife´s consent Mrs. [Wife 1],
[Shareholder F] and [Shareholder G]
(jointly the “Grantors”), grant in favor of
Mr. [Sellers Representative] (the “Attorney-
in-Fact”), a special power of attorney as
broad an ample as required under the law so
that the latter may, in their name and behalf:
a) give and receive any notices and
communications relating to this
Agreement (as defined below);
b) act on their behalf with respect to
any and all matters affecting such Grantors
under the Agreement, including without
limitation, pursuant to Articles II, VII,
VIII, IX and X of the Agreement, including
the delivery and receipt of any notices and
communications that must be given or
received in connection with any such
matters;
c) deliver and object any amounts
reflected in the Preliminary Closing
Statement and in the Final Closing
Statement;
d) authorize deliveries to Buyers (as
such term defined below) of cash in
satisfaction of claims for indemnification
pursuant to Article VIII of the Agreement;
e) initiate or to refrain from initiating,
or dispute or refrain from disputing, any
Poder especial
Los señores [Shareholder A], [Shareholder
B], [Shareholder C], [Shareholder D], con el
consentimiento de su esposa la señora [Wife
2], [Shareholder E], con el consentimiento
de su esposa la señora [Wife 1],
[Shareholder F] y [Shareholder G]
(conjuntamente los “Otorgantes”), otorgan
en favor del señor [Sellers Representative]
(el “Apoderado”), un poder especial pero
tan amplio como en derecho sea necesario
para que éste último, en su nombre y
representación:
a) entregue y reciba cualquier
comunicación y notificación relacionada
con el Contrato (según dicho término se
define más adelante);
b) actué en su nombre y representación
en relación con cualquiera de los asuntos
que afecten a dichos Otorgantes conforme al
Contrato, incluyendo, sin limitación,
conforme a los Artículos II, VII, VIII, IX y
X del Contrato, incluyendo la entrega y
recepción de cualesquier avisos y
notificaciones que deben darse o recibirse
en relación con cualquiera de dichos
asuntos;
c) entregar y objetar cualesquier
cantidades reflejadas en la Declaración de
Cierre Preliminar (Preliminary Closing
Statement) y la Declaración de Cierre Final
(Final Closing Statement);
d) autorizar la entrega de dinero a los
Compradores (según dicho término se
define más adelante) para cumplir con
cualesquier reclamaciones por
indemnización de conformidad con el
Artículo VIII del Contrato;
e) iniciar o abstenerse de iniciar, o
disputar o abstenerse de disputar cualquier
Exhibit 2.1
2.
indemnity or other claim under the
Agreement;
f) negotiate, compromise and resolve
any Dispute that may arise under the
Agreement;
g) exercise or refrain from exercising
remedies available to Grantors under the
Agreement and sign any release or other
document with respect to such Dispute or
remedy;
h) agree to and sign the Escrow
Agreement and to take any and all actions
in connection thereto;
i) agree to and sign any amendment
agreement of the Agreement;
j) take all actions necessary,
convenient or appropriate in his judgment
for the accomplishment of the foregoing
and, in general, to comply with his duties
as Seller Representative under the
Agreement, in each case without having to
seek or obtain the consent of any Grantor;
and
k) incur in any out-of-pocket costs and
expenses in connection with the
performance of his duties hereunder and
under the Agreement, including reasonable
fees and expenses of legal counsel,
accountants, investment bankers or other
advisors.
For the performance of his authority
hereunder, the Attorney-in-Fact shall have
all the powers provided for in the first three
paragraphs of article 2554 of the Federal
Civil Code of the United Mexican States
and the corresponding articles of the Civil
Codes for the States and of Mexico City,
reclamación por indemnización u otra
reclamación conforme al Contrato;
f) negociar, acordar, transigir y
resolver cualquier Disputa que pueda surgir
conforme al Contrato;
g) ejercer o abstenerse de ejercer
cualesquier recursos disponibles a los
Otorgantes conforme al Contrato y firmar
cualquier liberación u otro documento con
respecto a cualquier Disputa o recurso;
h) acordar y firmar el Convenio de
Depósito Condicionado (Escrow
Agreement) y llevar a cabo cualesquier
acciones en relación con el mismo;
i) acordar y firmar cualquier convenio
modificatorio al Contrato;
j) xxxxx y llevar a cabo cualesquier
acciones que fueren necesarias,
convenientes o apropiadas a juicio del
Apoderado para el cumplimiento de lo
anterior y, en general, para cumplir sus
funciones como Representante de los
Vendedores (Sellers Representative) de
acuerdo con lo establecido en el Contrato,
sin tener que solicitar ni obtener el
consentimiento de cualquier Otorgante; y
k) incurrir en cualesquier costos y
gastos relacionados con el desempeño de
sus funciones conforme al presente poder y
el Contrato, incluyendo honorarios y gastos
razonables de abogados, contadores,
consultores financieros u otros asesores.
Dentro de la especialidad de este poder, el
Apoderado tendrá todas las facultades
generales previstas en los tres primeros
párrafos del artículo 2554 del Código Civil
Federal de los Estados Unidos Mexicanos y
sus artículos correlativos de los Códigos
Civiles de los Estados de la República
Exhibit 2.1
3.
including all special faculties that require
special authority in accordance with law,
including special faculties in terms of
articles 2582 and 2587 of the Federal Civil
Code of the United Mexican States and the
corresponding articles of the Civil Codes
for the States and of Mexico City. The
Attorney-in-Fact shall have the authority to
substitute this power of attorney
exclusively in favor of Mr. Xxxx Xxxxxxx
Xxxxxxxx Xxxxxx in terms of Section
10.17(g) of the Agreement.
The Attorney-in-Fact is expressly released
from its obligation to be held accountable
to the Grantors in the exercise of the power
granted herein and shall be entitled to
receive from the Grantors the
indemnification referred to in clause 10.17
of the Agreement.
This power is granted pursuant to Section
10.17 of the Stock Purchase Agreement
(the “Agreement”) of even date hereof
entered into by and among Nexeo
Solutions, LLC and Nexeo Solutions
Mexico Holdings LLC as buyers (the
“Buyers”) and the Grantors as sellers (the
“Sellers”) pursuant to which the Buyers
agreed to purchase and the Sellers to sell,
subject to the terms and conditions
provided therein, 100% of the equity
interests held by them in Ultra Chem, S.
de X.X. de C.V., Global Chem, S. de X.X.
de C.V. and Chem Servicios, S. de X.X. de
C.V. companies incorporated and existent
in terms of Mexican laws.
The power granted herein is irrevocable
under article 2596 of the Federal Civil
Mexicana y la Ciudad de México,
incluyendo todas aquellas facultades
especiales que requieran cláusula especial
conforme a xx xxx, inclusive las facultades
especiales que señalan los artículos 2582 y
2587 del Código Civil Federal y sus
artículos correlativos de los Códigos Civiles
de los Estados de la República Mexicana y
la Ciudad de México. El Apoderado estará
facultado para sustituir el presente poder
únicamente a favor del señor Xxxx Xxxxxxx
Xxxxxxxx Xxxxxx de conformidad con la
cláusula 10.17(g) del Contrato.
El Apoderado queda expresamente relevado
de xx xxxxxxxxxx de rendir cuentas a los
Otorgantes en el ejercicio del presente poder
y tendrá derecho a recibir de los Otorgantes
la indemnización a que se refiere la cláusula
10.17 del Contrato.
El presente poder se otorga de conformidad
con lo previsto en la cláusula 10.17 del
Contrato de Compraventa de Partes
Sociales (Stock Purchase Agreement) de
esta misma fecha (el “Contrato”) celebrado
entre Nexeo Solutions, LLC y Nexeo
Solutions Mexico Holdings, LLC, como
compradores (los “Compradores”) y los
Otorgantes, como vendedores (los
“Vendedores”), por medio del cual los
Compradores se obligaron a comprar y los
Vendedores a vender, sujeto a los términos
y condiciones ahí establecidos, el 100%
(cien por ciento) de las partes sociales de las
que son titulares de Ultra Chem, S. de X.X.
de C.V., Global Chem, S. de X.X. de C.V. y
Chem Servicios, S. de X.X. de C.V.,
sociedades constituidas y existentes
conforme a las leyes de los Estados Unidos
Mexicanos.
El presente poder es irrevocable conforme a
lo previsto en el artículo 2596 del Código
Exhibit 2.1
4.
Code of the United Mexican States since it
is a condition for the effectiveness of a
bilateral contract and it is granted by the
undersigned to comply with the obligations
set forth in Section 10.17 of the
Agreement. All capitalized terms
contained and not defined herein shall have
the meanings attributed to them in the
Agreement.
Civil Federal, pues su otorgamiento en una
condición de un contrato bilateral y los
Otorgantes lo otorgan en cumplimiento de
xx xxxxxxxxxx establecida en la Cláusula
10.17 del Contrato. Todos los términos con
mayúscula inicial contenidos y no definidos
en el presente poder tendrán el significado
que se les atribuye a los mismos en el
Contrato.
[Shareholder B]
________________________________
In his own behalf/Por su propio derecho
[Shareholder C]
________________________________
In his own behalf/Por su propio derecho
[Shareholder D]
________________________________
In his own behalf/Por su propio derecho
[Wife 2]
________________________________
In her own behalf/Por su propio derecho
[Shareholder E]
________________________________
In his own behalf/Por su propio derecho
[Wife 1]
________________________________
In her own behalf /Por su propio derecho
[Shareholder F]
________________________________
In his own behalf/Por su propio derecho
[Shareholder G]
________________________________
In his own behalf/Por su propio derecho
[Shareholder A]
________________________________
In his own behalf/Por su propio derecho
Exhibit 2.1
