SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported) SEPTEMBER 28, 1998
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RICA FOODS, INC.
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(Exact name of registrant as specified in its charter)
NEVADA
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(State or other jurisdiction of incorporation)
0-18222 87-0432572
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(Commission File Number) (IRS Employer Identification No.)
95 MERRICK WAY, SUITE 507
CORAL GABLES, FLORIDA 33134
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (305) 476-1757
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COSTA RICA INTERNATIONAL, INC.
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(Former name or former address, if changed since last report)
Page 1 of 3 Pages
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ITEM 5. OTHER EVENTS
On September 28, 1998, Rica Foods, Inc. (the "Company") signed two
agreements to purchase the remaining outstanding shares of common stock of its
majority-owned subsidiaries Corporacion Pipasa, S.A. ("Pipasa") and Corporacion
As de Oros, S.A. ("As de Oros") for 11,050,784 and 5,012,762 shares of the
Company's common stock, respectively. Currently, the Company owns 59.6 percent
of Pipasa and 56.4 percent of As de Oros. The purchase price accorded each of
these acquisitions was determined by conducting a financial analysis of the
current and projected cash flow positions of Pipasa and As de Oros, discounted
to present value, and negotiated by independent persons of the respective
parties. The consummation of each of the acquisitions will be subject to certain
closing conditions, including the approval of the Company's shareholders.
The remaining 1,840,000 shares of Pipasa that the Company has agreed to
acquire are currently owned by Inversiones La Ribera, S.A., a Costa Rican
corporation owned by Calixto Chaves, the Company's president, chief executive
officer and director, as well as a major shareholder of the Company. The
remaining 654,300 shares of As de Oros that the Company has agreed to acquire
are currently owned by Comercial Angui, S.A. ("Angui"), a Costa Rican
corporation and major shareholder of the Company. Upon consummation of the two
transactions, if approved by the Company's shareholders, Mr. Chaves and Angui
will directly and indirectly own 17,030,729 shares and 7,459,820 shares, or
44.4% and 19.5%, of the outstanding common stock of the Company, respectively.
Pipasa is Costa Rica's largest poultry producer and marketer,
comprising approximately a 50% share of that country's poultry market. Pipasa
operates 33 farms and two processing plants throughout Costa Rica, and exports
poultry products to El Salvador, Honduras, Nicaragua and Colombia. As de Oros is
Costa Rica's second largest poultry producer, comprising approximately a 20%
share of that country's poultry market. In addition to the production and
marketing of poultry and poultry by-products, As de Oros is one of the leaders
in the Costa Rican animal feed market, and owns a chain of fried chicken
restaurants in Costa Rica called Restaurantes As de Oros.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED
None.
(b) PRO FORMA FINANCIAL INFORMATION
None.
(c) EXHIBITS
10.1 Stock Purchase Agreement, dated as of September 28, 1998, by and
between the Company and Inversiones La Ribera, S.A.
10.2 Stock Purchase Agreement, dated as of September 28, 1998, by and
between the Company and Comercial Angui, S.A.
Page 2 of 3 Pages
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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 thereunto duly authorized.
RICA FOODS, INC.
Dated: October 13, 1998 By: /S/ CALIXTO CHAVES
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Calixto Chaves
President and Chief Executive Officer
Page 3 of 3 Pages
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
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10.1 Stock Purchase Agreement, dated as of September 28, 1998, by and
between the Company and Inversiones La Ribera, S.A.
10.2 Stock Purchase Agreement, dated as of September 28, 1998, by and
between the Company and Comercial Angui, S.A.
EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is made and entered into as of
September 28, 1998, by and between RICA FOODS, INC., a corporation organized
under the laws of the State of Nevada (the "BUYER"), and INVERSIONES LA RIBERA,
S.A., a corporation organized under the laws of the Republic of Costa Rica (the
"SELLER").
WITNESSETH:
WHEREAS, the Seller owns forty point forty four percent ( 40.44 %) of the issued
and outstanding shares of the common stock of Corporacion Pipasa, S.A.. (the
"COMPANY").
WHEREAS, the Company has authorized a total of five million, fifty thousand
(5,050,000 ) shares of common stock, par value of one thousand ((cent) 1.000)
colones per share, of which four million, five hundred and fifty
thousand($4,550,000 ) shares are issued and outstanding; and
WHEREAS, the Seller desires to sell, convey, transfer, assign and deliver to the
Buyer one million eight hundred forty thousand ( 1,840,000 ) shares of common
stock of the Company, issued and outstanding, which represent forty point forty-
four percent ( 40.44% ) of the issued and outstanding shares of common stock of
the Company, all of which are owned by the Seller (collectively, the "Shares"),
upon and subject to the terms, covenants and conditions herein set forth. Upon
the transfer of the Shares to the Buyer, the Buyer shall own one hundred percent
(100 %) of the total outstanding common stock of the Company.
NOW THEREFORE, for and in consideration of the premises and the mutual covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby conclusively acknowledged, the parties hereto
hereby agree as follows:
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ARTICLE I
1.1 SALE AND PURCHASE OF THE SHARES: Subject to the terms of this
Agreement, the Seller agrees to sell, assign, transfer, convey and
deliver the Shares to the Buyer, free and clear of any lien, security
interest, encumbrance, restriction, and claim of any kind whatsoever,
and the Buyer agrees to purchase the Shares from the Seller. The sale,
assignment, transfer, conveyance and delivery by the Seller of the
Shares to the Buyer shall be effected on or before January 31, 1999 by
the Seller's delivery to the Buyer of the stock certificates evidencing
the shares duly endorsed for transfer or accompanied by stock powers
duly executed in blank, this agreement signed before a Notary Public
under Costa Rican law, as necessary to effectively vest in the Buyer
all of the right, title and interest of the Seller in and to the
Shares. The parties may mutually agree in writing, and pursuant to the
mutual benefits provided by this Agreement, to the delivery by the
Buyer to the Seller of the stock certificates of the Company after
January 31, 1999, if so required and duly justified.
1.2 PURCHASE PRICE AND PAYMENT: In consideration of the sale,
assignment, transfer, conveyance and delivery of the Shares by the
Seller to the Buyer, and in reliance upon the representations,
warranties and covenants made herein by the Seller, the Buyer shall
make payment in the aggregate amount of thirteen million eight hundred
thirteen thousand four hundred eighty dollars ($ 13,813,480 ) (the
"PURCHASE PRICE") payable in the voting stock the Buyer represented by
the issuance of 11,050,784 shares at a price of $1.25 per share, the
closing price of the stock of the Buyer as of August 31, 1998.
ARTICLE II
2.1 THE CLOSING: The transfer and delivery of the shares to be made
pursuant to this Agreement (the "CLOSING") shall take place on January
29, 1999, or such other time and date as may be mutually agreed upon in
writing by the Seller and the Buyer (the "CLOSING DATE").
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2.2 OBLIGATIONS OF SELLER AT CLOSING: At the Closing, the Seller shall
deliver to the Buyer stock certificates representing the Shares, duly
endorsed for transfer in blank, or accompanied by stock powers duly
hereof executed in blank, as described in Section 1.1.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby makes the following representations and warranties to
the Buyer, each of which shall be deemed material (and the Buyer, in executing,
delivering and consummating this Agreement, has relied and will rely upon the
correctness and completeness of each such representations and warranties
notwithstanding any independent investigation by the Buyer and/or the Buyer's
officers, directors, employees, representatives, agents and/or advisors):
3.1 ORGANIZATION AND EXISTENCE; AUTHORIZATION; ENFORCEABILITY.
(a) ORGANIZATION OF THE SELLER, GOOD STANDING. The Seller is a
corporation duly organized, validly existing and in good
standing under the laws of the Republic of Costa Rica with
full corporate power and authority to own, lease and operate
its properties and assets and conduct business in the manner
in which such business is conducted. The Seller has delivered
to the Buyer true, correct and complete copies of the Articles
of Incorporation and By-laws of the Company.
(b) AUTHORIZATION. The Seller has full corporate power, authority
and capacity to enter into this Agreement and the agreements,
documents and instruments contemplated hereby and perform its
obligations hereunder and thereunder. The execution, delivery
and performance of this Agreement and all other agreements and
transactions contemplated hereby have been duly authorized and
approved by the Board of Directors and the shareholders of the
Seller, if necessary, no other corporate proceedings on its
part are necessary to authorize this Agreement and the
transactions contemplated hereby, and this Agreement
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constitutes a valid and biding Agreement of Seller enforceable
in accordance with its terms.
(c) NO CONFLICTS - SELLER: The execution, delivery and performance
of this Agreement by the Seller does not and will not
contravene, conflict with, or result in a violation or breach
of any provision of, or give any person or entity the right to
declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or to cancel,
terminate or modify any agreement, indenture, mortgage, deed
of trust or other instrument to which the Seller is a party or
to which the assets of the Seller are bound.
3.2 LITIGATION. To the best of the Seller's knowledge, there is no
litigation or other actions, suits, proceedings or investigations
pending, at law or in equity, or before any governmental department,
commission, board, agency or instrumentality, or, to the best of the
Seller's knowledge, threatened against. To the best of the Seller's
knowledge, no event has occurred or circumstance exists that may give
rise or serve as the basis for commencement of any such action, suit,
investigation or other proceeding.
3.3 FINANCIAL STATEMENTS. The Seller has furnished the balance sheets
for the Company as of June 30, 1998, together with the related
unaudited income statements, unaudited statements of stockholder's
equity and statements of changes in financial position for the fiscal
years ending September 30, 1997, in each case including the notes
thereto, if any (collectively, the "Financial Statements"). The
Company's balance sheets (including the notes thereto) are true and
complete, and fairly present the financial condition of the Company as
of the respective dates thereof, and the other financial statements
referred to herein (including the notes thereto) fairly present the
results of operations and the financial position of the Company for the
respective fiscal periods or as of the respective dated therein set
forth. Each of such statements (including the notes thereto) has been
prepared in accordance with United States generally accepted accounting
principles consistently applied, and do not and will not fail to
disclose any material, extraordinary or out-of-period items. The books
and
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records of the Company have been, and are being, maintained in all
respects in accordance with applicable legal and accounting
requirements and reflect only actual transactions, and the Financial
Statements have been prepared in accordance with such books of account
and records.
3.4 ABSENCE OF CERTAIN CHANGES OR EVENTS. There has not been any
adverse change in the business, operations, properties, assets or
financial condition of the Company from that described in the Financial
Statements, and as of September 30, 1998. No fact or condition of any
character exists or will exist on the Closing Date that the Seller
believes will cause such an adverse change in the future as a result of
occurrences, acts or omissions prior to the Closing Date.
3.5 TAX MATTERS. The Company has duly filed with the appropriate
governmental agencies all information returns, tax returns and reports
required by any jurisdiction to be filed by it on or prior to the date
hereof (including, without limitation, estimated tax returns and
returns with respect to employee or employment-related taxes). Such
returns are accurate and complete in all respects. The Company has duly
paid all taxes, assessments, fees, penalties, interest and other
governmental charges that have been incurred or are due or claimed to
be due from it by any federal, state, local, foreign or other taxing
authorities on or prior to the date of this Agreement (including,
without limitation, those due in respect to its properties, income,
business, capital stock, deposits, licenses, sales, payroll,
unemployment insurance, retirement, social security and occupational
disability, as applicable). To the extent that any taxes may be due
from the Company for any period prior to the Closing, such taxes will
have been paid prior to the Closing Date. There are no tax liens of any
kind or nature upon the properties or assets of the Company, and there
are no disputes pending or claims asserted for taxes upon the Company
or with respect to any of the assets of the Company. No income, excise,
sales and/or federal, state, local, foreign or other tax returns are
currently being audited by the appropriate taxing authorities, and all
prior audits have been concluded and resolved.
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3.6 PROPERTY-TITLE AND LEASES. The Company has good, valid and
marketable title, free and clear of any and all liens, claims,
encumbrances, charges, defaults, equities, assessments, rights of way,
building or use restrictions, exceptions, variances or other
limitations of whatever kind or character, except as disclosed to
Buyer, to all of the real property and all other property owned by it,
except property and assets disposed of in the ordinary course of
business in accordance with the terms of this Agreement and for no less
than fair market value. All buildings, fixtures, equipment and other
property and assets held under leases or subleases by the Company with
third parties are held under valid instruments enforceable in
accordance with their terms, except as enforceability may be limited by
applicable bankruptcy laws. The Company is the lessee or sub-lessee in
possession under each lease or sublease to which it is a lessee or
sub-lessee. All rentals due by the Company under each such lease or
sublease have been paid, and there is no default or any event or
condition which, with the giving of notice, lapse of time or occurrence
or any further event or condition, would become a default under any
such lease or sublease, and the Company is entitled to possession and
quiet enjoyment of all such leased properties in accordance with the
terms of such instruments. All operating facilities, buildings,
furniture, equipment and other tangible property owned or used by the
Company are in good operating condition and repair. Such tangible
properties and all fixtures and improvements to real property owned or
leased by the Company, and the use thereof, conform in all respects
with all applicable building, zoning, environmental and other
requirements, and do not materially encroach in any respect on property
of others. All necessary occupancy and other certificates and permits
for the occupancy and lawful use thereof and of the equipment and
furnishings therein have been issued and are in full force and effect
and no current use of any assets of the Company is dependent on a
nonconforming use or other permit which materially limit the
Company's use thereof.
3.7 RECEIVABLES. The Company shall not have accounts payable other than
the accounts disclosed to Buyer by Seller, and shall not have accounts
receivable other than the ones disclosed to Buyer by Seller, nor in
excess of an amount to be determined subsequent to the Buyer's
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due diligence and satisfactory to the Buyer. All accounts and notes
receivable reflected in, or arising since the date of the most recent
balance sheet, are included in the Financial Statements, all of which
are owned by the Company and have either been collected or are
collectible and will be collected in the ordinary course of business.
None of such receivables are subject to any right of rescission.
3.8 INSURANCE. The Company maintains insurance policies and bonds in
force in such amounts and against such liabilities and hazards as are
customarily maintained by companies engaged in a business similar to
its business. The Company is not liable for any material retroactive
premium adjustments. All premiums due on such policies have been paid
and all such policies are enforceable and in full force and effect, and
the Company has not received any notice of premium increases or
cancellations.
3.9 INTANGIBLE PERSONAL PROPERTY. The Company validly holds and
possesses all patents, trademarks, service marks, copyrights, trade or
corporate names and licenses (collectively, "INTANGIBLE RIGHTS") which
are required and necessary for the Company to conduct its business as
presently conducted. The Company is the sole and exclusive owner of,
and has the unrestricted right to use, each of the Intangible Rights.
No claims or demands have been asserted against the Company with
respect to any of the Intangible Rights and no proceedings have been
instituted, are pending or have been threatened which challenge the
rights of the Company with respect thereto.
3.10 COMPLIANCE WITH LAWS. The Company has conducted and is conducting
its business in compliance with all applicable legal requirements.
Additionally, the Company has not been and is not in violation of any
permit, authorization, concession, agreement, contract, corporate
document or other legally enforceable obligation.
3.11 NO MISREPRESENTATIONS. None of the information contained in the
representations and warranties set forth in this Agreement, or in any
of the documents, certificates or instruments delivered or to be
delivered to any other party prior to or after the execution hereof as
required or permitted by any provision of this Agreement, contains or
will contain
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any untrue statement of a material fact or omits or will omit to state
a material fact necessary to make the statements contained herein or
therein not misleading as of the date hereof and as of the Closing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER
To induce the Seller to enter into this Agreement and to consummate the
sale of the Shares, the Buyer represents, warrants, covenants and agrees as
follows:
4.1 ORGANIZATION AND EXISTENCE: AUTHORIZATION; ENFORCEABILITY.
(a) ORGANIZATION OF THE COMPANY; GOOD STANDING. The Buyer is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada, with full
corporate power and authority to own, lease or operate its
properties and assets and conduct its business a the manner in
which it is currently conducted. The Buyer has the corporate
power and authority, will take all the actions necessary and
will obtain all necessary permits and authorizations , if
applicable, in order to execute and deliver this Agreement and
to consummate the transactions contemplated hereby.
(b) AUTHORIZATION, ETC. The Buyer has full corporate power,
authority and capacity to enter into this Agreement and to
carry out the transactions contemplated hereby. The Board of
Directors of the Buyer has duly authorized and approved the
execution, delivery and performance of this Agreement, and the
other agreements and transactions contemplated hereby, and if
other corporate proceedings on the part of the Buyer are
necessary to authorize this Agreement and the transactions,
contemplated hereby, will be obtained before the Closing Date.
(c) ENFORCEMENT, ETC. This Agreement is a valid and binding
agreement of the Buyer enforceable in accordance with its
terms,
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subject, as to enforceability, to bankruptcy, insolvency,
fraudulent transfer, reorganization moratorium and similar
laws of general applicability relating to or affecting
creditor's rights and to general equity principles. This
Agreement and all of the provisions hereof shall be binding
upon and inure to the benefit of the Buyer and any successor
of the Buyer by way of reorganization, merger, or
consolidation and any assignee of all or substantially all of
its business and assets.
(d) NO CONFLICT. The execution, delivery and performance of this
Agreement by the Buyer does not and will not violate or
constitute a breach of or default under any legal requirement
or order of any governmental entity to which the Buyer is
subject or under any agreement or instrument of the Buyer, or
to which the Buyer is subject or is a party or by which the
Buyer is otherwise bound.
ARTICLE V
CERTAIN AGREEMENTS AND COVENANTS OF THE PARTIES
Each and every obligation of the Buyer under this Agreement shall be
subject to the satisfaction by the Seller, on or before the Closing Date, of
each of the following conditions unless waived in writing by the Buyer:
5.1 ORDINARY COURSE. From the date hereof until January 31, 1999,
unless the prior written consent of the Buyer is first obtained, the Seller will
use its best efforts to preserve the value of the Company's assets and the
business operations of the Company, to preserve the goodwill of customers and
others having business relations with the Company, to maintain its properties in
good repair, working order and condition, to comply with all laws applicable to
it and the conduct of its business, to keep in force all licenses, permits and
authorizations held by the Company necessary or desirable for the conduct of the
Company's business, to keep in full force and effect at not less than their
present limits, all policies of insurance, and to
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make no material change in the customary terms and conditions of such insurance
policies.
5.2 NOTICE; REPRESENTATIVE. Seller will promptly give written notice to
Buyer upon becoming aware of any event or the impending or threatened occurrence
of any event which would cause or constitute a breach of any of its
representations and warranties contained or referred to in this Agreement, and
will use its best efforts to prevent the same or remedy the same promptly. The
Seller shall promptly notify the Buyer of any material change in the normal
course of business, operation or properties of the Company, or of any
governmental complaints, investigations or hearings (or communications
indicating that the same may be contemplated), or the institution or threat of
litigation, and shall keep the Buyer fully informed of any and all such events.
5.3 ACTIONS; FURTHER ASSURANCES. Subject to the terms and
conditions of this Agreement, the Seller shall (i), take all
steps that are within its power to cause to be fulfilled those
of the conditions precedent to Buyer's obligations to
consummate the transactions contemplated hereby that are
dependent upon Seller's actions, and (ii) use its best efforts
to take, or cause to be taken, all action and to do, or cause
to be done, all things necessary, proper or advisable under
applicable laws to consummate and make effective the
transactions contemplated by this Agreement and not to take
any actions which would be advise to such result. If at any
time after the Closing Date any further action is necessary or
desirable to carry out the purposes of any such agreements,
Seller or the proper agents of Seller shall take all such
necessary action. In addition, the Seller and the Company
shall at all times cooperate with the Buyer to assist them in
obtaining refunds, due the Company as a result of any tax
benefits granted to the Company.
5.4 NON-SOLICITATION. The Seller shall not take any actions to seek,
encourage, solicit or support any inquiry, proposal, expression of interest or
offer from any other person or entity in connection with or with respect to an
acquisition, combination or similar transaction, involving the Company and/or
the Shares or a substantial portion of the assets of the Company, and
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the Seller will immediately inform the Buyer of the existence of any such
inquiry, proposal, expression of interest or offer and shall not, without the
prior written consent of the Buyer, furnish any information to or participate in
any discussions or negotiations with, any other entity, person or group (other
than the Buyer and its agents and representatives) regarding same. Neither the
Seller nor the Company shall accept any inquiry, proposal, expression of
interest or offer, execute any agreement, or enter into or consummate any
transaction with respect to any of the foregoing and the Seller shall take all
actions necessary to ensure that the Company does not take any such action.
ARTICLE VI
CONDITIONS TO THE OBLIGATIONS OF THE BUYER
Each and every obligation of the Buyer under this Agreement shall be
subject to the satisfaction by the Seller and the Company, on or before the
Closing Date, of each of the following conditions unless waived in writing by
the Buyer:
6.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Seller and the Company contained in Section III and elsewhere in this
Agreement and all information contained in any exhibit, certificate, schedule or
attachment hereto or in any writing delivered by or on behalf of, the Seller or
the Company to the Buyer, shall be true and correct when made, and shall be true
in all material respects at and as of the Closing Date. The Seller and the
Company shall have performed and complied with all agreements, covenants and
conditions and shall have made all deliveries required by this Agreement to be
performed, delivered and complied with by them prior to the Closing Date.
6. 2 CONSENT AND APPROVALS. On or before January 31, 1999, the Seller
and/or the Company ( as the case may be ) shall have received in writing all
required approvals, consents or acquiescence from all governmental and
regulatory agencies, secured parties or other third parties with respect to the
transactions contemplated by this Agreement. Buyer and Seller may agree in
writing an another closing date if and consents or approvals are pending at the
Closing Date.
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6.3 NO PENDING OR THREATENED LEGAL CLAIM. No (i) litigation of any kind
shall be pending or threatened; (ii) preliminary or permanent injunction or
other order issued by any court of competent jurisdiction or by any federal or
state governmental or regulatory body; or (iii) statute, rule, regulation or
executive order promulgated or enacted by any federal or state governmental
authority after the date of this Agreement, which has or could have a material
adverse effect on the business, properties, prospects or condition, financial or
otherwise, of the Company, prohibits the consummation of the transactions
contemplated by this Agreement, or affects in any way the Seller's right, title
and interest to the Shares or the Seller's ability to transfer the Shares to the
Buyer in accordance with the terms of this Agreement, shall be in effect pending
or threatened.
6.4 NO MATERIAL ADVERSE CHANGE. No material adverse change in the
operations, the business, the financial condition or prospects of the Company
shall have occurred, no fact shall have arisen which has or reasonably could be
expected to have a material adverse effect on the Company, or its properties,
assets or the consummation of the transactions contemplated hereby, in each case
in the sole and absolute discretion of the Buyer.
6.5 DUE DILIGENCE. The Seller shall have provided Buyer under the terms
and conditions of the letter of intent and confidentiality agreement (the
"Agreements") with access to the Company's business, records and any information
which the Buyer deemed necessary, in its sole and absolute discretion, to
conduct a satisfactory due diligence examination, pursuant to which the Buyer
may, among other things, has, (i) evaluated the Company, its assets and
liabilities, (ii) satisfied itself, in its sole and absolute discretion, that
the Company's assets are being received in a satisfactory condition, (iii)
satisfied itself, in its sole and absolute discretion, that the Company does not
have any debts, liabilities or other obligations, whether absolute, contingent
or otherwise which have not been disclosed in writing by the Seller, or are
reflected in the financial statements, and (iv) satisfied itself, in its sole
and absolute discretion, that the Company's licenses, permits and authorizations
required for the Company to operate its business are valid. Such due diligence
was completed by the Buyer fifteen (15) days before the execution of this
Agreement (the "Due Diligence Period").
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6.6 SHARE CERTIFICATES AND OTHER DOCUMENTS. The Seller shall have
delivered to the Buyer stock certificates evidencing the Shares duly endorsed
for transfer or accompanied by stock powers duly executed in blank. The Buyer
shall have received from the Seller all such other documents and instruments,
duly executed where required or appropriate, as it may reasonably request in
connection with the transactions contemplated by this Agreement, as set forth in
Section 1.1.
6.7 OPINION OF SELLER'S COUNSEL. The Seller shall have delivered an
opinion of counsel in a form reasonably satisfactory to the Buyer.
6.8 CORPORATE ACTION. The Company's Board of Directors shall have
approved the transactions contemplated by this Agreement if such approval is
necessary under the Company's Articles of Incorporation or By-laws.
ARTICLE VII
CONDITIONS TO THE OBLIGATION OF THE SELLER
Each and every obligation of the Seller under this Agreement shall be
subject to the satisfaction by the Buyer, on or before January 31, 1998, of each
of the following conditions, unless waived in writing by the Seller:
7.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Buyer contained in Section IV and elsewhere in this Agreement and all
information contained in any exhibit, certificate, schedule or attachment hereto
or in any writing delivered by or on behalf of the Buyer to the Seller shall be
true and correct when made, and shall be true in all material respects at and as
of the Closing Date. The Buyer shall have performed and complied with all
agreements, covenants, and conditions and shall have made all deliveries
required by this Agreement to be performed, delivered and complied with by them
prior to the Closing Date.
7.2 COVENANTS PERFORMED. All of the covenants, terms and conditions of
this Agreement to be complied with and performed by the Buyer on or before the
Closing Date shall have been duly complied and performed.
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7.3 PURCHASE PRICE. The Buyer shall have delivered to the Seller the
Purchase Price in accordance with Section 1.1 of this Agreement.
ARTICLE VIII
INDEMNIFICATION
8.1 OBLIGATIONS OF BUYER. The Buyer agrees to defend, indemnify and
hold harmless Seller from, against and in respect of any and all demands,
claims, actions or causes of action, losses, liabilities, damages, assessments,
deficiencies, taxes, cost and expenses, including, without limitation, interest,
penalties and reasonable attorney's fees and expenses (collectively "Claims"),
asserted against, imposed upon or paid, incurred or suffered by Seller as a
result of, arising from, in connection with or incident to any material breach
or material inaccuracy of any representation, warranty, covenant or agreement of
the Buyer in this Agreement or in any document, certificate or other instrument
related hereto.
8.2 OBLIGATIONS OF SELLER. Seller agrees to defend, indemnify and hold
harmless the Buyer from, against and in respect of any and all demands, claims
actions or causes of action, losses, liabilities, damages, assessments,
deficiencies, taxes, cost and expenses, including, without limitation, interest,
penalties and reasonable attorney's fees and expenses (collectively "Claims"),
asserted against, imposed upon or paid, incurred or suffered by the Buyer as a
result of, arising from, in connection with , or incident to (i) any breach or
inaccuracy of any representation, warranty, covenant or agreement of Seller in
this Agreement, or in any document, certificate or other instrument related
hereto, (ii) the inability, failure or refusal of Seller to act in good faith in
connection with this Agreement, or the transactions, agreements, documents and
instruments delivered herewith or contemplated hereby, at any time from the date
of this Agreement until the later in time of (a) the Closing Date, (b) the end
of the Due Diligence Period and ( c ) which as of the Closing Date have not been
undisclosed to the Buyer in writing.
8.3 INDEMNIFICATION PROCEDURE. A party or parties hereto agreeing to be
responsible for or to indemnify against any matter pursuant to this Agreement is
referred to herein as the "Indemnifying Party" and the other
<PAGE>
party or parties claiming indemnification hereunder is referred to as the
"Indemnified Party". An Indemnified Party under this Agreement shall give prompt
written notice to the Indemnifying Party of any liability which might give rise
to a claim for indemnity under this Agreement. As to any claim by a third party,
the Indemnified Party may participate in the defense, compromise or settlement
of any such matter through the Indemnified Party's own attorneys and at the
Indemnifying Party's own expense; each of the indemnifying and the Indemnified
Party shall provide such cooperation and such reasonable access to its books,
records and properties as the other party shall reasonable request with respect
to any such matter; and the parties hereto agree to cooperate with each other in
order to ensure the proper and adequate defense thereof. The Buyer may setoff
against the amount of any other payments due to Seller hereunder or otherwise,
including, without limitation the Note, any and all amounts, due to the Buyer
pursuant to any and all claims that the Buyer may have against Seller hereunder
including, without limitation, with respect to the indemnification of the Buyer
hereunder by Seller.
An Indemnifying Party shall not make any settlement of any claims
without the written consent of the Indemnified Party which consent shall not be
unreasonably withheld. Without limiting the generality of the foregoing, it
shall not be deemed unreasonable to withhold consent to a settlement involving
injunctive or other equitable relief against the Indemnified Party or its
assets, employees or business.
In a case where responsibility for a matter giving rise to a claim for
indemnification is shared by the parties, any of the parties may elect to
relieve the other of its obligations of indemnification with respect to such
matter and, subject to the provisions of this section, such electing party may
thereupon assume full control of the resolution of such matter. If such election
is not made, control shall also be shared.
ARTICLE IX
SURVIVAL OF TERMS; REPRESENTATIONS
<PAGE>
9.1 SURVIVAL. The representations and warranties contained herein shall
be true and correct as of January 31, 1999 as though such representations and
warranties were made at and as of the Closing Date. All of these representations
and warranties shall survive the consummation of all of the transactions
contemplated by this Agreement.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 BINDING AGREEMENT. This Agreement may not be transferred,
assigned, pledged or hypothecated all or in part by any party hereto without the
prior written consent of all the other parties hereto. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective assigns and successors in interest. No other person shall acquire or
have any right under or by virtue of this Agreement.
10.2 GOVERNING LAW. This Agreement, the rights and obligations of the
parties, and any other claims or disputes relating in anyway thereto will be
governed by and construed in accordance with the laws of the State of Florida.
10.3 COUNTERPARTS, HEADINGS, ETC. This Agreement may be executed
simultaneously in any number of counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same instrument. The
headings herein are for convenience of reference only and shall not be deemed a
part of this Agreement.
10.4 NOTICES. Any notice or other communication required or permitted
hereunder shall be deemed validly given, made or served if in writing and if
delivered in person or sent by facsimile transmission or registered or certified
mail to the intended recipient at the following address or to such other address
or number as shall be furnished in writing by any such party to the other:
If to the Seller: Calixto Chaves
Inversiones La Ribera, S.A.
<PAGE>
400 meters west of National
Panasonic Plant, San Rafael
Alajuela.
If to the Buyer: Calixto Chaves
95 Merrick Way,
Suite 507,
Coral Gables,
Florida, 33134
10.5 AMENDMENT; SEVERABILITY. This Agreement may be amended only by an
agreement in writing signed by the parties hereto. In case any provision of this
Agreement shall be held invalid, illegal or unenforceable by any court, the
validity, legality and enforceability of the remaining provisions will not be
affected or impaired thereby.
10.6 ARBITRATION. Any dispute arising in connection with this Agreement
shall be exclusively settled by binding arbitration in the Spanish language in
Miami, Florida, in accordance with the Rules of Arbitration and Conciliation of
the International Chamber of Commerce. Notwithstanding any provision in these
rules, the arbitration panel at any such arbitration proceeding shall consist of
three arbitrators. One arbitrator will be designated by Buyer, another
arbitrator will be designated by Seller and the third arbitrator will be a
person mutually agreed upon by Buyer and Seller. The arbitration panel shall
render its decision in writing, and such written decision and conclusions with
respect to the disputes so settled shall be final and binding on the parties to
the arbitration proceeding and confirmation and enforcement of the awards so on
the parties to the arbitration proceeding and confirmation and enforcement of
the awards so rendered may be obtained and entered in any court having
jurisdiction thereof. Each of Buyer and Seller hereby irrevocably submits to the
jurisdiction of any such court for purposes of enforcement of the arbitration
panel's decision.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
<PAGE>
SELLER:
BY: /s/ CALIXTO CHAVES
-----------------------------------------
CALIXTO CHAVES
PRESIDENT
INVERSIONES LA RIBERA, S.A.
BY: /s/ CALIXTO CHAVES
-----------------------------------------
CALIXTO CHAVES
PRESIDENT
COSTA RICA INTERNATIONAL, INC.
EXHIBIT 10.2
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is made and entered into as of
September 28, 1998, by and between RICA FOODS, INC., a corporation, organized
under the laws of the State of Nevada (the "BUYER"), and Comercial Angui, S.A.,
a corporation, organized under the laws of the Republic of Costa Rica (the
"SELLER").
WITNESSETH:
WHEREAS, the Seller owns forty three point sixty two percent ( 43.62 %) of the
issued and outstanding shares of the common stock ( the " Common Stock") of
Corporacion As de Oros, S.A.. (the "COMPANY"). WHEREAS, the Company has
authorized a total of two million, ( 2.000.000 ) shares of Common Stock, par
value of one thousand ((cent) 1,000 ) colones per share, of which one million,
five hundred thousand ((cent)1.500.000) shares are issued and outstanding; and ;
WHEREAS, the Seller desires to sell, convey, transfer, assign and deliver to the
Buyer, six hundred and fifty four thousand three hundred ( 654,300 ) shares of
Common Stock , issued and outstanding, which represent forty three point sixty
two percent ( 43.62% ) of the issued and outstanding shares of Common Stock of
The Company , all of which are owned by the Seller (collectively, the "Shares"),
upon and subject to the terms, covenants and conditions herein set forth. Upon
the transfer of the Shares to the Buyer, the Buyer shall own one hundred percent
( 100 %) of the total outstanding Common Stock of the Company.
NOW THEREFORE, for and in consideration of the premises and the mutual covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby conclusively acknowledged, the parties hereto
hereby agree as follows:
ARTICLE I
1.1. SALE AND PURCHASE OF THE SHARES: Subject to the terms of this
Agreement, the Seller agrees to sell, assign, transfer, convey and
deliver the Shares to the Buyer, free and clear of any lien, security
<PAGE>
interest, encumbrance, restriction, and claim of any kind whatsoever,
and the
1.2. Buyer agrees to purchase the Shares from the Seller. The sale,
assignment, transfer, conveyance and delivery by the Seller of the
Shares to the Buyer shall be effected on or before January 29, 1999 by
the Seller's delivery to the Buyer of the stock certificates
evidencing the shares duly endorsed for transfer or accompanied by
stock powers duly executed in blank, and this Agreement signed before a
Notary Public under Costa Rican law, as necessary to effectively vest
in the Buyer all of the right, title and interest of the Seller in and
to the Shares.
PURCHASE PRICE AND PAYMENT: In consideration of the sale, assignment, transfer,
conveyance and delivery of the Shares by the Seller to the Buyer, and in
reliance upon the representations, warranties and covenants made herein by the
Seller, The Buyer shall make payment in an aggregate amount of six million two
hundred sixty five thousand nine hundred fifty two dollars with fifty cents
($6,265,952.50) (the "PURCHASE PRICE"), payable in the voting stock of the Buyer
represented by the issuance of 5,012,762 ( five million twelve thousand seven
hundred sixty two ) shares at a price of $1.25 per share, which is the closing
price of the stock of the Buyer as of August 31, 1998.
ARTICLE II
2.1 THE CLOSING: The transfer and delivery of the shares to be made pursuant to
this Agreement (the "CLOSING") shall take place at the offices of Rica Foods,
Inc, located in Costa Rica, on or before January 29, 1999, or such other place,
time and date as may be mutually agreed upon in writing by the Seller and the
Buyer (the "CLOSING DATE")
2.2 OBLIGATIONS OF SELLER AT CLOSING: At the Closing, the Seller shall deliver
to the Buyer stock certificates representing the Shares, duly endorsed for
transfer in blank, or accompanied by stock powers duly executed in blank, as
described in Section 1.1. hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
<PAGE>
The Seller hereby makes the following representations and warranties to
the Buyer, each of which shall be deemed material (and the Buyer, in executing,
delivering and consummating this Agreement, has relied and will rely upon the
correctness and completeness of each such representations and warranties
notwithstanding any independent investigation by the Buyer and/or the Buyer's
officers, directors, employees, representatives, agents and/or advisors ):
3.1 ORGANIZATION AND EXISTENCE; AUTHORIZATION; ENFORCEABILITY.
(a) ORGANIZATION OF THE SELLER; GOOD STANDING. The Seller is a
corporation duly organized, validly existing and in good
standing under the laws of the Republic of Costa Rica with
full corporate power and authority to own, lease and operate
its properties and assets and conduct its business in the
manner in which such business is conducted. The Seller has
delivered to the Buyer true, correct and complete copies of
the Articles of Incorporation and By-laws of the Seller.
(b) AUTHORIZATION. The Seller has full corporate power, authority
and capacity to enter into this Agreement and the agreements,
documents and instruments contemplated hereby and perform its
obligations hereunder and thereunder. The execution, delivery
and performance of this Agreement and all other agreements and
transactions contemplated hereby have been duly authorized and
approved by the Board of Directors and the shareholders of the
Seller, if necessary. No other corporate proceedings on its
part are necessary to authorize this Agreement and the
transactions contemplated hereby and this Agreement
constitutes a valid and binding Agreement of the Seller
enforceable in accordance with its terms. .
(c) NO CONFLICTS- SELLER: The execution, delivery and performance
of this Agreement by the Seller does not and will not
contravene, conflict with, or result in a violation or breach
of any provision of, or give any person or entity the right to
declare a default or exercise any remedy under, or to
accelerate the
<PAGE>
maturity or performance of, or to cancel, terminate or modify
any Agreement, indenture, mortgage, dead of trust or other
instrument to which the Seller is a party or to which the
assets of the Seller are bound.
3.2 PENDING OR THREATENED LITIGATION. To the best of the Seller's
knowledge, there is no litigation or other actions, suits, proceedings
or investigations pending, at law or in equity, or before any
governmental department, commission, board, agency or instrumentality,
or, to the best of the Seller's knowledge, threatened against. To the
best of the Seller's knowledge, no event has occurred or circumstance
exists that may give rise or serve as the basis for commencement of any
such action, suit, investigation or other proceeding.
3.3 FINANCIAL STATEMENTS. The Seller has furnished the unaudited
Balance Sheets for the Company as of June 30, 1998, together with the
related unaudited income statements, unaudited statements of
stockholder's equity and statements of changes in financial condition
for the fiscal year ending September 30, 1998, in each case including
the notes thereto, if any (collectively, the "Financial Statements").
The Company's Financial Statements (including the notes thereto) are
true and complete, and fairly present the financial condition of the
Company as of the respective dates thereof, and the other financial
statements referred to herein (including the notes thereto) fairly
present the results of operations and the financial condition of the
Company for the respective fiscal periods or as of the respective dates
therein set forth. The Financial Statements (including the notes
thereto) have been prepared in accordance with United States generally
accepted accounting principles, consistently applied, and do not fail
to disclose any material, extraordinary or out-of-period items. The
books of account and records of the Company have been, and are being,
maintained in all respects in accordance with applicable legal and
accounting requirements and reflect only actual transactions, and the
Financial Statements have been prepared in accordance with such books
and account and records.
3.4 ABSENCE OF CERTAIN CHANGES OR EVENTS. There has not been any
adverse change in the business, operations, properties, assets or
<PAGE>
financial condition of the Company from that described in the Financial
Statements, and as of August 31, 1998. No fact or condition of any
character exists or will exists on the Closing Date that the Seller
believes will cause such an adverse change in the future as a result of
occurrences, acts or omissions prior to the Closing Date.
3.5 TAX MATTERS. The Company has duly filed with the appropriate
governmental agencies all information returns, tax returns and
reports required by any jurisdiction to be filed by it on or
prior to the date hereof (including, without limitation,
estimated tax returns and returns with respect to employee or
employment-related taxes). Such returns are accurate and
complete in all respects. The Company has duly paid all taxes,
assessments, fees, penalties, interest and other governmental
charges that have been incurred or are due or claimed to be
due from it by any federal, state, local, foreign or other
taxing authorities on or prior to the date of this Agreement
(including, without limitation, those due in respect to its
properties, income, business, capital stock, deposits,
licenses, sales, payroll, unemployment insurance, retirement,
social security and occupational disability, as applicable).
To the extent that any taxes may be due from the Company for
any period prior to the Closing, such taxes will have been
paid prior to the Closing Date. There are no tax liens of any
kind or nature upon the properties or assets of the Company,
and there are no disputes pending or claims asserted for taxes
upon the Company or with respect to any of the assets of the
Company
3.6 PROPERTY-TITLE AND LEASES. The Company has good, valid and
marketable title, free and clear of any and all liens, claims,
encumbrances, charges, defaults, equities, assessments, rights of way,
building or use restrictions, exceptions, variances or other
limitations of whatever kind or character, except as disclosed to the
Buyer, to all of the real property and all other property owned by it,
except property and assets disposed of in the ordinary course of
business in accordance with the terms of this Agreement and for no less
than fair market value. All buildings, fixtures, equipment and other
property and assets held under leases or subleases by the Company with
third parties are held
<PAGE>
under valid instruments enforceable in accordance with their terms,
except as enforceability may be limited by applicable bankruptcy laws.
The Company is the lessee or sub-lessee in possession under each lease
or sublease to which it is a lessee or sub-lessee. All rentals due by
the Company under each such lease or sublease have been paid, and there
is no default or any event or condition which, with the giving of
notice, lapse of time or occurrence or any further event or condition,
would become a default under any such lease or sublease, and the
Company is entitled to possession and quiet enjoyment of all such
leased properties in accordance with the terms of such instruments. All
operating facilities, buildings, furniture, equipment and other
tangible property owned or used by the Company are in good operating
condition and repair. Such tangible properties and all fixtures and
improvements to real property owned or leased by the Company, and the
use thereof, conform in all respects with all applicable building,
zoning, environmental and other requirements, and do not materially
encroach in any respect on property of others. All necessary occupancy
and other certificates and permits for the occupancy and lawful use
thereof and of the equipment and furnishings therein have been issued
and are in full force and effect and no current use of any assets of
the Company is dependent on a nonconforming use or other permit which
materially limit the Company's use thereof.
3.7 ACCOUNTS RECEIVABLE. The Company shall not have accounts payable
other than the accounts disclosed to Buyer by Seller and shall not have
accounts receivable other than the ones disclosed to Buyer by Seller,
not in excess of an amount to be determined subsequent to the Buyer's
due diligence and satisfactory to the Buyer. All accounts and notes
receivable reflected in, or arising since the date of the most recent
balance sheet, are included in the Financial Statements, all of which
are owned by the Company and either been collected or are collectible,
and will be collected in the ordinary course of business. None of such
receivables are subject to any right of rescission.
3.8 INSURANCE. The Company maintains insurance policies and bonds in
force in such amounts and against such liabilities and hazards as are
<PAGE>
customarily maintained by companies engaged in a business similar to
its business. The Company is not liable for any material retroactive
premium adjustments. All premiums due on such policies have been paid
and all such policies are enforceable and in full force and effect, and
the Company has not received any notice of premium increases or
cancellations.
3.9 INTANGIBLE PERSONAL PROPERTY. The Company validly holds and
possesses all patents, trademarks, service marks, copyrights, trade or
corporate names and licenses (collectively, "INTANGIBLE RIGHTS") which
are required and necessary for the Company to conduct its business as
presently conducted. The Company is the sole and exclusive owner of,
and has the unrestricted Right to use, each of the Intangible Rights.
No claims or demands have been asserted against the Company with
respect to any of the Intangible Rights and no proceedings have been
instituted, are pending or have been threatened which challenge the
rights of the Company with respect thereto.
3.10 COMPLIANCE WITH LAWS. The Company has conducted and is conducting
its business in compliance with all applicable legal requirements.
Additionally, the Company has not been and is not in violation of any
permit, authorization, concession, agreement, contract, corporate
document or other legally enforceable obligation.
3.11 NO MISREPRESENTATIONS. None of the information contained in the
representations and warranties set forth in this Agreement, or in any
of the documents, certificates or instruments delivered or to be
delivered to any other party prior to or after the execution hereof as
required or permitted by any provision of this Agreement, contains or
will contain any untrue statement of a material fact or omits or will
omit to state a material fact necessary to make the statements
contained herein or therein not misleading as of the date hereof and as
of the Closing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER
<PAGE>
To induce the Seller to enter into this Agreement and to consummate the
sale of the Shares, the Buyer represents, warrants, covenants and agrees as
follows:
4.1 ORGANIZATION AND EXISTENCE: AUTHORIZATION; ENFORCEABILITY.
(a) ORGANIZATION OF THE COMPANY; GOOD STANDING. The Buyer is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada, with full
corporate power and authority to own, lease or operate its
properties and assets and conduct its business in the manner
in which it is currently conducted.. The Buyer has the
corporate power and authority, will take all the actions
necessary and will obtain all necessary permits and
authorizations, if applicable, in order to execute and deliver
this Agreement and to consummate the transactions contemplated
hereby.
(b) AUTHORIZATION, ETC The Board of Directors of the Buyer has
duly authorized and approved the execution, delivery and
performance of this Agreement, and the other agreements and
transactions contemplated hereby, and if other corporate
proceedings on the part of the Buyer are necessary to
authorize this Agreement and the transactions, contemplated
hereby, will be obtained before the Closing Date.
(c) ENFORCEMENT, ETC. This Agreement is a valid and binding
agreement of the Buyer enforceable in accordance with its
terms, subject, to enforceability, bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting
creditor's rights and general equity principles. This
Agreement and all of the provisions hereof shall be binding
upon and inure to the benefit of the Buyer and any successor
of the Buyer by way of reorganization, merger, or
consolidation and any assignee of all or substantially all of
its business and assets.
(d) NO CONFLICT. The execution, delivery and performance of this
Agreement by the Buyer does not and will not violate or
<PAGE>
constitute a breach of or default under any legal requirement
or order of any governmental entity to which the Buyer is
subject or under any agreement or instrument of the Buyer, or
to which the Buyer is subject or is a party or by which the
Buyer is otherwise bound.
ARTICLE V
CERTAIN AGREEMENTS AND COVENANTS OF THE PARTIES
Each and every obligation of the Buyer under this Agreement shall be
subject to the satisfaction by the Seller, on or before the Closing Date, of
each of the following conditions unless waived in writing by the Buyer:
5.1 ORDINARY COURSE. From the date hereof until January 29, 1999,
unless the prior written consent of the Buyer is first obtained, the Seller will
use its best efforts to preserve the value of the Company's assets and the
business operations of the Company, to preserve the goodwill of customers and
others having business relations with the Company, to maintain its properties in
good repair, working order and condition, to comply with all laws applicable to
it and the conduct of its business, to keep in force and effect all licenses,
permits and authorizations held by the Company necessary or desirable for the
conduct of the Company's business, to keep in full force and effect at not less
than their present limits, all policies of insurance, and to make no material
change in the customary terms and conditions of such insurance policies.
5.2 NOTICE; REPRESENTATIVE. Seller will promptly give written notice to
Buyer upon becoming aware of any event or the impending or threatened occurrence
of any event which would cause or constitute a breach of any of its
representations and warranties contained or referred to in this Agreement, and
will use its best efforts to prevent the same or remedy the same promptly. The
Seller shall promptly notify the Buyer of any material change in the normal
course of business, operation or properties of the Company, or of any
governmental complaints, investigations or hearings (or communications
indicating that the same may be contemplated), or the institution or threat of
litigation, and shall keep the Buyer fully informed of any and all such events.
<PAGE>
5.3 ACTIONS; FURTHER ASSURANCES. Subject to the terms and conditions of
this Agreement, the Seller shall (i), take all steps that are within its power
to cause to be fulfilled those conditions precedent to Buyer's obligations
to consummate the transactions contemplated hereby that are dependent upon
Seller's actions, and (ii) use its best efforts to take, or cause to be taken,
all action and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws to consummate and effect the transactions
contemplated by this Agreement and not to take any actions which would be
adverse to such result. If at any time after the Closing Date any further action
is necessary or desirable to carry out the purposes of this Agreement, Seller
shall take, or cause to be taken, all such necessary action. In addition, the
Seller and the Company shall at all times cooperate with the Buyer to assist, in
obtaining refunds due to the Company as a result of any tax benefits granted to
the Company.
5.4 NON-SOLICITATION. The Seller shall not take any actions to seek,
encourage, solicit or support any inquiry, proposal, expression of interest or
offer from any other person or entity in connection with or with respect to an
acquisition, combination or similar transaction, involving the Company and/or
the Shares or a substantial portion of the assets of the Company, and the Seller
will immediately inform the Buyer of the existence of any such inquiry,
proposal, expression of interest or offer and shall not, without the prior
written consent of the Buyer, furnish any information to or participate in any
discussions or negotiations with, any other entity, person or group (other than
the Buyer and its agents and representatives) regarding same. Neither the Seller
nor the Company shall accept any inquiry, proposal, expression of interest or
offer, execute any agreement, or enter into or consummate any transaction with
respect to any of the foregoing and the Seller shall take all actions necessary
to ensure that the Company does not take any such action.
ARTICLE VI
CONDITIONS TO THE OBLIGATIONS OF THE BUYER
Each and every obligation of the Buyer under this Agreement shall be
subject to the satisfaction by the Seller and the Company, on or before the
Closing Date, of each of the following conditions unless waived in writing by
the Buyer:
<PAGE>
6.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Seller and the Company contained in Article III and elsewhere in this
Agreement and all information contained in any exhibit, certificate, schedule or
attachment hereto or in any writing delivered by or on behalf of, the Seller or
the Company to the Buyer, shall be true and correct when made, and shall be true
in all material respects at and as of the Closing Date. The Seller and the
Company shall have performed and complied with all agreements, covenants and
conditions and shall have made all deliveries required by this Agreement to be
performed, delivered and complied with by them prior to the Closing Date.
6. 2 CONSENT AND APPROVALS. On or before January 29, 1999, The Seller
and/or the Company as the case may be shall have received in writing all
required approvals, consents or acquiescence from all governmental and
regulatory agencies, secured parties or other third parties with respect to the
transactions contemplated by this Agreement.
6.3 NO PENDING OR THREATENED LEGAL CLAIM. No (i) litigation of any kind
shall be pending or threatened; (ii) preliminary or permanent injunction or
other order issued by any court of competent jurisdiction or by any federal or
state governmental or regulatory body; or (iii) statute, rule, regulation or
executive order promulgated or enacted by any federal or state governmental
authority after the date of this Agreement, which has or could have a material
adverse effect on the business, properties, prospects or condition, financial or
otherwise, of the Company, prohibits the consummation of the transactions
contemplated by this Agreement, or affects in any way the Seller's right title
and interest to the Shares or the Seller's ability to transfer the Shares to the
Buyer in accordance with the terms of this Agreement, shall be in effect pending
or threatened.
6.4 NO MATERIAL ADVERSE CHANGE. No material adverse change in the
operations, the business, the financial condition or prospects of the Company
shall have occurred, and no fact shall have arisen which has or reasonably could
be expected to have a material adverse effect on the Company, or its properties,
assets or the consummation of the transactions contemplated hereby, in each case
in the sole and absolute discretion of the Buyer.
<PAGE>
6.5 DUE DILIGENCE. The Seller shall have provided Buyer with access to
the Company's business, records and any information which the Buyer deemed
necessary, in its sole discretion, to conduct a satisfactory due diligence
examination, pursuant to which the Buyer has, among other things, (i) evaluated
the Company, its assets and liabilities, (ii) satisfied itself, in its sole and
absolute discretion, that the Company's assets were free of all Liens, or in a
satisfactory condition to the Buyer, (iii) satisfied itself, in its sole and
absolute discretion, that the Company does not have any debts, liabilities or
other obligations, whether absolute, contingent or otherwise, which have not
been disclosed in writing by the Seller, or are reflected in the Financial
Statements, and (iv) satisfied itself, in its sole and absolute discretion, that
the Company's licenses, permits and authorizations required for the Company to
operate its business are valid. Such due diligence was completed by the Buyer
about fifteen (15) days before the execution of this Agreement (the "Due
Diligence Period").
6.6 SHARE CERTIFICATES AND OTHER DOCUMENTS. The Seller shall have
delivered to the Buyer stock certificates evidencing the Shares duly endorsed
for transfer or accompanied by stock powers duly executed in blank. The Buyer
shall have received from the Seller all such other documents and instruments,
duly executed where required or appropriate, as it may reasonably request in
connection with the transactions contemplated by this Agreement, as set forth in
Section 1.1.
6.7 OPINION OF SELLER'S COUNSEL. The Seller shall have delivered an
opinion of counsel in a form reasonably satisfactory to the Buyer.
6.8 CORPORATE ACTION. The Company's Board of Directors shall have
approved the transactions contemplated by this Agreement if such approval is
necessary under the Company's Articles of Incorporation or By-laws.
ARTICLE VII
CONDITIONS TO THE OBLIGATION OF THE SELLER
Each and every obligation of the Seller under this Agreement shall be
subject to the satisfaction by the Buyer, on or before January 29, 1999, of each
of the following conditions, unless waived in writing by the Seller:
<PAGE>
7.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Buyer contained in Article IV and elsewhere in this Agreement and all
information contained in any exhibit, certificate, schedule or attachment hereto
or in any writing delivered by or on behalf of the Buyer to the Seller shall be
true and correct when made, and shall be true in all material respects at and as
of The Closing Date. The Buyer shall have performed and complied with all
agreements, covenants, and conditions and shall have made all deliveries
required by this Agreement to be performed prior to the Closing Date.
7.2 COVENANTS PERFORMED. All of the covenants, terms and conditions of
this Agreement to be complied with and performed by the Buyer on or before the
Closing Date shall have been duly complied with and performed.
7.3 PURCHASE PRICE. The Buyer shall have delivered to the Seller the
Purchase Price in accordance with Section 1.1 of this Agreement.
ARTICLE VIII
INDEMNIFICATION
8. 1 OBLIGATIONS OF BUYER. The Buyer agrees to defend, indemnify and
hold harmless Seller from, against and in respect of any and all demands,
claims, actions or causes of action, losses, liabilities, damages, assessments,
deficiencies, taxes, cost and expenses, including, without limitation, interest,
penalties and reasonable attorney's fees and expenses (collectively "Claims"),
asserted against, imposed upon or paid, incurred or suffered by Seller as a
result of, arising from, in connection with or incident to any material breach
or material inaccuracy of any representation, warranty, covenant or agreement of
the Buyer in this Agreement or in any document, certificate or other instrument
related hereto.
8.2 OBLIGATIONS OF SELLER. Seller agrees to defend, indemnify and hold
harmless the Buyer from, against and in respect of any and all demands, claims
actions or causes of action, losses, liabilities, damages, assessments,
deficiencies, taxes, cost and expenses, including, without limitation, interest,
<PAGE>
penalties and reasonable attorney's fees and expenses (collectively "Claims"),
asserted against, imposed upon or paid, incurred or suffered by the Buyer as a
result of, arising from, in connection with or incident to (i) any breach or
inaccuracy of any representation, warranty, covenant or agreement of Seller in
this Agreement, or in any document, certificate or other instrument related
hereto, (ii) the inability, failure or refusal of Seller to act in good faith in
connection with this Agreement, or the transactions, agreements, documents and
instruments delivered herewith or contemplated hereby, at any time from the date
of this Agreement until the later in time of (a) the Closing Date, or (b) the
end of the Due Diligence Period and (c) event which, as of the Closing Date,
have not been disclosed to the Buyer in writing.
8.3 INDEMNIFICATION PROCEDURE. A party or parties hereto agreeing to be
responsible for or to indemnify against any matter pursuant to this Agreement is
referred to herein as the "Indemnifying Party" and the other party or parties
claiming indemnification hereunder is referred to as the "Indemnified Party". An
Indemnified Party under this Agreement shall give prompt written notice to the
Indemnifying Party of any liability which might give rise to a claim for
indemnity under this Agreement. As to any claim by a third party, the
Indemnified Party, participate in the defense, compromise or settlement of any
such matter through the Indemnified Party's own attorneys and at the
Indemnifying Party's own expense; each of the Indemnifying Party and the
Indemnified Party shall provide such cooperation and such reasonable access to
its books, records and properties as the other party shall reasonable request
with respect to any such matter; and the parties hereto agree to cooperate with
each other in order to ensure the proper and adequate defense thereof. The Buyer
may setoff against the amount of any other payments due to Seller hereunder or
otherwise, including, without limitation, the Note, and any and all amounts, due
to the Buyer pursuant to any and all claims that the Buyer may have against
Seller hereunder including, without limitation, with respect to the
indemnification of the Buyer hereunder by Seller.
An Indemnifying Party shall not make any settlement of any claims
without the written consent of the Indemnified Party which consent shall not be
unreasonably withheld. Without limiting the generality of the foregoing, it
shall not be deemed unreasonable to withhold consent to a settlement
<PAGE>
involving injunctive or other equitable relief against the Indemnified Party or
its assets, employees or business.
In a case where responsibility for a matter giving rise to a claim for
indemnification is shared by the parties, any of the parties may elect to
relieve the other of its obligations of indemnification with respect to such
matter and, subject to the provisions of this section, such electing party may
thereupon assume full control of the resolution of such matter. If such election
is not made, control shall also be shared.
ARTICLE IX
SURVIVAL OF TERMS; REPRESENTATIONS
9.1 SURVIVAL. The representations and warranties contained herein shall
be true and correct as of January 29, 1999 as though such representations and
warranties were made at and as of the Closing Date. All of these representations
and warranties shall survive the consummation of all of the transactions
contemplated by this Agreement.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 BINDING AGREEMENT. This Agreement may not be transferred,
assigned, pledged or hypothecated all or in part by any party hereto without the
prior written consent of all the other parties hereto. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective assigns and successors in interest. No other person shall acquire or
have any right under or by virtue of this Agreement.
10.2 GOVERNING LAW. This Agreement, the rights and obligations of the
parties, and any other claims or disputes relating in anyway thereto will be
governed by and construed in accordance with the laws of the State of Florida.
10.3 COUNTERPARTS, HEADINGS, ETC. This Agreement may be executed
simultaneously in any number of counterparts, each of which shall be deemed
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an original, but all of which shall constitute one and the same instrument. The
headings herein are for convenience of reference only and shall not be deemed a
part of this Agreement.
10.4 NOTICES. Any notice or other communication required or permitted
hereunder shall be deemed validly given, made or served if in writing and if
delivered in person or sent by facsimile transmission or registered or certified
mail to the intended recipient at the following address or to such other address
or number as shall be furnished in writing by any such party to the other:
If to the Seller: Antonio Echeverria
Ternerina
Hatillo Centro, de la Unidad
Sanitaria 500 metros al este.
If to the Buyer: Calixto Chaves
95 Merrick Way,
Suite 507,
Coral Gables,
Florida, 33134
10.5 AMENDMENT; SEVERABILITY: This Agreement may be amended only by an
agreement in writing signed by the parties hereto. In case any provision of this
Agreement shall be held invalid, illegal or unenforceable by any court the
validity, legality and enforceability of the remaining provisions will not be
affected or impaired thereby.
10.6 ARBITRATION. Any dispute arising in connection with this Agreement
shall be exclusively settled by binding arbitration in the Spanish language in
Miami, Florida, in accordance with the Rules of Arbitration and Conciliation of
the International Chamber of Commerce (the "Rules of Arbitration") .
Notwithstanding any provision in the Rules of Arbitration, the arbitration panel
at any such arbitration proceeding shall consist of three arbitrators. One
arbitrator will be designated by Buyer, another arbitrator will be designated by
Seller and the third arbitrator will be a person mutually agreed upon
<PAGE>
by Buyer and Seller. The arbitration panel shall render its decision in
writing, and such written decision and conclusions with respect to the
disputes so settled shall be final and binding on the parties to the
arbitration proceeding and confirmation and enforcement of the awards so
on the parties to the arbitration proceeding and confirmation and
enforcement of the awards so rendered may be obtained and entered in any
court having jurisdiction thereof. Each of Buyer and Seller hereby
irrevocably submits to the jurisdiction of any such court for purposes of
enforcement of the arbitration panel's decision.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
Seller:
By: /s/ ANTONIO ECHEVERRIA
-----------------------------------------
Antonio Echeverria
President
Comercial Angui, S.A.
By: /s/ CALIXTO CHAVES
-----------------------------------------
Calixto Chaves
President
Costa Rica International, Inc.
