EXHIBIT 4.2
CONFORMED COPY
MEMORANDUM OF AGREEMENT
PURPOSE OF To set forth all the material terms and conditions
MEMORANDUM OF pursuant to which Quilmes Industrial SA ("Quinsa") and Heineken
AGREEMENT International B.V. and its affiliates (collectively,
("MOA") "Heineken") agree to fully and finally settle and resolve all
disputes and claims brought by and against each other in the
pending ICC arbitration case number 12170/DB (the
"Arbitration") and all matters in connection therewith.
TERMINATION OF The Shareholders Agreement dated December 20, 1984 (the
SHAREHOLDERS "Shareholders' Agreement") is hereby terminated and shall have
AGREEMENT no further force and effect from and after the execution of
this MOA by Heineken and Quinsa.
SALE OF QIB At the Closing, Heineken will sell to Beverage Associates
SHARES (BAC) Corp. ("BAC") and BAC will purchase from
Heineken, all the shares of Quilmes International (Bermuda)
Ltd ("QIB") held by Heineken (i.e., 14,080,890 shares
representing currently 15% of the issued and outstanding
capital of QIB) (the "QIB Shares") (such sale and purchase,
the "QIB Sale"). Heineken will make no representations or
warranties with respect to the QIB Shares or QIB except that
(i) Heineken is the record and beneficial owner of the QIB
Shares; (ii) Heineken has the corporate power to sell,
transfer and assign the QIB Shares to BAC; and (iii) BAC will
acquire Heineken's interest in and title to the QIB Shares
free and clear of any liens, claims and encumbrances created
by Heineken, other than those provided in the Shareholders'
Agreement. BAC makes no representations to Heineken as to QIB.
At the Closing, Heineken shall deliver to BAC share
certificate(s) representing the QIB shares, with transfer
instruments duly executed. BAC may assign to Ambev (as defined
below) its right to acquire the QIB Shares, provided that no
such assignment shall relieve BAC of its obligations under
this MOA or create any direct rights for Ambev as against
Heineken.
DIVIDEND In line with QIB's Board of Director's
PAYMENT deliberations on December 20, 2002, QIB will declare
and pay a dividend in the aggregate of $US 26.5
million to Quinsa (85%) and Heineken (15%) on or
before January 15, 2003.
PURCHASE PRICE At the Closing, BAC will pay Heineken for the QIB Shares
the sum of US $102,670,000 (the "Purchase Price") in
immediately available funds by wire transfer to a bank account
in The Netherlands as designated by Heineken.
CLOSING The closing of the QIB Sale (the "Closing") is subject
only to, and shall occur simultaneously with, the closing of
the transactions contemplated in the Share Exchange Agreement
dated as of May 1, 2002 between Companhia de Bebidas Das
Americas - Ambev ("Ambev") and Quinsa (the "Ambev Closing").
Quinsa shall use its best efforts to obtain the clearance of
the Argentine anti-trust authorities required for the Ambev
Closing and to effect the Ambev Closing as promptly as
possible after obtaining such clearance.
EXPIRATION DATE The QIB Sale may be terminated by Quinsa or Heineken (the
FOR QIB SALE "Sale Termination") in the event that the Share Exchange
Agreement has been terminated by Ambev or Quinsa in accordance
with its terms and the transactions thereunder have been
definitively abandoned, and in any event on or after December
31, 2003 if the Closing shall not have occurred. Any Sale
Termination shall be effective upon written notice by one party
to the other party. The provisions of this MOA other than those
specifically related to the QIB Sale shall survive such Sale
Termination and shall continue in full force and effect. None of
the parties hereto shall have any liability to any of the other
parties hereto as a result of any Sale Termination effected in
accordance with this MOA. A Sale Termination shall not relieve
any party of any liability for any breach of this MOA occurring
either before or after such Sale Termination.
CONVERSION OF Within six (6) months after the occurrence of a Sale
QIB SHARES Termination, Heineken shall have the right and option to
elect, at its sole discretion exercised at any time within
such 6 months and upon 14 days prior written notice to Quinsa,
to convert all (but not less than all) of its QIB Shares into
that number of Class B common shares of Quinsa ("Conversion
Shares") as in the aggregate entitle Heineken receive, upon
payment of any dividend distribution in respect of the Quinsa
common shares, the same percentage of the aggregate amount of
such distribution as are represented by the QIB Shares in
respect of QIB at the time of such conversion (which
proportion is currently 15%). Upon delivery of certificates
for Heineken's QIB Shares, Quinsa shall issue the Conversion
Shares to Heineken and deliver to Heineken appropriate
evidence of ownership of the Conversion Shares in form
satisfactory to Heineken.
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TMLAS From and after the date hereof and until December 31, 2004,
Heineken shall have the option, exercisable at any time upon
prior written notice to QIB or its relevant operating company as
specified below (each a "Licensee"), to terminate such
Licensee's rights to produce, sell and distribute Heineken beer
in such Licensee's territory pursuant to its existing trademark
license agreement with Heineken together with all related
agreements (collectively, the "TMLA"). In respect of a
termination which becomes effective prior to December 31, 2003,
Heineken shall give the Licensee 60 days prior notice. In
respect of a termination which becomes effective from January 1,
2004 through December 31, 2004, Heineken shall give the Licensee
120 days prior notice. Upon such termination, Heineken shall be
released from and shall have no further obligations whatsoever
to such Licensee for the payment of damages or otherwise,
notwithstanding anything to the contrary in the TMLA or any
agreement entered into in connection therewith. Upon such
termination, Licensee shall be released from and shall have no
further obligations whatsoever to Heineken under the TMLA,
except for the payment of accrued obligations and for
obligations which are specifically stated in the TMLA to survive
its termination and those provided additionally in Section B of
the Annex to this MOA. Notwithstanding the foregoing, neither
the release contained in Annex B nor the termination of the TMLA
as aforesaid shall terminate the obligation of Heineken or any
Licensee to settle any open payment account between them in the
ordinary course. The foregoing provisions apply to the TMLA
between Heineken and (i) CMQ dated June 25, 1997, with respect
to Argentina (ii) Cerveceria Chile SA dated July 9, 1999, with
respect to Chile; and (iii) Fabricas Nacionales de Cerveza SA
(undated and unsigned), with respect to Uruguay.
So long as a TMLA remains in effect, the Licensee thereunder
shall use its best efforts, and Quinsa and QIB shall use its
respective best efforts to cause such Licensee, to faithfully
and diligently perform its obligations under the TMLA in a
manner consistent with past practice. It is understood and
agreed that the provisions of Annex A hereto shall apply to
the continuation and termination of each TMLA as from the date
hereof.
TECHNICAL At the Closing, all Technical Assistance Agreements between
ASSISTANCE Heineken and QIB or its operating companies shall be
AGREEMENTS terminated with immediate effect; provided, however that such
termination shall not affect QIB's and its operating
companies' post-termination obligations with respect to the
return of confidential information and the payment of accrued
obligations under such Agreements.
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OTHER DOCUMENTS Concurrently herewith, Heineken will execute and deliver to
each of the other parties hereto and each of such other
parties will execute and deliver to Heineken a Release in the
form attached as Annex B hereto. In addition, Heineken and
Ambev are exchanging mutual releases.
REPRESENTATIONS Each of Heineken, BAC, Quinsa, QIB and the other parties
hereto represents warrants to the others that:
(i) It has the full power and authority to enter into this MOA;
(ii) Except for the clearance of the Argentine anti-trust
authorities with respect to the QIB Sale and any judicial
proceedings in connection therewith, the consummation of the
transactions contemplated in this MOA is not subject to the
approval by or consent of (x) any governmental or judicial
authority or body or (y) any third party and will not
contravene, conflict with or violate or constitute a breach or
default under any applicable law, rule or regulation or any
judgment, decree or order of any judicial or governmental
authority or any agreement to which it is a party or by which
its properties or assets are bound;
(iii) Ambev has approved and consented to this MOA and the
transactions contemplated herein; and
(iv) The execution, delivery and performance by it of this MOA
has been duly authorized by all necessary corporate action and
this MOA is a binding agreement enforceable against such party
in accordance with its terms.
PUBLICITY Heineken and Quinsa shall jointly announce the settlement of
the Arbitration and the matters set forth herein in an agreed
press release. Except as set forth in such press release, no
party shall make any announcement or disclosure of this MOA or
the matters set forth herein without the consent of the other
parties. Each party may make such announcements which in the
opinion of its legal counsel it is required to make by law or
the regulations of the stock exchange applicable to such
party.
GOVERNING LAW; This MOA and the documents executed in connection herewith
ARBITRATION shall be governed by the laws of Switzerland. In the event
that any dispute or controversy arises in connection with the
validity, interpretation or performance of this MOA, the
parties shall submit much matter for final resolution to the
panel of arbitrators now constituted in the Arbitration, to
wit., Messrs. Xxxxxx Xxxxxx, Chairman, Xxxxxxx Xxxxx and
Xxxxxx Tschani (THE "PANEL"), such arbitration to be conducted
in Zurich pursuant to the rules of the International Chamber
of Commerce; provided that, if any of such arbitrators is
unwilling or unable to serve as an arbitrator in
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connection with any such dispute or controversy, the
arbitration panel shall be selected in accordance with the
rules of the International Chamber of Commerce.
MISCELLANEOUS The parties and their respective attorneys shall
cooperate in good faith to finalize and execute any documents
necessary or desirable to effect the provisions of this MOA
and the intention of the parties. Without limiting the
foregoing, Heineken and Quinsa shall instruct their counsel to
prepare and submit to the arbitrators in the Arbitration such
further instruments as their respective legal counsel deem
necessary or desirable to terminate the Arbitration and shall
use their best efforts to cause the panel to enter a final
order or award reflecting the terms of this MOA and the
releases being executed pursuant hereto. The costs of the
Arbitration (including the ICC Administrative fees and the
costs and expenses of the arbitrators) shall be borne equally
by Heineken and Quinsa. Each party shall bear its own legal
fees and expenses in connection with the Arbitration, this MOA
and the Closing.
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In Witness Whereof, the parties have executed this Memorandum of Agreement on
the 13th day of January 2003, intending to be legally bound hereby.
HEINEKEN INTERNATIONAL B.V. BEVERAGE ASSOCIATES (BAC) CORP.
BY: /s/ [Signature illegible] BY: /s/ Xxxxxxxxx Xxxxxxx
---------------------------- ---------------------------------
HEINEKEN BROUWERIJEN B.V. QUILMES INDUSTRIAL (QUINSA) Societe
Anonyme
BY: /s/ [Signature illegible] BY: /s/ Xxxxxxx-Xxxxx de Montalembert
---------------------------- ---------------------------------
HEINEKEN TECHNICAL SERVICES B.V. QUILMES INTERNATIONAL (BERMUDA) LTD
BY: /s/ [Signature illegible] BY: /s/ Xxxxxxx-Xxxxx de Montalembert
---------------------------- ---------------------------------
CERVECERIA CHILE SA
BY: /s/ Xxxxxxx-Xxxxx de Montalembert
---------------------------------
FABRICAS NACIONALES DE CERVEZA SA
BY: /s/ Xxxxxxx-Xxxxx de Montalembert
---------------------------------
CERVECERIA Y MALTERIA QUILMES S.A.
BY: /s/ Xxxxxxx Xxxxxx Xxxxxxxx
---------------------------------
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ANNEX A TO MOA
PROVISIONS REGARDING LICENSE AGREEMENTS
A. For so long as a TMLA is in effect, the Licensee will continue
to produce, package, sell and distribute the Heineken brand in the normal course
consistent with prior practice and existing agreed plans, maintain existing
points of sale and use its reasonable best efforts to maintain the sales of the
Heineken brand in its territory. Management of QIB and the Licensee will
dedicate all reasonable efforts to the Heineken brand in order to achieve
existing targets and goals. The Heineken Technological Manager and the Heineken
marketing and sales team(s) will remain with the Licensee or QIB as long as the
TMLA is in effect.
Not later than January 31, 2003 with respect to CMQ, and not later than February
29, 2003 with respect to the other Licensees, each of the licensees (such
licensees being referred to herein collectively as "Quilmes") shall deliver to
Heineken in writing the following information for the Heineken brand in respect
of each wholesaler, distributor, supermarket and other retail outlet attended to
by the Quilmes direct sales force in the territory of such Licensee (each a
"POS"):
- List containing name and address of each outlet of each POS;
- 2002 and 2001 volume history by POS;
- Crates and bottles contract or deposit receipt by POS;
- Pricing for each POS attended by the Quilmes direct sales
force; and
- All contracts (shelf space, signage, coolers, installation,
draught beer, equipment, etc.) signed exclusively for the
Heineken brand.
Such information shall be updated monthly.
B. The following provisions shall apply from and after a termination of
the TMLA:
1. Quilmes shall immediately discontinue brewing, selling,
marketing and distribution of Heineken lager and not use the Heineken lager and
not use the Heineken recipe, yeast, technology and know how.
2. Quilmes will sell to Heineken (i) at price equal to its cost,
all merchantable stock of Heineken lager beer, either packaged or in course of
production, brewing raw materials (i.e. malts, iso-hops)and (ii) at depreciated
cost all remaining usable stock of Heineken crates, bottles, kegs, and other
Heineken packaging materials (i.e. cover crates). In the case of Cerveceria y
Malteria Quilmes ("CMQ"), the bottles and crates shall be transferred to
Heineken at no cost(1).
--------------------
(1) Quinsa has agreed to transfer the CMQ bottles and crates at no cost
because the Heineken brand was not sold at a profit in Argentina during
2002 and is not expected to be profitable in 2003.
It is understood that there are different ways to identify the stock of
Heineken crates and returnable bottles introduced in the market since Quilmes
started local production: 1) Stock in Quilmes and distributors' warehouses 2)
Stock in retailers. Stock in retailers can be: a) Stock in Current Accounts in
Supermarkets; b) Stock in small retailers (attended by direct sales force) with
contract of loan and restitution with Quilmes; c) Stock in small retailers
(attended by distributors) with contract of loan and restitution with the
distributors; d) Stock in small retailers without contract of loan and
restitution.
In case a) Quilmes will transfer the current account to Heineken. In
case b) Quilmes will transfer to Heineken every contract of loan and restitution
issued to direct clients. In case c) Quilmes will provide copy of all the
invoices of crates and bottles sold by Quilmes to distributors along with the
contracts of loan and restitution issued by them to their own clients. Given the
difficulty to estimate the stock of bottles and crates in case d), the total
amount to be considered will be the result of subtracting the volume included in
items a), b) and c) from the aggregate volume resulting from the purchasing of
bottles and crates since the Heineken lager started to be produced by Quilmes,
after the deduction of an estimated annual average breakage to agreed upon.
Heineken shall have the option to buy at depreciated cost all Heineken
draught beer installations and Heineken coolers in the warehouse and in the
marketplace.
3. Quilmes shall transfer at cost all POS material in the
warehouse, and return to Heineken all Heineken specific material such as
advertising material, brand roadmaps, outlet segmentation, planning documents,
Heineken access, etc. free of charge. Heineken will have the right and option to
continue to use Heineken promotional/advertising agency.
4. CMQ grants Heineken the right to continue as official sponsor
of the `Union Argentina de Rugby' ("UAR") under the agreement signed by CMQ and
UAR on April 10th. 2001, ("Agreement") which expires on December 31st., 2003.
Subject to the provisions below, CMQ will exercise its right of first refusal to
negotiate and sign one or more new contracts with the UAR which will entitle the
Heineken brand to continue as a UAR sponsor until December 31, 2005. After
December 31, 2005, CMQ will retain for itself the right of first refusal that it
has with UAR.
Before November 1, 2003, Heineken shall inform CMQ if it intends to
exercise its right to renew the Agreement, and the fees it is willing to pay
UAR. Should CMQ not receive any notification by Heineken before the
above-mentioned date, it shall be understood that Heineken has opted not to
continue as a UAR sponsor as from January 1, 2004, in which case CMQ shall be
free to continue as a UAR sponsor with any of its brands.
Should Heineken's offer be lower than any other received by the UAR for
the same purpose. CMQ shall be free to equal the interested third party's offer
and continue as a UAR sponsor with any of its brands.
Likewise, if CMQ is notified by the UAR that a third party has offered
to be its sponsor in the beer category or any similar category, CMQ shall be
obliged to inform Heineken, within five working days after said notification, so
that Heineken can advise CMQ of its decision to
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either equal such offer or cease as a UAR sponsor, in which case CMQ shall be
free to act as sponsor with any of its brands.
In no event shall CMQ or its affiliates compete with Heineken with
respect to any bidding in connection UAR sponsorship until at least December 31,
2005.
5. Quilmes shall not use any Heineken advertising material,
marketing or get-up, labels, POS material, etc. Moreover Quilmes shall remove
all references, listings, trade marks, logos relating to Heineken from its
premises, letterhead, advertisements, equipment and packaging materials.
6. Quilmes shall refrain from taking any action to restrict any
beer re-seller's ability, right or incentive to sell or distribute the Heineken
brand in any territory, through exclusive arrangements, shelf space, cooler
restrictions or in any other manner. Additionally, all existing contracts for
the Heineken brand will be preserved and will be assigned by Quilmes to
Heineken.
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ANNEX B
FORM OF RELEASE
[Party A] hereby irrevocably and unconditionally releases, acquits and
forever discharges, on behalf of itself, its affiliates and any person acting
by, through, under or in concert with [Party A] (each a "Releasor", and
collectively the "Releasors"), each of [Party B] and the stockholders,
affiliates, subsidiaries, directors, officers, employees, representatives and
agents of [Party B] (each a "Released Party", and collectively the "Released
Parties") from any and all charges, complaints, claims, suits, judgments,
demands, actions, obligations or liabilities, damages, causes of action, rights,
costs, loans, debts and expenses (including attorneys' fees and expenses) of any
nature whatsoever, whether known or unknown, determined or determinable,
accrued, contingent, absolute or otherwise, whether arising under contract, in
tort or otherwise, that emanate from, arise out of, or in any way relate to (1)
the Arbitration, (2) any violation, breach or default by any Released Party of
or under, or any tortious act (including, without limitation, any act of
tortious interference) relating to, any of the Shareholders Agreement, any of
the Technical Assistance Agreements or any TMLA (collectively the
"Heineken/Quinsa Agreements") that arises as a result of, in connection with, or
relates in manner to, the Share Exchange Agreement dated as of May 1, 2002
between AmBev and Quinsa or the Stock Purchase Agreement dated as of May 1, 2002
between BAC and AmBev (collectively, the "AmBev Agreements") or any of the
transactions contemplated thereby, or (3) any act or omission of any Released
Party in connection with or relating to the AmBev Agreements or the transactions
contemplated thereby, whether arising before or after the commencement of the
arbitration or the execution of the AmBev Agreements and whether or not asserted
or identified in the Arbitration, and each Releasor agrees that neither it, nor
any other Releasor, nor any other person acting by, through, or under, any
Releasor, shall institute, pursue, solicit, encourage or assist any action or
actions, cause or causes of action (in law or at equity), suits, arbitration
proceedings or claims in any court (including state, federal or foreign) against
or adverse to any Released Party arising from, attributable to or related to the
foregoing. Each Releasor and each Released Party hereby represents and warrants
that, to the best of its knowledge, as of the date hereof there exist no
defaults under, or breaches or violations of, any provision of any contract
between such Releasor and such Released Party, that do not relate to or arise in
connection with the AmBev Agreements or the transactions contemplated thereby.
This Release shall not affect the obligation of any party to settle any open
account payment obligations in respect of transactions arising from a TMLA in
the ordinary course.
| Unless otherwise defined herein, all capitalized terms used herein
shall have the meanings set forth in the Memorandum of Agreement dated as of
January 13, 2003 among Heineken International B.V., Heineken Brouweruen B.V.,
Heineken Technical Services B.V., Beverage Associates (BAC) Corp., Quilmes
Industrial (Quinsa) Societe Anonyme, Quilmes International (Bermuda) Ltd.,
Cerveceria Chile S.A., Fabricas Nacionales de Cerveza S.A. and Cerveceria y
Malteria Quilmes S.A..
| [Name of Releasor]
By:______________________
