SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 10, 1997
VITECH AMERICA, INC.
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(Exact name of registrant as specified in its charter)
FLORIDA 0-21369 65-041-9086
- ---------------------------- ---------- -------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
8807 NORTHWEST 23 STREET, MIAMI, FLORIDA 33172
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(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (305) 477-1161
N/A
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(Former name or former address, if changed since last report)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On July 10, 1997, Vitech America, Inc. (the "Company") entered into
agreements with Microhold Participacoes e Empreendimentos S/C Ltda., and
Microtec Holding USA, Inc. whereby the Company acquired 94.4% of the capital
stock of Microtec Sistemas Industria e Comercio S.A. ("Microtec"). In accordance
with the agreements, the Company paid consideration in the form of 192,857
shares of Vitech America, Inc. common stock and $11,950,000 in cash. Of the
$11,950,000 in cash, $6,000,000 was paid upon closing of the acquisition and the
remainder will be paid in monthly installments over an eight month period
commencing August 13, 1997. The number of shares issued as consideration was
based on a per share value of $14 which approximated the market value of the
common stock at the time negotiations were completed. The shares of common stock
issued will be held in escrow for a period one year from the date of the closing
of the acquisition against any contingent liabilities associated with the prior
operations of Microtec. The consideration paid was derived through negotiations
between the Company and the shareholders of Microtec. The shareholders of
Microtec had no relationship with the Company or any of its affiliates prior to
the acquisition.
The Company financed the acquisition through the private placement of a
senior convertible note. Such note was issued for the principal amount
$10,000,000 on June 26, 1997 to Georges C. St. Laurent Jr., the father of
Georges St. Laurent III, the Company's Chairman of the Board and Chief Executive
Officer, and William St. Laurent, the Company's President and Chief Operating
Officer. The note bears an annual interest rate of 10% payable monthly and is
convertible into common stock of the Company, in whole or in part, at the rate
of one share of common stock for each $15 of principal converted. The note has a
term of two years.
Microtec, which was established in 1980, is a manufacturer and marketer
of its own line of personal computers and servers in the Federal Republic of
Brazil. During the year ended December 31, 1996, Microtec had net sales in the
amount of $72.1 million and net income in the amount of $2.1 million. The
acquisition of Microtec is being accounted for under the purchase method of
accounting.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA INFORMATION AND EXHIBITS
(a) As of the date of this filing of the Current Report on Form 8-K, it is
impracticable for the Registrant to provide the financial statements
required by this item 7(a). In accordance with Item 7(a)(4) of Form 8-K,
such financial statements shall be filed by amendment to this Form 8-K no
later than 60 days after July 25, 1997.
(b) As of the date of this filing of the Current Report on Form 8-K, it is
impracticable for the Registrant to provide the pro forma financial
statements required by this item 7(b). In accordance with Item 7(a)(4) of
Form 8-K, such pro forma financial statements shall be filed by amendment
to this Form 8-K no later than 60 days after July 25, 1997.
(c) Exhibits:
(2.1) Contract for Discontinuation of Company Participations and other
Agreements between Vitech America, Inc., Microtec Holding USA,
Inc. and Microhold Participacoes e Empreendimentos S/C Ltda. dated
July 10, 1997.
(2.2) Purchase agreement between Vitech America, Inc. and Microtec
Holdings USA, Inc. dated July 10, 1997.
<PAGE>
(10.13) Senior convertible note payable to Georges C. St. Laurent Jr.
dated June 26, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
VITECH AMERICA, INC.
By: /s/ WILLIAM ST. LAURENT
---------------------------
William St. Laurent, President and
Chief Operating Officer
Dated: July 25, 1997
EXHIBIT 2.1
CONTRACT FOR DISCONTINUATION OF COMPANY PARTICIPATIONS AND OTHER AGREEMENTS
By this present instrument and in the best legal form, Messrs. TOUMA SAMIR
MAKDASSI ELIAS, Brazilian, married, businessman, holder of Identification Card
Number RG 14.151.118, registered with the CPF under number 021.923.568-62,
residing in this Capital of the State of Sao Paulo at Rua Jose Maria Lisboa,
number 207, 8th floor, Jardim Paulista; ARTHUR CEZAR FALCAO, Brazilian, married,
attorney, holder of Identification Card number RG 1.491.862, registered with the
CPF under number 001.164.408-72, residing in this Capital of the State of Sao
Paulo at Rua Irere 1474, Planalto Paulista; RUI JOSE ARRUDA CAMPOS, Brazilian,
married, engineer, holder of Identification Card number RG 2.824.065, registered
with the CPF under number 008.062.698-04, residing in this Capital of the State
of Sao Paulo at Alameda dos Uapes number 801, Planalto Paulista; FAIZ MAKDISI
ILYAS, Brazilian, married, economist, holder of Identification card number RG
25.993.438-0, registered with the CPF under number 128.171.958-76, in this
action represented by Mr. Touma Samir Makdassi Elias, as qualified above; and
GHATTAS MAKDASSI ELIAS, Brazilian, married, merchant, holder of Identification
Card number RG 14.151.116-3, registered with the CPF under number
014.576.908-96, residing at Rua Batatais number 324, apartment 112; in the
quality of SELLERS, hereinafter referred to as such;
MICROTEC HOLDING USA, INC., a company duly constituted under the laws of the
State of Nevada, in the United States of America, registered with the IRS under
number 86-0878691, with headquarters at 1475 Terminal Way, Suite E, Reno,
Nevada, USA, in this action represented by Mr. GEORGES ST. LAURENT III,
American, single, business administrator, holder of passport number 044.215.108
- - USA, holder of Permanent Residency Registration for Foreigners, conferred on
December 4, 1995, according to copy of DOU attached and registered with the CPF
under number 051.541.497-26, residing in the city of Ilheus, State of Bahia, Rua
E, no number, Quadra Industrial Q, Lote 5/6, in the quality of PURCHASER,
hereinafter designated as such; and
VITECH AMERICA, INC., a company duly constituted under the laws of the State of
Florida in the United States of America, under number P93000045800, with
headquarters at 8807 N. W. 23rd Street, Miami, Florida, USA, in this action
represented by Mr. GEORGES ST. LAURENT III, American, single, business
administrator, holder of passport number 044.215.108 - USA, holder of Permanent
Residency Registration for Foreigners, conferred on December 4, 1995, according
to copy of DOU attached and registered with the CPF under number 051.541.497-26,
residing in the city of Ilheus, State of Bahia, Rua E, no number, Quadra
Industrial Q, Lote 5/6; MICROTEC SISTEMAS IND. COM. S.A., with headquarters in
the city of Cotia, State of Sao Paulo, at Rua Howard Archibald Acheson Jr.,
number 393, Moinho Velho, registered with the CGC under number
45.169.406/0001-30, in this action, according to its Social Statutes,
represented by Messrs. Touma Samir Makdassi Elias and Rui Jose Arruda Campos, as
qualified above; and MICROHOLD PARTICIPACOES E EMPREENDIMENTOS S/C LTDA., with
headquarters in the city of Cotia, State of Sao Paulo, at Rua Howard Archibald
Acheson Jr., number 393, 1st floor, Moinho Velho, registered with the CGC under
number 67.003.806/0001-04, in this action, according to its Social Contract,
represented by Messrs. Touma Samir Makdassi Elias and Arthur Cezar Falcao, as
qualified above, in the quality of assenting mediators, hereinafter designated,
respectively, VITECH, MICROTEC and MICROHOLD.
<PAGE>
CONSIDERING that:
The SELLERS are owners, free and unencumbered of any obligations, debts or
burdens of any kind, of 9,446 (nine thousand, four hundred and forty six) shares
of MICROHOLD ("SHARES"), representing 100% of the Social Capital of this
company, and in this quality they fully exercise the stock control of MICROHOLD,
without any restrictions, and of 40 (forty) common nominal shares of MICROTEC
("SHARES ENTITLED BY THE SELLERS"), representing 0.00006% of the voting social
capital of MICROTEC, with the purpose of participating in their Administrative
Council;
MICROHOLD, in its turn, is the owner, free and unencumbered of any obligations,
debts or burdens of any kind, of 58,999,960 (fifty eight million, nine hundred
and ninety nine thousand, nine hundred and sixty) nominal common shares,
representing 99.99994% of the voting social capital of MICROTEC, and of
1,769,193 (One million, seven hundred and sixty nine thousand, one hundred and
ninety three) preferred nominal shares, representing 32.91%(thirty two and
ninety one one hundredths percent) of the non-voting capital of MICROTEC, which
added to each other total 60,769,153 (sixty million, seven hundred and sixty
nine thousand, one hundred and fifty three) shares of MICROTEC ("SHARES ENTITLED
BY MICROHOLD"), and which, in this quality, fully exercise the stock control of
MICROTEC, without any restriction;
MICROHOLD is a holding company whose purpose is to be the title holder of the
MICROTEC shares and thereby control its activities;
The PURCHASER plans to assume control of MICROTEC through the acquisition of the
SHARES ENTITLED BY THE SELLERS and of the SHARES ENTITLED BY MICROHOLD;
VITECH is controlled by the PURCHASER, this being an instrument for the better
rationalization and execution of VITECH'S business.
The three parties have, between themselves, agreed and contracted to the
following:
FIRST CLAUSE - By this instrument, in the best legal form, the SELLERS, with the
assent and express participation of MICROHOLD and MICROTEC, yield and transfer
to the PURCHASER the total of the STOCK and SHARES ENTITLED BY THE SELLERS for
the price, in Reais, of the equivalent of US$ 13,950,000 (Thirteen Million, Nine
Hundred and Fifty Thousand U.S. Dollars), using the value of the sale of
commercial dollar on the date of payment for the conversion rate.
FIRST PARAGRAPH - The SELLERS assume the irretractable obligation, in this
action, of signing the Share Transfer Book of MICROTEC, on the DATE OF
SETTLEMENT (designation which indicates the date on which the installment
indicated in letter "a" of the Second Clause below is sent to the accounts
indicated by the SELLERS), as well as execute all the actions necessary or
convenient for the materialization of the sale of the STOCK and SHARES ENTITLED
BY THE SELLERS, under the
<PAGE>
penalty of being responsible for all the damages suffered by the PURCHASER,
beyond the fine determined in the ninth clause of this contract.
SECOND PARAGRAPH - In the event of the occurrence of any fact which would
prevent the SELLERS to effect the transfer of the SHARES ENTITLED BY THE SELLERS
on the DATE OF SETTLEMENT, they will be granted an unextendible time limit of 30
(thirty) days to realize the transfer, with this supplementary time limit not
being considered a contractual infraction. If this extension time is passed
without the transfer of the SHARES ENTITLED BY THE SELLERS being made, the
SELLERS are in default, being subject to the penalties foreseen in this
contract.
THIRD PARAGRAPH - The parties expressly agree to give this contract the legal
format and necessary effects to realize the transfer of the STOCK and SHARES
ENTITLED BY THE SELLERS, independent of any new consent of the parties, with the
recognition of the rights of the party who does not have its obligations
executed to demand them under the terms of this contract and of the Law.
SECOND CLAUSE - The payment of the total price of US$ 13,950,000 (Thirteen
Million, Nine Hundred and Fifty Thousand U.S. Dollars) should be made in the
following manner:
(a) US$ 6,000,000 (Six Million U.S. Dollars) to be sent to the bank accounts
indicated in the first paragraph of this clause, on the DATE OF SETTLEMENT,
which should not occur after July 13, 1997;
(b) 08 (eight) equal and successive monthly installments of US$ 743,750.00
(Seven Hundred and Forty Three Thousand, Seven Hundred and Fifty U.S.
Dollars), each of these, in its equivalent of current national currency,
converted by the quote of sale of commercial dollars on the date of
payment, with the first installment becoming due on August 13, 1997 and the
other installments due on the same day of the subsequent months;
(c) delivery of 142,857 (one hundred and forty two thousand, eight hundred and
fifty seven) common shares ("Common Stock") of VITECH, which transfer
should occur within 30 (thirty) days of the transfer of STOCK and SHARES
ENTITLED BY THE SELLER to the PURCHASER.
FIRST PARAGRAPH - The payments set forth in letters (a) and (b) of this clause
should be made directly to the SELLERS with the issuance of a receipt or through
a deposit in a bank account indicated by the SELLERS' representative, Mr. Touma
Samir Makdassi Elias, the with the proof of deposit being the proof of payment.
SECOND PARAGRAPH - Considering eventual difficulties with the transfer of
resources, which will be coming from abroad, the PURCHASER will not be
considered in violation if the payment should occur by the fifth working day
after the due date of the installment.
THIRD PARAGRAPH - In the event that a delay should occur in the payment of the
installments determined in letter "b" beyond that established in the second
paragraph above, the PURCHASER will be required to pay penalty interest of 1%
(one percent) per month, as well as the penalty foreseen in the ninth clause of
this contract, with the SELLERS having the option to adopt all the legal
measures necessary to ensure the receipt of their credit.
FOURTH PARAGRAPH - The installments determined in letter (b) of this clause will
be represented by promissory notes issued by the PURCHASER and guaranteed by
VITECH, who assumes the obligation
<PAGE>
of effecting the payment of the installments of the price and delivering the
shares referred to in the letter "c" above, inter-dependently with the
PURCHASER, in the eventuality of any non-payment by the PURCHASER.
FIFTH PARAGRAPH - The PURCHASER and VITECH guarantee that the shares referred to
in letter "c" of this contract are completely free and clear of any options,
agreements, obligations, requirements, debts, obligations, bonds, pledges,
burdens, rights of preference for acquisition and for subscription or other
burdens of any nature, with the SELLERS being able to negotiate them only after
the period of 01 (one) year, as of the date of their transference to them.
SIXTH PARAGRAPH - All the amounts paid by the PURCHASER to the SELLERS, as well
as the VITECH shares to be given in payment, will be transferred in the
proportion to be informed in writing by the SELLERS, within 10 (ten) days as of
the DATE OF SETTLEMENT.
THIRD CLAUSE - The SELLERS, in the quality of title holders of the STOCKS and of
the SHARES ENTITLED BY THE SELLERS, give the following guarantees and statements
to the PURCHASER, which they affirm to be true and correct, taking
responsibility for all eventual damages and other contingencies of the Law due
to the untruth of any of these.
I - RELATIVE TO MICROHOLD:
/bullet/ COMPANY SITUATION. MICROHOLD is a company by shares
of limited responsibility, duly constituted according to the
Brazilian laws, with powers to conduct business and
operations as they are currently being conducted.
/bullet/ CAPACITY. The SELLERS have the full capacity and powers to
execute and comply with this Contract, being obligated under
the terms herein agreed.
/bullet/ SOCIAL CONTRACT. The Social Contract of MICROHOLD, which
becomes part of this present instrument as "ANNEX A", is
true, current and correct.
/bullet/ SOCIAL CAPITAL. The Social Capital of MICROHOLD is R$
9,446,000.00 (Nine Million, Four Hundred and Forty Six
Reais), being completely integralized, divided in 9,446 (nine
thousand, four hundred and forty six) shares, distributed as
follows between the shareholders:
SHAREHOLDER # OF SHARES
----------- -----------
TOUMA SAMIR MAKDASSI ELIAS 3,571
FAIZ MAKDISI ILYAS 3,569
RUI JOSE ARRUDA CAMPOS 1,638
ARTHUR CEZAR FALCAO 668
/bullet/ OWNERSHIP OF SHARES. The SELLERS are legitimate owners of the
SHARES, which are completely free and clear of any
obligations, burdens or restrictions of any nature.
/bullet/ ACTIVITIES. MICROHOLD was constituted with the specific
objective of participating in other companies, and, in this
condition, became the title holder of the SHARES
<PAGE>
ENTITLED BY MICROHOLD, and not having any other activity.
/bullet/ FINANCIAL STATEMENTS. The financial statements of MICROHOLD
prepared on December 31, 1996, a copy of which are attached
to the present contract as "ANNEX B", adequately reflect, and
in a manner which corresponds to the immediately preceding
period, the assets, liabilities, net property, net income and
revenue relative to the period specified, according to the
generally accepted accounting principles in Brazil, not
having been qualified in any manner in the auditors report.
/bullet/ CONTINGENCIES. MICROHOLD does not have any debts, burdens,
contingencies or responsibilities of any nature, with the
exception of a debt of US$ 1,150,000.00 (One Million, One
Hundred and Fifty Thousand U.S. Dollars), whose creditor is
MICROTEC, under the terms of the reciprocal contract of
"ANNEX C".
II- RELATIVE TO MICROTEC
/bullet/ COMPANY SITUATION. MICROTEC is a company by shares, duly
constituted according to Brazilian laws, with powers to
conduct its social business, as it is currently being
conducted.
/bullet/ SOCIAL STATUTES. The social statutes of MICROTEC, which
integrates this present instrument as "ANNEX D", is true,
current and correct.
/bullet/ SOCIAL CAPITAL. The social capital of MICROTEC is R$
6,235,938.02 (Six Million, Two Hundred and Thirty Five
Thousand, Nine Hundred and Thirty Eight Reais and Two Cents)
completely integralized, divided in 64,375,400 (sixty four
million, three hundred and seventy five thousand, four
hundred) shares, of these 59,000,000 (fifty nine million)
being common nominative shares, all with a right to vote, and
5,375,400 (five million, three hundred and seventy five
thousand, four hundred) being preferred nominal shares, under
the terms of "ANNEX E", distributed between the shareholders
as follows:
SHAREHOLDER TYPE OF SHARE # SHARES
----------------- ------------- ---------
MICROHOLD common 8,999,960
MICROHOLD preferred 1,769,193
Touma S. M. Elias common 10
Rui J. A. Campos common 10
Ghattas M. Elias common 10
Arthur C. Falcao common 10
In public power preferred 3,606,207
---------
Total 64,375,400
<PAGE>
/bullet/ PROPERTY OF SHARES. MICROHOLD is the legitimate owner of the
SHARES ENTITLED BY MICROHOLD, in the same manner that the
SELLERS are the legitimate owners of the SHARES ENTITLED BY
SELLERS, having good and negotiable title over them. The
SELLERS declare and guarantee that, after the transference of
the STOCKS and SHARES ENTITLED BY THE SELLERS for the
PURCHASER, they shall be, through MICROHOLD, title holders of
100% (one hundred percent) of the voting social capital and
of 32.91% (thirty two, and ninety one one hundredths percent)
of the non-voting social capital of MICROTEC, with all the
rights and obligations which they represent.
/bullet/ SITUATION OF THE MICROTEC SHARES. All the shares of MICROTEC,
entitled by MICROHOLD and/or by the SELLERS, and completely
free and clear of any options, agreements, obligations,
requirements, debts, obligations, bonds, pledges, burdens,
rights of preference for acquisition and for subscription or
other burdens of any nature.
/bullet/ CIRCULATING TRADABLE VALUES. With the exception of the
preferred shares which are not an object of this contract, in
which the social capital of MICROTEC is divided, there are no
other tradable values of MICROTEC issue in circulation.
/bullet/ COMPANY DELIBERATIONS. To the knowledge of the SELLERS and
MICROHOLD, neither the shareholders nor the administrative
departments of MICROTEC have approved any deliberation which
has not been proper and usual during the normal course of
business of MICROTEC.
/bullet/ EXECUTION OF SOCIAL BUSINESS. Since the constitution of
MICROTEC, the social business of this company has been
conducted regularly, in all relevant aspects, according to
applicable Brazilian laws and regulations, without there
being any order, decree or judgement proffered by the
Brazilian courts or any governmental agency which, to the
knowledge of the SELLERS and MICROHOLD, may affect the
property or social business of MICROTEC.
/bullet/ PERMITS. MICROTEC has all the permits, authorizations and
franchises required by the federal, state and municipal
government authorities in order to conduct its social
business, as they are currently being conducted. Also,
MICROTEC observes and complies with all the licenses,
standards, rules and regulations of the government, including
those relative to zoning, basic sanitation, health, safety
and environmental protection, sanitary vigilance, labor and
welfare regulations applicable to its activity.
/bullet/ CONSUMER DEFENSE. MICROTEC has complied with all the
requirements of the consumer defense law applicable to its
products.
/bullet/ LITIGATION. With the exception of those listed in "ANNEX F" -
which annex is subdivided into the following matters (i)
civil and commercial; (ii) labor; (iii) tributary; (iv)
welfare; and (v) arbitral - there are no arbitral actions,
processes or procedures involving MICROTEC, to the knowledge
of the SELLERS and MICROHOLD.
/bullet/ ADMINISTRATIVE PROCESSES. There are no administrative
processes, demands or fiscalizations existing involving
MICROTEC or any of its property, except those listed in
"ANNEX F".
<PAGE>
/bullet/ INSOLVENCY. (i) no order has been given or petition presented
relative to the dissolution of MICROTEC; (ii) MICROTEC has
not requested bankruptcy or composition of creditors; (iii)
the SELLERS and MICROHOLD have no knowledge of any creditors
of MICROTEC having protested any bond taken out against it or
requested their bankruptcy; and (iv) the SELLERS, MICROHOLD
and MICROTEC have not concluded or proposed any agreement or
composition with their creditors or any class of creditors.
/bullet/ BOOKS AND REGISTERS. To the knowledge of the SELLERS and
MICROHOLD, the MICROTEC accounts, books, daily ledgers,
financial registers and others: (i) were completely, properly
and faithfully updated, they are in the possession of
MICROTEC and contain the true and faithful register of all
the matters which the law required be registered into them;
(ii) they do not contain or reflect any inaccuracies or
discrepancies; and (iii) they have not been an object of any
notification or allegation in the sense that the registers
are incorrect or that they should be corrected.
/bullet/ STATUTORY FINANCIAL STATEMENTS. The Statutory financial
statements of MICROTEC prepared on December 31, 1996, a copy
of which are attached to this contract as "ANNEX G",
adequately reflect, and in a manner corresponding to the
immediately preceding period, the assets, liabilities, net
property, net income and revenues on the respective date and
relative to the period specified, according to the generally
accepted accounting principles in Brazil, not having been
qualified, in any manner, in the auditors report. Also, the
statutory financial statements prepared on December 31, 1996,
translated into English, are in accordance with the US GAAP,
with the observations made by Deloitte Touche Tohmatsu
International, MICROTEC's external audit company.
/bullet/ ACCOUNTS. MICROTEC's accounts, prepared on December 31, 1996,
according to the MICROTEC ACCOUNTING STANDARDS, a copy of
which is included in this contract as "ANNEX H", adequately
reflect, and in a manner corresponding to the immediately
preceding period, the assets, liabilities, net property, net
income and revenues on the respective date and relative to
the period specified, according to the MICROTEC ACCOUNTING
STANDARDS.
/bullet/ STOCK INVENTORY EVALUATION AND ACCOUNTING POLICY. For the
purpose of the "Statutory Financial Statements" prepared on
December 31, 1996, the stock inventory and business under
development of MICROTEC were evaluated according to the
generally accepted accounting principles of Brazil and in a
manner corresponding, in all relevant aspects, to the
principles adopted for the purpose of accounting audits of
MICROTEC. Also, the statutory financial statements prepared
on December 31, 1996, translated to English, with regards to
stock inventory and business under development for MICROTEC,
are also in accordance with the US GAAP, and with the
observations made by Deloitte Touche Tohmatsu International,
the external audit company for MICROTEC.
/bullet/ DECLARATIONS. MICROTEC presented all the declarations,
reports, minutes of shareholder meetings, deliberations and
other documents which, under the terms of the applicable
legislation, should be delivered to the Brazilian authorities
under their name, and at the time of their presentation,
these documents were true and correct.
<PAGE>
/bullet/ BUSINESS AFTER THE DATE OF THE "STATUTORY FINANCIAL
STATEMENTS", THAT IS, JANUARY 1, 1997.
(i) MICROTEC conducted its social business normally, not
having executed any operation, assumed any responsibility or
effected any payment outside of the normal course of business
and without any significant interruption or alteration in the
nature, scope or manner of its activities, with the exception
of the reciprocal contract whose debtor is MICROHOLD, having
MICROTEC as creditor (ANNEX C);
(ii) MICROTEC paid its creditors within the terms agreed with
those creditors;
(iii) there was no significant change on the stock inventory
of MICROTEC; and
(iv) MICROTEC did not execute or agree to execute any
obligations of a value superior to those ordinarily executed
during the normal course of its activities during 1996.
/bullet/ COMMERCIAL NAMES. MICROTEC does not trade its products under
any other name, other than those stated in "ANNEX I" of this
instrument.
/bullet/ FIXED ASSETS. MICROTEC is the legitimate owner and title
holder of all the fixed assets reflected in its "Statutory
Financial Statement", all of which are free and clear of any
mortgages, obligations, debts, doubts, bonds, right of
retention, pledges, fiduciary alienations, responsibility
and/or burdens o any nature.
/bullet/ TITLE OF REAL ESTATE. MICROTEC does not have any real estate.
/bullet/ ACCOUNTS RECEIVABLE. The Accounts Receivable of MICROTEC are
reflected in its "Statutory Financial Statements", to which
are added all those originating from the social business of
MICROTEC effected after January 1, 1997, according to the
generally accepted accounting principles in Brazil. Also, the
statutory financial statements prepared on December 31, 1996,
translated to English, are in accordance with the US GAAP,
also as to what refers to accounts receivable, with the
observations made by Deloitte Touch Tohmatsu International,
the external audit company of MICROTEC.
/bullet/ RIGHTS OF INTELLECTUAL PROPERTY. MICROTEC is the title holder
of the rights of intellectual property contained in "ANNEX J"
of this instrument, to the extent that such rights are
passable for registration. To the knowledge of the SELLERS
and MICROHOLD:
(i) no person has been authorized to make use, of whatever
kind, of any rights of intellectual property entitled by
MICROTEC and by MICROHOLD;
(ii) none of the processes or products of MICROTEC infringes
on the rights of third parties with reference to intellectual
property or involves the use of non authorized or secret
information disclosed to MICROTEC by any third parties, under
circumstances which would cause demands against MICROTEC by
these third parties;
<PAGE>
(iii) the rights of intellectual property contained in ANNEX
J are not the object of use, demand, opposition or discussion
by third parties;
(iv) there is no violation, by third parties, the right of
intellectual property listed in ANNEX J; and
(v) all the fees and acts which refer to the necessary
requests for registration or renewal of the rights of
intellectual property, listed in ANNEX J, have been paid and
practiced up to the present date.
/bullet/ INSTALLATIONS. The factory, office, machinery, computer
system, vehicles and other equipment used during the course
of business of MICROTEC are in satisfactory useful and
working conditions.
/bullet/ SIGNIFICANT CONTRACTS. MICROTEC, to the knowledge of the
SELLERS and MICROHOLD, is not a part of and is not subject to
any contracts which:
(i) cannot be serviced or complied with in a timely manner
and without undue or unusual expense; and
(ii) are in any way outside of the normal course of its
business.
/bullet/ POWERS OF ATTORNEY. All powers of attorney currently in
effect executed by MICROTEC, granting powers to effect
transactions on bank accounts and/or assume obligations of
any nature in the name of the company, are listed in "ANNEX
K" of this contract, with a copy of each power of attorney
contained in the annex.
/bullet/ DEBTS. MICROTEC has not incurred any debts other than those
indicated in the "Statutory Financial Statements" or, as of
January 1, 1997, debts which have not arisen during the
normal course of its business.
/bullet/ BANK ACCOUNTS. All the bank accounts maintained in the name
of MICROTEC are listed in "ANNEX L" of this contract.
/bullet/ LIST OF EMPLOYEES IN MANAGEMENT POSITIONS. "ANNEX M" of this
instrument contains a list of all the employees currently
employed by MICROTEC who occupy positions of supervisors,
management and their superiors, with their respective
salaries and other benefits granted to them.
III - RELATIVE TO MICROTEC AND MICROHOLD:
Beyond all the declarations and guarantees given above, the SELLERS declare and
guarantee that the direct or indirect acquisition by the PURCHASER of the SHARES
ENTITLED BY MICROHOLD and of the SHARES ENTITLED BY THE SELLER, or the
compliance with this contract:
(i) will not cause to MICROHOLD and/or to MICROTEC the loss of any
rights which they currently enjoy;
<PAGE>
(ii) will not relieve third parties of any obligations to MICROTEC
and/or to MICROHOLD or will permit that third parties complete such
obligations, limiting or restricting in any way the rights and/or
benefits enjoyed by MICROTEC and MICROHOLD;
(iii) will not result in any current debt of MICROTEC and/or MICROHOLD
to become due or payable prior to the foreseen due date, with the
exception of the contract with IBM ("ANNEX N"); and
(iv) will not create for the PURCHASER any restriction, limitation or
loss of right over the STOCK and over the SHARES ENTITLED BY THE
SELLERS.
FIRST PARAGRAPH - Eventual errors or omissions of a tributary or accounting
nature contained in the financial statements of MICROHOLD and MICROTEC, as long
as they are correctable without any obligations to the PURCHASER by the SELLERS,
and as long as they do not cause any damages or cause difficulty in the regular
functioning of the social business of MICROTEC and MICROHOLD, will not
constitute sufficient cause to make insubsistent the declarations of the SELLERS
under the terms of this contract.
SECOND PARAGRAPH - Relative to the rights of intellectual property entitled by
MICROTEC (ANNEX J), there is a pending matter involving IBM of Brazil, which was
the object of an agreement, under the terms of the instrument marked as "ANNEX
N".
FOURTH CLAUSE - The SELLERS are personally and mutually responsible for any and
all liabilities not declared by MICROTEC and MICROHOLD, which were not included
in the financial statements of these companies (ANNEXES B and G), whatever the
origin of this obligation or its total, up to the total limit of US$
5,000,000.00 (Five Million U. S. Dollars), converted by the same criteria
established in the first clause of this contract. The SELLERS will continue to
be obligated for the liabilities not declared for the period of 5 (five) years
as of the DATE OF SETTLEMENT, with the exception of the obligations of a
tributary nature, for which they will continue to be obligated for a period of
10 (ten) years as of the DATE OF SETTLEMENT.
ONLY PARAGRAPH - Taking into account the obligation assumed in the CAPUT of this
clause, in the event of the PURCHASER, MICROTEC or MICROHOLD being demanded for
any undeclared liability, the PURCHASER will assume the obligation of
communicating such a fact to any of the SELLERS, who will act as a
representative for the others, so that they will adopt the measures which they
understand are necessary, under the penalty of making insubstantial that
obligation to reimburse.
FIFTH CLAUSE - The parties agree to previously and mutually consult with each
other before issuing any "press release" for disclosure to the press or make any
public declaration pertaining to this contract or to the operations contemplated
herein, and without this prior consultation no "press release" will be issued
for disclosure to the press nor will they make any public declaration, unless
required by applicable law, by the regulations of the stock exchange in which
MICROTEC's shares are negotiated.
ONLY PARAGRAPH - Subject to that contained in the CAPUT of this clause, the
parties obligate themselves to not disclose and maintain secrecy about the
information, documents and data which are given to them of a confidential
nature.
<PAGE>
SIXTH CLAUSE - Once the transfer of the STOCK and SHARES ENTITLED BY THE SELLERS
is effected, the PURCHASER is required to nominate the new administration for
MICROTEC and for MICROHOLD.
FIRST PARAGRAPH - During the period which the obligations of the SELLERS are
still in effect, the PURCHASER is required to maintain one of the SELLERS,
chosen by common agreement between them, on the Administrative Council of
MICROTEC, so that this person may inform the others about the eventual
responsibilities caused by the transaction hereby agreed upon.
SECOND PARAGRAPH - In order to comply with the requirements contained in the
First Paragraph above, the PURCHASER will take the necessary steps for the
referenced person to participate in the Administrative Council of MICROTEC,
taking into account the dispositions of the statute of this last and of the Law.
SEVENTH CLAUSE - The SELLERS are obligated, within the time of 03 (three) years
as of the DATE OF SETTLEMENT, to not participate, directly or indirectly, as an
individual contractor or together with others, as stockholder or shareholder of
any company, or another form or commercial association, in a business which
competes, directly or indirectly, with the social business currently being
executed by MICROTEC, with the exception of the right of the SELLERS to
participate as stockholders or shareholders of the PURCHASER or any other
company controlled by them.
EIGHTH CLAUSE - The sellers will maintain bonded , in the power of a fiduciary
agent on the United States of America, the shares of the PURCHASER referred to
in letter "c" of the second clause of this contract, for a period of 12 (twelve)
months counting from the date of transfer of the shares of VITECH, in order to
guarantee the compliance with any of their obligations originating from this
instrument.
ONLY PARAGRAPH - After the time period of 12 (twelve) months from the date of
transfer of the VITECH shares to the SELLERS, the fiduciary agent will be
obligated to release them to be freely disposed of by the SELLERS.
NINTH CLAUSE - The non-compliance with any obligation assumed with this
instrument will obligate the non-compliant party to pay to the other party the
amount in Reais equivalent to US$ 500,000.00 (Five Hundred Thousand U. S.
Dollars), converted by the quote of the commercial dollar on the date of the
payment.
<PAGE>
FIRST PARAGRAPH - It is hereby established that the SELLERS jointly assume the
obligation of paying the amount of the penalty to the PURCHASER in the event
that one or more of them do not comply with their obligations of this contract.
In the same manner, the PURCHASER is obligated to pay the penalty to any one of
the SELLERS, at one single time, in the event that they do not comply with their
obligations of this contract, and that person who receives the payment has the
obligation to divide it with the others.
SECOND PARAGRAPH - The parties expressly recognize that the amount of the
penalty does not include eventual non-declared liabilities, according to what is
established in the fourth clause of this contract, for which the SELLERS will
continue to be responsible until its complete liquidation, and also does not
prevent that the party who was wronged, upon presentation of proof, has the
right to receive all the damages (damages which arise and loss of profit), WHICH
ORIGINATE FROM THE CONTRACTUAL NON-COMPLIANCE OF THE OTHER PARTY, RESPECTING THE
LIMIT ESTABLISHED IN THE FOURTH CLAUSE OF THIS CONTRACT.
TENTH CLAUSE - The SELLERS declare to have a debit in the checking account of
MICROHOLD in the amount equivalent to US$ 1,150,000.00 (One Million, One Hundred
and Fifty Thousand U. S. Dollars), which debit they will clear within 5 (five)
days as of the DATE OF SETTLEMENT.
FIRST PARAGRAPH - The payment will be made directly to the PURCHASER, who
obligates itself to clear it with the creditor. To this end, the PURCHASER has
indicated the bank account number 6900211806, with Eastern National Bank (8190
Northwest 25th Street, Miami, Florida, 33122, USA), ABA# 067002533.
SECOND PARAGRAPH - In the event that the SELLERS do not effect the proper
payment within the stipulated time period, the PURCHASER will be authorized to
deduct this amount from the total of the installments established in letter "b"
of the second clause of this contract.
ELEVENTH CLAUSE - All correspondence referred to in this instrument will be made
via facsimile or letter with proof of receipt addressed to:
SELLERS: Mr. Touma Samir Makdassi Elias
Rua Jose Maria Lisboa, n(0) 207, 8(0) andar
CEP 01423-000, Sao Paulo, Brasil
Fax: 55 (11) 542-3228
PURCHASER: Mr. Georges St, Laurent III
Rua E, s/n, Quadra Industrial Q, Lotes 5/06
CEP 45650-000, Ilheus, Bahia, Brasil
Fax: 55 (73) 234-3090
FIRST PARAGRAPH - The correspondence will be considered as received with the
proof of the fax transmission or proof of receipt.
TWELFTH CLAUSE - In the event that there should occur any fact which might
prevent the execution of the transfer of STOCKS and/or SHARES ENTITLED BY THE
SELLERS to the PURCHASER, they are obligated to communicate this fact, within 30
(thirty) days as of the DATE OF SETTLEMENT, to the SELLER, indicating, in
writing, to what entity, person or business, the STOCKS and/or SHARES ENTITLED
BY THE SELLER should be transferred, which the SELLERS expressly agree to.
<PAGE>
THIRTEENTH CLAUSE - The present instrument is signed and is irrevocable and
irretractable, obligating the parties, their heirs and successors.
FOURTEENTH CLAUSE - Any dispute, controversy or demand arising from this
contract will be resolved by a Arbitration Court, in the City of Sao Paulo,
which should follow the Rules of Conciliation and Arbitration of the
International Chamber of Commerce ("Rules of Conciliation and Arbitration of the
International Chamber of Commerce - ICC").
FIRST PARAGRAPH - The decision of the Arbitration Court, under the terms of this
clause, will be definite and will obligate the parties independent of any other
provision other than the formal communication to the parties via registered
correspondence with return receipt, to the addresses listed in the eleventh
clause of this contract.
SECOND PARAGRAPH - The Arbitration Court will be composed of three Arbitrators,
with two of them being nominated one by each party and the third chosen by
mutual agreement by the two arbitrators nominated by the parties, this last one
being the president. In the event that the arbitrators nominated by the parties
cannot reach a consensus for the nomination of the president, this one will be
indicated by the International Chamber of Commerce.
THIRD PARAGRAPH - Brazilian law will be applicable to the Arbitration Court.
With regards to the procedure, the Rules of Conciliation and Arbitration of the
International Chamber of Commerce will be followed, with the modification
eventually consisting of this contract.
FOURTH PARAGRAPH - The party who loses the dispute will be responsible for the
expenses of the arbitration process, which include the legal fees the sponsors
of the parties.
FIFTEENTH CLAUSE - The present Contract for Discontinuation of Company
Participations and Other Agreements constitutes one single agreement between the
SELLERS, the PURCHASER, MICROHOLD, MICROTEC and VITECH, with regards to the sale
and purchase of the STOCKS and SHARES ENTITLED BY THE SELLERS, and supersedes
prior agreements and understandings, oral or written, with regards to the object
of this contract.
FIRST PARAGRAPH - The voiding of any clause or disposition of this contract will
not imply in the voiding of the other terms and conditions, which will continue
to be in full effect, obligating the parties.
SECOND PARAGRAPH - Any addendum or contractual addition will only be considered
valid if signed by all parties.
SIXTEENTH CLAUSE - In the event that there is the need to submit any pending
matters or litigation originating from this Contract to the appreciation of the
Judicial Power, respecting the dispositions in the fourteenth clause above, the
Court of the Capital of the State of Sao Paulo will be considered competent.
<PAGE>
And, being thus having agreed and contracted, the present instrument is signed
in two (two) copies of equal content and form, in the presence of the witnessed
nominated below.
Sao Paulo, July 10, 1997
/s/ TOUMA SAMIR MAKDASSI ELIAS /s/ ARTHUR CEZAR FALCAO
- ------------------------------ --------------------------
TOUMA SAMIR MAKDASSI ELIAS ARTHUR CEZAR FALCAO
/s/ RUI JOSE ARRUDA CAMPOS /s/ FAIZ MAKDISI ILYAS
- ------------------------------ --------------------------
RUI JOSE ARRUDA CAMPOS FAIZ MAKDISI ILYAS
/s/ GHATTAS MAKDASSI ELIAS
- ------------------------------
GHATTAS MAKDASSI ELIAS
/s/ GEORGES C. ST. LAURENT III
- ------------------------------
MICROTEC HOLDING USA, INC.
/s/ GEORGES C. ST. LAURENT III
- ------------------------------
VITECH AMERICA, INC.
/s/ ARTHUR CEZAR FALCAO /s/ TOUMA SAMIR MAKDASSI ELIAS
- ----------------------- ------------------------------
MICROHOLD PARTICIPACOES E EMPREENDIMENTOS S/C LTDA.
/s/ TOUMA SAMIR MAKDASSI ELIAS /s/ RUI JOSE ARRUDA CAMPOS
- ------------------------------ --------------------------
MICROTEC SISTEMAS IND. COM. S.A.
Witnesses:
1. /s/ WILLIAM ST. LAURENT 2. /s/ ALESSANDRA M. DE O. ONOFRE
---------------------------- ------------------------------
William St. Laurent Alessandra M. de O. Onofre
EXHIBIT 2.2
PURCHASE AGREEMENT
This Purchase Agreement is made and entered into this 10th day of July, 1997, by
and between Vitech America, Inc. ("Vitech"), a Florida Corporation with its
principal offices located at 8807 Northwest 23rd Street, Miami, Florida 33172,
and Microtec Holdings USA, Inc. ("Microtec"), a Nevada Corporation with its
principal offices located at 1475 Terminal Way, Suite E, Reno, Nevada 89502.
Recitals:
1. Microtec, with the consent of its shareholders, agrees to transfer 100% of
its capital stock to Vitech to become a wholly owned subsidiary of Vitech.
2. As consideration for the purchase of Microtec, Vitech agrees to issue
50,000 shares of the Common Stock of Vitech to the shareholders of Microtec
proportional to their holdings of Microtec.
In witness whereof, the parties hereto have executed this Purchase Agreement as
of the day and year first above written.
VITECH AMERICA, INC.
By: /s/ EDWARD A. KELLY
----------------------------
Edward A. Kelly
Chief Financial Officer
MICROTEC HOLDINGS USA
By: /s/ PAULO CORTEZ
----------------------------
Paulo Cortez
Director
EXHIBIT 10.13
VITECH AMERICA, INC.
10% SENIOR NOTE
DUE JUNE 26, 1999
$10,000,000 JUNE 26, 1997
VITECH AMERICA, INC. a Florida corporation (the "Company") having its
principal office at 8807 Northwest 23rd Street, Miami, Florida 33172, for value
received, hereby promises to pay to GEORGES C. ST. LAURENT JR., or registered
assigns (the "Holder") on June 26, 1999 or prior thereto as hereinafter provided
(the "Maturity Date") at the principal offices of the Company, the principal sum
of Ten Million Dollars ($10,000,000) in legal tender of the United States of
America, and to pay interest on the outstanding principal balance at the rate of
ten percent (10%) per annum from the date hereof until the Company's obligation
with respect to the payment of such principal sum shall be discharged as herein
provided. Interest hereunder shall accrue from the date of this Note and shall
be payable monthly on the 1st day of each month in arrears for interest accrued
during the preceding month, commencing July 1, 1997, while this Note is
outstanding.
This Note is the direct obligation of the Company chargeable against
all of its property, whatsoever and wheresoever, both present and future, and,
if divided into separate Notes, all such Notes shall rank equal and ratably
without preference or priority of any of said Notes, over any others thereof.
PREPAYMENT
The principal amount of this Note may be prepaid by the Company, in
whole or in part, without premium or penalty, at any time. Upon any prepayment
of the entire principal amount of this Note, all accrued but unpaid interest
shall be paid to the Holder of this Note on the date of prepayment.
CONVERSION
This Note is convertible into shares of Common Stock of the Company, at
the option of the Holder with no less than ninety (90) days prior written notice
of the Holder's intent to covert, along with the Note, delivered to the
Company's offices. The Note may be converted in whole or in part, so long as the
part is One Million Dollars ($1,000,000) or a whole multiple of One Million
Dollars ($1,000,000). The conversion rate shall be one share of Common Stock for
each Fifteen Dollars ($15.00) of principal, subject to adjustment in certain
events. On conversion, no payment or adjustment for interest shall be made.
The conversion price will be adjusted for dividends or distributions on
Common Stock payable in the Company's Common Stock, and for subdivisions,
combinations or certain reclassifications of the Company's Common Stock. If the
Company is a party to a consolidation or merger or transfer of all or
substantially all of its assets, the right to convert a Note into Common Stock
will be changed into a right to convert it into securities, cash or other assets
of the Company or another entity, on the same basis as the other common
shareholders of the Company.
Upon notification of the Holder's intent to convert, the Company will
use its best effort to file a registration statement on Form S-3 to register a
sufficient number of shares to satisfy the conversion of the Note.
COVENANTS
The Company covenants and agrees that, so long as this Note shall be
outstanding, it will
<PAGE>
/bullet/ promptly pay and discharge all lawful taxes, assessments and
governmental charges or levies upon the Company or upon its income
and profits, or upon any of its property, before the same shall
become in default, as well as all lawful claims for labor, materials
and supplies, which, if unpaid, might become a lien or charge upon
such properties or any part thereof.
/bullet/ do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate existence, rights and franchises
and comply with all laws applicable to the Company as its counsel may
advise.
/bullet/ keep adequately insured, by financially sound reputable insurers, all
property of a character usually insured by similar corporations and
carry such insurance as is usually carried by similar corporations.
/bullet/ at all times keep true and correct books, records and accounts.
EVENTS OF DEFAULT
This Note shall become due and payable upon written demand made by the
Holder hereof if one or more of the following events, herein called "events of
default", shall happen and be continuing as hereinafter provided:
/bullet/ Default in the payment of principal and accrued interest on this Note
when and as the same shall become due and payable, if such default
shall continued uncured for 30 days after due.
/bullet/ Default in the due observance or performance of any covenant,
condition or agreement on the part of the Company to be observed or
performed pursuant to the terms hereof, if such default shall
continue uncured for 60 days after written notice specifying such
default shall have been given to the Company by the Holder of the
Note.
/bullet/ Application for, or consent to, the appointment of a receiver,
trustee or liquidator of the Company or of its property.
/bullet/ Admission in writing of the Company's inability to pay its debts as
they mature. General assignment by the Company for the benefit of
creditors
/bullet/ Filing by the Company of a voluntary petition in bankruptcy or a
petition or an answer seeking reorganization or an arrangement with
creditors.
MISCELLANEOUS
The Company may consider and treat the person in whose name this Note
shall be registered as the absolute owner thereof for all purposes whatsoever.
Payments of interest shall be made as specified above to the registered
owner of this Note. Payment of principal shall be made to the registered owner
of this Note upon presentation of this Note upon or after maturity. No interest
shall be due on this Note for such period of time that may elapse between the
maturity of this Note and its presentation for payment.
The Holder shall not, by virtue hereof, be entitled to any rights of a
shareholder in the company, either at law or in equity until conversion of this
Note, and the rights of the Holder are limited to those expressed in this Note.
This Note shall be construed and enforced in accordance with the laws
of the State of Florida.
IN WITNESS WHEREOF, VITECH AMERICA, INC. has caused this Note to be
signed in its name by an authorized officer of the Company.
VITECH AMERICA, INC.,
A FLORIDA CORPORATION
By: /s/ EDWARD A. KELLY
--------------------------
Edward A. Kelly,
Chief Financial Officer
