EXHIBIT 2
Execution copy
SHARE PURCHASE AGREEMENT
HUHTAMAKI VAN LEER OYJ
as the Seller
and
▇▇▇▇▇ BROS. CORPORATION
as the Purchaser
for the acquisition by the Purchaser
of the entire issued share capital of
Royal Packaging Industries Van Leer N.V.
NAUTADUTILH
Amsterdam
Place: Amsterdam
Date: 27 October 2000
TABLE OF CONTENTS
ARTICLE 1 INTERPRETATION
1.1 Definitions 6
1.2 References 15
ARTICLE 2 SALE AND PURCHASE OF THE SHARES 15
2.1 Sale and Purchase of the Shares 15
2.2 Transfer of the Shares 16
ARTICLE 3 PURCHASE PRICE AND PAYMENT 17
3.1 Purchase Price 17
3.2 Provisional Purchase Price 17
3.3 Payment 18
ARTICLE 4 ADJUSTMENT TO PROVISIONAL PURCHASE PRICE 18
4.1 Reduction of the Provisional Purchase Price 18
4.2 Increase of the Provisional Purchase Price 19
4.3 Closing Balance Sheet 19
4.4 Open Issues 21
4.5 Payment of the Adjustment 22
4.6 Conversion US dollars - Euro 23
ARTICLE 5 REPRESENTATIONS AND WARRANTIES 23
5.1 Seller's Representations and Warranties 23
5.2 Purchaser's Representations and Warranties 23
ARTICLE 6 INDEMNIFICATION AND SURVIVAL 23
6.1 Indemnification 23
6.2 Survival of the Seller's Representations
and Warranties 24
6.3 Purchaser's Investigation and Awareness 25
6.4 Limitation of Indemnification Amount under the
Seller's Representations and Warranties 25
6.5 Threshold 26
6.6 Effects of Taxes, Insurances and Provisions 26
6.7 Change of law 27
6.8 Information of Claim 27
6.9 Defence against Third Party Claims 27
6.10 Officers and Directors of the Company's Group 29
6.11 Environmental Liability and Indemnity 29
ARTICLE 7 PRE-CLOSING COVENANTS 43
7.1 Conduct of Business 43
7.2 Reorganisation 44
7.3 Access to Information and Properties 46
7.4 Belgian Coordination Center 46
7.5 Supervisory Board Van Leer Netherlands B.V. 46
ARTICLE 8 CONDITIONS PRECEDENT 46
8.1 Conditions Precedent to the Obligations of
both Parties 46
8.2 Conditions Precedent to the Purchaser's Obligations 48
8.3 Conditions Precedent to the Seller's Obligations 48
8.4 Fulfilment of Conditions Precedent 48
8.5 Material Breach 49
ARTICLE 9 CLOSING 50
9.1 Place of Closing 50
9.2 Settlement of intercompany debt 50
9.3 Release of guarantees and indemnity 50
9.4 Pensions 51
9.5 Service Agreement 53
9.6 Insurance Policies 53
9.7 Resignation of Directors 53
9.8 Custody Agreement 53
9.9 Further Closing actions to be taken 53
ARTICLE 10 NON-COMPETITION AND CONFIDENTIALITY 54
10.1 Non-Competition Seller 54
10.2 Non-Solicitation Purchaser 55
10.3 Confidentiality 55
10.4 Name Van Leer and Huhtamaki 55
ARTICLE 11 ANNOUNCEMENT 56
11.1 Disclosure 56
11.2 Press release 56
ARTICLE 12 TERMINATION 57
12.1 Termination 57
12.2 Effect of Termination 57
ARTICLE 13 MISCELLANEOUS 58
13.1 Entire Agreement 58
13.2 Further Assurance 58
13.3 Changes 58
13.4 Invalid Provisions 59
13.5 Descriptive Headings 59
13.6 Expenses 59
13.7 No Implied Waivers 59
13.8 No Rescission 60
13.9 Notices 60
13.10 Assignment 61
13.11 Civil Law Notary 61
13.12 Counterparts 62
ARTICLE 14 GOVERNING LAW AND DISPUTES 62
14.1 Governing Law 62
14.2 Disputes 62
Schedules
Schedule 1 Draft deed of transfer of Shares
Schedule 2 Due Diligence Information List
Schedule 3 Purchaser's Representations and Warranties
Schedule 4 (i) Seller's Representations and Warranties
Schedule 4 (ii) Disclosure Letter
Schedule 5 Form of Service Agreement
Schedule 6 Significant Subsidiaries
Schedule 7 ▇▇▇▇▇▇▇ ▇▇▇▇▇ comfort letter
Schedule 8 (i) Description of Reorganisation
Schedule 8 (ii) Reorganisation indemnity exceptions
Schedule 9 Form of Transition Period Agreement
Schedule 10 (i) Legal opinion of Seller's Finnish counsel
Schedule 10 (ii) Legal opinion of Purchaser's US counsel
Schedule 11 Insurance policies terminating at Closing
Schedule 12 Jurisdictions re non-competition
Schedule 13 Press release
Schedule 14 Split enterprise pension funds
Schedule 15 Split enterprise pension fund employees
Schedule 16 Intentionally left blank
Schedule 17 (i) List of accounts re Net Outstanding Indebtedness
Schedule 17 (ii) List of accounts re Net Working Capital
Schedule 18 Mexico related loan
Schedule 19 Hypothetical calculations Provisional Purchase
Price
Schedule 20 Minimum Supporting Data
Schedule 21 Environmental disclosure letter
Schedule 22 Property
Schedule 23 Intentionally left blank
Schedule 24 Known matters excluded from insurance coverage
Schedule 25 Van Leer Corporate Environmental Policy
Schedule 26 Form of Custody Agreement
SHARE PURCHASE AGREEMENT
THE UNDERSIGNED:
(1) HUHTAMAKI VAN LEER OYJ, a company duly incorporated and
validly existing under the laws of Finland, established and
having its principal office in Espoo as the seller (the
"Seller"); and
(2) ▇▇▇▇▇ BROS. CORPORATION, a corporation organised under the
laws of the State of Delaware, USA, having its principal
offices at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇ as the
purchaser (the "Purchaser");
WHEREAS:
A. on the date hereof, the Seller has full right and title to
the entire issued share capital of ROYAL PACKAGING INDUSTRIES
VAN LEER N.V., a public company with limited liability
organised under the laws of the Netherlands, having its
registered seat and office at Amstelveen, the Netherlands as
(the "Company");
B. the Company, directly or indirectly, has full right and title
to the Subsidiary Shares (as hereinafter defined);
C. prior to Closing (as hereinafter defined), the Seller may
transfer the Shares (as hereinafter defined) to one of its
subsidiaries as further provided in Article 2.1 and Article
13.10;
D. the Seller wishes to sell the Shares to the Purchaser (or, as
the case may be, the Seller wishes to cause its subsidiary to
which it has transferred the Shares prior to Closing to sell
and transfer the Shares to the Purchaser) and the Purchaser
wishes to purchase the Shares from the Seller (or as the case
may be, from the subsidiary to which the Seller will have
transferred the Shares prior to Closing) subject to the terms
and conditions and for the Purchase Price as set forth in
this agreement (the "Agreement"); and
E. all required procedures, if any, to be followed under
employee or trade union consultation legislation and
regulations under Dutch law which have to be completed prior
to execution of this Agreement, have been completed .
NOW HEREBY AGREE AS FOLLOWS:
ARTICLE 1 INTERPRETATION
1.1 Definitions
Unless the context requires otherwise, the following capitalised
terms and expressions in this Agreement are defined terms and
expressions which shall have the following meanings:
Agreement: this Share Purchase Agreement
Annex: each of the annexes to Schedule 4(i)
Breach: shall have the meaning given to it in
Article 6.1
Civil Law Notary: civil law notary ▇▇ ▇. ▇▇▇▇▇▇▇▇▇ or any
other civil law notary of ▇▇▇▇▇ Dutilh,
attorneys, civil law notaries and tax
advisers or any of their deputies
Closing: the completion of the transactions
contemplated by this Agreement on the
Closing Date
Closing Balance Sheet: the audited consolidated balance
sheet of the Industrial Packaging
Division as at Closing to be prepared
in accordance with Articles 4.3 and 4.4
Closing Date: a date to be agreed upon by the
Parties, which date shall be within ten
(10) days after fulfilment or waiver of
all conditions precedent set forth in
Article 8
Company: Royal Packaging Industries Van Leer
N.V., a public company with limited
liability organised under the laws of
the Netherlands, having its registered
seat and office at Amstelveen, the
Netherlands
Company's Group: the Company and its Subsidiaries
Confidentiality Agreement: the agreement between the Parties dated
28 March 2000 setting forth the terms
and conditions on confidentiality with
respect to this transaction and as
further referred to in Article 10.3 and
13.1 of this Agreement
Consumer Packaging Division: the subsidiaries of the Seller,
excluding the Company's Group and
excluding the Included Assets and
including the Excluded Assets
Deed of Transfer: the notarial deed of transfer of the
Shares in the form of Schedule 1
Disclosure Letter: the letter, with the annexes
attached thereto and made part thereof,
of even date with this Agreement from
the Seller to the Purchaser, attached
to and made part of Schedule 4 (ii), as
accepted in writing by the Purchaser
and containing various specific
disclosures against the Seller's
Representations and Warranties
Due Diligence Information: the information as listed in part (i),
(ii) and (iii) of Schedule 2 disclosed
by the Seller or the Company's Group to
the Purchaser in connection with the
due diligence investigation carried out
by the Purchaser into the Company's
Group
Dutch GAAP: the accounting principles and
practices generally accepted in the
Netherlands with respect to the
preparation of annual accounts
Encumbrances: any lien (statutory or other),
attachment, charge, security interest,
mortgage, deed of trust, pledge,
hypothecation, assignment, usufruct,
conditional sale or other title
retention agreement, preference,
priority or other security agreement or
preferential arrangement of any kind or
nature, and any easement, encroachment,
restriction, right of way or other
encumbrance of any kind
Environmental Laws any and all applicable laws,
regulations, rules, orders,
ordinances, and/or decrees issued,
promulgated, enforced, or enacted by
any national, federal, state, or local
government or governmental authority,
and any non-statutory, common law, or
court decision, and concerning the
Investigation (as defined in Article
6.11.1 of this Agreement) of or the
actual or threatened contamination,
release, discharge, dispersal, escape,
migration or presence of pollutants in
the air, land, soil, subsurface
strata, surface water, or ground water
Estimated Net Outstanding
Indebtedness: the estimated Net Outstanding
Indebtedness as referred to in Article
3.2
Estimated Net Working
Capital: the estimated Net Working Capital as
referred to in Article 3.2
Excluded Assets: the assets and liabilities of the
Company's Group as per the Closing
Date which are not Included Assets
Included Assets: the assets and liabilities reflected
in the Pro Forma Accounts plus the
assets and liabilities belonging to
the business of the Industrial
Packaging Division which under Dutch
GAAP do not need to be reflected in
such Pro Forma Accounts, less those
assets disposed of and liabilities
discharged since 31 December 1999 in
the ordinary course of business of the
Industrial Packaging Division and plus
those assets acquired and liabilities
incurred by the Industrial Packaging
Division since 31 December 1999 in its
ordinary course of business
Indemnification Amount: shall have the meaning given to it
in Article 6.1
Industrial Packaging
Division: the Company's Group including the
Included Assets and excluding the
Excluded Assets
Net Outstanding Indebtedness: the sum of (i) all interest-bearing
indebtedness (including, without
limitation, long term loans, short
term loans, the current portion of
long term loans and, in each case, any
accrued interest thereon), (ii) all
negative cash accounts, overdrafts
and, in each case, any accrued
interest thereon, (iii) the amount of
all provisions and reserves for
unfunded pension liabilities and pre-
pension and post and early retirement
obligations included under "Provisions
for liabilities and other charges"
included in the Closing Balance Sheet,
(iv) all capitalised leases or other
leases which, pursuant to Dutch GAAP,
should be characterised as capital
leases, (v) the amount of outside
shareholders' interest included under
"Capital and Reserves" included in the
Closing Balance Sheet and (vi) accrual
for performance incentives as further
set forth in Article 4.3, minus (a)
all interest-bearing short term loan
receivables, interest-bearing long
term loan receivables and other
interest-bearing receivables, in each
case, net of related provisions and
reserves therefor (including, without
limitation, any accrued interest
thereon), and minus (b) all cash and
cash equivalents (including bank
receivables and marketable securities)
and, in each case, any accrued
interest thereon, of the Industrial
Packaging Division on a consolidated
basis as at Closing and all as the
same are determined in accordance with
the accounting principles and
practices applied on a basis
consistent with the accounting
principles and practices applied with
respect to the Pro Forma Accounts as
if the Closing were the year end; for
the avoidance of doubt it is hereby
provided that Net Outstanding
Indebtedness will be considered to be
a negative amount for the purpose of
calculating the Purchase Price if the
amount of the sum of the liabilities
referred to in subparagraphs (i)
through (vi) above is higher than the
amount of the sum of the assets
referred to in subparagraphs (a) and
(b) above and that Net Outstanding
Indebtedness will be considered to be
a positive amount for the purpose of
calculating the Purchase Price if the
amount of the sum of the liabilities
referred to in subparagraphs (i)
through (vi) above is lower than the
amount of the sum of the assets
referred to in subparagraphs (a) and
(b) above (a list of accounts with
account numbers in the Company's
accounting system that are included in
the Net Outstanding Indebtedness is
attached as Schedule 17(i));1
Net Working Capital: the sum of the trade receivables,
miscellaneous receivables and the
inventory minus the trade payables and
the miscellaneous payables of the
Industrial Packaging Division, all on a
consolidated basis as at Closing and
all as the same are determined in
accordance with the accounting
principles and practices applied on a
basis consistent with the accounting
principles and practices applied with
respect to the Pro Forma Accounts as if
the Closing were the year end (a list
of accounts with account numbers in the
Company's accounting system that are
included in the Net Working Capital is
attached as Schedule 17 (ii)). The
Purchaser reserves the right to review
the items to be included in the Net
Working Capital as presented in
Schedule 17 (ii) and shall finalise
such review prior to 31 October 2000;
whereby it is understood that the same
items will be included in the Pro Forma
Accounts Net Working Capital
Parties: the Seller, the Purchaser and their
respective permitted assigns
collectively, each of them to be
referred to respectively as a "Party"
1-inter company balances, including balances as a result of the Reorganisation
referred to in Article 7.2 are interest bearing and are therefore included
in the definition of Net Outstanding Indebtedness.
Pro Forma Accounts: the audited pro forma consolidated
balance sheet and profit and loss
account, cash flow statement and the
explanatory notes thereto relating to
the Industrial Packaging Division for
the period ended on the Pro Forma
Accounts Date containing comparative
profit and loss and cash flow
information for the period ending on
December 31, 1998, attached to Schedule
4(i) as Annex 8, as prepared on a basis
consistent with the accounting policies
of the Company. Annex 8a to Schedule
4(i) discloses each item or discrete
category of items included in
"Provisions for liabilities and charges
- Other provisions" in the Pro Forma
Accounts and the amount reserved for
such item or category
Pro Forma Accounts Date: 31 December 1999
Pro Forma Accounts
Net Working Capital: the sum of the trade receivables,
miscellaneous receivables and the
inventory minus the trade payables and
the miscellaneous payables of the
Industrial Packaging Division, all on a
consolidated basis, as at the Pro Forma
Accounts Date (for a matter of
reference being the amount of EUR
238,947,000 (two hundred thirty eight
million nine hundred forty seven
thousand Euro)) (a list of accounts
with account numbers in the Company's
accounting system that are included in
the Pro Forma Accounts Net Working
Capital is attached as Schedule 17
(ii))
Provisional Purchase Price: the provisional purchase price for
the Shares as referred to in Article
3.2
Purchase Price: the purchase price for the Shares as
referred to in Article 3.1
Purchaser: ▇▇▇▇▇ Bros. Corporation, a corporation
organised under the laws of the State
of Delaware, having its principal
offices at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇, ▇▇▇
Purchaser's Representations
and Warranties: the representations and warranties with
respect to the matters represented and
warranted by the Purchaser as set out
in Schedule 3
Reorganisation: the reorganisation provided for in
Article 7.2
Schedule: each of the schedules to this Agreement
Seller: Huhtamaki Van Leer Oyj, a company
duly incorporated and validly existing
under the laws of Finland, established
and having its principal office in
Espoo
Seller Ancillary Agreements: the agreements as referred to in
Section 1.5 of Schedule 4 (i) (the
Seller's Representations and
Warranties)
Seller's Representations
and Warranties: the representations and warranties
with respect to the matters represented
and warranted by the Seller as set out
in Schedule 4 (i)
Service Agreement: the agreement referred to in Clause
9.5
Shares: all 32,782,500 issued ordinary shares
and all 10,000,000 issued preferred
shares with a nominal value of NLG 5
each in the share capital of the
Company with numbers 1 through
32,782,500 for the ordinary shares and
1 through 10,000,000 for the preferred
shares
Significant Subsidiary: any Subsidiary listed on Schedule 6
hereto
Subsidiaries: the direct and indirect subsidiary
companies of the Company as listed in
Annex 6 (i) plus any direct or indirect
subsidiary companies of the Company
being part of the Industrial Packaging
Division incorporated in the process of
the Reorganisation referred to in
Clause 7.2 and plus any direct or
indirect subsidiary companies of the
Company being part of the Industrial
Packaging Division that the Company has
agreed prior to the execution of this
Agreement to acquire as listed in Annex
6 (ii)
Subsidiary Shares: the issued shares directly or
indirectly held by the Company in the
capital of the Subsidiaries as further
described in Annex 6
Taxes or Tax: all forms of taxation and statutory,
national, supra-national, federal,
state, provincial or municipal
impositions, duties, contributions,
levies and tariffs of the Netherlands
or any other jurisdiction, wherever
imposed by or due to any public
authority, including national social
security contributions and employee
social security contributions and all
penalties, charges, costs, interest,
deductions and withholdings relating to
the foregoing
Tax Authority: any national, supra-national or
local government, governmental body
and/or any other duly empowered
authority competent to impose and/or
collect Taxes or any other body or
authority having any official function
in relation to Taxes
Third Party Claim: any action, claim or proceeding from
or initiated by a third party against
the Company's Group, such third party
including but not limited to Tax
Authorities.
1.2 References
In this Agreement, unless otherwise specified, reference to:
(a) a "person" includes any person, individual, company,
corporation, partnership, firm, government, provincial,
municipal or other governmental authority;
(b) a "day" means any day which is a business day in the
Netherlands and Finland;
(c) "Articles", "Clauses", "Schedules" and "Annexes" are to the
articles and clauses of and the schedules and annexes to this
Agreement;
(d) words denoting the singular shall include the plural and vice
versa and words denoting any gender shall include all
genders;
(e) any statute, regulation, requirement or other legal concept
of Netherlands law as used in this Agreement shall in respect
of any other applicable jurisdiction be deemed to refer to
that which most nearly approximates in that jurisdiction to
the Netherlands term or concept;
(f) any time of day is a reference to the time in the
Netherlands; and
(g) the Agreement includes all Annexes and Schedules.
ARTICLE 2 SALE AND PURCHASE OF THE SHARES
2.1 Sale and Purchase of the Shares
Subject to the terms and conditions set out in this Agreement, the
Seller shall on the Closing Date sell the Shares to the Purchaser
and the Purchaser shall on the Closing Date purchase the Shares
from the Seller. It is understood between the Parties that only
the Industrial Packaging Division shall be included in the sale;
the Consumer Packaging Division and the Excluded Assets shall be
transferred by the Company or the relevant Subsidiary to the
Seller or a subsidiary thereof other than a Subsidiary and the
Included Assets (including any Subsidiary Shares) presently held
by entities in the Consumer Packaging Division shall be
transferred into the Company's Group, all in accordance with
Article 7.2.
It is agreed between the Parties that the Seller may transfer the
Shares to one of its wholly-owned subsidiaries prior to the
Closing, in which case the Seller shall cause such subsidiary to
assume all obligations and rights of the Seller pursuant to this
Agreement and the Seller's Representations and Warranties shall be
read as though they are given by such subsidiary. Without
prejudice to the preceding sentence, the Seller shall in that case
be jointly and severally liable towards the Purchaser for any
obligations thus assumed by that subsidiary and will cause that
subsidiary to perform its obligations under this Agreement.
It is further agreed between the Parties that the Purchaser may
designate one or more wholly owned subsidiaries of the Purchaser
to purchase the Shares, or any of the Subsidiary Shares, in which
case the Purchaser shall cause each such subsidiary to assume all
obligations and rights of the Purchaser pursuant to this Agreement
and the Purchaser's Representations and Warranties shall be read
as though they are given by such subsidiary. Without prejudice to
the preceding sentence, the Purchaser shall in that case be
jointly and severally liable towards the Seller for any
obligations thus assumed by that subsidiary.
2.2 Transfer of the Shares
At Closing the Seller shall transfer the Shares to the Purchaser
through the signing by the Parties of the Deed of Transfer, which
will be passed by the Civil Law Notary. At Closing the Parties
shall further take such actions as are required to be taken by
Article 9 of this Agreement. The Seller undertakes to cause the
Company to acknowledge the transfer of the Shares on the Closing
Date by co-signing the Deed of Transfer and to duly enter such
transfer in the Company's register of shareholders forthwith.
ARTICLE 3 PURCHASE PRICE AND PAYMENT
3.1 Purchase Price
The purchase price for the Shares shall be the amount of the
Provisional Purchase Price (as defined in Article 3.2) adjusted in
accordance with the provisions of Article 4 (such adjusted amount
to be referred to as the "Purchase Price").
3.2 Provisional Purchase Price
In order to determine the Provisional Purchase Price (as
hereinafter defined), the Seller shall make a reasonable best
estimate of both the amount of the Net Outstanding Indebtedness
("Estimated Net Outstanding Indebtedness") and the Net Working
Capital ("Estimated Net Working Capital"). In establishing the
amounts of the Estimated Net Outstanding Indebtedness and the
Estimated Net Working Capital, the Seller shall take into account
the figures in the last monthly accounts of the Industrial
Packaging Division, and the Seller shall use a conversion rate
which is the European Central Bank fixed rate on the date of its
estimate.
Ultimately ten (10) days before the Closing Date the Seller shall
notify the Purchaser of the amount of the Estimated Net
Outstanding Indebtedness and the amount of the Estimated Net
Working Capital.
The Provisional Purchase Price (the "Provisional Purchase Price")
shall be a sum equal to US$ 620,000,000 (six hundred and twenty
million US dollars) minus the Estimated Net Outstanding
Indebtedness, if it represents a negative amount, or plus the
Estimated Net Outstanding Indebtedness, if it represents a
positive amount, and shall be increased, if the Estimated Net
Working Capital is higher than the Pro Forma Accounts Net Working
Capital, or shall be decreased, if the Estimated Net Working
Capital is lower than the Pro Forma Accounts Net Working Capital,
by the difference between the Estimated Net Working Capital and
the Pro Forma Accounts Net Working Capital.
If the Provisional Purchase Price for the shares would exceed US
$ 620,000,000 (six hundred and twenty million US dollars), the
Seller will cause the Company to declare a dividend payable to the
Seller in an amount which is equal to the lower of (i) such excess
and (ii) the amount of the distributable reserves of the Company
in order to reduce the Provisional Purchase Price with the amount
of such dividend. The Seller and/or Huhtamaki Finance Oy will make
a loan to the Company to the extent there is not sufficient cash
in the Company's Group to pay the aforementioned dividend. The
amount of such loan will be taken into account by the Seller in
calculating and estimating the Estimated Net Outstanding
Indebtedness.
Schedule 19 sets forth, for purposes of illustration only,
hypothetical calculations of the Provisional Purchase Price based
on the Pro Forma Accounts as if the Closing Date were December 31,
1999. It is understood that the Purchaser still has to obtain
additional comfort, and shall do so before 31 October 2000, on the
US accounting implications of the mechanism presented in said
Schedule 19.
3.3 Payment
Attached hereto as Schedule 7 is a comfort letter from ▇▇▇▇▇▇▇
▇▇▇▇▇ Capital Corporation, bankers to the Purchaser, with respect
to the financing of the transaction.
The Provisional Purchase Price shall be paid at the Closing in
cash in same day funds. The Purchaser shall transfer an amount
equal to the Provisional Purchase Price one day before the Closing
Date to the bank account in the name of Derdengelden Notarissen
NautaDutilh Amsterdam with ABN AMRO Bank N.V. (account number
▇▇.▇▇.▇▇.▇▇▇), with reference to file number 50037435.
The Civil Law Notary shall hold the Provisional Purchase Price for
the benefit of the Seller immediately after the Deed of Transfer
shall have been executed. The Civil Law Notary is hereby
instructed by the Parties to transfer the Provisional Purchase
Price after the Deed of Transfer shall have been executed to the
bank account of the Seller as to be directed by the Seller to the
Civil Law Notary prior to Closing.
ARTICLE 4 ADJUSTMENT TO PROVISIONAL PURCHASE PRICE
4.1 Reduction of the Provisional Purchase Price
Should it be found in accordance with the following provisions of
this Article 4 that the Net Working Capital is less than the
Estimated Net Working Capital, then the Provisional Purchase Price
shall be reduced by an amount equal to the established shortfall.
Should it be found in accordance with the following provisions of
this Article 4 that the amount of the Net Outstanding Indebtedness
is more negative or less positive than the amount of the Estimated
Net Outstanding Indebtedness, then the Provisional Purchase Price
shall be reduced by an amount equal to the established difference
(such difference hereinafter to be referred to as the "Net
Outstanding Indebtedness Reduction Amount").
The sum of (i) the shortfall in the Net Working Capital, if any,
and (ii) the amount of the Net Outstanding Indebtedness Reduction
Amount, if any, pursuant to this Article 4.1 shall hereinafter be
referred to as the "Reduction Amount".
4.2 Increase of the Provisional Purchase Price
Should it be found in accordance with the following provisions of
this Article 4 that the Net Working Capital is in excess of the
Estimated Net Working Capital, then the Provisional Purchase Price
shall be increased by an amount equal to the established excess.
Should it be found in accordance with the following provisions of
this Article 4 that the amount of the Net Outstanding Indebtedness
is more positive or less negative than the amount of the Estimated
Net Outstanding Indebtedness, then the Provisional Purchase Price
shall be increased by an amount equal to the established
difference (such difference hereinafter to be referred to as the
"Net Outstanding Indebtedness Increase Amount").
The sum of (i) the excess in the Net Working Capital, if any, and
(ii) the amount of the Net Outstanding Indebtedness Increase
Amount, if any, pursuant to this Article 4.2 shall hereinafter be
referred to as the "Increase Amount".
4.3 Closing Balance Sheet
For the purpose of establishing the Net Working Capital and the
Net Outstanding Indebtedness the Seller shall prepare the Closing
Balance Sheet in accordance with accounting principles and
practices consistent with the accounting principles and practices
applied with respect to the Pro Forma Accounts as if the Closing
were the year end. The Seller shall deliver documentation of the
relevant balance sheet items that constitute the Net Outstanding
Indebtedness and the Net Working Capital. The Closing Balance
Sheet shall be audited by KPMG at Subsidiary level and by Ernst &
Young Accountants at consolidated Company's Group level as
involved by the Seller in the same manner as the audit of the Pro
Forma Accounts. The Seller shall submit such audited Closing
Balance Sheet no later than eight weeks after the Closing Date to
the Purchaser for the Purchaser to review and to submit all its
objections, if any, against such Closing Balance Sheet to the
Seller within six (6) weeks after the Closing Balance Sheet has
been submitted and the Minimum Supporting Data (as defined below)
have been made available to the Purchaser (the "Objection Date").
The Seller shall procure that the Purchaser shall have access to
the necessary supporting data, including the KPMG and Ernst &
Young working papers (collectively: the "Supporting Data").
Schedule 20 lists the minimum Supporting Data (the "Minimum
Supporting Data") to be made available to the Purchaser. For the
avoidance of doubt, it is agreed that Supporting Data on
Subsidiary level is available locally, while all Supporting Data
including Ernst & Young working papers related to Company's Group
consolidation is available in the Netherlands. The Purchaser may
participate in the physical inventory of the Company's Group.
Should the Parties fail to reach agreement on any objection raised
by the Purchaser within four weeks thereafter ("Disagreement
Date"), then any such unresolved matters or disputes (for the
purpose of this Article 4: the "Open Issues") shall be resolved in
accordance with the provisions of Article 4.4.
It is agreed between the Parties that events that occur after the
Closing shall not affect the Closing Balance Sheet.
The Seller and the Purchaser shall use their best efforts to agree
before Closing on the actuarial valuation assumptions to be used
for the purpose of establishing the Closing Balance Sheet for
unfunded pension liabilities and pre-pension and post and early
retirement obligations. Such actuarial valuation assumptions will
be consistent with those typically used by similar plans in the
relevant countries at the Closing Date. In the absence of such
agreement, such actuarial assumptions shall be established by an
independent third-party actuary selected by the Parties jointly
ultimately within two weeks after the Closing Date, or, failing
agreement on such election, by the relevant country's professional
actuarial body with the costs shared equally by the Parties, or as
agreed to by the Seller and the Purchaser.
It is agreed between the Parties that the post-retirement scheme
liability in South Africa amounting at January 1, 2000 to
approximately EUR 3,700,000, equivalent to SAR 23,077,000 as
disclosed in ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇'▇ Report on the Actuarial Valuation
of the Employer's Liability in respect of Health Care Benefits for
Retirees of Van Leer SA as at 1 January 2000, will be recalculated
as of the Closing Date and included under "Provisions for
liabilities and other charges" in the Closing Balance Sheet for
purposes of the determination of Net Outstanding Indebtedness
whether or not such liability would otherwise have been required
under applicable accounting principles to be included in the
Closing Balance Sheet. In addition, the Parties will, as soon as
practicable before Closing, determine for the purposes of
establishing the Closing Balance Sheet the correct accounting
treatment of the US cash surrender value life insurance of US$
4,226,000, including whether or not such item should be included
under "Provisions for liabilities and other charges" in the
Closing Balance Sheet for purposes of the determination of the Net
Outstanding Indebtedness.
The Parties will, as soon as practicable before Closing, agree for
the purposes of establishing the Closing Balance Sheet whether the
liability in France relating to the provision for medical and life
insurance benefits for former employees between early retirement
and age 65 and/or the liability in France relating to the benefits
arising from the early retirement convention, should be included
under "Provisions for liabilities and other charges" in the
Closing Balance Sheet for purposes of the determination of the Net
Outstanding Indebtedness.
Accruals in the Closing Balance Sheet for performance incentives
relating to the period from 1 January 2000 through the Closing
Date relating to the key management employees listed in Annex 9 as
well as the business unit managers of the Industrial Packaging
Division shall be accounted for as indebtedness in the Net
Outstanding Indebtedness.
To the extent that at Closing, the Company's Group will still hold
Excluded Assets belonging to the Consumer Packaging Division, the
Closing Balance Sheet will be adjusted in order to exclude such
Excluded Assets. To the extent that at Closing, the Company's
Group will not yet hold all Included Assets and the Subsidiary
Shares, the Closing Balance Sheet will be adjusted in order to
include such Included Assets and Subsidiary Shares. For the
avoidance of doubt, the Closing Balance Sheet will include the
Mexican loan, the USA loan and the German loan and only such other
loans necessitated by the Reorganisation that Purchaser approves
of.
Should the Purchaser have failed to submit its objections against
the Closing Balance Sheet to the Seller by the Objection Date,
then the Closing Balance Sheet and the Net Working Capital and the
Net Outstanding Indebtedness reflected therein shall be deemed to
have been finally established for the purpose of this Agreement.
The Purchaser shall, and shall procure that the Company's Group
shall, give all information and assistance to the Seller and the
auditors of Ernst & Young involved by the Seller as required or
desirable for the preparation of the Closing Balance Sheet.
4.4 Open Issues
If so agreed between the Parties as set forth in Article 14.2, the
Open Issues shall be submitted to and settled by an accountant of
an independent reputable firm of accountants (for the purpose of
this Article 4.4 to be referred to as the "Accountant") to be
jointly appointed by the Parties within three weeks after
Disagreement Date or, if the Parties fail to agree on such
appointment within that period, by the Chairman of the Netherlands
Institute of Registered Accountants ("NIVRA"). The Parties shall
within two weeks after such appointment submit the Closing Balance
Sheet and statements of their respective positions in writing to
the Accountant. The Accountant shall determine the further
procedural rules in his discretion.
The Parties undertake to procure that the Accountant shall then
finally resolve the Open Issues by way of a binding advice
("bindend advies") in accordance with this Agreement and that the
Accountant shall notify the Parties of his decision, inter alia
certifying the amounts of the Net Working Capital and the Net
Outstanding Indebtedness which he has established, as promptly as
possible and in any event no later than eight weeks after his
appointment. The fees and expenses arising out of the engagement
of the Accountant shall be borne by the party which has on balance
been put in the wrong or otherwise as allocated by the Accountant
in his discretion.
The failure of either the Seller or the Purchaser to timely submit
to the Accountant a written statement of its position or to
otherwise fail to respond to any request of the Accountant for
information shall not preclude or delay the Accountant's
determination of the Open Issues on the basis of the information
which will have been submitted.
The Parties shall, and the Purchaser shall procure that the
Company shall, give all information and assistance to the
Accountant requested by the Accountant for the preparation of his
binding advice. Simultaneously with providing such information to
the Accountant, the Parties shall provide each other with the same
information.
4.5 Payment of the Adjustment
At the latest within five (5) days after the Net Working Capital
and the Net Outstanding Indebtedness have been established by the
Parties pursuant to Article 4.3 or, in the event of disputes,
pursuant to Article 4.4 or 14.2, the Purchaser shall, if the
Increase Amount as referred to in Article 4.2, is higher than the
Reduction Amount as referred to in Article 4.1 pay the amount of
such difference to the Seller (on a "euro for euro" basis,
converted into US dollars in accordance with Article 4.6) by
transferring such amount to a bank account to be designated by the
Seller in writing, or, if the Reduction Amount as referred to in
Article 4.1 is higher than the Increase Amount as referred to in
Article 4.2, the Seller shall pay the amount of such difference to
the Purchaser (on a "euro for euro" basis, converted into US
dollars in accordance with article 4.6) by transferring such
amount to a bank account to be designated by the Purchaser to the
Seller in writing. Any payment to be made pursuant to this Article
4.5 shall be increased by an interest of 5% per annum accrued on
such amount as from Closing until payment of such amount.
4.6 Conversion US dollars - Euro
The conversion from Euro into US dollars as provided for in
Article 4.5 shall be made on the basis of the European Central
Bank fixing on the Closing Date.
ARTICLE 5 REPRESENTATIONS AND WARRANTIES
5.1 Seller's Representations and Warranties
The Seller represents and warrants to the Purchaser that each of
the Seller's Representations and Warranties is true and accurate
as at the date of this Agreement, save to the extent any
disclosures ("Disclosures") have fairly been made in the Due
Diligence Information, in the Disclosure Letter or in this
Agreement, and will be true and accurate as at Closing.
For the purpose of this Clause 5.1 any disclosures shall be deemed
to have "fairly" been made if the Purchaser, by taking prima facie
knowledge of the facts or circumstances so disclosed, could
reasonably be expected to have had awareness of such facts or
circumstances constituting a breach of the Seller's
Representations and Warranties.
5.2 Purchaser's Representations and Warranties
The Purchaser represents and warrants to the Seller that each of
the Purchaser's Representations and Warranties is true and
accurate as at the date of this Agreement and will be true and
accurate as at Closing.
ARTICLE 6 INDEMNIFICATION AND SURVIVAL
6.1 Indemnification
Subject to Articles 6.2 through 6.9, the Seller hereby agrees that
in case of a breach by the Seller of any of the Seller's
Representations and Warranties or of any of the Seller's covenants
or other obligations contained in this Agreement (collectively a
"Breach"), it shall indemnify the Purchaser for and hold the
Purchaser harmless against any direct damage (including reasonable
costs and expenses including attorneys fees but excluding lost
profits and consequential damage) incurred by the Purchaser and/or
the Company's Group as a result of any such Breach (the
"Indemnification Amount") except to the extent the amounts thereof
have already been taken into account in establishing the Purchase
Price in accordance with Articles 3 and 4 (i.e. led to a reduction
in the Provisional Purchase Price), or, as the case may be, have
been indemnified to the Purchaser and/or any member of the
Company's Group under Article 7.2, in which case the Seller shall
have no such obligation to indemnify the Purchaser or hold the
Purchaser harmless for such amounts which have already thus been
taken into account, or indemnified. The Purchaser shall, and the
Purchaser shall cause the Company's Group to, mitigate the amount
of any damage to the best of their ability.
Subject to Articles 6.2 and 6.8, the Purchaser hereby agrees that
in case of a breach by the Purchaser of any of the Purchaser's
Representations and Warranties or of any of the Purchaser's
covenants or other obligations contained in this Agreement, it
shall indemnify the Seller for and hold the Seller harmless
against any direct damage (including reasonable costs and expenses
and including attorneys fees but excluding lost profits and
consequential damage) incurred by the Seller and/or any of its
group companies (other than the Company's Group) as a result of
any such breach. The Seller shall, and the Seller shall cause any
group company of the Seller (excluding the Company's Group after
the Closing occurs) to, mitigate the amount of any damage to the
best of their ability.
Any payment pursuant to this Clause 6.1 shall be considered to
take place as an adjustment to the Purchase Price.
Notwithstanding anything to the contrary in the foregoing, the
obligations of the Seller and the obligations of the Purchaser
pursuant to Article 7.2 hereof are not governed by Articles 6.1
through 6.7.
6.2 Survival of the Seller's Representations and Warranties
With the exception of the Seller's Representations and Warranties
set forth in Sections 4 and 5 of Schedule 4 (i), which shall
survive the Closing Date for the applicable statute of limitations
period, the Purchaser shall not be entitled to claim any
Indemnification Amount:
(i) relating to the Seller's Representations and Warranties
set forth in Section 11 of Schedule 4 (i),upon expiry
of the applicable statute of limitations or assessment
period under applicable Tax laws, plus three (3)
months;
(ii) relating to the Pre-Closing Covenants, referred to in
Article 7 hereof, upon expiry of six (6) months from
the Closing Date; and
(iii) relating to all other the Seller's
Representations and Warranties upon expiry of eighteen
(18) months from the Closing Date,
and the Seller shall not be entitled to make any claim relating to
the Purchaser's Representations and Warranties upon expiry of
eighteen (18) months from the Closing Date,
all of the foregoing unless prior to the relevant dates legal
proceedings have been commenced pursuant to Article 14 or notice
of a claim and/or of either Party's intention to commence legal
proceedings has been served upon the other Party in compliance
with the notice provision contained in Article 13.
6.3 Purchaser's Investigation and Awareness
6.3.1 Subject always and without prejudice to Articles 5.1
and 6.3.2, the fact in itself that the Purchaser has carried
out an investigation into the Company's Group shall not
prejudice any claim by the Purchaser under the Seller's
Representations and Warranties or reduce any amount
recoverable thereunder.
6.3.2 The Purchaser hereby warrants to the Seller that it has
no actual awareness upon signing of this Agreement of any
breach of the Seller's Representations and Warranties (as
such Representations and Warranties are qualified by the
Disclosure Letter and its annexes). If any of the Purchaser
and the persons involved in the due diligence investigation
on its behalf have any such actual awareness, the Purchaser
will have no claim for any breach of the Seller's
Representations and Warranties to which such actual
awareness relates.
6.4 Limitation of Indemnification Amount under the Seller's
Representations and Warranties
In no case shall the Seller be liable for the payment of any
Indemnification Amount under the Seller's Representations and
Warranties insofar as the aggregate of all such Indemnification
Amounts exceeds US$ 125 million (one hundred and twenty five
million US dollars). This limitation is not applicable, for the
avoidance of doubt, to any adjustment of the Provisional Purchase
Price pursuant to Article 4.
6.5 Threshold
The Seller shall be under no liability in respect of any claim for
the payment of an Indemnification Amount under the Seller's
Representations and Warranties unless:
(a) the amount of any single claim shall equal or exceed Euro
50,000 (fifty thousand Euro); and
(b) the aggregate amount of all such single claims of Euro 50,000
or more shall exceed Euro 2,500,000 (two million and five
hundred thousand Euro), in which case the Seller shall merely
be liable for the excess over the said amount of Euro
2,500,000.
These limitations are not applicable, for the avoidance of doubt,
to any adjustment of the Purchase Price pursuant to Article 4.
6.6 Effects of Taxes, Insurances and Provisions
In determining any Indemnification Amount and in determining
whether the threshold set forth in Article 6.5 has been exceeded,
such amount shall be reduced:
(i) by the positive effect, if any, of
(a) insurance recoveries, provided that such recoveries
have been received in connection with the same fact or
facts which gives or give rise to the claim for the
Indemnification Amount; and
(b) Tax refunds or reductions actually received, provided
that such Tax refunds or reductions are caused by the
same fact or facts which gives or give rise to the
claim for the Indemnification Amount and provided
further that there will be no such reduction of any
Indemnification Amount to the extent that receipt of
such Indemnification Amount would be taxable income for
the Purchaser; and
(c) 50% of the benefit realised by the Purchaser or the
Company's Group by use of Tax losses of the Company's
Group originating from the period prior to Closing
carried forward;
(ii) by the amount of any provisions or reserves that have been
established in the Pro Forma Accounts with respect to the
matter for which an Indemnification Amount is claimed.
6.7 Change of law
The Seller shall not be liable for any claim based on an alleged
Breach of the Seller's Representations and Warranties asserted
pursuant to this Agreement to the extent that such claim would not
have arisen but for (i) any change in law entering into force
after Closing, whether or not such change purports to be effective
retroactively in whole or in part or (ii) any interpretation of
any law that was in existence as of the Closing Date by a court or
other public authority in a judgment or decision published after
Closing to the extent such interpretation is materially different
from interpretations in effect as of Closing.
6.8 Information of Claim
If either party ("Indemnitee") becomes aware of any fact or event
on the basis of which it will or may make a claim against the
other party ("Indemnitor") for the payment of any indemnification
under this Article 6, the Indemnitee shall as promptly as
practicable thereafter notify the Indemnitor thereof in writing
giving reasonable particulars of the facts that give rise to such
claim or potential claim and specifying if possible the
Indemnitee's best reasonable estimate of the likely amount of the
claim or potential claim. Any failure or delay of the Indemnitee
to give such notice to the Indemnitor shall not prejudice the
right of the Indemnitee to make any claims for indemnification
under this Article 6 but shall reduce the claimed amount by the
amount of damage attributable to such failure or delay.
6.9 Defence against Third Party Claims
Where a claim or potential claim of the Purchaser for an
Indemnification Amount is based upon or related to a Third Party
Claim, the Purchaser shall notify the Seller thereof in writing in
accordance with Article 6.8 and as soon as possible following the
date of the said notification the Parties shall consult on the
course of action to be taken. Without prejudice to the Purchaser's
right to claim any Indemnification Amount the Seller shall, at its
own cost and expense, be entitled to assume the defence of the
Third Party Claim, to employ its own counsel (which counsel shall
be reasonably satisfactory to the Purchaser) and to take such
action as may be necessary to avoid, dispute, resist, appeal, or
compromise such claim, any of the aforementioned if applicable in
the name of the company of the Company's Group which is the
subject of the claim; provided that the Purchaser shall be
entitled to have sole control over the defence or settlement of
any Third Party claim to the extent that such claim seeks an
order, injunction or other equitable relief against the Purchaser
which, if successful, would be reasonably likely to materially
interfere with the business, operations, assets, or financial
condition of the Purchaser, the Company's Group or the Industrial
Packaging Division. The Seller shall promptly notify the Purchaser
if it so elects to assume the defence of the Third Party Claim.
If the Seller elects not to assume the defence or, following
notice from the Purchaser to make an election, does not make any
election, the Purchaser shall be entitled to assume the defence of
the Third Party Claim in its own discretion provided that the
Purchaser or the Company's Group shall not compromise any such
claim without the prior written consent of the Seller, which
consent shall not be unreasonably withheld. In the event the
Seller assumes the defence of a Third Party Claim, the Purchaser
will co-operate in good faith with the Seller in such defence
and will have the right to participate in the defence of any
Third Party Claim assisted by counsel of its own choosing and at
its own expense. Notwithstanding the foregoing, if the named
parties to the Third Party Claim (including any impleaded
parties) include both the Seller and the Purchaser or if the
Seller proposes that the same counsel represent both the
Purchaser and the Seller and the Purchaser in good faith
determines that representation of both parties by the same
counsel would be inappropriate due to actual or potential
differing interests between them, then the Purchaser shall have
the right to retain its own counsel at the cost and expense of
the Seller.
If the defence of a Third Party Claim is conducted by the Seller,
and the Seller and the relevant third party wish to compromise the
Third Party Claim in a cash settlement while the Purchaser and/or
the relevant company of the Company's Group do not consent to such
compromise or refuse to co-operate in carrying out such
compromise, then the Seller's liability to pay any Indemnification
Amount shall in respect of such Third Party Claim be limited to
the amount offered in such compromise.
The Seller will co-operate with the Purchaser, and the Purchaser
will and will cause the Company's Group to co-operate with the
Seller, in resolving or attempting to resolve any Third Party
Claim including permitting the other Party access to all books and
records of the Company's Group which might be useful for such
purpose, during normal business hours and at the place where the
same are normally kept, with full right to make copies thereof or
take extracts therefrom at the cost of the requesting Party,
except to the extent that such disclosure would violate any
agreement, law or court order. Such books and records shall be
subject to a duty of confidentiality for each Party except to the
extent that it is necessary to disclose information contained
therein in the course of the proceedings resolving such Third
Party Claim or as otherwise required to be disclosed by applicable
law or stock exchange rules.
6.10 Officers and Directors of the Company's Group
The Seller confirms that it will not, after the Closing, claim
from any officer or employee of the Company's Group who was,
prior to the Closing, an officer or employee of the Seller or
its subsidiaries (including, but not limited to, the Company and
the Subsidiaries), any damages and/or losses incurred by the
Seller as a result of a breach of the Seller's Representations
and Warranties or as a result of the environmental indemnity as
set out in Clause 6.11 or the indemnity as set out in Article
7.2 on the basis that the information provided by said officer
or employee was inaccurate, incorrect or incomplete; provided
that the Seller may take action against such officer or employee
(but not against the Purchaser or the Company's Group) in case
of an act of fraud ("bedrog") or gross negligence ("grove
▇▇▇▇▇▇") on the part of such officer or employee.
6.11 Environmental Liability and Indemnity
6.11.1 The following capitalised terms and expressions in this
Article 6.11 are defined terms and expressions which shall
have the following meanings:
Environmental Authority: means the relevant
governmental agency or
other regulatory body
referred to in the
definition of
Environmental Laws in
Article 1.1 or a
judicial body or court
Environmental Cost(s): any liability, expense
or cost incurred by the
Purchaser or a member of
the Purchaser's Group,
both on premises and
off-premise, in relation
to or arising out of the
Investigation of or the
actual or threatened
contamination, release,
discharge, dispersal,
escape, migration or
presence of pollutants
in the air, land, soil,
subsurface strata,
surface water, or ground
water, and including but
not limited to the costs
of Investigation,
cleanup, removal,
remediation, restoration,
rehabilitation,
operations, neutralization,
immobilization,
maintenance, monitoring,
testing, consultant fees
and expenses (including
professional design
costs), and legal and
expert fees and
expenses, natural
resources damage, third
party claims, penalties,
fines and other
governmentally imposed
costs, punitive damages,
and damages for personal
injury and death;
provided that costs of
normal, recurring, on-
going operations shall
not be included and such
costs shall, by way of
example, include the
costs of maintaining and
operating manufacturing
equipment, renewal of
Environmental Permits,
management and/or
removal of asbestos
containing materials
that are an integral
part of building
materials maintained in
good condition on any
Property, and meeting
emission requirements in
Environmental Permits.
Environmental Disclosure Letter: the letter of even date
with this Agreement from
the Seller to the
Purchaser, attached as
Schedule 21, containing
disclosures under the
representations and
warranties of the Seller
stated in Article
6.11.12 of this
Agreement
Environmental Insurance
Policy: the insurance policy
referred to in Article
6.11.3
Environmental Laws: has the meaning given in
Article 1.1
Environmental Matter(s): all matters involving,
concerning, arising out
of, or relating to (i)
the compliance with or
violation of the
Environmental Laws by
the Seller or the
Company's Group prior to
or on the Closing Date
and/or (ii) the
environmental conditions
existing at and/or
pollutants present at,
on or under any Property
prior to or on the
Closing Date, which
could cause
Environmental Costs. For
avoidance of doubt,
Environmental Matters
includes, but is not
limited to, third party
claims in relation to
the foregoing
Environmental Permits: all EU, national,
federal, provincial and
municipal permits,
licences, exemptions,
consents or
authorisations howsoever
named, including but not
limited to equivalent or
similar governmental
items in any relevant
jurisdiction, as are
necessary under the
Environmental Laws
Investigation: means any inspection,
investigation,
assessment, auditing,
sampling, testing,
analysis, or monitoring
Property: any site, facility,
property, or premises
listed in Schedule 22
and any site, facility,
property, or premises
owned, operated, used,
occupied, or leased by
the Seller or the
Company's Group prior to
Closing and that is
transferred to the
Purchaser or the
Purchaser's Group upon
Closing
the Purchaser's Group: the Purchaser and all its
group companies including
the Company's group
Self Insured Retention
Amount: that amount of payment
that must be expended by
the Parties before
payments or
reimbursements will be
made by the insurer(s)
for matters covered
under the Environmental
Insurance Policy, as
defined in Article
6.11.3, which amount
shall be US$ 50 million.
6.11.2 Notwithstanding anything to the contrary in this Agreement
and to the exclusion of any responsibility or liability of
any party in respect of Environmental Matters and to the
exclusion of any limitations or reductions of
responsibility or liability of any party in respect of
Environmental Matters, in any other provision in this
Agreement, the provisions of this Article 6.11 shall
govern and control the obligations, liabilities and
responsibilities of the Parties with respect to any
Environmental Matter; provided, however, that Article
6.6.(i)(a) and Article 6.10 shall apply to this Article
6.11 and further provided that, if an amount can be claimed
under several provisions of this Agreement, such amount
shall not be reimbursed more than once.
6.11.3 The Seller and the Purchaser shall cause to be purchased
an environmental insurance policy to be issued on the date
of Closing and to be effective as of the Closing Date from
one or more insurers reasonably acceptable to the Seller
and the Purchaser covering certain environmental risks and
liabilities as the Parties shall agree between signing of
this Agreement and Closing (the "Environmental Insurance
Policy") on terms and conditions as shall be acceptable to
the Purchaser and the Seller. The total premium cost under
the Environmental Insurance Policy shall be paid by and be
for the account of the Purchaser and shall not exceed US$
10 million. If the total premium cost under the
Environmental Insurance Policy were to exceed US$ 10
million, the Purchaser shall be entitled to refuse to
purchase the Environmental Insurance Policy on the basis of
such higher premium and to refuse to proceed to Closing,
unless the Seller accepts a reduction of the Purchase Price
equal to the amount with which the total premium cost under
the Environmental Insurance Policy exceeds US$ 10 million.
If the Seller accepts such reduction of the Purchase Price,
the total premium cost under the Environmental Insurance
Policy including the excess, will be paid by and be for the
account of the Purchaser. The Seller and the Purchaser
agree to seek cost cap coverage for the excluded conditions
on or at the Lier 1 and 2 sites and some of the other sites
referred to on Schedule 24 referenced in Article 6.11.6
below as part of the environmental insurance coverage.
6.11.4 Subject to Articles 6.11.5 through 6.11.10 and Articles
6.11.13, 6.11.14 and 6.11.15 below, the Seller shall
reimburse the Purchaser an amount equal to the Seller's
share (as determined in accordance with Articles 6.11.5 and
6.11.6 respectively) of the Environmental Costs for any
Environmental Matters, including, without limitation, any
Environmental Matters among the matters disclosed in the
Environmental Disclosure Letter. Reimbursement by the Seller
to the Purchaser shall be made within thirty (30) days after
written notice to the Seller of the reimbursement amount,
provided that prior to or with such notice the Seller has
been provided with documentation reasonably sufficient for
the Seller to evaluate the Environmental Matter and review
in reasonable detail the Environmental Costs for which
reimbursement is being sought.
6.11.5 With respect to the payment of any Environmental Cost for
any Environmental Matter that qualifies to apply against the
Self-Insured Retention Amount, any and all payments therefor
shall be shared by the Purchaser being responsible for 30%
of the amount of any such payment and by the Seller
reimbursing the Purchaser in a timely manner of 70% of the
amount of any such payment.
6.11.6 With respect to the payment of any Environmental Costs
for any Environmental Matters not paid under the
Environmental Insurance Policy and not qualifying to apply
against the Self-Insured Retention Amount, including
without limitation those known matters excluded from
coverage under the Environmental Insurance Policy as listed
on Schedule 24, any and all payments therefor shall be
shared by the Parties and allocated as follows:
(a) the Purchaser shall have made such payments therefor
until such payments by the Purchaser total US$ 10
million; provided that such Purchaser's responsibility
to pay US$ 10 million shall be limited to Environmental
Costs for Environmental Matters listed on Schedule 24;
and
(b) as to Environmental Costs for Environmental Matters
listed on Schedule 24 in excess of the Purchaser's
obligation in Article 6.11.6 (a) above and as to all
other matters under this Article 6.11.6:
(i) the Purchaser shall be responsible for 30% of the
amount of any such payments; and
(ii) the Seller shall reimburse the Purchaser in a
timely manner for 70% of the amount of any such
payments.
6.11.7 In any dispute resolution with any insurer as to
whether any Environmental Cost shall be applied against the
Self-Insured Retention Amount or paid for under the
Environmental Insurance Policy, the Purchaser shall confer
with the Seller regarding the strategy for and steps to be
taken in such dispute resolution and the Seller's approval
shall not be unreasonably withheld or delayed; provided
that, if the Seller fails to provide its approval, the
Purchaser may at its election proceed with such dispute
resolution in the Purchaser's sole discretion and/or seek
dispute resolution under this Agreement regarding the
reasonableness of the Seller's failure or refusal to grant
approval and any related matters. The Purchaser's separate
pursuit of dispute resolutions with the insurer(s) shall not
prejudice the Seller's right to dispute the same issue with
the Purchaser provided that the Seller provides the
Purchaser with a written statement of the grounds for such
position.
6.11.8 (A) The Purchaser shall not be entitled to claim under
this Article 6.11 to the extent that such claim would not have
arisen but for, results from or is increased by:
(i) any act or omission after the Closing Date by any
employee, contractor, agent or other person
controlled by the Purchaser or a member of the
Purchaser's Group, which act or omission
constitutes negligence or wilful misconduct; and
any act or omission after the Closing Date by any
other person, other than an employee, agent,
contractor, or other person under the control of
the Seller, which act or omission constitutes
gross negligence or wilful misconduct;
(ii) any Environmental Cost that is not approved by the
Seller or excepted from approval as provided in
Article 6.11.10 below;
(iii) development construction, demolition, or
expansion of any Property after the Closing Date
by the Purchaser's Group ("Development") except
for Development in relation to a use of the
relevant Property which is substantially the same
as, or an extension of, the business carried on at
that Property as at the Closing Date;
(iv) loss of profits, loss of sales, loss of
production, business interruption, or any other
indirect or consequential loss or damage or
internal cost;
(v) any pollution or contamination first existing or
arising after the Closing Date; provided, for the
avoidance of doubt, that contamination or
pollution consisting of migration of pollutants
that were present at, on or under the Property
prior to or at Closing Date shall be an
Environmental Matter hereunder;
(vi) any indemnity, covenant, undertaking, warranty,
assurance or other contractual provision entered
into or given by any member of the Purchaser's
Group on or after the Closing Date;
(vii) the Purchaser's failure to comply with Article
6.11.9; or
(viii) changes in Environmental Laws or Environmental
Laws established after the Closing Date only as
they apply to claims under Articles 6.11.6 and
6.11.12, but not as to claims under Article
6.11.5.
(B) Any relief from liability of the Seller as a result of
an event described in Article 6.11.8(A)(i), (ii),
(iii), (v), (vi),(vii) or (viii) above, shall be only
to the extent that prejudice to the Seller is
reasonably quantifiable and is not immaterial;
(C) Notwithstanding any other provision to the contrary
but without prejudice to Article 6.11.9 (C) (i), the
Purchaser and any member of the Purchaser's Group may
conduct any Investigation at any time at any location
or Property without notice to or approval by the
Seller (provided that the Seller's obligation to share
the cost of Investigations applies only to
Investigations that result in the incurrence of other
Environmental Costs that must be reimbursed by the
Seller to the Purchaser under this Article 6.11);
(D) The Purchaser shall not be entitled to claim under this
Article 6.11 to the extent that such claim is increased
by the Purchaser or the Purchaser's Group or their
respective employees, agents and contractors, incurring
Environmental Costs which would otherwise be
reimbursable under this Article 6.11 but which exceed a
minimum level of Environmental Costs. Minimum level of
Environmental Costs is intended to mean such
reasonable Environmental Costs that are incurred in
exercising reasonable and professional judgment, from
time to time, under all the relevant facts and
circumstances known at the various times, regarding
decisions that are made with respect to both the
determination of the steps or actions reasonably
necessary to address the relevant Environmental Matter
and the incurrence of reasonable Environmental Costs .
6.11.9 The Purchaser shall ensure that, in relation to any
Environmental Matter:
(A) the Seller shall be notified as soon as reasonably
practicable in writing if the Purchaser or any member
of the Purchaser's Group becomes aware that a
particular Environmental Matter exists provided that
the Environmental Matters listed on Schedule 24
referenced in Article 6.11.6 or reported in the
Environmental Disclosure Letter, other than significant
changes in relation thereto after the Closing Date,
shall be deemed to have been notified under this sub-
article as at the date of this Agreement;
(B) the Seller shall be notified as soon as reasonably
practicable in writing upon any person initiating any
substantial written contact with the Purchaser or any
member of the Purchaser's Group, making or threatening
any claim based on an Environmental Matter; the Parties
acknowledge that management of the facilities is
decentralized and , in exercising its best efforts
within this management context, notice of Environmental
Matters under this Article 6.11.9 may take longer than
in other management contexts;
(C) Each member of the Purchaser's Group shall take
reasonable steps to:
(i) allow the Seller (and/or its advisers) to attend
and inspect the carrying out of any Investigation
or any other activities of the Purchaser which
involve the incurrence of an Environmental Cost,
other than Investigations in the ordinary course
of business, at any time whilst it is being
carried out subject to the notice provisions
above;
(ii) promptly provide to the Seller all relevant non-
privileged correspondence, documents or
information which are or come into the possession
of such member of the Purchaser's Group in
relation to such Environmental Matters, except
Investigations in the ordinary course of business,
and promptly provide a status report to the Seller
as and when the Seller shall reasonably require;
and
(iii) allow the Seller (and/or its advisers) to attend
and participate in any site visit or other meeting
as the Seller shall reasonably require on
reasonable notice in relation to such
Environmental Matters.
(iv) allow the Seller, and its agents and contractors,
reason-able access to conduct a reasonable scope
of Investi-gation on any Property which is then in
the custody and control of the Purchaser, provided
that the Purchaser can place reasonable conditions
on the time and scope of Investigation so as to
not unreasonably interfere with or disrupt
operations, or place the Purchaser at risk of
violating any Environmental Laws, Environmental
Permits, or contracts, or create any safety,
health or environmental risk, and provided that
the Seller shall promptly provide the Purchaser
with test results and reports, other than
privileged information;
(v) the Seller shall indemnify and hold harmless the
Purchaser and the Purchaser's Group from any
claim, damage or liability, including reasonable
legal fees and expense for defence of claims, to
the extent caused by the activities of the Seller
and its agents and contractors in exercising the
Seller's rights under this Article 6.11.9 (C) (i),
(iii) and (iv);
(D) in giving notice under this Article 6.11, the Purchaser
shall give to the Seller reasonable particulars of the
facts of the Environmental Matters and specifying, if
possible, the Purchaser's best reasonable estimate of
the likely amount of any claim.
6.11.10 The Purchaser shall not be entitled to any claim
whatsoever under Article 6.11.6 unless the Purchaser has
obtained the Seller's approval as provided in this Article
6.11.10, or would reasonably be entitled to such approval
under all relevant factors and circumstances:
(A) with respect to Environmental Costs for Environmental
Matters that result from the order, directive,
instruction, or injunction of an Environmental
Authority or third party claims in litigation, the
Purchaser or the Purchaser's Group shall, except as
otherwise provided for in this Article 6.11.10,
vigorously defend against such Environmental
Authority's action and shall not enter into any
agreement, concession, settlement, or admission which
is material in relation to such Environmental
Authority's action or the defence thereof (including
any failure to appeal or decision not to appeal such
Environmental Authority's action) without the prior
written approval of the Seller, which approval shall
not be unreasonably withheld or delayed. In defending
an order, directive, instruction, or injunction of an
Environmental Authority or any litigated third party
claim, the Purchaser or the Purchaser's Group will
consult with the Seller on the course of action to be
taken including reasonable steps to avoid, dispute,
resist, appeal or compromise each matter; provided that
the Purchaser and the Purchaser's Group shall
consistent with the rights of the Seller as stated in
this Article 6.11.10 (A) retain sole control over the
defence or settlement of any such matter. The word
"consult" in the prior sentence shall mean that the
Purchaser will co-operate with the Seller regarding the
Seller's rights under Article 6.11.9 (C) and in good
faith reasonably confer with and consider Seller's
input while retaining the right to make final decisions
on strategy, defence and settlement. If the Purchaser
proceeds without the Seller's approval, it is without
prejudice to the Seller's right to dispute whether or
the extent to which it must reimburse the Purchaser
under Article 6.11.6 provided that the Seller provides
the Purchaser with a written statement of the grounds
for its failure or refusal of approval;
(B) with respect to other Environmental Costs for
Environmental Matters that fall within Article 6.11.6,
the Purchaser or the Purchaser's Group will, except as
otherwise provided for in this Article 6.11.10,
endeavour to obtain the prior written approval of the
Seller under the criteria in Article 6.11.10 (D), such
approval not to be unreasonably withheld or delayed;
(C) the Purchaser or any member of the Purchaser's Group
may incur Environmental Costs for Environmental Matters
prior to obtaining the Seller's approval without
prejudice to the Seller's obligation to share in the
cost to the extent if in the Purchaser's reasonable
judgement after careful and professional consideration
such work should be promptly commenced and should not
be delayed by the notice and approval process, in order
to comply with or avoid violation of an Environmental
Permit or an instruction or requirement of an
Environmental Authority acting within its apparent
authority, to contain or mitigate contamination that
poses an immediate and substantial risk to human health
or the environment or, if action were delayed, the
likely result would be a significant increase in
Environmental Cost otherwise to be reimbursed under
Article 6.11.6;
(D) in exercising its rights to approve Environmental Costs
for Environmental Matters as provided in Article
6.11.10(B), the Seller acknowledges and agrees that it
may be desirable, appropriate and reasonable for the
Purchaser and members of the Purchaser`s Group to incur
Environmental Costs, which would be subject to cost
sharing hereunder, under voluntary action programs of
Environmental Authorities, to address substantial risks
to human health or the environment, to contain or
mitigate contamination or pollution that, if action
were delayed or denied, would likely result in
substantially increased Environmental Costs otherwise
to be reimbursed under Article 6.11.6 or violation of
Environmental Laws or Environmental Permits, and to
comply with Van Leer Corporate Environmental Policy in
effect on the Closing Date, a copy of which is attached
as Schedule 25 even without an order, directive,
instruction or injunction of an Environmental
Authority, and such circumstances may be the basis for
approval of such Environmental Costs subject to cost
sharing herein;
(E) the Purchaser or the Purchaser's Group may obtain the
Seller's approval in accordance with this Article
6.11.10 for Environmental Costs when (i) it is in doubt
whether, or (ii) the insurer(s) have yet to acknowledge
that, such Environmental Costs are qualifying for
application against the Self-Insured Retention Amount
and /or for payment or reimbursement under the
Environmental Insurance Policy.
6.11.11 Any real estate, facility, site, leased premise, occupied
premise, premise used or included in any contractual
relationship, transport or operation of the Company's Group
or the Industrial Products Division transferred to a third
party, transferred to or retained by the Seller or the
Consumer Packaging Division, or whose use ended (except for
Property) during the period of time up to and including the
Closing Date, shall be deemed as an Excluded Asset and all
liabilities and costs including but not limited to
Environmental Costs arising out of or relating thereto
shall be governed by the indemnity in the third paragraph
of Article 7.2 of this Agreement.
6.11.12 Except as fairly disclosed in the Environmental
Disclosure Letter, the Seller makes the following
representations and warranties in regard to this Article
6.11 of the Agreement, all of which shall be renewed at and
shall survive the Closing, and the Seller shall indemnify,
defend, and hold harmless the Purchaser from any
Environmental Cost not otherwise paid or reimbursed to the
Purchaser under the Environmental Insurance Policy
involving, concerning, arising out of, or relating to any
breach of these representations and warranties:
(A) to the knowledge of the Seller, neither the Company nor
its Subsidiaries have provided to any third party any
indemnity relating to any Environmental Matter that could
cause any Environmental Cost for the Company or any of
the Subsidiaries;
(B) the Company and each of its Subsidiaries has obtained
all Environmental Permits necessary to operate each of
its facilities other than Environmental Permits the
absence of which do not, individually or collectively,
have material adverse consequences for the Company's
Group taken as a whole; such Environmental Permits are in
full force and effect; and the Company and each of its
Subsidiaries has at all times conducted its operations in
compliance with such Environmental Permits, except for
violations which individually or collectively do not have
a material adverse consequence for the Company's Group
taken as a whole;
(C) to the knowledge of the Seller, the Company and each of
its Subsidiaries is in substantial compliance with the
Environmental Laws, except for violations which
individually or collectively do not have a material
adverse consequence for the Company's Group taken as a
whole;
(D) there is no pending litigation or administrative
adjudacatory proceeding against the Company or any of its
Subsidiaries relating to any Environmental Matter that
could cause material Environmental Costs;
(E) the Seller has no knowledge of criminal or civil
actions for, notice-of-violation, or summons to, or
court, regulatory or administrative adjudacatory
proceeding against, the Company or any Subsidiary
relating to a violation of any of the Environmental Laws
or any Environmental Matter that could cause any
Environmental Costs; and except for such actions,
notices, summonses or proceedings which individually or
collectively do not have a material adverse consequence
for the Company's Group taken as a whole, no such actions
or proceedings exist;
(F) there exists no Environmental Matter caused by nor any
violation by the Company or any of its Subsidiaries of
any of the Environmental Laws and, to the knowledge of
the Seller, there exists no Environmental Matter nor
violation of Environmental Laws by any third party, that
(i) could disrupt the operations of any facility of the
Company or any Subsidiary and (ii) has material adverse
consequences for the Company's Group taken as a whole;
and
(G) [note: intent is to draft language around provisions in
insurance policy and applications, which language is to
be agreed prior to Closing with reference to the
Environmental Insurance Policy and applications].2
For the avoidance of doubt, the Seller's liability to the
Purchaser under this Article 6.11.12 shall not be subject to
the provisions of Articles 6.1 through 6.9., except for
Article 6.6(i)(a). For purposes of Article 6.11.12,
knowledge shall have the meaning in Schedule 4 (i).
2-Warranty to deal with the provision of information to the insurers
Claims under Article 6.11.12 (B) , (C), (D), (E) and (F)
shall be subject to cost sharing with the Purchaser being
responsible for 30% and the Seller being responsible for 70%
of the amount of each such claim. Claims under Article
6.11.12 (A) and (G) shall not be subject to cost sharing and
the Seller shall be responsible for each entire claim.
6.11.13 The Purchaser shall not be entitled to claim against
the Seller under this Article 6.11 unless the Seller has
been given notice of such claim under this Article 6.11 on
or before the 10th annual anniversary date of the Closing
Date. For avoidance of doubt, for any claims under Article
6.11 properly noticed within such ten (10) year period ,
Environmental Costs and other damages and expenses may be
recovered from the Seller even though incurred after the
10th annual anniversary of the Closing Date, provided legal
proceedings under Article 14.2 have been commenced by the
Purchaser against the Seller with regard to such claim
within six (6) months after the 10th annual anniversary
date.
6.11.14 No claims by the Purchaser under Article 6.11 shall be
made against the Seller unless such claim is in excess of
US$ 5,000 for all amounts caused by the same fact or facts,
provided that, once the US$ 5,000 threshold has been
satisfied, then all qualified Environmental Costs shall be
subject to reimbursement as provided in Article 6.11. Such
minimum amount for claims shall also apply when claims are
to be taken into account for the purpose of determining
whether the US$ 10 million limit referred to in Article
6.11.6 has been reached.
6.11.15 In determining the Environmental Costs for the purposes
of reimbursement under Article 6.11 such amounts shall be
reduced by the positive effect, if any, of Tax refunds or
reductions actually received, provided that such Tax refunds
or reductions are caused by the same fact or facts which
gives or give rise to the claim in relation to the
Environmental Costs and provided further that there will be
no such reduction of any Environmental Costs to the extent
that receipt of any reimbursement for such Environmental
Costs would be taxable income for the Purchaser.
ARTICLE 7 PRE-CLOSING COVENANTS
7.1 Conduct of Business
The Seller agrees and will take measures to ensure that until the
Closing Date the Company and/or any of the Subsidiaries will not
without the prior written consent of the Purchaser, in so far as
the Industrial Packaging Division is concerned:
(i) enter into any material agreement or assume any material
obligation or liability relating to their assets, their
business and/or their financial condition other than in the
ordinary course of business as the same has been conducted
prior to the date of this Agreement;
(ii) enter into any transaction or take any action which, if
effected or performed prior to the date of this Agreement,
would constitute a material breach of the Seller's
Representations and Warranties; whereby for the purpose of
this Article 7.1 "material" should be interpreted taking into
account the Company's Group as a whole; or
(iii) enter into any transaction or take any action that
would result in or create a redundancy or severance liability
or obligation for the Company or the Subsidiaries that is not
satisfied in full prior to the Closing except in the ordinary
course of business and except with the prior written consent
of the Purchaser; provided however if any litigation ensues
regarding such liability or obligation and is not resolved
with all redundancy or severance amounts and related legal
and other costs paid prior to the Closing, the Seller shall
indemnify the Purchaser and hold the Purchaser harmless
against any direct damage (including reasonable costs and
expenses including attorneys fees but excluding lost profits
and consequential damages) incurred by the Purchaser and/or
the Company's Group as the result of the foregoing.
Any agreement, obligation, liability, transaction or action
relating to the direct or indirect transfer of the Consumer
Packaging Division and the Excluded Assets by the Company to the
Seller or any group company of the Seller (other than the
Company's Group) and/or relating to the transfer of the Included
Assets and Subsidiary Shares not yet held by the Company's Group
into the Company's Group is explicitly excluded from this Article
7.1.
7.2 Reorganisation
Prior to the Closing, the Seller shall cause the following
actions to be taken (collectively, the "Reorganisation"):
(a) cause the Company and its Subsidiaries to contribute and
transfer to other legal entities owned or controlled by the
Seller (other than entities within the Company's Group) all
right, title and interest in and to any and all Excluded
Assets, whether tangible or intangible and whether fixed,
contingent or otherwise, including but not limited to all
of the capital stock of the Company's subsidiaries that are
not Subsidiaries, to the extent that any of the foregoing
is not held legally and beneficially by such other entities
and to assume or cause such other entities to assume any
and all liabilities included in the Excluded Assets of
every kind whatsoever, whether absolute, known, unknown,
fixed, contingent or otherwise; and
(b) cause the Seller and its subsidiaries, excluding the
Company's Group, to contribute and transfer to the Company's
Group all right, title and interest in and to any and all of
the Included Assets, whether tangible or intangible and
whether fixed, contingent or otherwise, and the Subsidiary
Shares, to the extent any of the foregoing is not yet held
legally and beneficially by the Company's Group and cause
the Company and the Subsidiaries to assume any and all
liabilities included in the Included Assets of every kind
whatsoever, whether absolute, known, unknown, fixed,
contingent or otherwise.
A description of the Reorganisation is attached as Schedule 8
(i). The Seller and the Purchaser will negotiate in good faith in
order to reach agreement as soon as practicable but ultimately
before Closing on the details of the implementation of the
Reorganisation in the USA, France and Brazil and in such other
countries where a re-evaluation of the proposed scheme may become
desirable for both Parties. The Seller will exercise its
reasonable best efforts to cause the transfer of the Consumer
Packaging Division and the Excluded Assets by the Company or the
relevant Subsidiary to other legal entities within the group of
the Seller (excluding the Company's Group) and to transfer the
Included Assets (including the Subsidiary Shares) not yet held by
the Company's Group to the Company's Group as described above
under (a) and (b) before the Closing Date. To the extent this
shall not have been completed on or before the Closing, the
Company shall, as from Closing, have beneficial title
("economische gerechtigdheid") to all such Included Assets and
Subsidiary Shares, legal title ("juridische gerechtigdheid") of
which has not yet been transferred to the Company's Group, and the
Seller shall, as from Closing, have beneficial title to the
Consumer Packaging Division and all Excluded Assets, legal title
of which has not yet been transferred by the Company or the
relevant Subsidiary to the Seller's group (excluding the Company's
Group), and the Seller and the Purchaser shall jointly co-operate
to achieve the transfer of such legal title in the most
expeditious and effective manner. To that effect and to provide
for arrangements as to liabilities which are to be transferred in
accordance with this Article 7.2 but from which the transferor has
not yet been released by any relevant third party, the Parties
shall on the Closing Date sign an agreement substantially in the
form as set out in Schedule 9. 3
As from the Closing, the Seller will indemnify and keep the
Purchaser and any member of the Company's Group harmless from and
against any liability, costs or damages relating to or
constituting any of the Excluded Assets or resulting from the
Reorganisation (other than liabilities transferred as Included
Assets pursuant to the Reorganisation), including but not limited
to any Tax liability caused by, resulting from or attributable to
the Reorganisation or the Consumer Packaging Division save (i) for
the avoidance of doubt, to the extent these amounts have been
taken into account for the establishment of the Purchase Price
pursuant to Articles 3 and 4 hereof (i.e. led to a reduction of
the Provisional Purchase Price) or as a result of any claim(s)
under the Seller's Representations and Warranties and (ii) save in
relation to the Reorganisation steps as set out in Schedule 8
(ii). Without prejudice to the Purchaser's rights under the
Seller's Representations and Warranties and other indemnities
pursuant to this Agreement , as from the Closing, the Purchaser
will indemnify and keep the Seller and any of the members of the
Seller's group (excluding the Company's Group) harmless from and
against any liability relating to or constituting any of the
Included Assets, including but not limited to any Tax liability
attributable to the Industrial Packaging Division. For the
avoidance of doubt, it is explicitly agreed that the liability of
the Seller or the Purchaser pursuant to this Clause 7.2 is not
subject to the provisions of Article 6.1 through 6.7.
The Purchaser shall procure that the Seller, upon the Seller's
reasonable request, shall at all times after the Closing have
access to and obtain copies of all books and records relating to
the Consumer Packaging Division.
3- The Excluded Assets shall include the rights and obligations of the
Company of the agreement between it and Illinois Tool Works, Inc. ("ITW")
dated as of August 7,2000 pursuant to which the the Company sold VLF
Holding, Van Leer Flexibles N.V. and Van Leer Flexibles (Tx) Inc. to
ITW. Seller shall cause this agreement to be assigned to itself or a
company in the Consumer Packaging Division and use its best efforts to
have ITW consent thereto and release the Company from any obligations
thereunder.
7.3 Access to Information and Properties
Between the date of this Agreement and the Closing Date, the
Seller will upon reasonable advance notice (i) give the
Purchaser and its authorised representatives reasonable access,
during regular business hours, to the main offices and other main
facilities of the Company and the Significant Subsidiaries used
in connection with the Industrial Packaging Division and permit
the Purchaser to make such reasonable inspections of such
offices and facilities as it may require; and (ii) allow the
Purchaser and its authorised representatives reasonable access
to the key management of the Company and the Significant
Subsidiaries. The Seller will cause the Company's Group to fully
co-operate in connection with the foregoing activities.
7.4 Belgian Coordination Center
The Parties agree that Van Leer Coordination Center N.V. will as
at signing of this Agreement remain on Annex 6 (i); however, the
Seller shall use its reasonable best efforts to transfer this
company to the Consumer Packaging Division prior to Closing. If
such transfer shall not have occurred prior to Closing, the Seller
shall hold the Purchaser harmless against all costs actually
incurred by the Purchaser in connection with the closing down of
this company.
7.5 Supervisory Board Van Leer Netherlands B.V.
At Purchaser's request, the Seller shall use its reasonable best
efforts prior to Closing to obtain the resignations of the
supervisory directors of Van Leer Netherlands B.V..
ARTICLE 8 CONDITIONS PRECEDENT
8.1 Conditions Precedent to the Obligations of both Parties
The obligations of the Purchaser and the Seller to proceed with
Closing in order to complete the transactions contemplated by this
Agreement shall be subject to the satisfaction or to the waiver by
the Purchaser and the Seller on or prior to the Closing Date of
each of the following conditions:
(a) (i) all material approvals, licences, exemptions, clearances
and permissions from national, international or supra-
national authorities or other public authorities in any
juridiction required in connection with the transactions
contemplated by this Agreement and the related change of
control over the Company's Group have been obtained while
(ii) neither any national, international or supra-national
authority nor any other public authority in any jurisdiction
will have implemented or announced steps which could
materially impede the transactions contemplated by this
Agreement and the related change of control over the
Company's Group or which could in any other way have material
adverse consequences for the Purchaser and/or the Company's
Group and/or the Seller and (iii) all such waiting periods as
apply pursuant to applicable legislation will have expired
during which national, international or supra-national
authorities or other public authorities in any jurisdiction
may implement or announce such steps as referred to above or
during which any such authorities may raise objections
against the transactions contemplated by this Agreement and
the related change of control over the Company's Group;
(b) no action or proceeding by or before any court of law or
arbitral tribunal or any governmental, provincial or
municipal administrative body or authority or otherwise has
been taken or instituted against the Purchaser or the
Company's Group or the Seller, which may restrain, prohibit,
invalidate or otherwise affect the transactions contemplated
by this Agreement or which may have such a material influence
on the assets, the business and/or the financial position of
the Company's Group or the Seller that the Purchaser or the
Seller, as the case may be, should such action or proceeding
have been taken or instituted or threatened on or before the
date hereof, would not have entered into this Agreement on
the same or similar conditions.
(c) the Stichting Van Leer Group Foundation (the "Foundation")
shall have failed to exercise, or shall have notified the
Seller unconditionally and irrevocably that it does not
invoke or that it waives, its right of first refusal to
purchase the Industrial Packaging Division of the Company,
and the Foundation shall have transferred to the Company
legal and beneficial title to its share ownership interest
in the special purpose B.V. company holding legal title to
the Van Leer trademark, logo and related intellectual
property rights (collectively, the "Stichting Right of First
Refusal");
(d) the Environmental Insurance Policy referred to in Article
6.11 will have entered into force to provide the insurance
cover required under Article 6.11 as from the Closing Date;
(e) a detailed pension plan arrangement (per Article 9.4) shall
have been agreed upon; and
(f) the Parties shall have reached agreement on the
implementation of the Reorganisation as referred to in
Article 7.2.
8.2 Conditions Precedent to the Purchaser's Obligations
The obligations of the Purchaser to proceed with Closing in order
to complete the transactions contemplated by this Agreement shall
be subject to the satisfaction or to the waiver by the Purchaser
on or prior to the Closing Date of each of the following
conditions:
(a) all actions, corporate or otherwise, required to be taken by
the Seller prior to the completion of the transactions
contemplated by this Agreement have been taken;
(b) the Purchaser shall have received a legal opinion in the
form as attached as Schedule 10 (i) relating to the Seller.
8.3 Conditions Precedent to the Seller's Obligations
The obligations of the Seller to proceed with Closing in order to
complete the transactions contemplated by this Agreement shall be
subject to the satisfaction or to the waiver by the Seller on or
prior to the Closing Date of each of the following conditions:
(a) all actions, corporate or otherwise, required to be taken by
the Purchaser prior to the completion of the transactions
contemplated by this Agreement have been taken;
(b) the Seller shall have received a legal opinion in the form as
attached as Schedule 10 (ii) relating to the Purchaser.
8.4 Fulfilment of Conditions Precedent
The Seller and the Purchaser will, from the date hereof to the
Closing Date, each use their reasonable best efforts to cause the
conditions precedent referred to in this Article 8 to be
satisfied. Without limiting the generality of the foregoing, the
Seller and the Purchaser will use their respective reasonable best
efforts to obtain all consents, waivers and clearances of all
third parties and governmental or regulatory authorities or
otherwise which are necessary or advisable to complete and make
effective the transactions contemplated by this Agreement.
8.5 Material Breach
If at any time prior to Closing:
(a) a material breach of the Seller's Representations and
Warranties, having occurred prior to the date of this
Agreement, shall come to the notice of the Purchaser; or
(b) there shall occur any act or event after the date of this
Agreement which upon Closing would or might reasonably be
expected to result in a material breach of any of the
Seller's Representations and Warranties; or
(c) there is any material breach or non-fulfilment by the Seller
of any of its covenants or other obligations under this
Agreement,
which in any such case is incapable of remedy or, if capable of
remedy, is not remedied by the Seller by the Closing Date or (if
earlier) within five (5) days after notice thereof from the
Purchaser requiring the same to be remedied, then in any such case
(a "Termination Event") the Purchaser shall be entitled to elect
by notice to the Seller not to proceed with Closing, in which
event this Agreement shall terminate and Article 12.2 shall apply.
For the purposes of this clause 8.5 only a "material" breach means
a breach representing a value, when calculated in monetary terms,
in excess of US$ 62,000,000 (sixty two million US dollars).
If the Purchaser is entitled under this Article 8.5 to elect not
to proceed with Closing but it elects that it will proceed with
Closing, it will notify the Seller as soon as possible of such
election. If in that event the Purchaser does not confirm to the
Seller in its notification that it waives its rights to claim any
Indemnification Amount in respect of the relevant Termination
Event, the Seller shall be entitled to elect by notice to the
Purchaser not to proceed with Closing, in which event this
Agreement shall terminate and Article 12.2 shall apply and in
which event the Seller shall, if the facts and circumstances that
have caused such Termination Event were within the sole control of
the Seller, pay to the Purchaser in immediately available funds
all of Purchaser's out-of-pocket costs and expenses incurred in
connection with the transactions contemplated by this Agreement,
not to exceed US$ 5 million.
ARTICLE 9 CLOSING
9.1 Place of Closing
The Closing shall take place on the Closing Date at the offices of
NautaDutilh at ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ as of
10.00 a.m. or such other time as agreed between the Parties.
9.2 Settlement of intercompany debt
On or before the Closing Date, the Seller will undertake to cause
the full settlement of all loans to the Consumer Packaging
Division from the Company's Group (for a matter of reference the
loans which are in the categories "Loans to HVL consumer
companies" and "Loans to HVL consumer companies relating to
separation of consumer" in note (3) of the Pro Forma Accounts),
and all loans from the Consumer Packaging Division to the
Company's Group (for a matter of reference the loans which are in
the categories "Loans from HVL consumer companies" and "Loans from
HVL consumer companies relating to separation of consumer" in note
(7) of the Pro Forma Accounts) except for any such intercompany
debt between the Company on the one side and the Seller and/or
Huhtamaki Finance Oy on the other side as referred to in the
hypothetical calculations II and III of Schedule
19, and further except the Mexico related loan provided for in
Schedule 18. Any non-trade intercompany debts and receivables will
be included in the settlement of intercompany debt as provided for
in this Article 9.2.
The Purchaser or, as the case may be, the Seller shall cause to be
settled at Closing the intercompany debt between the Company on
the one side and the Seller and/or Huhtamaki Finance Oy on the
other side as referred to in the hypothetical calculations II and
III of Schedule 19.
9.3 Release of guarantees and indemnity
The Purchaser acknowledges that the Seller will cause to be
released or withdrawn as from Closing or, in respect of statements
of joint liability issued under Article 403 of Book 2 of the
Netherlands Civil Code, as soon as possible thereafter, any
guarantees, indemnities, letters of comfort or Encumbrances issued
or incurred by the Seller or any of its group companies (excluding
the Company's Group) for the benefit of any company belonging to
the Industrial Packaging Division (including any such 403
statements). The Purchaser shall, if necessary, assume or take
over from the Seller or such group company of the Seller all
obligations pursuant to any such guarantees, indemnities, letters
of comfort or Encumbrances. The Parties shall in reasonableness
co-operate with each other in order to cause the release,
withdrawal or assumption, as the case may be, of any such
guarantees, indemnities, letters of comfort or Encumbrances issued
or incurred by the Seller or such group company of the Seller.
Without prejudice to the Purchaser's rights under the Seller's
Representations and Warranties and other indemnities pursuant to
this Agreement, the Purchaser will indemnify and keep the Seller
and any of its group companies (excluding the Company's Group)
harmless from and against any liability, resulting from such
guarantees, indemnities, letters of comfort or Encumbrances for
the period preceding their release, withdrawal or assumption, as
the case may be (including but not limited to any residual
liability pursuant to Article 404 of Book 2 of the Netherlands
Civil Code).
The Seller acknowledges that the Purchaser will cause to be
released or withdrawn as from Closing or, in respect of statements
of joint liability issued under Article 403 of Book 2 of the
Netherlands Civil Code, as soon as possible thereafter, any
guarantees, indemnities, letters of comfort or Encumbrances issued
or incurred by the Company's Group for the benefit of any company
belonging to the Consumer Packaging Division (including any such
403 statements). The Seller shall, if necessary, assume or take
over from such company of the Company's Group all obligations
pursuant to any such guarantees, indemnities, letters of comfort
or Encumbrances. The Parties shall in reasonableness co-operate
with each other in order to cause the release, withdrawal or
assumption, as the case may be, of any such guarantees,
indemnities, letters of comfort or Encumbrances issued or incurred
by the Company's Group. The Seller will indemnify and keep the
Purchaser and any of the companies of the Company's Group harmless
from and against any liability, resulting from such guarantees,
indemnities, letters of comfort or Encumbrances for the period
preceding their release, withdrawal or assumption, as the case may
be (including but not limited to any residual liability pursuant
to Article 404 of Book 2 of the Netherlands Civil Code).
9.4 Pensions
Schedule 14 hereto lists the enterprise pension funds in
Australia, the United Kingdom, the United States of America,
South Africa, Nigeria, Kenya and Zimbabwe (the "Industrial
Pension Funds") which presently provide for the pensions of
(former) employees in the Industrial Packaging Division and of
(former) employees in the Consumer Packaging Division. After the
Closing the Industrial Pension Funds will remain with the
Industrial Packaging Division and after a transitional period
(the "Transitional Period") which will commence at Closing and
end ultimately on the date falling six months after the Closing
Date the Industrial Pension Funds will cease to provide for the
pensions of active employees in the Consumer Packaging Division.
Furthermore, Schedule 15 lists the active employees who are a
member of the Industrial Pension Funds and who are presently
employed by the Consumer Packaging Division in Australia, the
United Kingdom, the United States of America, South Africa,
Nigeria, Kenya and Zimbabwe, hereinafter referred to as the
"Consumer Employees"). Benefits which become due and payable to
Consumer Employees during the Transitional Period will be paid
by the Industrial Pension Fund, and the Seller will make
contributions to the Industrial Pension Fund equal to the normal
cost of such plans for all Consumer Employees for the
Transitional Period, as determined by the actuary to the
Industrial Pension Fund appointed by the Purchaser in accordance
with the local country laws and practices ("Plan Actuary").
Consumer Employees will cease being plan members at the end of
the Transitional Period.
The parties agree that a value transfer ("waardeoverdracht")
from the Industrial Pension Funds in respect of the Consumer
Employees shall take place, which value shall be calculated as
of the Closing Date as if the Consumer Employees would leave the
employment of their employer as per such date, but increased by
the Seller's contributions for Consumer Employees for the
Transitional Period, and decreased by benefits paid and expenses
and insurance premiums incurred during the Transitional Period
for Consumer Employees, and then adjusted for interest at a rate
determined by the Plan Actuary to reflect investment performance
of the plan during the Transitional Period. Furthermore, the
calculation of the amounts of the value transfer shall be on the
basis of the actuarial and accounting practices and principles
consistently applied by the relevant Industrial Pension Fund and
in accordance with the rules of the relevant Industrial Pension
Fund and local legislation. The Purchaser shall cause the
relevant Industrial Pension Funds to transfer the amounts thus
established to a pension fund and/or an insurer to be designated
by the Seller within six months from the Closing.
Prior to Closing the parties hereto shall agree to a more
detailed arrangement regarding the foregoing value transfer,
which arrangement shall be based on the principles set forth in
this Article 9.4.
9.5 Service Agreement
On the Closing Date the Parties shall sign a Service Agreement
substantially in the form as attached hereto as Schedule 5.
9.6 Insurance Policies
For the avoidance of doubt, the Parties acknowledge that the
insurance policies as listed on Schedule 11 will terminate in
respect of the Industrial Packaging Division as per Closing. The
Seller and the Purchaser will use their reasonable best efforts to
agree prior to Closing on a suitable transition period arrangement
together with the insurers with the objective of the least
possible disruption to the operations of the Company's Group. Any
claims arising out of events occurring prior to Closing will be
the responsibility of the Seller and Seller will have to provide
the required run-off insurance coverage. The Seller and the
Purchaser will use their best efforts to agree on the best
approach to implement these objectives in a timely manner.
9.7 Resignation of Directors
The Seller shall procure that at Closing, all persons acting on
behalf of the Seller on any of the boards of the Company or any of
the Subsidiaries will resign and the Purchaser shall procure that
such resignations are accepted and that (without prejudice to the
Purchaser's rights against Seller under the Seller's
Representations and Warranties and other indemnities pursuant to
this Agreement) such persons will be discharged at Closing for the
performance of their duties up until Closing.
9.8 Custody Agreement
At Closing, the Parties and the Civil Law Notary shall sign a
custody agreement in the form as attached as Schedule 26 (the
"Custody Agreement") governing the terms and conditions upon
which the Due Diligence Information will be given into the
custody of the Civil Law Notary.
9.9 Further Closing actions to be taken
At the Closing the Parties shall further take such actions and
shall sign and execute such documents and agreements as shall be
required to be taken, signed or executed, in order to complete the
transactions contemplated by this Agreement, and as will be listed
in a separate Closing agenda that shall be signed by all Parties
as evidence of all actions referred to therein having been taken
and all documents and agreements listed therein having been duly
signed and executed in the consecutive order set forth in such
Closing agenda.
ARTICLE 10 NON-COMPETITION AND CONFIDENTIALITY
10.1 Non-Competition Seller
The Seller hereby agrees and undertakes that it will not:
(a) in any of the jurisdictions set forth in Schedule 12 without
the prior written consent of the Purchaser for a period of
three (3) years from the Closing Date as principal,
consultant, sales representative, agent, distributor,
shareholder, partner or in any other capacity whatsoever,
either directly or indirectly solicit, endeavour to solicit,
be engaged in or concerned with the conduct of any business
involving the production of or the trading in any products,
produced or traded, or the provision of services provided by
the Industrial Packaging Division as produced, traded or
provided as at Closing;
(b) for a period of three years from the Closing persuade, cause
or attempt to persuade any employee or any sales
representative or agent of the Company's Group to terminate
his or her or their relationship with the Company's Group; or
(c) persuade, cause or attempt to persuade any customer, supplier
of or other company or enterprise doing business with the
Company's Group to terminate its relationship with the
Company's Group or take any action that may result in the
impairment of such relationship.
Notwithstanding anything to the contrary in this Article 10.1 the
Seller shall not be deemed to have violated the terms of this
Article 10.1 as a result of (i) ownership by the Seller directly
or indirectly of less than ten percent (10 %) of the outstanding
shares of capital stock of any publicly traded company with one or
more classes of capital stock listed on a national securities
exchange or publicly traded market, or (ii) the purchase by the
Seller directly or indirectly of any business which primarily is
engaged in activities that do not fall under the scope of this
Article 10.1, but which business is engaged for a lesser part of
its business in activities that do fall under the scope of this
Article 10.1, provided that the Seller first offers to the
Purchaser the right to acquire such competitive business on terms
and conditions and at the allocable share of the price paid
pursuant to the Seller's acquisition thereof.
10.2 Non-Solicitation Purchaser
The Purchaser hereby agrees and undertakes that it will not for a
period of three years from the Closing persuade, cause or attempt
to persuade any employee or any sales representative or agent of
the Consumer Packaging Division to terminate his or her or their
relationship with the Consumer Packaging Division.
10.3 Confidentiality
Without prejudice to the provisions of the Confidentiality
Agreement the Parties undertake not at any time subsequent to this
Agreement to divulge or communicate to any company, person or
entity (other than to the other Party or the Company's Group, as
the case may be, or to any of their directors or employees who
need to acquire such knowledge in the performance of their duties
or as directed or approved by the other Party in writing) any
confidential information or information of an apparently
confidential nature whatsoever concerning the business, affairs,
accounts, dealings, transactions, customers, suppliers or business
relations of the Industrial Packaging Division by the Seller and
the Consumer Packaging Division by the Purchaser or, to the extent
it has learned such information in negotiating this Agreement, of
the other Party, except:
(a) to the extent required by applicable law or stock exchange
rules or by any competent authority but in that case only
after consultation with the other Party about the timing and
content of such disclosure;
(b) to its professional advisers under conditions of
confidentiality and only to the extent necessary for advising
such Party; or
(c) to the extent that such information is at the date hereof or
hereafter becomes public knowledge other than through
improper disclosure by any person.
10.4 Name Van Leer and Huhtamaki
The Seller shall exercise its reasonable efforts to cease the
use of the name "Van Leer" by itself and its subsidiaries
(excluding the Company's Group) within a reasonable period after
Closing not to exceed nine months, during which the Seller and
its subsidiaries shall be allowed to continue to use the name
"Van Leer". The name "HVL", wherever used (including in any
domain name) shall remain with the Seller. The Seller shall
forward to the Purchaser all e-mails and other correspondence
that concern the Industrial Packaging Division and that are
received by the Seller (or any of its subsidiaries, excluding
the Company's Group) in the period two months following the
Closing Date.
The Purchaser shall exercise its reasonable efforts to cease the
use of the names "Huhtamaki" and "Huhtamaki" by itself and the
Company's Group within a reasonable period after Closing not to
exceed 9 months during which the Purchaser and the Company's
Group shall be allowed to continue to use the names " Huhtamaki"
and "Huhtamaki". The Purchaser shall forward to the Seller all
e-mails and other correspondence that concern the Consumer
Packaging Division and that are received by the Purchaser or any
of its subsidiaries in the period two months following the
Closing Date.
ARTICLE 11 ANNOUNCEMENT
11.1 Disclosure
No Party shall make any disclosure to any third party about this
Agreement, its contents or any other agreement referred to in this
Agreement without the prior consent of the other Party except:
(a) to the extent required by applicable law or stock exchange
rules or by any competent authority but in that case only
after consultation with the other Party about the timing and
content of such disclosure; or
(b) to its professional advisers under conditions of
confidentiality and only to the extent necessary for advising
such Party.
11.2 Press release
Upon signing of this Agreement, the Parties shall issue separate
press releases in the form as attached as Schedule 13.
ARTICLE 12 TERMINATION
12.1 Termination
This Agreement may only be terminated and the transactions
contemplated hereby may be abandoned as follows:
(a) at any time prior to Closing by mutual written agreement of
the Parties; or
(b) by each Party if the Closing is not completed on or before
six months from the date of this Agreement other than as a
result of a breach of this Agreement by the terminating
Party; or
(c) by the Purchaser or the Seller, as the case may be, in the
situation referred to in Article 8.5; or
(d) (i) by the Purchaser or the Seller at any time after (x) the
Stichting Right of First Refusal is invoked or exercised by
Stichting Van Leer Group Foundation prior to expiration of
its period of validity and in accordance with its terms and
(y) the Seller has entered into a binding share purchase
agreement with the Stichting Van Leer Group Foundation or
(ii) by the Purchaser if the Seller and the Stichting Van
Leer Group Foundation have failed to enter into such an
agreement by the 45th day after the invocation or exercise of
the Stichting Right of First Refusal.
12.2 Effect of Termination
In the event of this Agreement being terminated pursuant to the
provisions of this Article 12, this Agreement (with the exception
of Article 10.3 (Confidentiality), Article 11 (Announcements),
this Article 12 (Termination) and Articles 13 (Miscellaneous) and
14 (Governing Law and Disputes), which shall survive any
termination of this Agreement indefinitely) shall become null and
void and have no effect and the transactions contemplated under
this Agreement shall be abandoned, without any liability on the
part of any Party and/or the directors, shareholders, heirs,
assigns or personal representatives of any party in respect of
this Agreement, other than:
(a) the liability on the part of each Party for its own expenses
incurred in connection with the preparation of the
transactions contemplated by this Agreement; and
(b) the liability of either Party to the other Party for damages
and/or costs incurred by such other Party as a result of this
Agreement being terminated due to or in connection with the
liable Party failing to fulfil any of its obligations
contemplated in this Agreement; and
(c) solely with respect to termination pursuant to Section
12.1(d) (i) or (ii), within fifteen (15) days after any such
termination the Seller shall pay to the Purchaser in
immediately available funds US$ 10 million plus all of the
Purchaser's out-of-pocket costs and expenses incurred in
connection with the transactions contemplated by this
Agreement, not to exceed US$ 5 million.
ARTICLE 13 MISCELLANEOUS
13.1 Entire Agreement
This Agreement contains the entire agreement between the Parties
with respect to the transactions contemplated hereby. This
Agreement supersedes any and all earlier and/or contemporaneous
agreements and understandings, either verbally or in writing,
between the Parties except for the Confidentiality Agreement. The
English version of this Agreement is binding and any translation
thereof will not be taken into account for the purpose of
interpreting or construing this Agreement.
13.2 Further Assurance
If at any time after the Closing Date any further action is
necessary or desirable in order to carry out the purposes of and
give full effect to this Agreement and to secure to each Party the
full power of the rights and remedies conferred upon it in this
Agreement, the proper directors or other representatives of the
Purchaser or the Seller, as the case may be, shall execute and
deliver any further instruments or documents and take all such
necessary action that may reasonably be requested from any of
them.
13.3 Changes
Changes to this Agreement can only be validly made and shall come
into force only when agreed upon in writing between the Parties
and when duly signed by all Parties. Waivers of any rights or
claims can only be validly made when confirmed in writing by the
waiving Party in accordance with the provisions of Article 13.9
hereof.
13.4 Invalid Provisions
In the event that any of the provisions contained herein shall be
deemed invalid or unenforceable, then the remaining provisions
shall remain valid and enforceable and be construed as if any such
invalid or unenforceable provision was not contained herein; and
the Parties shall forthwith replace any such invalid and
unenforceable provision by a provision which as closely as
possible meets the intention of the Parties when agreeing upon the
original provision.
13.5 Descriptive Headings
The descriptive headings of this Agreement are for the sake of
convenience only and shall not control or affect the meaning,
construction or interpretation of any provision of this Agreement.
13.6 Expenses
Except as provided herein, each Party will bear its own expenses
incurred in connection with the negotiation and preparation of
this Agreement and the transactions contemplated thereby.
13.7 No Implied Waivers
No failure or abstention whatsoever of either Party to take any
action in the event of a breach of any of the provisions of this
Agreement by the other Party and/or in the event of the occurrence
of events enabling the Purchaser to make a claim under any of the
Seller's Representations and Warranties or the Seller to make a
claim under the Purchaser's Representations and Warranties shall
be considered to constitute a waiver by such Party of any rights
it may have under this Agreement or applicable law.
13.8 No Rescission
The Parties hereby waive their rights under Sections 6:265 ff. of
the Netherlands Civil Code to claim rescission ("ontbinding") of
this Agreement and their rights to claim annulment
("vernietiging") of this Agreement unless such rescission is
claimed pursuant to Article 12.1.
13.9 Notices
Any notice or communication required to be delivered to either
Party pursuant to or in connection with this Agreement shall be
delivered by hand or be given by registered mail with
acknowledgement of receipt or by facsimile (and with copy per
mail) to the addresses set forth below:
If to the Purchaser:
▇▇▇▇▇ Bros. Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇.▇.▇.
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax number: ▇▇ ▇ ▇▇▇ ▇▇▇-▇▇▇▇
With copy to:
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP
Capitol Square, Suite 2100
▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇.▇.▇.
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax number: ▇▇ ▇ ▇▇▇ ▇▇▇-▇▇▇▇
If to the Seller:
Huhtamaki Van Leer Oyj - Finland
Lansituulentie 7
Espoo 02100
Finland
Attn.: ▇▇▇▇ ▇▇▇▇▇▇▇
Fax: ▇▇ ▇▇▇-▇-▇▇▇ 622
With copy to:
NautaDutilh
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Attn.: ▇▇▇▇ Hooghoudt
Fax: ▇▇ ▇▇ ▇▇ ▇▇▇ ▇▇▇▇
or to such other address or representative as either Party may
designate by means of a written notice to be sent to the other
Party from time to time.
13.10 Assignment
This Agreement shall be binding upon and inure to the benefit of
the Parties and their respective successors and assignees. This
Agreement and each Party's respective rights and obligations
hereunder may not be assigned by either Party without the prior
written approval of the other Party, except that up to the Closing
Date:
(a) without the consent of the Seller, the Purchaser may assign
any or all of its rights and interests hereunder to one or
more of its wholly-owned subsidiaries or designate one or
more of its wholly-owned subsidiaries to perform its
obligations hereunder; provided that the Purchaser
nonetheless shall continue to remain responsible, in that
case jointly and severally with such assignee, for the
performance of all of its obligations hereunder; and
(b) without the consent of the Purchaser, the Seller may assign
this Agreement to one of its wholly-owned subsidiaries,
subject to the requirements of Article 2.1.
13.11 Civil Law Notary
The Purchaser has knowledge of the fact that the Civil Law
Notary works with NautaDutilh, the firm that has advised the
Seller in this transaction. With reference to article 10 of the
Guidelines regarding Co-operation between Advocates and Notaries
("Richtlijnen met betrekking tot de samenwerking van notarissen
onderling en met advocaten"), as determined by the board of the
Dutch Royal Organisation of Notaries, the Purchaser herewith
explicitly agrees that the Seller is assisted by NautaDutilh in
relation to this Agreement and any agreements that may be
concluded and any disputes that may arise in connection
therewith.
13.12 Counterparts
This Agreement may be executed in any number of counterparts which
together shall constitute one agreement. Any Party may enter into
this Agreement by executing a counterpart and this Agreement shall
not take effect until it has been executed by all Parties.
ARTICLE 14 GOVERNING LAW AND DISPUTES
14.1 Governing Law
This Agreement shall be construed in accordance with and be
governed exclusively by the laws of the Netherlands.
14.2 Disputes
Any disputes arising out of or in connection with this Agreement
and/or any other agreement related to this Agreement which cannot
be settled by the Parties through amicable settlement, shall be
resolved in accordance with this Article 14.2. If and to the
extent that any dispute concerns Open Issues as referred to in
Article 4.3 (Closing Balance Sheet) then, if the Parties so agree,
such dispute will be resolved in accordance with the binding
advice procedure of Article 4.4. If the Parties cannot so agree
and in respect of all other disputes, any such dispute will be
finally and exclusively settled by arbitration in accordance with
the rules of arbitration of the Netherlands Arbitration Institute
("Nederlands Arbitrage Instituut"), provided however that if and
to the extent any dispute specifically concerns the establishing
of the actuarial assumptions as referred to in Article 4.3, then
such dispute will be resolved in accordance with the binding
advice procedure set forth in said Article 4.3. The arbitration
proceedings and all documents delivered to or by the arbitrators
shall be in the English language and the arbitrators shall make
their award in accordance with the rules of law. The venue for the
proceedings shall be Amsterdam. Notwithstanding the foregoing,
nothing in this Article 14.2 shall preclude either Party from
applying for injunctive relief in summary proceedings ("kort
geding") to the competent District Court in the Netherlands.
Thus agreed and signed in two original copies in Amsterdam on 27
October 2000.
HUHTAMAKI VAN LEER OYJ ▇▇▇▇▇ BROS. CORPORATION
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: ▇▇▇▇ ▇▇▇▇▇▇▇ By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: group general counsel Title: chairman and CEO
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
By: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: group finance manager
FIRST AMENDMENT TO THE
SHARE PURCHASE AGREEMENT DATED 27 OCTOBER 2000
between
HUHTAMAKI VAN LEER OYJ
as the Seller
and
▇▇▇▇▇ BROS. CORPORATION
as the Purchaser
for the acquisition by the Purchaser
of the entire issued share capital of
Royal Packaging Industries Van Leer N.V.
NAUTADUTILH
Amsterdam
Place: Amstelveen/Espoo
Date: 5 January 2001
THE UNDERSIGNED:
(1) HUHTAMAKI VAN LEER OYJ, a company duly incorporated and
validly existing under the laws of Finland, established and
having its principal office in Espoo as the seller (the
"Seller"); and
(2) ▇▇▇▇▇ BROS. CORPORATION, a corporation organised under the
laws of the State of Delaware, USA, having its principal
offices at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇ as the
purchaser (the "Purchaser");
WHEREAS:
A. The Purchaser and the Seller have entered into an agreement
dated 27 October 2000 regarding the sale and transfer of all
shares in the capital of Royal Packaging Industries Van Leer
N.V. (the "Agreement");
B. The earnings before interest and taxes ("EBIT") of the
Industrial Packaging Division since the Pro Forma Accounts
Date through 30 November 2000 and the prospects in respect
of EBIT for the remaining part of the year 2000 deviate
negatively from the EBIT of the Industrial Packaging
Division which was estimated for such periods as per the
date of signing of the Agreement (such deviation the
"Negative Deviation"). Schedule A attached hereto purely for
identification purposes contains the following information
in respect of the Negative Deviation: (a) the actual EBIT of
the Industrial Packaging Division for the period from 1
January 2000 through 30 November 2000; and (b) the estimate
of EBIT of the Industrial Packaging Division for the period
1 January 2000 through 31 December 2000. The outlook for
EBIT of the Industrial Packaging Division for 2001 deviates
negatively from the outlook for EBIT of the Industrial
Packaging Division which was estimated for 2001 as per the
date of signing the Agreement (such deviation the "Reduced
Outlook"). In consideration for the Negative Deviation and
the Reduced Outlook, the Parties to the Agreement have
agreed to a reduction of the Purchase Price;
C. The Parties wish to record their amendment to the Agreement
in this Amendment Agreement;
NOW HEREBY AGREE AS FOLLOWS:
ARTICLE 1 DEFINITIONS
Capitalised terms used in this Amendment Agreement and not
otherwise defined herein shall have the meanings set forth in
the Agreement.
ARTICLE 2 PURCHASE PRICE
The Parties hereto hereby agree that Article 3.2, third and
fourth paragraph, of the Agreement is hereby amended and shall
read as follows:
"The Provisional Purchase Price shall be a sum equal to US$
555,000,000 (five hundred and fifty five million US dollars)
minus the Estimated Net Outstanding Indebtedness, if it
represents a negative amount, or plus the Estimated Net
Outstanding Indebtedness, if it represents a positive amount,
and shall be increased, if the Estimated Net Working Capital
is higher than the Pro Forma Accounts Net Working Capital, or
shall be decreased, if the Estimated Net Working Capital is
lower than the Pro Forma Accounts Net Working Capital, by the
difference between the Estimated Net Working Capital and the
Pro Forma Accounts Net Working Capital.
If the Provisional Purchase Price for the shares would
exceed US$ 555,000,000 (five hundred and fifty five million
US dollars), the Seller will cause the Company to declare a
dividend payable to the Seller in an amount which is equal to
the lower of (i) such excess and (ii) the amount of the
distributable reserves of the Company in order to reduce the
Provisional Purchase Price with the amount of such dividend.
The Seller and/or Huhtamaki Finance Oy will make a loan to
the Company to the extent there is not sufficient cash in the
Company's Group to pay the aforementioned dividend. The
amount of such loan will be taken into account by the Seller
in calculating and estimating the Estimated Net Outstanding
Indebtedness."
ARTICLE 3 ACKNOWLEDGEMENT AND WAIVER
The Purchaser hereby expressly confirms and agrees that from and
after the date hereof it shall have no claim whatsoever under
the Agreement, including but not limited to the Seller's
Representations and Warranties or any indemnities of the Seller
thereunder, due to or as a result of the Negative Deviation, the
Reduced Outlook, or the actual EBIT of the Industrial Packaging
Division for 2001 up to Closing. In particular, and without
prejudice to the Seller's position that these Articles are not
applicable anyway, the Purchaser confirms that it has no claim
under Article 8.5 of the Agreement or under Section 7.1 of the
Seller's Representations and Warranties with respect to the
Negative Deviation, the Reduced Outlook, or the actual EBIT of
the Industrial Packaging Division for 2001 up to Closing. If and
to the extent that the Purchaser could nevertheless be said to
have any such claim under the Agreement, including but not
limited to the Seller's Representations and Warranties, it
hereby expressly waives in favour of the Seller all of its
rights in respect of any such claim.
ARTICLE 4 MISCELLANEOUS
4.1 If and to the extent there is a material adverse change in
the Negative Deviation which occurs and becomes known to the
Parties before Closing, then, only with respect to such
excess deviation from the Negative Deviation, Article 3
hereof shall not apply and the Seller and the Purchaser
shall not be prejudiced in any of their respective other
rights under the Agreement and this Amendment Agreement,
provided, however, that no write-offs or other non-recurring
items, whether already stated in item (b) of Schedule A or
included in the year to date 30 November 2000 results or
otherwise, will for the purposes hereof be taken into
account in respect of the determination of the actual
results for the entire year 2000.
4.2 Articles 1.2, 10.3, 11, 13 and 14 of the Agreement apply
mutatis mutandis to this Amendment Agreement and are
considered to be repeated and included herein.
Thus agreed and signed in two original copies on 5 January 2001.
HUHTAMAKI VAN LEER OYJ ▇▇▇▇▇ BROS. CORPORATION
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: ▇▇▇▇ ▇▇▇▇▇▇▇ By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Group General Counsel Title: Chairman and CEO
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
By: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Financial Officer
SECOND AMENDMENT TO THE
SHARE PURCHASE AGREEMENT DATED 27 OCTOBER 2000
between
HUHTAMAKI VAN LEER OYJ
as the Seller
and
▇▇▇▇▇ BROS. CORPORATION
as the Purchaser
for the acquisition by the Purchaser
of the entire issued share capital of
Royal Packaging Industries Van Leer N.V.
NAUTADUTILH
Amsterdam
Place: Amsterdam
Date: 28 February 2001
SECOND AMENDMENT TO THE SHARE PURCHASE AGREEMENT
DATED 27 OCTOBER 2000
THE UNDERSIGNED:
(1) HUHTAMAKI VAN LEER OYJ, a company duly incorporated and
validly existing under the laws of Finland, established and
having its principal office in Espoo as the seller (the
"Seller"); and
(2) ▇▇▇▇▇ BROS. CORPORATION, a corporation organised under the
laws of the State of Delaware, USA, having its principal
offices at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇ as the
purchaser (the "Purchaser");
WHEREAS:
A. The Purchaser and the Seller have entered into an agreement
dated 27 October 2000 regarding the sale and transfer of all
shares in the capital of Royal Packaging Industries Van Leer
N.V. (the "Agreement");
B. The Parties have entered into a First Amendment to the
Agreement on 5 January 2001;
C. Article 4.3 and certain other Articles of the Agreement
provide that the Parties will reach further agreement in
respect of certain matters prior to Closing;
D. The Parties have reached agreement on such matters as
referred to in Article 4.3 and such other Articles of the
Agreement;
E. The Parties wish to record their agreement in respect of
such matters mentioned in recital (D) hereof in this Second
Amendment Agreement;
NOW HEREBY AGREE AS FOLLOWS:
ARTICLE 1 DEFINITIONS
Capitalised terms used in this Second Amendment Agreement and
not otherwise defined herein shall have the meanings set forth
in the Agreement.
ARTICLE 2 SEPARATE CLOSING AND PURCHASE PRICE ALLOCATION
2.1 Separate Closing
The Agreement provides that the shares in the capital of Royal
Packaging Industries Van Leer N.V. (the "Company") will be
transferred to the Purchaser on the Closing Date. In deviation
from such provision, the Parties agree that, in addition to the
transfer of the shares in the Company, certain shares in certain
companies, as listed below, shall be transferred at the Closing
Date on the same terms and conditions as are contained in the
Agreement, but by way of separate transfers under applicable
local law:
(i) France
▇. ▇▇▇ ▇▇▇▇ France Investments Holding B.V. will transfer
437,496 shares in the capital of Van Leer France Holding
S.A.S. to Greif France Holding S.A.S., resident in France.
▇. ▇▇▇ ▇▇▇▇ France Investments B.V. will transfer 4 shares in
the capital of Van Leer France Holding S.A.S. to Greif France
Holding S.A.S., resident in France.
c. The 437,500 shares in the capital of Van Leer France Holding
S.A.S. referred to immediately above currently constitute,
and on the Closing Date will constitute, all of the issued
and outstanding shares in the capital of Van Leer France
Holding S.A.S.
▇. ▇▇▇ ▇▇▇▇ France Holding S.A.S. shall be and hereby is added
to the list of Subsidiaries of Annex 6 of the Agreement.
(ii) Germany
4 P Verpackungsgruppe B.V. & Co. Holding KG has transferred all
issued and outstanding shares with a nominal value of 50 DM each
held by it in the capital of Van Leer Grundstucksverwaltungs GmbH
to the Company. The transfer tax due in respect of this transfer
shall be paid by the Purchaser, provided, however, that if the
Purchaser or any of its Group Companies will be assessed twice for
transfer tax in respect of Van Leer Grundstucksverwaltungs GmbH,
the Seller shall reimburse the Purchaser for such second tax
assessment.
(iii) United States of America
▇. ▇▇▇ ▇▇▇▇ Holding Inc. will transfer all issued and
outstanding shares in the capital of American Flange &
Manufacturing Company Inc. ("Flange & Manufacturing") to the
Purchaser.
▇. ▇▇▇ ▇▇▇▇ Holding Inc. will transfer all issued and
outstanding shares in Van Leer Containers Inc. ("Van Leer
Containers") to the Purchaser.
c. The Parties agree that they shall jointly make (i) elections
pursuant to Section 338(h)(10) of the Internal Revenue Code
of 1986 with respect to the purchase and sale of the shares
in Flange & Manufacturing and Van Leer Containers and the
deemed purchase and sale of subsidiaries of either
corporations and (ii) all comparable elections under state
and local Tax law, both as further to be recorded in the US
Stock Purchase agreement in respect of those sales and
transfers.
d. The Parties agree that no private letter ruling shall be
sought from the tax authorities in the United States of
America with respect to the tax basis of the assets of Flange
& Manufacturing and Van Leer Containers on the Closing Date.
e. The Parties agree that a restructuring liability in the
amount of USD 9,100,000 (nine million and one hundred
thousand US Dollar) shall be included in the Closing Balance
Sheet in respect of the tax consequences for the Purchaser of
the election mentioned sub (c) above.
(iv) Brazil
a. Feldreus Investments B.V. will transfer all but one of the
issued shares in the capital of Huhtamaki Holding Ltda. to
▇▇▇▇▇ Netherlands Holdings B.V. The one remaining share in
the capital of Huhtamaki Holding Ltda. shall continue to be
held by ▇▇. ▇▇▇▇▇▇▇▇▇▇.
b. Huhtamaki Holding Ltda. and Van Leer Holding S.A. shall be
and hereby are added to the list of Subsidiaries of Annex 6
to the Agreement.
2.2 Discrepancies
In case of any conflict or discrepancy between the terms of the
local agreements regarding the transactions mentioned in Article
2.1 hereof and the Agreement, including the First Amendment
Agreement and this Second Amendment Agreement, the provisions of
the Agreement, including the First Amendment Agreement and this
Second Amendment Agreement, shall prevail.
2.3 Purchase Price Allocation
The amounts to be paid as purchase price for the shares which will
be transferred separately in accordance with Article 2.1 hereof,
are included in the amount of the Purchase Price as defined in the
Agreement.
The Parties agree that the parts of the Purchase Price allocable
to the shares mentioned in Article 2.1 in respect of USA, France
and Brazil, are set out in Schedule AII.1 hereto.
The final consideration amounts paid in connection with the
transactions in respect of the Reorganisation are listed in
Schedule AII.2 hereto. The Purchaser's acknowledgement of such
amounts shall have no effect on its right under Article 7.2 of the
Agreement, including Seller's indemnity of the Purchaser contained
therein.
The Parties undertake that they shall prepare all of their
respective tax returns (belasting aangiften) in the respective
countries in accordance with the allocation as contained in such
Schedules AII.1 and AII.2.
2.4 Annex 6 and Schedules 8 (i) and 8(ii)
The Parties agree that there have been some changes in respect
of the Subsidiaries since the date of the Agreement.
Consequently, the Parties have agreed to update Annex 6 to the
Agreement, which updated Annex 6 is attached to this Second
Amendment Agreement and shall replace Annex 6 as attached to the
Agreement.
The Parties agree that the Reorganisation has been carried out in
the manner as set forth in the revised Schedule 8 (i), a copy of
which is attached hereto and which revised Schedule 8 (i) will
replace the Schedule 8 (i) as attached to the Agreement.
The Parties have further agreed to certain changes to Schedule 8
(ii) as set out in Schedule AII. 3 attached hereto.
2.5 Closing Balance Sheet Date
The Parties hereby agree that the Closing Balance Sheet Date
shall be 28 February 2001.
ARTICLE 3 ENVIRONMENT
3.1 Third Party Claims Relating to Known Conditions Excluded
from Insurance
The Parties were unable to obtain insurance coverage under the
Environmental Insurance Policy for third party claims related to
Environmental Matters identified in the Known Conditions
Schedule, Endorsement 6 to the Environmental Insurance Policy.
The Parties hereby amend the Agreement and agree that such third
party claims shall not be subject to the Purchaser's obligation
in Article 6.11.6(a) and shall be subject to immediate cost
sharing under Article 6.11.6(b).
3.2 Seller's Representation - Article 6.11.12.G
The following provision shall be deemed to have been inserted in
Clause 6.11.12 (G) of the Agreement:
"The Seller has not made any material misrepresentation,
which affects the insurability of the risk, towards the
insurers under the Environmental Insurance Policy. The
statements contained in the Declarations (as defined in the
Environmental Insurance Policy) and any other supplemental
materials and information submitted to ECS Underwriting,
Inc. as a part of the application process or with the
application, for the Environmental Insurance Policy are the
Seller's agreements and representations. The statements and
facts set forth in the application, including the
supplemental materials and information, for the
Environmental Insurance Policy towards ECS Underwriting,
Inc. and relied on by all insurers are true and no material
facts have been suppressed or misstated therein."
ARTICLE 4 ARTICLE 4.3 OF THE AGREEMENT
4.1 Working capital amount in the Pro Forma Accounts
The Parties have acknowledged that there was a mistake in the
Pro Forma Accounts which has an effect on the Pro Forma Accounts
Net Working Capital and the Parties wish to correct such
mistake. Consequently, the Parties hereby agree that the amount
of the Pro Forma Accounts Net Working Capital as included in the
Pro Forma Accounts shall be revised on the amount of EUR
205,344,000 (two hundred and five million and three hundred and
forty four thousand Euro).
4.2 United States of America
(i) Split dollar life statement
The Parties agree that the "Provisions for liabilities and other
charges" in the Closing Balance Sheet will include the full
liability for post-retirement benefits without netting out the
value of the US cash surrender value life ("split dollar life")
insurance policies, which are an asset of Van Leer Containers.
As a consequence, the Estimated Net Outstanding Indebtedness is
increased by USD 4,000,000 (four million US Dollar).
(ii) Post retirement benefits statement
For the establishment of the Closing Balance Sheet medical
inflation percentages shall be used for the United States of
America of 7.25%, grading down 0.5% each year to an ultimate
rate of 4.75%, using a discount rate of 7.5%. As a consequence,
the Estimated Net Outstanding Indebtedness is increased by USD
2,000,000 (two million US Dollar).
4.3 The Netherlands, France and Germany
(i) Back service pension liabilities in the Netherlands
The Parties acknowledge that the liability for unfunded back
service pension liabilities in the Netherlands as of 31 December
1999 has been duly included in the Pro Forma Accounts.
(ii) Funding of liabilities France
The Parties agree that the liability in France relating to the
provision for medical and life insurance benefits for former
employees between early retirement and age 65 and the liability in
France relating to the benefits arising from the early retirement
convention shall not be included under "Provisions for liabilities
and other charges" in the Closing Balance Sheet.
(iii) Funding of liabilities Germany
The Seller hereby represents and warrants to the Purchaser that
the reserve in the Germany local accounts as at 31 December 1999
of DM 15,225,615 (fifteen million and two hundred and twenty five
thousand and six hundred and fifteen German ▇▇▇▇) relates entirely
to re-insurance assets. In reliance on the foregoing, the
Purchaser agrees that the Pro Forma Accounts do not understate the
pension liabilities in Germany as of 31 December 1999.
4.4 Full Agreement
The Parties acknowledge and agree that they have now reached
full agreement on all issues which pursuant to Article 4.3 of
the Agreement have to be agreed upon prior to Closing.
ARTICLE 5 PENSION
Article 9.4 of the Agreement provides that prior to Closing the
parties shall agree on a more detailed arrangement regarding the
value transfers mentioned in such Article 9.4 in respect of the
Consumer Employees (as listed on Schedule 15). Such more
detailed arrangement is set forth below and will be in addition
to the mechanics already provided for in Article 9.4 of the
Agreement:
(i) United States of America
The Parties have meanwhile agreed that ▇▇▇ ▇▇▇▇▇ will remain
with the Industrial Packaging Division.
▇▇▇▇▇ ▇▇▇▇▇▇ has already left the relevant Industrial Pension
Fund.
▇▇▇▇ ▇▇▇▇▇ and Theo Kalifatidis are both expatriated Australians
who have remained within the Australian pension fund. They shall
be deemed to have been added to the Australia Chapter of the
list of Consumer Employees (Schedule 15 to the Agreement).
Based on the above circumstances, the Parties agree that no
value transfer has to take place in respect of Consumer
Employees in the United States of America.
(ii) United Kingdom
All Consumer Employees listed on Schedule 15 under the heading
"United Kingdom" will cease to be active members and become
deferred members of the relevant Industrial Pension Funds as per
the Closing Date, in accordance with the rules for leaving
service of the relevant Industrial Pension Fund, being either
the Van Leer (UK) Staff Pension Scheme or the Van Leer (UK)
Works Pension Scheme. As per the Closing Date, these members
will be entitled to take a transfer from their scheme on the
normal cash equivalent basis in force at the date they transfer,
which amount will be no less than the cash equivalent as at the
date of transfer as defined in the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇. A
value transfer ("waardeoverdracht") as provided for in Article
9.4, second paragraph, of the Agreement from the relevant
Industrial Pension Funds shall take place in accordance with
such provision.
(iii) Australia
The Consumer Employees in Australia are members of the Van Leer
Australia Salaried Staff Superannuation Plan ("VLASSSP"). Under
the governing superannuation legislation (Superannuation
Industry Supervision (SIS) Regulation 6.29), a transfer of a
member's benefits from one fund to another must be with the
consent of the member or the new fund must be a Successor Fund.
A Successor Fund approach has been adopted by the Seller. The
benefits of the Consumer Employees in Australia will be
transferred to the Oceana Superannuation Fund ("OSF"). A deed
of amendment to the VLASSSP trust deed was signed on 20 October
2000 to allow the trustee of the VLASSSP to transfer members to
another fund if satisfied that the new fund can be regarded as a
Successor Fund.
The OSF trust deed provides equivalent benefits for the
transferring employees from VLASSSP. As a result, the Seller
hereby warrants that members' accrued benefits in the VLASSSP
can be transferred to the OSF as a Successor Fund without
individual member consent being required.
The amount to be transferred to the OSF in respect of the
transferring members will be the equitable share of the total
defined benefit assets in the VLASSSP as at the date of
transfer, including a share of any surplus. Assets representing
members' Voluntary Contribution Accounts and Surcharge Offset
Accounts are specifically allocated to individual members and
would not form part of the equitable share calculation (but
would be transferred in addition).
(iv) South Africa
The two Consumer Employees listed on Schedule 15 under the
heading "South Africa", i.e. ▇.▇. ▇▇▇▇▇▇▇ and C.A. Reynecke,
have both left the relevant Industrial Pension Fund since the
date of the Agreement.
▇.▇. ▇▇▇▇▇▇▇ has retired and C.A. Reynecke has been transferred
to an outside pension fund; a value transfer in respect of C.A.
Reynecke has already taken place.
Based on the above circumstances, the Parties agree that no
value transfer has to take place in respect of Consumer
Employees in South Africa.
ARTICLE 6 VAN LEER COORDINATION CENTRE
The Parties confirm that the transfer of Van Leer Coordination
Center N.V. (the "VLC Center") to the Consumer Packaging Division,
as referred to in Article 7.4 of the Agreement, has not taken
place on the date hereof and will not take place prior to Closing.
The Purchaser agrees that it shall not close down VLC Center
before 1 August 2001 but that it shall close down VLC Center as
soon as practicable thereafter. Until closing down is completed,
the Purchaser will procure that VLC Center will be run in its
ordinary course of business consistent with the period before
Closing. The Seller shall hold the Purchaser harmless against and
shall reimburse the Purchaser upon its first request for all costs
actually incurred by VLC Center or the Purchaser's Group of
Companies in connection with (a) the operational costs of VLC
Center, other than the salary costs of the employees listed in
Annex AII.4 attached hereto (the "Industrial Employees") and (b)
the closing down of VLC Center, provided that the Seller shall
only be liable for dismissal costs up until 1 August 2002 and only
in relation to the employees who (i) are employed by VLC Center as
at Closing and are not Industrial Employees and (ii) following
their dismissal, are not employed within Purchaser's group of
companies. For the avoidance of doubt, the Purchaser shall have no
obligation to employ, or offer employment to, within the
Purchaser's group of companies, any employee who is currently
employed by VLC Center.
ARTICLE 7 INSURANCE
Article 9.6 of the Agreement provides that the Seller and the
Purchaser will use their reasonable best efforts to agree prior
to Closing on a suitable transition period arrangement with
respect to the insurance policies as listed on Schedule 11 which
will terminate in respect of the Industrial Packaging Division
as per Closing. The Parties hereby agree that no such
arrangement is necessary and that consequently neither Party has
any further obligation pursuant to such Article 9.6. except that
any claims arising out of events occurring prior to Closing that
would otherwise be covered by such terminated insurance
policies, will be the responsibility of the Seller whether or
not it obtains run-off insurance coverage.
ARTICLE 8 KENTUCKY REAL ESTATE
The Parties acknowledge that the fact that the Purchaser is
aware of a potential problem in connection with the lease of the
plant in Florence, Kentucky, will not prejudice the rights of
the Purchaser under the Seller's Representations and Warranties
or the indemnities as contained in the Agreement
ARTICLE 9 MISCELLANEOUS
Articles 1.2, 10.3, 13 and 14 of the Agreement apply mutatis
mutandis to this Amendment Agreement and are considered to be
repeated and included herein.
Thus agreed and signed in two original copies in Amsterdam on 28
February 2001.
HUHTAMAKI VAN LEER OYJ ▇▇▇▇▇ BROS. CORPORATION
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: ▇▇▇▇ ▇▇▇▇▇▇▇ By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: chief financial officer Title: chairman and CEO
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
By: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: group general counsel