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
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Date of Report (Date of earliest event reported) January 15, 1997
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QPQ CORPORATION
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(Exact name of registrant as specified in its charter)
Florida 1-12350 65-0423147
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(State or other jurisdiction (Commission File (IRS Employer
or incorporation) Number) Identification No.)
1000 Lincoln Road, Suite 200, Miami Beach, Florida 33139
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(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code (305) 531-5800
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
On January 15, 1997, the Registrant entered into a Letter of Intent with
Corporacion Vitex, S.A. de C.V., a Mexican corporation, for the purchase by the
Registrant of all of the stock of Vitex (the "Acquisition").
The proposed Acquisition is conditioned on, among other things, the preparation
of a mutually satisfactory definitive agreement of Acquisition, each party's
completion of a satisfactory due diligence review of the other party, the
Registrant having a minimum of $4 million dollars in cash for the specific use
by Vitex for operating purposes, the appointment of two members of the Hernaiz
family to the Registrant's Board of Directors and the appointment of the current
officers of Vitex to the positions of Chairman of the Board, Chief Executive
Officer and President of the Registrant.
The foregoing summary of the Letter of Intent is qualified in its entirety by
the copy of Letter of Intent attached hereto as an exhibit.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
Exhibits
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(a) Letter of Intent, dated January 15, 1997, between Registrant and
Corporacion Vitex, S.A. de C.V.
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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 hereunto duly authorized.
QPQ CORPORATION
By: /s/ Mitchell Rubinson
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MITCHELL RUBINSON
President
DATED: January 16, 1997
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January 10, 1997
Mr. Juan Ramon Hernaiz
Director General
Corporacion Vitex, S.A. de C.V.
Uxmal 81
Col. Navarte
03020 Mexico, D.F.
Dear Mr. Hernaiz:
This Letter of Intent (the "Letter of Intent") is designed to set forth a
proposal of QPQ Corporation, a Florida corporation ("QPQ") concerning QPQ's
proposed acquisition of all the stock of Corporation Vitex, S.A. de C.V.
("Vitex"). The principal terms of the proposed acquisition are set forth below:
1. STRUCTURE. The transaction will be structured as a purchase by QPQ of
all the stock of Vitex (the "Acquisition). The consideration to be paid by QPQ
shall consist of fifty-one percent (51.0%) of QPQ's Common Stock after the
issuance of such security. Forty percent (40%) of such shares shall be delivered
to Vitex at closing and the remaining eleven percent (11%) of such shares shall
be placed in escrow subject to certain earn-out conditions based upon earnings
of Vitex. Vitex shall have the right to vote all fifty-one percent (51%) of the
shares upon closing of the transaction.
2. INSPECTION AND ACCESS TO INFORMATION. After the date of acceptance of
this Letter of Intent, each of the parties hereto shall permit the other and its
representatives access to all books, papers and records relating to each of the
parties' assets, stock, ownership, properties, operations, obligations and
liabilities, including, but not limited to, books of account, tax records,
minute books of directors' and shareholders' meetings, Articles of Incorporation
and amendments thereto, By-Laws and amendments thereof, contracts and
agreements, filings with any regulatory authorities, litigation, patent and
trademark records, compensation plans affecting their employees, and any other
materials pertaining to business activities, projects or programs in which
either party may have an interest in light of the transactions contemplated
herein. Each of the parties hereto will make its employees, attorneys and
accountants available for consultation by the other and its representatives and
permit access to customers or suppliers for verification of information.
3. CONDITIONS PRECEDENT. Consummation of the Acquisition contemplated
herein shall occur on or before April 30, 1997 and will be subject to:
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Corporacion Vitex, S.A. de C.V.
January 10, 1997
Page 2
(a) The preparation, execution and delivery of a mutually
satisfactory definitive acquisition agreement on or before January 31, 1997 (the
"Acquisition Agreement"), and other related agreements containing, among other
things, terms, agreements, representations, warranties, opinions of counsel and
conditions providing for disclosure schedules containing information concerning
the properties, assets, businesses, employee plans, liabilities and obligations
of QPQ and Vitex as are reasonably customary for such transactions. The approval
of the Boards of Directors of QPQ and Vitex, the approval of the shareholders of
Vitex, the giving of all required notices and the obtaining of all required
approvals, consents, waivers and clearances from governmental and other
regulatory authorities, lenders and others shall be executed and/or delivered no
later than March 10, 1997. The Acquisition Agreement shall provide that QPQ
shall have no debt outstanding or other guarantees at the parent level in excess
of $200,000.
(b) A public announcement of the Acquisition of Vitex by QPQ shall
be issued no later than January 17, 1997. Additionally, a fairness opinion
necessary for the Acquisition of Vitex and the terms of said Acquisition
(including the shares to be issued to the Hernaiz Family and/or its affiliates)
shall be issued no later than April 15, 1997.
(c) The satisfactory completion of a due diligence, tax and
accounting review by QPQ of the financial condition, assets and business of
Vitex (and that the only evidence that such review has been completed in
satisfaction of this condition shall be a written statement to that effect
signed by the CEO of QPQ).
(d) At the closing of the Acquisition, QPQ shall have a minimum of
$4,000,000 in cash for the specific use by Vitex for operating purposes,
including without limitation, working capital, debt reduction and capital
expenditures (including the latex farm joint venture). The $4,000,000 shall not
be available for or distributed to any of the existing subsidiaries of QPQ. Any
and all cash needs of the existing QPQ subsidiaries, other than provided by the
existing cash flow of those subsidiaries, shall be satisfied from other sources
of capital.
(e) Upon the closing of the Acquisition, the Hernaiz Family shall
hold two (2) positions on the Board of Directors of QPQ, and additionally, the
officers of Vitex shall become the Chairman of the Board, Chief Executive
Officer and President of QPQ. The Hernaiz Family shall agree not to transfer or
otherwise dispose of their shares of stock issued under the Acquisition
Agreement for a period of two years from closing.
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Corporacion Vitex, S.A. de C.V.
January 10, 1997
Page 3
(f) Receipt by QPQ of (i) balance sheets, related statements of
income, retained earnings and changes in financial position of Vitex required by
QPQ for regulatory purposes, including the Securities and Exchange Commission,
audited by an independent public accounting firm acceptable to QPQ for the
periods ending December 31, 1995 and 1996, and delivered to QPQ no later than
March 30, 1997, (ii) an unaudited balance sheet and related statements of income
retained earnings and changes in financial position of Vitex for an interim
period since the date of such audited financial statements and within forty-five
(45) days of the date of delivery of the financial statements referred to in
clause (i) above, in each case which are not materially adverse compared to the
tax returns and unaudited financial statements provided by Vitex to QPQ for the
relevant periods, all of the above being prepared according to GAAP and GAAS;
and
(g) There shall have been no material adverse change with respect to
Vitex from the date hereof until Closing.
4. FEES AND EXPENSES. No commission, broker's fees, finder's fee or
similar fee or expense has been incurred or is or will be payable by either
Vitex or QPQ with respect to the transactions contemplated herein, except as set
forth by exhibit. Each party shall bear its own out-of-pocket costs and expenses
(including but not limited to, counsel fees) incurred in connection with the
transactions contemplated herein.
5. CONFIDENTIAL TREATMENT, PUBLICITY. All information furnished by any
party hereto shall be treated as the sole property of the party furnishing the
information until consummation of the transactions contemplated herein and, if
such transaction shall not occur, each party shall return to the party which
furnished such information all documents or other material containing, or
reflecting or referring to such information and all copies thereof. The parties
shall use their best efforts to keep confidential all such information, and
shall not directly or indirectly use such information for any competitive or
other commercial purpose. The obligation to keep such information confidential
shall not apply to (a) any information which (i) any party can establish was
already in its possession prior to disclosure thereof by the party furnishing
the information; or (ii) was then generally known to the public; or (iii) became
known to the public through no fault of such party; or (b) disclosures in
accordance with an order of a court of competent jurisdiction.
It is understood that the parties hereto will promptly commence to
incur substantial expenses and efforts to consummate this transaction and any
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Corporacion Vitex, S.A. de C.V.
January 10, 1997
Page 4
premature news release or other disclosure may jeopardize such efforts. QPQ and
Vitex agree to cooperate with each other in the development and distribution of
all news releases and other public information and disclosure relating to the
transactions contemplated herein, including any news release or other disclosure
made in response to a requirement of applicable law.
6. EXCLUSIVITY. From the date hereof until April 30, 1997, neither Vitex
or its directors, officers, employees, representatives, advisors or agents shall
directly or indirectly (a) take any action to solicit, initiate or encourage any
Proposal (as defined herein) or (b) continue, initiate or engage in negotiations
with, or disclose any information relating to Vitex, its assets or properties,
or afford access to the properties, books and records of Vitex, to any entity or
individual that is known to be considering or has made a Proposal. Vitex shall
promptly notify QPQ after receipt of any Proposal or indication that any entity
is considering making a Proposal and whether any entity has made a request for
access to the properties, books or records of that party, and Vitex shall keep
QPQ informed of the status of any such situation. The term "Proposal" means any
offer or proposal or indication of interest in a merger, consolidation or other
business combination, or the purchase of a substantial portion of the assets or
capital stock of Vitex.
7. CONDUCT OF THE BUSINESS. From the date hereof until the execution and
delivery of the Acquisition Agreement, Vitex shall not, without the written
consent of QPQ, acquire or dispose of any substantial assets, make any dividend
or distribution, enter into any material transaction or incur any material
obligation or otherwise take any action other than the ordinary course of
business consistent with Vitex's past business practice.
8. NON-BINDING NATURE OF LETTER. It is understood that this Letter of
Intent is a statement of the parties' present intent, that the rights and
obligations of the parties shall only be as set forth in the executed
Acquisition Agreement, and that this Letter of Intent is not to be binding on
either party (except for the provisions of Paragraph 5 with respect to
confidentiality, return of documents and publicity, Paragraph 6 with respect to
Exclusivity, Paragraph 4 with respect to payment of fees and expenses and
Paragraph 7 with respect to conduct of business).
If the foregoing correctly reflects the understanding between us, please
sign, date and return the enclosed copy of this letter, which will then
constitute an agreement with respect to the foregoing matters. We will then
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Corporacion Vitex, S.A. de C.V.
January 10, 1997
Page 5
proceed promptly with our investigation and the preparation of the Acquisition
Agreement. This letter may be executed simultaneously in two or more
counterparts, each of which shall constitute an original, but all of which
together shall constitute one and the same instrument.
QPQ CORPORATION
By: /s/ Mitchell Rubinson
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Mitchell Rubinson, President
ACCEPTED AND AGREED TO THIS
15th DAY OF January, 1997.
CORPORACION VITEX, S.A. DE C.V.
By:/s/ Juan Ramon Hernaiz
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Name: Juan Ramon Hernaiz
Title: Director General
