EXHIBIT 10.1
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STOCK PURCHASE AGREEMENT
Between
XXXXX CARIBE, INC.
("SELLER")
and
EMPRESAS XXXXX, INC.
("BUYER")
DATED AS OF JUNE 30, 2000
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Section Page
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ARTICLE I - CERTAIN DEFINITIONS................................................1
ARTICLE II - SALE OF SHARES AND XXXXX XXXXX....................................4
2.1 SALE OF SHARES AND XXXXX XXXXX...................................4
2.2 PURCHASE PRICE...................................................4
ARTICLE III - CLOSING..........................................................4
3.1 CLOSING..........................................................4
3.2 SELLER'S DELIVERIES AT THE CLOSING...............................5
3.3 BUYER'S DELIVERIES AT THE CLOSING................................5
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF SELLER..........................6
4.1 ORGANIZATION AND AUTHORITY.......................................6
4.2 SUBSIDIARIES AND DOCUMENTS.......................................7
4.3 CAPITALIZATION OF SUBSIDIARIES...................................7
4.4 OWNERSHIP OF SHARES..............................................7
4.5 FINANCIAL STATEMENTS.............................................7
4.6 ABSENCE OF CHANGES...............................................7
4.7 TAX MATTERS......................................................8
4.8 NO CONFLICT WITH PROPRIETARY RIGHTS..............................8
4.9 NON-COMPETITION ARRANGEMENTS.....................................8
4.10 EMPLOYEE BENEFITS...............................................8
4.11 LITIGATION AND LABOR RELATIONS..................................9
4.12 PROPERTY AND LIABILITY INSURANCE................................9
4.13 CONSENTS AND APPROVALS..........................................9
4.14 PROPERTIES AND ASSETS..........................................10
4.15 COMPLIANCE WITH LAWS; LICENSES AND PERMITS.....................10
4.16 ENVIRONMENTAL MATTERS..........................................10
ARTICLE V - REPRESENTATIONS AND WARRANTIES BY BUYER...........................11
5.1 ORGANIZATION AND STANDING.......................................11
5.2 AUTHORITY.......................................................11
5.3 CONSENTS AND APPROVALS; NO VIOLATIONS...........................11
ARTICLE VI - CERTAIN COVENANTS AND AGREEMENTS OF SELLER
AND BUYER..........................................12
6.1 ACCESS TO INFORMATION...........................................12
6.2 DISCLOSURE SUPPLEMENTS..........................................12
6.3 CONSENTS AND APPROVALS..........................................13
6.4 FILINGS.........................................................13
6.5 COVENANT TO SATISFY CONDITIONS..................................13
6.6 FURTHER ASSURANCES..............................................13
6.7 CONDUCT OF THE BUSINESS OF THE SUBSIDIARIES;
INTERCOMPANY ACCOUNTS..............................14
6.8 PUBLIC DISCLOSURE...............................................14
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ARTICLE VII - CONDITIONS PRECEDENT OF BUYER...................................14
7.1 REPRESENTATIONS AND WARRANTIES..................................14
7.2 COVENANTS.......................................................15
7.3 OFFICER'S CERTIFICATE...........................................15
7.4 NO ORDER OR PROCEEDINGS.........................................15
7.5 CONSENTS........................................................15
7.6 OPINION OF COUNSEL..............................................15
7.7 CONDUCT OF BUSINESS OF SUBSIDIARIES.............................15
7.8 CLOSING DELIVERIES..............................................16
ARTICLE VIII - CONDITIONS PRECEDENT OF SELLER.................................16
8.1 REPRESENTATIONS AND WARRANTIES..................................16
8.2 COVENANTS.......................................................16
8.3 OFFICER'S CERTIFICATE...........................................16
8.4 NO ORDER OR PROCEEDING..........................................16
8.5 CONSENTS........................................................17
8.6 OPINION OF COUNSEL..............................................17
8.7 iTract LLC MERGER...............................................17
8.8 CLOSING DELIVERIES..............................................17
8.9 STOCKHOLDER APPROVAL............................................17
ARTICLE IX - EMPLOYEE MATTERS.................................................18
9.1 RETENTION OF EMPLOYEES..........................................18
9.2 THIRD PARTY BENEFICIARIES.......................................18
ARTICLE X - SURVIVAL OF REPRESENTATIONS.......................................18
10.1 SURVIVAL OF REPRESENTATIONS....................................18
ARTICLE XI - TERMINATION AND ABANDONMENT......................................18
11.1 TERMINATION....................................................18
11.2 PROCEDURE AND EFFECT OF TERMINATION............................19
ARTICLE XII - MISCELLANEOUS...................................................19
12.1 EXPENSES OF THE PARTIES........................................19
12.2 PARTIES IN INTEREST............................................20
12.3 GOVERNING LAW..................................................20
12.4 CAPTIONS.......................................................20
12.5 ENTIRE AGREEMENT; AMENDMENTS...................................20
12.6 NOTICES........................................................20
12.7 COUNTERPARTS...................................................21
12.8 ASSIGNMENT.....................................................21
12.9 BROKERS........................................................22
12.10 ACCESS TO INFORMATION.........................................22
12.11 EXTENSION; WAIVER.............................................22
12.12 VALIDITY......................................................22
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LIST OF EXHIBITS AND SCHEDULES
Exhibit A - List of Subsidiaries
Schedule 2.2 - Lists of Debts to be Assumed by Buyer
Schedule 4.3 - Authorized and outstanding capital
of Subsidiaries
Schedule 4.13 - Required consents and approvals
Schedule 4.15 - Compliance with Laws
Schedule 4.16 - Environmental Matters
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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement") is made and executed in San
Xxxx, Puerto Rico as of this 30st day of June, 2000, by and between Xxxxx
Caribe, Inc., a Puerto Rico corporation ("Seller"), and Empresas Xxxxx, Inc., a
Puerto Rico corporation ("Buyer") (collectively the "Parties").
BACKGROUND
WHEREAS, Seller owns all of the issued and outstanding shares of stock
(the "Shares") of the corporations listed in Exhibit A hereto (the
"Subsidiaries"); and
WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase
from Seller, the Shares, as well as certain other proprietary rights of the
Seller, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the respective covenants,
representations and warranties contained herein, Seller and Buyer, intending to
be legally bound hereby, agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1 "Affiliated Company" means a company or other entity which
directly or indirectly (through one or more intermediaries) controls, is
controlled by, or is under common control with either Seller, on the one hand,
or Buyer, on the other hand, as the case may be.
1.2 "Closing" means the consummation of the purchase and sale of the
Shares and the Xxxxx Xxxxx contemplated hereby which shall be effected by
delivery of the documents and instruments referred to in Sections 3.2 and 3.3
hereof, each in form and content satisfactory to Buyer, Seller and their
respective counsel and each dated or being effective as of the Closing Date.
1.3 "Closing Date" means the date on which the Closing occurs.
1.4 "Code" means the United States Internal Revenue Code of 1986, as
amended.
1.5 "Commonwealth" means the Commonwealth of Puerto Rico.
1.6 "Consent" means any consent, waiver, approval, authoriza tion or
permit.
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1.7 "Contracts" has the meaning set forth in Section 4.9(a).
1.8 "Damages" means all demands, claims, actions or causes of action,
assessments, losses, damages, liabilities, costs and expenses, including,
without limitation, defense costs, interest, penalties and attorneys' fees and
expenses.
1.9 "Decree" means the decree of industrial tax exemption issued to
Rain Forest Products Group, Inc. on January 1, 1997 by the Governor of the
Commonwealth of Puerto Rico, pursuant to the provisions of the Commonwealth's
Tax Incentives Act of 1987, as amended.
1.10 "Disclosure Schedules" means the schedules delivered to Buyer by
Seller and attached to this Agreement listing certain information with respect
to or exceptions to the representations and warranties of Seller contained in
this Agreement.
1.11 "Employee Benefit Plans" means all employee benefit and welfare
plans, programs, policies or arrangements maintained or contributed to by any of
the Subsidiaries for the benefit of employees of the Subsidiaries, all
personnel, payroll or severance policies of the Subsidiaries, all other fringe
benefits provided by the Subsidiaries for the benefit of employees of the
Subsidiaries and all employment, severance, termination, consulting and
retirement agreements to which any Subsidiary is a party.
1.12 "Encumbrance" means any lien, charge, restriction, security
interest or encumbrance of any nature.
1.13 "Environmental Law" means any federal, Commonwealth or municipal
statute, law or regulation in effect on or prior to the Closing Date relating to
pollution or protection of human health or the environment, including but not
limited to the Comprehensive Environmental Response, Compensation and Liability
Act, the Resource Conservation and Recovery Act, the Clean Air Act, the Clean
Water Act and similar Commonwealth laws.
1.14 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
1.15 "Financial Statements" means the consolidated audited statements
of Seller and the Subsidiaries as of December 31, 1999 and 1998 and for each of
the three years in the period ended December 31, 1999, and the unaudited
consolidated statements of the Seller and its subsidiaries as of and for the
three-month period ended March 31, 2000, copies of which have previously been
delivered to the Buyer.
1.16 "GAAP" means generally accepted accounting principles in the
United States.
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1.17 "Governmental Entity" means any governmental or regulatory
authority, department, board, bureau, agency or commission, including courts of
competent jurisdiction, domestic or foreign.
1.18 "Information Memorandum" means the Confidential Information
Memorandum dated April 2000 describing the business of the Seller and the
Subsidiaries and heretofore delivered to Buyer.
1.19 "Interim Balance Sheet" means the consolidated unaudited balance
sheet of the Seller as of March 31, 2000.
1.20 "Litigation" means any action, lawsuit, claim, proceed ing or
investigation, in any court or before any federal, state, Commonwealth,
municipal or other governmental department, commis sion, board, bureau, agency
or instrumentality, domestic or foreign.
1.21 "Xxxxx Xxxxx" means each trademark, trade name, service xxxx and
patent which has been registered or for which an applica tion for registration
is pending in the name of Seller or any of the Subsidiaries, or in which the
Seller or any of the Subsidiaries have otherwise acquired rights under any
federal, state or Commonwealth laws, including but not limited to the right to
use the name "Xxxxx."
1.22 "Material Adverse Effect" means an effect on the business,
financial condition or results of operations of the Subsidiaries, taken as a
whole, which is both material and adverse.
1.23 "Order" means any order, writ, judgment, injunction, decree,
statute, ordinance, rule or regulation.
1.24 "Person" means any natural person or legal entity not a
party to this Agreement.
1.25 "PRIRC" means the Puerto Rico Internal Revenue Code of
1994, as amended.
1.26 "Public Disclosure" means any press release or public announcement
or publicity statement or other disclosure to the public, including any
announcement to employees.
1.27 "Proprietary Information" means all writings for which a claim to
copyright, know-how, formulas and trade secrets have been recorded or claimed by
the Subsidiaries.
1.28 "Purchase Price" means the aggregate purchase price for the Shares
and the Xxxxx Xxxxx set forth in Section 2.2 hereof.
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1.29 "Subsidiaries" or "Subsidiary" shall have the meaning assigned in
the introductory paragraph of this Agreement.
1.30 "Tax" means any, and "Taxes" means collectively all, federal,
state, Commonwealth, local and foreign taxes and assess ments, including all
interest, penalties and additions imposed with respect to such amounts.
ARTICLE II
SALE OF SHARES AND XXXXX XXXXX
2.1 SALE OF SHARES AND XXXXX XXXXX
Upon the terms and subject to the conditions contained in this
Agreement, Seller agrees to sell, assign and transfer to Buyer and Buyer agrees
to purchase from Seller at the Closing, for the consideration provided in
Section 2.2 below, the Shares and the Xxxxx Xxxxx, free and clear of any
Encumbrance.
2.2 PURCHASE PRICE
Upon the terms and subject to the conditions contained in this
Agreement, in consideration of the aforesaid sale, assignment and transfer of
the Shares and the Xxxxx Xxxxx at the Closing, Buyer will pay to Seller, in
cash, FIVE MILLION DOLLARS ($5,000,000) (the "Cash Purchase Price") by wire
transfer of immediately available funds to an account designated in writing by
Seller to Buyer at least two (2) business days prior to the Closing. The Buyer
shall also agree to expressly assume those debts or liabilities of the Seller
listed on Schedule 2.2 hereof. The payment of the cash amount and the assumption
of such indebtedness are hereinafter collectively referred to as the "Purchase
Price."
ARTICLE III
CLOSING
3.1 CLOSING
Upon the terms and subject to the conditions contained in this
Agreement, the Closing of the purchase and sale of the Shares and the Xxxxx
Xxxxx contemplated hereby will take place at the offices of Xxxxxxxxxxx Xxxxxx &
Xxxxxxx LLP, Banco Popular Center, Suite 1901, 209 Xxxxx Xxxxxx Avenue, Hato
Rey, Puerto Rico at 10:00 a.m. (local time), on the first business day following
the date on which all the conditions to each party's obligations
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hereunder have been satisfied or waived, or at such other time or place or both
as the parties may agree.
Closing shall occur by delivery of the documents and instruments
described in Sections 3.2 and 3.3 hereof, each in form and content satisfactory
to Buyer, Seller and their respective counsel and each dated or being effective
as of the Closing Date.
3.2 SELLER'S DELIVERIES AT THE CLOSING
(a) Stock certificates representing the Shares, duly endorsed in
blank or accompanied by stock transfer powers;
(b) A certified copy of the resolutions adopted by the Board of
Directors of Seller authorizing the execution, delivery and performance by
Seller of this Agreement and the transactions contemplated hereby;
(c) Written resignations of all directors and officers of the
Subsidiaries requested by Buyer to resign prior to the Closing Date;
(d) The officer's certificate referred to in Section 7.3;
(e) The opinion of counsel referred to in Section 7.6;
(f) The stock books, stock ledgers, minute books and corporate
seals of the Subsidiaries;
(g) All records pertaining to bank accounts of the Subsidiaries;
(h) An assignment by Seller to Buyer of all of its rights with
respect to the Xxxxx Xxxxx; and
(i) Such other documents, instruments and certificates as may be
provided for under this Agreement or reasonably requested by Buyer prior to
Closing.
3.3 BUYER'S DELIVERIES AT THE CLOSING
(a) The Purchase Price;
(b) An assumption agreement in form and substance satisfactory to
Seller and its counsel pursuant to which Buyer agrees to assume all of Seller's
debt listed on Schedule 2.2 which shall have not been cancelled prior to or
concurrently with the Closing.
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(c) One or more releases executed by each of the creditors listed
on Schedule 2.2 releasing the Seller and its successors and assigns from any and
all liability with respect to the debt listed on Schedule 2.2.
(d) A certified copy of the resolutions adopted by the Board of
Directors of Buyer authorizing the execution, delivery and performance by Buyer
of this Agreement and the transactions contemplated hereby;
(e) The officer's certificate referred to in Section 8.3; and
(f) The opinion of counsel referred to in Section 8.6; and
(g) Such other documents, instruments and certificates as may be
provided for under this Agreement or reasonably requested by Seller prior to
Closing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
4.1 ORGANIZATION AND AUTHORITY
(a) Seller and each of the Subsidiaries are corporations duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Puerto Rico. The execution, delivery and performance by Seller
of this Agreement have been duly authorized by all necessary corporate action on
the part of Seller. This Agreement has been duly executed and delivered by
Seller and, assuming due execution thereof by Buyer, constitutes a valid and
binding agreement of Seller enforceable against Seller in accordance with its
terms, except as may be limited by bankruptcy, insolvency, reorganization and
similar laws affecting the rights of creditors generally and by the availability
of equitable remedies.
(b) Each of the Subsidiaries (i) has all corporate power and
authority to own or lease its properties and to operate its business as
presently conducted; (ii) has all governmental licenses, authorizations and
permits required to own or lease its properties and to carry on its business as
presently conducted, and (iii) is duly qualified to do business and is in good
standing under the laws of the Commonwealth and each other jurisdiction in which
the conduct of its business or the ownership or leasing of its properties
requires such qualification, except in the case of clauses (ii) and (iii) where
the failure to have any such license,
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authorization or permit to be so qualified or in good standing would not have a
Material Adverse Effect on the business of the Subsidiaries, taken as a whole.
4.2 SUBSIDIARIES AND DOCUMENTS
The Subsidiaries do not own any subsidiaries and do not own any capital
stock or other interest in any other corporation or business entity nor are any
of them subject to any obligations or requirements to make any investment in any
entity. True and complete copies of the charter documents, the by-laws and the
minutes of meetings of the Board of Directors and the sole stockholder of each
of Subsidiaries have heretofore been delivered to Buyer, and said charters and
by-laws are in full force and effect.
4.3 CAPITALIZATION OF SUBSIDIARIES
Each of the Subsidiaries entire authorized and outstanding capital is
as set forth in Schedule 4.3 hereof. All such issued and outstanding shares of
the Subsidiaries common stock have been duly and validly issued and are fully
paid and non-assessable, free of any preemptive rights and are owned by Seller
free and clear of any and all Encumbrances. Neither Seller nor any of the
Subsidiaries is a party to or bound by any options, calls, contracts or
commitments of any character relating to any issued or unissued stock or any
other equity security issued or to be issued by the Subsidiaries.
4.4 OWNERSHIP OF SHARES
Seller has good and marketable title to the Shares, free of any and all
Encumbrances and has full and unrestricted power and authority to sell, assign,
transfer and deliver to Buyer valid title to the Shares. Upon delivery of the
certificates representing the Shares as provided herein, Buyer will acquire good
and marketable title to the Shares, free and clear of any and all Encumbrances,
except those, if any, created by Buyer.
4.5 FINANCIAL STATEMENTS
The Financial Statements fairly present the financial position and
results of operations of Seller and the Subsidiaries on a consolidated basis as
of the date and for the periods presented, all in accordance with GAAP.
4.6 ABSENCE OF CHANGES
Since the date of the Interim Balance Sheet, the Subsidiaries have
conducted their business in the ordinary course of business and there has not
been:
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(a) any material adverse change in the financial condition,
operations, properties, assets, liabilities or business of the Subsidiaries,
taken as a whole.
(b) any damage, destruction or loss (whether or not covered by
insurance) which, either singly or in the aggregate, would have a Material
Adverse Effect.
4.7 TAX MATTERS
(a) Each Subsidiary has (i) timely (after giving effect to
applicable extensions) filed all material returns required to be filed by it
with respect to Taxes; (ii) timely paid all Taxes shown to have become due
pursuant to such returns and (iii) paid all other Taxes for which a notice of
assessment or demand for payment has been received.
(b) All Tax returns for each Subsidiary have been prepared in
accordance with all applicable laws and requirements and accurately reflect the
taxable income (or other measure of Tax) of the corporation filing the return.
(c) None of the Subsidiaries are a party to or bound by any Tax
allocation or Tax sharing agreement or have any current or potential contractual
obligation to indemnify any other Person with respect to Taxes.
(d) The Decree is in full force and effect.
4.8 NO CONFLICT WITH PROPRIETARY RIGHTS
(a) To the best knowledge of Seller, the conduct of the
Subsidiaries' respective businesses as presently conducted does not infringe or
otherwise conflict with any valid trademark, tradename, service xxxx, patent or
copyright of others in any way which would have a Material Adverse Effect.
4.9 NON-COMPETITION ARRANGEMENTS
Following the Closing, none of the Subsidiaries will be subject to
any agreement which contains covenants limiting the freedom of such Subsidiary
(or any successor) to compete in any line of business or with any Person.
4.10 EMPLOYEE BENEFITS
There are no claims, actions or proceedings (other than routine
claims for benefits) pending or, to the best knowledge of Seller, threatened,
against any Subsidiary with respect to any Employee Benefit Plan.
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4.11 LITIGATION AND LABOR RELATIONS
(a) There is no Litigation which, if decided adversely, would have
a Material Adverse Effect.
(b) There are (i) no labor disputes, material grievances,
arbitration proceedings, actual or threatened strikes, work stoppages or
slowdowns pending or, to the best knowledge of Seller, threatened against any
Subsidiary or affecting any Subsidiary by any of their employees or their
representatives; and (ii) no charges of unfair labor practices are pending or,
to the best knowledge of Seller, threatened before any governmental, regulatory
or administrative agency or authority.
(c) None of the Subsidiaries are a party to a collective
bargaining agreement.
(d) Each of the Subsidiaries has complied with and is currently in
compliance with all applicable federal and Commonwealth laws relating to
employment, labor and working conditions, except such noncompliance which, in
the aggregate, would not have a Material Adverse Effect, and Seller is not aware
of the existence of any liability for any material arrearages of wages (other
than current wages not yet due or payable), severance pay or other applicable
laws or regulations relating to labor, or any taxes or penalties for failure to
comply with any of such laws.
4.12 PROPERTY AND LIABILITY INSURANCE
The property and liability insurance coverage relating to the business
of the Subsidiaries is sufficient for compliance with all requirements of law
and of all agreements to which any Subsidiary is a party and provides coverage
in amounts which are adequate against all risks usually insured against by
Persons operating similar businesses.
4.13 CONSENTS AND APPROVALS
Except as set forth in Schedule 4.13, neither the execution and
delivery of this Agreement by Seller nor the consummation of the transactions
contemplated hereby will (a) violate any provision of the Certificate of
Incorporation or By-Laws (or other comparable governing documents) of Seller or
of any of the Subsidiaries, (b) require any Consent of, or filing with or
notification to, any Governmental Entity, (c) require any Consent under, or
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation or acceleration of any obligation to repay) under, any contract to
which the Seller or any Subsidiary is a party or by which they or any of their
property or assets may be
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bound, or (d) violate any Order of any Governmental Entity applicable to Seller
or the Subsidiaries.
4.14 PROPERTIES AND ASSETS
Each of the Subsidiaries has good, valid and marketable title to all of
its properties and assets, including without limitation all assets reflected on
the Interim Balance Sheet and all assets acquired since the date of the Interim
Balance Sheet (except for assets since sold, used or otherwise disposed of in
the ordinary course of business consistent with past practices) free and clear
of all Encumbrances.
4.15 COMPLIANCE WITH LAWS; LICENSES AND PERMITS
(a) Except as set forth in Schedule 4.15, the operations of the
Subsidiaries have been conducted in accordance with applicable laws, except such
noncompliance which, in the aggregate, would not have a Material Adverse Effect.
4.16 ENVIRONMENTAL MATTERS
(a) Except as set forth in Schedule 4.16, each of the Subsidiaries
holds, and is in substantial compliance with, all material permits, licenses and
government authorizations required for the Subsidiaries to conduct their
respective business under any Environmental Law, and the Subsidiaries are
otherwise in compliance with all applicable Environmental Laws, except where the
failure to be in compliance would not have a Material Adverse Effect;
(b) None of the Subsidiaries have received any written request for
information, or been notified that they are a potentially responsible party,
under any Environmental Law with respect to any on-site or off-site location for
which liability is currently being asserted;
(c) None of the Subsidiaries have entered into or agreed to any
consent decree or order, and are not subject to any judgment, decree or order
relating to compliance with any Environmental Law or to investigation or cleanup
of regulated substances under any Environmental Law;
(d) No asbestos-containing material that could reasonably be
expected to pose a current hazard to health is present at any facility or
property owned or operated by any Subsidiary that could reasonably be expected
to have a Material Adverse Effect;
(e) None of the Subsidiaries have either expressly or by operation
of law assumed or otherwise become subject to the liability of any other Person
pursuant to any Environmental Law or
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any related common law theory that could reasonably be expected to have a
Material Adverse Effect;
(f) There are no other facts, events or circumstances with respect
to the past or present operations or facilities of any of the Subsidiaries or
any predecessor or affiliate thereof that would form the basis for any liability
(including contingent liability) or corrective or remedial obligation pursuant
to any Environmental Law or any related common law theory, including, without
limitation, any liability or obligation for on-site or off-site cleanup costs,
fines or penalties, property damage, personal injury or natural resources
damages that could reasonably be expected to have a Material Adverse Effect.
ARTICLE V
REPRESENTATIONS AND WARRANTIES BY BUYER
Buyer represents and warrants to Seller as follows:
5.1 ORGANIZATION AND STANDING
Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the Commonwealth and has full corporate power and
authority to enter into and perform this Agreement.
5.2 AUTHORITY
The execution, delivery and performance by Buyer of this Agreement have
been duly authorized by all necessary corporate action on the part of the Buyer.
This Agreement has been duly executed and delivered by Buyer and, assuming due
execution by Seller, constitutes a valid and binding agreement of Buyer
enforceable against Buyer in accordance with its terms, except as limited by
bankruptcy, insolvency, reorganization and similar laws affecting the rights of
creditors generally and by the availability of equitable remedies.
5.3 CONSENTS AND APPROVALS; NO VIOLATIONS
Neither the execution and delivery of this Agreement by Buyer nor the
consummation of the transactions contemplated hereby by Buyer will (a) violate
any provision of its Certificate of Incorporation or By-Laws, (b) require any
Consent of, or filing with or notification to, any Governmental Entity, except
where the failure to obtain such Consent or to make such filing or notification
would not impair, hinder or adversely affect the ability of Buyer to perform any
of its obligations under this Agreement or to consummate the transactions
contemplated hereby (a
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"Buyer Material Adverse Effect"), or (c) violate any Order of any Governmental
Entity applicable to Buyer, except such violations which, in the aggregate,
would not have a Buyer Material Adverse Effect.
ARTICLE VI
CERTAIN COVENANTS AND AGREEMENTS OF SELLER AND BUYER
6.1 ACCESS TO INFORMATION
(a) After the date of this Agreement, Seller shall continue to
permit Buyer and its representatives to have reasonable access during normal
business hours, upon reasonable advance notice, to the books and records,
properties and assets of the Subsidiaries, provided that such access shall be
conducted by Buyer and its representatives in such a manner as not to interfere
unreasonably with the business or operations of the Subsidiaries. Seller will
assist Buyer in conducting such review and investigation and, subject to the
aforesaid, will provide and will cause their independent public accountants to
provide Buyer, its employees, agents and representatives full access to, and
complete information concerning, all aspects of the businesses of the
Subsidiaries, including its books, records (including tax returns filed or in
preparation), personnel and premises and the audit work papers and other records
of its independent public accountants.
(b) In the event Seller is subject to a tax examination for years
prior to the Closing Date, after the Closing Date Buyer shall permit the Seller
and its representatives reasonable access during normal business hours, upon
reasonable advance notice, to the books and records of the Subsidiaries for the
periods under examination and will cooperate with Seller in making available to
Seller and its representatives financial information reasonably requested by
Seller for the tax audit, in either case, so long as it does not interfere
unreasonably with the business or operations of the Subsidiaries.
6.2 DISCLOSURE SUPPLEMENTS
From time to time prior to the Closing Date, Seller will supplement or
amend the disclosure schedules with respect to any matter hereafter arising
which, if existing or occurring at or prior to the date of this Agreement, would
have been required to be set forth or described in the disclosure schedules or
which is necessary to complete or correct any information in the disclosure
schedule or in any representation or warranty of Seller which has been rendered
inaccurate thereby; provided, however, that for the purposes of determining the
satisfaction of the condition set forth
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in Section 7.1 hereof, no such supplement or amendment shall be given effect.
6.3 CONSENTS AND APPROVALS
Each of the parties hereto shall use its best efforts to obtain as
promptly as practicable all Consents of Governmental Entities and third parties
required in connection with the consummation of the transactions contemplated by
this Agreement; it being understood, however, that neither party shall be
required, in satisfaction of its obligations under this or any other Section of
this Agreement, to agree to hold separate or sell any assets or operations or
otherwise take actions which it reasonably believes may interfere, in any
material respect, with the benefits intended to be realized by such party as a
result of the transactions contemplated hereby.
6.4 FILINGS
Promptly after the execution of this Agreement, each of the parties
hereto shall prepare and make or cause to be made any required filings,
submissions and notifications under the laws of any jurisdiction to the extent
that such filings are necessary to consummate the transactions contemplated
hereby, will use its best efforts to respond to and comply with any requests for
additional information made by any Governmental Entity, and will use its best
efforts to take all other actions necessary to consummate the transactions
contemplated hereby in a manner consistent with applicable law. Each of the
parties hereto will furnish to the other party such necessary information and
reasonable assistance as such other party may reasonably request in connection
with the foregoing.
6.5 COVENANT TO SATISFY CONDITIONS
Seller will use its best efforts to ensure that the conditions set
forth in Article VII hereof are satisfied, insofar as such matters are within
the control of Seller, and Buyer will use its best efforts to ensure that the
conditions set forth in Article VIII hereof are satisfied, insofar as such
matters are within the control of Buyer.
6.6 FURTHER ASSURANCES
Subject to the terms and conditions herein provided, each of the
parties hereto agrees to use its best efforts to take, or cause to be taken, all
action, and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
the transactions contemplated by this Agreement. If at any time after the
Closing Date any further action is necessary or desirable to carry out the
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purposes of this Agreement, the parties hereto shall, at Buyer's expense, take
or cause to be taken all such reasonably necessary action, including, without
limitation, the execution and delivery of such further instruments and documents
as may be reasonably requested by either party for such purposes or otherwise to
consummate and make effective the transactions contemplated hereby.
6.7 CONDUCT OF THE BUSINESS OF THE SUBSIDIARIES; INTERCOMPANY
ACCOUNTS
(a) Prior to the Closing, except as consented to or approved by
Buyer in writing, Seller shall cause the Subsidiaries to:
(i) conduct their respective businesses in the ordinary and
usual course consistent with past practice;
(ii) use their best efforts to maintain satisfactory
relationships with customers, suppliers, distributors and others having
commercially beneficial business relationships;
(b) All intercompany accounts between the Subsidiaries and the
Seller shall be settled at or prior to the Closing.
(c) Seller shall apply the certificates of deposit with Banco
Santander Puerto Rico securing the indebtedness listed on Schedule 2.2 against
the amounts owed with respect to such indebtedness.
6.8 PUBLIC DISCLOSURE
The parties will consult with each other and agree on desirability,
timing and substance of any Public Disclosure, relating solely to the
transactions contemplated hereby. Subject to applicable law, including but not
limited to federal, state and Commonwealth securities laws, neither party will
make any Public Disclosure without the prior agreement of the other party as to
the time of the issuance, extent of distribution, and form and substance of the
Public Disclosure.
ARTICLE VII
CONDITIONS PRECEDENT OF BUYER
The obligation of Buyer to consummate the transactions contemplated
hereby is subject to the fulfillment or written waiver by Buyer of each of the
following conditions prior to or at the Closing:
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7.1 REPRESENTATIONS AND WARRANTIES
The representations and warranties of Seller made hereunder shall be
true and correct in all material respects as of the date hereof and at and as of
the Closing Date, with the same force and effect as though made at and as of the
Closing Date, except for changes permitted or contemplated by this Agreement.
7.2 COVENANTS
Seller shall have performed and complied in all material respects with
all covenants and agreements required by this Agreement to be performed or
complied with by Seller.
7.3 OFFICER'S CERTIFICATE
Buyer shall have received a certificate of an authorized officer of
Seller, dated the Closing Date, certifying that the conditions contained in
Sections 7.1 and 7.2 have been fulfilled.
7.4 NO ORDER OR PROCEEDINGS
No Order shall have been enacted, entered or promulgated (and remain in
effect) or have been enforced by any Governmental Entity which prohibits or
restricts the consummation of the transactions contemplated hereby. No action or
proceeding by any Governmental Entity shall have been commenced (and remain
pending) against Buyer, Seller, the Subsidiaries or any of their respective
Affiliated Companies seeking to prevent, delay or materially change the
transactions contemplated hereby or challenging any of the terms or provisions
of this Agreement or seeking material damages in connection therewith.
7.5 CONSENTS
All Consents of Governmental Entities necessary for consummation of the
transactions contemplated hereby shall have been obtained.
7.6 OPINION OF COUNSEL
Buyer shall have received an opinion or opinions of Xxxxxxxxxxx Xxxxxx
& Xxxxxxx LLP, counsel to Seller, in form and substance reasonably satisfactory
to Buyer.
7.7 CONDUCT OF BUSINESS OF SUBSIDIARIES
Since the date of this Agreement, the respective businesses of the
Subsidiaries shall have been conducted, in all material respects, in the
ordinary and usual course consistent with past practice.
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7.8 CLOSING DELIVERIES
Buyer shall have received each of the following:
(a) all documents, instruments and other closing deliveries specified
in Section 3.2; and
(b) such other evidence as Buyer may reasonably request in order to
establish compliance with the conditions of Closing set forth herein.
ARTICLE VIII
CONDITIONS PRECEDENT OF SELLER
The obligation of Seller to consummate the transactions contemplated
hereby is subject to the fulfillment or written waiver by Seller of each of the
following conditions prior to or at the Closing:
8.1 REPRESENTATIONS AND WARRANTIES
The representations and warranties of Buyer made hereunder shall be
true and correct in all material respects as of the date hereof and at and as of
the Closing Date, with the same force and effect as though made at and as of the
Closing Date, except for changes permitted or contemplated by this Agreement.
8.2 COVENANTS
Buyer shall have performed and complied in all material respects with
all covenants and agreements required by this Agreement to be performed or
complied with by Buyer prior to or at the Closing.
8.3 OFFICER'S CERTIFICATE
Seller shall have received a certificate of an authorized officer of
Buyer, dated the Closing Date, certifying that the conditions contained in
Sections 8.1 and 8.2 have been fulfilled.
8.4 NO ORDER OR PROCEEDING
No Order shall have been enacted, entered or promulgated (and remain in
effect) or shall have been enforced by any Governmental Entity which prohibits
or restricts the consummation of the transactions contemplated hereby. No action
or proceeding by any Governmental Entity shall have been commenced (and remain
pending) against Buyer, Seller, the Subsidiaries or any of their respective
Affiliated Companies seeking to prevent, delay or materially change
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the transactions contemplated hereby or challenging any of the terms or
provisions of this Agreement or seeking material damages in connection
therewith.
8.5 CONSENTS
All Consents of Governmental Entities necessary for consummation of the
transactions contemplated hereby shall have been obtained.
8.6 OPINION OF COUNSEL
Seller shall have received an opinion of Xxxxxx & Colon Morales, LLP,
counsel to Buyer, in form and substance reasonably satisfactory to Seller.
8.7 iTract LLC MERGER
The S-4 Registration Statement filed with the Securities and Exchange
Commission by iTract, Inc. shall have been declared effective and Seller shall
have received evidence reasonably satisfactory to Seller and its counsel that
the mergers contemplated by that certain Agreement and Plan of Merger, dated as
of April 11, 2000, by and among Xxxxx Caribe, Inc., iTract Acquisition Company,
LLC, iTract, Inc., iTract, LLC and International Commercial Exchange Systems,
Inc. will occur concurrently with or immediately following the sale of the
Shares and the Xxxxx Xxxxx hereunder.
8.8 CLOSING DELIVERIES
Seller shall have received each of the following:
(a) all documents, instruments and other closing deliveries specified
in Section 3.3; and
(b) such other evidence as Seller may reasonably request in order to
establish compliance with the conditions of Closing set forth herein.
8.9 STOCKHOLDER APPROVAL
Seller shall have obtained the approval of its stockholders of this
Agreement and the transactions contemplated hereby.
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ARTICLE IX
EMPLOYEE MATTERS
9.1 RETENTION OF EMPLOYEES
Buyer agrees to retain the employees currently employed by the
Subsidiaries and to honor their years of service for purposes of determining
applicable employee benefits, including vacation and severance benefits. This
Agreement shall not limit the ability of Buyer to terminate employees in the
ordinary course of business or it otherwise deems necessary or advisable in
connection with the business of the Subsidiaries following the Closing.
9.2 THIRD PARTY BENEFICIARIES
Notwithstanding any provision to the contrary contained herein, no
employee or former employee of any of the Subsidiaries will be construed as a
third party beneficiary under this Article IX of this Agreement or otherwise.
ARTICLE X
SURVIVAL OF REPRESENTATIONS
10.1 SURVIVAL OF REPRESENTATIONS
All representations, warranties, covenants and agreements made by
either party to this Agreement or in any certificate delivered pursuant to this
Agreement shall expire on the Closing Date, and Seller shall have no liability
whatsoever with respect to said representations, warranties, covenants and
agreements other than the covenants and agreements contained in Article II
hereof and Sections 6.6, 6.8 and 11.1.
ARTICLE XI
TERMINATION AND ABANDONMENT
11.1 TERMINATION
This Agreement may be terminated at any time prior to the Closing Date
as follows:
(a) by mutual consent of Buyer and Seller;
(b) by either Buyer or Seller at any time after October 15, 2000
if, through no fault of the party seeking termination, the Closing shall not
have occurred;
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(c) by Buyer, if there has been a material violation or breach by
Seller of any agreement, representation, covenant or warranty contained in this
Agreement which has rendered the satisfaction of any condition to the
obligations of Buyer impossible and such violation or breach has not been waived
by Buyer;
(d) by Seller, if there has been a material violation or breach by
Buyer of any agreement, representation, covenant or warranty contained in this
Agreement which has rendered the satisfaction of any condition to the
obligations of Seller impossible and such violation or breach has not been
waived by Seller;
(e) by either Buyer or Seller if a court of competent jurisdiction
shall have issued an Order permanently restraining or prohibiting the
transactions contemplated by this Agreement, and such Order shall have become
final and nonappealable; or
11.2 PROCEDURE AND EFFECT OF TERMINATION
In the event of termination of this Agreement and abandonment of the
transactions contemplated hereby by either of the parties pursuant to Section
11.1 hereof, written notice thereof shall forthwith be given to the other party
hereto and this Agreement shall terminate and the transactions contemplated
hereby shall be abandoned, without any liability or further obligation except
that (i) in the event of the termination of this Agreement by Buyer under
Section 11.1(c), Seller shall be obligated to reimburse Buyer for all
out-of-pocket expenses incurred by Buyer in connection with this Agreement and
the transactions contemplated thereby, up to a maximum of $100,000 and (ii) in
the event of the termination of this Agreement by Seller under Section 11.1(d),
Buyer shall be obligated to reimburse Seller for all out-of-pocket expenses
incurred by Seller in connection with the Agreement and the transactions
contemplated thereby, up to a maximum of $100,000.
ARTICLE XII
MISCELLANEOUS
12.1 EXPENSES OF THE PARTIES
Buyer will pay its own expenses, and Seller will pay its own expenses
and the expenses of the Subsidiaries, including the expenses of its accountants
and attorneys, in connection with the negotiation, execution and consummation of
the transactions contemplated by this Agreement. Seller shall be responsible for
any and all stock transfer taxes or documentation, any other
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similar registration costs, taxes and fees in connection with the transfer of
the Shares contemplated hereby.
12.2 PARTIES IN INTEREST
This Agreement will inure to the benefit of and be binding on and
enforceable against the parties hereto and their respective successors and
permitted assigns.
12.3 GOVERNING LAW
This Agreement will be governed by and construed in accordance with the
laws of the Commonwealth, regardless of the laws that might otherwise govern
under applicable principles of conflict of laws thereof.
12.4 CAPTIONS
The captions and section numbers appearing in this Agreement are
inserted only as a matter of convenience and in no way define, limit or construe
the scope and intent of such sections nor in any way affect the interpretation
of this Agreement.
12.5 ENTIRE AGREEMENT; AMENDMENTS
This Agreement, the disclosure schedules and the documents and other
agreements referred to herein, set forth the entire agreement of the parties
with respect to the subject matter hereof, and supersede any prior oral or
written agreement or understanding (other than any confidentiality agreement
executed by the parties prior to this Agreement) between the parties. No
modification or amendment of this Agreement may be made except in writing signed
by both parties.
12.6 NOTICES
Any notices or communications required or permitted hereunder will be
deemed sufficiently given by either of the parties hereto to the other party if
such notice or communication is in writing and delivered in person or by a
nationally recognized overnight delivery service, sent via facsimile, or mailed
(postage prepaid), by registered or certified mail, return receipt requested, as
follows:
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If to Seller, to:
Xxxxx Caribe, Inc.
Xxxx 000, Xxxxxxxxx 0.0
Xxxx Xxxx, Xxxxxx Xxxx 00000
Fax: (000) 000-0000
Attention: Chief Executive Officer
with a required copy to:
Xxxxxxx Xxxxxxx, Esq.
Xxxxxxxxxxx Xxxxxx & Xxxxxxx LLP
Banco Popular Center, Suite 1901
000 Xxxxx Xxxxxx Xxxxxx
Xxxx Xxx, Xxxxxx Xxxx 00000
Fax: (000) 000-0000
If to Buyer, to:
Empresas Xxxxx, Inc.
Xxxx 000, Xxxxxxxxx 0.0
Xxxx Xxxx, Xxxxxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
with a required copy to:
Xxxx Xxxxxx Xxxxxx Pagan, Esq.
Suite 1112, Home Mortgage Plaza
000 Xxxxx xx Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
or to such other address or addresses as hereafter will be furnished as provided
in this Section 12.6 by either of the parties hereto to the other party hereto.
Each such notice will be deemed to have been given as of the date received. A
return receipt, or evidence of refusal, obtained by the Post Office authorities
at the request of the sender, or the expiration of ten days after mailing, will
be conclusive as of the fact of receipt.
12.7 COUNTERPARTS
This Agreement may be executed in counterparts, each of which will be
deemed to be an original, and together will constitute one and the same
instrument.
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12.8 ASSIGNMENT
This Agreement may not be assigned by either party hereto without the
prior written consent of the other party, except that Buyer may assign its right
to any of its Affiliated Company, but no such assignment shall relieve Buyer of
its obligations hereunder.
12.9 BROKERS
Buyer and Seller each represent and warrant to the other that, except
for San Xxxx Holdings, Inc., the fees and expenses of which will be paid by
Seller, all negotiations between them have been carried out by them directly,
without the intervention of any third person, and that there are no broker's
commissions, finder's fees or other payment payable to any Person in connection
with the transactions contemplated hereby.
12.10 ACCESS TO INFORMATION
For a period of eighteen (18) months following the Closing Date, Buyer
will give Seller and its officers, employees and representatives reasonable
access, upon reasonable advance notice, to such documentation and information
which Seller or its affiliates may reasonably request for inspection and copying
at Seller's expense, provided that such access and inspection and copying shall
be conducted in such a manner as not to interfere unreasonably with the business
and operations of the Subsidiaries and, provided further, that Seller and its
officers, employees and representatives shall keep all such documentation and
information confidential.
12.11 EXTENSION; WAIVER
At any time prior to the Closing Date, the party entitled to the
benefits of the respective term or provision may (a) extend the time for the
performance of any of the obligations or other acts of the other party hereto,
(b) waive any inaccuracies in the representations and warranties contained
herein or in any document, certificate or writing delivered pursuant hereto or
(c) waive compliance with any obligation, covenant, agreement or condition
contained herein. Any agreement on the part of either party to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of the party entitled to the benefits of such extended or
waived term or provision.
12.12 VALIDITY
The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, each of which shall remain in full force and effect.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
XXXXX CARIBE, INC.
By: /s/ XXXXXXX XXXXX
-----------------------------
Name: Xxxxxxx Xxxxx
Title: Director
EMPRESAS XXXXX, INC.
By: /s/ XXXXXXX X. XXXXXXX
-----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President and Chief
Executive Officer
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