-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HmUbIb5BajvtYNIvGSsH3uDGOQMkq6Rwhxl8ddi3in0ndfrHru/mrP+RY0oPNj6z hd7zJiPMG8bOumzVWI6PiA== 0000950170-00-000352.txt : 20000309 0000950170-00-000352.hdr.sgml : 20000309 ACCESSION NUMBER: 0000950170-00-000352 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000222 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000308 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DEVCON INTERNATIONAL CORP CENTRAL INDEX KEY: 0000028452 STANDARD INDUSTRIAL CLASSIFICATION: CONCRETE GYPSUM PLASTER PRODUCTS [3270] IRS NUMBER: 590671992 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-07152 FILM NUMBER: 563333 BUSINESS ADDRESS: STREET 1: 1350 E NEWPORT CENTER DR STREET 2: STE 201 CITY: DEERFIELD BEACH STATE: FL ZIP: 33443 BUSINESS PHONE: 3054291500 MAIL ADDRESS: STREET 1: 1350 E NEWPORT CENTER DR STREET 2: SUITE 201 CITY: DEERFIELD BEACH STATE: FL ZIP: 33442 8-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (date of earliest event reported) FEBRUARY 22, 2000 DEVCON INTERNATIONAL CORPORATION - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) FLORIDA - -------------------------------------------------------------------------------- (State or other jurisdiction of incorporation) 000-07152 59-0671992 - ------------------------ --------------------------------- (Commission File Number) (IRS Employer Identification No.) 1350 EAST NEWPORT CENTER DRIVE, SUITE 201 DEERFIELD BEACH, FLORIDA 33442 - -------------------------------------------------------------------------------- (Address of principal executive offices, including Zip Code) Registrant's telephone number, including area code (954) 429-1500 N/A - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On February 22, 2000, Devcon International Corp. (the "Company"), completed the disposition (the "Disposition") of its bulk cement terminals in the eastern Caribbean, valued at $19.6 million. The purchaser was Caricement, B.V., (the "Purchaser") an affiliate of Madrid-based Umar - Union Maritima Internacional S.A., ("Umar"). At the same time, the Company entered into an agreement with the Purchaser to sell its cement and ready-mix operations in Dominica for approximately $3.9 million (the "Dominica Transaction"). Devcon will ultimately recognize a multi-million dollar gain on the transactions, after certain contingency charges, given that the net book value of the assets being sold is approximately $6.3 million. The purchase price was determined based upon negotiations between the Company and the Purchaser. The Purchaser had previously paid the Company $1 million for an option to purchase the terminals and subsequently made an additional $6 million deposit. Part of this deposit is being applied to the Dominica Transaction. Supply agreements, which became effective on February 22, 2000, provide for Umar to deliver cement for use in the Company's ready-mix concrete and concrete block operations. The Company also entered into a one-year management agreement to operate the terminals and related cement bagging facilities for Umar. The Company and its subsidiaries are initially acting as Umar's distributor of bulk and bagged cement on the involved islands. The four cement terminals located on St. Thomas, St. Croix, St. Maarten and Antigua generate approximately $6.3 million in annual sales of bulk and bagged cement to third parties. The operations in Dominica generate approximately $4.9 million in annual sales of concrete and cement. The company expects to use a large portion of the proceeds to pay down debt and possibly buy back shares. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (a) Financial Statements of Business Acquired. Not applicable. (b) Pro Forma Financial Information. Note applicable. (c) Exhibits 2 EXHIBIT NUMBER DESCRIPTION - ---------------- ---------------------------------------------------------- 2.1 Asset Purchase Agreement, by and between Mapleton International B.V., a company organized under the laws of the Netherlands, trading under the name Caricement, their affiliate Union Maritima Internacional, S.A., a Spanish company, Devcon International Corp., a Florida corporation and its subsidiaries, V.I. Cement & Building Products, Inc., an entity formed and existing under the laws of the U.S. Virgin Islands, Bouwbedrijf Boven Winden, N.V., an entity formed and existing under the laws of the Netherlands Antilles, Antigua Cement, Ltd., an entity organized and existing under the laws of Antigua and Barbuda, Caribbean Construction & Development, Ltd., an entity organized and existing under the laws of the Commonwealth of Dominica and Caribbean Cement Carriers, Ltd., a Cayman Island company. 2.2 Stock Purchase Agreement dated February 22, 2000 among Caribbean Construction & Development, Ltd., a private company limited by shares organized under the laws of the Commonwealth of Dominica, West Indies, Devcon International Corp., a corporation organized under the laws of Florida, and Caricement Antilles N.V., a corporation organized under the laws of Curacao, Netherland Antilles. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. DEVCON INTERNATIONAL CORP. Dated: March 8, 2000 By:/s/ JAN NORELID ---------------------------------------- Name: Jan Norelid Its: VP Finance and Chief Financial Officer 3 EXHIBIT INDEX EXHIBIT DESCRIPTION ------- ----------- 2.1 Asset Purchase Agreement, by and between Mapleton International B.V., a company organized under the laws of the Netherlands, trading under the name Caricement, their affiliate Union Maritima Internacional, S.A., a Spanish company, Devcon International Corp., a Florida corporation and its subsidiaries, V.I. Cement & Building Products, Inc., an entity formed and existing under the laws of the U.S. Virgin Islands, Bouwbedrijf Boven Winden, N.V., an entity formed and existing under the laws of the Netherlands Antilles, Antigua Cement, Ltd., an entity organized and existing under the laws of Antigua and Barbuda, Caribbean Construction & Development, Ltd., an entity organized and existing under the laws of the Commonwealth of Dominica and Caribbean Cement Carriers, Ltd., a Cayman Island company. 2.2 Stock Purchase Agreement dated February 22, 2000 among Caribbean Construction & Development, Ltd., a private company limited by shares organized under the laws of the Commonwealth of Dominica, West Indies, Devcon International Corp., a corporation organized under the laws of Florida, and Caricement Antilles N.V., a corporation organized under the laws of Curacao, Netherland Antilles. EX-2.1 2 EXHIBIT 2.1 - -------------------------------------------------------------------------------- ASSET PURCHASE AGREEMENT BY AND AMONG UNION MARITIMA INTERNACIONAL, S.A., CARICEMENT (TOGETHER WITH ITS AFFILIATES AS THEY BECOME PARTIES TO THIS AGREEMENT FROM TIME TO TIME) AND DEVCON INTERNATIONAL CORP. AND CERTAIN OF ITS SUBSIDIARIES DATED AS OF NOVEMBER 22, 1999 - -------------------------------------------------------------------------------- TABLE OF CONTENTS PAGE ---- ARTICLE I PURCHASE OF ASSETS ---------------------------------------------------- 1.1 Purchase and Sale of Acquired Assets.................................1 1.2 Assigned Contracts and Assumed Obligations...........................2 1.3 Method of Conveyance.................................................2 1.4 Purchase Price.......................................................3 1.5 Option for Dominica Property.........................................3 ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE SELLERS ---------------------------------------------------- 2.1 Execution and Validity...............................................3 2.2 Organization and Qualification.......................................4 2.3 Capitalization of the Sellers........................................4 2.4 Absence of Violations................................................4 2.5 Consents.............................................................4 2.6 No Intent to Defraud.................................................5 2.7 Financial Statements.................................................5 2.8 No Material Adverse Change...........................................5 2.9 Tax Matters..........................................................6 2.10 Litigation and Governmental Matters..................................6 2.11 Compliance...........................................................6 2.12 Permits..............................................................7 2.13 Environmental Compliance.............................................7 2.14 Contracts and Other Agreements.......................................7 2.15 Real Estate..........................................................8 2.16 Fixed Assets.........................................................8 2.17 Intellectual Property................................................8 2.18 Title to Assets; Liens...............................................8 2.19 Significant Customers................................................8 2.20 Employees............................................................8 2.21 Insurance............................................................9 2.22 Brokers..............................................................9 2.23 Acquired Assets......................................................9 2.24 Improvements.........................................................9 2.25 Powers of Attorney...................................................9 (i) ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS ---------------------------------------------------- 3.1 Execution and Validity..............................................10 3.2 Organization and Qualification......................................10 3.3 Absence of Violations...............................................10 3.4 No Intent to Defraud................................................10 3.5 Brokers.............................................................10 ARTICLE IV OTHER AGREEMENTS ---------------------------------------------------- 4.1 Conduct of Transactions Prior to the Closing........................11 4.2 Further Assurances..................................................11 4.3 Deliveries After Closing............................................12 4.4 Non-Competition.....................................................12 4.5 Public Announcements................................................12 4.6 Affected Employees..................................................13 4.7 Guarantee Obligations...............................................13 4.8 No Shop Provision...................................................13 4.9 Insurance...........................................................13 ARTICLE V CONDITIONS TO THE OBLIGATIONS OF THE PURCHASERS ---------------------------------------------------- 5.1 Representations and Warranties; Performance.........................14 5.2 Consents and Approvals..............................................14 5.3 Proceedings and Documents...........................................14 5.4 Creditor Consents...................................................14 5.5 Additional Agreements...............................................14 5.6 Other Documents.....................................................14 ARTICLE VI CONDITIONS TO THE OBLIGATIONS OF THE SELLERS ---------------------------------------------------- 6.1 Representations and Warranties; Performance.........................15 6.2 Consents and Approvals..............................................15 6.3 Proceedings and Documents...........................................15 6.4 Creditor Consents...................................................15 6.5 Additional Agreements...............................................15 6.6 Other Documents.....................................................15 (ii) ARTICLE VII CLOSING ---------------------------------------------------- 7.1 Closing.............................................................16 7.2 Deliveries at Closing...............................................16 ARTICLE VIII SURVIVAL OF TERMS; INDEMNIFICATION ---------------------------------------------------- 8.1 Survival............................................................18 8.2 Limitations.........................................................19 8.3 Third-Party Claims..................................................20 8.4 St. Maarten Contingency.............................................21 ARTICLE IX TERMINATION AND ABANDONMENT ---------------------------------------------------- 9.1 Methods of Termination..............................................22 9.2 Procedure Upon Termination..........................................22 ARTICLE X MISCELLANEOUS PROVISIONS ---------------------------------------------------- 10.1 Amendment and Modification..........................................23 10.2 Waiver of Compliance; Consents......................................23 10.3 Certain Definitions.................................................23 10.4 Notices.............................................................25 10.5 Assignment..........................................................26 10.6 Governing Law.......................................................26 10.7 Counterparts........................................................26 10.8 Headings............................................................27 10.9 Entire Agreement....................................................27 10.10 Binding Effect......................................................27 10.11 Arbitration.........................................................27 10.12 Injunctive Relief...................................................28 10.13 Delays or Omissions.................................................28 10.14 Severability........................................................29 10.15 Expenses............................................................29 10.16 Waiver of Jury Trial................................................29 (iii) SCHEDULES AND EXHIBITS SCHEDULE/EXHIBIT RESPONSIBILITY - ---------------- -------------- ("SELLERS" OR "PURCHASERS") --------------------------- 1.1(a) Acquired Assets..........................................S 1.2(a) Assigned Contracts and Assumed Obligations...............S 1.2(b) Assignment and Assumption Agreement .....................P 1.3(e) Real Property............................................S 1.4 Allocation of Purchase Price.............................S 2.2 Jurisdictions of Sellers.................................S 2.3 Capitalization...........................................S 2.4 Violations...............................................S 2.5 Consents.................................................S 2.7(a) Financial Statements (December 31).......................S 2.7(b) Financial Statements (June 30)...........................S 2.7(d) Change in Accounting Methods.............................S 2.8 Material Adverse Change..................................S 2.9 Tax Matters..............................................S 2.10 Litigation...............................................S 2.11 Compliance...............................................S 2.12 Permits..................................................S 2.13 Environmental............................................S 2.14 Contracts................................................S 2.15 Real Property............................................S 2.16 Fixed Assets.............................................S 2.17 Intellectual Property....................................S 2.18 Title/Liens..............................................S 2.19 Significant Customers....................................S 2.20 Employee Compensation....................................S 2.21 Insurance................................................S 2.24 Improvements.............................................S 3.3 Violations...............................................P 5.4 Creditor Consents........................................S 5.5(a) Distributorship Agreement................................S 5.5(b) Supply Agreement.........................................S 5.5(c) Management Agreement.....................................P 5.5(d) License Agreement .......................................S 7.1 Letter of Understanding..................................S (iv) ASSET PURCHASE AGREEMENT This ASSET PURCHASE AGREEMENT, dated as of the 22nd day of November, 1999, by and between MAPLETON INTERNATIONAL B.V., a company organized under the laws of The Netherlands with its registered address as Officia 1, De Boelelaan 7, 1083 HJ Amsterdam, The Netherlands, trading under the name Caricement ("CARICEMENT") (Caricement, together with its affiliates as they become parties to this Agreement from time to time are herein referred to as the "PURCHASERS" and each individually as a "PURCHASER"), their Affiliate UNION MARITIMA INTERNACIONAL, S.A., a Spanish company ("GUARANTOR"), DEVCON INTERNATIONAL CORP., a Florida corporation ("Devcon") and its subsidiaries, V.I. Cement & Building Products, Inc., an entity formed and existing under the laws of the U.S. Virgin Islands ("VICBP"), Bouwbedrijf Boven Winden, N.V., an entity formed and existing under the laws of the Netherlands Antilles ("BBW"), Antigua Cement, Ltd., an entity organized and existing under the laws of Antigua and Barbuda ("ACL"), Caribbean Construction & Development, Ltd., an entity organized and existing under the laws of the Commonwealth of Dominica ("CCD") and Caribbean Cement Carriers, Ltd., a Cayman Island company ("CCC"). VICBP, BBW, ACL, CCD and CCC are together referred to herein as the "SUBSIDIARIES." The Subsidiaries, together with Devcon, are herein referred to as the "SELLERS" and each individually as a "SELLER". Terms used herein and not otherwise defined shall have the meanings set forth in Section 9.3 hereof. This Asset Purchase Agreement is entered into to enable the Purchasers to acquire certain of the assets used by or in connection with the business of the Sellers which shall be defined as all activities relating to the operation of a bulk cement terminal, bagging of cement and transportation on the ocean of bulk cement in all of Sellers' locations (the "BUSINESS"). NOW, THEREFORE, in consideration of the representations and warranties, covenants and agreements set forth in this Agreement, and subject to the conditions contained herein, the Sellers and the Purchasers agree as follows: ARTICLE I PURCHASE OF ASSETS 1.1 PURCHASE AND SALE OF ACQUIRED ASSETS. Subject to the terms and conditions of this Agreement and subject to Section 7 hereof, at Closing (as hereinafter defined) the Sellers shall sell, assign, convey and transfer to the Purchasers, and the Purchasers shall purchase, free and clear of any and all Liens (as hereinafter defined), all of, and only, the assets relating to the Business specifically set forth in SCHEDULE 1.1(A) herein (the "ACQUIRED ASSETS") and the Permits identified in SCHEDULE 2.12, to the extent the same are transferable. The parties hereto specifically understand and agree that any and all inventory, cash, cash equivalents, receivables, including without limitation, all trade accounts receivable, notes receivable, receivables arising as a result of contracts in transit and receivables from manufacturers, insurance companies, service contract providers and any other vendors or suppliers of the Sellers (whether on accounts owed as incentive payments or otherwise) and any equipment used by the Sellers to transfer bulk cement from the terminals to the end user (collectively, the "EXCLUDED ASSETS") will remain the property of the Sellers. At Caricement's election, the purchase of the Acquired Assets from CCD may be structured as a stock purchase of CCD (the "STOCK PURCHASE OPTION") with the remainder of CCD's assets to be segregated and transferred to a legal entity to be formed and owned by the Sellers and, in such case, the parties shall agree to the use of a stock purchase agreement with customary terms and conditions. All fees, costs and expenses incurred by the Sellers in connection with the Stock Purchase Option, up to a maximum amount of $12,000, shall be borne by the Purchasers (except that any and all Taxes owing as a result of segregation of the remainder of CCD's assets from its Acquired Assets in order to effectuate the Stock Purchase Option shall be borne equally between the applicable Seller, on the one hand and the Purchasers, on the other hand). 1.2 ASSIGNED CONTRACTS AND ASSUMED OBLIGATIONS. The Purchasers shall assume and agree to pay, satisfy, perform and discharge, as the same shall become due, only those obligations of the Sellers arising from and after the Closing ("ASSUMED OBLIGATIONS") under Contracts, capital leases and operating leases of the Sellers specifically set forth in SCHEDULE 1.2(A) hereto and assigned to and assumed by the Purchasers (the "ASSIGNED CONTRACTS") pursuant to an Assignment and Assumption Agreement attached hereto as SCHEDULE 1.2(B) (the "ASSIGNMENT AND ASSUMPTION AGREEMENT"). Except as expressly set forth in this SECTION 1.2 and SCHEDULE 1.2(A), the Purchasers shall not assume or otherwise be responsible at any time for any liability, obligation, debt or commitment of the Sellers, whether absolute or contingent, accrued or unaccrued, asserted or unasserted, or otherwise, including, but not limited to, any liabilities, obligations, debts or commitments of the Sellers (a) incident to, arising out of or incurred with respect to this Agreement and the transactions contemplated hereby (except that any and all Taxes owing as a result of the transfer of any of the Acquired Assets shall be borne equally between the applicable Seller, on the one hand and the Purchasers, on the other hand) or (b) which otherwise arise or are asserted or incurred by reason of events, acts or transactions occurring, or the operation of the Sellers' Business prior to the Closing (the "EXCLUDED LIABILITIES"). The Sellers agree to satisfy and discharge the Excluded Liabilities as the same shall become due. The Purchasers' assumption of the Assigned Contracts and the Assumed Obligations shall in no way expand the rights or remedies of third parties against the Purchasers as compared to the rights and remedies which such parties would have had against the Sellers had this Agreement not been consummated. Obligations arising under the Assigned Contracts relating to periods prior to the Closing constitute Excluded Liabilities and are not part of the Assumed Obligations. 1.3 METHOD OF CONVEYANCE. Except as otherwise provided for in this Agreement, including pursuant to Section 7, the sale, transfer, conveyance and assignment by the Sellers of the Acquired Assets to the Purchasers in accordance with Section 1.1 hereof shall be effected at the Closing, each upon the execution and delivery to the applicable Purchasers of instruments of transfer including: (a) bills of sale in such form as shall be necessary and appropriate pursuant to the local law of the jurisdiction in which the applicable Acquired Assets are located, (b) an assignment of the Assigned Contracts and the Assumed Obligations in the form of the Assignment and Assumption Agreement, (c) transfer documents for the certificates of title for all of the Sellers' vehicles used in the Business in such form as shall be necessary and appropriate pursuant to the local law, (d) a license for the use of certain intellectual property included among the Sellers' Proprietary Rights relating to the Business, (e) deeds of transfer for the real property 2 used in the Business and identified in SCHEDULE 1.3(E), in such form as shall be necessary and appropriate pursuant to the local law of the jurisdiction of location of the real property and (f) an instrument transferring the Permits set forth in SCHEDULE 2.12 as being transferable, in such form as shall be necessary and appropriate pursuant to the Regulations of the Authority issuing the Permit or approving the assignment. 1.4 PURCHASE PRICE. In consideration for the conveyance of the Acquired Assets and in reliance on the representations and warranties, covenants and agreements of the Sellers contained herein and the documents contemplated hereby, the Purchasers agree to assume the Assigned Contracts and the Assumed Obligations and shall pay to the parties listed in SCHEDULE 1.4 hereto an amount equal to $ 22.0 million (the "PURCHASE PRICE"), of which $ 7.0 million has heretofore been paid. The Purchase Price shall be allocated among the Acquired Assets and the Assigned Contracts and the Assumed Obligations as agreed to by the parties hereto and set forth in SCHEDULE 1.4 hereto. Except as set forth in Section 7, the final $15.0 million of the Purchase Price shall be paid to the Sellers at the Closing by wire transfer of immediately available funds (the "CLOSING PAYMENT"). 1.5 OPTION FOR DOMINICA PROPERTY. Certain assets related to the Business of CCD are included in the Acquired Assets. Caricement shall have the option, on or prior to December 15, 1999, to elect to purchase all of the remaining assets of CCD (i.e. those related to the ready-mix business of CCD) from CCD in exchange for an additional purchase price of $1.5 million plus an amount equal to the working capital of CCD at such time. In the event Caricement so elects, Caricement and Devcon agree to act in good faith to enter into an Asset Purchase Agreement and to effectuate such transaction within thirty (30) days of Caricement notifying Devcon of its election to do so. At Caricement's election, the purchase of such remaining assets of CCD may be structured as a stock purchase of CCD and, in such case, the parties shall agree to the use of a stock purchase agreement with customary terms and conditions. ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE SELLERS The Sellers jointly and severally make the representations and warranties contained in this Article II to the Purchasers, intending that the Purchasers rely on each of such representations and warranties in order to induce the Purchasers to enter into and complete the transactions contemplated by this Agreement. 2.1 EXECUTION AND VALIDITY. The execution and delivery of this Agreement by each Seller has been authorized by its respective board of directors and shareholders, as appropriate. The execution and delivery of this Agreement by Devcon has been authorized by its board of directors. Each Seller has the full right, power and authority to enter into, and the ability to perform its obligations under, this Agreement and all other agreements and instruments contemplated by this Agreement. This Agreement has been duly executed and delivered by each Seller and is, and the other agreements and instruments to be executed and delivered by the 3 Sellers will be, when executed and delivered by them, legal, valid and binding agreements of the Sellers, enforceable in accordance with their respective terms. 2.2 ORGANIZATION AND QUALIFICATION. Each Seller (a) is duly organized, validly existing and in good standing under the laws of the U.S. Virgin Islands in the case of VICBP, the Netherlands Antilles in the case of BBW, Antigua and Barbuda in the case of ACL, the Commonwealth of Dominica in the case of CCD, the Cayman Islands in the case of CCC and Florida in the case of Devcon, their jurisdictions of incorporation, and (b) has all requisite corporate power and authority to carry on its business as is presently conducted and to own or lease and to operate its assets and business in the places where its business is now conducted and where its assets are now owned, leased or operated. SCHEDULE 2.2 consists of a true and complete list of the jurisdictions in which each Seller is duly qualified and in good standing as a foreign corporation, which are the only jurisdictions where the nature of the activities conducted by each Seller or the nature of the assets owned, leased or operated by each Seller requires such qualification and where the failure to so qualify would have a material adverse effect on the business, operations, properties or assets of any Seller. 2.3 CAPITALIZATION OF THE SELLERS. Except as set forth in SCHEDULE 2.3, all of the issued and outstanding shares of capital stock of each class of each Subsidiary (collectively, the "SHARES OF SUBSIDIARIES") are owned beneficially and of record by Devcon, free and clear of any Liens. All of the Shares of Subsidiaries are validly issued, fully-paid and non-assessable. None of the Subsidiaries (a) owns any shares of capital stock or other securities of any other corporation or other entity, or (b) is a partner in any partnership or a member of any joint venture. 2.4 ABSENCE OF VIOLATIONS. Except as set forth in SCHEDULE 2.4, neither the execution nor delivery of this Agreement or of any of the other agreements and instruments contemplated by this Agreement, nor the consummation of the transactions contemplated by this Agreement or such other agreements and instruments, will conflict with or result in the breach of any term or provision of, or constitute a default under, or result in the creation of, any Lien upon any of the Shares of Subsidiaries or the assets or properties of any Seller relating to the Business, or give any third-party the right to accelerate any obligation under any charter provision, bylaw, contract, agreement, indenture, deed of trust, instrument, order, law or regulation relating to the Business to which any Seller is a party or by which any Seller or any of their assets or properties relating to the Business are in any way bound or obligated. 2.5 CONSENTS. To the knowledge of the Sellers, and except as set forth in SCHEDULE 2.5, (a) no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any governmental authority is required on the part of the Sellers in connection with the transactions contemplated by this Agreement; and (b) no consent, approval, waiver or other action by any Person under any contract, instrument or other document is required or necessary for the execution, delivery and performance of this Agreement, or the consummation of the transactions contemplated by this Agreement. 2.6 NO INTENT TO DEFRAUD. None of the Sellers intend by executing and delivering this Agreement or any other document contemplated by this Agreement or by entering into any 4 transactions contemplated by this Agreement to hinder, delay or defraud any person or entity to whom any of the Sellers are indebted or will become indebted. 2.7 FINANCIAL STATEMENTS. The financial statements described in Sections 2.7(a) and 2.7(b) are sometimes referred to in this Agreement as the "FINANCIAL STATEMENTS". (a) SCHEDULE 2.7(A) consists of the unaudited income statements of the Sellers relating to the Business for the years ended on December 31, 1997 and 1998. (b) SCHEDULE 2.7(B) consists of the unaudited income statement of the Sellers relating to the Business for the six months ended on June 30, 1999. (c) The Financial Statements have been relied upon by the Sellers in connection with their operation of the Business. The aggregate expenses of the Business are accurately reflected in the Financial Statements, within ten percent of the actual expenses incurred in connection with the operation of the Business. (d) Except as set forth in SCHEDULE 2.7(D), there has been no material change in accounting methods made by any Seller with respect to the Business since January 1, 1997. 2.8 NO MATERIAL ADVERSE CHANGE. Except as disclosed in SCHEDULE 2.8, since June 30, 1999 there has not been: (a) Any material adverse change in the business, operations, affairs, properties, assets or financial condition of any Seller relating to the Business, nor has any event occurred or circumstance arisen, including without limitation, the implementation of any law or regulation, which has a reasonable likelihood of causing such a change. (b) Any damage, destruction or loss (whether or not covered by insurance) materially and adversely affecting the business, operations, affairs, properties, assets or financial condition of any Seller relating to the Business. (c) Any labor dispute, strike, work stoppage, union activity or any threatened union activity which is likely to materially and adversely affect the business or operations of any Seller relating to the Business. (d) Any material default (including, without limitation, any event that with the giving of notice or passage of time would cause a default), termination or threatened termination under, or amendment to, any Contract of any Seller relating to the Business. (e) Any theft, damage, destruction, casualty, loss, condemnation or eminent domain proceeding materially and adversely affecting any Seller relating to the Business, whether or not covered by insurance. (f) Any sale, assignment or transfer of any assets of any Seller relating to the Business, except in the ordinary course of business and consistent with past practices. 5 (g) Any waiver by any Seller of any material rights relating to any Seller's Business. (h) Any other material transaction, agreement, contract or commitment entered into by any Seller affecting any Seller's Business, except in the ordinary course of business and consistent with past practices. (i) Any agreement or understanding to do, or which results or is reasonably likely to result in, any of the actions, events or circumstances described in Sections 2.8(a) - 2.8(h). 2.9 TAX MATTERS. Except as set forth in SCHEDULE 2.9, each Seller has collected (as applicable) and paid all taxes that are due, including, without limitation, income taxes, estimated taxes, excise taxes, sales taxes, use taxes, gross receipts taxes, franchise taxes, turnover taxes, employment and payroll related taxes, withholding taxes, property taxes and import duties, whether or not measured in whole or in part by net income, and all deficiencies, or other additions to tax, interest and penalties owed by each Seller (individually a "TAX" and collectively the "TAXES") required to be collected and/or paid by each Seller, in each case, relating to the Business, the nonpayment of which is likely to materially and adversely affect the Business of the Sellers (other than Taxes the liability for which is adequately reserved for by the Sellers). Except as set forth in SCHEDULE 2.9, the Sellers have no knowledge of any deficiency for Taxes or claim for additional Taxes or interest on or penalties in connection with such Taxes, asserted, threatened to be asserted or proposed against any Seller relating to the Business. 2.10 LITIGATION AND GOVERNMENTAL MATTERS. Except as described in SCHEDULE 2.10, there is no action, suit or proceeding that has been (a) filed and served, whether or not purportedly on behalf of a Seller, at law or in equity, or before or by any governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, which is pending relating to the Business, or (b) to the knowledge of any Seller, (i) filed but not served or (ii) threatened, against (including, but not limited to, counterclaims), any Seller which involves the transactions contemplated by this Agreement or the possibility of any judgment or liability which if determined adversely to any Seller would result in a material adverse change in the Business of such Seller; and none of them is in default with respect to any final judgment, writ, injunction, decree, rule or regulation of any court or any federal, state, local or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, which would have a material adverse effect on the Business of such Seller. 2.11 COMPLIANCE. Except as set forth in SCHEDULE 2.11, none of the Sellers nor their respective Businesses, nor the use, operation or maintenance of any of their respective assets or properties, is in or constitutes a default under, or are in violation of or contravene, any applicable (including, without limitation, any Tax, health, environmental, employment, customs or interstate or international commerce) statute, law, ordinance, decree, order, rule or regulation of any governmental authority, domestic or foreign, except where such default, violation or contravention would not have a material adverse effect on the Business of such Seller. 6 2.12 PERMITS. Except as set forth in SCHEDULE 2.12, each Seller has all permits, licenses, certificates and other governmental authorizations relating to the Business (the "PERMITS"). Each of the Permits is listed in SCHEDULE 2.12. Except as set forth in SCHEDULE 2.12, each Permit is in full force and effect and, to the knowledge of the Sellers, no suspension or cancellation of any Permit has been threatened and there is no basis for believing that any Permit will not be renewable upon expiration. Any Permits listed in SCHEDULE 2.12 that are transferable are designated as such in SCHEDULE 2.12. 2.13 ENVIRONMENTAL COMPLIANCE. Except as set forth in SCHEDULE 2.13 and, in relation to the Business, none of the Sellers is in violation of any environmental law (including any applicable order, ordinance, statute, resolution, rule or regulation) and none of the Sellers has any knowledge of any violations of any such environmental law, in each case with respect to the real property owned, leased, occupied or managed by any Seller that is used in the Business (the "PREMISES"). 2.14 CONTRACTS AND OTHER AGREEMENTS. SCHEDULE 2.14 sets forth a list of all of the following written contracts and other arrangements, options, understandings and agreements relating to the Business (collectively, the "CONTRACTS"), to which any of the Sellers is a party or by or to which it or any of its assets or properties are bound or subject: (a) Contracts for the sale of any of the assets or properties of any Seller other than in the ordinary course of business or for the grant to any Person of any options, rights of first refusal, or preferential or similar rights to purchase any of such assets or properties. (b) Partnership or joint venture agreements. (c) Contracts and Leases of real property or personal property calling for an aggregate purchase or sale price or payments in any one year of more than (a) $12,000 in the case of any one Contract or Lease or (b) $100,000 in the case of all Contracts and Leases in the aggregate. (d) Contracts containing covenants of any Seller not to compete in any line of business or with any Person or covenants of any other Person not to compete with any Seller in any line of business. There are available to the Purchasers true and complete copies of all of the Sellers' Contracts (and all amendments, waivers or other modifications to such Contracts). All of the Assigned Contracts are valid, binding and in full force and effect and enforceable in accordance with their respective terms and conditions, except as such terms may be limited by (a) any applicable bankruptcy, reorganization, moratorium or similar laws, now or hereafter in effect, affecting the enforceability of creditors' rights generally or (b) general principles of equity. Except as described in SCHEDULE 2.14, there is no existing default under or breach by any Seller or to the knowledge of any Seller by any other party of any Assigned Contract or condition which, with the passage of time or notice or both, is reasonably likely to constitute such a default by any Seller or, to the knowledge of each Seller, any other party to any such instrument. Except as set forth in SCHEDULE 2.14, there has been no termination or threatened termination or notice of 7 default under any of the Assigned Contracts and the transactions contemplated by this Agreement will not result in or give rise to the termination or default of any Assigned Contract. 2.15 REAL ESTATE. SCHEDULE 2.15 sets forth all the real property used in connection with the Business. Except as indicated in SCHEDULE 2.15, none of the Sellers owns or leases any real property or any buildings or other structures or has any options or any contractual obligations to purchase or acquire any interest in or lease any real property relating to the Business. None of the interests of any Seller described in SCHEDULE 2.15 is subject to any Lien, except as set forth on such Schedule. 2.16 FIXED ASSETS. SCHEDULE 2.16 consists of lists (which lists describe each item listed in reasonable detail) of all tangible fixed assets owned by each Seller in connection with the operation of the Business including, without limitation, all office furniture, office fixtures, computer equipment, communications equipment and motor vehicles used by each Seller in connection with the operation of the Business (collectively, the "FIXED ASSETS"). Except as set forth in SCHEDULE 2.16, subject to normal wear and tear and the next sentence, all of such assets are in reasonably good operating condition and in reasonably good working order. Except for property leased pursuant to leases assumed by the Purchasers in accordance with Section 1.2 as Assigned Contracts, the Acquired Assets constitute all operating assets owned and used by each Seller in connection with the respective Seller's operation of the Business. SCHEDULE 2.16 also separately identifies any assets used in connection with each Seller's operation of the Business which are leased. 2.17 INTELLECTUAL PROPERTY. SCHEDULE 2.17 sets forth the names and logos used by the Sellers in connection with the Business. None of the Sellers own any patents, trademarks or servicemarks relating to the Business. None of the Sellers has any knowledge of any third party challenging the use of the names and logos set forth in SCHEDULE 2.17. 2.18 TITLE TO ASSETS; LIENS. Except as set forth in SCHEDULE 2.18, each Seller owns outright and has good title to all of the Acquired Assets, free and clear of any Lien, except for any Permitted Liens. Upon Closing, the Sellers will deliver to the applicable Purchasers good title to the Acquired Assets, free and clear of any Liens. 2.19 SIGNIFICANT CUSTOMERS. SCHEDULE 2.19 contains an accurate list of the ten largest non-affiliated customers of the Business of each Seller, based on dollar volume of sales for the period from January 1, 1999 through June 30, 1999. 2.20 EMPLOYEES. SCHEDULE 2.20 contains, with respect to the Business, a complete and accurate list, as of October 15, 1999, of all current officers, employees and consultants of each Seller, together with the current job title, aggregate remuneration rate (bonus, commission and salary). To the knowledge of the Sellers, there is no dispute or controversy with any union or other organization of the Sellers' employees and no arbitration proceedings pending or threatened involving a dispute or controversy affecting the Sellers' Business. 2.21 INSURANCE. SCHEDULE 2.21 sets forth a list of all policies or binders of fire, liability, product liability, workmens' compensation, vehicular, directors and officers, medical, group 8 health, life, disability, business interruption and other insurance held by or on behalf of any Seller with respect to the Business. Such policies and binders are in full force and effect, are in conformity with the requirements of all Contracts to which any Seller is a party and, to the knowledge of the Sellers, are valid and enforceable obligations of the insurers in accordance with their terms. None of the Sellers is in default with respect to any provision contained in any such policy or binder and none of the Sellers has failed to give any notice or present any claim under any such policy or binder in due and timely fashion. Except as set forth in SCHEDULE 2.21, (a) there are no material outstanding unpaid claims under any such policy or binder, and (b) the Sellers have timely filed all claims that they may have under any of their insurance policies. None of the Sellers has received notice of cancellation or non-renewal of any such policy or binder. 2.22 BROKERS. No agent, broker, investment banker or other Person acting on behalf of any Seller under its or their authority is or will be entitled to any broker's fee or finder's fee or any other commission or similar fee, directly or indirectly, in connection with the transactions contemplated by this Agreement for which the Purchasers will become liable. 2.23 ACQUIRED ASSETS. SCHEDULE 1.1(A) sets forth all of the material assets owned or used by the Sellers in connection with the operation of the Business, except for the Excluded Assets. Any non-material machinery, equipment, furniture, fixtures or supplies owned or used by the Sellers in connection with the operation of the Business that are not Excluded Assets, shall also be transferred to the Purchasers at the Closing. 2.24 IMPROVEMENTS. Except as set forth in SCHEDULE 2.24, none of the Sellers has received any notice which remains outstanding and unremedied alleging, proving or contending that the location, construction, occupancy, operation or use of any improvements attached to or placed, erected, constructed or developed as a portion of the real property owned, leased or otherwise utilized by any Seller violates any applicable law, statute, ordinance, rule, regulation, policy, order or determination of any federal, state, local or other governmental authority or any board of fire underwriters (or other body exercising similar functions), or any restrictive covenant or deed restriction affecting any portion of such property, including, without limitation, any applicable zoning ordinances and building codes, flood disaster laws and health and environmental laws, rules and regulations, the violation of which would individually or in the aggregate have a material adverse effect on any Seller or the Business. 2.25 POWERS OF ATTORNEY. There are no Persons holding powers of attorney granted by any Seller with respect to any of the Acquired Assets, Assigned Contracts or the Business that will be utilized in a manner which will result in a material adverse effect on the Acquired Assets, the Assigned Contracts or the Business. 9 ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS The Purchasers jointly and severally make the representations and warranties contained in this Article III to the Sellers, intending that the Sellers rely on each of such representations and warranties in order to induce the Sellers to enter into and complete the transactions contemplated by this Agreement. 3.1 EXECUTION AND VALIDITY. The execution and delivery of this Agreement by the Purchasers has been authorized by their respective boards of directors and shareholders as appropriate. The Purchasers have the full right, power and authority to enter into, and the ability to perform their obligations under, this Agreement and all other agreements and instruments contemplated by this Agreement. This Agreement has been duly executed and delivered by the Purchasers and is, and the other agreements and instruments to be executed and delivered by the Purchasers will be, when executed and delivered by them, legal, valid and binding agreements of the Purchasers, enforceable in accordance with their respective terms. 3.2 ORGANIZATION AND QUALIFICATION. The Purchasers (a) are duly organized, validly existing and in good standing under the laws of their jurisdiction of incorporation, and (b) have all requisite corporate power and authority to carry on their businesses as are presently conducted and to own or lease and to operate their assets and businesses in the places where their businesses are now conducted and where their assets are now owned, leased or operated. 3.3 ABSENCE OF VIOLATIONS. To the knowledge of the Purchasers, and except as set forth in SCHEDULE 3.3, neither the execution nor delivery of this Agreement or of any of the other agreements and instruments contemplated by this Agreement, nor the consummation of the transactions contemplated by this Agreement or such other agreements and instruments, will conflict with or result in the breach of any term or provision of, or constitute a default under, or result in the creation of, any Lien upon the assets or properties of the Purchasers, or give any third-party the right to accelerate any obligation under any charter provision, bylaw, contract, agreement, indenture, deed of trust, instrument, order, law or regulation to which the Purchaser is a party or by which the Purchaser or any of its assets or properties are in any way bound or obligated. 3.4 NO INTENT TO DEFRAUD. No Purchaser intends by executing and delivering this Agreement or any other document contemplated by this Agreement or by entering into any transactions contemplated by this Agreement to hinder, delay or defraud any person or entity to whom any Purchaser is indebted or will become indebted. 3.5 BROKERS. No agent, broker, investment banker or other Person acting on behalf of the Purchasers under its authority is or will be entitled to any broker's fee or finder's fee or any other commission or similar fee, directly or indirectly, in connection with the transactions contemplated by this Agreement for which the Sellers will become liable. 10 ARTICLE IV OTHER AGREEMENTS The parties further agree as follows: 4.1 CONDUCT OF BUSINESS PRIOR TO THE CLOSING. From and after the date of this Agreement until the Closing Date, except to the extent contemplated by this Agreement or the other agreements contemplated herein, or otherwise consented to in writing by Caricement, the Sellers shall operate the Business in the same manner as presently conducted and only in the ordinary and usual course and consistent with past practice, and will use all reasonable efforts to preserve intact its present business organization and to keep available the services of all employees, representatives and agents. Each of the Sellers shall use its best efforts, consistent with past practices, to promote the Business and to maintain the goodwill and reputation associated with the Business, and shall not take or omit to take any action which causes, or which is likely to cause, any deterioration of the Business or any of the Sellers' relationships with suppliers or customers. Without limiting the generality of the foregoing, (i) the Sellers will maintain all of the Acquired Assets, tangible or intangible, in substantially the same condition and repair as such Acquired Assets are maintained as of the date hereof, ordinary wear and tear excepted; (ii) the Sellers shall not sell, transfer, lease or otherwise dispose of any of the Acquired Assets, other than in the ordinary course of business; (iii) the Sellers shall not amend, terminate or waive any material right in respect of the Acquired Assets, the Assigned Contracts or the Business, or willfully do any act, or willfully omit to do any act, which will cause a breach of any Assigned Contract and Assumed Obligation; (iv) the Sellers shall maintain their books, accounts and records in accordance with good business practice and (v) the Sellers shall not engage in any activities or transactions outside the ordinary course of business. 4.2 FURTHER ASSURANCES. Subject to the terms and conditions of this Agreement, the parties hereto shall use their best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable under applicable Regulations and Orders to consummate and make effective as promptly as possible the transactions contemplated by this Agreement, and to cooperate with each other in connection with the foregoing, including without limitation using all reasonable efforts (a) to obtain all necessary waivers, consents, and approvals, that are presently known or become known prior to Closing, from other parties to loan agreements, leases, mortgages and other Contracts, (b) to obtain all necessary Permits, consents, approvals and authorizations, that are presently known or become known prior to Closing, as are required to be obtained under any Regulation, (c) to lift or rescind any injunction or restraining order or other Order adversely affecting the ability of the parties to consummate the transactions contemplated hereby, (d) to effect all necessary registrations and filings and submissions of information requested by Authorities, and (e) to fulfill all conditions to the obligations of the parties under this Agreement. Each of the Purchasers and the Sellers further covenants and agrees that it shall use its respective best efforts to prevent, with respect to a threatened or pending preliminary or permanent injunction or other Regulation or Order prohibiting the transactions contemplated by this Agreement, the entry, enactment or promulgation thereof, as the case may be. 11 4.3 DELIVERIES AFTER CLOSING. From time to time after the Closing, at the Purchasers' request and without further consideration from the Purchasers, the Sellers shall execute and deliver such other instruments of conveyance and transfer and take such other action as the Purchasers reasonably may require to convey, transfer to and vest in the Purchaser and to put the Purchasers in possession of any rights or property to be sold, conveyed, transferred and delivered hereunder. 4.4 NON-COMPETITION. (a) During the Restricted Period and in the Restricted Area, the Sellers agree not to (i) directly or indirectly, engage in any business activity which is directly or indirectly in competition with the Business or (ii) solicit any person who has a business relationship with the Purchasers to discontinue or reduce the extent of the relationship. For the longer of (x) a period of two years after the date hereof and (y) the termination of the Management Agreement or the Distributorship Agreement, whichever is later, the Sellers agree not to seek to employ or employ any person who is in the employ of the Purchasers. The parties agree that the Sellers' activities as contemplated by the Supply Agreement, the Distributorship Agreement and the Management Agreement shall in no way be deemed to be competition in violation of this provision. (b) During the Restricted Period and in the Restricted Area, the Purchasers agree not to (i) directly or indirectly, engage in any business activity which is directly or indirectly in competition with the Sellers' ready-mix, concrete block and crushed aggregate business or (ii) solicit any person who has a business relationship with any of the Sellers to discontinue to reduce the extent of their relationship. For the longer of (x) a period of two years after the date hereof and (y) the termination of the Management Agreement or the Distributorship Agreement, whichever is later, the Purchasers agree not to seek to employ or employ any person who is in the employ of the Sellers (except for the Affected Employees). (c) "RESTRICTED PERIOD" means five (5) years from the date hereof. "RESTRICTED AREA" means the U.S. Virgin Islands, the Dutch Antilles, the French West Indies, Antigua and Barbuda, Dominica and the British Virgin Islands. (d) If Caricement elects to exercise the Option set forth in Section 1.5 of this Agreement, then the restrictions set forth in Section 4.4(b) above will not apply to the Purchasers in Dominica and, with respect to Dominica, the Sellers agree that, during the Restricted Period, they will not (i) directly or indirectly, engage in any business activity which is directly or indirectly in competition with the Purchasers' ready-mix, concrete block and crushed aggregate business or (ii) solicit any person who has a business relationship with Purchasers to discontinue to reduce the extent of such relationship. 4.5 PUBLIC ANNOUNCEMENTS. Neither the Sellers nor the Purchasers nor any Affiliate, representative or shareholder of any of such persons, shall disclose any of the terms of this Agreement to any third party without the other parties' prior written consent, except as may be required by law. The form, content and timing of all press releases, public announcements or publicity statements with respect to this Agreement and transactions contemplated hereby shall be subject to the prior approval of Devcon and Caricement, which approval shall not be 12 unreasonably withheld. No press releases, public announcements or publicity statements shall be released by either party without such prior mutual agreement, expect as may be required by law. Each party shall be entitled to rely on the advice of its counsel regarding applicable legal disclosure requirements. 4.6 AFFECTED EMPLOYEES. The parties agree that certain employees shall remain employed by their current employers after the date hereof (the "AFFECTED EMPLOYEES"), under substantially the same terms and conditions existing prior to the date hereof, until such time as the parties agree it to be reasonably practicable to have their employment with their current employers terminated, with the understanding that the Purchasers agree to make reasonable efforts to hire the Affected Employees upon such termination. Any severance payment due to such employees shall be the responsibility of the current employers (i.e. the Sellers and/or Affiliates of Sellers) upon any such termination. 4.7 GUARANTEE OBLIGATIONS. UMAR hereby agrees to guarantee the payment and performance of all of the Purchasers' obligations under this Agreement, the Supply Agreement, the Distributorship Agreement, the Management Agreement and the License Agreement and other exhibits hereto. 4.8 NO SHOP PROVISION. From and after the date hereof, until the date that is ninety (90) days from the date hereof, the Sellers shall not, nor shall they permit any of their officers, directors, employees or agents, to solicit, initiate or knowingly encourage, or knowingly take any other action to facilitate, any inquiries or the making of any proposal which constitutes, or may reasonably be expected to lead to, a proposal for the purchase of the Acquired Assets or the Business by a third party who is not an Affiliate of the Purchasers. Notwithstanding the foregoing, at any time the Board of Directors of Devcon determines in good faith that it may be necessary to do so in order to comply with its fiduciary duties to Devcon's shareholders under applicable law, Devcon may, in response to an unsolicited proposal, furnish information with respect to the Acquired Assets to the person making such unsolicited proposal and participate in discussions or negotiations regarding such proposal. 4.9 INSURANCE. To the extent that the Purchasers do not have, as of the date hereof, insurance coverage that is standard and customary including, but not limited to, all-risk, product liability, vehicular, or business interruption insurance, or such other insurance as shall be reasonably requested by the Sellers, each Purchaser shall obtain the same at or prior to the Closing, with respect to those Purchasers who are parties hereto at the time of the Closing or, with respect to those Purchasers who are not parties hereto at the time of Closing, at or prior to such time that they become a party hereto. 13 ARTICLE V CONDITIONS TO THE OBLIGATIONS OF THE PURCHASERS Except as set forth in Section 7 hereof, each and every obligation of the Purchasers under this Agreement shall be subject to the satisfaction of each of the following conditions unless waived in writing by Caricement: 5.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE. The representations and warranties of the Sellers contained in Article II of this Agreement and all information contained in any exhibit or schedule hereto delivered by, or on behalf of, the Sellers, to the Purchasers, shall be true and correct except as expressly provided herein. The Sellers shall have performed and complied with all agreements, covenants and conditions required by this Agreement to be performed and complied with by them according to the terms hereof. 5.2 CONSENTS AND APPROVALS. Except as otherwise set forth in Section 7 hereof, the Purchasers and the Sellers shall have obtained any and all consents, approvals, Orders, qualifications, licenses, Permits or other authorizations required by all applicable Regulations, Orders and Contracts of the Sellers or binding on its properties and assets, with respect to the execution, delivery and performance of the Agreement and consummation of the transactions contemplated herein and the conduct of the Business of the Sellers in the same manner after the Closing Date as before the Closing Date. 5.3 PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in connection with the transactions contemplated hereby and all documents and instruments incident to such transactions shall be reasonably satisfactory in form and substance to the Purchasers and the Purchasers' counsel, and the Sellers shall have made available to the Purchasers for examination the originals or true, complete and correct copies of all records and documents relating to the business and affairs of the Sellers that the Purchasers may reasonably request in connection with said transaction. 5.4 CREDITOR CONSENTS. The creditors set forth in SCHEDULE 5.4 hereto shall have agreed in writing with the Sellers as to the amounts owed in order for such creditors to have been paid in full and to release all Liens in favor of such creditors. The creditors set forth in SCHEDULE 5.4 shall provide at Closing such UCC termination statements, releases of mortgages and other releases of Liens as shall be required by the Purchasers. 5.5 ADDITIONAL AGREEMENTS. The applicable Sellers, shall have executed and delivered the Distributorship Agreement, the Supply Agreement, the Management Agreement and the License Agreement, each substantially identical to the form attached hereto as Exhibits 5.5(a), 5.5(b), 5.5(c) and 5.5(d). 5.6 OTHER DOCUMENTS. The Sellers shall have furnished the Purchasers with such other and further documents and certificates, including certificates of the Sellers' officers and others, as the Purchasers shall reasonably request to evidence compliance with the conditions set forth in this Agreement, including but not limited to a secretary's certificate(s) as to all necessary 14 corporate action having been taken to authorize this Agreement, the Supply Agreement, the Management Agreement, the Distributorship Agreement and the License Agreement, as well as indicating incumbent officers authorized to execute such and all related documents. ARTICLE VI CONDITIONS TO THE OBLIGATIONS OF THE SELLERS Except as set forth in Section 7 hereof, each and every obligation of the Sellers under this Agreement shall be subject to the satisfaction of each of the following conditions unless waived in writing by Devcon: 6.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE. The representations and warranties of the Purchasers contained in Article III of this Agreement and all information contained in any exhibit or schedule hereto delivered by, or on behalf of, the Purchasers to the Sellers, shall be true and correct except as expressly provided herein. The Purchasers shall have performed and complied with all agreements, covenants and conditions required by this Agreement to be performed and complied with according to the terms hereof. 6.2 CONSENTS AND APPROVALS. Except as otherwise set forth in Section 7 hereof, the Purchasers shall have obtained any and all material consents, approvals, Orders, qualifications, licenses, permits or other authorizations required by all applicable Regulations or Orders, with respect to the execution, delivery and performance of the Agreement, and the consummation of the transactions contemplated herein. 6.3 PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in connection with the transactions contemplated hereby and all documents and instruments incident to such transactions shall be reasonably satisfactory in form and substance to the Sellers and their counsel, and the Purchasers shall have made available to the Sellers for examination the originals or true, complete and correct copies of all records and documents relating to the business and affairs of the Purchasers that the Sellers may reasonably request in connection with said transaction. 6.4 CREDITOR CONSENTS. The creditors set forth in SCHEDULE 5.4 hereto shall have agreed in writing with the Purchasers as to the amounts owed in order for such creditors to have been paid in full and to release all Liens in favor of such creditors. 6.5 ADDITIONAL AGREEMENTS. The Purchasers or their Affiliates, as applicable, shall have executed and delivered the Distributorship Agreement, the Supply Agreement, the Management Agreement and the License Agreement, each substantially identical to the form attached hereto as Exhibits 5.5(a), 5.5(b), 5.5(c) and 5.5(d). 6.6 OTHER DOCUMENTS. The Purchasers shall have furnished the Sellers with such other and further documents and certificates, including certificates of the Purchasers' officers and others, as the Sellers shall reasonably request to evidence compliance with the conditions set forth in this Agreement, including but not limited to a secretary's certificate(s) as to all necessary 15 corporate action having been taken to authorize this Agreement, the Supply Agreement, the Management Agreement, the Distributorship Agreement and the License Agreement as well as indicating incumbent officers authorized to execute such and all related documents. ARTICLE VII CLOSING 7.1 CLOSING. Subject to the release of all Liens on the Acquired Assets, the Parties agree that the closing of the transactions contemplated by this Agreement will occur no later than five business days after the Acquired Assets relating to (a) four of the five territories (any four of Antigua, Dominica, St. Croix, St. Thomas and St. Maarten) and (b) the MV Cemcon are transferable in accordance with the terms of this Agreement. Notwithstanding the foregoing, the closing of all of the transactions contemplated by this Agreement (the "Closing") shall occur no later than ninety (90) days from the date hereof (the "CLOSING DATE"). Any transaction contemplated by this Agreement which cannot be closed in accordance with the terms of this Agreement by the Closing Date shall be closed in accordance with the terms set forth in the letter of understanding attached hereto as EXHIBIT 7.1 (the "LETTER"), provided that the Purchasers may decide to consummate such transactions in accordance with this Agreement rather than the Letter, it being understood that any representation, warranty or covenant that is incorrect as a result of such decision shall not be considered to be or be in breach. Notwithstanding anything else contained herein, the Purchasers, upon ten (10) days advance written notice to the other parties hereto, may at any time request that the Closing occur regardless of whether the Acquired Assets in four of the five territories above are transferable in accordance with the terms of this Agreement. In the event that any of the transactions contemplated by this Agreement close (whether pursuant to this Agreement or the Letter) prior to the Purchaser having obtained the necessary Permits, consents, approvals or waivers, any loss, claims, damages, whether direct or consequential, shall be at the risk of, and assumed by, the Purchasers and shall not be covered by the representations, warranties and/or indemnification provisions of this Agreement. 7.2 DELIVERIES AT CLOSING. At the Closing, and subject to the terms and conditions contained herein: (a) The Sellers will execute and deliver and/or cause the delivery to the Purchasers of the following: (i) transfer documents for the certificates of title for all of the Sellers' vehicles used in the Business; (ii) all third party consents which may be necessary or desirable in connection with the transfer of each Seller's right, title and interest in and to the Acquired Assets and the assignment of the Assigned Contracts and the Assumed Obligations, attached hereto as SCHEDULE 1.2(A); 16 (iii) bills of sale for the Acquired Assets in such form as shall be necessary and appropriate, properly executed by the appropriate Sellers; (iv) all third party consents which may be necessary in connection with the transfer and/or assignment of the Seller's right, title and interest in and to the Permits listed in SCHEDULE 2.12, to the extent any of the same are transferable and/or assignable; (v) the Supply Agreement properly executed by the appropriate Sellers; (vi) the Distributorship Agreement properly executed by the appropriate Sellers; (vii) the Management Agreement properly executed by the appropriate Sellers; (viii) the License Agreement properly executed by the appropriate Sellers; (ix) the Assignment and Assumption Agreement properly executed by the Sellers and any necessary third parties; (x) certified copies, in form and substance reasonably satisfactory to the Purchasers, of the resolutions of the Sellers' board of directors and shareholders as appropriate approving the execution, performance and delivery of this Agreement, the transactions contemplated by this Agreement, the bills of sale and any other documents; (xi) a certificate, in form and substance reasonably satisfactory to the Purchasers, executed by each of the Sellers representing and warranting to the Purchasers as to certain corporate matters, representing and warranting to the Purchasers that each of the Sellers' representations and warranties contained in this Agreement were accurate in all respects as of the date of this Agreement and are accurate in all respects as of the Closing Date as if made on the Closing Date and representing and warranting to the Purchasers that each of the Sellers has performed and complied with all of the terms, provisions and conditions to be performed and complied with by each of the Sellers at or prior to the Closing; and (xii) such other certificates, filings, notices, documents of conveyance and transfer, opinions and other instruments as the Purchasers or their counsel may request, properly executed by each of the Sellers (as applicable) and in a form reasonably satisfactory to the Purchasers and their counsel. (b) The Purchasers will execute and deliver and/or cause the delivery to the Sellers of the following: 17 (i) the unpaid balance of the Purchase Price in immediately available U.S. funds; (ii) the Supply Agreement properly executed by the applicable Purchaser or Affiliate; (iii) the Distributorship Agreement properly executed by the applicable Purchaser or Affiliate; (iv) the Management Agreement properly executed by the applicable Purchaser or Affiliate; (v) the License Agreement properly executed by the applicable Purchaser or Affiliate; (vi) the Assignment and Assumption Agreement properly executed by the applicable Purchaser and any necessary third parties; (vii) certified copies, in form and substance reasonably satisfactory to the Purchasers, of the resolutions of the Sellers' board of directors and shareholders as appropriate approving the execution, performance and delivery of this Agreement, the transactions contemplated by this Agreement, the bills of sale and any other documents; (viii) a certificate, in form and substance reasonably satisfactory to the Sellers, executed by each of the Purchasers representing and warranting to the Sellers as to certain corporate matters, representing and warranting to the Sellers that each of the Purchasers' representations and warranties contained in this Agreement were accurate in all respects as of the date of this Agreement and are accurate in all respects as of the Closing Date as if made on the Closing Date and representing and warranting to the Sellers that the Purchasers have performed and complied with all of the terms, provisions and conditions to be performed and complied with by the Purchasers at or prior to the Closing; and (ix) such other certificates, filings, notices, third party consents, documents of conveyance and transfer, opinions and other instruments the Sellers or their counsel may reasonably request, properly executed by the Purchasers and in a form reasonably satisfactory to the Sellers and their counsel. ARTICLE VIII SURVIVAL OF TERMS; INDEMNIFICATION 8.1 SURVIVAL. All of the terms and conditions of this Agreement, together with the representations, warranties and covenants contained herein or in any instrument or document delivered or to be delivered pursuant to this Agreement, shall survive the execution of this 18 Agreement until all obligations set forth therein shall have been performed and satisfied notwithstanding any investigation heretofore or hereafter made by or on behalf of any party hereto; provided, however, that all obligations of the Sellers and the Purchasers to indemnify each other for breaches of representations and warranties contained in Articles II and III and as set forth in this Article VIII, shall survive and continue for, and all claims with respect thereto shall be made prior to the end of, eighteen (18) months from the Closing Date, except for representations, warranties and indemnities for which an indemnification claim shall be pending as of the end of the eighteen (18) month period, in which event such indemnities shall survive with respect to such claim until the final disposition thereof. Notwithstanding anything to the contrary in this Section 8.1, (i) Guarantor's obligations pursuant to Section 4.7 hereof shall survive and continue as long as any obligation of the Purchasers remains outstanding under this Agreement, the Supply Agreement, the Distributorship Agreement, the Management Agreement, the License Agreement or any other exhibit hereto, (ii) the covenants set forth in Section 4.4 shall survive until, and all claims with respect thereto shall be made within, the Restricted Period, (iii) any claims for indemnification by the Purchasers for nonfulfillment of Sellers' obligations relating to the Excluded Liabilities shall survive for the applicable statutes of limitation, (iv) the covenants set forth in Section 4.6 shall survive until, and all claims with respect thereto shall be made within, eighteen (18) months after the termination of the Management Agreement, (v) the covenants set forth in Section 8.4 shall survive until, and all claims with respect thereto shall be made before, February 28, 2002 and (vi) any claims relating to the covenant set forth in Section 4.3 shall survive, and all claims made with respect thereto shall be made prior to the end of five years from the Closing Date; except that, in each case, claims filed within the applicable time period, which are pending at the end of such time period shall survive until the final disposition thereof. 8.2 INDEMNIFICATION AND LIMITATIONS. (a) Except as otherwise set forth in this Agreement and subject to the limitations set forth in this Agreement, from and after the Closing, the Sellers, jointly and severally, shall indemnify, defend and hold harmless the Purchasers and their officers, directors, shareholders, employees and agents and their successors and assigns against any loss, claim, damage, cost, obligation, liability, penalty and expense, including all legal and other expenses reasonably incurred in connection with investigating or defending against any such loss, claim, damage or liability or action in respect of such matters (collectively referred to as "SECTION 8 DAMAGES") occasioned by, arising out of or resulting from any breach of any representation or warranty by, or default pursuant to a covenant of, any or all of the Sellers contained in this Agreement. Except as otherwise set forth in this Agreement and subject to the limitations set forth in this Agreement, from and after the Closing, the Purchasers, jointly and severally, shall indemnify, defend and hold harmless the Sellers and their officers, directors, shareholders, employees and agents and their successors and assigns against any Section 8 Damages occasioned by, arising out of or resulting from any breach of any representation or warranty by, or default pursuant to a covenant of, any or all of the Purchasers contained in this Agreement. (b) Neither party shall be required to indemnify the other party relating to claims for breaches of representations and warranties until the indemnifiable damages, individually or in the aggregate, exceed $100,000 (the "HURDLE RATE"), at which point such 19 indemnifying party shall be responsible for all indemnifiable damages that may arise in excess of the Hurdle Rate. The Hurdle Rate shall not be applicable to claims for damages relating to any nonfulfillment of the Sellers' obligations under the Excluded Liabilities. (c) Notwithstanding any other provision hereof, after the Closing, the aggregate amount of indemnifiable damages for which the Sellers shall be liable under this Article VIII shall not exceed $13,000,000, which amount shall be exclusive of any indemnification resulting from the nonfulfillment of the Sellers' obligations under the Excluded Liabilities. (d) The parties agree that the Sellers' indemnification obligations hereunder shall not cover any damages, whether direct or consequential, that may result from any Authority taking any action after the date hereof, (i) if such action arises from any act or omission of the Purchasers other than the consummation of the transactions contemplated by this Agreement or (ii) that does not arise from a breach of a representation or warranty by the Sellers. (e) The allocations set forth in SCHEDULE 1.4 shall not be binding on the parties for indemnification purposes. 8.3 THIRD-PARTY CLAIMS. (a) Except as otherwise provided in this Agreement, the following procedures shall be applicable with respect to indemnification for third-party Claims. Promptly after receipt by the party seeking indemnification hereunder (hereinafter referred to as the "INDEMNITEE") of notice of the commencement of any Claim, or assertion of any Claim, liability or obligation by a third party (whether by legal process or otherwise), against which Claim, liability or obligation the other party to this Agreement (hereinafter the "INDEMNITOR") is, or may be, required under this Agreement to indemnify such Indemnitee, the Indemnitee will, if a Claim thereon is to be, or may be, made against the Indemnitor, notify the Indemnitor in writing of the commencement or assertion thereof and give the Indemnitor a copy of such Claim, process and all legal pleadings. The Indemnitor shall have the right to participate in the defense of such action with counsel of reputable standing. The Indemnitor shall have the right to assume the defense of such action unless such action (i) may result in injunctions or other equitable remedies in respect of the Indemnitee or its business; (ii) may result in liabilities which, taken with other then existing Claims under this Article VIII, would not be fully indemnified hereunder; or (iii) may have an adverse effect on the business or financial condition of the Indemnitee after the Closing Date (including an effect on the Tax liabilities, earnings or ongoing business relationships of the Indemnitee). The Indemnitor and the Indemnitee shall cooperate in the defense of such Claims. In the case that the Indemnitor shall assume or participate in the defense of such audit, assessment or other proceeding as provided herein, the Indemnitee shall make available to the Indemnitor all relevant records and take such other action and sign such documents as are reasonable necessary to defend such audit, assessment or other proceeding in a timely manner. If the Indemnitee shall be required by judgment or a settlement agreement to pay any amount in respect of any obligation or liability against which the Indemnitor has agreed to indemnify the Indemnitee under this Agreement, the Indemnitor shall promptly reimburse the Indemnitee in an amount equal to the amount of such payment plus all reasonable expenses (including legal fees 20 and expenses) incurred by such Indemnitee in connection with such obligation or liability subject to this Article VIII. No Indemnitor, in the defense of any such Claim, shall, except with the consent of the Indemnitee, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnitee of a release from all liability with respect to such Claim. In the event that the Indemnitor does not accept the defense of any matter for which it is entitled to assume such defense as provided above, the Indemnitee shall have the full right to defend against any such Claim, and shall be entitled to settle or agree to pay in full such claim or demand, in its sole discretion. With respect to any matter as to which the Indemnitor is not entitled to assume the defense pursuant to the terms of this section, the Indemnitee shall not enter into any settlement for which an indemnification claim will be made hereunder without the approval of the Indemnitor, which will not be unreasonably withheld. (b) Prior to paying or settling any Claim against which an Indemnitor is, or may be, obligated under this Agreement to indemnify an Indemnitee, the Indemnitee must first supply the Indemnitor with a copy of a final court judgment or decree holding the Indemnitee liable on such Claim or failing such judgment or decree, must first receive the written approval of the terms and conditions of such settlement from the Indemnitor. An Indemnitor or Indemnitee shall have the right to settle any Claim against it, subject to the prior written approval of the other, which approval shall not be unreasonably withheld. (c) An Indemnitee shall have the right to employ its own counsel in any case, but the fees and expenses of such counsel shall be at the expense of the Indemnitee unless (i) the employment of such counsel shall have been authorized in writing by the Indemnitor in connection with the defense of such action or claim, (ii) the Indemnitor shall not have employed counsel in the defense of such action or claim, or (iii) such Indemnitee shall have reasonably concluded that there may be defenses available to it which are contrary to, or inconsistent with, those available to the Indemnitor, in any of which events such fees and expenses of not more than one additional counsel for the indemnified parties shall be borne by the Indemnitor. 8.4 ST. MAARTEN CONTINGENCY. In the event that, due to the Purchasers' inability to obtain the necessary Permits or other governmental approvals, the Purchasers are forced to cease the bagging of cement at the existing St. Maarten location, the Sellers shall reimburse the Purchasers for their actual damages incurred as a result of having to import the cement, at the rate of $6.80 per metric ton of bags imported, up to a maximum amount of $10,000 per month until such time as the Purchasers are able to commence bagging on the existing location, but in no event later than December 31, 2001. ARTICLE IX TERMINATION AND ABANDONMENT 9.1 METHODS OF TERMINATION. Subject to Section 7 hereof, this Agreement may be terminated and the transactions herein contemplated may be abandoned at any time: 21 (a) by mutual consent of the Purchaser and the Seller; (b) by either party if the other party has materially breached or defaulted with respect to its respective obligations under this Agreement and such breaching party is unable to cure such breach within thirty (30) days after receiving written notice of such breach; (c) by the Sellers if the transactions contemplated by this Agreement are not consummated on or before the Closing Date due to the willful breach or default by the Purchasers; PROVIDED that if the Sellers have materially breached or defaulted with respect to their respective obligations under this Agreement on or before such date, the Sellers may not terminate this Agreement pursuant to this Section 9.1(c); (d) by the Purchasers if the transactions contemplated by this Agreement are not consummated on or before the Closing Date due to the willful breach or default by the Sellers; PROVIDED that if the Purchasers have materially breached or defaulted with respect to their respective obligations under this Agreement on or before such date, the Purchasers may not terminate this Agreement pursuant to this Section 9.1(d); (e) by the Purchaser if as of the Closing Date any of the conditions specified in Article V hereof have not been satisfied in any material respect or if the Seller is otherwise in default in any material respect under this Agreement; or (f) by the Seller if, as of the Closing Date, any of the conditions specified in Article VI hereof have not been satisfied in any material respect or if the Purchaser is otherwise in default in any material respect under this Agreement. 9.2 PROCEDURE UPON TERMINATION. In the event of termination and abandonment pursuant to Section 9.1 hereof, this Agreement shall terminate and shall be abandoned, without further action by any of the parties hereto. If this Agreement is terminated as provided herein: (a) each party shall redeliver all documents and other materials of any other party relating to the transactions contemplated hereby, whether obtained before or after the execution hereof, to the party furnishing the same; (b) all information received by any party hereto with respect to the business of any other party (other than information which is a matter of public knowledge or which has heretofore been or is hereafter published in any publication for public distribution or filed as public information with any governmental authority) shall not at any time be used for the advantage of, or disclosed to third parties by, such party to the detriment of the party furnishing such information; (c) no party hereto shall have any liability or further obligation to any other party to this Agreement; PROVIDED, however, that in the case of a willful breach or default by any party hereto, in which case the other parties hereto may, at their option, enforce their rights against such breaching or defaulting party and seek any remedies against such party, in either case, as provided hereunder and by applicable law; and 22 (d) the Sellers shall immediately return Six Million dollars ($6,000,000) of the Purchasers' deposit to the Purchaser by wire transfer and the Sellers shall be entitled to retain One Million dollars ($1,000,000) of the Purchasers' deposit. ARTICLE X MISCELLANEOUS PROVISIONS 10.1 AMENDMENT AND MODIFICATION. Subject to applicable law, this Agreement may be amended, modified and supplemented only by written agreement of Devcon and Caricement. 10.2 WAIVER OF COMPLIANCE; CONSENTS. Any failure of any party hereto to comply with any obligation, covenant, agreement or condition herein may be waived in writing by the other parties hereto, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure. Whenever this Agreement requires or permits consent by or on behalf of any party hereto, such consent shall be given in writing. 10.3 CERTAIN DEFINITIONS. "AFFILIATE" means, with regard to any Person, (a) any Person, directly or indirectly, controlled by, under common control with, or controlling such Person, (b) any Person, directly or indirectly, in which such Person holds, of record or beneficially, five percent or more of the equity or voting securities, (c) any Person that holds, directly or indirectly, of record or beneficially, five percent or more of the equity or voting securities of such Person, (d) any Person that, through Contract, relationship or otherwise, exerts a substantial influence on the management of such Person's affairs, (e) any Person that, through Contract, relationship or otherwise, is influenced substantially in the management of their affairs by such Person, or (f) any director, officer, partner or individual holding a similar position in respect of such Person. "AUTHORITY" means any federal, state, local or foreign governmental, regulatory or administrative body, agency, commission, board, arbitrator or authority, any court or judicial authority, any public, private or industry regulatory authority, whether foreign, federal, state or local. "BUSINESS" means all activities relating to the operation of a bulk cement terminal, bagging of cement and transportation on the ocean of bulk cement in all of Sellers' locations. "CLAIM" means any action, claim, lawsuit, demand, suit, inquiry, hearing, investigation, notice of a violation, litigation, proceeding, arbitration, appeals or other dispute, whether civil, criminal, administrative or otherwise. "CONTRACT" means any agreement, contract, commitment, instrument or other binding arrangement or understanding, whether written or oral. 23 "GUARANTOR" means Union Maritima Internacional, S.A., a Spanish company. "LIEN" means any security interest, lien, mortgage, pledge, hypothecation, encumbrance, Claim, easement, charge, restriction on transfer or otherwise, or interest of another Person of any kind or nature. "ORDER" means any decree, order, judgment, injunction, rule, ruling, voting right or consent of or by an Authority. "PERMITS" means all permits, licenses, registrations, certificates, Orders or approvals from any Authority or other Person (including without limitation those relating to the occupancy or use of owned or leased real property) issued to or held by the Sellers. "PERMITTED LIEN(S)" means (a) Liens to be released at or prior to the Closing; (b) liens for taxes, assessments or other governmental charges not yet due and payable; (c) statutory liens of landlords, carriers, warehousemen, mechanics, materialmen and other similar liens imposed by law for sums not more than 30 days delinquent or which are being contested in good faith; (d) Liens incurred or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social security, statutory obligations, surety and appeal bonds, bids, leases, government contracts, trade contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money); (e) deposits made in the ordinary course of business to secure liability to insurance carriers; and (f) easements, rights-of-way, Liens, restrictions, and other similar charges or encumbrances not interfering in any material respect with the ordinary conduct of each Seller's Business. "PERSON" means any corporation, partnership, joint venture, organization, entity, Authority or natural person. "PROPRIETARY RIGHTS" means all (i) patents, patent applications, patent disclosures and all related continuation, continuation-in-part, divisional, reissue, reexamination, utility, model, certificate of invention and design patents, patent applications, registrations and applications for registrations, (ii) trademarks, service marks, trade dress, logos, trade names and corporate names and registrations and applications for registration thereof, (iii) copyrights and registrations and applications for registration thereof, (iv) mask works and registrations and applications for registration thereof, (v) computer software, data and documentation, (vi) trade secrets and confidential business information, whether patentable or unpatentable and whether or not reduced to practice, know-how, manufacturing and production processes and techniques, research and development information, copyrightable works, financial, marketing and business data, pricing and cost information, business and marketing plans and customer and supplier lists and information, (vii) other proprietary rights relating to any of the foregoing and (viii) copies and tangible embodiments thereof. "PURCHASERS" means Mapleton International B.V., a company organized under the laws of The Netherlands with its registered address as Officia 1, De Boelelaan 7, 1083 HJ Amsterdam, The Netherlands, trading under the name Caricement, together with its Affiliates as 24 they become parties to this Agreement from time to time, or its designees but does not include the Guarantor. "REGULATION" means any rule, law, code, statute, regulation, ordinance, requirement, announcement or other binding action of or by an Authority. "SUBSIDIARY" shall have the meaning set forth in the introductory paragraph of this Agreement. "TAXES" means, including without limitation, taxes on income, gross receipts, net proceeds, alternative or add-on minimum, ad valorem, value added, turnover, sales, use, property, personal property (tangible and intangible), stamp, leasing, lease, user, excise, duty, franchise, transfer, license, withholding, payroll, employment, foreign, fuel, excess profits, occupational and interest equalization, windfall profits, severance, and other charges (including interest and penalties). 10.4 NOTICES. All notices, requests, demands and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given when delivered by hand, sent by telecopy (with confirmation of transmission) or by overnight receipted courier service: (a) If to the Sellers, to: c/o Devcon International Corp. 1350 E. Newport Center Drive Suite #201 Deerfield Beach, Florida 33442 Facsimile: (954) 429-1506 Attn: Jan Norelid with a copy to: Greenberg Traurig, P.A. 1221 Brickell Avenue Miami, Florida 33131 Facsimile: (305) 579-0717 Attn: Robert Grossman, Esq. or to such other Person or address as the Sellers shall furnish by notice to the Purchasers in writing. 25 (b) If to the Purchasers, to: Mapleton International B.V. (trading under the name of Caricement) Officia 1, De Boelelaan 7, 1083 HJ Amsterdam P.O. Box 71744 1008 DE Amsterdam The Netherlands Facsimile: 31 20 642 76 75 Attn: Equity Trust Co. N.V. (Ms. Sue Bennion) with a copy to: Union Maritima Internacional, S.A. Serrano, 45 - planta 3 28001 MADRID - SPAIN Facsimile +34915779346 Attn: Joaquin Villanueva Diaz De Espada with a copy to: Holland & Knight LLP 701 Brickell Avenue Miami, Florida 33131 Facsimile: (305) 789-7799 Attn: Ronald Albert, Jr. or to such other Person or address as the Purchasers shall furnish by notice to the Sellers in writing. 10.5 ASSIGNMENT. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto without the prior written consent of the other parties, except that the Purchasers may, with the prior written consent of the Sellers, which shall not be unreasonably withheld, assign its rights, interests and obligations hereunder to any Affiliate, and may grant Liens in respect of its rights and interests hereunder to its lenders (and any agent for the lenders), and the parties hereto consent to any exercise by such lenders (and such agent) of their rights and remedies with respect to such collateral. It shall be reasonable for any Seller to withhold such consent to any assignment for reasons based upon the financial capability of the Affiliate. Execution by any additional Purchasers as contemplated in the introductory paragraph of this Agreement shall not be deemed to constitute an assignment. 10.6 GOVERNING LAW. This Agreement shall be governed by the internal laws of the State of Florida as to all matters, including but not limited to matters of validity, construction, effect and performance, except where the laws of the jurisdiction of the location of Acquired Assets governs. 10.7 COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Facsimile signatures are acceptable as originals. 26 10.8 HEADINGS. The article and section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 10.9 ENTIRE AGREEMENT. This Agreement, including the schedules and exhibits hereto and the documents, certificates and instruments referred to herein (including but not limited to the Distributorship Agreement, the Supply Agreement, the Management Agreement, the License Agreement and the Assignment and Assumption Agreement), embody the entire agreement and understanding of the parties hereto in respect of the transactions contemplated by this Agreement and supersedes all prior agreements, representations, warranties, promises, covenants, arrangements, communications and understandings, oral or written, express or implied, between the parties with respect to such transactions. There are no agreements, representations, warranties, promises, covenants, arrangements or understandings between the parties with respect to such transactions, other than those expressly set forth or referred to herein. 10.10 BINDING EFFECT. This Agreement will apply to, be binding in all respects upon, and inure to the benefit of the successors and permitted assigns of the parties. Nothing expressed or referred to in this Agreement will be construed to give any Person other than the parties to this Agreement any legal or equitable right, remedy, or claim under or with respect to this Agreement or any provision of this Agreement. This Agreement and all of its provisions and conditions are for the sole and exclusive benefit of the parties to this Agreement and their successors and permitted assigns. 10.11 ARBITRATION. (a) Any dispute, controversy or claim arising out of or relating to this Agreement, or the breach, termination or validity of this Agreement, which has not been resolved by a non-binding procedure, shall be settled by arbitration in Miami, Florida (unless the Purchasers and the Sellers mutually agree in writing to another location), in accordance with the Arbitration Rules of the American Arbitration Association then in effect, except that the Purchasers and the Sellers agree under any circumstances they shall be permitted reasonable discovery of documents and depositions of an adequate number of witnesses. Notwithstanding anything to the contrary in this Agreement, the Purchasers and the Sellers further agree that arbitration shall not be utilized to determine: (i) any dispute arising out of or relating to the non-competition provisions set forth in Section 4.4 of this Agreement (although such non-competition provisions may be modified, voided or rescinded in an arbitration proceeding in connection with the modification, voiding or rescission of all of the other transaction agreements) or (ii) any dispute, controversy or claim which requires a third party's presence either as the co-respondent or as an indemnifier, unless the third party agrees to be bound by the arbitration. Disputes described in clauses (i) and (ii) of the preceding sentence shall be resolved through proceedings commenced and prosecuted in a state or federal court in Miami, Florida. (b) Within one week after the Purchasers, on the one hand, or the Sellers, on the other hand, requests arbitration and the other party receives notice of such request, both parties shall supply the American Arbitration Association with a list of qualifications for the arbitrators. Within two weeks after receipt of the parties' lists of qualifications for the 27 arbitrators, the American Arbitration Association shall supply the parties with a list of 21 potential arbitrators, and the Purchasers, on the one hand, and the Sellers, on the other hand, shall each be permitted to strike up to nine proposed arbitrators and shall notify in writing the American Arbitration Association of the party's decisions. Within two weeks after receipt of the parties' decisions as to the acceptable potential arbitrators, the American Arbitration Association shall appoint the three arbitrators from the group of arbitrators which has not been stricken by either party. (c) Resolution of disputes, controversies or claims shall be determined by a majority vote of the arbitration panel. The Purchasers, on the one hand, and the Sellers, on the other hand, shall share equally the fees, costs and expenses of the arbitration, unless the arbitrators modify the allocation of such fees, costs and expenses because they have determined that fairness dictates other than an equal allocation between the parties. Each party shall be responsible for its own attorneys' fees, costs of its experts and expenses of its witnesses, unless the arbitrators provide otherwise because they have determined that fairness so dictates. Any award rendered shall be final, binding and conclusive (without the right to an appeal, unless such appeal is based on fraud by the other party in connection with the arbitration process) upon the parties and any judgment on such award may be enforced in any court having jurisdiction, unless otherwise provided by law. The party submitting such dispute to arbitration shall inform the American Arbitration Association that the parties have agreed: (i) to reasonable discovery pursuant to the rules then in effect under the Federal Rules of Civil Procedure (as used in the United States District Court for the Southern District of Florida) for a period not to exceed 120 days prior to such arbitration and (ii) to require that the testimony at the arbitration hearing be transcribed. 10.12 INJUNCTIVE RELIEF. The parties hereto agree that in the event of a breach of any provision of this Agreement, the aggrieved party or parties may be without an adequate remedy at law. The parties therefore agree that in the event of a breach of any provision of this Agreement, the aggrieved party or parties may elect to institute and prosecute arbitration or court proceedings, as provided in Section 10.11(a), in any court of competent jurisdiction to enforce specific performance or to enjoin the continuing breach of such provision, as well as to obtain damages for breach of this Agreement. By seeking or obtaining any such relief, the aggrieved party shall not be precluded from seeking or obtaining any other relief to which it may be entitled. 10.13 DELAYS OR OMISSIONS. No delay or omission to exercise any right, power or remedy accruing to any party hereto, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party hereto of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement must be made in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative. 28 10.14 SEVERABILITY. Unless otherwise provided herein, if any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 10.15 EXPENSES. The Purchasers shall bear their own expenses, including without limitation, legal fees and expenses, with respect to this Agreement and the transactions contemplated hereby. The Sellers shall bear their own expenses, including without limitation, legal fees and expenses, with respect to this Agreement and the transactions contemplated hereby. The payment of any and all Taxes owing as a result of the transfer of the Acquired Assets is addressed in Section 1.2 hereof. 10.16 WAIVER OF JURY TRIAL. SUBJECT TO THE PROVISIONS OF SECTION 10.11, EACH OF THE PARTIES HERETO KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY EXHIBIT HERETO, OR ANY COURSE OF CONDUCT, COURSE OF DEALING OR STATEMENTS (WHETHER VERBAL OR WRITTEN) RELATING TO THE FOREGOING. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES HERETO TO ENTER INTO THIS AGREEMENT. * * * 29 IN WITNESS WHEREOF, the parties hereto have made and entered into this Asset Purchase Agreement the date first hereinabove set forth. SELLERS DEVCON INTERNATIONAL CORP., a Florida corporation /s/ JAN NORELID -------------------------------------------- By: Jan Norelid Title: Chief Financial Officer V.I. Cement & Building Products, Inc. /s/ JAN NORELID -------------------------------------------- By: Jan Norelid Title: Chief Financial Officer Bouwbedrijf Boven Winden, N.V. /s/ JAN NORELID -------------------------------------------- By: Jan Norelid Title: Chief Financial Officer Antigua Cement, Ltd. /s/ JAN NORELID -------------------------------------------- By: Jan Norelid Title: Chief Financial Officer Caribbean Construction & Development, Ltd. /s/ JAN NORELID -------------------------------------------- By: Jan Norelid Title: Chief Financial Officer Caribbean Cement Carriers, Ltd. /s/ JAN NORELID -------------------------------------------- By: Jan Norelid Title: Chief Financial Officer 30 PURCHASERS MAPLETON INTERNATIONAL B.V., a company organized under the laws of The Netherlands (trading under the name Caricement) By: /s/ JOAQUIN VILLANVEVA Title: GENERAL MANAGER ____________________________________________ By:_________________________________________ Title:______________________________________ ____________________________________________ By:_________________________________________ Title:______________________________________ ____________________________________________ By:_________________________________________ Title:______________________________________ ____________________________________________ By:_________________________________________ Title:______________________________________ ____________________________________________ By:_________________________________________ Title:______________________________________ 31 GUARANTOR UMAR By: /s/ JOAQUIN VILLANVEVA Title: GENERAL MANAGER 32 EX-2.2 3 EXHIBIT 2.2 EXECUTION COPY - -------------------------------------------------------------------------------- STOCK PURCHASE AGREEMENT DATED AS OF FEBRUARY 22, 2000 AMONG CARICEMENT ANTILLES N.V. AND DEVCON INTERNATIONAL CORP. AND CARIBBEAN CONSTRUCTION & DEVELOPMENT, LTD. - -------------------------------------------------------------------------------- TABLE OF CONTENTS PAGE ---- STOCK PURCHASE AGREEMENT.......................................................1 BACKGROUND.....................................................................1 AGREEMENT......................................................................1 1. Purchase and Sale........................................................1 2. Purchase Price and Payment...............................................1 2.1 Purchase Price.......................................................1 2.2 Earn-Out.............................................................2 2.3 Working Capital......................................................3 2.4 Holdback.............................................................3 3. Representations and Warranties of Seller.................................4 3.1 Execution and Validity...............................................4 3.2 Organization and Qualification.......................................4 3.3 Capitalization of the Company and Lack of Subsidiaries...............5 3.4 Absence of Encumbrances..............................................5 3.5 Options and Warrants.................................................5 3.6 Absence of Violations................................................5 3.7 Consents.............................................................5 3.8 Financial Statements.................................................6 3.9 Absence of Undisclosed Liabilities...................................6 3.10 No Material Adverse Change..........................................7 3.11 Tax Matters.........................................................8 3.12 Indebtedness and Guarantees.........................................9 3.13 Litigation and Governmental Matters.................................9 3.14 Compliance.........................................................10 3.15 Permits and Licenses...............................................12 3.16 Environmental Compliance...........................................12 3.17 Contracts and Other Agreements.....................................13 3.18 Accounts and Notes Receivable......................................14 3.19 Real Estate........................................................15 3.20 Fixed Assets.......................................................15 3.21 Intellectual Property..............................................15 3.22 Title to Assets; Liens.............................................16 3.23 Significant Suppliers and Customers................................17 3.24 Compensation of Employees..........................................17 3.25 Employee Benefit Plans.............................................17 3.26 Employee Relations.................................................18 3.27 Labor Agreements...................................................18 3.28 Affiliate Transactions.............................................19 3.29 Commission Arrangements............................................19 3.30 Insurance..........................................................19 3.31 Improvements.......................................................20 3.32 Bank and Other Accounts............................................20 3.33 Powers of Attorney.................................................20 3.34 Records............................................................20 3.35 Accounts Payable...................................................20 3.36 Letters of Credit and Bonds........................................20 3.37 Brokers............................................................20 3.38 Absence of Misrepresentations......................................21 i 4. Representations and Warranties of Buyer.................................21 4.1 Execution and Validity..............................................21 4.2 Organization and Qualification......................................21 4.3 Absence of Violations...............................................21 4.4 Consents............................................................22 4.5 Brokers.............................................................22 4.6 Absence of Misrepresentations.......................................22 5. Covenants of the Company and Seller.....................................22 5.1 Conduct of Business.................................................22 5.2 Cooperation.........................................................23 5.3 Certain Acts........................................................24 5.4 Governmental Filings................................................24 5.5 Access and Information..............................................24 5.6 Expenditures........................................................24 5.7 Taxes...............................................................24 5.8 No Shop; Standstill.................................................25 6. Covenants of Buyer......................................................25 6.1 Cooperation.........................................................25 6.2 Certain Acts........................................................25 6.3 Governmental Filings................................................25 7. Conditions Precedent to the Obligations of the Company and Sellers......25 7.1 Representations and Warranties......................................25 7.2 Performance.........................................................26 7.3 No Material Adverse Change..........................................26 7.4 Absence of Litigation...............................................26 7.5 New Legislation.....................................................26 8. Conditions Precedent to Obligations of Buyer............................26 8.1 Representations and Warranties......................................26 8.2 Performance.........................................................26 8.3 No Material Adverse Change..........................................27 8.4 Absence of Litigation...............................................27 8.5 Consents............................................................27 8.6 Due Diligence.......................................................27 8.7 Amendment to Asset Purchase Agreement...............................27 8.8 New Legislation.....................................................27 9. Closing and Post-Closing Covenants......................................27 9.1 Time and Place......................................................27 9.2 Obligations of the Company and Seller...............................28 9.3 Obligations of Buyer................................................29 9.4 Guarantee of Accounts Receivable....................................29 9.5 Non-Competition.....................................................29 9.6 Sharing of Tax Benefits.............................................30 ii 10. Indemnification.........................................................30 10.1 Indemnification by Seller..........................................30 10.2 Indemnification by Buyer...........................................30 10.3 Notice of Indemnification..........................................31 10.4 Hurdle Rate and Limitation.........................................31 11. Termination.............................................................32 12. Miscellaneous...........................................................32 12.1 Notices............................................................32 12.2 Entire Agreement...................................................34 12.3 Amendment..........................................................34 12.4 Binding Effect.....................................................35 12.5 Waiver.............................................................35 12.6 Captions...........................................................35 12.7 Construction.......................................................35 12.8 Section, Schedule and Exhibit References...........................35 12.9 Severability.......................................................35 12.10 Absence of Third-Party Beneficiaries..............................35 12.11 Business Day......................................................35 12.12 Assignment........................................................36 12.13 Other Documents...................................................36 12.14 Governing Law.....................................................36 12.15 Attorneys' Fees...................................................36 12.16 Public Disclosure.................................................36 12.17 Arbitration.......................................................36 12.18 Currency..........................................................37 12.19 Counterparts......................................................38 12.20 Seller's Release..................................................38 iii STOCK PURCHASE AGREEMENT Stock Purchase Agreement dated February 22, 2000 among: A. Caribbean Construction & Development, Ltd., a private company limited by shares organized under the laws of the Commonwealth of Dominica, West Indies, (the "Company"); B. Devcon International Corp., a corporation organized under the laws of Florida, ("Seller"); and C. Caricement Antilles N.V., a corporation organized under the laws of Curacao, Netherland Antilles, ("Buyer"), or its permitted assignee as provided in Section 12.12 . BACKGROUND A. Seller is the owner of 500 shares of common stock, par value $100.00 per share (the "Common Stock"), of the Company. Seller desires to sell to Buyer 500 shares (the "Shares") of the Common Stock, representing all of the issued and outstanding shares of the Common Stock, and Buyer desires to purchase the Shares, on the terms and subject to the conditions set forth in this Agreement. B. On January 19, 2000, Seller and Mapleton International B.V., trading under the name of Caricement, ("Caricement") executed a letter of intent with respect to this transaction (the "Letter of Intent"). This Agreement is the definitive Stock Purchase Agreement contemplated in the Letter of Intent. The Letter of Intent is terminated as of the effective date of this Agreement and is of no further force or effect. AGREEMENT The parties agree as follows: 1. PURCHASE AND SALE. Upon and subject to the terms and conditions contained in this Agreement, at the "Closing" (as defined in Section 9.1), Seller shall sell to Buyer and deliver the Shares to Buyer, and Buyer shall purchase the Shares from Seller. Seller shall transfer good and valid title to the Shares to Buyer, free and clear of all claims, liens and encumbrances. 2. PURCHASE PRICE AND PAYMENT. 2.1 PURCHASE PRICE. The consideration to be paid by Buyer to Seller for the Shares (the "Purchase Price") shall be US$3,167,590 [US$800,000 for the Ready Mix Business plus US$2,367,590 for the Cement Business, as set forth in the Asset Purchase Agreement] (the "Cash Consideration") plus the earn-out payment(s) described in Section 2.2. The Purchase Price shall be adjusted (upward or downward) based on the working capital adjustment described in Section 2.3. US$753,324 of the Cash Consideration has been previously paid to Seller as part of the US$7 million down payment made by Buyer and Union Maritima Internacional, S.A. ("UMAR") pursuant to that certain Asset Purchase Agreement among UMAR, Caricement, Buyer, Seller and certain of Seller's subsidiaries dated as of November 22, 1999 (the "Asset Purchase Agreement.) Subject to Sections 2.3 and 2.4, the remaining balance of the Cash Consideration shall be paid at the Closing in immediately available funds. 2.2 EARN-OUT. Buyer shall cause the Company to pay Seller 50% of the net profit (the "Net Profit"), if any, generated by the Company's Ready Mix Business (as defined below) for a period of 24 months commencing with the month immediately following the month in which the Closing occurs (unless the Closing occurs on the first day of a month, in which event the 24 month period will commence with the month in which the Closing occurs). In the event the Company generates a negative Net Profit (i.e., a net loss), Seller shall pay 50% of the amount of such negative Net Profit to the Company. The Net Profit shall be calculated as set forth in Schedule 2.2, consistent with the Company's historical accounting practices, to the extent such practices are not inconsistent with United States generally accepted accounting principles consistently applied ("GAAP"). The Net Profit shall be calculated before taxes only if the payment of the Net Profit to Seller by the Company would be tax deductible to the Company, Buyer or any of Buyer's Affiliates (as described in Section 3.28); otherwise, Net Profit shall be calculated after taxes. For purposes of calculating the Net Profit, the parties shall allocate the costs of the Company's activities relating to the ready mix operations (the "Ready Mix Business") and the Company's activities relating to the operation of a bulk cement terminal and bagging of cement (the "Cement Business") as set forth on Schedule 2.2; provided, however, for the purposes of calculating Net Profit, the transfer price of bulk cement from the Cement Business to the Ready Mix Business shall be calculated as established in the Supply Agreement between UMAR, certain of UMAR's affiliates, the Company, Seller and certain of Seller's subsidiaries dated December 29, 1999. Net Profit shall be estimated by the Company and presented to Buyer and Seller within ten days after the end of each week, and quarterly financial statements shall be prepared by the Company within 30 days after the end of each calendar quarter. Within ten days after the quarterly financial statements of the Company have been presented to Buyer by the Company, Buyer shall make the Net Profit payment to Seller if the Net Profit for the quarter has been positive. Within ten days after the quarterly financial statements of the Company have been presented to Buyer, Buyer shall advise Seller to make the Net Profit payment to Buyer if the Net Profit for the quarter has been negative. After the Company's annual audited financial statements for any period scheduled in the 24 month period become available, the parties shall adjust the earn-out payments previously made pursuant to this Section to take into account any audit or year-end or other adjustments not reflected on the monthly or quarterly financial statements. Such adjustment may result in a payment from Buyer to Seller or a payment from Seller to Buyer, as applicable. Notwithstanding the foregoing, at any time during such 24 month period, in lieu of making or receiving the payment described in the first sentence of this Section, Buyer shall have the option of paying the higher of: (i) US$700,000 or (ii) the sum of any accrued but unpaid earn-out payments for completed months plus the product of (a) 50% of the average historical monthly Net Profit for all of the then completed months of such 24 month period multiplied by (b) the number of months remaining until the conclusion of such 24 month period (including the month in which such election is made), and, in such event, the obligation of Seller to pay 50% of the amount of any negative Net Profit to the Company shall cease commencing with the month in which such election is made. In the event Buyer elects to 2 terminate the Management Agreement in the form of Exhibit 9.2.7 prior to the end of such 24 month period, Buyer shall be deemed to have made the election set forth in the immediately preceding sentence. 2.3 WORKING CAPITAL. The Purchase Price and the Cash Consideration shall each be adjusted (upward or downward) by an amount equal to the Company's "Working Capital" (as defined below) as of the date of the Closing. If the Company's Working Capital as of the date of the Closing is positive, the Purchase Price and the Cash Consideration shall be increased by such amount. If the Company's Working Capital as of the date of the Closing is negative, the Purchase Price and the Cash Consideration shall be decreased by such amount. Since the amount of the Company's Working Capital as of the date of the Closing cannot be accurately determined on the date of Closing, the parties agree to estimate such amount based upon the Company's "Current Balance Sheet" (as defined in Section 3.9) and to determine the amount of the Company's Working Capital as of the date of the Closing as provided in Section 2.4. For purposes of this Agreement, "Working Capital" means Total Current Assets minus Total Liabilities, as set forth on the Current Balance Sheet. 2.4 HOLDBACK. Buyer shall hold back an amount equal to US$100,000 of the Cash Consideration (the "Holdback Amount") for purposes of assuring that the Working Capital adjustment made pursuant to Section 2.3 is adequate. For purposes of determining the Company's Working Capital as of the date of the Closing, Seller shall prepare and shall cause an accounting firm selected by Buyer (the "Accountants") to review the unaudited balance sheet of the Company dated as at the date of the Closing (the "Estimated Closing Balance Sheet") and related statement of operations of the Company for the period from January 1, 2000 through the date of the Closing, in each case prepared in accordance with GAAP and certified by the principal financial officer of Seller as presenting fairly in all material respects the financial condition and results of operations of the Company for the period then ended (collectively, the "Estimated Closing Financial Statements"). Seller will deliver the Estimated Closing Financial Statements to the Accountants within 30 days after the Closing. The Accountants will have 30 days following delivery of the Estimated Closing Financial Statements to review the Estimated Closing Financial Statements. The Estimated Closing Financial Statements will be revised as determined by the Accountants and such revised financial statements shall constitute the Company's Actual Closing Financial Statements, provided that if Buyer or Seller disagrees with the accuracy of the Actual Closing Financial Statements as determined by the Accountants, such disagreement shall be resolved through an arbitration proceeding in accordance with Section 12.17. The Actual Closing Financial Statements shall conclusively establish the Company's actual Working Capital as of the date of the Closing (the "Actual Working Capital"). In the event that the Actual Working Capital is less than the Company's Working Capital as set forth in the Company's Current Balance Sheet (the "Estimated Working Capital"), Buyer shall deduct the amount of such difference from the Holdback Amount and promptly pay to Seller the remainder, if any, of the Holdback Amount. In the event that the Estimated Working Capital is greater than the Actual Working Capital (the "Working Capital Variance") and the Working Capital Variance is greater than the Holdback Amount, then (i) Buyer shall be entitled to retain the entire Holdback Amount, and (ii) Seller shall promptly pay to Buyer an amount equal to the difference between the Working Capital Variance and the Holdback Amount. In the event that the Actual Working Capital is equal to the Estimated Working Capital, Buyer shall promptly pay Seller the 3 entire Holdback Amount. In the event that the Actual Working Capital is greater than the Estimated Working Capital, Buyer shall promptly pay to Seller (i) the Holdback Amount and (ii) an amount equal to the difference between the Actual Working Capital and the Estimated Working Capital. 3. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller makes the representations and warranties contained in this Section (including Sections 3.1 - - 3.38) to Buyer, intending that Buyer relies on each of such representations and warranties in order to induce Buyer to enter into and complete the transactions contemplated by this Agreement. These representations and warranties shall survive the consummation of the transactions contemplated by this Agreement until the expiration of two years from the date of the Closing, except that the tax representations and warranties contained in Section 3.12 shall survive the consummation of the transactions contemplated by this Agreement until the expiration of any applicable statute of limitations or extension of such statute of limitations; provided, however, that in cases of fraud these representations and warranties shall survive the consummation of such transactions without any time limit. 3.1 EXECUTION AND VALIDITY. The execution and delivery of this Agreement by Seller has been authorized by Seller's board of directors and, to the extent necessary, its shareholders. The execution and delivery of this Agreement by the Company has been authorized by the Company's board of directors and all of its shareholders. Each of the Company and Seller has the full right, power and authority to enter into, and the ability to perform its respective obligations under, this Agreement and all other agreements and instruments contemplated by this Agreement. This Agreement has been duly executed and delivered by the Company and Seller and is, and the other agreements and instruments to be executed and delivered by the Company and Seller will be, when executed and delivered by each of them, legal, valid and binding agreements of the Company and Seller, respectively, enforceable against each such party, as applicable, in accordance with their respective terms. 3.2 ORGANIZATION AND QUALIFICATION. The Company (a) is duly organized, validly subsisting and in good standing under the laws of the Commonwealth of Dominica, West Indies, its jurisdiction of incorporation, and (b) has all requisite corporate power and authority to carry on its business as is presently conducted and to own or lease and to operate its assets and business in the places where its business is now conducted and where its assets are now owned, leased or operated. The Seller (a) is duly organized, validly subsisting and in good standing under the laws of the State of Florida, its jurisdiction of incorporation, and (b) has all requisite corporate power and authority to carry on its business as is presently conducted and to own or lease and to operate its assets and business in the places where its business is now conducted and where its assets are now owned, leased or operated. Schedule 3.2 consists of the Certification of Incorporation (the "Charter") and Bylaws of the Company and also includes a true and complete list of the jurisdictions in which the Company is duly qualified and in good standing as a foreign corporation, which are the only jurisdictions where the nature of the activities conducted by the Company or the nature of the assets owned, leased or operated by the Company requires such qualification and where the failure to so qualify would have a material adverse effect on the business, operations, properties or assets of the Company. 4 3.3 CAPITALIZATION OF THE COMPANY AND LACK OF SUBSIDIARIES. Schedule 3.3 sets forth the authorized capital of the Company by class, authorized number of shares and par value; the number of issued and outstanding shares of capital stock of each class; and the record and beneficial owners of all issued and outstanding shares of the Company's capital stock. All of the Shares are validly issued, fully-paid and non-assessable. Except as set forth on Schedule 3.3, the Company (a) does not own any shares of capital stock or other securities of any other corporation or other entity, and (b) is not a partner in any partnership or a member of any joint venture. 3.4 ABSENCE OF ENCUMBRANCES. Except as set forth in Schedule 3.4, Seller is the record and beneficial owner of all of the issued and outstanding Shares of the Company, free and clear of any liens, pledges, claims, options, proxies, restrictions, agreements, charges and encumbrances of any kind ("Encumbrances"), and there are no pending or threatened claims or proceedings which would impair or encumber any of the Shares. Any Encumbrances set forth on Schedule 3.4 shall be paid or otherwise discharged at the Closing, and upon consummation of the transactions contemplated by this Agreement, Buyer will own, free and clear of any Encumbrances, title to all of the Shares. 3.5 OPTIONS AND WARRANTS. The Company does not have any outstanding securities, options, warrants, agreements or other instruments pursuant to which any entity, trust or individual ("Person") has or may have any right to subscribe for or acquire any shares of the Company's capital stock or any securities convertible into or exchangeable for shares of its capital stock. 3.6 ABSENCE OF VIOLATIONS. Except as set forth in Schedule 3.6, neither the execution nor delivery of this Agreement or of any of the other agreements and instruments contemplated by this Agreement, nor the consummation of the transactions contemplated by this Agreement or such other agreements and instruments, will conflict with or result in the breach of any term or provision of, or constitute a default under, or result in the creation of, any Encumbrance upon any of the Shares or the assets or properties of the Company, or give any third-party the right to accelerate any obligation under, any charter provision, bylaw, contract, agreement, indenture, deed of trust, instrument, order, law or regulation to which the Company or Seller is a party or by which the Company or Seller or any of their assets or properties are in any way bound or obligated. 3.7 CONSENTS. Except as set forth in Schedule 3.7, (a) no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any governmental authority is required on the part of the Company or Seller in connection with the transactions contemplated by this Agreement; and (b) no consent, approval, waiver or other action by any Person under any contract, instrument or other document is required or necessary for the execution, delivery and performance of this Agreement by the Company or Seller, or the consummation by the Company and Seller of the transactions contemplated by this Agreement. Except as set forth in Schedule 3.7, all consents described in Schedule 3.7 have been obtained and are in full force and effect. 5 3.8 FINANCIAL STATEMENTS. The financial statements described in Sections 3.8.1, 3.8.2, 3.8.3 and 3.8.4 are sometimes referred to in this Agreement as the "Financial Statements." 3.8.1 Schedule 3.8.1 consists of the unaudited balance sheet of the Company dated as of December 31, 1997 and related statement of operations for the year ended on such date, together with and a certificate from KPMG LLP, the Seller's certified public accountants ("KPMG"), that such financial statements constitute a part of the audited financial statements of Seller. 3.8.2 Schedule 3.8.2 consists of the unaudited balance sheet of the Company dated as of December 31, 1998 and related statement of operations for the year ended on such date, together with a certificate from KPMG, that such financial statements constitute a part of the audited financial statements of Seller. 3.8.3 Schedule 3.8.3 consists of the audited balance sheet of the Company dated as of December 31, 1999 and related statements of operations and retained earnings for the year ended on such date, together with related notes, certified by the Accountant. Schedule 3.8.3 is not attached to this Agreement as of the date of execution of this Agreement. Schedule 3.8.3 will be delivered no less than five business days prior to the Closing. 3.8.4 The Financial Statements were prepared in accordance with GAAP. The balance sheets and related notes which are part of the Financial Statements present fairly, in all material respects, the financial condition of the Company as of the dates of such balance sheets in accordance with GAAP. The statements of operations and accumulated deficit or retained earnings which are part of the Financial Statements present fairly, in all material respects, the results of operations of the Company for the periods covered by such statements in accordance with GAAP. 3.8.5 The books and records of the Company are complete and correct in all material respects and accurately reflect, in all material respects, the basis for the financial position, results of operations and operating cash flow of the Company set forth in the Financial Statements. 3.8.6 Except as set forth in Schedule 3.8.7, there has been no change in accounting methods made by the Company since December 31, 1996. 3.9 ABSENCE OF UNDISCLOSED LIABILITIES. Except as disclosed in Schedule 3.9, as of the date of the Current Balance Sheet (as defined below), the Company did not have any liabilities of any nature, whether accrued, absolute, contingent or otherwise (including, without limitation, liabilities as guarantor or otherwise with respect to obligations of others, liabilities under consignment agreements, liabilities under contracts previously performed or long-term debt), required to be shown on the Company's audited balance sheet as of December 31, 1999 (the "Current Balance Sheet") in accordance with GAAP that were not fully and adequately reflected or reserved against on such balance sheet. Since the date of the Current Balance Sheet, 6 the Company has not incurred any such liabilities (other than liabilities incurred in the ordinary course of its business) or incurred any long-term liabilities. 3.10 NO MATERIAL ADVERSE CHANGE. Except as disclosed in Schedule 3.10, since the date of the Current Balance Sheet there has not been: 3.10.1 Any material adverse change in the business, operations, affairs, properties, assets or financial condition of the Company, nor has any event occurred or circumstance arisen, including without limitation, the implementation of any law or regulation, which has a reasonable likelihood of causing such a change. 3.10.2 Any damage, destruction or loss (whether or not covered by insurance) materially and adversely affecting the business, operations, affairs, properties, assets or financial condition of the Company. 3.10.3 Any labor dispute, strike, work stoppage, union activity or any threatened union activity which is likely to materially and adversely affect the business or operations the Company. 3.10.4 Any increase in salary, wages, bonus, commission or other compensation to any employees or agents of the Company, other than routine increases in the ordinary course of business and consistent with past practices, or any increase in salary, wages, bonus, commissions or other compensation to any director or officer of the Company or Seller or any of their relatives, including, without limitation, any relative by marriage ("Relatives"). 3.10.5 Any loan or advance to Seller or any Relatives, officers, directors, employees, consultants, agents or other representatives of the Company or any other loan or advance by the Company. 3.10.6 Any payment or commitment to pay any severance or termination pay to any officers or directors of the Company or Seller. 3.10.7 Any default (including, without limitation, any event that with the giving of notice or passage of time would cause a default), termination or threatened termination under, or amendment to, any Contract (as defined in Section 3.17) of the Company. 3.10.8 Any theft, damage, destruction, casualty, loss, condemnation or eminent domain proceeding materially and adversely affecting the Company, whether or not covered by insurance. 3.10.9 Any sale, assignment or transfer of any assets of the Company, except in the ordinary course of business and consistent with past practices. 3.10.10 Any waiver by the Company or Seller of any material rights relating to the Company. 7 3.10.11 Any other material transaction, agreement, contract or commitment entered into by the Company or Seller affecting the Company, except in the ordinary course of business and consistent with past practices. 3.10.12 Any non-cash dividend or any other non-cash distribution of any kind declared, made or paid with respect to the capital stock of the Company. 3.10.13 Any change in the accounting principles, methods, estimates or practices (including, without limitation, depreciation, amortization or inventory valuation policies or rates) followed by the Company. 3.10.14 Any agreement or understanding to do, or which results or is reasonably likely to result in, any of the actions, events or circumstances described in Sections 3.10.1 - 3.10.13. 3.11 TAX MATTERS. 3.11.1 Except as set forth on Schedule 3.11.1, the Company has collected (as applicable) and paid all federal, state, county, local, foreign and other taxes that are due, including without limitation, income taxes, estimated taxes, excise taxes, sales taxes, use taxes, gross receipts taxes, franchise taxes, turnover taxes, employment and payroll related taxes, withholding taxes, property taxes and import duties, whether or not measured in whole or in part by net income, and all deficiencies, or other additions to tax, interest and penalties owed by the Company (individually a "Tax" and collectively the "Taxes") required to be collected and/or paid by the Company. Neither the Company nor Seller knows of any deficiency for Taxes or claim for additional Taxes or interest on or penalties in connection with such Taxes, which have been asserted, threatened to be asserted or proposed against the Company. 3.11.2 Schedule 3.11.2 sets forth all jurisdictions in which the Company has filed or is required to file returns and reports for Taxes and lists the type of Tax covered by each such filing. The Company has timely filed all returns for Taxes, federal, state, local, foreign and other (collectively, the "Tax Returns"). The Company does not have any liability for Taxes with respect to any period subsequent to the periods covered by the Tax Returns other than Taxes incurred in the ordinary course of business. 3.11.3 Schedule 3.11.3A contains a true and correct copy of all Tax Returns filed by the Company since April 1, 1996. Schedule 3.11.3B sets forth the status of federal, state, local and foreign tax audits of the Tax Returns of the Company with respect to items of income or deduction of the Company for each fiscal year for which the statute of limitations has not expired, including the amounts of any deficiencies or additions to Taxes, interest and penalties that have been made or proposed, and the amounts of any payments made by the Company with respect to such Taxes. Except as set forth in Schedule 3.11.3C, each of the Tax Returns filed by the Company correctly and accurately reflects the amount of its liability for Taxes payable as reflected on such Tax Return, and makes all disclosures required by applicable provisions of law. 8 3.11.4 Schedule 3.11.4 sets forth all federal Tax elections or agreements under the Internal Revenue Code of 1986, as amended (the "Code"), and all Tax-related elections or agreements made to or with any state or foreign taxing authority that are in effect with respect to the Company. The Company has not filed a consent under Code ss.341(f) concerning collapsible corporations. The Company has not made any payments, is not obligated to make any payments, and is not a party to any agreement that will not be deductible under Code ss.280G. The Company has not been a United States real property holding corporation within the meaning of Code ss.897(c)(2) during the applicable period specified in Code ss.897(c)(I)(A)(ii). Except as set forth on Schedule 3.11.4A, the Company has disclosed on its federal income Tax Returns all positions taken in such Tax Returns that could give rise to a substantial understatement of federal income Tax within the meaning of Code ss.6662. The Company is not a party to any Tax allocation or sharing agreement. The Company (A) has not been a member of an affiliated group filing a consolidated federal income Tax Return (other than a group the common parent of which was the Company) and (B) has no liability for the Taxes of any Person (other than the Company) under Reg. ss.1.502-6 (or any similar provision of state, local or foreign law), as a transferee or successor, by contract or otherwise. 3.11.5 Schedule 3.11.5 sets forth the details of any extension of time obtained by the Company with respect to the assessment of any Tax. 3.11.6 The Company has not agreed to, nor is required to, make any adjustments under Codess.481(a) by reason of a change in accounting method or otherwise. 3.11.7 Except as set forth on Schedule 3.11.7, the provisions for Taxes on its respective Current Balance Sheet are sufficient under GAAP for the payment of all accrued and unpaid Taxes owed by the Company, whether or not assessed or disputed, as of the date of the Current Balance Sheet. The Company has timely paid any estimated federal or other income Taxes which it was required to pay. 3.12 INDEBTEDNESS AND GUARANTEES. Schedule 3.12 sets forth, as of the date of the Current Balance Sheet, the principal amount of each item of indebtedness owed by the Company (excluding accounts payable incurred in the ordinary course of business). Schedule 3.12 also sets forth a description of all guarantees with respect to any of the items of indebtedness required to be listed on that Schedule and a list and description of all guarantees by the Company of any indebtedness of any other Person, whether or not such indebtedness is otherwise required to be listed on Schedule 3.12. 3.13 LITIGATION AND GOVERNMENTAL MATTERS. Except as described in Schedule 3.13, there is no action, suit or proceeding that has been (a) filed and served, whether or not purportedly on behalf of the Company or Seller, at law or in equity, or before or by any federal, state, local or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, which is pending, or (b) to the knowledge of the Company or Seller, (i) filed but not served or (ii) threatened, against (including, but not limited to, counterclaims), the Company or Seller which involves the transactions contemplated by this Agreement or the possibility of any judgment or liability which if determined adversely to the Company or Seller would result in a material adverse change in the business, operations, affairs, 9 properties or assets, or in the financial condition of the Company; and neither the Company nor Seller is in default with respect to any final judgment, writ, injunction, decree, rule or regulation of any court or any federal, state, local or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, which would have a material adverse effect on the Company. 3.14 COMPLIANCE. Except as set forth in Schedule 3.14, neither the Company nor its business, nor the use, operation or maintenance of any of its assets or properties, is in or constitutes a default under, or is in violation of or contravenes, any applicable (including, without limitation, any Tax, health, employment, customs or interstate or international commerce) statute, law, ordinance, decree, order, rule or regulation of any governmental authority, domestic or foreign, except where such default, violation or contravention would not have a material adverse effect on the Company. The Company has not, nor has any entity or individual acting on behalf of the Company, made any payment of funds prohibited by law, and no funds of the Company have been set aside to be used for any such payment. The Company has complied with all applicable laws and regulations in connection with government contracts, if any, and, to the knowledge of the Company and Seller, no Person has made any allegation that the Company has not so complied. 3.15 PERMITS AND LICENSES. The Company has (a) all permits, licenses, certificates and other governmental authorizations, and (b) all industry affiliations and memberships in industry groups necessary to conduct its business as presently conducted (collectively (a) and (b), the "Permits"), except where the failure to have such Permits would not have a material adverse effect on the Company. Each of the Permits is listed on Schedule 3.15. Neither the Company nor Seller is in violation of any regulation, right or requirement of any industry affiliations or groups, except where such violation would not have a material adverse effect on the Company. Each Permit is in full force and effect and, to the knowledge of the Company and Seller, no suspension or cancellation of any Permit is threatened and there is no reasonable basis for believing that any Permit will not be renewable upon expiration. The transactions contemplated by this Agreement will not materially adversely affect, terminate or impair the validity of the Permits. 3.16 ENVIRONMENTAL COMPLIANCE. As used in this Agreement, the term "Environmental Law" means all applicable laws, ordinances, orders, resolutions, rules or regulations relating to "Hazardous Material" or the environment issued or enacted by any governmental authority with jurisdiction over any of the Company, its subsidiaries and/or real property owned, leased, occupied or managed by the Company or any of its subsidiaries, including without limitation, the Dominica Facility (as defined on Schedule 3.16) (collectively the "Premises"); and the term "Hazardous Material" means any substance meeting any one or more of the following criteria: (a) the presence or anticipated presence of which requires investigation or remediation under any applicable governmental statute, regulation, rule, ordinance, order, action, policy or common law, federal, state or local, domestic or foreign; (b) which is or becomes defined as a "hazardous waste", "hazardous substance", "pollutant" or "contaminant" under any applicable federal, state, local or foreign statute, regulation, rule, ordinance or law (c) which is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous and is or becomes regulated by any applicable 10 governmental authority; (d) which contains gasoline, diesel fuel, varsol or other petroleum hydrocarbons; (e) which contains polychlorinated bipheynols (PCBs), asbestos or urea formaldehyde foam insulation; or (f) which contains radon gas. Except as set forth in Schedule 3.16 and except for ordinary and customary items found in any commercial office (e.g., ink, batteries and carbon material relating to reproductions), (x) the Company has violated not any Environmental Law and neither the Company nor Seller has any knowledge of any violations of Environmental Law with respect to the Premises or any other location at which the Company conducts or has conducted its business; (y) the Premises do not contain any Hazardous Material to be disposed of or otherwise handled as waste; and (z) the Company does not own or lease, nor has ever owned or leased, fuel storage tanks or containers or any other underground or aboveground storage tanks. 3.17 CONTRACTS AND OTHER AGREEMENTS. Schedule 3.17 sets forth a list of all of the following written and material oral contracts and other arrangements, options, understandings and agreements as well (collectively, the "Contracts"), to which the Company is a party or by or to which it or any of its assets or properties are bound or subject: 3.17.1 Contracts with any current or former officer, director, shareholder, employee, consultant, agent or other representative of the Company. 3.17.2 Contracts with any labor union or association representing any employee of the Company. 3.17.3 Contracts for the sale of any of the assets or properties of the Company other than in the ordinary course of business or for the grant to any Person of any options, rights of first refusal, or preferential or similar rights to purchase any of such assets or properties. 3.17.4 Partnership or joint venture agreements. 3.17.5 Contracts under which the Company agrees to indemnify any Person against, or to share, the liability of any Person, other than routine, non-material Contracts such as a lease of a postage machine. 3.17.6 Contracts calling for an aggregate purchase or sale price or payments in any one year of more than US$5,000 in any one case (or in the aggregate, in the case of any related series of contracts and other agreements). 3.17.7 Contracts for the sharing of fees, the rebating of charges or other similar arrangements. 3.17.8 Contracts containing obligations or liabilities of any kind to holders of the securities of the Company. 3.17.9 Contracts containing covenants of the Company or Seller not to compete in any line of business or with any Person or covenants of any other Person not to compete with any Company or Seller in any line of business. 11 3.17.10 Contracts relating to the acquisition by the Company of any operating business or the capital stock of any other Person. 3.17.11 Contracts requiring the payment to any Person of a commission or fee. 3.17.12 Contracts for the payment of fees or other consideration to Seller or any officer or director of the Company or Seller or to any other Person in which any of such Persons has an interest or to any Relative of any such Persons. 3.17.13 Contracts relating to the borrowing of money. 3.17.14 Leases of real or personal property. 3.17.15 Consignment contracts, with contracts in which the Company is consignor or consignee separately listed. 3.17.16 Contracts with independent agents, brokers, dealers or distributors. 3.17.17 Advertising or marketing contracts. 3.17.18 All other material Contracts whether or not made in the ordinary course of business. There are available to Buyer true and complete copies of all of the Company's Contracts (and all amendments, waivers or other modifications to such Contracts) and a summary of all material terms for any material oral Contracts listed on Schedule 3.17. All of the Company's Contracts are valid, binding and in full force and effect and enforceable in accordance with their respective terms and conditions and have been made in the ordinary course of the Company's business, and, except as described on Schedule 3.17, there is no existing default under or breach by the Company or, to the knowledge of the Company or Seller, by any other party of any such Contract or condition which, with the passage of time or notice or both, is reasonably likely to constitute such a default by the Company or, to the knowledge of the Company or Seller, any other party to any such instrument. Except as set forth on Schedule 3.17, there has been no termination or, to the knowledge of the Company or Seller, threatened termination or notice of default under the Company's Contracts, and the transactions contemplated by this Agreement will not result in or give rise to the termination or default of any such Contract. Except as set forth on Schedule 3.17, there has not occurred, and the consummation of the transactions contemplated by this Agreement will not result in, any event or circumstance with respect to which indemnification payments are required under the Company's Contracts. The Company does not have any Contracts other than these listed in Schedule 3.17. 3.18 ACCOUNTS AND NOTES RECEIVABLE. All accounts and other receivables of the Company as of five business days prior to the Company's execution of this Agreement are listed on Schedule 3.18 by debtor, date and amount. Except as set forth on Schedule 3.18, all accounts and other receivables reflected on the Current Balance Sheet and all accounts and other 12 receivables arising subsequent to the date of the Current Balance Sheet have arisen in the ordinary course of the Company's business, are bona fide and properly recorded (along with any reserves) on the books of the Company in accordance with GAAP, and the Company has not been and is not now subject to any set-off or counter-claim with respect to any such receivables. 3.19 REAL ESTATE. Except as set forth on Schedule 3.19, the Company does not own or lease any real property or any buildings or other structures or have any options or any contractual obligations to purchase or acquire any interest in or lease any real property. None of the interests of the Company described in Schedule 3.19 are subject to any Encumbrance, except as set forth on such Schedule 3.19. 3.20 FIXED ASSETS. Schedule 3.20 consists of lists of all tangible fixed assets owned by the Company in connection with the operation of the Company's business including, without limitation, all office furniture, office fixtures, computer equipment, communications equipment and motor vehicles used by the Company in connection with the operation of its business (collectively, the "Fixed Assets"). Subject to normal wear and tear and the next sentence, all of such assets are in reasonably good operating condition and in reasonably good working order. All appropriate repair and maintenance of all such assets has been performed, subject only to pending maintenance calls in the ordinary course of business. The Fixed Assets constitute all operating assets owned and used by the Company in connection with operation of its business. Schedule 3.20 also separately identifies any assets used in connection with the Company's operation of its business which are leased. 3.21 INTELLECTUAL PROPERTY. 3.21.1 Schedule 3.21.1 contains a true and complete list of all patents, trademarks, service marks, trade names, franchises, trade secrets, know-how, technology, service manuals, inventions, copyrights and applications for such rights and all other intellectual property (collectively, the "Intellectual Property") in which the Company has rights, except that such Schedule is not required to list any copyrights that have not been registered or any trade secrets, know-how or technology which is not in writing or stored electronically. Neither the Company nor Seller has received any notice of infringement by the Company of any Intellectual Property of others. Except as set forth in Schedule 3.21.1, none of the present activities of the Company or any of its assets infringe, to the knowledge of the Company or Seller, on any Intellectual Property of others. To the knowledge of the Company and Seller, the Company has the right to use, free and clear of claims or rights of others, all trade secrets, customer lists, procedures, processes and other information required for or incident to its business as presently conducted or contemplated to be conducted. To the knowledge of the Company and Seller, the Company is not making unauthorized use, and has no agreements with any Person for the use, of any confidential information or trade secrets of any past or present employees of the Company or any other Person. None of the activities of the employees of the Company on behalf of the Company violates, to the knowledge of the Company or Seller, any agreements or arrangements currently in effect which any such employees have with their former employers. 3.21.2 The current software applications used by the Company in the operation of its business are set forth and described on Schedule 3.21.2 (the "Software"). Except 13 as set forth on Schedule 3.21.2, the Software, to the extent it is licensed from any third-party licensor or constitutes "off-the-shelf" software, is held by the Company legitimately and is fully transferable to Buyer without any third-party consent. To the Company's and Seller's knowledge, all of the computer hardware of the Company has legitimately-licensed, installed software. The Software operates and runs in a reasonable business manner and is adequate for the operation of the Company's business, including all applicable foreign conversions. 3.21.3 To the knowledge of the Company and Seller, the Company's assets are Year 2000 Compliant; i.e., the Company's software and other information technology (the "Technology") are designed to be used before, during and after calendar year 2000, and, to the knowledge of the Company and Seller, the Technology, if used during each such time period, will accurately receive, provide and process date/time data (including calculating, comparing and sequencing) from, into and between the twentieth and twenty-first centuries, including the years 1999 and 2000, and leap year calculations, to the extent that other software or information technology, used in combination with the Technology, properly exchanges date/time data with the Technology. 3.22 TITLE TO ASSETS; LIENS. Except as set forth on Schedule 3.22, the Company owns outright and has good title to all of its assets and properties, free and clear of any Encumbrance, except for the following "Permitted Encumbrances": (a) assets and properties disposed of, or subject to purchase or sales orders, in the ordinary course of business subsequent to the date of the Current Balance Sheet; (b) Encumbrances to be released at or prior to the Closing; (c) liens for taxes, assessments or other governmental charges not yet due and payable; (d) statutory liens of landlords, carriers, warehousemen, mechanics, materialmen and other similar liens imposed by law for sums not more than 30 days delinquent or which are being contested in good faith; (e) liens incurred or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social security, statutory obligations, surety and appeal bonds, bids, leases, government contracts, trade contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money); (f) deposits made in the ordinary course of business to secure liability to insurance carriers; and (g) easements, rights-of-way, restrictions, and other similar charges or encumbrances not interfering in any material respect with the ordinary conduct of the Company's business. 3.23 SIGNIFICANT SUPPLIERS AND CUSTOMERS. Schedule 3.23 contains an accurate list of all significant suppliers and significant customers, it being understood and agreed that (a) a "significant supplier", for purposes of this Section, means a supplier to whom the Company paid an aggregate of US$100,000 or more during 1999, and (b) a "significant customer", for purposes of this Section, means a customer representing five percent or more of the Company's aggregate annual revenues, in either case as of the date of the Current Balance Sheet. Except to the extent set forth on Schedule 3.23.1, none of the Company's significant suppliers or customers (or persons or entities that are sources of a significant number of suppliers or customers) have canceled or substantially reduced or, to the knowledge of the Company or Seller, are currently attempting or threatening to cancel a contract or reduce the purchase of the products and/or utilization of the services provided to or by the Company. 14 3.24 COMPENSATION OF EMPLOYEES. Schedule 3.24 contains a complete and accurate list of all current officers, employees and consultants of the Company, together with the current job title, aggregate remuneration rate (bonus, commission and salary) and accrued but untaken vacation for each such individual. 3.25 EMPLOYEE BENEFIT PLANS. 3.25.1 Schedule 3.25.1 contains a true and complete list of each pension, retirement, profit sharing, deferred compensation, stock option, stock purchase, bonus, medical, welfare, disability, severance or termination pay, insurance or incentive plan, and each other employee benefit plan, program, agreement or arrangement, whether funded or unfunded, sponsored, maintained or contributed to or required to be contributed to by the Company or by any trade or business, whether or not incorporated. 3.25.2 True and complete copies of each of the plans described in Section 3.25.1 (the "Plans") and related trusts have been furnished to Buyer, along with the most recent financial statement and the most recent actuarial report prepared with respect to any of such Plans, the most recent Summary Plan Description and the most recent Annual Report together with a statement setting forth any such documents which cannot be furnished. 3.25.3 All contributions required by each Plan or by law with respect to all periods through the Closing Date shall have been made by such date (or provided for by the Company by adequate reserves on its financial statements) and no excise or other taxes have been incurred or are due and owing with respect to any such Plan. 3.25.4 No claim, lawsuit, arbitration or other action has been threatened, asserted or instituted against any Plan, any trustee or fiduciaries of any Plan, the Company or any of the assets of any trust maintained under any Plan. 3.25.5 The present value, determined on a termination basis, of all accrued benefits, vested and unvested, under each Plan, determined using the actuarial valuation assumptions and methods (including interest rates) contained in the most recent actuarial report for such Plan, does not exceed the assets of such Plan allocable to such benefits. 3.25.6 No welfare benefit plan provides for continuing benefits or coverage for any participant or beneficiary of a participant after such participant's termination of employment. 3.25.7 The Company does not maintain or contribute to any severance pay plan. 3.25.8 No individual shall accrue or receive any additional benefits, service or accelerated rights to payment of benefits under any Plan as a result of the actions contemplated by this Agreement. 3.26 EMPLOYEE RELATIONS. As of January 31, 2000, the Company had an aggregate of 47 employees. The Company generally enjoys a good employer-employee 15 relationship and is not delinquent in payments to any of its employees or consultants for any wages, salaries, commissions, bonuses or other direct compensation for any services performed by them or for amounts required to be reimbursed to such employees. Except as set forth on Schedule 3.26, upon termination of the employment of any of its employees, the Company will not by reason of anything done prior to the Closing, be liable to any of its employees or consultants for severance pay or any other payments (other than accrued salary, vacation or sick pay in accordance with the Company's normal policies). Except as set forth on Schedule 3.26, the Company has no contracts of employment with any employees nor any legal responsibility for the employees of any other entity. 3.27 LABOR AGREEMENTS. Except as set forth on Schedule 3.27, there are no contracts with labor unions binding upon the Company and the Company has not agreed to recognize any union or other collective bargaining unit nor has any union or other collective bargaining unit been certified as representing any employees of the Company. Neither the Company nor Seller has any knowledge of any organization effort currently being made or threatened by or on behalf of any labor union with respect to employees of the Company. 3.28 AFFILIATE TRANSACTIONS. Schedule 3.28 identifies all Contracts, transactions or arrangements involving any Person (including such Person's officers, directors, shareholders, partners, employees and Relatives) who is an "Affiliate" or Relative of the Company or of Seller (i.e., a Person who or which directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with Seller) and lists all amounts paid (or deemed for accounting purposes to have been paid) by the Company to such Person (provided that payments by the Company in respect of its standard payroll obligations and the reimbursement of expenses to employees incurred in the ordinary course of business shall not be included on Schedule 3.28) or received by the Company from any such Person at any time since December 31, 1995 with respect to any Contracts and all products or services (including any charge for administrative, purchasing, legal, financial or other services) purchased, sold or leased to or by the Company. Except as set forth on Schedule 3.28, each of the Contracts involving an Affiliate, including any and all amendments to each such Contract, contains terms and conditions which are not less favorable than those the Company could have obtained at the time it entered into them from one or more independent third-parties in negotiations at arm's length. No Affiliate or Relative of the Company or Seller is the direct or indirect owner of an interest in any Person that is a present or potential competitor, supplier or customer of the Company, nor does any such Person receive income from any source other than the Company that should properly accrue to the Company. 3.29 COMMISSION ARRANGEMENTS. Except as set forth on Schedule 3.29, the Company does not have any sales or commission arrangements with any of its officers, directors, employees or shareholders or any of their Affiliates or Relatives. 3.30 INSURANCE. Schedule 3.30 sets forth a list of all policies or binders of fire, liability, product liability, workmen's compensation, vehicular, directors and officers, medical, group health, life, disability, business interruption and other insurance held by or on behalf of the Company. Such policies and binders are in full force and effect, are in conformity with the requirements of all Contracts to which the Company is a party, except where the failure to be in such conformity would not have a material adverse effect on the Company, and, to the 16 knowledge of the Company and Seller, are valid and enforceable obligations of the insurers in accordance with their terms. The Company is not in default with respect to any provision contained in any such policy or binder and the Company has not failed to give any notice or present any claim under any such policy or binder in due and timely fashion. Except as set forth on Schedule 3.30, (a) to the knowledge of the Company and Seller, there are no material outstanding unpaid claims under any such policy or binder, and (b) the Company has timely filed all claims that it may have under any of its insurance policies. The Company has not received notice of cancellation or non-renewal of any such policy or binder. 3.31 IMPROVEMENTS. Except as set forth on Schedule 3.31, the Company has not received any notice which remains outstanding and unremedied alleging, proving or contending that the location, construction, occupancy, operation or use of any improvements attached to or placed, erected, constructed or developed as a portion of the real property owned, leased or otherwise utilized by the Company, violates any applicable law, statute, ordinance, rule, regulation, policy, order or determination of any federal, state, local or other governmental authority, domestic or foreign, or any board of fire underwriters (or other body exercising similar functions), or any restrictive covenant or deed restriction affecting any portion of such property, including, without limitation, any applicable zoning ordinances and building codes, flood disaster laws and health and Environmental Laws, rules and regulations the violation of which would individually or in the aggregate have a material adverse effect on the Company. 3.32 BANK AND OTHER ACCOUNTS. Schedule 3.32 sets forth a true and complete list of all bank, savings, brokerage and other accounts of the Company, including the name of the depositary, the account number and the persons authorized to make deposits and withdrawals or to effect transactions in such accounts. 3.33 POWERS OF ATTORNEY. Except as set forth on Schedule 3.33, there are no Persons holding powers of attorney granted by the Company with respect to any of the assets of the Company, any of the Contracts, or any other matters related to the Company. 3.34 RECORDS. All records relating to the Company's assets are maintained in accordance with applicable legal, regulatory and other requirements. 3.35 ACCOUNTS PAYABLE. Each of the accounts payable of the Company reflects bona fide indebtedness of the Company incurred in the ordinary course of the Company's operation of its business and on terms and conditions negotiated in good faith with independent parties at arm's length. 3.36 LETTERS OF CREDIT AND BONDS. Set forth on Schedule 3.36 is a list of all letters of credit and bonds together with their face amounts and a description as to their character (e.g., standby, irrevocable, etc.) which are the obligations of the Company. 3.37 BROKERS. No agent, broker, investment banker or other Person acting on behalf of the Company or Seller under its or his authority is or will be entitled to any broker's fee or finder's fee or any other commission or similar fee, directly or indirectly, in connection with 17 the transactions contemplated by this Agreement for which Buyer or the Company will become liable. 3.38 ABSENCE OF MISREPRESENTATIONS. No representation or warranty by the Company or Seller contained in this Agreement or any Exhibit or Schedule to this Agreement, under the circumstances made, (i) contains any untrue statement of a material fact or omits to state a material fact required to make the statements not false or misleading, or (ii) with respect to statements made to the knowledge of the Company or Seller, contains to the knowledge of the Company or Seller, any untrue statement of a material fact or, to the knowledge of the Company or Seller, omits to state a material fact required to make the statements not false or misleading. 4. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer makes the representations and warranties contained in this Section (including Sections 4.1 - - 4.6) to Seller intending that Seller rely on each of such representations and warranties in order to induce Seller to enter into and complete the transactions contemplated by this Agreement. These representations and warranties shall survive the consummation of the transactions contemplated by this Agreement until the expiration of two years from the date of the Closing, provided that in cases of fraud these representations and warranties shall survive the consummation of such transactions without any time limit. 4.1 EXECUTION AND VALIDITY. The execution and delivery by Buyer of this Agreement has been authorized by its board of directors. Buyer has the full right, power and authority to enter into, and the ability to perform its obligations under, this Agreement and all other agreements and instruments contemplated by this Agreement. This Agreement has been duly executed and delivered by Buyer and is, and the other agreements and instruments to be executed and delivered by Buyer will be, when executed and delivered by it, legal, valid and binding agreements of Buyer, enforceable in accordance with their respective terms. 4.2 ORGANIZATION AND QUALIFICATION. Buyer (a) is duly organized, validly existing and in good standing under the laws of the Netherland Antilles, its jurisdiction of incorporation, and (b) has all requisite corporate power and authority to carry on its business as is presently conducted and to own or lease and to operate its assets and business in the places where its business is now conducted and where its assets are now owned, leased or operated. 4.3 ABSENCE OF VIOLATIONS. Except as set forth in Schedule 4.3, neither the execution nor delivery of this Agreement or of any of the other agreements and instruments contemplated by this Agreement, nor the consummation of the transactions contemplated by this Agreement or such other agreements and instruments, will conflict with or result in the breach of any term or provision of, or constitute a default under, or result in the creation of, any Encumbrance upon any of the assets or properties of Buyer, or give any third-party the right to accelerate any obligation under any charter provision, bylaw, contract, indenture, deed of trust, instrument, order, law or regulation to which Buyer is a party or by which Buyer or any of its assets or properties are in any way bound or obligated. 4.4 CONSENTS. Except as set forth in Schedule 4.4, (a) no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any 18 governmental authority is required on the part of Buyer in connection with the transactions contemplated by this Agreement; and (b) no consent, approval, waiver or other action by any Person under any contract, instrument or other document is required or necessary for the execution, delivery and performance of this Agreement by Buyer, or the consummation by Buyer of the transactions contemplated by this Agreement. Except as set forth in Schedule 4.4, all consents described in Schedule 4.4 have been obtained and are in full force and effect. 4.5 BROKERS. No agent, broker, investment banker or other Person acting on behalf of Buyer or under its authority is or will be entitled to any broker's fee or finder's fee or any other commission or similar fee, directly or indirectly, in connection with the transactions contemplated by this Agreement for which Seller will become liable. 4.6 ABSENCE OF MISREPRESENTATIONS. No representation or warranty by Buyer contained in this Agreement or any Exhibit or Schedule to this Agreement, under the circumstances made, (i) contains any untrue statement of a material fact or omits to state a material fact required to make the statements not false or misleading, or (ii) with respect to statements made to the knowledge of Buyer, contains to the knowledge of Buyer, any untrue statement of a material fact or, to the knowledge of Buyer, omits to state a material fact required to make the statements not false or misleading. 5. COVENANTS OF THE COMPANY AND SELLER. In addition to other obligations contained in this Agreement, between the date of this Agreement and the Closing, unless specifically waived in writing by Buyer, the Company shall, and Seller shall cause the Company to, as the case may be: 5.1 CONDUCT OF BUSINESS. (a) Conduct its business in the ordinary course, consistent with prior practice; (b) keep intact its business and goodwill; (c) comply in all material respects with all of the terms of its Contracts; (d) use its reasonable best efforts to keep available the services of its officers and employees; (e) use its reasonable best efforts to maintain good relationships with Persons having business relationships with it; and (f) promptly notify Buyer of any material event or occurrence adverse to, and not in the ordinary and usual course of business or consistent with past practice of, the Company. Without the prior written consent of Buyer, which shall not be unreasonably withheld, the Company shall not, and Seller shall not permit the Company to, take or permit any action to: 5.1.1 Change materially any aspect of its current business. 5.1.2 Affect or change its capital structure. 5.1.3 Terminate or amend any material Contract. 5.1.4 Merge or consolidate with any Person or acquire or sell any stock or equity interest in any other Person. 5.1.5 Sell, lease, pledge, encumber or otherwise dispose of any of its assets, other than in the ordinary course of its business. 19 5.1.6 Change or amend its Charter or Bylaws. 5.1.7 Other than in the ordinary course of business, incur any indebtedness, make any guarantees or make capital expenditures or investments in excess of US$25,000 in the aggregate. 5.1.8 Increase the rate of compensation, bonuses or other benefits provided to employees, other than in the ordinary course of business, or to officers, directors, Seller or its Affiliates or Relatives. 5.1.9 Settle any threatened or pending material litigation or other proceeding. 5.1.10 Effect changes in its method or practice of reporting or paying Taxes or effect changes in the business, contractual arrangements or structure of its relations which would have the effect of altering its Tax treatment or Tax liabilities. 5.1.11 Redeem or make any distributions with respect to its capital stock or pay dividends to Seller. 5.1.12 Agree or commit to do any of the actions described in Sections 5.1.1 - 5.1.11. 5.2 COOPERATION. Not take any action with the intention of preventing the fulfillment of any conditions upon which the obligations of the parties to effect the transactions contemplated by this Agreement are conditioned, including any action taken with the intention of causing the representations and warranties made by the Company or Seller in this Agreement not to be true and correct in all material respects as of the Closing. 5.3 CERTAIN ACTS. Use its reasonable best efforts (including, without limitation, executing required documents and the payment of any related fees and expenses required by Contract or otherwise) to cause to be fulfilled the conditions precedent to Buyer's obligations to consummate the transactions contemplated by this Agreement that are dependent upon the actions of the Company or Seller. 5.4 GOVERNMENTAL FILINGS. Promptly make all governmental filings or other submissions which may be necessary in order for the Company to be able to consummate the transactions contemplated by this Agreement. 5.5 ACCESS AND INFORMATION. Permit the authorized representatives of Buyer to have reasonable access upon reasonable notice to the facilities, equipment, employees, agents, independent auditors, properties, books, records and documents of the Company and shall furnish to Buyer's representatives such information, financial records and other documents with respect to the assets, operations and business of the Company as Buyer shall reasonably request. The Company shall be afforded the opportunity to appoint one or more representatives to accompany and permit the authorized representatives of Buyer access to the offices, employees and accountants of the Company, and to accompany the representatives of Buyer on the visits 20 described in Section 8.6, for consultation or verification of any information reasonably necessary to Buyer's due diligence review, and shall use its reasonable best efforts to cause such Persons to cooperate with Buyer in such consultation and in verifying such information. Any failure of the Company to appoint representatives or the failure of the representatives to accompany or to cause such persons or entities to cooperate with Buyer in such consultation or verification of such information shall allow Buyer's representatives to consult with such Persons without being accompanied by any representative of the Company. 5.6 EXPENDITURES. Not make any material expenditure other than in the ordinary course of business or as contemplated by this Agreement without the prior written approval of Buyer, which approval shall not be unreasonably withheld. 5.7 TAXES. Prepare and timely file, in a manner consistent with applicable laws and regulations, all Tax Returns for Taxes required to be filed on or before the date of the Closing. Seller shall pay and be responsible for paying any sales taxes, documentary stamp taxes, income taxes or other taxes or fees due or owing in connection with the transfer and sale of the Shares. 5.8 NO SHOP; STANDSTILL. Subject to the fiduciary duties of the Board of Directors of Seller, refrain from taking, directly or indirectly, any action to encourage, initiate, solicit or continue any discussions or negotiations with, or any other offers from, any other Person concerning a sale of assets or stock, a merger or any similar transaction concerning the Company which would affect the business of the Company or all or any portion of the Shares. The provisions of this Section 5.8 shall terminate upon the earlier of the termination of this Agreement in accordance with Section 11 or the Closing. 6. COVENANTS OF BUYER. In addition to other obligations contained in this Agreement, between the date of this Agreement and the Closing, unless specifically waived in writing by Seller, Buyer shall: 6.1 COOPERATION. Not take any action that would cause the conditions upon which the obligations of the parties to effect the transactions contemplated by this Agreement not to be fulfilled including, without limitation, taking or causing to be taken any action that would cause the representations and warranties made by Buyer in this Agreement not to be true and correct in all material respects as of the Closing. 6.2 CERTAIN ACTS. Use its best efforts (including, without limitation, the payment of any related fees and expenses required by contract or otherwise) to cause to be fulfilled the conditions precedent to Seller's obligations to consummate the transactions contemplated by this Agreement that are dependent upon the actions of Buyer. 6.3 GOVERNMENTAL FILINGS. Promptly make all governmental filings or other submissions which may be necessary in order for Buyer to be able to consummate the transactions contemplated by this Agreement. 21 7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE COMPANY AND SELLERS. Unless each of the following conditions are satisfied or waived in writing by Seller, the Company and Seller shall not be obligated to effect the transactions contemplated by this Agreement: 7.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties of Buyer contained in this Agreement shall be true and complete in all material respects as at the date of this Agreement and as at the actual date of the Closing (as if each were made at such time), subject to any actions or changes which may have taken place after the date of this Agreement which are expressly permitted by this Agreement, and Seller shall have received a certificate signed by the President or a Vice President of Buyer to that effect. 7.2 PERFORMANCE. Each of the agreements, obligations, conditions and covenants to be performed or complied with by Buyer on or before the Closing pursuant to the terms of this Agreement shall have been fully performed or complied with on or before the date of the Closing, including, without limitation, each of the deliveries to be made by Buyer pursuant to Section 9.3. 7.3 NO MATERIAL ADVERSE CHANGE. No material adverse change in the business, properties or assets or in the financial condition of Buyer taken as a whole shall have occurred from the date of this Agreement through the date of the Closing. 7.4 ABSENCE OF LITIGATION. There shall be no pending or threatened claim, action, litigation, suit or other proceeding, either judicial or administrative, against the Company or with respect to Buyer, Seller or the Shares for the purpose of enjoining or preventing the consummation of this Agreement or otherwise claiming that this Agreement or its consummation is improper or adversely affecting or which would adversely affect the benefit to Seller of the transactions contemplated by this Agreement. 7.5 NEW LEGISLATION. No new law has been enacted or legislation proposed which would preclude the transaction contemplated by this Agreement or limit the business of the Company. 8. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER. Unless each of the following conditions are satisfied or waived in writing by Buyer, Buyer shall not be obligated to effect the transactions contemplated by this Agreement: 8.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties of Seller contained in this Agreement shall be true and complete in all material respects as at the date of this Agreement and as at the date of the Closing (as if each were made at such time), subject to any actions or changes which may have taken place after the date of this Agreement which are expressly permitted by this Agreement, and Buyer shall have received a certificate signed by the President or a Vice President of Seller to that effect. 8.2 PERFORMANCE. Each of the agreements, obligations, conditions and covenants to be performed or complied with by the Company and/or Seller on or before the Closing pursuant to the terms of this Agreement shall have been fully performed or complied 22 with on or before the date of the Closing, including, without limitation, each of the deliveries to be made by the Company and Seller pursuant to Section 9.2. 8.3 NO MATERIAL ADVERSE CHANGE. No material adverse change in the business, properties or assets or in the financial condition of the Company shall have occurred from the date of this Agreement through the date of the Closing. 8.4 ABSENCE OF LITIGATION. There shall be no pending or threatened claim, action, litigation, suit or other proceeding, either judicial or administrative against Buyer or with respect to the Company, Seller or the Shares for the purpose of enjoining or preventing the consummation of this Agreement or otherwise claiming that this Agreement or its consummation is improper or adversely affecting or which would adversely affect the benefit to Buyer of the transactions contemplated by this Agreement. 8.5 CONSENTS. All consents, approvals, permits, estoppel certificates and/or waivers from governmental authorities and all other Persons necessary to effectuate the transactions contemplated by this Agreement including, without limitation, consents permitting the continuation in effect of all of the Contracts and the Permits have been obtained (and/or in the case of governmental regulations, all applicable time periods shall have expired or been terminated). 8.6 DUE DILIGENCE. Representatives of Buyer shall have been allowed to visit with the owners and/or managers of entities which are parties to material Contracts in a manner reasonably satisfactory to Buyer (provided that, subject to Section 5.5, Buyer acknowledges that one or more representatives of the Company shall have the right to accompany the representatives of Buyer on all such visits) and all other review of and due diligence relating to the Company and its business which Buyer elects to undertake shall have been completed to Buyer's satisfaction and Buyer shall not have elected in its sole discretion to terminate this Agreement. 8.7 AMENDMENT TO ASSET PURCHASE AGREEMENT. The Amendment to Asset Purchase Agreement in the form of Exhibit 8.7 shall have been executed and delivered by all of the parties. 8.8 NEW LEGISLATION. No new law has been enacted or legislation proposed which would preclude the transaction contemplated by this Agreement or limit the business of the Company. 9. CLOSING AND POST-CLOSING COVENANTS. 9.1 TIME AND PLACE. The closing under this Agreement (the "Closing") shall take place at 10:00 a.m. on March 29, 2000, or such earlier date as may be agreed to by Buyer and Seller, at the offices of Holland & Knight LLP, 30th floor, 701 Brickell Avenue, Miami, FL 33131, or such other place as may be agreed to by Buyer and Seller. If all of the conditions set forth in Sections 7 and 8 are not satisfied by such date, subject to extension as provided in this Agreement, Buyer or Seller, as the case may be in connection with the applicable condition, shall 23 have the right, but not the obligation, to postpone the Closing from time to time, but not beyond an additional 60 days in the aggregate. Notwithstanding the foregoing, if the failure to satisfy a condition is a breach of this Agreement, exercise of an option provided in this Section shall not constitute a waiver of such breach or of the right to seek damages for such breach. 9.2 OBLIGATIONS OF THE COMPANY AND SELLER. At the Closing, the Company and/or Seller, as applicable, shall deliver to Buyer: 9.2.1 The certificate dated as of the date of the Closing as described in Section 8.1. 9.2.2 Stock certificate(s) representing the Shares, duly endorsed in blank by Seller. 9.2.3 Certified copies of the resolutions of the boards of directors and the shareholders, as applicable, of the Company and Seller authorizing the execution, delivery and performance of, and the transactions contemplated by, this Agreement. 9.2.4 An opinion of counsel for Seller, in form and substance reasonably satisfactory to Buyer as to the matters set forth in Exhibit 9.2.4, and an opinion of counsel for the Company, in form and substance reasonably satisfactory to Buyer. 9.2.5 A good standing certificate or its equivalent with respect to the Company from the Commonwealth of Dominica, West Indies and each of the jurisdictions identified on Schedule 3.2, in each case not more than 10 days prior to the date of the Closing. 9.2.6 All required consents, approvals, permits, estoppel certificates and/or waivers as required by Section 3.5. 9.2.7 The Management Agreement between Seller and Buyer in the form of Exhibit 9.2.7 executed by Seller. 9.2.8 Such other certificates, instruments and documents of transfer, if any, as may be necessary to consummate the transactions contemplated by this Agreement. 9.3 OBLIGATIONS OF BUYER. At the Closing, Buyer shall deliver to Seller: 9.3.1 The unpaid balance of the Cash Consideration, as adjusted pursuant to Section 2.3, by wire transfer of immediately available funds. 9.3.2 The certificate dated as of the date of the Closing as described in Section 7.1. 9.3.3 A certified copy of the resolutions of the Board of Directors of Buyer authorizing the execution, delivery and performance of, and the transactions contemplated by, this Agreement. 24 9.3.4 The Management Agreement in the form of Exhibit 9.2.7 executed by Buyer. 9.3.5 Such other certificates, instruments and documents of transfer if any, as may be necessary to consummate the transactions contemplated by this Agreement. 9.4 GUARANTEE OF NOTES AND ACCOUNTS RECEIVABLE. Seller hereby guarantees to Buyer the collection of the accounts receivable and notes receivable of the Company in existence as of the Closing; provided, however, Seller shall not be liable for doubtful accounts which do not exceed, individually or in the aggregate, US$74,125.70 (the "Doubtful Account Allowance"). Subject to the Doubtful Account Allowance, on the second anniversary of the date of the Closing, Seller shall pay to Buyer an amount equal to all then outstanding accounts receivable and notes receivable which were in existence on or before the date of the Closing. In the event the Company collects, in respect of the Company's accounts receivable and notes receivable as of the date of Closing, an amount in excess of such accounts receivable and notes receivable net of the Doubtful Account Allowance by the second anniversary of the date of the Closing, then Buyer shall pay Seller an amount equal to such excess. Any accounts receivable and/or notes receivable in existence on the date of the Closing that remain outstanding on the second anniversary of the date of the Closing shall be transferred to Seller on such second anniversary for no additional consideration. Notwithstanding the foregoing, in the event that within six months after the date of the Closing Buyer makes the election described in the penultimate sentence of Section 2.2 to cease the making or receiving of the payments described in the first sentence of Section 2.2, the parties shall have no rights or obligations under this Section 9.4, and this Section 9.4 shall be deemed to be deleted from this Agreement. 9.5 NON-COMPETITION. 9.5.1 During the Restricted Period and in the Restricted Area (as such terms are defined below), Seller, on behalf of itself and its Affiliates, agrees not to (i) directly or indirectly, engage in any business activity which is directly or indirectly in competition with the Cement Business or Ready Mix Business or (ii) solicit any person who has a business relationship with the Company or Buyer to discontinue or reduce the extent of the relationship. Until the later of (x) a period of two years after the date of the Closing and (y) the date of the termination of the Management Agreement between UMAR and Seller and its wholly-owned subsidiaries dated February 22, 2000 (the "UMAR Management Agreement"), the Management Agreement between Buyer and Seller in the form of Exhibit 9.2.7 or the Distributorship Agreement between UMAR and Seller and its wholly-owned subsidiaries dated February 22, 2000 (the "Distributorship Agreement"), whichever is later, Seller agrees not to seek to employ or employ any person who is in the employ of the Company or Buyer. The parties agree that Seller's activities as contemplated by the Supply Agreement, the Distributorship Agreement, the UMAR Management Agreement and the Management Agreement in the form of Exhibit 9.2.7 shall in no way be deemed to be competition in violation of this provision. 9.5.2 "RESTRICTED PERIOD" means five years from the date of the Closing. "RESTRICTED AREA" means: (i) for purposes of the Ready Mix Business, Dominica and (ii) for 25 purposes of the Cement Business, the U.S. Virgin Islands, the Dutch Antilles, the French West Indies, Antigua and Barbuda, Dominica and the British Virgin Islands. 9.6 SHARING OF TAX BENEFITS. Buyer and Seller agree to work together to structure their relationships under this Agreement and the Management Agreement to minimize taxes payable to the extent legally permissible. Buyer and Seller agree to share equally any tax savings arising as result of such structuring. 10. INDEMNIFICATION. 10.1 INDEMNIFICATION BY SELLER. From and after the Closing, Seller shall indemnify, defend and hold harmless Buyer and the Company and their respective officers, directors, shareholders, employees and agents and their successors and assigns against any loss, claim, damage, cost, obligation, liability, penalty and expense, including all legal and other expenses reasonably incurred in connection with investigating or defending against any such loss, claim, damage or liability or action in respect of such matters (collectively referred to as "Section 10 Damages" in the remainder of this Agreement) occasioned by, arising out of or resulting from any breach or default of any representation or warranty by, or covenant of, the Company or Seller contained in this Agreement, including without limitation, non-payment, late payment and/or underpayment of Taxes. 10.2 INDEMNIFICATION BY BUYER. From and after the Closing, Buyer shall indemnify, defend and hold harmless Seller and its officers, directors, shareholders, employees and agents and their successors and assigns against any Section 10 Damages occasioned by, arising out of or resulting from any breach or default of any representation or warranty by, or covenant of, Buyer contained in this Agreement. 10.3 NOTICE OF INDEMNIFICATION. Upon receipt by an indemnified party of notice of the commencement against it of any action involving a claim, including, but not limited to, notice of a tax audit, assessment or other tax related inquiry, investigation or claim, such indemnified party, if a claim in respect of such action is to be made by it against any indemnifying party under this Section 10, shall promptly notify in writing the indemnifying party of such commencement. In case any such action is brought against any indemnified party, and it notifies an indemnifying party of such commencement, the indemnifying party will be entitled to participate in the defense and, to the extent that it may wish, assume the defense of the action, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election to assume the defense, the indemnifying party will not be liable to such indemnified party under this Section 10 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense other than reasonable costs of investigation. Any such indemnifying party shall not be liable to any such indemnified party on account of any settlement of any claim or action effected without the consent of such indemnifying party unless the indemnifying party had determined not to assume the defense of the action. The indemnifying party will not settle or compromise any claim or action without the written consent of the indemnified party (which consent shall not be unreasonably withheld). 26 10.4 HURDLE RATE AND LIMITATION. Except as otherwise provided in this Agreement, neither Seller, on the one hand, nor Buyer, on the other hand, shall have any liability for indemnification pursuant to this Section 10 unless the total Section 10 Damages for which the indemnifying party would otherwise be liable exceeds US$25,000 (the "Hurdle Rate"), at which point such indemnifying party shall be responsible for all indemnifiable damages that may arise in excess of the Hurdle Rate. The Hurdle Rate shall not apply to any breach of contract or covenant by any of the parties to this Agreement and shall apply only to misrepresentations by the parties to this Agreement. The aggregate amount of Section 10 Damages occasioned by, arising out of or resulting from any breach or default of any representation or warranty by, or covenant of, the Company or Seller contained in this Agreement, including without limitation, non-payment, late payment and/or underpayment of taxes for which Seller shall be liable under this Agreement shall not exceed the Purchase Price. 11. TERMINATION. This Agreement shall be terminated and the transactions contemplated by this Agreement abandoned at any time prior to the Closing: 11.1 By mutual written consent of Buyer and Seller. 11.2 By either Buyer or Seller, upon written notice to the other, if without fault of such terminating party, the Closing has not taken place by the close of business on May 28, 2000, unless Buyer, Seller and the Company agree in writing to extend such date. 11.3 By Buyer upon written notice to Seller, if the Company and/or Seller has violated or breached any representation, warranty or covenant contained in this Agreement or any agreement contemplated by this Agreement; provided that Buyer shall have given the Company and Seller 30 days' advance written notice setting forth the basis on which Buyer is exercising its right to terminate and such violation or breach is not cured within such 30 days. 11.4 By Seller upon written notice to Buyer, if Buyer has violated or breached any representation, warranty or covenant contained in this Agreement or any agreement contemplated by this Agreement; provided that Seller shall have given Buyer 30 days' advance written notice setting forth the basis on which Seller is exercising its right to terminate and such violation or breach is not cured within such 30 days. Termination by Buyer or Seller pursuant to Sections 11.3 or 11.4, respectively, shall not constitute a waiver of the breach affording such right of termination or of the right to seek damages for such breach. 27 12. MISCELLANEOUS. 12.1 NOTICES. All notices, demands or requests provided for or permitted to be given pursuant to this Agreement must be in writing and shall be delivered or sent, with the copies indicated, by personal delivery, telefax (with confirmation and additional copy sent by overnight delivery service) or overnight delivery service (by a reputable international carrier) to the parties as follows (or at such other address as a party may specify by notice given pursuant to this Section): To the Company and/or Sellers: c/o Devcon International Corp. 1350 E. Newport Center Drive Suite #201 Deerfield Beach, Florida 33442 Facsimile: (954) 429-1506 Attn: Jan Norelid 28 With a copy to: Greenberg Traurig, P.A. 1221 Brickell Avenue Miami, Florida 33131 Facsimile: (305) 579-0717 Attn: Robert Grossman, Esq. To Buyer: Caricement Antilles N.V. Equity Trust (Curacao) N.V. Scharlooweg 81 Curacao Netherland Antilles Facsimile: +5999 461 7879 Attn: Mr. Evert Rakers With a copy to: Union Maritima Internacional, S.A. Serrano, 45 - planta 3 28001 MADRID - SPAIN Facsimile: +34915779346 Attn: Joaquin Villanueva Diaz De Espada With a copy to: Holland & Knight LLP 701 Brickell Avenue Suite 3000 Miami, Florida 33131 Facsimile: (305) 789-7799 Attn: Ronald Albert, Jr., Esq. All notices shall be deemed given and received one business day after their delivery to the addresses for the respective party(ies), with the copies indicated, as provided in this Section. 12.2 ENTIRE AGREEMENT. This Agreement, the documents which are Exhibits and Schedules to this Agreement and any other contemporaneous agreements entered into by the parties contain the sole and entire agreement among the parties with respect to their subject matter and supersede any and all other prior written or oral agreements among them with respect to such subject matter. The Asset Purchase Agreement, as amended by the Amendment to Asset Purchase Agreement, remains in full force and effect. The Letter of Intent is terminated as of the date of this Agreement and is of no further force or effect. 12.3 AMENDMENT. No amendment or modification of this Agreement shall be valid unless in writing and duly executed by the parties affected by the amendment or modification. 12.4 BINDING EFFECT. This Agreement shall be binding upon and inure to the benefit of the parties and their respective representatives, heirs, successors and permitted assigns. 29 12.5 WAIVER. Waiver by any party of any breach of any provision of this Agreement shall not be considered as or constitute a continuing waiver or a waiver of any other breach of the same or any other provision of this Agreement. 12.6 CAPTIONS. The captions contained in this Agreement are inserted only as a matter of convenience or reference and in no way define, limit, extend or describe the scope of this Agreement or the intent of any of its provisions. 12.7 CONSTRUCTION. In the construction of this Agreement, whether or not so expressed, words used in the singular or in the plural, respectively, include both the plural and the singular and the masculine, feminine and neuter genders include all other genders. Since all parties have engaged in the drafting of this Agreement, no presumption of construction against any party shall apply. 12.8 SECTION, SCHEDULE AND EXHIBIT REFERENCES. All references contained in this Agreement to Sections, Schedules and Exhibits shall be deemed to be references to Sections of, and Schedules and Exhibits attached to, this Agreement, except to the extent that any such reference specifically refers to another document. All references to Sections shall be deemed to also refer to all clauses of such Sections, if any. The definitions of terms defined in this Agreement shall apply to the Schedules. 12.9 SEVERABILITY. In the event that any portion of this Agreement is illegal or unenforceable, it shall affect no other provisions of this Agreement, and the remainder of this Agreement shall be valid and enforceable in accordance with its terms. 12.10 ABSENCE OF THIRD-PARTY BENEFICIARIES. Nothing in this Agreement, express or implied, is intended to (a) confer upon any Person other than the parties to this Agreement and as set forth in Sections 12.4 and 12.12 any rights or remedies under or by reason of this Agreement as a third-party beneficiary or otherwise; or (b) authorize anyone not a party to this Agreement to maintain an action or institute an arbitration proceeding pursuant to or based upon this Agreement. 12.11 BUSINESS DAY. As used in this Agreement, the term "business day" means any day other than a Saturday, Sunday or legal or bank holiday in the City of Miami, Florida (the "City"). If any time period set forth in this Agreement expires on other than a business day in the City, such period shall be extended to and through the next succeeding business day in the City. 30 12.12 ASSIGNMENT. Neither this Agreement nor any rights under this Agreement may be assigned by any party without the written consent of all other parties; provided, however, Buyer may assign this Agreement to a direct or indirect wholly-owned subsidiary of Buyer or Buyer's direct or indirect parent or to a purchaser of all or substantially all of Buyer's assets. 12.13 OTHER DOCUMENTS. The parties shall take all such actions and execute all such documents which may be necessary to carry out the purposes of this Agreement, whether or not specifically provided for in this Agreement. 12.14 GOVERNING LAW. This Agreement and the interpretation of its terms shall be governed by the laws of the State of Florida, without application of conflicts of law principles. 12.15 ATTORNEYS' FEES. Seller and Buyer shall pay their respective attorneys' fees and expenses for the negotiation and preparation of this Agreement, the Exhibits and Schedules and the other agreements contemplated by this Agreement. Notwithstanding the foregoing, Buyer shall reimburse Seller for up to US$12,000 for Seller's attorneys' fees and expenses for the negotiation and preparation of this Agreement. 12.16 PUBLIC DISCLOSURE. No party to this Agreement shall make any public disclosure or publicity release pertaining to the existence of the subject matter contained in this Agreement without notifying and consulting with the other parties; provided, however, that notwithstanding the foregoing, each party shall be permitted, after notice to the other parties, to make such disclosures to the public or to governmental agencies as its counsel shall deem necessary to maintain compliance with, and to prevent violation of, applicable laws, federal, state and local, domestic and foreign. 12.17 ARBITRATION. 12.17.1 Any dispute, controversy or claim arising out of or relating to this Agreement, or the breach, termination or validity of this Agreement, which has not been resolved by a non-binding procedure, shall be settled by arbitration in Miami-Dade County, Florida (unless Buyer, the Company and Seller mutually agree in writing to another location), in accordance with the Arbitration Rules of the American Arbitration Association then in effect, except that Buyer, the Company and Seller agree under any circumstances they shall be permitted reasonable discovery of documents and depositions of an adequate number of witnesses. Notwithstanding anything to the contrary in this Agreement, Buyer, the Company and Seller further agree that arbitration shall not be utilized to determine any dispute, controversy or claim which requires a third party's presence either as the co-respondent or as an indemnifier, unless the third party agrees to be bound by the arbitration. Disputes described in the preceding sentence shall be resolved through proceedings commenced and prosecuted in a state or federal court in Miami-Dade County, Florida. 12.17.2 Within one week after Buyer, on the one hand, or Seller, on the other hand, requests arbitration and the other party receives notice of such request, both parties shall supply the American Arbitration Association with a list of qualifications for the arbitrators. Within two weeks after receipt of the parties' lists of qualifications for the arbitrators, the 31 American Arbitration Association shall supply the parties with a list of 21 potential arbitrators, and Buyer, on the one hand, and Seller, on the other hand, shall each be permitted to strike up to nine proposed arbitrators and shall notify in writing the American Arbitration Association of the party's decisions. Within two weeks after receipt of the parties' decisions as to the acceptable potential arbitrators, the American Arbitration Association shall appoint the three arbitrators from the group of arbitrators which has not been stricken by either party. 12.17.3 Resolution of disputes, controversies or claims shall be determined by a majority vote of the arbitration panel. Buyer, on the one hand, and Seller, on the other hand, shall share equally the fees, costs and expenses of the arbitration, unless the arbitrators modify the allocation of fees, costs and expenses because they have determined that fairness dictates other than an equal allocation between the parties. Each party shall be responsible for its own attorneys' fees, costs of its experts and expenses of its witnesses, unless the arbitrators provide otherwise because they have determined that fairness so dictates. Any award rendered shall be final, binding and conclusive (without the right to an appeal, unless such appeal is based on fraud by the other party in connection with the arbitration process) upon the parties and any judgment on such award may be enforced in any court having jurisdiction, unless otherwise provided by law. The party submitting such dispute to arbitration shall inform the American Arbitration Association that the parties have agreed: (i) to reasonable discovery pursuant to the rules then in effect under the Federal Rules of Civil Procedure (as used in the United Sates District Court for the Southern District of Florida) for a period not to exceed 120 days prior to such arbitration and (ii) to require that the testimony at the arbitration hearing be transcribed. 12.18 CURRENCY. All monetary amounts in this Agreement are stated in United States dollars (US$) and shall be paid in that currency. No charges shall be made in any of such amounts based upon changes in the value of the United States dollar against any other currency. 12.19 COUNTERPARTS. This Agreement may be executed and delivered in two or more counterparts, each of which shall be deemed to be an original and all of which, taken together, shall be deemed to be one agreement. 12.20 SELLER'S RELEASE. Effective as of the Closing, Seller hereby releases the Company and all of its affiliated subsidiaries, divisions, parents, shareholders, predecessors, successors and assigns, directors, employees, managers, officers, representatives, agents, and attorneys, from any and all manner of action, claim, suit, cause of action, debt, sum of money, contract, covenant, controversy, agreement, promise, damage, judgment and demand whatsoever, in law or in equity, whether now known or unknown, including but not limited to any claim under the common law or statutes of the United States, or any other jurisdiction, country or state which Seller ever had or now has against such Persons by reason of any matter, cause or thing whatsoever. 32 The parties have entered into this Stock Purchase Agreement as of the date first set forth above. SELLER DEVCON INTERNATIONAL CORP., a corporation organized under the laws of Florida By: /S/ JAN NORELID ---------------------------------------------- Title: Chief Financial Officer COMPANY Caribbean Construction & Development, Ltd., a private company limited by shares organized under the laws of the Commonwealth of Dominica, West Indies By: /S/ JAN NORELID ------------------------------------------------ Title: Chief Financial Officer BUYER CARICEMENT ANTILLES N.V., a corporation established under the laws of Curacao, Netherland Antilles By: /S/ JOAQUIN VILLANVEVA ------------------------------------------------ Title: 33 -----END PRIVACY-ENHANCED MESSAGE-----