Exhibit 4.10
Final Version
(Unofficial translation)
PARTICIPATION AND SHARE PURCHASE CONTRACT
ENTERED INTO BETWEEN AND AMONG
CORPORACION XXXX X. XXXXXXX S.A.
AND
EMBONOR HOLDINGS S.A.,
EMBOTELLADORA ARICA OVERSEAS
WITH THE PARTICIPATION OF
SOCIEDAD DE CARTERA DEL PACIFICO S.R.L.
COCA-COLA EMBONOR S.A.
January 29, 2004
Final Version
(Unofficial translation)
This document evidences the Participation and Share Purchase Contract entered
into by:
-- Corporacion Xxxx X. Xxxxxxx S.A., taxpayer number 20101024645, duly
represented by Xxxxxx Xxxxxxxxx-Xxxxxxx, national identity card number
0707276734, and Xxxxxx Xxxxxxx Corvetto, national identity card number
07269039 and Xxxxxx Xxxxxxx Xxxxxxx, national identity card number
07815944, all of them domiciled at Xxxxxxxxx 000, Xxxxx, Xxxx, Xxxx,
as per powers of attorney awarded by the General Shareholders' Meeting
held on January 20, 2004 (hereinafter, "the Buyer" or "JRL"), as one
party;
and:
-- Embonor Holdings S.A., a company domiciled in the Republic of Chile,
duly represented by Xxxxxx Xxxxxx Xxxxxx-Xxxxxxxx, national identity
card number 7.040.012-k, and Cristian Hohlberg Recabarren, national
identity card number 7.149.293-1, all of them domiciled at Xxxxxxx
Xxxxxxxxx X(xxxxxx)0000, 00xx xxxxx, Xxxxxxxx xx Xxx Xxxxxx, Xxxxxxxx,
Xxxxx, as per powers of attorney evidenced through a Public Deed dated
January 6, 2004 executed at the Notary Public's Office of Santiago,
Chile of Xx. Xxxx Xxxxxxxxx, (hereinafter "Holdings") and
Embotelladora Arica Overseas, a company organized and incorporated
under the laws of Cayman Islands, duly represented by Xxxxxx Xxxxxx
Xxxxxx-Xxxxxxxx, national identity card number 7.040.012-k, and Xxxx
Xxxxx Errazuriz Grez, national identity card number 7.013.621-K, all
of them domiciled at Xxxxxx House, P.O. Box 309, Xxxxxx Town, Grand
Cayman, as per a power of attorney dated December 18, 2003 executed at
the Notary's Office of Santiago, Chile of Xx. Xxxx Xxxxxxxxx
(hereinafter "Overseas") (both hereinafter referred to as, "the
Sellers") as the other party; and
with the participation of:
-- Sociedad de Cartera del Pacifico S.R.L., taxpayer number 20423835622,
duly represented by Ximena Xxx Xxxxxxxxx Reverditto, national identity
card number 10803724, domiciled at Xx. Xxxxx Xxxxx 000, Xxxxxxxxxx,
Xxxx, Xxxx, as per powers of attorney recorded under Record number
1119700 of the Register of Legal Entities, (hereinafter, "SOCAP").
-- Coca-Cola Embonor S.A., a company domiciled in the Republic of Chile,
duly represented by Xxxxxx Xxxxxx Xxxxxx-Xxxxxxxx, national identity
card number 7.040.012-K, and Cristian Hohlberg Recabarren, national
identity card number 7.149.293-7, all of them domiciled at Avenida
Apoquindo 3721, 00xx xxxxx, xxxxxxxx xx Xxx Xxxxxx, Xxxxxxxx, Xxxxx,
(hereinafter, "Embonor"),
under the following terms and conditions:
CLAUSE FIRST: BACKGROUND
1.1. Embonor is the indirect owner of Shares of Common Stock and of Investment
Shares in Embotelladora Latinoamericana S.A. ("XXXX") through the following
structure:
Final Version
(Unofficial translation)
(a) Its subsidiaries Holdings and Overseas, are partners, jointly with
Peru Beverages Limitada S.R.L. ("PBL"), a company controlled by The
Coca Cola Company, in SOCAP.
SOCAP is a limited liability company organized and domiciled in Peru,
registered in record number 11119700 of the Ledger of Mercantile
Companies of the Register of Legal entities of Lima.
SOCAP is a holding company that keeps the following assets and
liabilities:
(i) the only assets are 604,013,193 Shares of Common Stock and
6,742,216 Investment Shares, and
(ii) the only liability is an account payable to XXXX in the amount of
US$ 63,000.
Holdings is the owner of 556,105,810 participations, and Overseas is
the owner of 42,484,061 participations in SOCAP. The participation of
both companies is the equivalent to 81.73% of the corporate capital of
SOCAP, whereas that of PBL is the equivalent to 18.27%.
(b) Holdings is the direct owner of 12,822,042 Shares of Common Stock and
602,500 Investment Shares.
Consequently, the structure described above determines that Embonor,
through Holdings and Overseas, holds in the aggregate a total
participation of 60.45% in XXXX.
1.2. XXXX is the corporation organized and domiciled in Peru, registered in
record number 11012037 of the Ledger of Mercantile Companies of the
Register of Legal entities of Lima, the capital of which is represented by
748,236,466 Shares of Common Stock each one of which is worth S/. 1.00,
fully subscribed and paid-in, and which also has issued another 99,747,256
Investment Shares each one of which is worth S/.1.00, fully paid-in.
XXXX is registered in the Register of Legal entities of CONASEV and its
Shares of Common Stock and Investment Shares are registered in the Public
Register of the Securities Market and in the Lima Stock Exchange.
1.3. Through a business agreement dated January 14, 2004 (the "Business
Agreement"), JRL and Embonor agreed upon certain terms and conditions
applicable to this transaction.
1.4. Within the frame of the Business Agreement, the Parties have conducted
negotiations as of the date hereof, reaching the agreements described
below, which are materialized through this document which is entered into
by the persons
Final Version
(Unofficial translation)
individualized in the introductory section hereof, who have stated to have
been awarded by the parties they represent with all the authorizations and
powers of attorney as necessary for the execution of this Contract.
CLAUSE SECOND: DEFINITIONS
For the purposes of the Contract, the following terms shall have the meanings
set forth below:
Share of Common Stock: It is a share with a voting right representing the
corporate capital of XXXX.
Direct Shares of Common Stock: They are 12,822,042 Shares of Common Stock owned
by Holdings, representing 1.1713635% of the corporate
capital of XXXX.
Indirect Shares of Common Stock: They are 604,013,193 Shares of Common Stock
owned by SOCAP, representing 80.724907% of the
corporate capital of XXXX.
Investment Share: It is an investment Share representing ELSA's
Investment Shares account.
Direct Investment Shares: They are 602,500 Investment Shares owned by
Holdings, representing 0.604% of ELSA's Investment
Shares account.
Indirect Investment Shares: They are 6,742,216 Investment Shares owned by
SOCAP, representing 6.75929972% of
ELSA's Investment Shares account.
Direct Shares: They are the Direct Shares of Common Stock plus the
Direct Investment Shares.
Indirect Shares: They are the Indirect Shares of Common Stock plus the
Indirect Investment Shares.
Bottling Activities: They are those activities related with the
preparation, production and distribution, in both a
wholesale and retail basis, of carbonated beverage
products, table water and the other products currently
produced and/or marketed and/or sold by XXXX.
Business Agreement: It has the meaning assigned to same in number 1.3.
Adjustment of Net Cash and Working Capital: It is the adjustment made to the
Price of the Securities as per the terms of
number 6.1.
OPA Adjustment: It is the adjustment made to the Price of the
Securities as per the terms of number 6.2.
Independent Auditor: It is Ernst & Young.
Final Version
(Unofficial translation)
Yankee Bonds: They are the bonds with their accrued interest,
issued by Embonor acting through its Agency in Cayman
Islands under the Indenture Contract dated March 25,
1999, the Trustee of which is the Bank of New York,
owned by XXXX.
Net Cash and Working Capital: It has the meaning assigned to same in
Appendix 6.1.
Notice Letter: It is the letter that must be sent by the
Buyer no later than April 30, 2004, to the Sellers,
identifying the facts being rendered as a possible
Infringement and their respective quantification, or
the materialization of a Declared Contingency,
pursuant to what is provided in clause 10.2.
CINORSA: Means Compania Industrial Nor Oriente S.A., a
company organized in Peru, registered under number
05.013354 of the Register of Legal entities of Lima.
Companies: Jointly SOCAP, XXXX and Industrial Iquitos S.A.
Buyer: It is JRL.
Declared Contingencies: They are the facts, events, circumstances, respects
and situations expressly stated in Appendix 7.13.(a),
same which, if materialized, give rise to Damages.
Contingencies Recognized as of the Month of April: They are (i) the Declared
Contingencies plus (ii) the Claims filed by the Buyer
by May 29, 2004 based on Infringements included in the
Notice Letter; which may have been subsequently
admitted by the Sellers or awarded by the Arbitrating
Court.
Contract: It is this Participation and Share Purchase Contract.
Material Contracts: They are the contracts and agreements to which XXXX
is a party and which are listed in Appendix 7.20(a).
Damage: They are the damages or losses actually undergone and
the amounts of which have been borne by (i) XXXX, (ii)
SOCAP, or (iii) the Buyer; and which must be borne by
the Sellers pursuant to the terms of Clauses Ninth and
Tenth.
Deductible: It has the meaning assigned to same in number 9.2.
Intercompany Debt: It is the debt with XXXX, including accrued interest,
commissions and any type of compensation if any,
issued in accordance with the Loan Contract dated
July 9, 2003, between XXXX and Overseas and the Loan
Contract dated July 9, 2003, between XXXX and
Inversora Los Andes S.A.
Dollar or US$: They are the dollars of the United States of America.
XXXX: It is Embotelladora Latinoamericana S.A.
Final Version
(Unofficial translation)
Embonor: It is Coca-Cola Embonor S.A.
Public Deed of Participations Transfer: It is the public deed that must be
executed by the Sellers and the Buyer to formalize
the transfer of the Holding of Embonor in SOCAP, the
text of which is attached herewith as Appendix 5.4.1.
Financial Statements: They are (i) SOCAP's and ELSA's the audited balance
sheets and the statements of profit and loss, as well
their related Notes, closed as of December 31, 2002,
and (ii) SOCAP's and ELSA's non audited balance sheets
and statements of profit and loss, closed as of
September 30, 2003, as well as their related Notes;
all of which are contained in Appendix 7.9.(a).
Closing Date: It is January 29, 2004, date on which this
Contract is entered into and the date on which the
acts contemplated in Clause Fifth take place.
Accounting Guidelines of the Independent Auditor: They are the guidelines
determined by the Parties, which shall be used by the
Independent Auditor to determine the Adjustment of Net
Cash and Working Capital and which are attached
herewith as Appendix 6.1.
Holdings: It is Embonor Holdings S.A.
Indemnity: It is the indemnity or indemnities that shall be
paid by the Sellers in favor of the Buyer in case any
Damages arte determined, pursuant to the terms of
Clauses Ninth and Tenth.
Infringement: It is the falsehood or inaccuracy of some of the
declarations and warranties made by the Sellers in
Clause Seventh.
Recognized Infringement: It is an Infringement that has been recognized by
the Sellers or sanctioned by the Arbitrating Court,
as per the claims procedure set forth in Clause Tenth.
Audit Report: It is the Report to be issued by the Independent
Auditor whereby the Net Cash and Working Capital of
XXXX as of the Closing Date shall be determined.
JRL: It is Corporacion Xxxx X. Xxxxxxx S.A.
Maximum Limit: It has the meaning assigned to same in number 9.4.
Accounting Norms: They are those legal provisions in force in Peru
applicable to accounting issues, as well as the
Peruvian generally accepted accounting principles.
New Soles or S/.: It is the legal currency in the Republic of Peru.
OPA: It is the public offering for the acquisition of
Shares of Common Stock, to be made by the Buyer, or
any of its related companies, subsequently to the
Closing Date, for the acquisition of 100% of the
Shares of Common Stock, excluding the direct or
indirect holdings of The Coca-Cola Company, governed
by the OPA Regulations.
Final Version
(Unofficial translation)
Overseas: It is Embotelladora Arica Overseas.
Party: They are, on the one hand, the Buyer, on an individual
basis, and, on the other hand, the Sellers, on a
joint basis.
Parties: They are the Buyer and the Sellers, on a joint basis.
Participations: They are the participations representing the corporate
capital of SOCAP.
PBL: It is Peru Beverages Limitada S.R.L.
Practices in the Industry: They are the practices conducted on a regular basis
by XXXX and its affiliates, JRL and the bottlers of
Pepsi.
Price of the Securities: It is US$ 129,917,924 which the Sellers shall receive
from the Buyer in compensation for the sale of the
Securities, which is paid under the terms and
conditions set forth in this Contract.
Price of the Securities Sold: It is US$ 126,644,328 which the Sellers receive
as of the Closing Date in compensation for the sale
of the Securities Sold to the Buyer, under this
Contract.
Price of the Direct Shares: It is the price of the total number of Direct
Shares, which amounts to US$ 3,338,080.
Price of the Holding of Embonor in SOCAP: It is the price of
the total Holding of Embonor in SOCAP, which amounts
to US$ 126,579,844.
Price per Direct Share of Common Stock: It is the price per each Direct Share
of Common Stock, which amounts to US$ 0.25531.
Price per Direct Investment Share: It is the price per each Direct
Investment Share, which amounts to US$ 0,107032.
Final Price of the Securities: It is the sum of the price of the Securities,
plus the amount of the Adjustment of Net Cash and
Working Capital, plus the amount of the OPA
Adjustment, both adjustments being calculated as per
the terms of Clause Sixth.
Final Price per Share of Common Stock: It is the price per Share of Common
Stock, as adjusted by the Adjustment of Net Cash and
Working Capital and/or by the OPA Adjustment.
XXXX Pro rata: It has the meaning assigned to same in number 9.3 (a).
SOCAP Pro rata: It has the meaning assigned to same in number 9.3 (b).
Final Version
(Unofficial translation)
Claim: It is the formal notice sent by the Buyer to the
Sellers claiming (i) the existence of an Infringement
that could give rise to an Indemnity, or (ii) the
existence of a Damage originating in the
materialization of a Declared Contingency; and which
gives rise to procedure contemplated in Clause Tenth.
The Claim must meet the formalities contemplated in
number 10.5.
OPA Regulations: It is the Public Offering Regulations for the
Acquisition and Purchase of Bearer Securities by
Exclusion, as approved through Resolution of the
CONASEV number 630-97-EF/94.10, as amended, extended
or complemented.
SAB: It is Citicorp Peru S.A., SAB, a stock brokerage
company that shall acts (i) as intermediary, both with
the Sellers and with the Buyer in the purchase of the
Direct Investment Shares, and (ii) as an irrevocable
attorney of Holdings for the sale of the Direct Shares
of Common Stock in the OPA.
SOCAP: It is Sociedad de Cartera del Pacifico S.R.L.
Holding of Embonor in XXXX: It is the stock ownership held by Embonor,
indirectly through Holdings and Overseas, from the
total of the Shares of Common Stock and Investment
Shares in XXXX, which is equivalent to 60.45% of the
corporate capital and of the Investment Shares Account
in XXXX.
Holding of Embonor in SOCAP: It is the total participations of SOCAP owned by
Holdings and Overseas, equivalent to 81.73% of the
corporate capital in SOCAP.
Exchange Rate: It has the meaning assigned to same in number 15.6.
Arbitrating Court: It is the Arbitrating Court referred to in Clause
Thirteenth.
Value of the Shares of Common Stock: It is the amount resulting from adding the
Value of the Indirect Shares of Common Stock plus the
price of the Direct Shares of Common Stock.
Value of the Direct Shares of Common Stock: It is the amount resulting from
multiplying the number of the Direct Shares of Common
Stock by the price per Direct Share of Common Stock.
Value of the Indirect Shares of Common Stock: It is the amount resulting from
multiplying the number of the Indirect Shares of
Common Stock by the price per Direct Share of Common
Stock.
Valor Final of the Shares of Common Stock: It is the amount resulting from
adding the Value of the Shares of Common Stock, plus
the Adjustment of Net Cash and Working Capital, plus
the OPA Adjustment.
Value of the Indirect Investment Shares: It is the amount resulting from
multiplying the number of the Indirect Investment
Shares by the price per Direct Investment Share.
Final Version
(Unofficial translation)
Value of the Investment Shares: It is the amount resulting from adding the
Value of the Indirect Investment Shares plus the
price of the Direct Investment Shares.
Securities: It is in the aggregate the Holding of Embonor in
SOCAP, plus the Direct Shares.
Securities Sold: It is in the aggregate the Holding of Embonor in
SOCAP plus the Direct Investment Shares.
Sellers: They are Holdings and Overseas.
CLAUSE THIRD: PURPOSE OF THE CONTRACT
3.1. (A) By virtue of this Contract, the Sellers sell to the Buyer the
Securities Sold, and the Buyer buys from the Sellers the Securities
Sold, under the terms and conditions set forth in this Contract. The
transfer of the Securities Sold and the payment of the price of the
Securities Sold shall be made in the manner stated in Clause Fifth.
(B) The Buyer's obligation to make the OPA and acquire in same all of the
Direct Shares of Common Stock is also the purpose of this Contract.
(C) Lastly, the moneyed loan made by the Buyer to Holdings in the amount
equivalent to the Value of the Direct Shares of Common Stock under the
terms and conditions set forth in Clause Fourth is also the purpose of
this Contract.
3.2. The sale of the Securities includes all the rights and economic and
political benefits which pertain or may pertain to them, without any
exclusions or limitations, whether they are actual or prospective, declared
or agreed, to be declared or to be agreed, accrued or accruable, present or
future, including: (i) rights over pending dividends and over reserves of
any nature; (ii) all the contributions to the capital, of any type or
nature, as may have been made as of the Closing Date, inclusive; (iii) each
and any bonds convertibles into shares issued or to be issued by SOCAP or
XXXX and pertaining to the Securities; (iv) all the participations whether
created or to be created in SOCAP and any shares issued or to be issued by
SOCAP or XXXX pertaining to the Securities as a consequence of the
restatement of the capital, capitalization of profits or reserves, or, in
general, any capital increase in SOCAP or XXXX agreed prior to the Closing
Date.
3.3. The Sellers declare that there are no contributions to the capital of SOCAP
or XXXX whose capitalization is pending, or obligations to be borne by
SOCAP or XXXX conferring to the Sellers or to third parties the right to
make contributions into the capital of SOCAP or XXXX.
3.4. The Buyer declares that the purchase of the Holding of Embonor in SOCAP is
solely intended to attain the control of the Indirect Shares, under the
same economic terms as would have been applicable in the event that a
direct purchase had been made.
Final Version
(Unofficial translation)
3.5. In accordance with what is contemplated in the OPA Regulations, the Buyer
undertakes to conduct, subsequently to the Closing Date, an OPA or any
other public offering as CONASEV may authorize, in respect of all of the
remaining Shares of Common Stock, except for the shares directly owned, or
owned through a related company, to The Coca-Cola Company, at the Final
Price per Share of Common Stock payable to the Sellers.
CLAUSE FOURTH: PRICE AND LOAN
4.1. The price of the Securities has been set by the Parties in the amount of
US$ 129,917,924.
The price of the Securities is based on a Price per Direct Share of Common
Stock of US$ 0,255310 and on a Price per Direct Investment Share of US$
0,107032. (The latter is the quotation value of the Investment Share in
XXXX as of the closing of January 8, 2004, equivalent to S/. 0.37, and
assuming the purchase exchange as at that date to be S/. 3.4569).
4.2. The price of the Securities is structured as follows:
(a) Price of the Holding of Embonor in SOCAP: US$ 126,579,844, broken down
as US$ 117,596,020 to Holdings and US$ 8,983,824 to Overseas.
This price is the result of the following arithmetical operation:
(i) the result of (A) all of the Indirect Shares of Common Stock
times the aforementioned price per Share of Common Stock i.e. US$
0.255310, plus (B) all of the Indirect Investment Shares times
the aforementioned price per Investment Share i.e. US$ 0.1070320,
minus (C) US$ 64,077, this last amount being the only liability
of SOCAP; times,
(ii) the Holding of Embonor in SOCAP (81.73%).
(b) Price of the Direct Shares: US$ 3,338,080.
This price is the result of the following arithmetical operation:
(i) The number of the Direct Shares of Common Stock times the price
per Share of Common Stock, plus
(ii) The number of the Direct Investment Shares times the price per
Investment Share.
4.3 Bearing in mind the foregoing, the price of the Securities Sold amounts to
US$ 126,644,328, which is comprised as follows:
(a) Price of the Holding of Embonor in SOCAP: US$ 126,579,844.
(b) Price of the Direct Investment Shares: US$ 64,484.
Final Version
(Unofficial translation)
4.4. The Adjustment of Net Cash and Working Capital and the OPA Adjustment
stated in Clause Sixth below shall affect the Value of the Shares of Common
Stock and, consequently, the price of the Securities. The Parties recognize
and accept that the Final Price of the Securities shall be the final price
of same, and, therefore, after the Adjustment of Net Cash and Working
Capital and of the OPA Adjustment, for all legal, accounting, tax,
contractual or any other purpose, any reference to the price must be
understood as being made to the Final Price of the Securities.
4.5. The Parties declare that the price of the Holding of Embonor in SOCAP has
been determined by multiplying 81.73% by the result of the addition of (i)
the number of Indirect Shares of Common Stock multiplied by the price per
Direct Share of Common Stock, plus (ii) the number of Indirect Investment
Shares multiplied by the price per Direct Investment Share, and (iii)
subtracting the amount of the liability kept by SOCAP in the amount of US$
64,077.
4.6. The Parties declare that between the price of the Securities (including the
price attributed to the Shares of Common Stock and the Investment Shares)
and the value of the assets to be acquired, there is a fair and perfect
equivalence, therefore the Parties, in the broadest possible way, waive any
claim between them in connection therewith, save for what is contemplated
in Clause Sixth of this Contract.
4.7. Through this act and through the act of execution of the Public Deed of
Participations Transfer and, in accordance with the Certification made by
SUNAT about the computable cost of the Holding of Embonor in SOCAP, of the
Direct Shares of Common Stock and of the Direct Investment Shares attached
herewith as Appendix 4.7., the Buyer pays, without any withholdings, the
total price of the Securities Sold, in Dollars, as follows:
4.7.1 Price of the Holding of Embonor in SOCAP
(a) US$ 100,216,936.62 through a bank transfer, as per the form of letter
attached herewith as Appendix 4.7.1 (a) in funds immediately and
freely available, into account number 00000000 of Citibank N.A., New
York, ABA # 000000000, for the benefit of Embonor Holdings S.A., the
holder of which is Citibank N.A., Santiago, Chile.
(b) US$ 10,816,867 through the transfer of the Yankee Bonds to Holdings
which, immediately before, have been acquired by the Buyer from XXXX
at that price.
(c) US$ 15,546,040.38, through a bank transfer into the bank account in
foreign currency kept by XXXX with Citibank N.A. Lima Branch, in the
account number 000-0000000, ABA # 10991389, as per the forms of
letters attached herewith as Appendix 4.7.1. (c). With the deposit of
said amount, Holdings (with the authorization and on account of its
related companies Overseas and Inversora Los Andes S.A.) and Overseas,
by itself, fully pay to XXXX the Intercompany Debt, as per the
following breakdown:
(i) US$ 5,516,336.91, which Holdings pays on account of Inversora
Los Andes S.A., and which corresponds to the full and entire
payment of the debt kept by said company with XXXX by virtue
of
Final Version
(Unofficial translation)
the Loan Contract entered into between them on July 9,
2003.
(ii) US$ 1,045,879.47, which Holdings pays on account of Overseas,
and which corresponds to the partial payment of the debt kept
by said company with XXXX by virtue of the Loan Contract
entered into between them on July 9, 2003; and
(iii) US$ 8,983,824, which Overseas pays on its own account, and
which corresponds to the full balance of the debt kept by said
company with XXXX by virtue of the Loan Contract entered into
between them on July 9, 2003.
With the aforementioned bank transfer, Holdings and Overseas pay and
extinguish on a full ant total basis the Intercompany Debt, their
warranties and others, as per what has been declared in the receipts
issued by XXXX, which are also comprised of Appendix 4.7.1. (c), which
is entered into by XXXX on the Closing Date.
4.7.2 Price of the Direct Investment Shares
(a) US$ 64,484 through a bank transfer into the account to be specified by
SAB.
4.8. Through this instrument, the Buyer grants to Holdings a moneyed loan in an
amount equivalent to the Value of the Direct Shares of Common Stock, that
is, US$ 3,273,596, through the transfer into account number 00000000 with
Citibank N.A., New York, United States ABA # 000000000, for the benefit of
Embonor Holdings S.A., the holder of which is Citibank, Santiago, Chile, as
per the form of letter included in Appendix 4.8. Said moneyed loan shall
not accrue interest in favor of the Buyer and shall be refunded whenever
the OPA should be paid, with the proceeds of the sale of the Direct Shares
of Common Stock in the OPA. For this purpose, on this same date, Holdings
has awarded SAB with an irrevocable mandate irrevocable to appear at the
sale of the Direct Shares of Common Stock in the OPA. The Buyer expressly
waives to seek the payment of the loan with other of Holdings' assets other
than the Direct Shares of Common Stock or the proceeds from the sale of
same, save that the Direct Shares of Common Stock may not be transferred to
the Buyer in the OPA for a cause imputable to Holdings. This limitation
shall not be applicable to the payment of the difference that may exist in
favor of the Buyer the sale price of the Direct Shares of Common Stock in
the OPA and the amount of the loan, as per what is provided in number 6.2
(b) below. Holdings undertakes not to encumber or dispose of in any form to
third parties the Direct Shares of Common Stock, or to perform any act
whatsoever intended to limit the force of the irrevocable mandate. The
infringement of this obligation shall bring as a consequence the
termination of the aforementioned limitation. The text of said irrevocable
mandate forms part of this Contract as Appendix 4.8.
4.9 The payment of the price of the Securities Sold and the granting of the
loan are made notwithstanding the eventual application and payment of the
adjustments set forth in Clause Sixth.
Final Version
(Unofficial translation)
CLAUSE FIFTH: ACTS UPON CLOSING
Prior to or concurrently with the execution of this Contract, and
notwithstanding the Sellers' obligation to register in the Public Registers the
transfer of the Holding of Embonor in SOCAP and the other obligations
contemplated in this Contract, the following acts take place:
5.1. Acts to be performed by the Sellers:
5.1.1. Holdings' giving irrevocable instructions to SAB to sell to the
Buyer, by means of a stock exchange operation, the Direct
Investment Shares. The text of said communication forms part of
this Contract as Appendix 5.1.1.
5.1.2. Holdings' awarding of an irrevocable mandate to SAB to sell the
Direct Shares of Common Stock in the OPA. The text of said
communication forms part of this Contract as Appendix 4.8.
5.1.3 Delivery to the Buyer of the letter subscribed by SOCAP's manager
addressed to SOCAP, submitting his irrevocable resignation to his
position, stating that he has no claims to file against SOCAP as
to his condition as the manager. A copy of the text that must be
contained in said letter is shown in detail as Appendix 5.1.3.
5.1.4. Delivery to the Buyer, through the respective CEOs of the
Companies, of the following: (a) the books of Minutes of Board
Meetings, of Shareholders' Meetings and of Partners' Meetings of
the Companies; and, (b) the ELSA's Shares Register, CAVALI's
report on XXXX as of the day before the Closing Date and the
public deeds and registration entries evidencing the Holding of
Embonor in SOCAP and the owners.
5.1.5. Delivery to the Buyer of a certified copy of the Partners' Meeting
Minutes of SOCAP where it was agreed to appoint Mr. Francisco
Xxxxxxx Xxxxxx Xxxxx as the Manager of SOCAP.
5.2. Acts to be performed by the Buyer:
5.2.1. Giving SAB irrevocable instructions to acquire and pay, by way of
a stock exchange operation the Direct Investment Shares to
Holdings, providing same with sufficient funds to that effect,
pursuant to what is set forth in Clause 4.7.2. The text of the
aforementioned instructions forms part of this Contract as
Appendix 5.2.1.
5.2.2. Granting of the loan in favor of Holdings, in accordance with what
is provided in Clause 4.8.
5.2.3 Payment of the price of the Holding of Embonor in SOCAP in the
form contemplated in number 4.7.1.
Final Version
(Unofficial translation)
5.2.4 Delivery to the Sellers of the voucher for the deposit made by
SAB, in funds immediately and freely available, in the account
number 00000000 of Citibank N.A., New York, ABA # 000000000, for
the benefit of Embonor Holdings S.A., the holder of which is
Citibank N.A., Santiago, Chile, for the price of the Direct
Investment Shares, that is, US$ 64,484.
5.3. By SOCAP
5.3.1. Delivery to the Buyer of a certified copy of the Minutes of the
Partners' Meeting of SOCAP where PBL, Holdings, Overseas and SOCAP
state their approval of the transfer of the Participations which
operates by virtue of the Contract, with the partners waiving any
first refusal right, consent or the like which they may be
entitled to.
5.4. By the Parties.
5.4.1. Awarding of the Public Deed of Participations Transfer, pursuant
to the text in Appendix 5.4.1.
5.4.2. Acquisition, by JRL of the Yankee Bonds at the price of US$
10,816,867 and transfer of same as a partial payment to the
Sellers, in the form stated in Appendix 5.4.2.
5.4.3. The taking place of one or more board meetings of XXXX by virtue
of which the resignations of the current directors of XXXX are
accepted, except for that of Xx. Xxxxxxx Xxxxxx Xxxxxxx and
Xxxxxxxxx Xxxxx, who are related to PBL, and the appointment of
new directors in lieu of the resigned ones appointed by the Buyer,
and the adoption of the other agreements to be decided by the new
board of directors.
5.4.4. Entering into the contract for the purchase of 100% of the shares in
CINORSA, pursuant to the text in Appendix 5.4.4.
CLAUSE SIXTH: THE ADJUSTMENT OF THE PRICE
The Parties agree to apply the following adjustments to the Price of the
Securities:
6.1. Adjustment of Net Cash and Working Capital.
6.1.1. The price of the Shares of Common Stock and consequently the price
of the Securities implies that Net Cash and Working Capital
amounts to US$ 27,000,000.
6.1.2. Immediately after the Closing Date and within 10 business days as
of the date on which XXXX delivers to the Independent Auditor the
necessary information in accordance with the Accounting Guidelines
of the Independent Auditor, the Independent Auditor shall issue
the Audit Report where Net Cash and Working Capital as of the
Closing Date shall be determined. This term of 10 business days
shall be extended to a maximum of 5 business days, in the event
that the Independent Auditor determines so, by means of a
communication stating to both Parties the
Final Version
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reasons calling for such an extension. The Independent Auditor shall
support his determination in the Accounting Guidelines of
Independent Auditor, attached herewith as Appendix 6.1. The
Independent Auditor's determination shall bear the nature of an
arbitral award of consciousness, pursuant to what is permitted by
the Tenth Complementary and Final Provision of the General law on
Arbitration. Consequently, Independent Auditor's determination shall
be final for the Parties, notwithstanding the Parties' right to
request to the same Independent Auditor the rectification or
amendment in the event of errors or omissions in the Audit Report in
case of departure from the Accounting Guidelines of the Independent
Auditor. The Independent Auditor's response in case of request for
the rectification or amendment of error shall not give rise to any
claim, not even before the Arbitrating Court. Appendix 6.1.2.
contains the letter of the Independent Auditor stating his
accordance with this agreement.
6.1.3. The Buyer undertakes to cause XXXX to make available to the
Independent Auditor, within 15 business days following the Closing
Date, all the documentation related with the Net Cash and Working
Capital at the main offices of XXXX located at Xxxx. Xxxxxxxx
Xxxxx X. Xxxxxxxxx 0000, Xxxx.
6.1.4. Appendix 6.1.4 contains the letter of hiring of the Independent
Auditor subscribed by the Parties. All the fees and expenses
related with the work to be conducted by the Independent Auditor
shall be borne by the Parties in equal shares. Except for what is
stated above in this paragraph, all other costs and expenses
incurred into by the Parties in connection with the Independent
Auditor's determination of the Net Cash and Working Capital, shall
be borne by the Party incurring into such cost and expense.
6.1.5. The Adjustment of Net Cash and Working Capital shall be determined
as per the following procedure:
(a) If the Audit Report states that the Net Cash and Working
Capital is less than US$ 27,000,000, an Adjustment of Net Cash
and Working Capital in favor of the Buyer shall be applicable.
Said adjustment in favor of the Buyer shall be equivalent to
multiplying the Holding of Embonor in XXXX by the difference
between US$ 27,000,000 and the Net Cash and Working Capital (as
same has been determined by the Independent Auditor). In this
case, the Adjustment of Net Cash and Working Capital shall
reduce the Value of the Shares of Common Stock.
(b) If the Audit Report states that the Net Cash and Working
Capital is higher than US$ 27,000,000, and Adjustment of Net
Cash and Working Capital in favor of the Sellers shall be
applicable.
Said Adjustment in favor of the Sellers shall be equivalent to
multiplying the Holding of Embonor in XXXX by the difference
between the Net Cash and Working Capital (as same has been
determined by the Independent Auditor) and the imports of US$
27,000,000. In this case, the Adjustment of Net Cash and Working
Capital shall increment the Value of the Shares of Common Stock.
Final Version
(Unofficial translation)
(c) If the report submitted by the Independent Auditor states that
the Net Cash and the Working Capital amounts to US$ 27,000,000,
there shall be no Adjustment of Net Cash and Working Capital in
favor of the Parties.
6.1.6. The Adjustment of Net Cash and Working Capital shall be determined
in New Soles and shall be translated into Dollars, at the Exchange
Rate in force as of the Closing Date.
The Party that ends up with the obligation to make the
aforementioned payment, should materialize same, regarding the
Indirect Shares of Common Stock, within a maximum period of 3
business days as of the date on which Audit Report was informed to
same, in Dollars, through a freely and immediately available bank
transfer, with said amount being susceptible only to the tax
withholdings that, as the case may be, are contemplated in the
applicable norms in Peru. The portion of the Adjustment of Net
Cash and Working Capital corresponding to the Direct Shares of
Common Stock shall be expressed in the price to be offered in the
OPA.
6.1.7. The determination and the payment of the Adjustment of Net Cash
and Working Capital as per this Clause do not absolutely affect or
prevent the payment of the Indemnities that may result from the
application of what is set forth in Clause Ninth and Clause Tenth,
save for the case of the same facts or circumstances that would
have already been covered in full as to their amount by the
Adjustment of Net Cash and Working Capital.
6.1.8. The price of the Investment Shares shall not be adjusted as a
consequence of the Adjustment of Net Cash and Working Capital.
6.2. OPA Adjustment
Since the Final Price per Share of Common Stock must be reflected in the
OPA to be submitted by the Buyer, the Parties set forth as follows:
(a) In the event that in the OPA submitted by the Buyer, or its related
companies, a price per Share of Common Stock higher than the Price per
Share of Common Stock plus the Adjustment of Net Cash and Working
Capital is voluntarily offered, this higher price shall be reflected
in the price payable in the OPA by the Direct Shares of Common Stock.
The difference corresponding to the Indirect Shares of Common Stock
shall have to be paid directly to the Sellers by the Buyer on the date
of payment of the OPA.
(b) The refund of the moneyed loan referred to in number 4.8 of this
Contract shall be made on the date of liquidation of the OPA, with the
proceeds from the sale of the Direct Shares of Common Stock in the
OPA, in accordance with the irrevocable mandate conferred to SAB. If
after the OPA Adjustment the Final Price per Share of Common Stock
corresponding to the Direct
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(Unofficial translation)
Shares of Common Stock is higher than the loaned amount, then SAB
must refund the difference to Holdings. In case that the Final Price
per Share of Common Stock corresponding to the Direct Shares of
Common Stock is less than the loaned amount, as a consequence of the
Adjustment of Net Cash and Working Capital, then Holdings must pay
the balance of the loan to the Buyer within five business days as of
the date of liquidation of the OPA.
(c) The Parties bear in mind that, due to the nature of this operation,
the performance of a process of appraisal of the shares in XXXX is
unnecessary for the purposes of the regulations of the OPA, since the
price of the Holding of Embonor in SOCAP has been determined bearing
in mind that SOCAP's only asset is comprised of the Indirect Shares
and, its only liability is an account receivable from XXXX in the
amount of US $ 63,000.00.
Nevertheless, in case that, based on the report of a third party
assessment, CONASEV should determine, through a resolution determining
that there are no more administrative steps available, and which is
consented to or ratified on a judicial basis, an assignment of value
to the Shares of Common Stock differing from the Price per Share of
Common Stock plus the Adjustment of Net Cash and Working Capital, and
as a result of the foregoing the authority compels the Buyer to offer
in the OPA a value that exceeds that agreed herein, said higher value
shall not imply any economic compensation whatsoever to the Sellers,
provided that the Buyer has complied with the obligations set forth in
number 2 of the Clause Fifth of the Business Agreement, in order for
said appraisal not to differ from the Final Price per Share of Common
Stock.
CLAUSE SEVENTH: DECLARATIONS AND WARRANTIES OF THE SELLERS
The Sellers declare and guarantee the correctness, accuracy, truthfulness and
force (prior to an on the Closing Date, as appropriate) of the following:
7.1. Existence and Position of the Companies.
The Companies are companies duly organized and existing under the laws of
the jurisdiction of their incorporation, and they are duly qualified to
operate in Peru.
The copies of the documents of incorporation (bylaws and any eventual
amendments to same) of the Companies referred to in Appendix 7.1., have
been delivered to the representatives of JRL prior to the date hereof and
are complete. Additionally, the Company has granted access to the Buyer to
the books containing all the relevant minutes of the Shareholders' Meeting,
Partners' Meeting, Board of Directors' Meeting and those of the other
bodies of administration.
7.2. Capital of the Companies.
(a) The structure of the corporate capital and of the Investment Shares of
the Companies is, as of the Closing Date, the following:
Final Version
(Unofficial translation)
(i) SOCAP: Its corporate capital is the amount of 723,391,223.00 New
Soles and it is represented by 723,391,223 participations with a
nominal value of S/.1.00 each.
(ii) XXXX: Its corporate capital amounts to 748,236,466.00 New Soles
represented by 748.236.466 shares with a nominal value of
S/.1.00 each. Likewise, it has 99,747,256 Investment Shares with
a nominal value of S/.1.00 each.
(b) (iii) Iquitos: Its corporate capital amounts to 8,358,103,00 New Soles
represented by 8,358,103 shares with a nominal value of S/.1.00
each. Save for what is stated in number 7.2 (a), the Companies
do not have any other (i) authorized or issued shares, (ii)
certificates of preemptive subscription, bonds convertible into
shares, pending subscriptions or options (including share
purchase options in favor of the employees), or (iii) pending
obligations (whether or not represented by securities titles)
for the issuance of shares representing its capital or
Investment Shares.
The Companies' shares are duly authorized, validly issued and
subscribed, fully paid-in, and are not subject to additional
contributions. They were not issued in infringement of any
preemptive rights of any nature.
(c) The Securities are free from any charges or encumbrance and there are
no options, usufructs, pledges, conversion or preemptive rights or
other rights, limitations, charges, restrictions, agreements or any
other type of commitments affecting them and which may compel Embonor
to sell or offer for sale any of the Securities.
(d) There are no share syndication contracts, agreements among
shareholders or partners or between them and third parties, powers of
attorney and other understandings in force in connection to the
exercise of any political and economic rights.
(e) As of the Closing Date, the Shares' Register, the Investment Shares'
Register and the accounting records of CAVALI truly reflect 100% of
the shares representing the corporate capital of XXXX and the 100% of
the Investment Shares representing the Investment Shares account of
XXXX, and that the ownership of all of the Indirect Shares and of the
Direct Shares corresponds to SOCAP and to the Sellers, respectively,
save for what is contemplated in Appendix 7.2.(e).
Likewise, on that date, the bylaws of SOCAP registered with the Public
Registers accurately reflect 100% of the participations representing
the corporate capital of SOCAP and that the ownership over the entire
Holding of Embonor in SOCAP corresponds to the Sellers, save for what
is allowed in Appendix 7.2(e).
Final Version
(Unofficial translation)
(f) There are no claims, legal actions or court cases referring the
Securities, derived from offers, issuances, purchases, options,
transfers or negotiations of any nature filed prior to the Closing
Date. Likewise, the Sellers are not aware of any situation or fact
that may give rise to a claim, court case or legal action in that
nature.
7.3. Holding of Securities.
The Companies no either directly or indirectly have any shares or bonds
convertible into shares or, in general, current securities with a voting
right or capital participations in another company, joint venture,
association agreements or entities of any other nature, save for what is
contemplated in Appendix 7.3.
7.4. Compliance with other Instruments.
The Companies have not infringed: any of the provisions containing in their
articles of incorporation referred to in the second paragraph of Number
7.1. Furthermore, the Companies have not infringed any agreement or
instrument del to which they are a party or whereby they or any of their
assets are bound; nor have they infringed any provision of any applicable
law, ordinance, order, sentence, right, norm or provision of any court,
arbitrator or governmental authority, the infringements of which could have
a materially adverse effect over the businesses, property or financial
position of the Companies, considered either individually or jointly. In
case that any other declaration or warranty included in this clause
contravenes this Number 7.4, what is stated in the specific declaration or
warranty shall prevail.
The execution and compliance with the Contract, as well as the execution of
the operations contemplated in same shall not result in the creation or
imposition of any obligation over the Companies which may originate any
attachment, charges, claims, encumbrances, warranty rights, restrictions of
any kind, or other third party rights. The Sellers and the Companies are
not aware of any situation or fact that could generate a claim, court case
or legal action over any property or asset of the Companies.
7.5. Powers of the Sellers.
Embonor and the Sellers have the required power and authority to enter into
the Contract and each one of the acts set forth by same, to comply with
their obligations and execute the operations contemplated in same. Said
execution and compliance have been duly authorized by the Sellers, by way
of an agreement of the respective corporate entity, and the representatives
of the Sellers have sufficient powers to enter into the Contract, and the
acts and agreements contemplated in same, as appropriate. A copy of the
respective minutes and of the powers of attorney of the representatives of
the Sellers are attached herewith as Appendix 7.5.
7.6. No Conflict.
Neither the execution of the Contract, nor the execution of the obligations
contained in the instruments subscribed in accordance with same, determine
that Embonor, the Sellers or the Companies incur into the default of any
obligation rising from:
Final Version
(Unofficial translation)
(a) Any agreement, contract, covenant or another instrument where either
of them is a party to and which determines the commitment their
assets;
(b) Any law, ordinance, norm or regulation enforceable by any governmental
authority;
(c) Any applicable order, resolution, sentence or decree of any court,
arbitrator or governmental authority, the default of which may have an
adverse effect over:
(i) Their capacity to enter into, execute or issue or comply with
their obligations pursuant to the terms of Contract or of the
acts and agreements contemplated in same, or
(ii) Their businesses, property or financial position, in such terms
that said default could have an adverse effect over the
businesses, property or financial position of the Companies,
considered on an individual or joint basis or an adverse effect
over the ownership, possession and/or exercise of the Securities.
7.7. Governmental Approval.
No declaration, registration or notification before any governmental
authority is required, or to obtain a consent, approval, authorization,
license, order or permit from any governmental authority whatsoever in
connection with the execution and the compliance with the Contract, or for
the execution of the operations contemplated in same, except for the
notification of same to the SUNAT, the CONASEV and PROINVERSION (formerly
CONITE), when appropriate.
7.8. Licenses and Permits.
The Companies have all the authorizations, permits, registers, licenses and
the administrative habilitations necessary and required by the law to carry
forth, in all material respects, the activities and operations encompassed
in their business, without any limitations other than those contained in
them.
7.9. Accounting Information.
(a) Are attached herewith as Appendix 7.9.(a) the Financial Statements.
(b) The Financial Statements were prepared in accordance with the
Accounting Norms in force and reflect the equity position and the
result of the operations of the Companies, taken in the aggregate, as
of the date of same and for the period encompassed by them. In case
there are any differences in the treatment of the claims derived from
this provision and another provision in this Clause Seventh that is
specific, what is provided in the specific provision shall prevail.
(c) There are no obligations, debts or liabilities generated, accrued or
contingent which, in observance of the Accounting Norms, should be
included in the Financial Statements and that are not reflected in
same.
Final Version
(Unofficial translation)
(d) The accounting books which the Companies have the legal obligation to
keep reasonably reflect the inflow and outflow items and the assets
and liabilities that must be recorded in them under the Accounting
Norms, and have been kept in accordance with the generally accepted
accounting principles, and applied consistently by the Companies.
7.10. No Changes.
Between September 30, 2003 and the Closing Date:
(a) The Companies have been managed as per the ordinary course of
business, consistently with the regular practices that have been
applied in the past, not having incurred into obligations or debts
other than those related to the Companies' ordinary line of
business.
(b) No modification has been agreed or made in the bylaws of the
Companies other than those stated in Appendix 7.1.
(c) No significantly adverse changes in the assets, businesses,
properties or in the financial position of the Companies have
occurred, nor any fact has occurred, nor any agreement has been
entered into, nor there are any circumstances (nor has a threat been
contemplated or exists of any such fact) which could reasonably be
expected and which could cause a significantly adverse effect in the
future;
(d) No damages, destruction, loss or claim have occurred in or against
any business, property or asset of the Companies, whether or not
covered by an insurance, which could be reasonably expected to cause
a significantly adverse change;
(e) No Significant Contract has been entered into, modified or
terminated, save for what is stated in Appendix 7.10.(e);
(f) No substantial reduction in the levels of maintenance observed by
the Companies in connection to their properties and which has not
been contemplated in their annual maintenance plans, has occurred;
(g) No sale, lease, assignment, mortgage, pledge or another disposal or
encumbrance of any of the real estates or other significant assets
of the Companies has taken place, save for the operations conducted
during the normal course of their businesses;
(h) No labor conflict or another fact or condition of any kind affecting
or that may reasonably and in a materially adverse form may affect
the financial position of the Companies or any of their businesses
or properties has occurred;
(i) No changes in labor matters under the terms represented in numbers
7.14 (j) and 7.14 (k) have occurred;
(j) No reassessment of any of the properties or other assets of the
Companies, other than those described in Appendix 7.10.(j) have
occurred.;
(k) No contribution to the capital of the Companies, or the distribution
of any dividend or payment in respect of the corporate capital of
the Companies has
Final Version
(Unofficial translation)
been agreed, nor any similar subdivision, redemption, repurchase,
consolidation or transaction affecting the corporate capital of the
Companies, other than those described in Appendix 7.1. has been
agreed;
(l) No process related with the merger, consolidation, liquidation or
reorganization of the Companies has been agreed or started, nor have
the Companies negotiated the sale or transfer of its own shares or
participations, save for what has been contemplated in the Contract;
(m) No rights or significant claims pertaining to the Companies in
connection with the Bottling Activity have been waived. For the case
of non-significant rights or claims, the negotiations and
adjustments to accounts receivable have been conducted in a manner
consistent with the Companies' past practices;
(n) The Companies are not aware of any started, initiated or filed
lawsuits, claims or, in general, any legal pretensions whatsoever
related with the Bottling Activity other than the routine of
collection of accounts payable or the defense of their interest in
any of the branches or instances where their rights are discussed
(such as Governmental, labor, commercial, and other instances), save
for those contemplated in Appendix 7.10.(n); and
(o) No changes in the accounting methods and criteria used by the
Companies have been made, salvo that said changes are required by
the Law, by new Accounting Norms or that they form part of new
Practices in the Industry.
(p) The Companies have not made sales to the distribution channels in
volumes significantly higher than those that would be appropriate as
per their regular practices.
7.11. Industrial and Intellectual Property.
(a) XXXX is the owner of all the brands and the elements of the
intellectual and industrial property, including, among others,
product and service marks, trade names, trade mottos, patents,
industrial designs and copyrights detailed in Appendix 7.11.(a), and
has entered into all the license, sub-license contracts and the
other necessary agreements for the adequate use of the
aforementioned intellectual and industrial property rights owned by
third parties, used and/or necessary for the development of the
Bottling Activities of XXXX;
(b) As of the Closing Date, XXXX has satisfactorily complied with the
execution of all of the obligations derived of the license and
sub-license contracts referring to the use of the intellectual and
industrial property rights owned by third parties detailed in
Appendix 7.11.(a). Regarding the obligations derived from the other
agreements to which it is a party, XXXX has complied with all the
obligations pertaining to same, the default of which could have a
materially adverse effect for XXXX.
(c) XXXX is the owner, and may exercise and use in a full, pacific
fashion and without affecting third party rights, even those
resulting from association agreements with third parties, all the
rights referred to in number 7.11.(a), which are free from any
charges or encumbrances and, where applicable, it
Final Version
(Unofficial translation)
is up-to-date in the payment of appropriate fees for same. The
aforementioned rights suffice to enable XXXX to conduct all of its
activities in all of their substantial respects.
(d) As of the Closing Date there are no judicial proceedings or
contentious administrative procedures of any type notified to the
Companies affecting the free use and availability of the rights
mentioned in number 7.11.(a). Likewise, the Sellers and the
Companies are not aware of any situation or fact that could give
rise to a claim, court case or legal action that could affect or
serve as grounds for questioning the ownership or validity of said
rights or which could cause the cancellation of their registration.
(e) No individual or legal entity other than XXXX has a right, license
or authorization to acquire or use in the Republic of Peru the trade
marks, mottos and formulas used by XXXX and mentioned in Appendix
7.11.(a), except for what is set forth in Appendix 7.11.(e).
7.12. Environment.
(a) The Companies have all the space permits, authorizations and
licenses related to the compliance with the laws on Environment as
required to conduct their Bottling Activities, which have been
obtained by complying with all the requirements under the law about
Environment, that default with which could have a materially adverse
effect in the Companies.
(b) The Companies comply and half complied in all material respects with
the legislation related with the environmental protection and with
all the applicable permits, licenses or authorizations.
(c) Neither the Companies nor the Sellers have been notified or are
aware of any claims or pending files of claims awaiting to be
started against the Companies due to any infringement of the
legislation on Environment, nor do they have any plausible reasons
to fear a claim on such matter, including, but not limited to,
claims derived from the operations of the Companies or with any
facilities the Companies have used or operated.
7.13. Declared Contingencies.
(a) Appendix 7.13.(a) contains a list of the Declared Contingencies.
(b) Except for what is set forth in Appendix 7.13.(a), as of the Closing
Date:
a. There are no notices of claims by way of judicial, arbitral,
administrative or any other means, nor, are the Sellers or the
Companies aware of the existence of any situation or fact that
could give rise to a claim, trial or legal action that could
have a material effect over the assets, rights, contracts or
financial position of the Companies;
b. There are no notices of claims by way of judicial, arbitral,
administrative or any other means, nor, are the Sellers or the
Companies aware of the existence of any situation or fact that
could give rise to a claim, trial or legal action that could
affect the holding of the Securities;
Final Version
(Unofficial translation)
c. There are no notices of claims by way of judicial, arbitral,
administrative or any other means, nor, are the Sellers or the
Companies aware of the existence of any situation or fact that
could give rise to a claim, trial or legal action that could
affect the holding, use or operation by SOCAP, of the property
and assets which as per the Contract, shall pertain to same
after the Closing Date;
(iv) Neither the Companies nor any of its assets, property or rights
are subject to an order or mandate of any competent authority
which, having been duly notified to the Companies, affects,
damages, restricts or limits, directly or indirectly the holding
of the Securities.
7.14. Workers.
(a) There are no situations which the Sellers and the Companies are aware
of, that lead them to foresee that some of the managers or the
accountant of the Companies shall not continue to be available under
the same contractual terms and compensation after the Closing Date.
(b) Appendix 7.14.(b) lists the unionized organizations existing in the
Companies and the number of individuals comprising same.
(c) Appendix 7.14.(c) describes in sufficient terms the plan(s) of
retirement benefits, juvenile hiring and contracting of cooperatives,
and in general, the labor policy agreed or conducted by the Companies.
(d) Appendix 7.14.(d) enumerates the administrative procedures and the
legal proceedings for labor or social security matters currently being
in place against the Companies, regarding which a written
communication has been received, or which the Companies are aware that
could be filed against the Companies.
(e) The Companies substantially comply with all the applicable laws, terms
and conditions for contracting and health and labor safety agreements.
(f) The Companies comply with all individual and collective labor
agreements as in connection to employment, business practices, wages
and hours, severance payments, social benefits, and, except for what
is stated in Appendix 7.14.(d), there are no current (nor there are,
to the best of the Companies' knowledge, threats of any) action,
lawsuit or legal or any other proceedings or investigation against the
Companies in connection with any of its obligations of a labor nature.
If, for any reason, this declaration contravenes any other declaration
made in this Contract, this declaration shall prevail.
(g) No agreement, individual or collective labor covenant or order from a
competent authority which has been duly notified, limit or restricts
the Companies its capability to relocate any of their operations or
the severance of any of their workers under the applicable legal
provisions.
(h) The Companies have not experienced any strike, stoppage or any other
form of collective suspension of work during the last three years, nor
are the Companies aware of any situation or fact that cause same to
occur.
Final Version
(Unofficial translation)
(i) The execution and entering into of the Contract and the consummation
of the operations contemplated in same shall not have as a direct
consequence the acceleration or shall increment any obligation or debt
(regarding severance payments, accrued social benefits, indemnities,
etc.) related with any covenant or agreement with any employee or
former employee currently working or who has worked for the Companies,
nor shall they cause, nor shall it be understood that they cause by
the mere fact of their execution, entering into and/or consummation,
the severance of workers;
(j) Save for the provisions that may have been made in the financial
statements as of December 31, 2003 and inventories as of that same
date, including all the preceding ones, the Companies: (A) have not
incurred into any type of obligations due to a default of any labor
contract, indemnity for individual or collective severance (including
indemnity for arbitrary severance) or due to a default of any order
related with the rehiring of any worker or any other obligation
deriving from the severance or variation of any labor relationship;
(B) have not made or undertaken to make payments of any kind of
bonuses, including those related to the actual or potential severance
or suspension of workers or due to the variation of any labor
relationship other than those required by the governance of the law;
(C) have not incurred into any material obligation due to accidents or
injuries of their workers; (D) have not incurred into any obligation
implying the payment of contributions, taxes, participation in
profits, salary reserves, deposits of compensations for years in
service and any other form of remuneration of the personnel due to
their labor relationship with the Companies, except for what is stated
in Appendix 7.13.(a); and, (E) have made all the payments of tax
withholdings, contributions, deposits and social security payments as
required by the applicable laws, including fines and indemnities, if
any.
(k) Save for the operations conducted during the normal and ordinary
course of business, consistently with past practices, since September
30, 2003, the Companies have not hired any new personnel or executed
any new labor contracts, bonuses, participations in profits, pensions,
retirement funds, salary raises, target plans, prizes or incentives,
or any benefits other than those that have been in force.
(l) All taxes, contributions and imposts of any of the contractors of the
Companies that should be withheld or collected by same by virtue of a
legal order have been dully collected and/or withheld and have been
paid to the respective governmental entities including fines or
indemnities, if any.
(m) No provision stipulated or implicit in the Contract shall appoint a
third party as a beneficiary nor shall entitle any worker or former
worker (including any beneficiary, case-holder or dependant of same)
of the Companies to extend the term of their labor relationship,
modify same, be replaced or hired by any of the Companies. In addition
to the foregoing, no provision in the Contract shall award rights to
said persons in connection with any benefit awarded, either directly
or indirectly, under any plan, schedule, policies, covenants and
agreements for benefits or payments to the workers (including those of
a non-salary nature) or any plan or agreement established by the
Companies.
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Notwithstanding any provision stating otherwise included in the
Contract, no provision in same shall operate as a limitation to the
rights to rearrange, modify or conclude, after the Closing Date, each
and any specific individual or collective social benefit plan or
agreement of the Companies.
(n) The Companies have taken for their workers the mandatory insurance set
forth by the standing norms, which are currently in force.
(o) The Companies have withheld from the remuneration of their workers and
from the other payments made to third parties, the amounts
corresponding to all taxes that must be withheld by the Companies from
them, including interest and fines as the case may be, and have
deposited said withholdings in favor of the competent agency or entity
and is not late with said obligations as of the Closing Date.
7.15. Corporate Books.
The Companies' Corporate Books are kept as per what is contemplated in the
law and contain records of all the minutes of the bodies of the respective
company, and encompass all the significant decisions or agreements adopted
by said bodies.
7.16. Products and Guarantee.
(a) The products from the ELSA's Bottling Activities are substantially in
agreement with all the contractual commitments, guarantees,
authorizations and requirements under the law and the franchise
contracts entered into with The Coca-Cola Company, Inc.
(b) XXXX has no legal liability whatsoever (and there are no grounds for
any present or future action, litigation, proceedings, hearing,
investigation, charge, complaint, claim or requirement against same
that may give rise to such liability) which could result into a
materially adverse effect from paying indemnities to some client,
buyer, third party or replacing or repairing some product or service
manufactured, sold, leased, supplied or delivered by XXXX or any other
deficiencies or damages related with same. No product or service
manufactured, sold, leased, supplied or delivered by XXXX is subject
to any guarantee of a pecuniary or any other nature, or to the payment
of penalties or indemnities, save for those of a general nature
contemplated by the law.
(c) The terms and conditions of sale, marketing, lease or delivery for use
which the Companies agree for their products or services, including
the provisions applicable to monetary guarantees, other guarantees and
indemnities, are consistent with the Practices in the Industry.
7.17 Companies' Assets.
The Companies own all the tangible and intangible assets listed in the
Financial Statements and inventories, which have been acquired after the
closing of same, and hold a valid, full and perfect ownership title over
them; they are free from any charges and encumbrances, and are in their
possession, except for the assets
Final Version
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sold, assigned, leased or encumbered in any forma during the ordinary
course of business and in accordance with past practices consistently
applied by the Companies.
Save for what is stated in Appendix 7.17.(a):
(a) The accounting value of the Companies' assets are not overpriced as
per the Accounting Norms.
(b) The Financial Statements do not reflect any obsolete assets as the
Companies' assets, in accordance with the Accounting Norms and the
Practices in the Industry.
(c) The assets owned by the Companies and the assets that have been leased
out or taken under lease by same encompass all of the assets necessary
for the continuous conduct of their businesses in the form in which
said businesses have been conducted until the Closing Date, and are in
good condition of conservation and operation, save for the
deterioration and wearing out caused by the ordinary use of same.
There are no assets that shall be transferred or excluded from the
Companies on the Closing Date save for those to be transferred as a
consequence of their ordinary course of business. Likewise, there are
no assets or property whose use does not continue to be exercised by
the Companies under the respective lease contracts, licenses or others
on the Closing Date.
7.18. Real Estates and Goods and Chattels.
(a) XXXX has a valid, full and perfect and firm ownership title over the
real estates reflected in the Financial Statements, in the inventory
as of December 31, 2003, and those which have been acquired after
the closing of same; said real estates are free from any charges and
encumbrances, and are duly registered with the Public Registers to
the name of XXXX, save for what is stated in Appendix 7.18.(a).
There are no notified expropriation processes, or claims or trials
against XXXX where the right of ownership or the possession of its
real estates is questioned. Likewise, the Sellers and the Companies
state that they are not aware of any situation or fact that may give
rise to a claim, trial or legal action which could result in the
existence of said expropriation processes, claims or trials, save
for what is stated in Appendix 7.18(a).
(b) There are no real estates leased out or taken under lease by XXXX,
which imply the payment of an annual rent exceeding US $ 50,000. All
of the lease contracts entered into by XXXX are legitimate, valid
and enforceable as per their respective terms. Likewise, XXXX is not
in default of any of the terms agreed in said lease contracts.
Furthermore, neither the Sellers nor the Companies are aware of the
existence of any situation or fact that could give rise to a claim,
trial or legal action that could result in situations that could be
rendered as a default imputable to the counterparts.
Final Version
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The Companies have not received any notice stating the existence of
expropriation proceedings, claims or trials against the owners of
the real estates leased out to XXXX. Furthermore, neither the
Sellers nor the Companies are aware of the existence of any
situation or fact that could give rise to a claim, trial or legal
action whereby the right of ownership or the possession of said real
estates could be questioned.
(c) All of the real estates owned by or used by XXXX comply with all of
the zoning, purpose compatibility, architectural requirements and
construction provisions and with the other applicable laws and
regulations, having the respective administrative habilitations and
authorizations for the performance of the activities conducted in
same, the absence of which could result into a materially adverse
effect.
Likewise, there are no pending complaints, claims, administrative
proceedings or trials, or any penalties imposed by the competent
authorities regarding the default of the obligations and
requirements described in this Number.
(d) XXXX holds a valid, full and perfect ownership title over each and
every one of its goods and chattels whether or not they are
reflected in the Financial Statements as of December 31, 2003
including all the previous ones and the inventories, or whether they
have been acquired subsequently to the closing of same, free from
any charges and encumbrance, which are fit for purpose and in good
condition of conservation save for the wearing out caused by the
legitimate use.
7.19. Inventories.
(a) XXXX has a valid, full, perfect and negotiable ownership title over
its inventories, which are free from any charges and encumbrances.
XXXX does not have any obligation or responsibility whatsoever to
accept the returning of any items of the inventory or goods held by
its clients save for what has been agreed in the ordinary course of
its businesses, consistently with past practices.
(b) The inventories are in satisfactory condition, being fit for
purpose, being in such a condition that they may be used or disposed
of for the purpose of ELSA's Bottling Activities, consistently with
past practices.
(c) The inventories are sufficient and adequate to cover the needs and
requirements of ELSA's operations within the normal course of
business.
7.20. Material Contracts.
(a) Appendix 7.20.(a) individualizes all of the Companies' Material
Contracts, which are important for their development, conduct of
their activities and compliance with their purpose, for instance:
(i) Franchise Contracts and licenses in force, entered into with
The Coca-Cola Company or any of its subsidiaries.
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(ii) Contracts and agreements entered into between any director or
manager of any of the Companies, Embonor or any of Embonor's
related companies with the Companies; and
(iii) The contracts and agreements which, in the Sellers' opinion,
are material to the Companies or for the conduct of their
businesses or the inexistence of which could give rise to an
adverse effect for the Companies; and
(iv) Contracts entered into outside the regular line of business,
the purpose of which involves the compliance of services in an
amount exceeding US $ 10,000 per annum.
(v) Contracts entered into within the regular line of business the
purpose of which involves the compliance of services in an
amount exceeding US $ 100,000 per annum.
(b) Appendix 7.20.(a) lists in detail, in addition to what is stated in
the preceding number, the Material Contracts that may not be
unilaterally terminated without having to pay a penalty or another
payment or with a prior notice greater than thirty (30) days.
(c) The Material Contracts are valid and binding for the respective
Parties; they are in full force and effect and, upon the execution of
the operations contemplated in the Contract, their force shall remain
unaltered, and the franchise contracts stated in Appendix 7.20.(a)
respect of which the Buyer is required to have an express
authorization from The Coca Cola Company, the obtaining of which is
its sole responsibility.
(d) The Companies have not infringed nor they currently violate or breach
any Material Contract and, the Sellers and the Companies are not
aware that any counterpart to the Companies in a Material Contract
has infringed or is in a situation of contractual infringement or
default.
7.21. Powers of Attorney and Related Contracts.
(a) Appendix 7.21 (a) includes a list of all of the registered and
non-registered powers of attorney, awarded by the Companies and
currently in force as of the Closing Date jointly with a brief
detail of the nature, extent and purpose of each one of them.
(b) Appendix 7.21(b) includes a list of all of the contracts entered
into between the Companies and Embonor or the Sellers, currently in
force as of the Closing Date and a brief detail of their nature,
powers and purpose of each one of them.
(c) Except for what is stated in numbers 2 and 3 if Appendix 7.21.b, all
the contracts, whether written or oral, direct or indirect, entered
into and executed by the Companies with or in favor of Embonor, the
Sellers or their respective affiliates, shall become extinguished,
terminated or revoked on the Closing Date or prior to same, and all
those contracts that have not been terminated by the Closing Date,
shall be rendered as terminated as at said date.
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(Unofficial translation)
7.22. Banking Operations.
Appendix 7.22 includes a complete and true list of all the banks and their
respective domiciles, stating the respective branch office or agency where
the Companies keep an account or perform other banking operations,
including escrow accounts and safety deposit boxes, stating the nature and
the number of the respective account or box and the names of each and
every one of the individuals authorized to perform operations with said
accounts or to access the aforementioned safety deposit boxes.
7.23. Accounts and Securities Titles Receivable by XXXX.
(a) XXXX:
(i) Is the owner and beneficiary of all of its accounts
receivable, whether or not they are represented by invoices or
securities titles, which are reflected in the Financial
Statements, and of those accounts receivable generated as of
the closing of same;
(ii) No accounts receivable debtor is late in the payment of same
by over one hundred and twenty (120) days, and no provision
pursuant to the Accounting Norms has been set in place, save
for those stated in Appendix 7.23(a)(ii); and
(iii) To the Sellers' and the Companies' best knowledge, there are
no reasons causing any security title not to be collected by
XXXX under its terms.
(b) All the accounts and securities titles receivable appearing in the
Financial Statements correspond to operations validly and legally
conducted during the ordinary course of business and are or shall
become on demand from the debtors under the terms agreed with them.
7.24. Insurance.
(a) Appendix 7.24(a) contains a list of the insurance policies in force
which have been taken by XXXX. The insurance policies in force which
have been taken by XXXX and their respective endorsements, have a
coverage which, reasonably and under its terms, reasonably and
sufficiently cover the risks to which XXXX is exposed in connection
to its businesses.
As of the Closing Date, all the policies taken by XXXX and stated in
Appendix 7.24(a) are currently in force and their premiums are
up-to-date as per what has been stipulated in each case. To the best
knowledge of the Sellers and the Companies, no insurance company has
refused to provide XXXX with any insurance for having considered the
preexistence of a risk to be insured or the reasonable probability
of occurrence, and the respective insurance company has not
cancelled or terminated any insurance policy during the last five
(5) years due to malpractice, infringements and/or defaults by XXXX.
Final Version
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As of the Closing Date, the coverage of the aforementioned policies
shall remain in force until the dates that are respectively stated
in the policies taken by XXXX.
(b) There is no rejected coverage affecting the insurance policies taken
by XXXX nor has any notice been received in connection to the
cancellation or termination of the insurance policies, or a notice
to the effect that they may not be made effective under their terms,
or any notices of claims affecting the contracted coverage and/or
which should be reported to the insurers and/or with a pending
resolution and/or payment by the insurers.
7.25. Information Systems of XXXX.
Appendix 7.25 contains a list of the important information systems,
legitimately used and operated by XXXX or leased and operated by third
parties. Said information systems used by XXXX are adequate and suffice to
support the operation of the businesses of XXXX in the form in which they
are currently conducted, and are in good operating condition. As of the
Closing Date, XXXX holds a number of software licenses equivalent to the
number installations of said software. Appendix 7.25 contains the terms
and conditions for the utilization of the "SOIN" system by XXXX until July
31, 2004.
7.26. Tax Obligations.
(a) The Companies have submitted within the legal periods of time and in
the required form, all the affidavits and the other forms which they
have the obligation to submit regarding any taxes, imposts, duties
and contributions applicable to same and/or which assess their
operations without any limitation whatsoever. The Companies have
filed reported their income, sales and services and made all
payments on account of, advancers and withholdings which they have
the obligation to make under the law, and have timely paid and in
due form all taxes, interest and fines as they have the obligation
to do so, as a consequence of fact originating prior to the Closing
Date. For the cases where the Companies have adhered to the benefits
of fractioning, tax amnesties or payment plans, they have timely
complied with the payment of their obligations and are compliant, as
of the Closing Date, with all of their obligations under same.
(b) The provisions made and the amounts contemplated to cover the tax
obligations in the Financial Statements, match those required in the
Accounting Norms as of the respective dates consistently applied by
the Companies.
(c) There are no current agreements or consents or applications
whatsoever in place for an extension or release of the term to (A)
file any tax report in connection with the Companies; or, (B) for
the determination or collection of any taxes related with the
Companies.
(d) (i) There are currently no pending requirements, inspections or
administrative procedure or judicial proceedings of a tax or
tax-penal nature, whether or not contentious, which the
Companies and/or their managers and/or representatives have
been notified about, and the
Final Version
(Unofficial translation)
Companies and the Sellers are not aware of any situation or
fact that could give rise to the commencement of any such
proceedings, save for what is stated in Appendix 7.10(n),
7.13(a), 7.14(d) and 7.26(d)(iv);
(ii) There are no tax benefits (exonerations, acquittals, etc.)
related to the taxes assessing the Companies' assets;
(iii) There are no agreements whereby the Companies and the Sellers
have assumed taxes assessing third parties other than those
stated in Appendix 7.14 (d); and
(iv) During the 5 years immediately before the Closing Date, the
Companies have not been subject to any requirements,
inspections or impositions (orders of payment, fine or
determination resolutions or liquidations from collection or
other similar securities) by the tax authorities, resulting in
a higher payment of taxes by the Companies or in a lower
balance in favor of or state credit to same, other than those
stated in Appendix 7.26.(d)(iv).
7.27. Indirect Shares as the Sole Assets Of SOCAP.
The Sellers declare and guarantee the correctness, accuracy, truthfulness
and force (prior to, during and after the Closing Date, as appropriate) of
the following in connection with SOCAP:
(a) The Indirect Shares are the only assets of SOCAP and the only
property or right owned by SOCAP or in respect of which SOCAP
exercises any rights.
(b) SOCAP does not keep any debts, liabilities, contingencies, charges,
encumbrances, or obligations, duties or civil, labor, tax
contingencies or contingencies of any other nature, save for:
(i) the account payable to XXXX in the amount of US$ 63,000, and
(ii) the rights which correspond to the partners of SOCAP for the
participations representing the corporate capital of SOCAP.
(c) SOCAP has not entered into any contracts, agreements or commitments
of any kind, nor has it hired any workers or employees, nor does it
maintain any labor, services or similar relationships.
(d) There are no claims, complaints, demands, litigations,
controversies, conflicts, judicial administrative proceedings,
judicial, arbitral or of any other nature, currently in force or
known by the imminent the Sellers in respect of SOCAP or its
participations, save for those stated in Appendix 7.27.(d).
7.28. Competition between the Companies
The Companies have not entered into any commitments or agreements with
competitors in the industry which, directly or indirectly may restrain or
limit the competitiveness, having to perform its Bottling Activities under
the respective franchise contracts and the modifications of their
commercial terms and conditions determined with The Coca-Cola Company.
Final Version
(Unofficial translation)
7.29 Due Diligence
The Sellers have granted JRL, its lawyers, advisors, accountants and any
authorized representative, free access to all the tax, accounting,
financial, operating and legal respects of the Companies as available at
the habilitated offices of XXXX.
7.30 Compliance with the Business Agreement.
The Sellers, in representation of Embonor, have been strictly compliant in
time and forma with the obligations derived for Embonor from the Business
Agreement.
7.31 Other Contracts
(a) The Companies have not entered into any verbal and informal
agreements whose consequences may give rise to materially adverse
effects to the Companies.
(b) There is no contract, agreement or another understanding granting
any person a preemptive right to acquire on a free or paid basis any
of the property or assets of the Companies, salvo for the case of
operations materialized as part of the regular business activity of
the Companies and provided that same is consistent with the past
practices, save for what is stated in Appendix 7.11.(e).
7.32 Ownership, inoperativeness of CINORSA and irrelevance over the equity of
XXXX.
The Sellers declare and guarantee the correctness, accuracy, truthfulness
and force as of the Closing Date, as appropriate, of the following in
connection with CINORSA:
(a) That they own 100% of the shares in CINORSA, which are free from
charges and encumbrances, and the ownership of which is not a matter
of any trial or controversy. Likewise, the Sellers are not aware of
any situation or fact that may give rise to a claim, trial or legal
action that could affect said situation.
(b) That CINORSA is a company that is not operating and, therefore, it
does not perform any business or any other kind of activities.
(c) That XXXX has no liabilities in favor of CINORSA, and that it has
not undertaken any debts, liabilities or contingencies in the name
of said company, nor has it lodged any guarantees or collateral or
support guaranteeing any obligation of the aforementioned company.
7.33 Nature of the Declarations.
(a) Any declaration or guaranty of the Sellers in the Contract or in any
certificate or another writ delivered by or in representation of
Embonor or of the Companies, under the provisions of the Contract,
have been executed bona fide and no false declaration has been made
nor have any omissions been made about facts which, in the light of
the circumstances in which they were made, turn out to be deceiving
to the Buyer, or leading same to errors. Consequently, the
declarations and guarantees in this Clause Seventh must
Final Version
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contain the exact, complete, correct and true information required or
intended to be set forth in the Contract. The declarations or
guarantees contained in the Contract, certificates or other writs,
shall not be affected nor shall be construed as waived for the mere
fact that any member of the Buyer, its employees or representatives
may have Known or should have known that any of said declarations,
guarantees, certified documents or other writs is or could be
inaccurate, incomplete or incorrect.
(b) The declarations and guarantees made by the Sellers to the Buyer in
this clause Seventh are the only statements in connection with the
matters referred to in same and in respect of any other matter,
business or issue related with the Companies, their businesses,
and/or financial or equity position. Consequently, the Sellers shall
not be responsible in any case whatsoever for the incorrectness,
inaccuracy, falsehood or lack of force of any background information
or document held by the Buyer and that is not contained in the
declarations and warranties of this clause Seventh.
CLAUSE EIGHTH: DECLARATIONS and GUARANTEES of the BUYER
The Buyer declares and guarantees the correctness, truthfulness and force (prior
to, during and after the Closing Date, as appropriate) of the following:
8.1 Existence and Situation of the Buyer.
The Buyer is a company duly organized, validly existing under the laws of
the jurisdiction of its incorporation and is duly qualified to operate in
Peru.
8.2 Authority of the Buyer.
The Buyer has the power and authority required to enter into the Contract
and each one of the acts set forth in same, to comply with its obligations
and execute the operations contemplated in same. Said execution and
compliance have been duly authorized by the Buyer, by way of an agreement
of the respective corporate body the minutes of which is attached herewith
as Appendix 8.2(a), and the representatives of the Buyer hold sufficient
powers to enter into the Contract and the acts and agreements contemplated
in same, as appropriate. A copy of the powers of attorney of the
representatives of the Buyer are attached herewith as Appendix 8.2.(b).
8.3 No Conflict
Neither the execution of the contract, nor the execution of the obligations
contained in the instruments executed in accordance with same, determine
that the Buyer or its related entities incur into a default of any
obligation rising from:
(a) Any agreement, contract, covenant or another instrument to which
either of them is a party, or which determines the involvement of
their assets;
(b) Any law, ordinance, norm or regulation applicable by any governmental
authority;
Final Version
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(c) Any applicable order, resolution, sentence or decree of any court,
arbitrator or governmental authority, the default of which could have
an adverse effect over:
(i) Its capacity to enter into, execute or issue or comply with its
obligations pursuant to the terms of Contract or to the acts and
agreements contemplated in same, or
(ii) Its businesses, property, or financial position, in such terms
that said default could have an adverse effect over the
businesses, property or financial position of the Buyer,
considered on an individual or joint basis.
8.4 Governmental Approval
No declaration, registration or notification before any governmental
authority is required to be made, nor to obtain the consent, approval,
authorization or license, order or permit from any governmental authority
whatsoever in connection with the execution and the compliance with the
Contract, nor for the execution of the operations contemplated in same,
except for the notification of same to SUNAT and CONASEV, when appropriate.
8.5 Due Diligence
The Buyer and its related entities, their lawyers, advisors, accountants
and any other authorized representative, have had free access to all the
tax, accounting, financial, operating and legal respects of the Companies
that were available at the habilitated offices of XXXX.
8.6 Compliance with the Business Agreement
The Buyer, in representation of JRL, has given strict compliance in time
and form to the obligations deriving for JRL from the Business Agreement.
8.7 Nature of the Declarations.
(a) Any declaration or guaranty of the Buyer in the Contract or in any
certificate or another writ delivered by or in representation of the
Buyer, under the provisions of the Contract, have been executed bona
fide and no false declaration has been made nor have any omissions
been made about facts which, in the light of the circumstances in
which they were made, turn out to be deceiving to the Sellers, or
leading same to errors. Consequently, the declarations and guarantees
in this Clause Eighth must contain the exact, complete, correct and
true information required or intended to be set forth in the Contract.
The declarations or guarantees contained in the Contract, certificates
or other writs, shall not be affected nor shall be construed as waived
for the mere fact that any member of the Sellers, their employees or
representatives may have Known or should have known that any of said
declarations, guarantees, certified documents or other writs is or
could be inaccurate, incomplete or incorrect.
Final Version
(Unofficial translation)
(b) The declarations and guarantees made by the Buyer to the Sellers in
this clause Eighth are the only statements in connection with the
matters referred to in same and in respect of any other matter,
business or issue related with its powers, businesses and/or financial
or equity position. Consequently, the Buyer shall not be responsible
in any case whatsoever for the incorrectness, inaccuracy, falsehood or
lack of force of any background information or document held by the
Seller and that is not contained in the declarations and warranties of
this clause Eighth.
CLAUSE NINTH: INDEMNITIES
9.1. Indemnities.
(a) The Sellers shall indemnify the Buyer, under the terms contemplated in
this Clause Ninth and in Clause Tenth, for the following:
(i) For any Damages rising as a consequence of a Recognized
Infringement.
(ii) For any Damages rising as consequence of a Contingency Recognized
as of the Month of April.
(b) The Sellers shall indemnify the Buyer for any Damages deriving from
any default of the following obligations undertaken by the Sellers by
virtue of this Contract:
(i) The obligation to deliver the Securities.
(ii) The payment obligations deriving from the Adjustment of Net Cash
and Working Capital, as per what is set forth in Clause 6.1.
(iii) The obligation no to compete set forth in Clause Eleventh.
(iv) The obligation set forth in Clause Thirteenth.
(v) The obligation of confidentiality set forth in Clause
Fourteenth.
(vi) Any other obligation stipulated in this Contract, expressly
excluding those stated in Clause Seventh.
In the assumption contemplated in this letter (b), the appropriateness
of the indemnity and the amount of same, in the absence of an
agreement between the Parties, shall be submitted to the Arbitrating
Court, with what is provided in the remaining provisions of this
clause Ninth and clause Tenth below, including the XXXX Pro rata, the
SOCAP Pro rata, the Deductible or the Maximum Limit not being
applicable.
It is expressly left on record that in case of a default of the
aforementioned obligations which, additionally is an Infringement or
could be an Infringement, the remaining provisions of this clause
Ninth and Clause Tenth below shall apply.
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(Unofficial translation)
(c) The Buyer shall indemnify the Sellers for any damages which the
Sellers may be affected by as a consequence of a default of the
obligations of the Buyer under this Contract. In the assumption
contemplated in letter (c), the source of the indemnity and the amount
of same, in the absence of an agreement between the Parties, shall be
submitted to the Arbitrating Court.
9.2. Deductible. The Damages originated as a consequence of Recognized
Infringements and/or Contingencies Recognized as of the Month of April in
respect of XXXX shall give rise to Indemnities provided that they exceed
the Deductible, which amounts to US$ 4 million.
Once the amount of the Damages reaches or exceeds the above-stated amount,
the Indemnities shall become effective only in excess of said Deductible.
It is hereby and expressly left on record that the Indemnities
corresponding to SOCAP shall not be subject to the Deductible and,
therefore, they must be paid by the Sellers without any deduction or
detraction whatsoever, notwithstanding the application of the SOCAP Pro
rata and of the Maximum Limit contemplated in numbers 9.3 and 9.4. below.
9.3 Pro Rata.
(a) XXXX Pro rata. For the excess of the Deductible and subject to the
Maximum Limit stated in number 9.4 below, the Sellers' obligation to
indemnify shall be enforceable only in the proportion of 60.45% over
the actual amount of the Damages from Recognized Infringements in
connection with XXXX (hereinafter the "XXXX Pro rata").
(b) SOCAP Pro rata. Subject to the Maximum Limit stated in number 9.4
below, but not applying the Deductible, the Sellers' obligation to
indemnify shall be enforceable only in the proportion of 81.73% over
the actual amount of the Damages from Recognized Infringements in
connection with SOCAP (hereinafter the "SOCAP Pro rata").
9.4. Maximum Limit. The Damages susceptible of being indemnified by the Sellers
become subject to a maximum limit between US$ 30 million and US$ 60 million
(hereinafter the "Maximum Limit"), and which shall be determined on the
basis of the Contingencies Recognized as of the Month of April, pursuant to
the procedure se forth in number 10.2, just as it is stated below:
(a) If the Contingencies Recognized as of the Month of April amount to
less than US$ 30 million, the Maximum Limit shall be US$ 30 million.
(b) If the Contingencies Recognized as of the Month of April are equal to
or higher than US$ 30 million but less than US$ 60 million, the
Maximum Limit shall be the amount of the Contingencies Recognized as
of the Month of April.
(c) If the Contingencies Recognized as of the Month of April are equal to
or higher than US$ 60 million, the Maximum Limit shall be US$ 60
million.
Final Version
(Unofficial translation)
For the determination of the Contingencies Recognized as of the Month of
April, it shall not be necessary for the Damage to have occurred o to have
been verified as of that date. In this sense, the Arbitrating Court, if
appropriate, must restrict its efforts to verify the existence of the
respective contingency, for the sole purpose of determining the Maximum
Limit. The foregoing is notwithstanding the Buyer's right to file a new
Claim demanding the payment of an Indemnity, in case that Damage has been
verified or in the future.
9.5 Examples.
The applicability of the foregoing is illustrated in the following
examples:
o Case A: if the Contingencies Recognized as of the Month of April
amount to US$ 15 million, the Maximum Limit shall be US$ 30 million.
o Case B: if the Contingencies Recognized as of the Month of April
amount to US$ 45 million, the Maximum Limit shall be US$ 45 million.
o Case C: if the Contingencies Recognized as of the Month of April
amount to US$ 70 million, the Maximum Limit shall be US$ 60 million.
Likewise, only as an example, the applicability of the Deductible, of the
XXXX Pro rata and of the Maximum Limit, determines, in connection with
cases A, B and C above, the following maximum indemnity amounts to which
the Sellers would be exposed:
o Case A: US$ 15,717,000.
o Case B: US$ 24,784,500.
o Case C: US$ 33,852,000.
9.6. Unlimited Indemnity. Notwithstanding what is set forth in numbers above,
the Indemnities from Recognized Infringements are not subject to any type
of Deductible or Maximum Limit and, therefore, shall amount to the total
Damages, adjusted as per the XXXX Pro rata or the SOCAP Pro rata, as
appropriate, in any of the following cases:
(a) If it is evidenced before the Arbitrating Court, that the Recognized
Infringement or the Damage derive from dolus, fraud or inexcusable
guilt of the Sellers or of Embonor (it being understood that the
situation occurs whenever there has been dolus, fraud or inexcusable
guilt on the part of the Directors and Managers of Embonor, Holdings
and Overseas and/or on the part of the current Chief Executive Officer
of XXXX, Xx. Xxxxxxx Xxxx, or on the part of the Directors of XXXX
appointed by the Sellers, that is, Messrs. Xxxxxx Xxxxxx, Xxxxxx
Xxxxxx, Xxxxxx Xxxxx, Xxxxxxx Xxxxxxxxxx and Xxxx Xxxxx).
(b) The Infringement or the Damage affect the ownership, possession or
exercise of the rights entitled by the Securities (or those of the
Indirect Shares), notwithstanding any other legal action that may be
available. In this case neither the XXXX Pro rata nor the SOCAP Pro
rata shall be applicable, save that the Infringement or Damage refers
to the Indirect Shares, in which case the SOCAP Pro rata shall be
applicable.
Final Version
(Unofficial translation)
In no case shall the amount of the indemnities referred to in number
9.1 exceed the Final Price of the Securities.
9.7. General Limitations to the Indemnities.
(a) The Sellers shall not be responsible for the incremented Damages
occurring due to the enactment of any legal or regulatory norm, which
is not in force as of the Closing Date.
(b) If the matter giving rise to a Claim is likewise a fact insured under
an insurance policy in force with a third party, the affected Company
must file the respective claim with the insured, and any indemnity
obtained from said insurance company from that item shall reduce the
Damage subject to indemnity, in an amount equal to the amount actually
recovered by the respective Company.
(c) Whenever either the Buyer or the Companies are entitled to demand
indemnity from a third party for Damages, the Buyer must choose
between (i) assigning to the Sellers the right to demand such
indemnity, or (ii) executing all the acts to demand the indemnity. Any
amount actually recovered by the Buyer from the third party, after all
the costs, charges and reasonable expenses evidenced and incurred into
by the Buyer and/or the respective Company to obtain said recovery
have been deducted, the amount of the Damages shall be deducted.
(d) Neither the Buyer nor the persons who derive their title from the
Buyer may be indemnified, on a joint basis, more than once for the
Damages caused by one same Recognized Infringement.
(e) In any case, the obligation of the Sellers to indemnify the Buyer,
pursuant to what is provided in clauses Ninth and Tenth of this
Contract, shall become extinguished upon the elapse of 6 years as of
the Closing Date, save for the case of Infringements related to claims
from third parties, the judicial, arbitral or administrative
proceedings of which are still pending.
9.8 Payment of the Indemnity. The Indemnity must be paid to the Buyer whenever
a Recognized Infringement or a Contingency Recognized as of the Month of
April has caused a Damage, and once the Buyer has complied with the
obligation and with the formalities set forth in Clause Tenth below.
CLAUSE TENTH: PROCEDURE TO DETERMINE THE INDEMNITIES
10.1. General. In case any situation giving rise or which may give rise to
Indemnities occurs, the Buyer shall have access to be indemnified by the
Sellers, in observance of what is set forth in Clause Ninth and pursuant
to the procedure set forth in this clause.
10.2. Claims related to Contingencies Recognized as of the Month of April. In
the event that, during the period of time between the Closing Date and
April 29, 2004,
Final Version
(Unofficial translation)
the Buyer has detected a possible Infringement or if a Declared
Contingency has occurred, the Buyer must submit to the Sellers, no later
than on April 30, 2004, the Notice Letter, separately identifying each
possible Infringement or materialization of Declared Contingency, and
their respective quantification. The respective Claim for the facts
described in the Notice Letter must be formally submitted to the Sellers
no later than on May 29, 2004, in compliance with the formalities
contemplated in number 10.4.
10.3. Other Claims. The Claims other than those referred to in number 10.2
above, must be filed within the periods of time contemplated in number
10.4 below, and the formalities contemplated in number 10.5 below must be
complied with.
10.4. Time for Claims. The Indemnities shall apply for the case of Damages
caused by Recognized Infringements or Contingencies Recognized as of the
Month of April provided that the respective Claim is filed with the
Sellers within one year as of the execution of this Contract, that is, no
later than on January 29, 2005, except for the case of Claims in
connection with:
(i) Matters of a labor, tax or social security nature (pensions system
and ESSALUD), including remuneration and social benefits,
liquidations, penalties, fines, interest or surcharges regarding
said matters, which may be filed within the legally applicable
periods of time prior to prescription;
(ii) The ownership, possession or exercise of the rights awarded by the
Securities, which may be filed within the appropriate period of time
prior to prescription; and
(iii) Infringements and/or Declared Contingencies related with the
existence of dolus, fraud or inexcusable guilt, as per what is
described in letter (a) of number 9.6., which may be filed within
the appropriate period of time prior to prescription.
(iv) Infringements occurred as a consequence of environmental damages,
which may be filed within two years' time as of the Closing Date,
save that there is a legal norm extending the period of time prior
to the prescription of the applicable extra-contractual
responsibility.
10.5. Formalities Applicable to the Claims. For the purposes of filing a Claim
before the Sellers, the Buyer, separately identifying each possible
Infringement or materialization of a Declared Contingency and its
respective quantification, must comply with the following requirements:
(a) Separately Identify (i) each possible Infringement or
materialization of a Declared Contingency, specifying the number of
the Contract that has been rendered as infringed, (ii) the facts
comprising same and the reasons why they would be rendered as in
Infringement or materialization of Declared Contingency, and (iii)
the supported quantification of the Damage that the infringement or
the materialization of the Declared Contingency would cause upon the
Buyer, SOCAP or XXXX.
(b) Attach each and every one of the following documents:
Final Version
(Unofficial translation)
(i) A report of the Independent Auditor confirming the feasibility
of the Infringement or of the materialization of a Declared
Contingency. Said report may be based on the opinion of
experts. In case that the Independent Auditor is not, as of
the time the report is requested, the external auditor of
XXXX, or se if he withheld form issuing the respective report
due to a conflict of interests or another plausible reason,
the report must be issued by another firm if auditors
appointed by the Board of XXXX, the appointment of which must
be agreed with the assenting vote of at least one director
appointed by The Coca-Cola Company. Appendix 6.1.2. contains
the letter of the Independent Auditor stating his approval of
this agreement, as far as he is concerned.
(ii) A favorable legal opinion regarding the Claim, subscribed by a
partner of a firm of lawyers of renowned experience in Peru.
(iii) A report subscribed by the Finance Managing Department of JRL
regarding of the feasibility of the Infringement and the
quantification of the Claim.
(iv) A copy of all the documentation held by the Buyer related with
the Claim. The foregoing does not include complementary
reports or reports other than those stated in clauses
10.5.(b).(i), 10.5.(b).(ii), 10.5.(b).(iii), or reports or
documents of evaluation or internal analysis made by the
Buyer.
(v) Additionally, and at the Buyer's discretion, the opinion of a
specialized third party of a renowned prestige in the matter
of the Claim, supporting the existence and amount of same, as
the case may be.
(c) Attach a copy of the pertinent portion of the minutes of the Board
Meeting of JRL where the submittal of the Claim or Claims is
approved, or a Notary's copy of the respective minutes. The
respective agreement of the Board of JRL must have been adopted with
the favorable vote of all of the Directors with a right to vote,
with the sole exception of the Directors appointed by The Coca-Cola
Company or its affiliates.
10.6. In order for a Claim to be filed, the Infringement or Declared Contingency
need not have materialized or become enforceable. If the Claim is related
to the claim of a third party or to a potential claim of a third party, as
per what is contemplated in number 10.8 below, it is understood that the
Damage has occurred once (i) the claim is declared founded by the
respective judicial, arbitral or administrative body and said award (a)
becomes enforceable, (b) is not susceptible of being impugned, (c) becomes
consented to, or (d) is agreed, resolved or negotiated as per what is
provided in number 10.8 below. In case that the Claim is not related to a
third-party claim or potential claim of a third party, the Damage shall be
understood as occurred whenever all the requirements contained in the
definition of Damage occur.
10.7. Impugnation of Claims. In the event that a Claim is filed by the Buyer,
the following rules shall be applied:
Final Version
(Unofficial translation)
(a) if within forty five (45) days after the receipt of the Claim, the
Sellers have not impugned same, the Infringement on which it is
based shall be rendered as a Recognized Infringement.
For the purpose of the impugnation of Claims, the Sellers must
enclose a copy of (i) the report or reports prepared by a third
party not subordinate to the Sellers or Embonor, of renowned
prestige, supporting the rejection of the Claim; and (ii) a notarial
certification of the board minutes of Embonor whereby it is recorded
that the Claim impugnation agreement was adopted by all of the
Directors with a right to vote, with the sole exception of the
Directors appointed by The Coca-Cola Company or its affiliates.
(b) In the event of any discrepancies between the Parties regarding the
Claim and same has been communicated by the Sellers to the Buyer
within the period of time stated in letter (a), the Parties shall
have a period of twenty (20) days to resolve same directly between
themselves.
(c) In the event that no agreement is reached within the period of time
stated in letter (b), the discrepancy may be submitted by either of
the Parties to the Arbitrating Court. In case that it is the Buyer
who decides to submit the discrepancy to the arbitral instance, same
must place as a requirement for admittance of the demand, in
addition to the appropriate requirements, a new report prepared by
an independent third party of renowned prestige, other than the
Independent Auditor, who is a specialist in the matter of the Claim,
appointed by the Buyer from among a list of three candidates
proposed by The Coca-Cola Company or an affiliate appointed by same.
10.8. Third party Claims. In case that the circumstances that may give rise to
Indemnity are related with the claim filed by third party, the following
rules shall be applied:
(a) Immediately after the occurrence of a situation or threat of
occurrence of a situation that gives rise or may give rise to an
Indemnity, and as soon as possible, the Buyer shall file a Claim
with the Sellers stating the situations, actions and other events
that may give rise to an Indemnity.
(b) Regarding those facts or circumstances that are brought to the
knowledge of a judicial, administrative or supervising authority,
SOCAP, XXXX, the Buyer or the defendant related entity, as
appropriate, shall be the sole responsible for its own defense.
(c) As soon as the Buyer becomes aware of the filing of a legal or
administrative action in connection with an alleged Infringement,
the Buyer must provide a prompt notice to the Sellers about the
existence of the aforementioned action and deliver a copy of all the
existing documentation in connection with said action, even though
the filing of the respective Claim is still pending.
(d) If the facts or circumstances that are brought to the knowledge of a
judicial, administrative or supervising authority are related with
SOCAP, the Sellers may assume the defense of the legal action,
either through the appointment of the professional or professionals
in charge of the defense of the accused Company; assume as an
assisting third party, or assuming another processal quality
permitted by the applicable laws. To this effect, the Sellers
Final Version
(Unofficial translation)
must inform the Buyer their intention to assume or participate in
the defense, within 30 days as of receiving the notice from the
Buyer, informing same about the legal action.
In this case, the Buyer must conduct all the acts, deliver the
information and grant the Sellers and their attorneys access to the
personnel, facilities, assets, documents and records as appropriate
and which the Sellers reasonably request in writing in order to
avoid, dispute, resist, mitigate, negotiate, agree, defend or appeal
to the legal action founded on an eventual Infringement.
If the Sellers fail to exercise this right to assume the defense
within the aforementioned period of time, the Buyer or the Company
being subject to the claim or the aforementioned legal action may
freely decide the form how to defend said legal action,
notwithstanding what is set forth in letter (e) below.
(e) Notwithstanding the foregoing, The Party in charge of the defense,
through those in charge of same, must:
o listen to the opinion about the defense strategy eventually
stated by the other Party. In case of discrepancy, the Party in
charge of the defense must fundament before the other Party the
reasons why the proposed defense could be detrimental to same.
o notify the other Party, as soon as possible, about the course of
the defense and the intended acts, as well as any relevant fact
or circumstance occurring in the respective process.
o listen to the other Party's opinion about the defense and the
intended actions and admit, to a reasonable extent, its
recommendations to avoid, dispute, resist, defend or appeal the
legal action filed.
(f) Prior to agreeing or negotiate any matter that could give rise to an
Indemnity, the Buyer shall provide the Sellers with a notice of its
intention to perform such action, and must abstain from doing so as
long as the Sellers and not authorized same in writing. Said
authorization may not be unreasonably be rejected by the Sellers. If
Embonor has not objected to the Buyer's request to negotiate or
agree the claim within ten (10) consecutive days as of being served
with the notice, said requirement shall be rendered as approved.
10.9. Ongoing Processes. With regard to those judicial or administrative
processes which as of the Closing Date are still pending, the Companies
shall continue to be in charge of the defense of same under the terms as
they have been doing so as at that date, having to keep the Sellers
updated about any relevant fact or circumstance occurring in the
respective processes.
10.10. Whenever the Indemnity is awarded to be paid in New Soles, the figure
shall be translated into Dollars, at the Exchange Rate of the date of
payment of the Indemnity, save that the Parties or the Arbitrating Court
determine otherwise.
Final Version
(Unofficial translation)
CLAUSE ELEVENTH: OBLIGATION NOT TO COMPETE
11.1. During a period of 4 years as of the Closing Date, the Sellers, Embonor
and its affiliates shall abstain from:
(a) Being the owners or holders, manage, advise, direct, finance
(excluding operations in the capital market), operate, associate,
control, or participate in the ownership, administration,
management, guidance, operation or control of any business conducted
in Peru involving Bottling Activities; either directly or
indirectly, individually or in association with third parties, by
themselves or on behalf of third parties, either as the sole owners,
partners, shareholders, members, advisors, or representatives of an
association, corporation, trust or another organization or
commercial entity;
(b) Causing, inducing or assisting any individual or legal entity to
cause or induce in any way, any employee of the Companies to resign
or be separated from his job or to breach an employment contract
with the Companies.
11.2. The geographical reach of the obligations set forth in this clause
encompasses the Republic of Peru.
11.3. The Parties expressly recognize and agree that:
(a) The restrictions placed by this Clause are reasonable as to time and
geographical limitation; and,
(b) If during the period in force of the obligations contemplated in
this Clause any governmental authority holds that the duration,
extent or restrictions of what is stated in this Clause is not
adequate, depending on the prevailing circumstances as of that date,
the Parties agree that the duration, extent or restrictions shall be
replaced by the duration, extent or restrictions as may be admitted
as adequate at that time.
11.4. JRL recognizes that, regardless the fact that the Sellers, Embonor and its
affiliates apply their best efforts seeking to comply with the
stipulations in this clause, the areas of Tacna and Arica comprise venues
within where, due to their special characteristics, certain situations of
apparent default of this Clause (for instance, contraband) may be
generated. In that sense, the marketing in Tacna and influence areas of
products marketed and/or manufactured by Embonor and/or affiliates shall
not themselves be a default of this Contract, with JRL having, in any
case, to bear in mind the above-described situation prior to accuse the
Sellers, Embonor and/or its affiliates of a default.
CLAUSE TWELFTH: WAIVER OF RESOLUTORY ACTION
The Parties expressly waive the right to declare or request the resolution of
this Contract, notwithstanding the right they have to demand its compulsory
enforcement.
Final Version
(Unofficial translation)
CLAUSE THIRTEENTH: OTHER OBLIGATIONS
12.1. Cooperation.
Each of the Parties shall undertake to apply their best efforts to obtain
all the authorizations, consents, orders and approvals as necessary to
execute and comply with its obligations deriving from the Contract and to
obtain all the authorizations, approvals, consents, exceptions or orders
required from CONASEV or another competent authority for launching the OPA
without the formality of prior appraisal contemplated in letter a) of
article 31 of the OPA Regulations, and shall cooperate with the other
Party in promptly obtaining said authorizations, consents, orders and
approvals and in sending such notices and performing said submittals.
Likewise, the Parties shall undertake not to take measures which delay,
render difficult or prevent in an unreasonable fashion the obtaining of
said authorizations, consents, orders or approvals.
12.2. Other Acts.
Subject to the terms and conditions set forth in the Contract, each of the
Parties shall undertake to apply its best efforts to cause all the
additional actions as may be necessary, convenient, appropriate, or
advisable to consummate and render the Contract effective to be carried
out.
12.3. Joint and Several Liability.
Embonor jointly and severally undertakes responsibility with the Sellers
for the total, timely and entire compliance by the latter regarding all of
the duties, obligations, services, stipulations and pacts pertaining to
the Sellers, as agreed in the Contract. Consequently, Embonor assumes
joint and several liability with the Sellers as a consequence of each and
any default on their part of their aforementioned duties, obligations,
services, stipulations and pacts, in identical terms and with the same
extent as those contained in this Contract with regard to the Sellers.
Specifically, Embonor assumes joint and several liability for the
correctness, accuracy, truthfulness and force of the declarations and
warranties set forth in Clause Seventh of Contract on the part of the
Sellers, assuming the obligation to indemnify JRL under the terms
contemplated in this Contract.
CLAUSE THIRTEENTH: DISCREPANCIES AND ARBITRATION
13.1. Save where the Contract contemplates a different mechanism to settle
differences, any dispute, controversy, difference or claim rising between
the Parties in connection with the interpretation, execution, resolution,
termination, efficacy, nullity, voidness or validity of the Contract, that
may not be resolved by mutual agreement of the parties, same shall be
submitted to arbitration under the law.
13.2. The arbitrators shall be three (3), with each of the Parties appointing
one and the arbitrators appointed so shall appoint the third arbitrator,
who shall preside the Arbitrating Court. If one of the Parties fails to
appoint its arbitrator within fifteen (15)
Final Version
(Unofficial translation)
consecutive as of receiving the request from the Party requesting the
arbitration, or if within a similar period of fifteen (15) consecutive
days as of the appointment of the last arbitrator, the two arbitrators
fail to reach an agreement on the appointment of the third arbitrator, the
designation shall be made, upon either Party's request, by the
International Chamber of Commerce. None of the arbitrators may be related
to the Parties.
13.3. In case that for any circumstance a substitute arbitrator should have to
be appointed, same shall be appointed following the same procedure set
forth in this clause for the designation of the arbitrator being replaced.
13.4. The arbitration shall be conducted in the city of Miami, United States of
America, sponsored by the International Chamber of Commerce and the norms
that said entity generally applies shall be used. It is expressly left on
record that the Arbitrating Court established shall be authorized to set
the penalties and indemnities contemplated in the Contract.
13.5. The Arbitrating Court must deliver its award within a maximum period of
time of 8 months as of the designation of the last arbitrator.
13.6. The Parties shall waive the filing of recourses of appeal to or revision
of the arbitral award delivered.
13.7. The expenses incurred into due to the arbitration shall be borne by the
Parties in the proportions or form stated in the award, which may
determine that the expenses shall be borne by only one of the Parties.
13.8. The final award of the Arbitrating Court may be enforced by any court
having jurisdiction in the judicial venue where said enforcement is
requested.
CLAUSE FOURTEENTH: CONFIDENTIALITY
Without the previous consent and in writing of the representatives of the
other Party, neither of the Parties may disclose to any person the terms
or conditions related with the Contract and which have not been made
public as of the date this Contract is entered into, or which must be made
public as per the regulation of the securities market on Communication
regarding the Relevant facts in Peru, or as per the applicable norms in
Chile. The obligation contemplated in this Clause shall have a duration of
three (3) years as of the execution of the Contract.
In case either of the Parties is legally or judicially required to
disclose any portion of this operation and which should be kept
Confidential, said Party must inform this circumstance to the other Party
within 24 hours of receiving said legal or judicial requirement, in order
for the other Party to be able to adopt the necessary measures to protect
its right to privacy. If the filing of a defense measure does not succeed,
and if the required Party is, in the opinion of its lawyers, compelled to
disclose said information under threat of liability or penalty, it may
disclose only that portion of the information that it is legally required
to disclose without same being construed as a default of the Contract;
provided that it applies its best efforts to ensure that the information
shall be treated confidentially.
Final Version
(Unofficial translation)
CLAUSE FIFTEENTH: MISCELLANEOUS
15.1. Notices.
All notices, requests, approvals, waivers or other communications
delivered to the Parties in connection with the Contract, must be made in
writing and shall be understood as having been received three (3) days
after being sent via courier or facsimile, return receipt requested,
addressed as follows:
Sellers: Embonor Holdings S.A.
Avenida Apoquindo N(degree) 3721, Piso 00,
Xxxxxx xx Xxx Xxxxxx, Xxxxxxxx, Xxxxx
562-2067722
Atencion: Xxxxxx Xxxxxx Xxxxxx-Xxxxxxxx
Embotelladora Arica Overseas
Avenida Apoquindo N(degree) 3721,
Piso 00, Xxxxxx xx Xxx Xxxxxx, Xxxxxxxx, Xxxxx
562-2067722
Atencion: Xxxxxx Xxxxxx Xxxxxx-Xxxxxxxx
Buyer: Corporacion Xxxx X. Xxxxxxx X.X.
Xxxxxxxxx 000, Xxxxx, Xxxx, Xxxx
482-3670.
Atencion: Xxxxxx Xxxxxxx Corvetto
Xxxxxx Xxxxxxxxx-Xxxxxxx
Any variation in the aforementioned information must be communicated in writing
to the other Party at least ten (10) consecutive days in advance, without which
requirement the communications sent to the domiciles or facsimiles subject to a
modification shall be rendered as correctly made.
15.2. Interpretation of the Contract.
(a) The Parties recognize that the headers preceding the Clauses of the
Contract son merely an aid for convenience of reference and shall
not be borne in mind for the interpretation of their content.
(b) All the references in the Contract to a Clause or Number, shall
refer to the respective Clause or Number in said Contract.
Final Version
(Unofficial translation)
(c) The references in the Contract to a Clause, shall include all the
Numbers within said Clause, and the references to a Number, shall
include all the paragraphs within same.
(d) Salvo that the context calls for an interpretation otherwise, the
plural shall include the singular and vice versa; and the masculine
shall include the feminine and vice versa.
(e) The word "Knowledge" includes both the fact, circumstance, event or
situation that a Party (or the Companies, as appropriate) knows or
should have known, as otherwise they would have acted in inexcusable
guilt, either due to their position before the fact, circumstance,
event or situation, of their proximity to same or of the
circumstances relating that Party with said facts, circumstances,
events or situations.
(f) The adjective "Significant" has been included in the Contract bona
fide and by mutual agreement between them, therefore its invocation
by the Buyer shall be accepted by the Sellers as legitimate and such
invocation shall not be denied, ignored, questioned, observed or
rejected by the Sellers except if same in the event of a reasonable
objection due to the slight relevance of the fact claimed by the
Buyer.
15.3. No Waiver of Rights.
The mere fact that either of the Parties fails to exercise some of the
rights conferred to same by the Contract, in no case may be construed as a
waiver of such right, which shall remain in force as long as fact giving
rise to same survives. Any waiver of rights conferred by the Contract must
be expressly stated in writing.
15.4. Days.
(a) Save that it is stated that it refers to business days, the periods
of time stated in days are understood as referring to consecutive
days.
(b) For the purposes of the Contract, business days shall be all those
consecutive days that are not a Saturday, Sunday or non-business day
for the private sector in the city of Lima, Peru or in the city of
Xxxxxxxx, Chile.
15.5. Entire Agreement.
The Contract shall encompass the entire agreement of the Parties regarding
the purpose of same, and it supersedes all previous agreements, either
written or oral, between Embonor and JRL in connection with said purpose,
including the Business Agreements, save that in connection with what is
provided in number 2 of the Clause Fifth of the Business Agreement, which
shall remain in force, and in those other cases expressly contemplated in
this Contract.
15.6. Exchange Rate
For the conversion of Dollars into New Soles and for the conversion of New
Soles into Dollars, the last average Exchange Rate between the purchase
and sale prices published by the Superintendency of Banks and Insurance in
the El Peruano Newspaper on the respective day (the "Exchange Rate") shall
be used.
15.7. Appendixes.
The Appendixes to the Contract shall form an integral part of same,
therefore the reference to said Contract shall include the reference to
said Appendixes.
15.8. Applicable Law.
The Contract shall be subject to the laws of the Republic of Peru.
IN WITNESS WHEREOF, the parties sign in Lima, this 29th day of January of year
2004.
CORPORATION XXXX X. XXXXXXX S.A.
Name: Xxxxxx Xxxxxxx T. Xxxxxx Xxxxxxx C. Xxxxxx Xxxxxxxxx L.
Position: President Chief Executive Officer Director
EMBONOR HOLDINGS S.A.
Name: Xxxxxx Xxxxxx Cristian Hohlberg R. Xxxxxx Xxxxxxxxx X.
Xxxxxx-Xxxxxxxx Attorney Director
Position: Manager
EMBOTELLADORA ARICA OVERSEAS
Name: Xxxxxx Xxxxxx Xxxx Xxxxx Errazuriz Grez
Xxxxxx-Xxxxxxxx Attorney
Position: Manager
COCA-COLA EMBONOR S.A.
Name: Xxxxxx Xxxxxx Cristian Hohlberg X.
Xxxxxx-Xxxxxxxx Business Manager
Position: Manager
SOCIEDAD DE CARTERA DEL
PACIFICO S.R.L.
Name: Xxxxxx Xxxxxxxxx
Reverditto
Position: Manager
