EXHIBIT 10.33
ASSET PURCHASE AGREEMENT
DATED AS OF JANUARY 25, 2003
AMONG
TEMPUS CORPORATION, S.A. DE C.V.,
MIGUEL ANGEL PACHUR SALGADO,
OSCAR GUADALUPE DE LEON ULLOA,
AND
HI METALS, S.A. DE C.V.
TABLE OF CONTENTS
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Page No.
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ARTICLE 1 EXISTENCE AND REPRESENTATION............................................................................1
SECTION 1.1 EXISTENCE OF TEMPUS..........................................................................1
SECTION 1.2 REPRESENTATION OF TEMPUS.....................................................................1
SECTION 1.3 EXISTENCE OF HI METALS.......................................................................1
SECTION 1.4 REPRESENTATION OF HI METALS..................................................................1
ARTICLE 2 CONTRACT PURPOSES.......................................................................................1
ARTICLE 3 PURCHASE OF ASSETS......................................................................................1
SECTION 3.1 PURCHASE AND SALE OF ASSETS..................................................................1
(a) Inventory.............................................................................................2
(b) Furniture and Equipment...............................................................................2
(c) Other Property........................................................................................2
SECTION 3.2 PURCHASE PRICE...............................................................................2
SECTION 3.3 INVENTORY....................................................................................3
(a) Finished Products Inventory...........................................................................3
(b) In Process Inventory..................................................................................3
(c) Raw Materials.........................................................................................3
SECTION 3.4 LIABILITIES..................................................................................3
SECTION 3.5 ACCOUNTS RECEIVABLE..........................................................................3
ARTICLE 4 CLOSING.................................................................................................4
SECTION 4.1 CLOSING......................................................................................4
SECTION 4.2 TRANSFER OF ASSETS; PAYMENT..................................................................4
SECTION 4.3 CLOSING DOCUMENTS............................................................................4
ARTICLE 5 REPRESENTATIONS AND WARRANTIES..........................................................................5
SECTION 5.1 REPRESENTATIONS AND WARRANTIES OF SELLING PARTIES............................................5
(a) Organization, Standing and Corporate Power of Tempus..................................................5
(b) Authority; Noncontravention...........................................................................5
(c) Litigation............................................................................................6
(d) Brokers...............................................................................................6
(e) Title to Properties; Liens............................................................................6
(f) Owned and Leased Real Property........................................................................7
(g) Accounts Receivable; Inventories......................................................................7
(h) Employee Relations....................................................................................7
(i) Leased Personal Property..............................................................................8
(j) Condition of Acquired Assets..........................................................................8
(k) Product Warranties....................................................................................8
(l) Compliance with Laws..................................................................................9
(m) Disclosure.........................................................................................9
SECTION 5.2 REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS...............................................9
SECTION 5.3 REPRESENTATIONS AND WARRANTIES OF HI METALS.................................................10
(a) Organization, Standing and Corporation Power of HI Metals............................................10
(b) Authority; Noncontravention..........................................................................10
(c) Brokers..............................................................................................11
ARTICLE 6 COVENANTS RELATING TO CONDUCT OF ACTIVITIES............................................................11
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SECTION 6.1 CONDUCT OF ACTIVITIES BY SELLING PARTIES....................................................11
SECTION 6.2 OTHER ACTIONS...............................................................................11
ARTICLE 7 ADDITIONAL AGREEMENTS..................................................................................12
SECTION 7.1 ACCESS TO INFORMATION; CONFIDENTIALITY......................................................12
SECTION 7.2 REASONABLE EFFORTS; NOTIFICATION............................................................12
SECTION 7.3 FEES AND EXPENSES; TAXES....................................................................13
SECTION 7.4 PUBLIC ANNOUNCEMENTS........................................................................13
SECTION 7.5 NO SOLICITATION.............................................................................14
SECTION 7.6 INFORMATION FOR TAX RETURNS.................................................................14
SECTION 7.7 LEASING CONTRACT............................................................................14
SECTION 7.8 TELEPHONES..................................................................................14
SECTION 7.9 RADIO FREQUENCIES...........................................................................15
SECTION 7.10 INSURANCE COVERAGES AND WARRANTIES.......................................................15
SECTION 7.11 EMPLOYEES................................................................................15
SECTION 7.12 LABOR UNIONS.............................................................................16
ARTICLE 8 CONDITIONS PRECEDENT...................................................................................16
SECTION 8.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE CLOSING.................................16
(a) Authorizations, Consents, and Approvals..............................................................16
(b) No Injunctions or Restraints.........................................................................16
SECTION 8.2 CONDITIONS TO OBLIGATIONS OF HI METALS......................................................16
(a) Representations and Warranties.......................................................................16
(b) Performance of Obligations of Selling Parties........................................................17
(c) No Suit or Judgment..................................................................................17
(d) Opinion of Counsel...................................................................................17
(e) Consents.............................................................................................17
(f) Tempus Records.......................................................................................17
(g) Material Adverse Change..............................................................................17
(h) Board and Lender Authorizations......................................................................17
(i) Delivery of Notarial Instruments and Invoices........................................................17
SECTION 8.3 CONDITIONS TO OBLIGATIONS OF SELLING PARTIES................................................18
(a) Representations and Warranties.......................................................................18
(b) Performance of Obligations of HI Metals..............................................................18
(c) No Suit or Judgment..................................................................................18
SECTION 8.4 FRUSTRATION OF CLOSING CONDITIONS...........................................................18
ARTICLE 9 TERMINATION, AMENDMENT AND WAIVER......................................................................18
SECTION 9.1 TERMINATION.................................................................................18
SECTION 9.2 EFFECT OF TERMINATION.......................................................................19
SECTION 9.3 AMENDMENT...................................................................................19
SECTION 9.4 EXTENSION: WAIVER...........................................................................19
ARTICLE 10 INDEMNIFICATION.......................................................................................19
SECTION 10.1 INDEMNIFICATION..........................................................................19
(a) By the Selling Parties...............................................................................19
(b) By HI Metals.........................................................................................20
(c) Direct Liability.....................................................................................20
(d) Third Party Claim....................................................................................20
(e) Limitation of Indemnity..............................................................................21
SECTION 10.2 RIGHT TO SET-OFF.........................................................................21
ARTICLE 11 GENERAL PROVISIONS....................................................................................21
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SECTION 11.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS....................................21
SECTION 11.2 NOTICES..................................................................................22
SECTION 11.3 DEFINITIONS..............................................................................23
SECTION 11.4 INTERPRETATION; GOVERNING LANGUAGE.......................................................25
SECTION 11.5 COUNTERPARTS; FACSIMILES.................................................................25
SECTION 11.6 ENTIRE AGREEMENT: NO THIRD PARTY BENEFICIARIES...........................................25
SECTION 11.7 GOVERNING LAW............................................................................25
SECTION 11.8 ASSIGNMENT...............................................................................25
SECTION 11.9 ENFORCEMENT..............................................................................26
SECTION 11.10 EXHIBITS AND SCHEDULES...................................................................26
SECTION 11.11 ARBITRATION..............................................................................26
SECTION 11.12 CURRENCY AND PAYMENT.....................................................................26
EXHIBITS
Exhibit C-Opinion of Counsel for Selling Parties
SCHEDULES
Schedule 3.1(a) - Inventory
Schedule 3.1(b) - Furniture and Equipment
Schedule 5.1(f) - Real Property
Schedule 5.1(g) - Accounts Receivable; Inventories
Schedule 5.1(h) - Employee Relations
Schedule 5.1(i) - Leases
Schedule 5.1(j) - Condition of Acquired Assets
Schedule 5.1(k) - Product Warranties
Schedule 7.7 - Leasing Contracts
Schedule 7.11 - Tempus Employees
Schedule 7.12 - Contract with Labor Union
Schedule 8.2(e) - Consents
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made as of January 25,
2003, by and among TEMPUS CORPORATION, S.A. DE C.V. ("Tempus"), MIGUEL ANGEL
PACHUR SALGADO ("Pachur") and OSCAR GUADALUPE DE LEON ULLOA ("de Leon") and HI
METALS, S.A. DE C.V., a Mexico corporation ("HI Metals"). Pachur and de Leon are
sometimes referred to as the "Stockholders." Tempus and Stockholders are
sometimes referred to as the "Selling Parties." Other capitalized terms used in
this Agreement are defined or cross-referenced to the applicable definition in
Section 11.3 of this Agreement.
ARTICLE 1
EXISTENCE AND REPRESENTATION
SECTION 1.1 Existence of Tempus. Tempus is a Mexican corporation,
constituted through Public Contract number 3,254 (three thousand two hundred and
fifty four) dated December 1, 1995, granted before the faith of Licenciado
(Attorney) Jose Luis Trevino Manrique Notary Public number 97 with practice in
the City of Monterrey, N.L.
SECTION 1.2 Representation of Tempus. Pachur justifies his representation
of Tempus, with the public contract number _____________.
SECTION 1.3 Existence of HI Metals. HI Metals is a Mexican corporation,
constituted through Public Deed number 32804, dated December 16, 2002, granted
before the faith of Licenciado (Attorney) Mr. Jose Maria Morera Gonzalez Notary
Public number 102 for the Federal District with practice in the City of
Monterrey, N.L.
SECTION 1.4 Representation of HI Metals.Kenneth J. Cichocki justifies his
representation of HI Metals, with the public contract number 33069 dated January
23, 2003, granted before the faith of Licenciado (Attorney) Mr. Jose Maria
Morera Gonzalez Notary public number 102 with practice in the City of Monterrey,
N.L.
ARTICLE 2
CONTRACT PURPOSES
The purpose of this Agreement is for Tempus to sell to HI Metals all the
assets described in this Agreement and for HI Metals to purchase those assets
for the Purchase Price (hereinafter defined) and for no other purpose.
ARTICLE 3
PURCHASE OF ASSETS
SECTION 3.1 Purchase and Sale of Assets. Upon the terms and subject to the
conditions set forth in this Agreement, Tempus shall sell to HI Metals at
Closing, all of the tangible assets used or held for use by or on behalf of
Tempus, in connection with its metal, glass and ceramics design, fabrication,
and manufacturing and sales activities and all activities related thereto (the
"Activities"), free and clear of all Liens, other than the Bancomext Liens
(hereinafter defined), which shall be
ASSET PURCHASE AGREEMENT - PAGE 1
released after Closing as contemplated by Section 3.2 below, including, without
limitation, the following tangible assets (collectively, the "Acquired Assets"):
(a) Inventory. All inventory, parts, raw materials, supplies, packaging
materials and other materials used or usable by Tempus, including, without
limitation, those items listed on Schedule 3.1(a) hereto, (the "Inventory");
(b) Furniture and Equipment. The furniture, equipment, ovens, molds,
machines, including all related spare or replacement parts, vehicles, tools, and
other items described on Schedule 3.1(b) hereto; and
(c) Other Property. All other additional tangible assets of Tempus of
every kind and description and wherever located, that are used or intended for
use in connection with, or that are necessary to the continued conduct of, the
Activities as presently being conducted or as contemplated to be conducted in
the future.
SECTION 3.2 Purchase Price. Subject to the terms and conditions of this
Agreement, in consideration for HI Metals' acquisition of the Acquired Assets,
HI Metals shall pay to Tempus the following amounts (collectively, the "Purchase
Price"): (a) at Closing (hereinafter defined), TWO MILLION AND NO/100 DOLLARS
(U.S. $2,000,000.00) plus the applicable value added tax by wire transfer in
immediately available funds, (b) promptly after Tempus has delivered
documentation to HI Metals satisfactory to HI Metals evidencing that (i) all of
the indebtedness owing from Tempus to Bancomext Nacional de Comercio Exterior
("Bancomext") has been paid in full, (ii) all Liens in favor of Bancomext that
encumber or cloud title to the Acquired Assets (the "Bancomext Liens") have been
terminated by Bancomext, and (iii) Bancomex has taken all action necessary for
the Registry Publico del Comercio to release the Bancomext Liens from the public
record, an additional TWO MILLION AND NO/100 DOLLARS (U.S. $2,000,000.00) (the
"Bancomext Holdback"), plus the applicable value added tax by wire transfer in
immediately available funds, and (c) the payment for all Finished Inventory
pursuant to Section 3.3 below. If the Bancomext Liens have not been released in
full on or before March 7, 2003, HI Metals shall be permitted to apply such
portion of the Bancomext Holdback as shall be necessary or advisable to pay
Bancomext in full for any loans by Bancomext to Tempus (including all principal,
interest, prepayment charges and penalties and any related fees and expenses) in
order for the Bancomext Liens to be released in full, and Tempus shall
indemnify, release and hold HI Metals harmless from and against any liabilities
or obligations incurred by HI Metals in connection with such dealings with
Bancomext. On and after March 7, 2003, Bancomext is irrevocably authorized to
(i) disclose to HI Metals and its attorneys and agents all information,
including confidential information, of Tempus and Pachur relating directly or
indirectly to the Bancomext Liens, (ii) enter into all agreements and
transactions with HI Metals in connection with the payment of indebtedness of
Tempus to Bancomext to the same extent as Bancomext could with Tempus and
Pachur, and (iii) take all actions requested by HI Metals relating directly or
indirectly to the Bancomext Liens, all without further consent by Tempus or
Pachur. In the event HI Metals is required to exercise the rights granted by
Tempus under this Section 3.2 in order to obtain a release of the Bancomext
Liens, HI Metals shall be entitled to retain the balance of the Bancomext
Holdback until the conditions set forth in clause (b) above have been satisfied
and all litigation or proceedings relating thereto have
ASSET PURCHASE AGREEMENT - PAGE 2
been concluded and are no longer subject to appeal and HI Metals has recovered
from the Bancomext Holdback all of its costs, expenses and attorney's fees. All
remaining sums shall be remitted by HI Metals to Tempus. No interest shall be
paid to Tempus with respect to the Bancomext Holdback.
SECTION 3.3 Inventory. Tempus and HI Metals hereby agree as follows
concerning the finished, work in progress and raw materials Inventory of Tempus:
(a) Finished Products Inventory. HI Metals shall pay Tempus at Closing
for all the Finished Inventory reflected on the written inventory records of
Tempus and stored in the plant facilities located at calle Lerdo de Tejada #
749, Predio El Lechugal in Santa Catarina, Nuevo Leon (the "Plant") at the
Closing. No payment shall be due for any other Finished Inventory, if any. The
term "Finished Inventory" shall mean all products inventory of Tempus
manufactured by Tempus and completed for sale by Tempus to such a degree that no
further expenditure of money or labor is required to sell such products. Tempus
shall sell to HI Metals (or its designee) and HI Metals (or its designee) shall
purchase, subject to Section 10.2 below, all Finished Inventory located at the
Plant, according to wholesale list prices that are mutually acceptable to the
parties (but not higher than the average wholesale prices of such products
published by Tempus during the prior thirty (30) days), within the thirty (30)
days following Closing; provided, however, that HI Metals shall not be required
to purchase any Finished Inventory that it does not believe is readily saleable,
of poor quality, or otherwise not acceptable to HI Metals in its sole and
absolute discretion.
(b) In Process Inventory. All Inventory, other than Finished
Inventory, including, without limitation, the in process Inventory, stored in
the facilities of the Plant or elsewhere at the Closing, shall be property of HI
Metals, even if it is not itemized in Schedule 3.1(a) hereto.
(c) Raw Materials. All the raw materials Inventory and packaging
material stored at the facilities of the Plant or elsewhere at the Closing, ,
shall be property of HI Metals, even if it is not itemized in Schedule 3.1(a)
hereto.
SECTION 3.4 Liabilities. In connection with the purchase of the
Acquired Assets, and subject to and upon all the terms and condition of this
Agreement, HI Metals shall not assume or agree to pay, perform and discharge any
liabilities or obligations of Tempus. HI Metals is not assuming, and shall have
no liability for, and Tempus agrees that it will retain and be solely
responsible for, the payment, performance, and discharge of all liabilities of
Tempus, whether accrued, absolute, contingent or otherwise (collectively, the
"Retained Liabilities").
SECTION 3.5 Accounts Receivable. Tempus shall retain title to the Accounts
Receivable (hereinafter defined) after Closing. For purposes of this Agreement,
the term "Accounts Receivable" shall mean only the accounts receivable of Tempus
that relate to Finished Inventory that has been shipped by Tempus on or before
the Closing, provided that (a) such goods are not returned to HI Metals or
rejected or objected to by the customer after Closing and (b) such Accounts
Receivable are accounts receivable in accordance with Mexican GAAP. HI Metals
shall not have any liability in connection with the collection of the Accounts
Receivable, and Tempus shall not pursue any collection activities with respect
to the Accounts Receivable against any customers of
ASSET PURCHASE AGREEMENT - PAGE 3
Tempus or HI Metals without the prior written consent of HI Metals. HI Metals
shall have the sole and exclusive right, title and interest in and to all
accounts receivable generated by the Activities and HI Metals after Closing. To
the extent that either Tempus or HI Metals receives a payment from a customer
that belongs to the other party, the receiving party shall promptly pay such
money to the other party.
ARTICLE 4
CLOSING
SECTION 4.1 Closing. The closing of the purchase and sale of the Acquired
Assets (the "Closing") will take place on or before January 31, 2003 (the
"Closing Date"), at the offices of Bell Nunnally & Martin LLP, 3232 McKinney
Avenue, Suite 1400, Dallas, Texas 75204-2429, unless another date or place is
agreed to in writing by the parties hereto.
SECTION 4.2 Transfer of Assets; Payment. At the Closing, Selling Parties
shall do and take all steps reasonable and necessary to transfer, assign and
convey to HI Metals all of the right, title and interest in and to the Acquired
Assets free and clear of all Liens, other than the Bancomext Liens, which shall
be released after Closing as contemplated by Section 3.2 above. HI Metals shall
deliver the Purchase Price at the Closing to Tempus, other than the Bancomext
Holdback, which shall be payable pursuant to Section 3.3(a). Tempus is required
to deliver a letter from Bancomext, in form and substance satisfactory to HI
Metals stating the amount of the outstanding principal and interest and that
Bancomext will release the Bancomext Liens upon payment of such amounts (the
"Bancomext Authorization").
SECTION 4.3 Closing Documents. At the Closing, Selling Parties, as
appropriate, shall deliver, or cause to be delivered, the following items:
(a) Schedules and Exhibits to this Agreement that are in form and
substance satisfactory to HI Metals;
(b) Certified copies of the Tempus incorporation deeds, as well as
evidence of registration of the same in the Public Registry of Commerce;
(c) Certified copies of the public deeds through which the powers of
attorney of Tempus' legal representatives to complete the transactions
noted herein are evidenced;
(d) Copies of all permits, authorizations or licenses needed to be
granted by any Governmental Entities in order for the Acquired Assets to be
transferred to HI Metals;
(e) The Bancomext Authorization;
(f) Duly notarized powers of attorney for Pachur to represent de Leon
to execute this Agreement and the Ancillary Documents in Dallas, Texas,
U.S.A. granted by the de Leon.
ASSET PURCHASE AGREEMENT - PAGE 4
(g) Invoices, executed by Tempus, in form and substance satisfactory
to HI Metals and its legal counsel, to convey to HI Metals good and
marketable title to all of the Acquired Assets;
(h) Leases between HI Metals and the landlords of the Santa Catarina
facility (the "Santa Catarina Facility") for the lease of the Santa
Catarina Facility upon terms and conditions satisfactory to HI Metals;
(i) Such other documents, certificates of title, endorsements,
assignments and instruments in form and substance satisfactory to HI Metals
and its legal counsel, as shall be necessary, advisable or desirable to
vest in HI Metals title to the Acquired Assets free and clear of all Liens,
other than the Bancomext Liens, which shall be released after Closing as
contemplated by Section 3.2 above;
(j) An Officers' Certificate, dated the Closing Date, of the President
and Secretary of Tempus, certifying to (a) the governing documents of
Tempus (as certified to by an appropriate governmental authority), (b)
evidence of the approval by Tempus of the execution, delivery and
performance of this Agreement and the Ancillary Documents, and (c) the
incumbency of the representatives of Tempus executing this Agreement and
the Ancillary Documents; and
(k) Copies of all consents, authorizations, orders or approvals of and
filings or registrations with, and any permits, licenses or other
authorizations required by, any third party or applicable Governmental
Entity that are required for, or in connection with, the execution and
delivery of this Agreement and the Ancillary Documents by the Selling
Parties and the consummation by Selling Parties of the transactions
contemplated herein and therein.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
SECTION 5.1 Representations and Warranties of Selling Parties. As an
inducement to HI Metals to enter into this Agreement and to consummate the
transactions contemplated hereby, Selling Parties hereby jointly and severally
represent and warrant to HI Metals that the following statements are true and
correct as of the date of this Agreement and will be true and correct with equal
force and effect as of the Closing Date.
(a) Organization, Standing and Corporate Power of Tempus. Tempus is a
Mexican corporation, constituted through Public Contract number 3,254 (three
thousand two hundred and fifty four) dated December 1, 1995, granted before the
faith of Licenciado (Attorney) Jose Luis Trevino Manrique Notary Public number
97 with practice in the City of Monterrey, N.L.
(b) Authority; Noncontravention. Tempus has the requisite corporate
power and authority to enter into this Agreement and to consummate the
transactions contemplated by this Agreement and the other documents, agreements,
contracts and instruments that are executed or contemplated to be executed in
connection with this Agreement (the "Ancillary Documents"). The execution and
delivery of this Agreement and the Ancillary Documents by Tempus and the
ASSET PURCHASE AGREEMENT - PAGE 5
consummation by Sellers of the transactions contemplated by this Agreement and
the Ancillary Documents have been duly authorized by all necessary corporate
action on the part of Tempus. This Agreement and the Ancillary Documents have
been duly executed and delivered by Sellers and constitute the valid and binding
obligations of Sellers, enforceable against Sellers in accordance with their
terms. The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated by this Agreement and compliance
with the provisions of this Agreement will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or to the loss of any benefit under, or result in the creation of
any Liens upon, any of the properties or assets of Tempus under (i) the
incorporation deed or bylaws of Tempus, (ii) any loan or credit agreement, note,
bond, mortgage, indenture, lease or other agreement, instrument, permit,
concession, franchise or license applicable to Tempus or its properties or
assets, or (iii) any judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Tempus or its properties or assets. No consent,
approval, order or authorization of, or registration, declaration or filing
with, any Governmental Entity, is required by or with respect to Selling Parties
in connection with the execution and delivery of this Agreement and the
Ancillary Documents by Tempus or the consummation by Tempus of the transactions
contemplated by this Agreement and the Ancillary Documents.
(c) Litigation. There is no suit, action or legal proceeding pending
or, to the Knowledge of Selling Parties, threatened against or affecting Tempus
nor is there any judgment, decree, injunction, rule or order of any Governmental
Entity or arbitrator outstanding against Tempus.
(d) Brokers. No broker, investment banker, financial advisor or other
person, the fees and expenses of which will be paid by Selling Parties, is
entitled to any broker's, finder's, financial advisor's or other similar fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Selling Parties.
(e) Title to Properties; Liens. Tempus has good title to, or valid
leasehold interests in, all of the Acquired Assets. All of the Acquired Assets
are free and clear of all Liens, other than the Bancomext Liens, which shall be
released no later than March 7, 2003, as contemplated by Section 3.2 above. The
debt secured by the Bancomex Lien shall be no greater than U.S.$575,000.00 at
Closing. Upon consummation of the transactions proposed herein, HI Metals will
own the Acquired Assets free and clear of all Liens. In connection with Closing,
Tempus shall provide invoices that indicate whether the Acquired Assets are
imported and whether their sale relates to a first sale. The Acquired Assets
constitute all of the tangible assets and properties, real and personal, that
are used or useable in the conduct of the Activities as presently being
conducted, or as currently contemplated to be conducted in the future. None of
the Acquired Assets are required to be registered with any Mexican Public
Registry. Additionally, none of the Acquired Assets are subject to any Mexican
governmental program, such as Pitex or maquila, that could limit the
transferability of the Acquired Assets.
ASSET PURCHASE AGREEMENT - PAGE 6
(f) Owned and Leased Real Property.
(i) Schedule 5.1(f) contains a list and brief description of all
of the leased real property of Tempus (the "Real Property"). Tempus
owns no real property. The Real Property constitutes all real
properties used or occupied by Sellers in connection with the
Activities.
(ii) Except as set forth on Schedule 5.1(f), with respect to the
Real Property:
(A) All buildings and structures located on the Real
Property, as well as the operation and maintenance thereof,
comply in all material respects with all applicable legal
requirements, including without limitation, Environmental
Laws, and do not violate the rights of any third party and,
except as set forth in Schedule 5.1(f), all buildings and
structures are in good and operable condition, in all
material respects;
(B) There are no contracts, agreements, instruments,
licenses, commitments, leases or similar document, written
or oral, to which Selling Parties are a party, granting to
any one or more persons the right of use or occupancy of any
portion of the parcels of the Real Property;
(C) There are no persons (other than Tempus) in
possession of the Real Property; and
(g) Accounts Receivable; Inventories.
(i) All Accounts Receivable have arisen from bona fide arms
length transactions by Tempus in the ordinary course of the
Activities, Tempus has performed all of its obligations in connection
with such Accounts Receivable. Schedule 5.1(g) shall contain at
Closing a true and accurate aging schedule of all Accounts Receivable
of Tempus as of Closing.
(ii) The Inventories of Tempus (including raw materials, supplies
and other materials) are accurately reflected on Schedule 3.1(a)
hereto at Closing at the lower of cost or market in accordance with
Mexican GAAP. The Inventory is free of defects, is merchantable and
complies in all material respects with the Legal Requirements of all
countries in which the Finished Inventory is to be sold.
(h) Employee Relations.
(i) Schedule 5.1(h) hereto sets forth a list of (x) all
employees, commission salespersons and independent contractors of
Tempus as of December 31, 2002, (y) then current annual compensation
of, and a description of fringe benefits provided by Sellers to any
such employees, commission salespersons and independent contractors,
and (z) any increase, effective on or after December 31,
ASSET PURCHASE AGREEMENT - PAGE 7
2002, in the rate or manner of compensation of any employees,
commission salespersons or independent contractors.
(ii) Tempus has no employment, consulting, labor union or
collective bargaining agreement with any director, officer or
employee, except as set forth on Schedule 5.1(h).
(iii) Tempus is and has complied with all laws, rules and
regulations which relate to hiring, termination, wages, hours,
discrimination in employment, working conditions, including without
limitation, laws, rules and regulations relating to equal employment
opportunities, fair employment practices and occupational health and
safety, and collective bargaining and are not liable for any arrears
of wages or any Taxes (including penalties) for failure to so comply
with any of the foregoing.
(iv) Tempus has duly paid all taxes and contributions in
connection with their actual or former employees, including those
related with the Mexican Social Security Institute (IMSS), National
Housing Fund (INFONAVIT) and the Retirement Administration System
(SAR).
(v) There is no unfair labor practice charge or complaint against
Tempus pending before any Governmental Entity. There is no charge or
complaint against Tempus pending, or to the Knowledge of Selling
Parties, threatened under any Legal Requirement. There is no labor
strike, dispute or stoppage, or any union organizing campaign or
petition for certification actually pending or, to the Knowledge of
Selling Parties, threatened against or involving Tempus. No labor
grievance has been filed with Tempus, has arisen out of or under a
collective bargaining or other labor agreement and is pending, and no
claim therefor has been asserted. Tempus has not experienced any work
stoppage over the past two (2) years.
(i) Leased Personal Property. Schedule 5.1(i) contains a list of all
leases under which Tempus is a lessee of or holds or operates any personal
property owned by any third person, and true, complete and correct copies (or,
in the case of oral leases, written descriptions) of such leases have been
previously furnished to HI Metals.
(j) Condition of Acquired Assets. Except as set forth on Schedule
5.1(j), the Acquired Assets are in good operating condition and repair, taking
into account ordinary wear and tear. Selling Parties have regularly maintained
such Acquired Assets in the ordinary course and none of such Acquired Assets are
in need of maintenance or repair except for ordinary, routine maintenance and
repairs made necessary through ordinary wear and tear. Additionally, except as
set forth on Schedule 5.1(j), all of the Acquired Assets that were imported into
Mexico, are freely transferable and no Taxes or Permits are due or required as a
result of such transfer.
(k) Product Warranties. Schedule 5.1(k) hereto contains the forms of
express warranties and guaranties which have been used by Tempus in the
Activities. Tempus has not offered any different forms of express product
warranties and guaranties. No events have occurred
ASSET PURCHASE AGREEMENT - PAGE 8
or facts exist which could result in an increase to Tempus' warranty expenses.
The Finished Inventory does not violate any such warranties or guaranties.
(l) Compliance with Laws. Tempus has complied with and is in
compliance with all federal, state, local and foreign statutes, laws,
ordinances, regulations, rules, permits, judgments, orders or decrees or other
Legal Requirement applicable to Tempus or any of its respective properties,
assets, operations and activities, and there does not exist any basis for any
claim or default under or violation of any such statute, law, ordinance,
regulation, rule, judgment, order or decree or other Legal Requirement.
(m) Disclosure.
(A) Selling Parties have delivered or made available to
HI Metals complete and accurate copies of all documents
listed on the schedules delivered as a part hereof and all
other information requested by HI Metals pursuant hereto. No
representation or warranty of Sellers contained in this
Agreement or any statement in the Schedules hereto contains
any untrue statement. No representation or warranty of
Sellers contained in this Agreement or statement in the
Schedules hereto omits to state a material fact necessary in
order to make the statements herein or therein, in light of
the circumstances under which they were made, not
misleading.
(B) There is no fact known to Sellers which has
specific application to the Activities and which could have
a Material Adverse Effect on the Activities but which has
not been set forth in this Agreement or the Schedules
hereto.
(C) The disclosures in the Schedules hereto shall
relate only to the representations and warranties in the
Section of this Agreement to which they expressly relate and
to no other representation or warranty in this Agreement.
(D) In the event of any inconsistency between the
statements in the body of this Agreement and those in the
Schedules hereto (other than an exception expressly set
forth as such in the Schedules in relation to a specifically
identified representation or warranty), those in this
Agreement shall control.
SECTION 5.2 Representations and Warranties of Stockholders. As an
inducement to HI Metals to enter into this Agreement and to consummate the
transactions contemplated hereby, Stockholders hereby, jointly and severally,
represent and warrant to HI Metals that the following statements are true and
correct as of the date of this Agreement and will be true and correct with equal
force and effect as of the Closing Date:
(a) This Agreement has been duly executed and delivered by
Stockholders and is the legal, valid and binding obligation of each
Stockholder enforceable against each Stockholder in accordance with its
terms.
ASSET PURCHASE AGREEMENT - PAGE 9
(b) Neither the execution and delivery of this Agreement nor the
consummation of any of the transactions contemplated hereby or compliance
with or fulfillment of the terms, conditions and provisions hereof or
thereof, by Stockholders, will:
(i) conflict with, result in a breach of the terms, conditions or
provisions of, or constitute a default, an event of default or an
event creating rights of acceleration, termination or cancellation or
a loss of rights under, (1) any material note, instrument, agreement,
mortgage, lease, license, franchise, permit or other authorization,
right, restriction or obligation to which Stockholders are a party or
are bound, or (2) any court order to which Stockholders are a party or
to which any of the assets or properties of Stockholders are subject
or by which Stockholders are bound; or
(ii) require the approval, consent, authorization or act of, or
making by any Stockholder of any declaration, filing or registration
with, any person or entity.
(c) Stockholders have a participation of 100% in the capital stock of
Tempus as evidenced in the copy of the latest entry of Tempus' Stockholders
Registry Books to be delivered at Closing and shall continue to hold such
participation until Closing.
(d) Pachur has full authority and power to execute this Agreement and
the Ancillary Documents in Dallas, Texas, U.S.A on behalf of de Leon,
through a power of attorney that complies with all applicable Legal
Requirements.
SECTION 5.3 Representations and Warranties of HI Metals. HI Metals hereby
represents and warrants to Selling Parties that the following statements are
true and correct as of the date of this Agreement and will be true and correct
with equal force and effect as of the Closing Date:
(a) Organization, Standing and Corporation Power of HI Metals. HI
Metals is a corporation duly organized, validly existing and in good standing
under the laws of Mexico and has the requisite corporate power and authority to
carry on its activities as now being conducted.
(b) Authority; Noncontravention. HI Metals has all requisite corporate
power and authority to enter into this Agreement and to consummate the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement and the consummation of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate action on the
part of HI Metals. This Agreement has been duly executed and delivered by HI
Metals and constitutes a valid and binding obligation of HI Metals, enforceable
against HI Metals in accordance with its terms. The execution and delivery of
this Agreement does not, and the consummation of the transactions contemplated
by this Agreement and compliance with the provisions of this Agreement will not,
conflict with, or result in any violation of the incorporation deed or bylaws of
HI Metals. No consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity is required by or with
respect to HI Metals in connection with the execution
ASSET PURCHASE AGREEMENT - PAGE 10
and delivery of this Agreement or the consummation by HI Metals, of any of the
transactions contemplated by this Agreement.
(c) Brokers. Except for MHT Partners, no broker, investment banker,
financial advisor or other person, the fees and expenses of which will be paid
by HI Metals, is entitled to any broker's, finder's, financial advisor's or
other similar fee or commission in connection with the transactions contemplated
by this Agreement based upon arrangements made by or on behalf of HI Metals.
ARTICLE 6
COVENANTS RELATING TO CONDUCT OF ACTIVITIES
SECTION 6.1 Conduct of Activities by Selling Parties. During the period
from the date of this Agreement to the Closing Date, Selling Parties shall carry
on the Activities in the usual, regular and ordinary course in substantially the
same manner as heretofore conducted and, to the extent consistent therewith, use
all reasonable efforts to preserve intact Tempus' current organization, keep
available the services of their current officers and employees and preserve
their relationships with customers, suppliers, licensors, licensees,
distributors and others having dealings with them to the end that their
goodwill, ongoing activities and the Acquired Assets shall be unimpaired at the
Closing Date. Without limiting the generality of the foregoing, during the
period from the date of this Agreement to the Closing Date, without the prior
written consent of HI Metals, Tempus shall not:
(a) sell any Acquired Assets, other than Finished Inventory, in the
ordinary course of activities;
(b) mortgage, pledge or otherwise encumber any of the Acquired Assets;
(c) enter into any employment, independent contractor agreement or
arrangement relating to any of the Acquired Assets other than in the
ordinary course of the Activities consistent with past practice;
(d) ship or manufacture Finished Inventory or send invoices for
shipped Finished Inventory on an accelerated basis or expedited schedule;
or
(e) enter into any agreement to do any of the things described in
clauses (a) through (d) above.
SECTION 6.2 Other Actions. Selling Parties and HI Metals shall not
take any action that would result in (i) any of the representations and
warranties of such party set forth in this Agreement becoming untrue, or (ii)
any of the conditions to the Closing set forth in Article 8 not being satisfied.
ASSET PURCHASE AGREEMENT - PAGE 11
ARTICLE 7
ADDITIONAL AGREEMENTS
SECTION 7.1 Access to Information; Confidentiality. Selling Parties shall
afford to HI Metals, its financial advisors, attorneys and agents reasonable
access, during normal hours during the period prior to the Closing Date, to
Tempus' properties, books, contracts, licenses, commitments, personnel and
operating and other records and, during such period, the Selling Parties shall
furnish promptly to HI Metals all information concerning the activities,
properties and personnel of the Activities as HI Metals may reasonably request.
Each party shall treat in confidence all documents, materials and other
information which it shall have obtained regarding the other party during the
course of the negotiations leading to the consummation of the transactions
contemplated hereby (whether obtained before or after the date of this
Agreement), and, in the event the transactions contemplated hereby shall not be
consummated, each party will return to the other party all copies of nonpublic
documents and materials which have been furnished in connection therewith. Such
documents, materials and information shall not be communicated to any third
person (other than to the respective counsel, accountants, financial advisors,
engineers, or the lenders of any party). Prior to the Closing, HI Metals shall
not use any confidential information in any manner whatsoever except solely for
the purpose of fully understanding the Activities and sale and purchase of the
Acquired Assets, or the negotiation or enforcement of this Agreement or any
agreement contemplated hereby. The obligation of each party to treat such
documents, materials and other information in confidence shall not apply to any
information that (i) is or becomes lawfully available to such party from a
source other than the furnishing party, provided that such confidential
information is not known by the receiving party to be subject to another
confidentially agreement with or other obligation of secrecy to the furnishing
party, (ii) is or becomes generally available to the public other than as a
result of disclosure by such receiving party or its agents, or (iii) is required
to be disclosed under applicable law or judicial process, but only to the extent
it must be disclosed, and after notice to the furnishing party.
SECTION 7.2 Reasonable Efforts; Notification.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, the parties shall use all reasonable efforts to take, or cause
to be taken, all actions, and to do, or cause to be done, and to assist and
cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
reasonably practicable, the Closing, and the other transactions
contemplated by this Agreement, including (i) the obtaining of all
necessary actions or nonactions, waivers, consents and approvals from
Governmental Entities and the making of all necessary registrations and
filings (including filings with Governmental Entities, if any) and the
taking of all reasonable steps as may be necessary to obtain an approval or
waiver from, or to avoid an action or proceeding by, any Governmental
Entity, (ii) the obtaining of all necessary consents, approvals or waivers
from third parties, (iii) the defending of any lawsuits or other legal
proceedings, whether judicial or administrative, challenging this Agreement
or the consummation of any of the transactions contemplated by this
Agreement, including seeking to have any stay or temporary restraining
order entered by any court or other Governmental Entity vacated or
reversed, and (iv) the execution and delivery of any additional instruments
ASSET PURCHASE AGREEMENT - PAGE 12
necessary to consummate the transactions contemplated by, and to fully
carry out the purposes of, this Agreement.
(b) Selling Parties shall give prompt notice to HI Metals, and HI
Metals shall give prompt notice to Selling Parties, of (i) any
representation or warranty made by such party contained in this Agreement
that has become untrue or inaccurate in any material respect, or (ii) the
failure by it to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it under this Agreement;
provided, however, that such notification shall not, in and of itself,
excuse or otherwise affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the
parties under this Agreement.
SECTION 7.3 Fees and Expenses; Taxes.
(a) Except as set forth in Subsection 7.3(b):
(i) if the Closing and purchase of the Acquired Assets are
consummated, all fees and expenses (other than duties, taxes,
recordation fees and notary public fees, which shall be split by the
parties) incurred by HI Metals in connection with the Closing, this
Agreement and the transactions contemplated by this Agreement (the
"Expenses") shall be paid by HI Metals and all Expenses incurred by
Selling Parties shall be paid by Stockholders, and
(ii) if the Closing and purchases of the Acquired Assets are not
consummated, all Expenses shall be paid by the party incurring such
expenses.
(b) In the case of a breach of this Agreement by any party, all
reasonable fees and expenses incurred by the prevailing, nonbreaching party
or parties in connection with such breach, shall be paid by the party
breaching this Agreement.
(c) Selling Parties shall be responsible for the payment, if any, of
any and all importation taxes, value added taxes, and other related
expenses to the Mexican customs and tax authorities necessary to modify the
import regime on the Acquired Assets from temporary to definitive. Selling
Parties shall hold in trust and remit on a timely basis to the Governmental
Entities entitled thereto, all value added tax paid by HI Metals under
Section 3.2.
SECTION 7.4 Public Announcements. HI Metals and Selling Parties will
consult with each other before issuing, and will provide to each other the
opportunity to review and comment upon, any press release or other public
statements with respect to the transactions contemplated by this Agreement, and
shall not issue any press release or make any public statement prior to such
consultation and prior to the Closing Date, except as may be required by
applicable law, court process or obligations pursuant to any listing agreement
with any national securities exchange, in which case the party required to make
the release or announcement shall allow the other parties reasonable time to
comment on such release or announcement in advance of such issuance.
ASSET PURCHASE AGREEMENT - PAGE 13
SECTION 7.5 No Solicitation. The Selling Parties covenant and agree that
they will not and will not permit any of their affiliates, agents or
representatives (including, without limitation, investment bankers, attorneys
and accountants) to, directly or indirectly (a) solicit, initiate or encourage
submission of proposals or offers by, or (b) furnish any information with
respect to or otherwise cooperate in any way with, or participate in any
discussions or negotiations with, any Person with respect to any proposal
regarding the acquisition or purchase of all or a material portion of the
Acquired Assets, or any equity interest in Tempus or any combination with
Tempus. Sellers shall promptly notify HI Metals in writing of any inquiry or
proposal that is received concerning any of the foregoing transactions.
SECTION 7.6 Information for Tax Returns. The Selling Parties shall
cooperate with HI Metals after the Closing by providing HI Metals, promptly upon
request, such records and other information regarding the Acquired Assets and/or
Tempus as may reasonably be requested from time to time by HI Metals in
connection with the preparation or audit of its federal, state and local income
and other Tax returns, and audits, disputes, refund claims or litigation
relating thereto. In such connection, the Selling Parties will afford HI Metals'
representatives including independent tax advisers and others access to books
and records or relating to the Acquired Assets.
SECTION 7.7 Leasing Contract. Tempus shall cause the landlords under the
leases of the real property on which the Plant is located, and all related real
estate used by Tempus, to enter into leases with HI Metals, in form and
substance satisfactory to HI Metals, effective as of the Closing. Tempus does
not have any other contracts, licenses, commitments, leasings or similar
documents, whether written or oral, pursuant to which it has the right of usage
or occupancy of any portion of the property on which the Plant is located,
except as described in Schedule 7.7. There are no Persons different than Tempus
in possession of the property on which the Plant is located.
SECTION 7.8 Telephones. Tempus shall transfer and assign and irrevocably
authorizes HI Metals to obtain from the applicable telephone company, the
following telephone lines, which are all the lines currently working in Tempus'
name in connection with the Activities:
(a) (81) 83-36-36-13
(b) (81) 83-36-33-58
(c) (81) 83-36-81-15
(d) (81) 83-36-81-16
(e) (81) 83-36-81-18
(f) (81) 83-36-88-08
By virtue of the above, Tempus shall perform within ten (10) working days
following Closing, the necessary procedures before the various telephone
companies in order to transfer and assign such telephone numbers to HI Metals
and direct such telephone companies to begin invoicing their services to HI
Metals.
ASSET PURCHASE AGREEMENT - PAGE 14
SECTION 7.9 Radio Frequencies. Tempus shall transfer and assign and
irrevocably authorizes HI Metals to obtain from the applicable radio company,
the radio frequencies currently working in the name of Tempus in connection with
the Plant. By virtue of the above, Tempus shall perform within ten (10) working
days following Closing, the necessary procedures before the radio company in
order to transfer and assign such radio frequencies to HI Metals and direct such
radio company to begin invoicing its services to HI Metals.
SECTION 7.10 Insurance Coverages and Warranties. Tempus shall transfer and
assign to HI Metals the insurance policies (contract) and warranties it has over
the existing machinery and plant, and Tempus shall notify the insurance
companies about the sale by Tempus of the Acquired Assets in order to transfer
and assign insurance policies to HI Metals and direct such insurance companies
to begin invoicing the appropriate premiums payment to HI Metals if such
policies are kept in force by HI Metals. Tempus shall cause the insurance
policies to remain in effect at all times until their transfer to HI Metals is
completed and shall also provide that HI Metals will be the sole beneficiary of
such policies on and after the date of Closing. Tempus shall be the only party
liable in case it does not comply with this provision and any unforeseen event
damages or destroys the Acquired Assets.
SECTION 7.11 Employees. As a condition to HI Metals' agreement to purchase
the Acquired Assets, in order for the machinery, equipment and other Acquired
Assets to continue operating efficiently, Tempus agrees to communicate to all
the workers of Tempus that HI Services de Mexico, S.A. de C.V. ("HI Services")
has offered to hire all employees of Tempus following the Closing. Tempus shall
terminate the employment of the workers not wishing to be employed by HI
Services and pay all severance payments, fees, Taxes and other charges in
connection therewith. For those workers who agree to be employed by HI Services,
HI Services shall, within thirty (30) days following Closing, enter into an
individual labor contract with each such employee, in form and substance
satisfactory to HI Services, recognizing their seniority rights, according to
the period of time worked at Tempus. . HI Services shall take action required by
applicable law in connection with becoming the substitute employer of employees
of Tempus who desire to work for HI Services. Schedule 7.11 is a complete and
accurate list of all Tempus employees as of Closing, including a description of
the current positions and salary benefits, their commissions and any increase in
compensation to which Tempus has agreed to be effective after that date. Tempus
does not have a contract with any employees, consultancy firms, directors or
officers of Tempus not included in Schedule 7.11. Tempus has complied with all
the laws and regulations related to hiring, termination, wages, hours, employee
discrimination, working conditions, equal opportunity conditions, fair
employment practices, occupational health and safety and it is not responsible
for any delay in wages or any other employer obligation. There have not been any
unfair working practices at Tempus. There do not exist any pending demands from
workers of Tempus before any government entity. There are no labor strikes or
stoppages, or any union organizing campaign against Tempus and to the Knowledge
of Selling Parties, there are not any threatened claims, demands, actions or
proceedings with respect to the foregoing. Tempus has never experienced any
labor stoppage or any strike. From and after the date hereof through the Closing
Date or earlier termination of this Agreement, HI Services has the right to
enter into negotiations with any or all of the employees and independent
contractors of Tempus for their continued employment with HI Metals from and
after the Closing Date at compensation levels as HI Services and such employees
or contractors shall
ASSET PURCHASE AGREEMENT - PAGE 15
agree. Nothing in this Agreement shall be construed to require HI Services, or
any of its Affiliates, to hire or continue in effect any employee benefit plan
or arrangement of Tempus. HI Services shall have no liability whatsoever with
respect to any matter relating to the employment, contracting or termination of
such persons by Tempus prior to the Closing Date and the Selling Parties shall
defend and hold HI Services harmless from any labor controversy or claim brought
against HI Metals or HI Services by former employees of Tempus relating to
events that occurred prior to the Closing Date.
SECTION 7.12 Labor Unions. Tempus has established a Work Contact with
"Sindicato Industrial de Trabajadores de Nuevo Leon (Industral Labor Union of
Nuevo Leon State Workers) incorporated to "Federacion Nacional de Sindicators
Independientes" (National Federation of Independent Labor Unions), having an
excellent relationship with its leaders until the date of this Agreement, and it
has never had any problem or intent of stoppage or strike. The contract with the
labor union mentioned in this Section 7.12 is attached as Schedule 7.12. Pachur
shall participate in the necessary meetings (in consultation with HI Metals and
HI Services) with "Sindicato Industrial de Trabajadores de Nuevo Leon
(Industrial Labor Union of Nuevo Leon State Workers) incorporated to Federacion
Nacional de Sindicators Independientes" (National Federation of Independent
Labor Unions), entity which have good relationships with it in order to change
the existing work contract before Tempus and the mentioned Labor Union
ARTICLE 8
CONDITIONS PRECEDENT
SECTION 8.1 Conditions to Each Party's Obligation to Effect the Closing.
The respective obligations of each party to effect the Closing are subject to
the satisfaction, or waiver on or prior to the Closing Date of the following
conditions:
(a) Authorizations, Consents, and Approvals. Any authorizations,
consents, approvals, orders or waivers required to be obtained, and all filings,
notices or declarations required to be made with any Federal, foreign, state or
local governmental regulatory agency, shall have been obtained or made.
(b) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
Closing shall be in effect; provided, however, that each of the parties shall
have used such party's reasonable efforts to prevent the entry of any such
injunction or other order and to appeal as promptly as possible any injunction
or other order that may be entered.
SECTION 8.2 Conditions to Obligations of HI Metals. The obligations of HI
Metals to effect the Closing and to purchase the Acquired Assets pursuant to
this Agreement shall, at the option of HI Metals, be subject to the
satisfaction, on or prior to the Closing Date, of the following conditions:
(a) Representations and Warranties. The representations and warranties
of Selling Parties, set forth in this Agreement, in each case as of the date of
this Agreement, and as of the Closing Date as though made on and as of the
Closing Date, shall be true and correct, and HI
ASSET PURCHASE AGREEMENT - PAGE 16
Metals shall have received a certificate to such effect, signed on behalf of
Tempus by an authorized officer of Tempus with respect to representations and
warranties of Tempus, and signed by the Stockholders with respect to
representations and warranties of the Stockholders.
(b) Performance of Obligations of Selling Parties. Selling Parties
shall have performed all obligations required to be performed by them under this
Agreement at or prior to the Closing Date, and HI Metals shall have received a
certificate to such effect signed on behalf of Tempus by an authorized officer
of Tempus, as well as a certificate to such effect signed by the Stockholders
with respect to obligations of the Stockholders.
(c) No Suit or Judgment. There shall be no suit or proceeding
instituted to prohibit or otherwise challenge the legality or validity of the
transactions contemplated hereby, and there shall be no judgment, order or
decree by any court with proper jurisdiction prohibiting consummation of such
transactions.
(d) Opinion of Counsel. HI Metals shall have received written
opinions, dated as of the Closing Date, from counsel for Selling Parties
substantially in the form of Exhibit "D" hereto.
(e) Consents. Selling Parties shall have received consents to the
transactions contemplated hereby from the parties to contracts and debt
instruments listed in Schedule 8.2(e).
(f) Tempus Records. HI Metals shall have received from Tempus
certificates of the Secretary of Tempus, dated the Closing Date, in form and
substance satisfactory to HI Metals, as to (y) the resolutions of Stockholders,
authorizing the execution, delivery and performance of this Agreement and the
transactions contemplated hereby, and (z) incumbency and signatures of the
officers of Tempus executing the Agreement and any related documents.
(g) Material Adverse Change. From and after the date of this
Agreement, there shall not have been any Material Adverse Change to any of the
operations, financial condition, revenues or properties of Tempus.
(h) Board and Lender Authorizations. HI Metals shall have received
approval of the sale and purchase of the Acquired Assets by the Board of
Directors of HI Metals, as well as any authorizations, consents or waivers
required to be obtained by HI Metals from their lenders in order for HI Metals
to enter into the transactions made the subject of this Agreement.
(i) Delivery of Notarial Instruments and Invoices. Subject to the
terms of this Agreement, Selling Parties shall have delivered, at their sole
cost and expense, and shall have caused such instruments of transfer or
conveyance, and of assignment, as are reasonably requested by HI Metals to vest
in HI Metals good and marketable title to the Acquired Assets, including,
without limitation, a notarial instrument, executed by a properly empowered
notary public and Tempus, evidencing the transfer of the Real Property and
invoices, executed by Selling Parties, evidencing the transfer of the Acquired
Assets other than the Real Property.
ASSET PURCHASE AGREEMENT - PAGE 17
SECTION 8.3 Conditions to Obligations of Selling Parties. The obligations
of Selling Parties to effect the Closing and to transfer and convey the Acquired
Assets pursuant to this Agreement shall, at the option of Selling Parties, be
subject to the satisfaction, on or prior to the Closing Date, of the following
conditions:
(a) Representations and Warranties. The representations and warranties
of HI Metals set forth in this Agreement, in each case as of the date of this
Agreement, and as of the Closing Date as though made on and as of the Closing
Date, shall be true and correct, and Selling Parties, shall have received a
certificate to such effect signed on behalf of HI Metals by an authorized
officer of HI Metals.
(b) Performance of Obligations of HI Metals. HI Metals shall have
performed all obligations required to be performed by it under this Agreement at
or prior to the Closing Date, and Selling Parties shall have received a
certificate to such effect, signed on behalf of HI Metals by an authorized
officer of HI Metals.
(c) No Suit or Judgment. There shall be no suit or proceeding
instituted to prohibit or otherwise challenge the legality or validity of the
transactions contemplated hereby, and there shall be no judgment, order or
decree by any court with proper jurisdiction prohibiting consummation of such
transactions.
SECTION 8.4 Frustration of Closing Conditions. HI Metals and Selling
Parties may not rely on the failure of any condition set forth on this Article 8
to be satisfied, if such failure was caused by such party's failure to act in
good faith or to use its reasonable efforts to cause the Closing to occur.
ARTICLE 9
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.1 Termination. This Agreement may be terminated at any time
prior to the Closing Date without liability:
(a) by the unanimous written consent of HI Metals and Selling Parties;
(b) by HI Metals or Selling Parties if the Closing shall not have
occurred on or before March 31, 2003, unless the failure to effect the
Closing is the result of a material breach of this Agreement by the party
seeking to terminate;
(c) by HI Metals or Selling Parties:
(i) if any Governmental Entity shall have issued an order, decree
or ruling or taken any other action permanently enjoining, restraining
or otherwise prohibiting the Closing and such order, decree, ruling or
other action shall have become final and nonappealable as long as the
party seeking to terminate is not liable for the issuance of such
order, decree, ruling or action; and
ASSET PURCHASE AGREEMENT - PAGE 18
(ii) in the event of any breach by HI Metals, on the one hand, or
by Selling Parties, on the other hand, of its or his respective
agreements, representations or warranties contained herein and the
failure of such party to cure such breach within ten (10) days after
receipt of notice from any other party requesting such breach to be
cured.
SECTION 9.2 Effect of Termination. In the event of termination of this
Agreement as provided in Section 9.1, this Agreement shall forthwith become void
and have no effect, without any liability or obligation on the part of any
party, other than the provisions of this Section 9.2 and Article 9. In the event
that HI Metals or Selling Parties shall terminate this Agreement pursuant to
Section 9.1(b) or (c) hereof, the rights of the parties, as the case may be, to
pursue any and all rights they may have at law or equity or hereunder shall
survive unimpaired.
SECTION 9.3 Amendment. This Agreement may be amended by the parties at any
time prior to the Closing Date by an instrument in writing signed on behalf of
each of the parties hereto.
SECTION 9.4 Extension: Waiver. At any time prior to the Closing Date, the
parties may (a) extend the time for the performance of any of the obligations or
other acts of the other parties, (b) waive any inaccuracies in the
representations and warranties contained in this Agreement or in any document
delivered pursuant to this Agreement, or (c) waive compliance with any of the
agreements or conditions contained in this Agreement. Any agreement on the part
of a party to any such extension or waiver shall be valid only if set forth in
an instrument in writing signed on behalf of such party. The failure of any
party to this Agreement to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of those rights.
ARTICLE 10
INDEMNIFICATION
SECTION 10.1 Indemnification.
(a) By the Selling Parties. Subject to the limitations set forth in
Section 10.1(e), from and after the Closing Date, the Selling Parties, shall,
jointly and severally, (i) indemnify and hold harmless the HI Metals and its
Affiliates and their officers, directors, employees, affiliates, successors and
assigns and attorneys from and against any and all losses which it or such
persons may suffer or incur, resulting from, related to or arising out of (a)
any misrepresentation or breach of warranty of the Selling Parties contained in
or made pursuant to this Agreement; (b) any breach by the Selling Parties of any
of their agreements or obligations contained in or made pursuant to this
Agreement; (c) any liability or obligation arising out of the Activities as
conducted prior to the Closing; (d) any losses or costs of defending against any
claims which may be made against HI Metals and its Affiliates by any Person
claiming violations by any Selling Party of any local, state, or federal law
relating to the employment relationship, including, but not limited to, wages,
hours, concerted activity, nondiscrimination, occupational health and safety and
the payment and withholding of Taxes, where such claims arise out of
circumstances occurring prior to the Closing Date; or (e) any actual or
threatened violation of or non-compliance with, or remedial obligation arising
under, any Environmental Laws arising from any event, condition, circumstance,
activity, practice, incident, action
ASSET PURCHASE AGREEMENT - PAGE 19
or plan existing or occurring prior to the Closing relating in any way to the
Acquired Assets, the Plant or Tempus; and (ii) reimburse HI Metals and each of
its respective officers, directors, employees and attorneys for any and all
reasonable fees, costs and expenses related thereto (including without
limitation, reasonable legal expenses) ((i) and (ii), collectively, "HI Metals'
Indemnifiable Losses").
(b) By HI Metals. From and after the Closing Date, HI Metals shall (i)
indemnify and hold harmless the Selling Parties and their respective officers,
directors, employees, affiliates, successors and assigns, from and against any
and all losses, which any of them may suffer or incur, resulting from, related
to or arising out of (a) any misrepresentation or breach of warranty of HI
Metals which is contained in or made pursuant to this Agreement; (b) any breach
by HI Metals of any of its agreements or obligations contained in or made
pursuant to this Agreement; and (c) any and all claims or litigation arising out
of any of the foregoing; and (ii) reimburse each Stockholder and his or her
heirs, personal representatives, administrators, trustees, agents or employees,
and Sellers and their officers, directors, employees and attorneys for any and
all reasonable fees, costs and expenses related thereto (including, without
limitation, reasonable legal expenses) ((i) and (ii), collectively, "Selling
Parties' Indemnifiable Losses").
(c) Direct Liability. In the event that the person or entity seeking
indemnification under this Article 10 (the "Indemnified Party") shall become
aware of an event which will give rise to or result in an Indemnifiable Loss,
he, she or it shall, within thirty (30) days thereafter, give written notice to
the party from whom indemnification under this Article 10 is sought (the
"Indemnifying Party") of the amount of the Indemnifiable Loss, together with
sufficient information to enable the Indemnifying Party to determine the
accuracy and nature of the claimed Indemnifiable Loss (the "Indemnity Notice").
The failure of the Indemnified Party to give the Indemnifying Party an Indemnity
Notice shall not release the Indemnifying Party from liability under this
Article 10; provided, however, that the Indemnifying Party shall not be liable
for losses which would not have been incurred but for the delay in the delivery
of, or the failure to deliver, the Indemnity Notice. Within thirty (30) days
after the receipt by the Indemnifying Party of the Indemnity Notice, the
Indemnifying Party shall either (i) pay to the Indemnified Party an amount equal
to the Indemnifiable Loss, or (ii) object to such claim, in which case the
Indemnifying Party shall give written notice to the Indemnified Party of such
objection together with the reasons therefor, it being understood that the
failure of the Indemnifying Party to so object shall preclude the Indemnifying
Party from asserting any claim, defense or counterclaim relating to the
Indemnifying Party's failure to pay any Indemnifiable Loss.
(d) Third Party Claim. In the event the facts giving rise to the claim
for indemnification under this Article 10 shall involve any action or threatened
claim or demand by any third party against the Indemnified Party (a "Third Party
Claim"), within the earlier of, as applicable, ten (10) days after receiving
notice of the filing of a lawsuit or thirty (30) days after receiving notice of
the existence of a claim, demand, suit or proceeding (each a "Claim") giving
rise to the claim for indemnification, the Indemnified Party shall send written
notice of such Claim to the Indemnifying Party (the "Claim Notice"). The failure
of the Indemnified Party to give the Indemnifying Party the Claim Notice shall
not release the Indemnifying Party from liability under this Article 10;
provided, however, that the Indemnifying Party shall not be liable for losses
incurred by the Indemnified Party which would not have been incurred but for the
delay in the delivery of, or the failure to deliver, the
ASSET PURCHASE AGREEMENT - PAGE 20
Claim Notice. Except as set forth below, the Indemnifying Party shall be
entitled to defend such Claim in the name of the Indemnified Party at his or its
own expense and through counsel of his or its own choosing. The Indemnifying
Party shall give the Indemnified Party notice in writing within ten (10) days
after receiving the Claim Notice from the Indemnified Party in the event the
Claim is one involving an instituted suit or proceeding, or otherwise within
thirty (30) days, of his or its intent to do so. If the Indemnifying Party
chooses to defend or prosecute a Third Party Claim, all the Indemnified Parties
shall cooperate in the defense or prosecution thereof. Such cooperation shall
include the retention and (upon the Indemnifying Party's request) the provision
to the Indemnifying Party of records and information that are reasonably
relevant to such Third Party Claim, and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder. Whether or not the Indemnifying Party assumes the
defense of a Third Party Claim, the Indemnified Party shall not admit any
liability with respect to, or settle, compromise or discharge, such Third Party
Claim without the Indemnifying Party's prior written consent, which consent
shall not be unreasonably withheld, delayed or conditioned. The Indemnified
Party may elect, by notice in writing to the Indemnifying Party, to continue to
participate through his or its own counsel, at his or its expense, but the
Indemnifying Party shall have the right to control the defense of the Claim with
counsel reasonably acceptable to the Indemnified Party. In the event that the
Indemnifying Party is controlling the defense of the Claim and shall have
negotiated a settlement thereof, which proposed settlement is final and
unconditional as to the parties thereto and contains an unconditional release of
the Indemnified Party, without the Indemnified Party being liable for damages of
any kind or nature or being otherwise required to pay any amount of money to any
third party and does not include the imposition of any restrictions on the part
of the Indemnified Party or require that the Indemnified Party make an admission
of guilt or liability or deliver a confession of judgment, or any other
non-financial obligation which, in the reasonable judgment of the Indemnified
Party, renders such settlement unacceptable, the Indemnified Party shall consent
to such settlement.
(e) Limitation of Indemnity. Anything herein to the contrary
notwithstanding, neither party shall be entitled to make a claim for indemnity
with respect to a misrepresentation or breach of warranty after the statute of
limitation period for such claim has expired.
SECTION 10.2 Right to Set-Off. To secure the indemnification provided for
in Section 10.1(a) hereof, and to compensate HI Metals for any claim having as
its basis the indemnification provided for in Section 8.1(a) hereof, HI Metals
shall have a right of set-off from any sum due by HI Metals or its Affiliates to
any of the Selling Parties or their Affiliates, including sums due under this
Agreement, and the other documents, agreements, contracts and instruments
executed in connection with the transactions contemplated hereby or contemplated
by this Agreement.
ARTICLE 11
GENERAL PROVISIONS
SECTION 11.1 Survival of Representations, Warranties and Covenants. The
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Closing Date.
ASSET PURCHASE AGREEMENT - PAGE 21
SECTION 11.2 Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally when received if or sent by overnight courier
(providing proof of delivery) to the parties at the following addresses (or at
such other address for a party as shall be specified by like notice):
(a) if to HI Metals, to:
HI Metals, S.A. de C.V.
c/o Home Interiors & Gifts, Inc.
1649 Frankford Road West
Carrollton, Texas 75007
Attn: Michael D. Lohner
with a mandatory copy to:
William E. Swart, Esq.
Bell Nunnally & Martin LLP
3232 McKinney Avenue, Suite 1400
Dallas, Texas 75204-2429
(b) if to Selling Parties or the Stockholders to:
Tempus Corporation, S.A. de C.V.
Rio Moctezuma numero 110 interior 8
Colonia del Valle
San Pedro Garza Garcia, N.L.
C.P. 66220
Attn: Miguel Angel Pachur Salgado
and
Miguel Angel Pachur Salgado
c/o Tempus Corporation, S.A, de C.V.
Rio Moctezuma numero 110 interior 8
Colonia del Valle
San Pedro Garza Garcia, N.L.
C.P. 66220
ASSET PURCHASE AGREEMENT - PAGE 22
and
Oscar Guadalupe de Leon Ulloa
c/o Tempus Corporation, S.A, de C.V.
Rio Moctezuma numero 110 interior 8
Colonia del Valle
San Pedro Garza Garcia, N.L.
C.P. 66220
with a mandatory copy to:
C.P. Raul Martinez Gandara
Rio Moctezuma numero 110 interior 8
Colonia del Valle
San Pedro Garza Garcia, N.L.
C.P. 66220
and
Lic. Carlos Arias Lozano
Nicolas Bravo numero 7171 Sur
Colonia Maria Luisa
Monterrey, N.L.
C.P. 64040
SECTION 11.3 Definitions. For purposes of this Agreement, the following
terms shall have the following respective meanings:
"Acquired Assets": As defined in Section 3.1 hereof.
"Activities": As defined in Section 3.1 hereof.
"Affiliate": Any corporation, partnership, limited liability company or
other entity of which 25% of the equity or voting power is controlled
directly or indirectly by Home Interiors & Gifts, Inc., a Texas
corporation ("HIG"), or another Affiliate of HIG, or which owns 51% or
more of the equity of voting power of HIG (the "HIG Parent"), or which
is an Affiliate of the HIG Parent.
"Bankomext Authorization": As defined in Section 4.2 hereof.
"Bankomext Liens": As defined in Section 3.2 hereof.
"Claim": As defined in Section 10.1(d) hereof.
"Claim Notice": As defined in Section 10.1(d) hereof.
"Closing": As defined in Section 4.1 hereof.
"Closing Date": As defined in Section 4.1 hereof.
"Environmental Laws" means, as of the Closing Date, any applicable
treaties, laws, regulations, enforceable requirements, order, decrees
or judgments issued, promulgated or entered into by any Governmental
Entity, which relate to (x) pollution or protection of the
ASSET PURCHASE AGREEMENT - PAGE 23
environment or (y) Hazardous Materials generation, storage, use,
handling, disposal or transportation and any similar or implementing
state or local law, and all amendments or regulations promulgated
thereunder.
"Expenses": As defined in Section 7.3(a) hereof.
"Finished Inventory": As defined in Section 3.3(a) hereof.
"GAAP": means those generally accepted accounting principles and
practices, applied on a consistent basis, which are recognized as such
by the applicable financial accounting standards boards of the U.S. or
Mexico and/or their respective successors and which are applicable in
the circumstances as of the date in question.
"Governmental Entity": Any court or any foreign, federal, state,
municipal or other governmental department, commission, board, bureau,
agency, authority or instrumentality.
"Hazardous Materials" means all explosive or regulated radioactive
materials or substances, hazardous or toxic substances, wastes or
chemicals, petroleum or petroleum distillates, asbestos or asbestos
containing materials and all other materials or chemicals regulated
pursuant to any Environmental Law.
"HI Metals' Indemnifiable Losses": As defined in Section 10.1(a)
hereof.
"Indemnified Party": As defined in Section 10.1(c) hereof.
"Indemnifying Party": As defined in Section 10.1(c) hereof.
"Indemnity Notice": As defined in Section 10.1(c) hereof.
"Knowledge of Selling Parties" means, with respect to the Stockholders,
the current actual knowledge of a person, and with respect to Tempus,
current actual knowledge obtained (through the exercise of due
diligence) of any of its officers.
"Legal Requirement": means any federal, state, local, municipal,
foreign, international, multi-national, or other administrative order,
constitution, law, ordinance, principle of common law, regulation,
statute, or treaty as in effect on the date in question.
"Liens": All mortgages, deeds of trust, claims, liens, security
interests, pledges, leases, conditional sale contracts, rights of first
refusal, options, charges, liabilities, obligations, agreements,
easements, rights-of-way, powers of attorney, limitations,
reservations, restrictions and other encumbrances of any kind.
"Material Adverse Change" or "Material Adverse Effect": Any change
(individually or in the aggregate) that has a material adverse effect
on the activities, results of operations or financial condition of
Selling Parties that is likely to result in a cost, expense, charge or
liability equal to or greater than U.S. $10,000.00
"Order": Any judgment, writ, decree, injunction, order, stipulation,
compliance agreement or settlement agreement issued or imposed by,
entered into with, a Governmental Entity, whether or not having the
force of law.
"Permits": All permits, authorizations, certificates, approvals,
registrations, variances, exemptions, rights-of-way, franchises,
privileges, immunities, grants, ordinances, licenses and other rights
of every kind and character (a) under any (1) federal, state, local or
foreign statute, ordinance or regulation, (2) Order or (3) contract
with any Governmental Entity or (b) granted by any Governmental Entity.
"Person": An individual, partnership, joint venture, corporation,
company, limited liability company, bank, trust, unincorporated
organization, Governmental Entity or group.
"Purchase Price": As defined in Section 3.2 hereof.
ASSET PURCHASE AGREEMENT - PAGE 24
"Plant": As defined in Section 3.3(a) hereof.
"Real Property": As defined in Section 5.1(f) hereof.
"Taxes": Any federal, state, local or foreign income, sales, excise,
real or personal property franchise, capital stock, gross receipts,
license, payroll, employment, unemployment, social security, stamp,
occupation, intangible, estimated tax or other taxes, assessments,
fees, levies, imposts, duties, deductions or other charges of any
nature whatsoever (including, without limitation, interest and
penalties) imposed by any law, rule or regulation.
"Third Party Claim": As defined in Section 10.1(d) hereof.
SECTION 11.4 Interpretation; Governing Language. When a reference
is made in this Agreement to a Section, such reference shall be to a Section of
this Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. This Agreement is in
the English language only, and all communications between the parties relative
to this Agreement shall be conducted in the English language only. Any version
of this Agreement in the Spanish language, whether or not executed by the
parties, is and shall be prepared solely for the benefit of Sellers and
Stockholders and shall be considered a non-binding translation of the Agreement.
SECTION 11.5 Counterparts; Facsimiles. This Agreement may be executed
in one or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties. Facsimile
signatures shall be effective. SECTION 11.6......Entire Agreement: No Third
Party Beneficiaries. This Agreement constitutes the entire agreement and
supersedes all prior representations, agreements or understandings among the
parties with respect to the subject matter of this Agreement both written and
oral. This Agreement is not intended to confer upon any person other than the
parties any rights or remedies hereunder.
SECTION 11.7 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Texas, regardless of the
laws that might otherwise govern under applicable principles of conflict of laws
thereof; provided, however, that to the extent the law of Mexico expressly
provides for application of the law of Mexico to real property and personal
property situated within Mexico, the law of Mexico shall apply to that limited
extent. Each of the parties hereby agrees that the laws of the State of Texas
bear a reasonable relationship to the transaction. Buyer is a subsidiary of DWC
GP, Inc., a Texas corporation.
SECTION 11.8 Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise by Selling Parties without the prior
written consent of the other. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of, and be enforceable by, the
parties and their respective successors and assigns.
ASSET PURCHASE AGREEMENT - PAGE 25
SECTION 11.9 Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any Federal court located in the
State of Texas, County of Dallas, or in any Texas State court located in the
County of Dallas, this being in addition to any other remedy to which they are
entitled at law or in equity. In addition, each of the parties hereto (a)
consents to submit himself, herself or itself to the personal jurisdiction of
any Federal court located in the State of Texas, County of Dallas, or any Texas
State court located in the County of Dallas, in the event any dispute arises out
of this Agreement or any of the transactions contemplated by this Agreement, (b)
agrees that he, she or it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court and (c)
agrees that he, she or it will not bring any action relating to this Agreement
or any of the transactions contemplated by this Agreement in any court other
than a Federal court located in the State of Texas, County of Dallas, or a Texas
State court located in the County of Dallas.
SECTION 11.10 Exhibits and Schedules. Any matter set forth on any
Schedule shall be deemed set forth on all other Schedules to the extent
relevant. Except when the context requires otherwise, any reference in this
Agreement to any Article, Section, clause, Schedule or Exhibit shall be to the
Articles, Sections and clauses of, and Schedules and Exhibits to, this
Agreement. The words "include," "includes" and "including" are deemed to be
followed by the phrase "without limitation." Any reference to the masculine,
feminine or neuter gender shall include such other genders and any reference to
the singular or plural shall include the other, in each case unless the context
otherwise requires. All Exhibits and Schedules annexed hereto or referred to
herein are hereby incorporated in and made a part of this Agreement as if set
forth in full herein. When a reference is made in this Agreement to a Section,
Exhibit or Schedule, such reference shall be to a Section of, or an exhibit or
Schedule to, this Agreement unless otherwise indicated.
SECTION 11.11 Arbitration. The parties agree that except as otherwise
set forth in this Agreement, any disputes arising out of or in connection with
this Agreement shall be finally settled by arbitration under the then current
rules of arbitration of the United Nations Commission for International Trade
Law ("UNCITRAL"). There shall be three arbitrators. Each of HI Metals and
Selling Parties shall select one arbitrator at will, and the third arbitrator
shall be selected by the two arbitrators previously chosen by HI Metals and
Selling Parties. The arbitration shall take place in Dallas, Texas and shall be
conducted in English. The decision of the arbitrators shall be final and shall
be enforceable in any court of competent jurisdiction. The non-prevailing party
in arbitration will pay its own expenses, the fees of each arbitrator, the
administrative costs of the arbitration and the expenses, including reasonable
attorneys' fees and witness fees and costs, incurred by the other party to the
arbitration. Each party hereby irrevocable consents to the jurisdiction of the
UNCITRAL solely for the purposes of arbitration described in this Section 9.11.
SECTION 11.12 Currency and Payment. All amounts payable hereunder shall
be calculated and payable in United States dollars.
ASSET PURCHASE AGREEMENT - PAGE 26
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above.
TEMPUS:
TEMPUS CORPORATION, S.A. DE C.V.,
a Mexico corporation
By: /s/ MIGUEL ANGEL PACHUR SALGADO
-----------------------------------
Name: Miguel Angel Pachur Salgado
---------------------------------
Title: Legal Representative
--------------------------------
STOCKHOLDERS:
/s/ MIGUEL ANGEL PACHUR SALGADO
--------------------------------------
Miguel Angel Pachur Salgado
/s/ MIGUEL ANGEL PACHUR SALGADO
--------------------------------------
Oscar Guadalupe de Leon Ulloa
HI METALS:
HI METALS, S.A. DE C.V.,
a Mexican corporation
By: /s/ KENNETH CICHOCKI
-----------------------------------
Name: Kenneth Cichocki
---------------------------------
Title: Senior Vice President of
Finance and Chief Financial
Officer
--------------------------------
ASSET PURCHASE AGREEMENT - PAGE 27
EXHIBIT "C"
[HERNANDEZ, MAYORQUIN, RODRIGUEZ Y CASTILLO, S.C. ABOGADOS LETTERHEAD]
Guadalajara, Jal., February 7, 2003
HI Ceramics
1649 Frankford Road West
Carrollton, Texas 75007
Attn: Michael D. Lohner
Re: Ceramica y Vidrio de Nuevo Leon, S.A. de CV.
Ladies and Gentlemen:
We have acted as counsel for Ceramica y Vidrio de Nuevo Leon, S.A. de C.V.
("Ceramica") in connection with that certain Asset Purchase Agreement (together
with all schedules and exhibits thereto, the "Agreement") dated as of January
24, 2003, among Ceramica, Maquiladora Produr, S.A. de C.V. ("Produr"),
Industrias Tromex Corporation, S.A. de C.V. ("Tromex", Produr and Tromex,
collectively, the "Original Owners"), and HI Ceramics, S.A. de C.V., ("HI
Ceramics"), pursuant to which the Original Owners have sold to Ceramica the
Acquired Assets, and Ceramica has purchased from the Original Owners the
Acquired Assets. We are providing this opinion pursuant to Section 7.2(e) of the
Agreement. Capitalized terms utilized and not otherwise defined herein have the
meanings given to them in the Agreement.
In connection with the delivery of this opinion, we have examined originals
or copies, certified or otherwise identified to our satisfaction, of the
following documents (the "Transaction Documents");
1. the Asset Purchase Agreement;
2. the Mortgages releases from HI Ceramics and Xanadu;
3. the Public Deeds evidencing the transfer of the Real Estate;
4. the Termination Agreements executed as of this date related to the
described transaction;
5. the Closing Agreement.
HERNANDEZ, MAYORQUIN, RODRIGUEZ y CASTILLO, S.C.
In connection with this Opinion Letter, we have also examined originals or
copies, certified or otherwise identified to our satisfaction as true copies, of
the corporate records of Ceramica, as amended to date, Ceramica's minute books
and stock transfer books, and such additional corporate records, agreements and
other instruments and certificates or comparable documents of public officials
and/or of officers and representatives of Ceramica, and have made such
inquiries of such officers and representatives as we have deemed relevant and
necessary, as the basis for the opinions hereinafter set forth. In such
examination, we have assumed: (i) the genuineness of all signatures, other than
the signatures on behalf of Ceramic; (ii) the authenticity of all documents or
other papers submitted to us as originals, and the conformity to authentic
original documents of all documents or other papers submitted to us as
certified, conformed or photostatic copies thereof; and (iii) the legal capacity
of each natural person executing the Transaction Documents. In addition, we are
unaware of the existence of any fraud or dishonesty with respect to any of the
matters relevant to our opinions and, accordingly, we understand that no fraud
or dishonesty exists with respect to any of the matters relevant to our
opinions.
With respect to those matters which are stated herein to be "to our
knowledge," our opinions are limited to our current actual knowledge. Such
knowledge does not include constructive knowledge; instead, it is limited to the
conscious awareness of the lawyers in our firm who have participated in the
negotiation and consummation of the transactions contemplated by the Agreement.
On the basis of and in reliance upon the foregoing and in reliance of the
information provided by Ceramica, and subject to the assumptions,
qualifications, and limitations set forth herein, we are of the opinion that:
1. Ceramica is a corporation duly organized, validly existing and in good
standing under the laws of Mexico, and Ceramica has all requisite power and
authority to own its assets and to carry on its business.
2 Ceramica has all requisite corporate power and authority to execute,
deliver and perform its obligations under the Transaction Documents to which
Ceramica is a party; the execution and delivery of the Transaction Documents and
the other agreements, documents and instruments contemplated thereby to be
executed and delivered by it (collectively, the "Ancillary Documents") and the
consummation of the transactions contemplated thereby have been duly authorized
and approved by the board of directors of Ceramica and by all other necessary
corporate action on the part of Ceramica; and the Transaction Documents have
been duly executed and delivered by Ceramica, to the extent they are parties
thereto, and constitute valid and binding obligations of Ceramica, enforceable
in accordance with their respective terms.
HERNANDEZ, MAYORQUIN, RODRIGUEZ y CASTILLO, S.C.
3. The execution and delivery of the Transaction Documents, as applicable,
by Ceramica do not, and consummation by Ceramica of the transactions
contemplated by the Transaction Documents will not: (A) to our actual knowledge,
violate any law, rule, order or regulation applicable to Ceramica; (B) conflict
with any provision of the Articles of Incorporation of Ceramica or to our actual
knowledge, result in the creation of any Lien upon any of the assets of Ceramica
pursuant to any mortgage, indenture, lease, agreement or other instrument to
which Ceramica is a party or by which Ceramica or any properly of Ceramica may
be bound; or (C) to our actual knowledge, except as set forth in Schedule 3.1(b)
to the Agreement, result in a default (with or without notice or lapse of time
or both), give rise to a right of termination, cancellation or acceleration,
result in the loss of a benefit or breach any prohibition or restriction
concerning assignment or transfer under any of the Material Agreements.
4. To our current actual knowledge, except as described in Schedule 3.1(e)
to the Agreement, Ceramica is not a party to, and the business and assets of
Ceramica are not the subject of or materially affected by, any pending or
threatened suit, claim, action or litigation by or with any party or any
administrative, arbitration or other governmental proceeding, investigation or
inquiry, which, if determined adversely to Ceramica, would severally or in the
aggregate have a Material Adverse Effect on Ceramica or prevent the consummation
of any of the transactions contemplated by the Agreement, nor is there any
judgment, decree, injunction, rule or order of any Governmental Entity or
arbitration outstanding against Ceramica which, insofar as reasonably can be
foreseen, could materially prevent the consummation of any of the transactions
contemplated in the Agreement.
5. As to questions of fact material to the opinions herein expressed, we
have, without verification of their accuracy, relied upon (i) the information
provided by Ceramica and (ii) the representations and warranties and factual
statements contained in the Transaction Documents and upon statements and
representations of the directors and officers of Ceramica and nothing has come
to our attention which has caused us to believe that such representations and
warranties are false in any respect or that would affect the opinions expressed
herein. In addition, as to certain matters, we have obtained and relied upon,
with your permission, such other certificates and assurances from Mexican state
authorities and public officials as we have deemed necessary, desirable, or
appropriate for the purpose of rendering the opinions expressed.
6. The opinions contained herein are subject to the following limitations
and qualifications:
HERNANDEZ, MAYORQUIN, RODRIGUEZ Y CASTILLO, S.C.
(a) The validity, binding effect and enforceability of, and the rights
and remedies set forth in and the effect of, the Transaction Documents may
be limited by and subject to (1) the effect of bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the rights and
remedies of creditors; (2) the effect of general principles of equity,
whether applied by a court of law or equity; (3) the possible
unenforceability of provisions requiring indemnification for, or providing
exculpation, release, or exemption from liability for, action or inaction,
to the extent such action or inaction involves negligence or willful
misconduct or to the extent otherwise contrary to public policy; (4) the
possible unenforceability of provisions purporting to require arbitration
of disputes; (5) the possible unenforceability of provisions prohibiting
competition, the solicitation or acceptance of customers, of business
relationships, or of employees, the use or disclosure of information, or
other activities in restraint of trade; (6) the possible unenforceability
of provisions that waivers or consents by a party may not be given effect
unless in writing or in compliance with particular requirements or that a
person's course of dealing, course of performance, or the like or failure
or delay in taking action may not constitute a waiver of related rights or
provisions or that one or more waivers may not under certain circumstances
constitute a waiver of other matters of the same kind; (7) the effect of a
course of dealing, course of performance, or the like, that would modify
the terms of an agreement or the respective rights or obligations of the
parties under an agreement; (8) the possible unenforceability of provisions
that enumerated remedies are not exclusive or that a party has the right to
pursue multiple remedies without regard to other remedies elected or that
all remedies are cumulative; (9) the possible unenforceability of
provisions that determinations by a party or a party's designee are
conclusive; (10) the possible unenforceability of provisions permitting
modifications of an agreement only in writing; (11) the possible
unenforceability of provisions that the provisions of an agreement are
severable; (12) the possible unenforceability of provisions permitting the
exercise, under certain circumstances, of rights without notice or without
providing opportunity to cure failures to perform; (13) the possible
unenforceability of provisions which provide for the waiver of any right to
trial by jury; (14) the possible unenforceability of provisions which
provide for or otherwise select or elect choice of venue or jurisdiction;
and (15) the possible unenforceability of provisions which provide for or
otherwise select or elect choice of law.
(b) Based on the information provided by Ceramica, we understand the
enforceability of the Transaction Documents against III Ceramics, Ceramica,
Produr and Tromex and that HI Ceramics, Ceramica, Produr and Tromex have
all requisite power and authority and have taken all necessary action to
authorize, execute, and deliver the Transaction Documents.
HERNANDEZ, MAYORQUIN, RODRIGUEZ Y CASTILLO, S.C.
(c) We express no opinion with respect to any violation of law,
statute, judgment, decree, order, rule or regulation which results from the
legal or regulatory status of facts relating specifically to HI Ceramics or
any of its affiliates.
(d) We have assumed the absence of agreements or understandings
between Ceramica and the HI Ceramics (other than those, if any, to which
we have current actual knowledge) that would modify the terms of the
Transaction Documents or the respective rights and obligations of the
parties thereunder.
In rendering the opinions contained herein, we express no opinion with
respect to any other law other than applicable Mexican laws.
We are authorize to practice law under Mexican law, and we express no
opinion as to any questions of law other than with respect to laws of Mexico in
effect on the date hereof, and no opinion is expressed herein as to any other
matters governed by the laws of any other jurisdiction.
The opinions expressed herein are specific to the matters and documents
referred to herein, and no opinion may be inferred beyond the opinions stated.
The opinions expressed herein are as of the date hereof, and we disclaim any
obligation to update or modify such opinions because of any changes in the law
or undisclosed information by Ceramica or represented facts relevant thereto.
This opinion is furnished to you solely for your benefit in connection with the
transactions contemplated by the Agreement and may not be relied upon in any
manner, for any other purposes or by any other person or entity, without the
prior written consent of this firm.
Very truly yours,
HERNANDEZ, MAYORQUIN, RODRIGUEZ Y CASTILLO, S.C.
/s/ HERNANDEZ, MAYORQUIN, RODRIGUEZ Y CASTILLO, S.C.