Exhibit (d)(3)
[Please note that following is an English translation of a document written in
Spanish which is also attached as an exhibit to the Schedule TO. Although
Purchaser believes the following English translation to be an accurate
translation of the original document written in Spanish, the following English
translation is qualified in its entirety by reference to the original document
written in Spanish.]
This Agreement (the "Agreement") is entered into by and among PRIMOR ALIMENTOS
C.A., a Venezuelan corporation with domicile in the City of Caracas and
originally registered as ALPROVENCA, Alimentos y Productos Venezolanos C.A. in
the Fifth Commercial Registry of the Judicial Circumscription of the Federal
District and State of Miranda on September 23, 1998, under No. 42, Volume
251-A-Qto., (such name was changed pursuant to a document recorded in the above
mentioned Registry on December 13, 2000 under No. 49, Volume 491A Qto.) ("Primor
Alimentos"), represented by its Director, Xxxxxxx Xxxxxxx G., a Venezuelan
citizen of full age, holder of identity card No. 6.818.047, whose authority was
evidenced by the document attached hereto and marked "Exhibit A"; PRIMOR
INVERSIONES C.A., a Venezuelan corporation with domicile in the City of Caracas
and registered in the referenced Registry on January 9, 2001, under No. 81,
Volume 497-A QTO. ("Primor Inversiones" or "The Offeror" and, together with
Primor Alimentos, "Primor") represented by its Director Xxxxxxx X. Xxxxxxx a
Venezuelan citizen of full age, holder of identity card No. 6.818.047, whose
authority was evidenced by the document attached hereto and marked "Exhibit B",
PARTY OF THE FIRST PART, and XXXXXXXX XXXXX XXXX, a Venezuelan citizen of full
age, holder of identity card No. 4.769.803; XXXXXXX XXXXX XXXXXX, a Venezuelan
citizen of full age, holder of identity card 5.541.127; XXXXXX XXXXXXX XX XXXXX,
a Venezuelan citizen of full age, holder of identity card No. 941.150, XXXXXX
XXXXX, a Venezuelan citizen of full age, holder of identity card 11.306.466,
XXXXXX XXXXX, a Venezuelan citizen of full age, holder of identity card
10.335.123, represented by Xxxxxxxx Xxxxx, a Venezuelan citizen of full age, a
resident of Caracas and holder of identity card 4.769.803, whose representation
authority was evidenced by a power of attorney granted on 15
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January 2001, XXXXXX XXXXX, a Venezuelan citizen of full age, holder of identity
card No. 14.121.012, represented by Xxxxxxxx Xxxxx, whose particulars and
authority appear herein above, XXXXX XXXXXXX DE FRAGACHAN, a Venezuelan citizen
of full age, holder of identity card No. 350.085, XXXXX XXXXXX XXXXX, a
Venezuelan citizen of full age, holder of identity card No. 501.866; XXXXXXX DE
CHELMISNKI COLES, a Venezuelan citizen of full age, holder of identity card No.
3.174.756, XXXXX XXXXXX XXXXX, a Venezuelan citizen of full age, holder of
identity card No.2.154.559, NICHOLASHA LIMITED, a company incorporated and
existing under the laws of the British Virgin Islands, represented by Xxxxxxxxx
de la Xxxx, a Venezuelan citizen of full age and a resident of Caracas, holder
of identity card No. 5.538.705, duly empowered to act by virtue of the power of
attorney granted to him on 15 January 2001, SHARE SYNDICATE I. L.L.C., a company
incorporated and existing under the laws of the State of Delaware, USA,
represented by its Vice-president and Secretary, Xxxxxxx Xxxxxx, a Venezuelan
citizen of full age and a resident of Caracas, holder of identity card No.
10.841.544, duly empowered to act by virtue of the resolution passed by the sole
administrator of the company on December 8, 2000, SHARE SYNDICATE II, L.L.C., a
company incorporated and existing under the laws of the State of Delaware, USA,
represented by its President and Secretary, Xxxxxxxxx de la Xxxx, a Venezuelan
citizen of full age and resident of Caracas, holder of identity card No.
5.538.705, duly empowered to act by virtue of the resolution passed by the sole
administrator of the company on December 8, 2000, SHARE SYNDICATE IX, L.L.C., a
company incorporated and existing under the laws of the State of Delaware, USA,
represented by its Vice-President and Secretary, Xxxxxxx Xxxxxx, a Venezuelan
citizen of full age and resident of Caracas, holder of identity card No.
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10.841.544, duly empowered to act by virtue of the resolution passed by the sole
administrator of the company on December 8, 2000, BERKSHIRE INTERNATIONAL S.A.,
a corporation incorporated and existing under the laws of the Republic of
Panama, represented by Xxxx Xxxxxx Xxxxxxx, a Venezuelan citizen of full age
residing in Caracas and holding identity card No. 3.189.825, acting in his
capacity as agent, who is duly empowered to act by virtue of the minutes of the
meeting of the board of directors of the company held on 15 January, 2001,
VALORES SAN NICOLAS C.A., a business company with domicile in the city of
Caracas, duly formed on 25 April 1986 by the recordation of the relevant
documents with the Commercial Registry of the Judicial Circumscription of the
Federal District and State of Miranda, under No. 2, Volume 26-A Pro, represented
by its agent, Angel Xxxxxxx Xxxxxxx, a Venezuelan citizen of full age, residing
in Caracas and holding identity card No. 945.768, duly authorized to act by
virtue of the power of attorney certified on 19 January 2001 before an officer
of Notary Public's Office No. 25 of the Libertador Municipality, Capital
District, under No. 36, Volume 04 of the Certification Book kept by such Office,
EDIFICIOS Y REMODELACIONES EL ENCUENTRO C.A., a company with domicile in the
city of Caracas, duly formed on 6 October 1988 by the recordation of the
relevant documents with the Commercial Registry of the Judicial Circumscription
of the Federal District and State of Miranda, under No. 68, Volume 5-A Sgdo.,
represented by its President, Xxxxx Xxxxx Xxxxxxx, a Venezuelan citizen of full
age, residing in Caracas and holding identity card No. 4.898.663, duly
authorized to act by virtue of the Certificate of Incorporation and Bylaws of
the company he represents and by the minutes of the Shareholders' Meeting held
on 15 January 2001, registered with the Second Commercial Registry of the
Judicial Circumscription of the Federal
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District and State of Miranda on 17 January 2001 and recorded under No. 5,
Volume 8-A Sgdo., DESARROLLOS 480 C.A., a company with domicile in the city of
Caracas, duly formed on 15 December 1976 by the recordation of the relevant
documents with the Commercial Registry of the Judicial Circumscription of the
Federal District and State of Miranda, under No. 101, Volume 110-A Pro.,
represented by its director, Xxxxx Xxxxxxx, a Venezuelan citizen of full age,
residing in Caracas and holding identity card No. 943.768, duly authorized to
act by virtue of the Certificate of Incorporation and Bylaws of the company he
represents and by the minutes of the Shareholders' Meeting held on 15 January
2001, registered with the First Commercial Registry of the Judicial
Circumscription of the Federal District and State of Miranda on 16 January 2001
and recorded under No. 60, Volume 6-A Pro., CONSULTORIA ESTUDIOS PROYECTOS, C.A.
(CONEPRO), a company duly formed on 26 March 1987 by the recordation of the
relevant documents with the Second Commercial Registry of the Judicial
Circumscription of the Federal District and State of Carabobo, under No. 21,
Volume 12-A, represented by Xxxxxxxx Xxxx, a Venezuelan citizen of full age,
residing in Caracas and holding identity card No. 4.769.803, duly authorized to
act by virtue of the power of attorney granted to him on 15 January 2001,
INVERSIONES STUART, C.A., a company with domicile in Caracas, duly formed on 28
August 1990 by the recordation of the relevant documents with the First
Commercial Registry of the Judicial Circumscription of the Federal District and
State of Miranda, under No. 19, Volume 248-A Sgdo., represented by Xxxxxxxx
Xxxxx, a Venezuelan citizen of full age, residing in Caracas and holding
identity card No. 4.769.803, duly authorized to act by
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virtue of the Certificate of Incorporation and Bylaws of the company he
represents and by the minutes of the Shareholders' Meeting held on 15 January
2001, duly authorized to act by virtue of the power of attorney granted to him
on 15 January 2001, XXXXXX FINANTIAL LTD., a company formed and existing under
the laws of the British Virgin Islands, represented by Xxxx Xxxxxx Xxxxxxx, a
Venezuelan citizen of full age, residing in Caracas and holding identity card
No. 3.189.825, duly authorized to act by virtue of the power of attorney granted
to him on 19 January 2001, and VALORES EL JUNKO, C.A., a company with domicile
in the city of Caracas, duly formed on 22 March 1988 by the recordation of the
relevant documents with the First Commercial Registry of the Judicial
Circumscription of the Federal District and State of Miranda, under No. 23,
Volume 80-A Pro., represented by its director, Xxxxxx Xxxxxxx xx Xxxxx, a
Venezuelan citizen of full age, residing in Caracas and holding identity card
No. 2.837.560, duly authorized to act by virtue of the Certificate of
Incorporation and Bylaws of the company (the "Shareholders" and the "Holders")
as evidenced by the documents attached hereto marked C-1 to C-14, which make a
part hereof, ALL OF WHOM ARE PARTIES OF THE SECOND PART. This Agreement shall be
governed by the Provisions below which, together with all the Exhibits hereto,
shall constitute the entire Agreement.
1. SUBJECT MATTER.
------------------
Subject to the terms and conditions hereof, Primor agrees to purchase from the
Shareholders and Holders and such Shareholders and Holders agree to sell to
Primor, as a single unit, one billion, three hundred eighty-four million, four
hundred forty-seven thousand, one hundred five (1,384,447,105) shares of
MAVESA S.A. ("Mavesa"), a business company originally recorded on 19 May, 1949
in the Commercial Registry maintained by the District Court on Commercial
Matters of the Federal District under No. 522, Volume 2-B. The latest amendment
was recorded with the First Commercial Registry of the
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Judicial Circumscription of the Federal District and State of Miranda on 28
August 2000, under No. 39, Volume 148-A-Pro. The par value of such shares (the
"Shares") is 10 Bolivares (Bs. 10) each, two hundred ninety-six million, six
hundred seven thousand, one hundred fifty-nine (296,607,159) of which are
represented by four million, nine hundred forty-three thousand, four hundred
fifty-three (4,943,453) American Depositary Receipts (the "ADRs") issued by The
Bank of New York and, together with the Shares, the "Securities". Each ADR
represents 60 Mavesa shares. It is a material provision of this Agreement that
the Securities be purchased as a single unit, i.e., with respect to the total
number of such Securities. The purchase shall under no circumstances be made in
parts or fractions.
The obligation to transfer the ownership rights on the Securities and the
obligation to pay the price therefore will be enforceable only if the Offers are
successful and upon the appropriate Offer closings effected in the manner set
forth in section 3 below.
2. PRICE
--------
The price (the "Price") to be paid for the Securities shall be US$0.1416887470
per Share and US$8.5013248220 per ADR. The full price to be obtained by
Shareholders and Holders shall be one hundred ninety-six million, one hundred
sixty thousand, five hundred seventy-five US dollars and sixty cents (US$
196,160,575.60). The price will be paid in United States dollars only. Exhibit D
hereto sets forth the portion of the Price that will be paid to each Shareholder
and Holder.
3. SECURITIES PURCHASE AND SALE PROCEDURE
-----------------------------------------
Primor's acquisition of the Securities as a single unit implies that Primor will
have a Controlling Majority interest in Mavesa. Consequently, the purchase
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shall be made subject to the provisions of the Capital Market Law, of the Rules
on Assumption of Control of Companies which make Public Offers of Shares and
other Rights Regarding the Same, as published on 19 September, 2000 in the
Republic of Venezuela Official Gazette No. 37,039 (the "Rules on POs"), of the
Rules of the Venezuelan Securities Commission ("Venezuelan Securities
Commission"), including the Rules on Capital Market Transparency established by
the Venezuelan Securities Commission and published on 26 February, 1999 in the
Republic of Venezuela Official Gazette No. 36,650, and of other laws applicable
in Venezuela, including the Income Tax Act and its regulations (such laws
applicable in Venezuela shall be hereinafter referred to as the "Venezuelan
Regulations"). As to ADRs, the referenced purchase shall abide by the
regulations in force in the United States of America (hereinafter the "American
Regulations").
The procedure set forth below will be followed in order to enforce the
Venezuelan and American Regulations:
A) Primor and the Shareholders and Holders, acting through the Representative
(as defined in section 4 below) shall, immediately after the execution
hereof, make a joint disclosure of the terms of this Agreement in a manner
that will ensure the transparency and protection of all the shareholders
and holders of ADRs, pursuant to the provisions of the Venezuelan and
American Regulations.
B) Subject to the terms and conditions hereof, Primor will simultaneously
carry out (i) a controlling interest public offering in Venezuela, directed
to all Mavesa shareholders (the "Venezuela Offering"), and (ii) a
securities purchase public offering in the United States of America (the
"US Offering", and together with the Venezuela Offering, the "Offers")
directed to all Mavesa ADR holders.
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C) The subject matter of the offers will be the purchase of a number of
outstanding Mavesa shares and ADRs (free of pledges, security assignments,
privileges and any other encumbrance that may negatively affect the full
use, enjoyment and disposition thereof) that jointly represent at least
sixty-five percent (65%) of the outstanding share capital of Mavesa (the
"Base Condition"). However, Primor will state in the Offers that if valid
acceptances are received from Mavesa shareholders and ADR holders that
allow Primor to acquire, as indicated above, a number of Mavesa shares and
ADRs in excess of the referenced percentage, then Primor will purchase all
the outstanding Mavesa shares and ADRs that are offered to Primor during
the life of the Offers. Consequently, there will be no Offer prorating.
D) The Offer price shall be US$0.1416887470 per Mavesa share and US$
8.5013248220 per Mavesa ADR, i.e., the same price to be paid to the
Shareholders and Holders in accordance with the provisions of section 2
hereof.
E) The initial duration period of the Offers shall be twenty-one (21) trading
days, commencing at the start of the Offers.
F) Exhibits E-1 and E-2 describe the main terms and conditions of the Offers.
It is agreed that Primor will be able to unilaterally increase the price,
extend the Offer periods, decide whether the Offers have failed, waive the
Base Condition or any other condition or rule for the benefit of Primor, or
terminate or revoke the Offers pursuant to the terms and conditions
established in such Offers. If the Venezuelan Securities Commission or the
US Securities and Exchange Commission (the "SEC") request that the
structure of the Offers be changed, Primor and the Shareholders and
Holders, acting through their Representative, will
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mutually and in good faith determine such changes. If no agreement has been
reached within ten (10) trading days following the request by the
Venezuelan Securities Commission or the SEC, Primor or the Shareholders and
Holders may treat this Agreement as terminated in the manner set forth in
section 11 below.
G) In order to keep a balance with respect to the Offers and to provide equal
treatment to all Mavesa shareholders and ADR holders, the terms and
conditions of the Offers shall be substantially the same, and they will
only change where required by the Venezuelan or American Regulations or by
the practices of the American or Venezuelan markets.
H) Primor will allow the Representative of the Shareholders and Holders and
their financial, accounting and legal advisors to examine and make
observations to the reports, prospectuses and any and all documents that
must be filed with the Venezuelan Securities Commission and/or with the
SEC; such examinations and observations must be made in advance within
periods reasonably habitual for transactions of this nature.
Notwithstanding the foregoing, Primor will abide by the Venezuelan and
American Regulations. Primor will provide the Representative with a first
draft of the Offer Reports no later than three (3) trading days before the
date on which such Reports are to be filed with the Venezuelan Securities
Commission and the SEC. The Shareholders and Holders will allow Primor and
its financial, accounting and legal advisors to examine and make
observations to the statements, reports and other documents that they must
file with the Venezuelan Securities Commission or the SEC in connection
with this Agreement and with the Offers, such examinations and observations
must be made in advance within periods reasonably habitual for transactions
of this nature. Notwithstanding the foregoing,
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the Shareholders and Holders will abide by the Venezuelan and American
Regulations. Primor and the Shareholders and Holders Representative shall
agree on the terms of any representation or document related to the
background and formation of the negotiation.
I) Subject to the terms and conditions hereof, within five (5) trading days
from the execution of this Agreement Primor will file with the SEC a no
action letter in connection with the Offers. Should the SEC present no
objections thereto, Primor will file the Offer Report Disclosure
Authorization set forth in section 6 of the Rules on POs with the
Venezuelan Securities Commission within ten (10) trading days from
receiving the SEC response in writing. Primor will forthwith send a copy of
the response to the Representative. The Offers shall start as soon as
practicable, but within a period not in excess of five (5) trading days
following the date on which the Venezuelan Securities Commission issued the
Offer report disclosure authorization and the relevant Summaries.
J) Subject to the terms and conditions hereof, as soon as practicable, but
within a period not in excess of five (5) trading days following the Offer
commencement date, the Shareholders and Holders shall accept the Offers for
all of the Securities, shall follow the acceptance procedures set forth in
the Offers and shall only withdraw their acceptances in the manner provided
for in section 11 hereof. The Shareholders and Holders whose Securities are
subject to the Encumbrances described in Exhibit F shall make sure that the
encumbrance creditors accept the Offers and the terms and conditions
thereof.
K) If Mavesa shares and ADRs (including the Securities) are purchased under
the Offers, the settlement and payment of the price will be made
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within the periods of time mandated by the Venezuelan and American
Regulations, respectively.
L) If the price for the Offer in Venezuela or in the US is not paid within
five (5) trading days after the closing of the respective Offer, Primor
shall pay to all of Mavesa shareholders and ADR holders who validly
accepted the Offers and whose price remains unpaid, as sole compensation
for interest and damages, late interest at a rate of nine percent (9%) per
annum; such interest will accrue as from the sixth (6th) trading day
following the closing of the Offer in Venezuela or in the US, and will
continue accruing until the date on which the payment related to the shares
or ADRs is made available to shareholders or ADR holders. The compensation
provided herein shall only be paid where the reasons for default are
exclusively attributable to Primor. The following shall not be deemed
reasons for default attributable to Primor: delays caused by actions or
omissions of governmental authorities, of the Caracas Stock Exchange, of
the Venezuelan Securities Depository, or arising from settlement procedures
established by the Caracas Stock Exchange or other agencies.
M) Primor will designate a brokerage firm for Offer closing purposes in
Venezuela. The closing of the Offer in Venezuela will take place during a
special session of the Caracas Stock Exchange (the "Closing Date of the
Offer") as provided by the Venezuelan Regulations and by the Caracas Stock
Exchange rules.
N) The parties acknowledge that a portion of the price for the shares included
in the Offer in Venezuela shall be withheld. The amount withheld shall be
equivalent to the withholding percentage provided in the Venezuelan
Regulations. The amounts withheld from the ADR price
11
shall be equivalent to the withholding percentage provided in the
American Regulations, if applicable.
O) Primor shall pay the expenses related to the preparation and acceptance
of the Offers and any other expense to be paid by the initial offerors in
accordance with the Rules on POs and the American Regulations. Primor
shall not pay any expenses to be paid by Mavesa or by the Shareholders
and Holders in accordance with the Rules on POs and the American
Regulations. Professional fees of financial and legal advisors of each of
the parties arising out of this Agreement and of the Offers shall be paid
by the party who hired such advisors.
4. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS AND HOLDERS.
-----------------------------------------------------------
A) Representations and warranties of Shareholders and Holders in connection
------------------------------------------------------------------------
with the Securities
-------------------
On the date hereof and on the Closing Date of the Offer the Shareholders
and Holders jointly represent and warrant as follows:
(i) That they own the Securities listed next to the name of each
Shareholder or Holder in Exhibit G hereto
(ii) That the Securities represent thirty-eight point forty-nine
percent (38.49%) of the outstanding share capital of Mavesa and
that, collectively, such securities represent the whole of the
shares and ADRs of Mavesa directly or indirectly owned by the
Shareholders and Holders.
(iii) That the Securities have been validly issued, subscribed for,
acquired and paid in full and that they are outstanding and free
and clear of any Encumbrance, except as otherwise described in
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Exhibit F. Except as otherwise provided in this Agreement or in
the Bylaws of Mavesa, which the parties hereby declare to know,
the Securities are not subject to any voting agreements, voting
trusts, shareholder agreements, options, subscription rights,
preemptive rights, acquisition, conversion or exchange rights or
any other arrangement that may require the Shareholders or Holders
to transfer or encumber the Securities for any reason whatsoever.
(iv) Each Shareholder and Holder has the ability, power and authority
(including spousal authority (if required) or any other authority
from a governmental authority or a third party) needed to execute
this Agreement, to fulfill the obligations arising herefrom, and
to sell the Securities in accordance with the terms herein. This
Agreement has been duly signed by each Shareholder and Holder or
by their duly authorized representatives. Consequently, this
Agreement is valid, binding and enforceable in its entirety with
respect to the parties, it does not run counter to the provisions
of the Bylaws of Mavesa, or to the provisions of any other
agreement or document or obligation of any of the parties, it does
not entail the termination of any other agreement or document to
which the Shareholders or Holders are parties, it does not give
any third party the right to terminate, resolve or rescind any
agreement or instrument to which the Shareholders or Holders are
parties, nor does it violate any applicable regulation or judicial
or administrative action.
(v) Upon their acquisition by Primor, the Securities will give Primor
the right to exercise all economic and political rights provided
in
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the Venezuelan Regulations, in the Bylaws of Mavesa and in the ADR
deposit agreement, subject to the observation of the Rules on POs.
B) REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS AND HOLDERS IN
-----------------------------------------------------------------
CONNECTION WITH MAVESA AND ITS SUBSIDIARIES
-------------------------------------------
The Shareholders and Holders listed in Exhibit H jointly and severally
represent and warrant that, on the date hereof,
1. Subsidiaries. Exhibit I contains a list of Mavesa's subsidiaries
------------
with an indication of Mavesa's shareholding in each of them. The
shares and other equity interests of Mavesa or its Subsidiaries
described in Exhibit I-1 are free and clear of Encumbrances and
are not subject to any voting agreements, voting trusts,
shareholder agreements, options, subscription rights, preemptive
rights, acquisition, conversion or exchange rights or any other
arrangement that may require Mavesa or its Subsidiaries to
transfer or encumber such shares or interests, except in the
manner established in its certificate of incorporation and bylaws.
2. Capital Stock; Shares.
---------------------
A) Mavesa's capital stock is divided into three billion, six
hundred ninety million (3,690,000,000) common registered
shares of a single class with a par value of ten Bolivares
(Bs. 10) each. There are three billion, five hundred ninety
seven million, ninety-nine thousand, eight hundred thirty-
nine (3,597,099,839) outstanding shares. No issuance of
additional Mavesa shares has been authorized.
B) Except for the Repurchase Plan adopted at the Shareholders'
Meeting of August 20, 2000 (The "Repurchase Plan") or the
right to convert shares into ADRs, there is no option,
security, agreement,
14
plan, commitment or right of any kind whatsoever that binds
Mavesa or any of its Subsidiaries to (i) issue, dispose of,
acquire, redeem, convert, subscribe for or exchange any
share or ADR of Mavesa or its Subsidiaries, (ii) issue
securities convertible into or exchangeable for shares or
ADRs of Mavesa or its Subsidiaries.
3. Financial Statements. To the knowledge of the Shareholders and Holders,
--------------------
the audited financial statements and the unaudited financial statements
included in the reports filed with the Venezuelan Securities Commission
and with the SEC and those audited as of October 31, 2000 (hereinafter,
including their notes and schedules, the "Financial Statements") present
fairly the financial position, result of the operations and the changes
in the consolidated financial condition of Mavesa and its Subsidiaries as
of the date thereof and for the periods indicated (subject, in the case
of the unaudited financial statements, to year end adjustments). The
financial statements have been prepared (i) in conformity with generally
accepted accounting principles in Venezuela and in the US, applied
consistently with the ones applied in previous periods (except as
otherwise indicated in the respective notes to the Financial Statements)
and in conformity with applicable regulations (the "GAAP"), and (ii) on
the basis of the books and records of Mavesa and its Subsidiaries.
4. Property and Assets; Encumbrances. Mavesa and each of its Subsidiaries
---------------------------------
own or have the continuous right to use any and all material assets
needed for the continuity of the business under current conditions, free
and clear of any Encumbrances, except as indicated in Exhibit J.
5. Industrial Property Rights.
--------------------------
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A) Exhibit K lists the registrations and applications for
registration in connection with trademarks, slogan, trade names,
labels, logos and any other intellectual property right subject to
registration, copyrights, whether registered or unregistered (the
"Industrial Property Rights") owned by or licensed to Mavesa and
its Subsidiaries, free and clear of any Encumbrance.
B) To the knowledge of the Shareholders and Holders, Mavesa and its
Subsidiaries are not violating any Industrial Property Right of
third parties, and such Shareholders and Holders have not received
written claims or notices of violation of Industrial Property
Rights of third parties.
6. Agreements.
-----------
(A) Exhibit L lists the following agreements, which are currently in
force and which have been executed by Mavesa or its Subsidiaries
(the "Material Agreements"):
(1) agreements of any kind whatsoever that cause Mavesa or its
Subsidiaries to receive or to pay an amount of money or any
other consideration in excess of one million US dollars
(US$1,000,000), or its equivalent in any other currency in
a period of twelve (12) months, or that entail an
obligation, liability,
16
debt or contingency to be assumed by Mavesa or any of its
Subsidiaries in excess of one million UD dollars(US$
1,000,000), or its equivalent in any other currency in a
period of twelve (12) months;
(2) agreements of any kind whatsoever that entail the
termination, payment, indemnification, compensation or
right to request their termination in the event that a
change in control occurs with respect to Mavesa or its
Subsidiaries;
(3) trademark use or trademark coexistence license agreements;
and
(4) agreements with Related Persons.
(B) Exhibit L lists all of the Material Agreements.
(C) To the knowledge of the Shareholders and Holders, Mavesa and its
Subsidiaries have fulfilled all of the relevant obligations
imposed on them and arising from the Material Agreements. The
other parties to the Material Agreements have also fulfilled their
obligations thereunder. Mavesa and its Subsidiaries have not been
given any notice of default in connection with any Material
Agreement.
7. Non Off-Balance Sheet Liabilities or Significant Changes
--------------------------------------------------------
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Except (i) as shown in the Audited Financial Statements as of October 31,
2000, (ii) for the liabilities or obligations generated during the
ordinary course of business in a manner consistent with past practices,
or (iii) as shown in Exhibit M, (a) neither Mavesa nor its Subsidiaries
have liabilities or obligations of any kind whatsoever that are required
to be shown in the balance sheet of Mavesa or its Subsidiaries in
accordance with the GAAP, whether actual, contingent, due or undue, that
materially and adversely affect the audited financial statements, (b) the
ordinary course of business of Mavesa and its Subsidiaries has been
conducted in a manner consistent with past practices, and (c) none of the
events described in section 6 hereof have occurred.
8. Lawsuits. Exhibit N contains a list of all administrative,
--------
judicial or arbitration proceedings of any kind and of
jurisdictional or arbitration decisions under execution or of
administrative decisions of preventive or summary nature which
Mavesa or the Subsidiaries thereof have been given notice of or
which are known by the Shareholders and Holders and which involve
Mavesa or any of its Subsidiaries in amounts above one million
American Dollars (US$1,000,000), or an equivalent amount in other
currencies, or which object the validity of Important Contracts.
9. Compliance with the Rules and Regulations. Mavesa and its
-----------------------------------------
Subsidiaries and, if applicable, the Shareholders and the Holders,
comply with all the laws, regulations and rules related to the
securities and capital market and with the tax laws in force in
Venezuela and in the United States. To the extent known by the
Shareholders and the Holders, Mavesa and its Subsidiaries
18
comply with all the laws, regulations, resolutions and with any
other rules, administrative acts and applicable judgements, either
national, state, municipal or foreign ones.
There is no communication or notice arising from governmental
authorities and sent to Mavesa or its Subsidiaries which proves
non-performance or shows any facts that may imply failure to
comply with the rules.
10. Financial Information and Prospective Cash Flow. The financial
-----------------------------------------------
information as of December 31, 2000 prepared according to the GAAP
and the prospective cash flow as of March 31, 2001 which are
contained in Exhibit N-1 hereof, present fairly Mavesa financial
position and that of the Subsidiaries thereof at that date.
Moreover, the activity of the financial position of Mavesa and its
subsidiaries for the prospective period have been prepared by
Mavesa in good faith, based on the books and records thereof and
taking into account the information known by Mavesa and its
Subsidiaries at the present date. The best estimate of regular and
extraordinary income, as well as disbursements of any kind (costs,
expenses, investments, including those incurred with relation to
this Agreement and to the transactions provided for herein, etc.)
have been included therein.
For the purpose of this Agreement, the following terms shall have the following
meaning:
"Encumbrances": mortgages, pledges and any other interests, assignments, sales
with right of redemption, sales with title retention, conditional sales,
securitization, liens, trusts, restraining orders to sell and assess, seizures
and any other judicial summary or preventive measure, third parties' rights or
19
claims that may affect the right of full use, enjoyment and disposition of a
property, purchase options and any other encumbrances, not including easements.
"Related Persons": Related persons are (i) the Shareholders and the Holders;
(ii) persons who are directors or executive officers of Mavesa or any of its
Subsidiaries; (iii) shareholders or holders of ADRs of Mavesa representing more
than five (5%) percent of Mavesa capital stock (other than the Shareholders and
Holders); (iv) any person which directly or indirectly controls, is under the
control of, or under the joint control of any of the persons mentioned in the
above paragraphs; (v) the spouses or any relative of the persons mentioned in
the above subsections, up to relatives to the second degree by marriage and to
the fourth degree by consanguinity.
"Subsidiaries" of Mavesa means any legal person whose capital stock or assets is
directly or indirectly owned by Mavesa, in more than fifty percent (50%), or
any legal person where Mavesa has the right to choose a majority of the members
of the Board or similar body.
FIVE: REPRESENTATIONS AND WARRANTIES OF PRIMOR
----------------------------------------------
Primor represents and warranties that as at the present date:
(i) except for the authorizations of the Venezuela Securities Commission and
of the SEC provided for herein, Primor has any necessary power and
authorization (including from government authorities or any third party)
to enter into this Agreement, to perform the obligations provided herein
and to purchase the Securities, under the terms set forth herein. This
Agreement has been duly signed by the authorized representative of
Primor. Therefore, this Agreement is valid, binding and enforceable among
the parties thereto; it does not violate any other Agreement, document or
obligation of any party; neither does it cause the maturity
20
of the terms of any other Agreement or document where Primor is a party
thereto; it does not grant any third party the right to terminate any
other Agreement or instrument where Primor is a party thereto and it does
not violate any judicial, regulatory act or applicable rule.
(i) Primor has the financial and indebtness capacity to perform the
obligations hereunder and the obligations to be assumed by virtue of the
Offers.
(ii) Primor is a party of the industrial holding "Empresas Polar" and shall
remain as such for a period of twelve (12) months following the Closing
Date of the Offers.
(iii) Primor is a corporation duly organized and existing. There are no grounds
for dissolution or liquidation, and it is empowered to execute this
Agreement and to make Offers.
(iv) Primor is financially able to meet its obligations and it is not under
any proceeding prior to the adjudication of bankruptcy; it is not a party
of any lawsuit whose negative result may materially affect its
obligations arising from this Agreement and the Offers.
SIX: OBLIGATIONS ASSUMED BY THE SHAREHOLDERS AND HOLDERS
--------------------------------------------------------
The Shareholders and Holders mentioned in Exhibit H shall make sure that, from
the present date up to the date of actual election of the new Directors of
Mavesa appointed by Primor at a Special Meeting of Shareholders of Mavesa (the
"Date on which Officers take Office"), Mavesa and its Subsidiaries:
A) shall conduct their business within the regular course of business
consistently with its past performance for the last twelve (12) months,
except for the provisions of Exhibit O;
21
B) shall not submit grounds for dissolution of Mavesa or any Subsidiaries
thereof provided for in the applicable rules; they shall not be
liquidated, merged or divided;
C) shall not sell in whole or in part any substantial fixed assets for the
regular performance of the business or any Industrial Property Rights;
they shall not give any kind of encumbrance on the whole or part of the
substantial fixed assets thereof for the regular performance of the
business or any Industrial Property Rights, except for the provisions set
forth in Exhibit P;
D) shall not unfairly dismiss nor hire employees (but, they shall abide by
the labor commitments made before the date of this Agreement); they shall
not enter into material agreements with current employees; they shall not
increase labor compensations or benefits (except those provided for in
Collective Bargaining Agreements in force or provided by law); and they
shall not adversely affect the current relationship with their suppliers,
contractors and customers;
E) shall not authorize dividend distribution to the shareholders, except (i)
in the amounts required in article 115 of the Capital Market Act; (ii)
dividends totally or partially payable to Mavesa by Subsidiaries which
are totally owned by Mavesa; they shall not change their habitual manner
of quarterly payments of dividends; and they shall not call Special
Shareholders' Meetings other than the one provided for herein.
F) shall not redeem nor purchase their respective shares or ADRs (including
without limitation, the purchase of shares or ADRs according to the
Repurchase Plan); they shall not sell nor distribute shares or ADRs of
Mavesa owned by Mavesa or by any Subsidiaries thereof;
22
G) shall not issue shares, ADRs or securities that may be exchanged or
converted into shares or ADRs, or securities that may grant the right to
vote in Mavesa or in the Subsidiaries thereof; and they shall not grant
options that give the right to subscribe, purchase or exchange shares or
ADRs of Mavesa;
H) shall timely perform the obligations arising from the laws, regulations,
resolutions and any other applicable Venezuelan and American regulation
related to the capital or securities market, and specifically, they shall
timely submit the reports, information or documentation required by the
Venezuelan and American regulation on securities matters. Furthermore,
they shall disclose the information required in such regulation and said
documentation shall comply with the Venezuelan and American Regulation
and specially they shall timely submit the Form 14D-9 and the comments on
the Offers according to the applicable rules, and the information
contained therein shall comply with the Venezuelan and American
Regulation;
I) shall maintain the existing insurance policies with the current coverage;
J) shall not modify, terminate, infringe or assign any Material Agreements
or Industrial Property Rights; they shall not enter into any other
contracts that are deemed Material Agreements; they shall not waive,
accept, dismiss, enter into an agreement in connection with lawsuits;
they shall not require a decision in Equity with relation to any rights
under any Material Agreements and Industrial Property Rights; they shall
not lease their assets;
K) shall not incur financial liabilities above two million American Dollars
(US$2,000,000), or its equivalent amount in other currencies; they shall
not secure third party's obligations other than the obligations of their
23
Subsidiaries; they shall not grant loans or advances; they shall not make
investments, except in the case stated in Exhibit Q, or in case of
investments during the regular course of business;
L) shall not modify any accounting methods or practices, except the
modifications required by law, rules or the GAAP; and
M) shall not adopt any decision that renders any representation or warranty
of the Shareholders or Holders contained in Subsection B) of Section Four
inaccurate.
SEVEN: OTHER OBLIGATIONS OF THE SHAREHOLDERS AND HOLDERS
--------------------------------------------------------
Apart from the obligations assumed in the remaining Sections of this Agreement,
the Shareholders and Holders assume the following obligations:
A) Upon acceptance of the Offers, the Shareholders and Holders shall waive,
only for the Offers, the preemptive rights that may correspond according
to Section Six of the Certificate of Incorporation and Bylaws of Mavesa.
B) Except otherwise provided for herein, the Shareholders and Holders shall
not indirectly nor directly request or make any proposal, offer or claim
of information through third parties; they shall not supply information
to any third party, and shall not be a party in a discussion or
negotiation with any third party intended to enter into preliminary
and/or final agreements that involve (i) the sale or transfer of any
securities issued by Mavesa (including shares and ADRs) or by any
Subsidiaries thereof that the Shareholders and Holders may own directly
or indirectly in Mavesa or in any Subsidiaries thereof, (ii) approval of
mergers, divisions, consolidation, business combination, reorganization,
recapitalization, or any other transaction related to
24
Mavesa or any Subsidiaries thereof or any entity or corporate body that
directly or indirectly owns Mavesa securities or those of any of the
Subsidiaries thereof (each of the transactions mentioned in subsections
(i) and (ii), hereinafter referred to as a "Transaction").
C) During the term of this Agreement the Shareholders and Holders shall
postpone any discussion or negotiation related to a Transaction that may
be currently performed by the Shareholders and Holders or by the
representatives thereof.
D) Each Shareholder and Holder shall immediately give written notice to the
Offeror of any offer or request, either verbal or written, made by any
natural person or legal person or entity related to a Transaction
submitted to such Shareholder or Holder, including the identification of
the person that makes the offer or the request, except when forbidden by
confidentiality agreements executed before December 15, 2000.
E) The Shareholders and Holders shall call a Special Meeting of Shareholders
of Mavesa to be held no later than six (6) trading days following the
payment day of the Offers, in order to deal with the appointment of new
Directors and Statutory Auditors (comisarios).
F) The Shareholders and Holders shall comply with the laws, regulations and
any other applicable rules related to Venezuelan and American securities
and capital markets.
G) The Shareholders and Holders shall not vote for modifications of the
Certificate of Incorporation and Bylaws of Mavesa or modifications of the
rule on dividends, except for the amounts required by article 115 of the
Capital Market Act; and they shall not suggest nor vote for the
modification of their habitual manner of quarterly payment of
25
dividends; they shall not request the calling of special meetings of
shareholders, except the one provided for herein.
EIGHT: OBLIGATIONS ASSUMED BY PRIMOR
------------------------------------
Apart from the obligations assumed in the other Sections hereof, Primor is bound
to:
A) Not to exercise the right to limit the number of Shares or ADRs, subject
matter of the Offers foreseen in article 16 of the rules on POs and the
American regulation, without written consent of all the Shareholders and
Holders.
B) Not to exercise the right of withdrawal foreseen in subsection 1 of
article 16 of the rules on POs, without written consent of all
Shareholders and Holders; having Primor the right to terminate this
Agreement according to the provisions set forth therein.
NINE: INDEMNITY
----------------
(A) Indemnity by the Shareholders and Holders
-----------------------------------------
(a) The Shareholders and Holders, and with relation to subsection B) of
Section Four and Section Six, only the Shareholders and Holders mentioned in
Exhibit H shall indemnify and hold Primor harmless (and Mavesa and the
Subsidiaries thereof as from the Date on which officers take office), and their
respective assignees, directors, executives, advisors and shareholders (jointly
referred to as "Indemnitees") against any and all Damages (defined below)
sustained by the Indemnitees that directly result from any of the following:
(i) false or inaccurate representation by any Shareholders or
Holders contained in Section Four herein;
(ii) non-compliance of any obligation provided for herein by the
Shareholders or Holders; and
26
(iii) any claim that has been sustained by final judgement or arbitration
award made by third parties with whom any Shareholders, Holders or
Mavesa have entered into final or preliminary agreements or to whom
any Shareholders, Holders or Mavesa have made any representation or
have given any warranty with relation to the sale of any assets,
securities or interests in Mavesa and the Subsidiaries thereof.
For the purposes hereof, "Damages" mean any damages that may be cured according
to the Venezuelan legislation, including without limitation, damages resulting
from the debtor's contractual breach, income loss, interest, penalties,
fines, taxes, costs and expenses (including reasonable fees and expenses of
lawyers and experts, and any other expenses incurred in the defense with
relation to such Damages, provided that the claim is sustained by final
judgement or award).
(b) Should the Shareholders and Holders need to indemnify any of the
Indemnitees in accordance herewith, the Shareholders and Holders shall have no
right to claim indemnity from Mavesa or any Subsidiaries thereof. Consequently,
the Shareholders and Holders waive any counterclaim against such persons.
(B) Indemnity by Primor
-------------------
(c) Primor shall indemnify and hold the Shareholders and Holders harmless
(and Mavesa and the Subsidiaries thereof as from the Date on which officers take
office), and their respective assignees, directors, executives, advisors and
shareholders (jointly referred to as "Indemnitees") against any and all Damages
(defined below) sustained by the Indemnitees that directly result from any of
the following:
27
(i) false or inaccurate representation by any Shareholders or Holders
contained in Section Five herein;
(ii) non-compliance of any obligation provided for herein by Primor; and
(iii) any claim that has been sustained by final judgement or arbitration
award made by third parties with whom Primor has entered into final
or preliminary agreements or to whom Primor has made any
representation or given any warranty with relation to the sale of any
assets, securities or interests in Mavesa and the Subsidiaries
thereof.
(C) Indemnity Procedure
------------------------
(a) As soon as the Indemnitee is given notice of a claim or the file of
any legal, arbitration or administrative action (an "Action") through which
indemnity or reimbursement is claimed against any Shareholder or Holder, or
against Primor, as the case may be, in accordance herewith ("Indemnitor"), the
Indemnitee shall give written notice to the Representative or to Primor, as
applicable, concerning such indemnity. It is understood that failure to give
such notice shall relieve Indemnitor from its indemnity liability, except when
failure to give such notice results in the loss or limitation of the right of
defense of the Indemnitor. Likewise, as soon as the Indemnitee knows about any
fact or omission with relation to which it may claim an indemnity or
reimbursement in accordance herewith, it must give notice to Indemnitor,
regardless whether there is a claim from any third party or not.
(b) Indemnitor is in charge of the defense of the Action, and the lawyers
who shall be in charge of such Action must be appointed by the Indemnitor. Such
lawyers shall be any of the ones mentioned in Exhibit R or any other lawyers
acceptable by the parties, being the Indemnitee able to
28
cooperate in the defense with its own lawyers. In case the Action is not
sustained by final judgement, arbitration award or administrative act, without
any remedies or recourses whatsoever, or while the final decision of the Action
is still pending, the parties shall bear the costs incurred during the process
and the lawyers' fees on an equal basis.
(c) Indemnitee shall not perform any of the acts set forth in Article 154
of the Code of Civil Procedures with relation to any Action without prior
consent of the Representative or Primor, as the case may be, which shall not be
unreasonably denied.
(d) The party which does not agree with the legal basis of the indemnity
shall give notice to the other, stating in detail the grounds for such
disagreement, no later than ten (10) trading days after reception of the
indemnity claim. Should the claim fail to be solved on a friendly basis, as per
provisions of Section Thirteen, any party may request an arbitration procedure,
according to the provisions of said Section. In case there is no disagreement
concerning the indemnity right relative to an indemnity claim within the period
of ten (10) trading days above mentioned, The Indemnitee shall have the right to
be indemnified within five (5) trading days following the end of the period of
ten trading days (10) above mentioned, or within five (5) trading days following
the amicable decision, if this takes place later.
(D) The right of the Indemnitee to be indemnified according to this Section
shall not be affected in any way by any inspection or audit performed by
any of the Indemnitors during the course of negotiation hereof.
(E) Limitations to the Indemnity Rights.
Subject to the provisions of the last paragraph of this subsection (E), the
obligation of the Shareholders, Holders and Primor, as the case may be, to
29
indemnify Indemnitees according to this Section, shall be subject to the
following limitations:
(i) The Shareholders and Holders shall be severally liable in connection
with the indemnity obligation in case of false or inaccurate
representations and warranties provided for in subsection (A) of
Section Four (Representations and Warranties of Shareholders and
Holders in connection with Securities). Such liability shall be in
force during three (3) years as from the Closing Date;
(ii) The Shareholders and Holders mentioned in Exhibit H shall be
severally liable in connection with the indemnity obligation in case
of false or inaccurate representations or warranties provided for in
subsection (B) of Section Four (Representations and Warranties of
Shareholders and Holders related to Mavesa and the Subsidiaries
thereof). Such liability shall be in force during twelve (12) months
as from the Closing Date, and the Shareholders and Holders shall be
only liable for Damages caused to Indemnitees up to a maximum amount
of ten million American Dollars, (US$10,000,000).
(iii) The Shareholders and Holders shall be severally liable in connection
with the indemnity obligation in case of breach of the obligations of
the Shareholders and Holders provided for herein. Such obligation
shall be in force during twelve (12) months as from the Closing date.
(iv) The indemnity obligation of Primor in case of false or inaccurate
representations or warranties provided for in Section Five shall be
in force during twelve (12) months as from the Closing Date; and
30
Primor shall be only liable for Damages caused to Indemnitees up to a
maximum amount of ten million American Dollars, (US$10,000,000);
(v) The indemnity obligation of Primor in case of breach of the
obligations provided for herein shall remain in force during twelve
(12) months as from the Closing Date.
The terms above stated shall extend until a final decision is passed with
relation to a claim, but only with relation to (i) court or out-of-court claims,
administrative actions or proceedings brought before expiration of the terms
mentioned in the above items of this subsection, or (ii) facts or omissions
whose notice is given by Indemnitee to Indemnitor within the above mentioned
terms, provided that the action or proceeding is brought within three (3) months
following maturity of such terms (and in this case, it relates to indemnity
obligations other than the ones set forth in subsection (A) of Section Four).
(F) In order to guaranty Indemnitees the indemnity payment for Damages to which
they may be entitled on account of false or inaccurate representations or
warranties provided for in subsection (B) of Section Four, Xxxxx Brothers,
Xxxxxxxx & Co., ("BBH") has given a letter of credit in the name of the
Shareholders and Holders named in Exhibit H, an irrevocable letter of credit in
the amount of ten million American Dollars (US$ 10,000,000) the beneficiary of
which is Primor Inversiones. Said letter of Credit, attached hereto as Exhibit S
(the "Letter of Credit"), has the following conditions: (i) its maturity date
shall be September 30, 2002, except in cases of early termination or extension
that are provided for herein below; and (ii) payment of the pertinent indemnity
amount or amounts shall be made
31
by BBH as soon as it receives the direction to do so from Banco Venezolano de
Credito C.A., S.A.C.A. ("BVC") under the following conditions:
(a) In case Primor gives the Representative and BVC the notice provided in
subsection (C)(a) hereof, that is enclosed hereto as T-1 and the
Representative fails to give notice expressing its disagreement, as
provided in subsection (C)(d) hereof, under the format of exhibit T-2,
BVC shall direct BBH, on the trading day twelve (12) following the
notice T-1, to proceed with the payment of the pertinent amount
charging it to the Letter of Credit.
(b) In case Primor and the Representative reach an agreement concerning
the payment of damages for the concepts mentioned in subsection (B) of
Section Four, Primor and the Representative shall jointly give notice
to BVC, in the format enclosed hereto as T-3, for the latter to
direct, within two (2) trading days, BBH to proceed with the payment
of the pertinent amount charging it to the letter of Credit.
(c) In case an indemnity payment for Damages for the concepts mentioned in
subsection (B) of Section Four is ordered by the arbitrators according
to Section Thirteen, Primor is empowered to unilaterally direct BVC,
under the format enclosed hereto as T-4, to request from BBH, within
the following two (2) trading days, the pertinent amount, charging it
to the Letter of Credit.
(d) Finally, should the arbitration award state that Primor is entitled to
an indemnity payment according to this Agreement, but a final decision
sustaining the Action is necessary, Primor is empowered, provided that
a final decision sustaining the Action is passed, to
32
immediately direct BVC, under the format enclosed hereto as T-5, to
request within the following two (2) trading days from BBH to proceed
with payment of the pertinent amount, charging it to the Letter of
Credit and enclosing a certified copy of the final decision.
In spite of the Letter of Credit being issued with a maturity date on September
30, 2002,
(i) Primor is bound to contact as soon as practicable BVC and BBH directly,
ordering the immediate cancellation of the Letter of Credit, when, by
virtue of any reason, this Agreement is terminated by any reason provided
for herein or by law.
(ii) In case that, as of August 31, 2002 there are indemnity claims filed within
the terms and conditions set forth in subsection (E) hereof, still pending
of a final decision, the Shareholders and Holders indicated in Exhibit H
must renew the Letter of Credit until September 30, 2003 under the same
conditions than the ones currently in force, but limited to an amount equal
to the sum of the outstanding claims plus ten percent (10%) of such sum.
Should said Shareholders and Holders fail to renew the Letter of Credit
before September 2002, Primor is empowered to unilaterally direct BVC to
request, within the following two (2) trading days, from BBH the payment in
an amount equal to the claims that are still pending of resolution, plus
ten percent (10%) of said amount. In this case, Primor is bound to return
in whole or in part, the received amounts in case the pending claims are
not sustained, either in whole or in part, plus ten percent (10%) of the
amounts that must be reimbursed. The same procedure shall apply each year
if, as of
33
August 30 of any year, there are pending claims (deducting any settled
claims from such amounts).
The parties acknowledge that the duty entrusted to BVC for the above mentioned
purposes has been separately agreed upon.
It is herein agreed upon that the Shareholders and Holders indicated in Exhibit
H, may, as from this date, replace the Letter of Credit with a bond or insurance
policy issued by an insurance company or any other credit worthy financial
institution, prior approval of Primor, which shall not be unreasonably withheld
or denied.
TEN: TERM OF THE AGREEMENT; CONDITION PRECEDENT
-----------------------------------------------
This Agreement shall be in force as from its execution date, except for the
obligation of Primor to start the Offers, which obligation shall be subject to
the Venezuela Security Commission authorizing the disclosure of the reports of
the Offers and the Summaries thereof, in accordance with article 9 of the Rules
on POs, and subject to the approval by the SEC of the no action letter necessary
to start the Offers.
ELEVEN: AGREEMENT TERMINATION AS BY OPERATION OF LAW.
-----------------------------------------------------
This Agreement may be terminated as by operation of law at any time before the
expiration date of the Offers (or on the first expiration date of both Offers)
in the following cases:
A) By Primor or by the Shareholders and Holders, (i) if the Offers end without
the shares or the ADRs of Mavesa being purchased, according to the terms
and conditions of the Offers, or if the Closing of Offers fails to take
place no later than June 30, 2001; or (ii) if the Venezuela Security
Commission or the SEC fail to give the pertinent instructions or exemptions
to start the Offers no later than February 28, 2001; in case of subsection
(i) or (ii) provided that it is not due to reasons
34
attributable to the party requesting a resolution; or (iii) any regulation
forbidding the performance of the transaction herein provided becomes in
force (including without limitation the Offers) under the terms stated
herein; (iv) an exchange control system or exchange rate differential
system is established or (v) a judgement hindering, prohibiting or
restraining the completion of the Offers on a permanent basis under the
terms hereof is pronounced.
B) By Primor or by the Shareholders and Holders, if (i) the other party has
infringed any obligations hereunder, or (ii) if the representations and
warranties of the other party are not true or accurate, except when it is
possible to remedy the infringement within five (5) trading days following
the notice given by the other party.
C) By any Shareholder or Holder, in case there is a competitive offer in cash,
offering to purchase all the shares and ADRs of Mavesa that the
shareholders and holders of ADRs are willing to sell, regardless the base
condition, that provides a higher added value from an economic-financial
point of view, and better terms and conditions than the ones set forth in
the Offers, for all shareholders and holders of ADRs.
D) By Primor or by the Shareholders and Holders, in case that the
Superintendency for the Promotion and Protection of Free Competition or any
other entity having jurisdiction, by way of administrative act, objects or
subjects the transaction to certain conditions that make it necessary to
alter the essential provisions of this Agreement, of the Offers or of any
other contract related to said offers, or that adversely affects the party
requesting it, and provided that the action remains in force for more than
five (5) trading days.
35
E) By Primor, when a competitive offer has been submitted, or in case of
extraordinary circumstances not related to Primor, prior consent of the
Venezuelan Security Commission, or in case the Board of Directors of Mavesa
withdraws or modifies its recommendation related to the Offers.
In case of termination upon the request of any Shareholder or Holder, the
Agreement shall be terminated only with relation to such Shareholder or Holder,
having full force and effect with relation to the other Shareholders or Holders,
except in case the decision is requested by the Shareholders and Holders
representing more than twenty six percent (26%) of the Securities, in which
case the decision shall have full force and effect for all the shareholders.
Termination of the Agreement according to this Section shall be effective
through written notice given to the other party, where the grounds for
termination shall be stated. Likewise, termination of the Agreement in
accordance with this Section shall not render any party liable, except in the
case of breach of this Agreement. In case the party that is not requesting
termination of the Agreement believes that such termination is not applicable,
it must give notice to the other party within five (5) trading days following
reception of the notice of termination, and provisions of Section Thirteen shall
apply. In any case, the arbitration award shall have declaratory effects only.
The Agreement may be terminated at any time by written notice given among Primor
and the Shareholders and Holders.
TWELVE: NOTICES
---------------
For purposes of this Agreement, any notice related hereto shall be deemed valid
by sending the pertinent written notices to the following addresses:
36
Primor:
Cuarta Transversal de los Cortijos de Xxxxxxx
Centro Empresarial Polar, Piso 1
Los Cortijos de Xxxxxxx
Caracas
Attention: Xxxxxxxxx Xxxxxxxx, Direccion de Asuntos Legales (Legal
Department)
Tel. 000-0000
Fax. 000-0000
The Shareholders and Holders:
Escritorio Viso Rodriguez Cottin Xxxxxx Xxxxxx & Asociados
Avenida Xxxxxxxxx Xxxxxx Xxxxx, xxxxx con calle Xxxxxxx Xxxxxxx
Torre Banvenez, Piso 14
Sabana Grande
Caracas
Attention: Xxxx Xxxxxx Xxxxxxx and Xxxxxxx Xxxxx Xxxxxx
Either party may modify the address where notices are to be given through
written notice to the other party. However, while notice of said modification is
not given, the addresses for notice purposes shall remain the same.
THIRTEEN: ARBITRATION
---------------------
The parties shall timely try to solve in good faith any controversy relative to
this Agreement. In case of any discrepancy or dispute relative to this
Agreement, its construction, validity, terms or performance, a period of seven
(7) running days will be given to the parties to try to reach an agreement on
friendly terms. Said term shall be extended upon mutual agreement between the
parties.
In case such term has elapsed or the parties have failed to reach an
agreement to extend such term, the parties agree that any controversy arising
from this Agreement, its construction, validity, term, performance, and anything
relative to substantial issues hereof, shall be finally solved by the
arbitration
37
proceeding, according to the Venezuelan law exclusively, in the City of Caracas.
The proceeding shall be conducted in Spanish, according to the Commercial
Arbitration Act of the Venezuela Republic, in conformity with to the following
rules:
(i) The arbitration proceeding shall be conducted by three (3) neutral
arbitrators appointed as follows: each party shall appoint one arbitrator
and the arbitrators so appointed shall in turn appoint a third arbitrator,
who shall be the President of the Arbitration Court. The appointment of the
members of the Arbitration Court shall be made within a period not in
excess of ten (10) running days as from the date the arbitration proceeding
is requested; upon such date the Arbitration Court must be organized.
Should the arbitrators so elected fail to agree on the appointment of the
third arbitrator, then, in the afternoon of the next business day following
expiration of the period of ten (10) days above mentioned, the parties
shall place three (3) slips in a bag, each of them indicating the name of
the proposed arbitrator. Once all the slips have been placed in the bag,
one slip will be taken out indicating the name of the third arbitrator. The
person to take the slip from the bag shall be chosen at random.
(ii) In any case, the arbitrators shall have the following qualifications: (a)
speak fluent Spanish and English; (b) be neutral and have no conflicts of
interests; (c) be a lawyer familiar with the commercial laws and customs
and uses of Venezuela and the United States; (d) have experience in
commercial arbitration.
(iii) Service of the summon to answer the arbitration complaint and any other
notices to be given during the proceeding, shall be given in the
38
way and to the address for notice purposes of the defendant(s), as
provided for in Section Eleven hereof.
(iv) The hearing of the arbitration proceeding shall commence on the next
business day following the organization of the Arbitration Court.
(v) The parties shall have thirty (30) running days as from the date of
commencement of the hearing of the arbitration proceeding to offer
evidence and arguments. Such term shall not be extended except by written
consent of the parties and prior writings duly prepared and founded by
the members of the Arbitration Court.
(vi) The arbitrators shall have thirty (30) running days as from the end of
the term for the offering of evidence and arguments of the parties to
pass the arbitration award. Such term shall not be extended except by
written consent of the parties and prior writing duly prepared and
founded by the member of the Arbitration Court.
(vii) The arbitration award shall be evidenced in writing and shall indicate
the facts that constitute the grounds and the jure and the fact reasons
for the decision contained in the award.
(viii) The arbitration award shall be final and binding on the parties and it
must contain a decision related to the costs, including the lawyers'
reasonable fees and expenses incurred therein. Upon submission of the
controversy to an arbitration proceeding, it is understood that the
parties have waived any remedies against the arbitration award which they
might be entitled.
(ix) The costs, including lawyers' reasonable fees and expenses, shall be
totally paid by the party against which the arbitration award was passed.
In case the arbitration award was not totally passed against either
party, the cost of the arbitration proceeding shall be equally allocated
between
39
the parties, except with regard to the fees and costs of each party's
lawyer, which shall be paid by each party.
(x) Judgement may be passed at any court having jurisdiction on the award or on
the parties or assets thereof.
By delivery of these presents, the parties accept and agree on the arbitration
proceeding herein contained and they expressly waive any other defense that they
may have based upon lack of jurisdiction or competence.
The parties and members of the Arbitration Court shall keep strict
confidentiality with relation to the proceedings, the information provided by
the parties and the result of the arbitration award, except when such
information must become public due to any legal or judicial requirement.
FOURTEEN: PARTIES INVOLVED; REPRESENTATIVES
-------------------------------------------
This is an intuitu personae Agreement. However, Primor may appoint any legal
person totally controlled by it to purchase Securities or it may appoint
financial institutions to finance the purchase of Securities, if applicable, in
both cases without novation of their obligations. Likewise, the Shareholders and
Holders may assign the Securities to any natural person or body corporate
totally controlled by them, who shall in turn assign them to Primor under the
terms hereof, without novation of their obligations.
The Shareholders and Holders appoint Xx. Xxxx Xxxxxx Xxxxxxx, from Venezuela,
of age, holder of the identification card number 3.189.825, in the capacity of
Representative of the Shareholders and Holders (the "Representative") for all
matters related to this Agreement and for all representations that are to be
made accordingly, and Xx. Xxxxxxx Xxxxx Xxxxxx, from Venezuela, of age, holder
of the identification card number 5.541.127, in the capacity of alternate
representative for all matters related to this Agreement and for all
representations that are to be made accordingly.
40
For the same purposes, Primor appoints Xxxxxxx Xxxxxxx G., above mentioned, as
representative, and Xx. Xxxx Xxxxx Xxxxxxx, from Venezuela, of age, holder of
the identification card number 6.512.781 as alternate representative for all
matters related to this Agreement.
FIFTEEN. EQUIVALENT AMOUNTS
---------------------------
In order to comply with article 95 of the Act of the Central Bank of Venezuela,
the equivalent amount in Bolivares of all the amounts stated herein in American
Dollars shall be the amount resulting from applying thereto the exchange rate
differential of six hundred ninety nine Bolivares with fifty cents per American
Dollars (Bs.699.50 per US$).
SIXTEEN: This Agreement shall only give rights and obligations unto the parties
-------
hereto, and therefore no third party shall have any rights arising herefrom.
SEVENTEEN: APPLICABLE LEGISLATION
---------------------------------
This Agreement shall be governed by the laws of the Bolivarian Republic of
Venezuela.
EIGHTEEN: CONTRACTUAL JURISDICTION AND DOMICILE
-----------------------------------------------
For all purposes hereof, the city of Caracas is chosen as the special and
exclusive domicile and the parties agree to submit themselves to the
jurisdiction of the pertinent courts.
NINETEEN: PUBLICATION
---------------------
Any publication, press release, and communications with governmental
entities concerning this Agreement and the Offers shall be previously consulted
with and coordinated by the parties through the Representatives thereof. They
shall take place under the terms and conditions intended to protect the
shareholders' rights and the enforcement of the Venezuelan and American
regulations.
41
This Agreement has been executed in twenty six (26) counterparts.
Caracas, on this twenty first (21) day of the month of January of the year
two thousand and one (2001).
PRIMOR ALIMENTOS, C.A.
-----------------
Xxxxxxx Xxxxxxx G.
Director
PRIMOR INVERSIONES, C.A.
-----------------
Xxxxxxx Xxxxxxx G.
Director
XXXXXXXX XXXXX XXXX
-----------------
XXXXXXX XXXXX XXXXXX XXXX XXXXXXX XX XXXXX
---------------------- -------------------------
C.I. 7.682.460
XXXXXXX XX XXXXXXXXXX XX XXXXX
-------------------
XXXXXX XXXXX XX XXXXXXXXXX
--------------------
42
XXXXXX XXXXX DE CHELMISNKI
--------------------
XXXXXX XXXXX XX XXXXXXXXXX
---------------------
XXXXX XXXXXXX DE FRAGACHAN
---------------------
XXXXX XXXXXX XXXXX XXXXXXXXX XXXXXXX XX XXXXX
--------------------- ---------------------------
C.I. 3.405.258
XXXXX XXXXXX XXXXX XXXXXXX XXXXXX XX XXXXX
--------------------- ---------------------------
C.I. 2.499.743
NICHOLASHA LIMITED
-----------------
Xxxxxxxxx De La Xxxx
43
Attorney-in-Fact
SHARE SYNDICATE I, L.L.C.
---------------------------
Xxxxxxx Xxxxxx
Vice-president and Secretary
SHARE SYNDICATE II, L.L.C.
---------------------------
Xxxxxxxxx de la Xxxx
President and Alternate Secretary
SHARE SYNDICATE IX, L.L.C.
---------------------------
Xxxxxxx Xxxxxx
Vice-president and Secretary
BERKSHIRE INTERNATIONAL S.A.
----------------------------
Xxxx Xxxxxx Xxxxxxx
Representative
VALORES SAN NICOLAS, C.A.
------------------------------
Angel Xxxxxxx Xxxxxxx
44
Attorney-in-Fact
EDIFICIOS Y REMODELACIONES EL ENCUENTRO, C.A.
----------------------------
Xxxxx Xxxxx Xxxxxxx
President
DESARROLLOS 480, C.A.
----------------------------
Xxxxx Xxxxxxx
Director
CONSULTORIA ESTUDIOS PROYECTOS, C.A. (CONEPRO)
---------------------------
Xxxxxxxx Xxxxx
Attorney-in-Fact
INVERSIONES STUART, C.A.
---------------------------
Xxxxxxxx Xxxxx
Attorney-in-Fact
XXXXXX FINANTIAL LTD
45
--------------------------
Xxxx Xxxxxx Xxxxxxx
VALORES EL JUNKO, C.A.
-------------------------
Xxxxxx Xxxxxxx xx Xxxxx
XXXXXX XXXXXXX XX XXXXX
------------------------
46
