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): November 17, 1997
VITECH AMERICA, INC.
(Exact name of registrant as specified in its charter)
FLORIDA 0-21369 65-041-9086
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(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)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On November 17, 1997, Vitech America, Inc. (the "Company") entered into
an agreement with Tech Shop Holdings USA, Inc. ("Tech Shop"), a Nevada
Corporation, whereby the Company acquired 100% of the capital stock of Tech
Shop. Tech Shop is a holding company whose sole purpose is to be the owner of
51% of the capital stock of Tech Shop Ltda. and Tech Stock Ltda. The remaining
49% is owned by Mr. Randolpho Abreu Pereira da Silva, the Founder of Tech Shop
Ltda. and Tech Stock Ltda. Both Tech Shop Ltda. and Tech Stock Ltda. are located
in Belo Horizonte, Brazil and are companies incorporated under the laws of
Brazil. Their operations include regional distribution and sales in the
corporate and retail markets in Brazil. In accordance with the agreement, the
Company paid total consideration of $6,003,954 in the form of 91,188 shares of
Vitech America, Inc. common stock and $4,409,620 in cash. The number of shares
issued as consideration was based on a per share value of $17.875 which was the
closing price of the Company's common stock on Friday, November 14, 1997. The
Company has a right of first refusal to purchase the common shares at a purchase
price of $17.875 per share except for 35,363 shares which shall remain in escrow
until November 17, 1998. The Company is required to register the shares on a
Form S-3 and to endeavor to cause such registration statement to be declared
effective within 90 days of November 17, 1997. The shares of common stock are
subject to certain restriction on sale as defined in the Buy-Sell Contract by
and between the Company and Tech Shop. The consideration paid was derived
through negotiations between the Company and the owner of Tech Shop.
On November 18, 1997, the Company entered into an agreement with Recife
Holdings USA, Inc. ("Rectech"), a Nevada Corporation, whereby the Company
acquired 61.616% of the capital stock of Rectech. The remaining 38.38% is owned
by Mr. Robson Medina Catao, the Founder of Rectech - Recife Tecnologia Ltda.
Rectech is a holding company whose sole purpose is to be the owner of 99% of the
capital stock Rectech - Recife Tecnologia Ltda. Rectech - Recife Tecnologia
Ltda. is located in Recife, Brazil and is incorporated under the laws of Brazil.
Their operation include regional sales in the corporate and retail markets in
Brazil. In accordance with the agreement, the Company paid total consideration
of $2,750,000 in the form of 41,958 shares of Vitech America, Inc. common stock
and $2,000,000 in cash. The number of shares issued as consideration was based
on a per share value of $17.875 which was the closing price of the Company's
common stock on Friday, November 14, 1997. The Company has a right of first
refusal to purchase the common shares at the market price of the common stock on
the date of any proposed sale. The Company is required to register the shares on
a Form S-3 and to endeavor to cause such registration statement to be declared
effective within 90 days of November 17, 1997. The shares of common stock are
subject to certain restriction on sale as defined in the Buy-Sell Contract by
and between the Company and Rectech. The consideration paid was derived through
negotiations between the Company and the owner of Rectech.
For the year ended December 31, 1996, the above described businesses
had combined sales of approximately $28 million, and for the nine month period
ended September 30, 1997 they had approximately $36.5 million in sales. The
acquisitions of Tech Shop and Rectech are being accounted for under the purchase
method of accounting.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA INFORMATION AND EXHIBITS
(c) Exhibits:
(2.1) Buy-Sell Contract between Vitech America, Inc. and Tech Shop
Holdings USA, Inc. dated November 17, 1997.
<PAGE>
(2.2) Buy-Sell Contract between Vitech America, Inc. and Recife
Holdings USA, Inc. dated November 18, 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/ EDWARD A. KELLY
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Edward A. Kelly
Chief Financial Officer
Dated: December 2, 1997
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
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2.1 Buy-Sell Contract between Vitech America, Inc. and Tech Shop
Holdings USA, Inc. dated November 17, 1997.
2.2 Buy-Sell Contract between Vitech America, Inc. and Recife
Holdings USA, Inc. dated November 18, 1997.
EXHIBIT 2.1
BUY-SELL CONTRACT BY AND BETWEEN
VITECH AMERICA, INC. AND TECH SHOP HOLDINGS USA, INC.
<PAGE>
BUY-SELL CONTRACT
On this day, the 17th of November, 1997, in Belo Horizonte and in Ilheus,
Brazil, by this instrument, Mr. Randolpho Abreu Pereira da Silva, Brazilian,
married, businessman, holder of Identification Card Number RG M 2089925,
registered with the CPF under number 508673696-04, Brazilian Passport Number CG
411384, valid until 3/30/05, residing in this Capital of the State of Minas
Gerais at Rua Correas, 305, Apartment 900, Belo Horizonte; in the quality of
SELLER, hereinafter referred to as such;
TECH SHOP HOLDINGS USA, INC., a company duly constituted under the laws of the
State of Nevada, in the United States of America, with headquarters at 1475
Terminal Way, Suite E, Reno, Nevada, USA, in this action represented by Mr.
Randolpho Abreu Pereira da Silva, Brazilian, married, businessman, holder of
Identification Card Number RG M 2089925, registered with the CPF under number
508673696-04, Brazilian Passport Number CG 411384, valid until 3/30/05, residing
in this Capital of the State of Minas Gerais at Rua Correas, 305, Apartment 900,
Belo Horizonte, hereinafter referred to as TECH SHOP;
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;, hereafter VITECH or, in the quality of PURCHASER,
hereinafter designated as such and interchangeable; and
CONSIDERING that:
The SELLER is owner, free and unencumbered of any obligations, debts or burdens
of any kind, of 25,000 (twenty-five thousand) shares of TECH SHOP ("SHARES"),
representing 100% of the outstanding shares of this company, and in this quality
they fully exercise the stock control of TECH SHOP, without any restrictions;
TECH SHOP is a holding company whose sole purpose is to be the title holder of
51% of all voting and outstanding capital of Tech Shop Ltda. and Tech Stock
Ltda. (formerly Flytech Minas Tecnologia Ltda.), hereafter called the COMPANIES;
The three parties have, between themselves, agreed and contracted to the
following:
FIRST CLAUSE - By this instrument, in the best legal form, the SELLER shall
yield and transfer to the PURCHASER the total of the SHARES owned by the SELLER
for the price of US$ 6,003,954.00 (Six Million Three Thousand Nine Hundred and
Fifty Four U.S. Dollars).
<PAGE>
FIRST PARAGRAPH - The SELLER assumes the irrevocable obligation, in this action,
of transferring the Shares of TECH SHOP, on the DATE OF SETTLEMENT (designation
which indicates the date on which the installment indicated in letter "a" and
letter "b" of the Second Clause below is sent to the accounts indicated by the
SELLER), as well as execute all the actions necessary or convenient for the
materialization of the sale of the SHARES of the SELLER, under the 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 SELLER to effect the transfer of the SHARES of the SELLER on the
DATE OF SETTLEMENT, they will be granted a 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 of the SELLER being made, the SELLER is 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 SHARES of the
SELLER, 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$ 6,003,954.00 (Six Million
Three Thousand Nine Hundred and Fifty Four U.S. Dollars) should be made in the
following manner, For the purposes of values in Brazilian Reais, the Commercial
Exchange rate to be used is R$1.1074 per US Dollar:
(a) US$ 4,109,620.00 (Four Million One Hundred and Nine Thousand Six
Hundred and Twenty U.S. Dollars and No Cents) sent by wire transfer to
the bank accounts indicated by SELLER, duly received and acknowledge by
SELLER by the attached Confirmation of Receipt of Wire;
(b) R$ 300,000.00 (Three Hundred Thousand Brazilian Reais) sent by wire
transfer to the bank accounts indicated by SELLER, duly received and
acknowledge by SELLER by the attached Confirmation of Receipt of Wire;
(c) the delivery of the equivalent of R$1,800,000.00 (One Million, Eight
Hundred Thousand Brazilian Reais) of common shares ("Common Stock") of
VITECH based on closing price of common shares of VITECH on Friday,
November 14, 1997 of US17.875 per share, or 91,188 shares to the
SELLER.
FIRST PARAGRAPH - Considering eventual difficulties with the transfer of funds
and resources the PURCHASER will not be considered in violation if the payment
should occur by the fifth working day after the due date of the payment or
transfer.
SECOND PARAGRAPH - In the event that a delay should occur in the payments beyond
those dates established in the second paragraph above, the PURCHASER will be
required to pay penalty interest of 1% (one percent) per month with the SELLER
having the option to adopt all the legal measures necessary to ensure the
receipt of their credit.
<PAGE>
THIRD PARAGRAPH - PURCHASER shall have the first right of refusal to purchase
the common shares of VITECH mentioned in letter (c) above, upon the releases
specified in the Fifth Paragraph below of the SELLER to sell the common shares
of VITECH, to purchase said shares for the market price of VITECH common shares
at DATE OF CLOSING of this contract and in its sole discretion to effect
payments in Brazilian Reais in place of any or all of the common shares of
VITECH in letter (c) above, except for R$700,000 worth of common shares of
VITECH which shall remain in escrow until one year after DATE OF SETTLEMENT in
accord with the Fourth Clause below. If PURCHASER effects this right, it shall
replace the common shares of VITECH with Promissory Notes from the PURCHASER
with guarantee by William C. St. Laurent for full and complete payment in the
event of default of the PURCHASER until the full amount is paid.
FOURTH PARAGRAPH - The PURCHASER guarantees 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 SELLER being able to sell or negotiate them only
after effective date of registration of a Form S-3 with the Securities Exchange
Commission, which the PURCHASER will endeavor to complete within 90 days of DATE
OF SETTLEMENT, but not before November 17, 1997 and with the following limits of
the sale of share equivalents: one (1) lot of R$350,000 immediately upon
effective registration of an S-3 for the shares of this contract, four (4) lots
of R$50,000 every thirty days beginning on November 15, 1997, one (1) lot of
R$250,000 commencing on March 15, 1998, six (6) lots of R$50,000 every thirty
days beginning on April 15, 1998, and one (1) lot of R$700,000.00 beginning one
(1) year after DATE OF SETTLEMENT.
THIRD CLAUSE - The SELLER, in the quality of title holders of the SHARES, 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 TECH SHOP:
/bullet/ CAPACITY. The SELLER has the full capacity and powers to
execute and comply with this Contract, being obligated under
the terms herein agreed.
/bullet/ ARTICLES OF INCORPORATION. The Articles of Incorporation of
TECH SHOP, which becomes part of this present instrument as
"ANNEX A", is true, current and correct.
/bullet/ ACTIVITIES. TECH SHOP was constituted with the specific
objective of participating in other companies, and, in this
condition, became the title holder of the control of certain
assets, including shares in duly organized Brazilian entities,
herein after referred to as the COMPANIES, and not having any
other activity.
/bullet/ CONTINGENCIES. TECH SHOP does not have any debts, burdens,
contingencies or responsibilities of any nature
II- RELATIVE TO THE COMPANIES:
<PAGE>
/bullet/ COMPANIES' SITUATION. The COMPANIES are duly constituted
according to Brazilian law with powers to conduct its business
as it is currently being conducted.
/bullet/ SOCIAL STATUTES. The social statutes of the COMPANIES, which
integrates this present instrument as "ANNEX D", is true,
current and correct.
/bullet/ PROPERTY OF SHARES AND OWNERSHIP OF THE COMPANIES. TECH SHOP
is the legitimate owner of the shares or ownership in the
COMPANIES, having good and negotiable title over them. The
SELLER declares and guarantees that, after the transference of
the SHARES of the SELLER to PURCHASER, they shall be, through
TECH SHOP, title holders of 51% (fifty one percent), 63,750
shares of 125,000 total shares of the voting social capital of
Tech Shop Ltda. and 204 shares of the 400 total shares
outstanding of Tech Stock Ltda. representing 51% (fifty one
percent) of all equity and voting or non-voting stock of Tech
Stock Ltda., with all the rights and obligations which they
represent.
/bullet/ SITUATION OF COMPANIES SHARES. All the shares of the
COMPANIES, entitled by TECH SHOP and/or by the SELLER, 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.
/bullet/ OUTSTANDING SHARES. With the exception of the shares and
ownership stipulated above there are no other shares or
ownership instruments of the COMPANIES issued and/or in
circulation.
/bullet/ COMPANY DELIBERATIONS. To the knowledge of the SELLER and TECH
SHOP, neither the shareholders nor the administrative
departments of the COMPANIES have approved any deliberation,
which has not been proper and usual during the normal course
of business of COMPANIES.
/bullet/ EXECUTION OF SOCIAL BUSINESS. Since the constitution of the
COMPANIES, 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 SELLER and TECH SHOP, may affect the property or social
business of the COMPANIES.
/bullet/ PERMITS. The COMPANIES have 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, The
COMPANIES observe and comply 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. The COMPANIES have 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
<PAGE>
involving the COMPANIES, to the knowledge of the SELLER and
TECH SHOP.
/bullet/ ADMINISTRATIVE PROCESSES. Other than those mentioned in "ANNEX
F", there are no administrative processes, demands or tax
audits existing involving the COMPANIES or any of its
property.
/bullet/ INSOLVENCY. (i) no order has been given or petition presented
relative to the dissolution of the COMPANIES; (ii) the
COMPANIES have not requested bankruptcy or composition of
creditors; (iii) the SELLER and TECH SHOP have no knowledge of
any creditors of the COMPANIES having protested any bond taken
out against it or requested their bankruptcy; and (iv) the
SELLER, TECH SHOP and the COMPANIES have not concluded or
proposed any agreement or composition with their creditors or
any class of creditors.
/bullet/ BOOKS AND REGISTERS. To the best knowledge of the SELLER and
TECH SHOP, the COMPANIES accounts, books, daily ledgers,
financial registers and others: (i) were completely, properly
and faithfully updated, they are in the possession of the
COMPANIES 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/ FINANCIAL STATEMENTS. The financial statements of the
COMPANIES, 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.
/bullet/ ACCOUNTS. The COMPANIES' accounts prepared according to the
COMPANIES' 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 COMPANIES ACCOUNTING STANDARDS.
/bullet/ INVENTORY EVALUATION AND ACCOUNTING POLICY. For the purpose of
the "Financial Statements" the inventory and business under
development of COMPANIES 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 the
COMPANIES. Also, the financial statements translated to
English with regards to stock inventory and business under
development for COMPANIES are also in accordance with the US
GAAP.
/bullet/ DECLARATIONS. The COMPANIES 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,
<PAGE>
and at the time of their presentation, these documents were
true and correct.
/bullet/ BUSINESS AFTER THE DATE OF THE "FINANCIAL STATEMENTS".
(i) The COMPANIES conducted 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 and expects sales
for the year of 1997 to reach approximately R$40,000,000.00 in
gross sales with profits of approximately R$1,400,000.00;
(ii) the COMPANIES have paid creditors within the terms agreed
with those creditors;
(iii) there was no significant change on the inventory of
COMPANIES, being a minimum of approximately R$700,000.00, net
of any payables associated; and
(iv) the COMPANIES 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. The COMPANIES does not trade its products
under any other name, other than those stated in "ANNEX I" of
this instrument.
/bullet/ FIXED ASSETS. The COMPANIES are the legitimate owner and title
holder of all the fixed assets reflected in its "Financial
Statement", all of which are free and clear of any mortgages,
obligations, debts, doubts, bonds, right of retention,
pledges, fiduciary alienation, responsibility and/or burdens o
any nature with a minimum value of R$1,400,000.00.
/bullet/ TITLE OF REAL ESTATE. The COMPANIES do not have any real
estate.
/bullet/ ACCOUNTS RECEIVABLE. The Accounts Receivable of the COMPANIES
are reflected in its "Financial Statements", to which are
added all those originating from the social business of the
COMPANIES according to the generally accepted accounting
principles in Brazil, which should equal any payables of the
COMPANIES.
/bullet/ RIGHTS OF INTELLECTUAL PROPERTY. The COMPANIES are the
titleholder 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
SELLER and TECH SHOP:
(i) no person has been authorized to make use, of whatever
kind, of any rights of intellectual property entitled by the
COMPANIES and by TECH SHOP;
(ii) none of the processes or products of the COMPANIES
infringes on the rights of third parties with reference to
intellectual property or involves the use of non authorized or
secret information disclosed to the COMPANIES by any third
parties, under circumstances which would cause demands against
the COMPANIES 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 warehouse, office, machinery, computer
system, vehicles and other equipment used during the course of
business of the COMPANIES are in satisfactory useful and
working conditions.
/bullet/ SIGNIFICANT CONTRACTS. The COMPANIES, to the knowledge of the
SELLER and TECH SHOP, are 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 the COMPANIES, 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. The COMPANIES have not incurred any debts other than
those indicated in the "Financial Statements" or debts which
have not arisen during the normal course of its business,
which should be equal to or less than the total of the Net
Accounts Receivable.
/bullet/ BANK ACCOUNTS. All the bank accounts maintained in the name of
the COMPANIES 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 the COMPANIES who occupy positions of supervisors,
management and their superiors, with their respective salaries
and other benefits granted to them.
III - RELATIVE TO COMPANIES AND TECH SHOP:
Beyond all the declarations and guarantees given above, the SELLER declare and
guarantee that the direct or indirect acquisition by the PURCHASER of the
SHARES, or the compliance with this contract:
(i) will not cause to TECH SHOP and/or the ASSETS the loss of any
rights which they currently enjoy;
<PAGE>
(ii) will not relieve third parties of any obligations to the ASSETS
and/or to TECH SHOP or will permit that third parties complete such
obligations, limiting or restricting in any way the rights and/or
benefits enjoyed by ASSETS and TECH SHOP;
(iii) will not result in any current debt of COMPANIES and/or TECH SHOP
to become due or payable prior to the foreseen due date; and
(iv) will not create for the PURCHASER any restriction, limitation or
loss of right over the SHARES of the SELLER.
FIRST PARAGRAPH - Eventual errors or omissions of a tributary or accounting
nature contained in the financial statements of TECH SHOP and/or the COMPANIES,
as long as they are correctable without any obligations to the PURCHASER by the
SELLER, and as long as they do not cause any damages or cause difficulty in the
regular functioning of the social business of COMPANIES and TECH SHOP, will not
constitute sufficient cause to make incorrect or false the declarations of the
SELLER under the terms of this contract.
FOURTH CLAUSE - The SELLER and is personally responsible for any and all
liabilities not declared by the COMPANIES and TECH SHOP, which were not included
in the financial statements of these companies (ANNEXES B and G), whatever the
origin of this obligation or its total, converted by the same criteria
established in the first clause of this contract. The SELLER 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.
Taking into account the obligation assumed in the clause above, in the event of
the PURCHASER, COMPANIES or TECH SHOP being demanded for any undeclared
liability, the PURCHASER will assume the obligation of communicating such a fact
to any of the SELLER, 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
the parties' shares are negotiated.
Subject to that contained above, the parties obligate themselves to not disclose
and maintain secrecy about the any and all information, documents and data which
are given to them of a confidential nature, or any information regarding this
transaction or other transactions among the parties.
SIXTH CLAUSE - Once the transfer of the SHARES of the SELLER is effected, the
PURCHASER is required to nominate the new administration for COMPANIES and for
TECH SHOP.
SEVENTH CLAUSE - The SELLER is 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
<PAGE>
business which competes, directly or indirectly, with the business currently
being executed by COMPANIES or PURCHASER in Brazil or Mercosul, with the
exception of the right of the SELLER to participate as stockholders or
shareholders of the PURCHASER or any other company controlled by them in Brazil
or Mercosul.
EIGHTH CLAUSE - The SELLER will maintain, in the power of a fiduciary agent in
the United States of America, the R$700,000 worth of common shares of VITECH
based upon the original market price at DATE OF CLOSING referred to in letter
"c" of the second clause of this contract, for a period of 12 (twelve) months
counting from the DATE OF CLOSING in order to guarantee the compliance with any
of their obligations originating from this instrument.
After the time period of 12 (twelve) months from the DATE OF CLOSING, the
fiduciary agent will be obligated to release them to be freely traded or
disposed of as is the wish of the SELLER.
NINTH CLAUSE - The non-compliance with any obligation assumed with this
instrument will obligate the non-compliant party to pay to the other party the
amount in Reais equivalent to US$ 50,000.00 (Fifty Thousand U. S. Dollars),
converted by the quote of the commercial dollar on the date of the payment.
FIRST PARAGRAPH - It is hereby established that the SELLER 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 SELLER, 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 SELLER 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 - All correspondence referred to in this instrument will be made
via facsimile or letter with proof of receipt addressed to:
SELLER: Mr. Randolpho Abreu Pereira da Silva
Rua Correas, 305, apt. 900
Belo Horizonte - MG
Fax: 55 (31) 288-1800 ext. 253
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
<PAGE>
FIRST PARAGRAPH - The correspondence will be considered as received with the
proof of the fax transmission or proof of receipt.
ELEVENTH CLAUSE - In the event that there should occur any fact which might
prevent the execution of the transfer of the SHARES of the SELLER to the
PURCHASER, the SELLER is 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 SHARES of the SELLER should be transferred,
which the SELLER expressly agree to effect such transfer immediately giving the
PURCHASER any rights or powers as necessary by Power of Attorney expressly for
the purpose of effecting such transfer.
THIRTEENTH CLAUSE - The present instrument is signed and is irrevocable and
binding to 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 binding to 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, one shall be
indicated by the International Chamber of Commerce.
THIRD PARAGRAPH - United States Law and Uniform Commercial Code 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 constitutes one single agreement between
the SELLER, the PURCHASER with regards to the sale and purchase of the SHARES of
the SELLER, 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.
<PAGE>
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
parties shall use the courts in the State of Florida.
And, thus having agreed and contracted, the present instrument is signed in two
(two) copies of equal content and form, in the presence of the witnesses
nominated below.
Belo Horizonte and Ilheus, Brazil, November 17, 1997
VITECH AMERICA, INC.
By: /s/ GEORGES C. ST. LAURENT, III
---------------------------------------
Georges C. St. Laurent, III
Chairman and Chief Executive Officer
TECH SHOP HOLDINGS USA, INC.
By: /s/ RANDOLPHO ABREU PEREIRA DA SILVA
---------------------------------------
Randolpho Abreu Pereira da Silva
President and Shareholder
Witness: /s/ WILLIAM ST. LAURENT
-------------------------------------
Name: WILLIAM ST. LAURENT
---------------------------------------
<PAGE>
PURCHASE AGREEMENT
This Purchase Agreement is made and entered into this 17th day of November,
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 TECH SHOP Holdings USA, Inc. ("TECH SHOP"), a Nevada Corporation with
its principal offices located at 1475 Terminal Way, Suite E, Reno, Nevada 89502.
Recitals:
1. TECH SHOP with the consent of its shareholders agrees to transfer 100% of
its capital stock to Vitech to become a wholly owned subsidiary of Vitech.
VITECH AMERICA, INC.
By: /s/ GEORGES C. ST. LAURENT, III
---------------------------------------
Georges C. St. Laurent, III
President and Chief Executive Officer
TECH SHOP HOLDINGS USA, INC.
By: /S/ RANDOLPHO ABREU PEREIRA DA SILVA
---------------------------------------
Randolpho Abreu Pereira da Silva
President and Shareholder
<PAGE>
CONFIRMATION OF RECEIPT OF WIRES
I, Randolpho Abreu Pereira da Silva, hereby acknowledge a receipt of wires
totaling US$ 4,109,620.00 (Four Million One Hundred and Nine Thousand Six
Hundred and Twenty U.S. Dollars and No Cents) sent by wire transfer to the bank
accounts indicated by me.
/s/ RANDOLPHO ABREU PEREIRA DA SILVA
- ---------------------------------------
Randolpho Abreu Pereira da Silva
November 17, 1997
<PAGE>
CONFIRMATION OF RECEIPT OF WIRES
I, Randolpho Abreu Pereira da Silva, hereby acknowledge a receipt of wires
totaling R$ 300,000.00 (Three Hundred Thousand Brazilian Reais) sent by wire
transfer to the bank accounts indicated by me.
/s/ RANDOLPHO ABREU PEREIRA DA SILVA
- ---------------------------------------
Randolpho Abreu Pereira da Silva
November 17, 1997
EXHIBIT 2.2
BUY-SELL CONTRACT BY AND BETWEEN
VITECH AMERICA, INC. AND RECIFE HOLDINGS USA, INC.
<PAGE>
BUY-SELL CONTRACT
On this day, the 18th of November, 1997, in Recife and in Ilheus, Brazil, by
this instrument, Mr. Robson Medina Catao, Brazilian, married, businessman,
holder of Identification Card Number RG 2287108, registered with the CPF under
number 358636414-87, residing in this Capital of the State of Pernambuco at Rua
Raul Lafayete, 159, apartment 901, Boa Viagem, Recife, Pernambuco; in the
quality of SELLER, hereinafter referred to as such;
RECIFE HOLDINGS USA, INC., a company duly constituted under the laws of the
State of Nevada, in the United States of America, with headquarters at 1475
Terminal Way, Suite E, Reno, Nevada, USA, in this action represented by Mr.
Robson Medina Catao, SELLER, hereinafter referred to as RECTECH;
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;, hereafter VITECH or, in the quality of PURCHASER,
hereinafter designated as such and interchangeable; and
CONSIDERING that:
The SELLER is owner, free and unencumbered of any obligations, debts or burdens
of any kind, of 25,000 (twenty-five thousand) shares of RECTECH ("SHARES"),
representing 100% of the outstanding shares of this company, and in this quality
they fully exercise the stock control of RECTECH, without any restrictions;
RECTECH is a holding company whose sole purpose is to be the title holder of 99%
of all voting and outstanding capital of Rectech - Recife Tecnologia Ltda. the
COMPANY;
The three parties have, between themselves, agreed and contracted to the
following:
FIRST CLAUSE - By this instrument, in the best legal form, the SELLER shall
yield and transfer to the PURCHASER the total of 61.616%, 15,404 (Fifteen
Thousand Four Hundred and Four), of the SHARES owned by the SELLER for the price
of US$ 2,750,000.00 (Two Million Seven Hundred and Fifty Thousand U.S. Dollars).
FIRST PARAGRAPH - The SELLER assumes the irrevocable obligation, in this action,
of transferring the Shares of RECTECH to PURCHASER as well as execute all the
actions necessary or convenient for the materialization of the sale of the
SHARES of the SELLER, under the penalty of being responsible for all
2
<PAGE>
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 SELLER to effect the transfer of the SHARES of the SELLER on the
DATE OF CLOSING, they will be granted a 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 of the SELLER being made, the SELLER is 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 SHARES of the
SELLER, 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$ 2,750,000.00 (Two Million
Seven Hundred and Fifty Thousand U.S. Dollars) should be made in the following
manner:
(a) US$ 2,000,000 (Two Million U.S. Dollars and No Cents) sent by wire
transfer to the bank accounts indicated by SELLER, duly received and
acknowledge by SELLER by the attached Confirmation of Receipt of Wire;
(b) the delivery of the equivalent of U$750,000 (Seven Hundred and Fifty
Thousand U.S. Dollars) of common shares ("Common Stock") of VITECH
based on closing price of common shares of VITECH on Friday, November
14, 1997 of US17.875 per share, or 41,958 shares to the SELLER.
FIRST PARAGRAPH - Considering eventual difficulties with the transfer of funds
and resources the PURCHASER will not be considered in violation if the payment
should occur by the fifth working day after the due date of the payment or
transfer.
SECOND PARAGRAPH - In the event that a delay should occur in the payments beyond
those dates established in the second paragraph above, the PURCHASER will be
required to pay penalty interest of 1% (one percent) per month with the SELLER
having the option to adopt all the legal measures necessary to ensure the
receipt of their credit.
THIRD PARAGRAPH - PURCHASER shall have the first right of refusal to purchase
the common shares of VITECH mentioned in letter (b) above, upon the release
specified in the Fourth Paragraph below of the SELLER to sell the common shares
of VITECH closing market price on the preceding trading day prior to sale of
securities. SELLER agrees to give two weeks written notice to PURCHASER prior to
intended sale.
FOURTH PARAGRAPH - The PURCHASER guarantees that the shares referred to in
letter "b" 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 SELLER being able to sell or negotiate them only
after effective date of registration of a Form S-3 with the Securities Exchange
Commission, which the PURCHASER will endeavor to complete within 90 days of DATE
OF CLOSING, but not before November 18, 1997 and with the following limits of
the sale of share equivalents: one (1) lot of U$750,000.00 beginning three (3)
years after DATE OF CLOSING or, earlier, at the full and sole discretion of
PURCHASER.
3
<PAGE>
THIRD CLAUSE - The SELLER, in the quality of title holders of the SHARES, 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 RECTECH:
/bullet/ CAPACITY. The SELLER has the full capacity and powers to
execute and comply with this Contract, being obligated under
the terms herein agreed.
/bullet/ ARTICLES OF INCORPORATION. The Articles of Incorporation of
RECTECH, which becomes part of this present instrument as
"ANNEX A", is true, current and correct.
/bullet/ ACTIVITIES. RECTECH was constituted with the specific
objective of participating in other COMPANY, and, in this
condition, became the title holder of the control of certain
assets, including shares in duly organized Brazilian entities,
herein after referred to as the COMPANY, and not having any
other activity.
/bullet/ CONTINGENCIES. RECTECH does not have any debts, burdens,
contingencies or responsibilities of any nature other than
those disclosed to the PURCHASER.
II- RELATIVE TO THE COMPANY:
/bullet/ COMPANY' SITUATION. The COMPANY are duly constituted according
to Brazilian law with powers to conduct its business as it is
currently being conducted.
/bullet/ SOCIAL STATUTES. The social statutes of the COMPANY, which
integrates this present instrument as "ANNEX D", is true,
current and correct.
/bullet/ PROPERTY OF SHARES AND OWNERSHIP OF THE COMPANY. RECTECH is
the legitimate owner of the shares or ownership in the
COMPANY, having good and negotiable title over them. The
SELLER declares and guarantees that, after the transference of
the SHARES of the SELLER to PURCHASER, they shall be, through
RECTECH, title holders of 61% (sixty one percent) , 61,000
shares of 100,000 total shares of the voting social capital of
RECTECH Ltda.
/bullet/ SITUATION OF COMPANY SHARES. All the shares of the COMPANY,
entitled by RECTECH and/or by the SELLER, 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.
/bullet/ OUTSTANDING SHARES. With the exception of the shares and
ownership stipulated above there are no other shares or
ownership instruments of the COMPANY issued and/or in
circulation.
4
<PAGE>
/bullet/ COMPANY DELIBERATIONS. To the knowledge of the SELLER and
RECTECH, neither the shareholders nor the administrative
departments of the COMPANY have approved any deliberation,
which has not been proper and usual during the normal course
of business of COMPANY.
/bullet/ EXECUTION OF SOCIAL BUSINESS. Since the constitution of the
COMPANY, 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 SELLER and RECTECH, may affect the property or social
business of the COMPANY.
/bullet/ PERMITS. The COMPANY have 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, The
COMPANY observe and comply 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. The COMPANY have 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 the COMPANY, to the knowledge of the
SELLER and RECTECH.
/bullet/ ADMINISTRATIVE PROCESSES. Other than those mentioned in "ANNEX
F", there are no administrative processes, demands or tax
audits existing involving the COMPANY or any of its property.
/bullet/ INSOLVENCY. (i) no order has been given or petition presented
relative to the dissolution of the COMPANY; (ii) the COMPANY
have not requested bankruptcy or composition of creditors;
(iii) the SELLER and RECTECH have no knowledge of any
creditors of the COMPANY having protested any bond taken out
against it or requested their bankruptcy; and (iv) the SELLER,
RECTECH and the COMPANY have not concluded or proposed any
agreement or composition with their creditors or any class of
creditors.
/bullet/ BOOKS AND REGISTERS. To the best knowledge of the SELLER and
RECTECH, the COMPANY accounts, books, daily ledgers, financial
registers and others: (i) were completely, properly and
faithfully updated, they are in the possession of the COMPANY
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/ FINANCIAL STATEMENTS. The financial statements of the COMPANY,
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
5
<PAGE>
period specified, according to the generally accepted
accounting principles in Brazil, not having been qualified, in
any manner, in the auditors report.
/bullet/ ACCOUNTS. The COMPANY's accounts are prepared according to the
COMPANY's 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 COMPANY ACCOUNTING STANDARDS.
/bullet/ INVENTORY EVALUATION AND ACCOUNTING POLICY. For the purpose of
the "Financial Statements" the inventory and business under
development of COMPANY 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 the
COMPANY. Also, the financial statements translated to English
with regards to stock inventory and business under development
for COMPANY are also in accordance with the US GAAP.
/bullet/ DECLARATIONS. The COMPANY 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.
/bullet/ BUSINESS AFTER THE DATE OF THE "FINANCIAL STATEMENTS".
(i) The COMPANY conducted 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 and expects sales
and sales originations for the year of 1997 to reach
approximately R$18,000,000.00 in gross sales with profits of
approximately R$700,000.00;
(ii) the COMPANY has paid creditors within the terms agreed
with those creditors;
(iii) there was no significant change on the inventory of
COMPANY, being a minimum of approximately R$1,000,000.00; and
(iv) the COMPANY 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. The COMPANY does not trade its products
under any other name, other than those stated in "ANNEX I" of
this instrument.
/bullet/ FIXED ASSETS. The COMPANY are the legitimate owner and title
holder of all the fixed assets reflected in its "Financial
Statement", all of which are free and clear of any mortgages,
obligations, debts, doubts, bonds, right of retention,
pledges, fiduciary
6
<PAGE>
alienation, responsibility and/or burdens o any nature with a
minimum value of R$250,000.00.
/bullet/ TITLE OF REAL ESTATE. The COMPANY do not have any real estate.
/bullet/ ACCOUNTS RECEIVABLE. The Accounts Receivable of the COMPANY
are reflected in its "Financial Statements", to which are
added all those originating from the social business of the
COMPANY according to the generally accepted accounting
principles in Brazil, which should equal any payables of the
COMPANY.
/bullet/ RIGHTS OF INTELLECTUAL PROPERTY. The COMPANY are the
titleholder 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
SELLER and RECTECH:
(i) no person has been authorized to make use, of whatever
kind, of any rights of intellectual property entitled by the
COMPANY and by RECTECH;
(ii) none of the processes or products of the COMPANY
infringes on the rights of third parties with reference to
intellectual property or involves the use of non authorized or
secret information disclosed to the COMPANY by any third
parties, under circumstances which would cause demands against
the COMPANY by these third parties;
(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 warehouse, office, machinery, computer
system, vehicles and other equipment used during the course of
business of the COMPANY are in satisfactory useful and working
conditions.
/bullet/ SIGNIFICANT CONTRACTS. The COMPANY, to the knowledge of the
SELLER and RECTECH, are 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 the COMPANY, 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. The COMPANY have not incurred any debts other than
those indicated in the
7
<PAGE>
"Financial Statements" or debts which have not arisen during
the normal course of its business, which should be equal to or
less than the total of the Net Accounts Receivable.
/bullet/ BANK ACCOUNTS. All the bank accounts maintained in the name of
the COMPANY 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 the COMPANY who occupy positions of supervisors,
management and their superiors, with their respective salaries
and other benefits granted to them.
III - RELATIVE TO COMPANY AND RECTECH:
Beyond all the declarations and guarantees given above, the SELLER declare and
guarantee that the direct or indirect acquisition by the PURCHASER of the
SHARES, or the compliance with this contract:
(i) will not cause to RECTECH and/or the ASSETS the loss of any rights
which they currently enjoy;
(ii) will not relieve third parties of any obligations to the ASSETS
and/or to RECTECH or will permit that third parties complete such
obligations, limiting or restricting in any way the rights and/or
benefits enjoyed by ASSETS and RECTECH;
(iii) will not result in any current debt of COMPANY and/or RECTECH to
become due or payable prior to the foreseen due date; and
(iv) will not create for the PURCHASER any restriction, limitation or
loss of right over the SHARES of the SELLER.
FIRST PARAGRAPH - Eventual errors or omissions of a tributary or accounting
nature contained in the financial statements of RECTECH and/or the COMPANY, as
long as they are correctable without any obligations to the PURCHASER by the
SELLER, and as long as they do not cause any damages or cause difficulty in the
regular functioning of the social business of COMPANY and RECTECH, will not
constitute sufficient cause to make incorrect or false the declarations of the
SELLER under the terms of this contract.
FOURTH CLAUSE - The SELLER is personally responsible for any and all liabilities
not declared by the COMPANY and RECTECH, which were not included in the
financial statements of these COMPANY (ANNEXES B and G), whatever the origin of
this obligation or its total, converted by the same criteria established in the
first clause of this contract. The SELLER will continue to be obligated for the
liabilities not declared for the period of 5 (five) years as of the DATE OF
CLOSING, 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 CLOSING.
Taking into account the obligation assumed in the clause above, in the event of
the PURCHASER, COMPANY or RECTECH being demanded for any undeclared liability,
the PURCHASER will assume the obligation of communicating such a fact to any of
the SELLER, who will act as a representative for
8
<PAGE>
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
the parties' shares are negotiated.
Subject to that contained above, the parties obligate themselves to not disclose
and maintain secrecy about the any and all information, documents and data which
are given to them of a confidential nature, or any information regarding this
transaction or other transactions among the parties.
SIXTH CLAUSE - Once the transfer of the SHARES of the SELLER is effected, the
PURCHASER is required to nominate the new administration for COMPANY and for
RECTECH.
SEVENTH CLAUSE - The SELLER is obligated, within the time of 3 (three) years as
of the DATE OF CLOSING, 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 business currently being executed by
COMPANY or PURCHASER in Brazil or Mercosul, with the exception of the right of
the SELLER to participate as stockholders or shareholders of the PURCHASER or
any other company controlled by them in Brazil or Mercosul.
EIGHTH CLAUSE - The PURCHASER will maintain for SELLER the U$750,000 worth of
common shares of VITECH based upon the original market price at DATE OF CLOSING
referred to in letter "b" of the second clause of this contract, for a period of
36 (thirty six) months counting from the DATE OF CLOSING in order to guarantee
the compliance with any of SELLER's obligations originating from this instrument
or other debts owed to the PURCHASER by SELLER which arise form this instrument
or other obligations of SELLER to the PURCHASER which may be released at the
sole discretion of the PURCHASER.
NINTH CLAUSE - The non-compliance with any obligation assumed with this
instrument will obligate the non-compliant party to pay to the other party the
amount in Reais equivalent to US$ 50,000.00 (Fifty Thousand U. S. Dollars),
converted by the quote of the commercial dollar on the date of the payment.
FIRST PARAGRAPH - It is hereby established that the SELLER 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 SELLER, 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 SELLER 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.
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TENTH CLAUSE - All correspondence referred to in this instrument will be made
via facsimile or letter with proof of receipt addressed to:
SELLER: Mr. Robson Medina Catao
Rua Raul Lafayette, 159
Apartment 901
Boa Viagem - Recife - Pernambuco
Fax: 55 (81) 465-6899
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.
ELEVENTH CLAUSE - In the event that there should occur any fact which might
prevent the execution of the transfer of the SHARES of the SELLER to the
PURCHASER, the SELLER is obligated to communicate this fact, within 30 (thirty)
days as of the DATE OF CLOSING, to the SELLER, indicating, in writing, to what
entity, person or business, the SHARES of the SELLER should be transferred,
which the SELLER expressly agree to effect such transfer immediately giving the
PURCHASER any rights or powers as necessary by Power of Attorney expressly for
the purpose of effecting such transfer.
THIRTEENTH CLAUSE - The present instrument is signed and is irrevocable and
binding to 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 binding to 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, one shall be
indicated by the International Chamber of Commerce.
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THIRD PARAGRAPH - United States Law and Uniform Commercial Code 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 constitutes one single agreement between
the SELLER, the PURCHASER with regards to the sale and purchase of the SHARES of
the SELLER, 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
parties shall use the courts in the State of Florida.
And, thus having agreed and contracted, the present instrument is signed in two
(two) copies of equal content and form, in the presence of the witnesses
nominated below.
Recife and Ilheus, Brazil, November 18, 1997
VITECH AMERICA, INC.
By: /s/ GEORGES C. ST. LAURENT III
---------------------------------------
Georges C. St. Laurent, III
Chairman and Chief Executive Officer
RECIFE HOLDINGS USA, INC.
By: /s/ ROBSON MEDINA CATAO
---------------------------------------
Robson Medina Catao
President and Shareholder
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PURCHASE AGREEMENT
This Purchase Agreement is made and entered into this 18th day of November,
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 RECIFE HOLDINGS USA, INC. ("RECTECH"), a Nevada Corporation with its
principal offices located at 1475 Terminal Way, Suite E, Reno, Nevada 89502.
Recitals:
1. RECTECH with the consent of its shareholders agrees to transfer 61.616% of
its capital stock, 15,404 shares, to Vitech to become a majority owned
subsidiary of Vitech.
VITECH AMERICA, INC.
By: /s/ GEORGES C. ST. LAURENT III
---------------------------------------
Georges C. St. Laurent, III
President and Chief Executive Officer
RECIFE HOLDINGS USA, INC.
By: /s/ ROBSON MEDINA CATAO
---------------------------------------
Robson Medina Catao
President and Shareholder
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CONFIRMATION OF RECEIPT OF WIRES
I, Robson Medina Catao, hereby acknowledge a receipt of wires totaling US$
2,000,000.00 (Two Million U.S. Dollars and No Cents) sent by wire transfer to
the bank accounts indicated by me.
/s/ ROBSON MEDINA CATAO
- ---------------------------
Robson Medina Catao
November 18, 1997
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