Exhibit 2.3
PURCHASE AGREEMENT
This PURCHASE AGREEMENT ("Agreement") of this 27th day of July
1998, between Xxxxxx Packaging Company, a limited partnership organized under
the laws of the State of Delaware of the United States of America, whose head
office is located at 0000 Xxxx Xxxxxxxx Xxxxxx, Xxxx XX 00000, ("Buyer") and
CarnaudMetalbox S.A., a French societe anonyme, having a corporate capital of
FRF 529,486,300, whose head office is located at 00, xxx Xxxxx, 00000 Xxxxx
Xxxx, registered with the Registry of Commerce and Companies of Bobigny under
number B 775 721 996 ("Seller"), which acts (x) as owner of the French Shares
and the Turkish Shares, (y) as controlling shareholder of Societe de
Participation CarnaudMetalbox, a French societe anonyme having a corporate
capital of FRF 290,050,200, whose head office is located at 00 xxx Xxxxx,
00000 Xxxxx-Xxxx, registered with the Registry of Commerce and Companies of
Bobigny under number B 389 579 012 ("SPC") with respect to the Aggregate
Closing Date Intragroup Indebtedness and of CMB Germany with respect to
actions to be taken by CMB Germany and (z) as affiliate of CMB U.K. with
respect to actions to be taken by CMB U.K.
R E C I T A L S:
WHEREAS, Seller and Seller's affiliates hold directly or indirectly
the following assets and shares:
(i) 100% of the issued and outstanding shares and voting rights,
less one (1) share, that is 470,499 shares ("French Shares") of CMB Plastique
S.A., a French societe anonyme, having a corporate capital of FRF 47,050,000,
whose head office is located at 00, xxx Xxxxx, 00000 Xxxxx Xxxx, registered
with the Registry of Commerce and Companies of Bobigny under number B 342 952
694 ("CMB France") and which owns and operates two plants located at Xxxxx
("Xxxxx Plant") and Noeux-les-Mines ("Noeux Plant") and an in-house bottle
manufacturing facility located at Asnieres ("Asnieres Facility") engaged in
the manufacture of plastic products identified in Schedule 0.1 attached
hereto ("Plastic Products");
(ii) 100% of the issued and outstanding shares and voting rights of
CarnaudMetalbox plc, a corporation organized under the laws of England,
having a corporate capital of (Pound Sterling)85,000,000, whose head office
is located at Downsview Road, Wantage, Oxfordshire ("CMB U.K."), and which
owns a plant, formerly operated by CMB Bottles and Closures plc ("CMB&C"),
located at Wrexham (said plant, together with other fixed and movable assets,
contracts, goodwill and real property related to the conduct of the business
at the plant which are to be transferred and associated liabilities which are
to be assumed pursuant to the U.K. Asset Purchase Agreement attached hereto
as Exhibit IV, and are more fully described therein, the "U.K. Plant")
engaged in the manufacture of Plastic Products identified in Schedule 0.1
attached hereto;
(iii) 100% of the issued and outstanding shares and voting
rights of Raku GmbH, a corporation organized under the laws of Germany,
having a corporate capital of DM 3,100,000, whose head office is located at
Xx Xxxxx 0, 00000 Xxxxxxx ("XXX Xxxxxxx") and which owns and operates a plant
located at Bad Bevensen engaged in the manufacture of Plastic Products
identified in Schedule 0.1 attached hereto (said plant, together with other
fixed and movable assets, contracts, goodwill and real property related to
the conduct of business at the plant which are to be transferred and
associated liabilities which are to be assumed pursuant to the German Asset
Purchase Agreement attached as Exhibit II, and are more fully described
therein, the "German Plant");
(iv) 100% of the issued and outstanding shares and voting rights,
that is 80,000,000 shares ("Turkish Shares") of CMB Plastpak Plastic, Ambalaj
Sanayi A.S., a corporation organized under the laws of Turkey, having a
corporate capital of TL 80,000,000,000, whose head office is located at
Firuzkoeyue Ba lar Mevkii, Avcilar, Istanbul ("CMB Turkey") and which owns
and operates one plant located at Istanbul ("Istanbul Plant") engaged in the
manufacture of Plastic Products identified in Schedule 0.1 attached hereto;
WHEREAS, Seller desires to sell or cause to sell to Buyer, or an
affiliate of Buyer, and Buyer desires to purchase, or cause its designated
affiliate to purchase, all of the French Shares and the Turkish Shares
(collectively the "Shares") and the U.K. Plant and the German Plant
(sometimes collectively the "Plants") for the Purchase Price (as hereinafter
defined) and Seller agrees to sell, or cause its designated affiliate to sell
to Buyer, or an affiliate of Buyer, and Buyer agrees to purchase or cause its
designated affiliate to purchase the Aggregate Closing Date Intragroup
Indebtedness (as hereinafter defined), all upon the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises and
covenants contained herein, the parties hereto agree as follows:
ARTICLE 1
PURCHASE AND SALE OF SHARES, PLANTS AND
AGGREGATE CLOSING DATE INTRAGROUP INDEBTEDNESS.
1.1 Purchase of Shares, Plants and Aggregate Closing Date
Intragroup Indebtedness. Subject to the terms and conditions hereof, Seller
agrees to sell, assign and transfer or to cause to sell, assign and transfer,
as the case may be, to Buyer or an affiliate of Buyer and Buyer agrees to
purchase or cause its designated affiliate to purchase from Seller, on the
Closing Date and at the Closing (as defined in Section S.1 hereof), (i) the
Shares, (ii) the Plants, comprising the tangible and intangible assets,
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rights, properties, contracts and liabilities described herein, in the form
of the real property deed of conveyance, and the asset purchase agreements
attached hereto as Exhibits I, II, III and IV, and to be executed and
delivered at the Closing, and (iii) the Aggregate Closing Date Intragroup
Indebtedness (as defined in Section 1.2.1(b) hereof).
1.2 Purchase Price and Payment.
1.2.1 Purchase Price for Shares and Plants. (a) The aggregate
purchase price for the Shares and the Plants payable at Closing shall be
equal to: (i) thirty-seven million five hundred thousand U.S. Dollars
(US$37,500,000), minus (ii) the estimated amount of Aggregate Closing Date
Intragroup Indebtedness, minus (iii) the estimated amount of Closing Date
Third Party Financial Indebtedness, plus (iv) the estimated amount of
Reimbursed Capital Expenditures, plus (v) the estimated amount of Reimbursed
Restructuring Costs, plus (vi) interest on the net amount of items (i)
through (v) above from July 1, 1998 to the Closing Date at the Agreed
Interest Rate (as defined at Section 1.2.2 below).
(b) As used in this Agreement, "Aggregate Closing Date Intragroup
Indebtedness" shall mean the principal amount of aggregate Intragroup
indebtedness and accrued interest thereon of CMB France and CMB Turkey to
Seller and/or its affiliates, determined as of the Closing Date, the amount
of which was equal to approximately US$14.482 million at December 31, 1997.
"Closing Date Third Party Financial Indebtedness" shall mean any
indebtedness, other than the Aggregate Closing Date Intragroup Indebtedness,
owed by CMB France or CMB Turkey, or to be assumed by Buyer or its affiliates
in respect of the Plants as of the Closing Date and which (i) is owed to
banks or other financial institutions or third party lenders, in full or
partial repayment of amounts advanced up to the Closing Date (including both
the current and longterm portions of such indebtedness); or (ii) constitutes
capital lease obligations under U.S. GAAP (as defined in Section 1.2.3) for
buildings, goods or equipment provided or made available to CMB France, CMB
Turkey or the Plants up to the Closing Date including future payments to be
made in satisfaction of such capital lease obligations, the net amount of
which was equal to approximately US$707,000 at December 31, 1997. "Reimbursed
Capital Expenditures" shall mean capital expenditures which have been
invoiced on or after January 1, 1998 to and including the Effective Date to
CMB U.K. or CMB Germany (in respect of the Plants) or to CMB France or CMB
Turkey, with respect to those 1998 capital expenditure projects identified at
Schedule 1.2.1 (b) hereto (and shall include amounts disbursed as deposits in
respect thereof in 1997). "Reimbursed Restructuring Costs" shall mean, with
respect to the German Plant, those costs incurred to and including the
Effective Date in respect of restructuring of the labor force and with
respect to CMB France such costs actually paid, as more fully itemized at
Schedule 1.2.1(b) (such costs including in each case non-capitalized costs in
addition to direct payments to employees). The parties have agreed that, for
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the purposes of the calculation set forth above in this Section 1.2.1, the
Reimbursed Capital Expenditures plus the Reimbursed Restructuring Costs shall
not exceed US$8,400,000 and the Reimbursed Restructuring Costs shall not
exceed US$3,000,000.
(c) The net amount of items (i), minus (ii), minus (iii), plus
(iv), plus (v), plus (vi) as estimated immediately prior to the Closing Date
is herein referred to as the "Unadjusted Purchase Price". The allocation of
the Unadjusted Purchase Price among the French Shares, the Turkish Shares,
the U.K. Plant and the German Plant, and the estimated allocation of the
Aggregate Closing Date Intragroup Indebtedness, is set forth in Schedule
1.2.1(c) attached hereto. Seller shall receive the Unadjusted Purchase Price,
the estimated amount of the Aggregate Closing Date Intragroup Indebtedness
and the Post-Closing Adjustment Amount (or shall pay the Post-Closing
Adjustment Amount, as defined in Section 1.2.6 hereof) in its own name and on
its own behalf with respect to the French Shares, the Turkish Shares, in the
name and on behalf of SPC with respect to the Aggregate Closing Date
Intragroup Indebtedness, and (to the extent payment is not made and received
directly by the relevant local affiliates) in the name and on behalf of CMB
Germany and CMB U.K. with respect to the German Plant and the U.K. Plant.
1.2.2 General Method of Payment. The payment of the Unadjusted
Purchase Price, the Aggregate Closing Date Intragroup Indebtedness, the Post-
Closing Adjustment Amount and all other cash payments under this Agreement
shall be made to the receiving party by depositing, by bank wire transfer,
the required amount in immediately available funds in an account designated
by the receiving party for such purpose (or, at the option of the receiving
party, by certified or bank check). Without prejudice to the provisions of
Section 1.2.7, all sums payable hereunder which are not paid in a timely
fashion shall bear interest, in U.S. Dollars and net of withholding tax, at
the rate per annum equal to LIBOR for deposits of three months duration plus
one hundred (100) basis points ("Agreed Interest Rate") from and including
the day payment was due through and including the day payment is made.
1.2.3 Base Balance Sheets. Attached hereto as Schedule 1.2.3 are
(i) unaudited pro forma balance sheets of the assets and liabilities of the
German Plant (including all German assets to be transferred and all
liabilities to be assumed pursuant to the German Asset Purchase Agreement)
and the U.K. Plant (including all U.K. assets to be transferred and all
liabilities to be assumed pursuant to the U.K. Asset Purchase Agreement) as
at December 31, 1997, (respectively the "German and U.K. Pro-Forma Base
Balance Sheets") and (ii) the unaudited balance sheets of CMB France and CMB
Turkey as at December 31, 1997 (respectively the "French and Turkish Base
Balance Sheets") (the German and U.K. Pro-Forma Base Balance Sheets and the
French and Turkish Base Balance Sheets being referred to collectively as the
"Base Balance Sheets"). The Base Balance Sheets have been prepared in
accordance with generally accepted accounting principles in the United States
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("U.S. GAAP") as applied by Seller's group for such year-end ("Seller's
Accounting Principles"). The German and U.K. Pro Forma Base Balance Sheets
reflect as assets and liabilities only such categories thereof as will
constitute Transferred Assets and Transferred Liabilities (as defined in the
deed of conveyance and asset purchase agreements attached hereto as Exhibits
I, II, III and IV).
1.2.4 Effective Date Balance Sheets and Closing Statements. As
soon as practicable and, in any event, not later than seventy-five (75)
calendar days after the Closing, Seller shall deliver to Buyer (i) unaudited
pro-forma balance sheets of the Plants as of June 30, 1998 ("Effective Date")
and unaudited balance sheets of CMB France and CMB Turkey as of the Effective
Date ("Effective Date Balance Sheets") together with (ii) statements
("Closing Statements") setting forth (A) the amount of the Pro Forma Year-to-
Effective Date Net Income (as defined in Section 1.2.6(c) below), Net Working
Capital as of the Effective Date (as defined in Section 1.2.6(c) hereof),
Reimbursed Capital Expenditures, Reimbursed Restructuring Costs, Aggregate
Closing Date Intragroup Indebtedness and Closing Date Third Party Financial
Indebtedness, (B) any adjustment to the Base Balance Sheets or Effective Date
Balance Sheets required to appropriately reflect, consistently between the
Base Balance Sheets and Effective Date Balance Sheets, pension or retirement
liabilities in accordance with FAS 87 and FAS 106 of U.S. GAAP and (C) the
resulting Post-Closing Adjustment Amount, if any, determined in accordance
with Section 1.2.6(a) hereof. The Effective Date Balance Sheets shall be
prepared on a basis consistent with the Base Balance Sheets. Buyer's
independent accountant, Deloitte Touche Tohmatsu ("Buyer's Auditor"), on
behalf of Buyer, shall have access to all work papers prepared by Seller, and
any other documents, accounting records or evidence of financial transactions
as they consider necessary in connection with the audit of the Effective Date
Balance Sheets and the Closing Statements.
1.2.5 Disputes Regarding Effective Date Balance Sheets and Closing
Statements. (a) As soon as practicable and, in any event, not later than
sixty (60) calendar days after the delivery to Buyer of the Effective Date
Balance Sheets and the Closing Statements, Buyer shall have reviewed such
documents. Unless Buyer notifies Seller in writing within such period of any
objection to the Effective Date Balance Sheets and/or the Closing Statements,
specifying in reasonable detail the items and amounts subject to such
objection ("Disputed Items"), the Effective Date Balance Sheets and the
Closing Statements (including the Post-Closing Adjustment Amount, if any,
shown thereon) shall be conclusive and binding on Buyer. If within such
period Buyer notifies Seller in writing of any such objection, then Buyer and
Seller shall use reasonable efforts for thirty (30) calendar days after the
expiration of such initial period to resolve in good faith their differences
and agree upon any adjustments to the Effective Date Balance Sheets and/or
the Closing Statements (including any Post-Closing Adjustment Amount shown
thereon). Any Disputed Items which are not resolved by the mutual agreement
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of Buyer and Seller within such thirty-day period shall be submitted for
resolution to the Paris, France office of KPMG, or, if KPMG shall not accept
such mission, to another internationally recognized independent certified
public accounting firm mutually acceptable to Seller and Buyer ("Independent
Accounting Firm"). Seller and Buyer shall instruct the Independent Accounting
Firm to limit its examination to the unresolved Disputed Items, to resolve
any Disputed Items affecting the Effective Date Balance Sheets and/or the
Closing Statements in such manner as to preserve the conformity of the
Effective Date Balance Sheets and/or the Closing Statements with the
requirements described in Sections 1.2.4 and 1.2.6(c) hereof and to use its
best efforts to make its determination thereon within twenty (20) calendar
days after its engagement hereunder. The resolution of any such previously
unresolved Disputed Items by such accounting firm shall be made in a writing
delivered to Buyer and Seller as promptly as practicable (which writing shall
set forth the amount of any Post-Closing Adjustment Amount as finally
determined) and shall be final, conclusive and binding upon Seller and Buyer
in accordance with Article 1592 of the French Civil Code. The fees and
expenses charged by the Independent Accounting Firm with respect to Disputed
Items shall be borne by the non-prevailing party or pro-rated between the
parties to the extent the resolution thereof involves an allocation between
the parties of the amount of the Disputed Items.
(b) The Effective Date Balance Sheets and the Closing Statements
to which Buyer does not object as provided in Section 1.2.5(a) hereof, or to
which Seller and Buyer agree, or as otherwise conclusively determined
pursuant to Section 1.2.5(a) hereof (such final form of the Effective Date
Balance Sheets and the Closing Statements being referred to herein
respectively as the "Final French, U.K., Turkish and German Effective Date
Balance Sheets" or sometimes collectively "Final Effective Date Balance
Sheets") and the Final Closing Statements shall be used in determining the
Post-Closing Adjustment Amount.
1.2.6 Determination of any Post-Closing Adjustment Amount. (a)
The payment of a post-closing adjustment and the amount thereof, if any,
shall be determined as follows:
(i) If the Pro Forma Year-to-Effective Date Net Income (as
defined in Section 1.2.6(c) hereof) is a positive amount (profit), said
amount shall be credited to Seller for purposes of the calculation of
the Post-Closing Adjustment Amount.
(ii) If the Pro Forma Year-to-Effective Date Net Income is a
negative amount (loss), said amount (expressed as a positive number)
shall be credited to Buyer for the purposes of the calculation of the
Post-Closing Adjustment Amount.
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(iii) If the Net Working Capital as of the Effective Date exceeds
US$1,413,000, said excess shall be credited to Seller for purposes of
the calculation of the Post-Closing Adjustment Amount.
(iv) If the Net Working Capital as of the Effective Date is less
than US$1,413,000, said deficit shall be credited to Buyer for the
purposes of the calculation of the Post-Closing Adjustment Amount.
(v) To the extent the sum of the Aggregate Closing Date
Intragroup Indebtedness and the Closing Date Third Party Financial
Indebtedness (expressed as positive numbers) minus the sum of the
Reimbursed Capital Expenditures and the Reimbursed Restructuring Costs
(expressed as positive numbers) as finally determined on the Closing
Statements shall exceed the result of such amounts as estimated for the
purposes of Section 1.2.1 above, said excess shall be credited to Buyer
for the purposes of the calculation of the Post-Closing Adjustment
Amount (provided always that the sum of Reimbursed Capital Expenditures
and Reimbursed Restructuring Costs for purposes hereof shall not exceed
US$8,400,000 and that Reimbursed Restructuring Costs shall not exceed
US$3,000,000).
(vi) To the extent the sum of the Aggregate Closing Date
Intragroup Indebtedness and the Closing Date Third Party Financial
Indebtedness (expressed as positive numbers) minus the sum of the
Reimbursed Capital Expenditures and the Reimbursed Restructuring Costs
(expressed as positive numbers) as finally determined on the Closing
Statements shall be less than the result of such amounts as estimated
for the purposes of Section 1.2.1 above, said deficit shall be credited
to Seller for the purposes of the calculation of the Post Closing
Adjustment Amount (provided always that the sum of Reimbursed Capital
Expenditures and Reimbursed Restructuring Costs for purposes hereof
shall not exceed US$8,400,000 and that Reimbursed Restructuring Costs
shall not exceed US$3,000,000).
(b) The net amount due to Buyer by Seller or to Seller by Buyer as
the case may be, resulting from the calculations set forth at paragraph (a)
(i) through (vi) above, shall constitute the "Post Closing Adjustment
Amount".
(c) As used in this Agreement, the "Pro Forma Year-to-Effective
Date Net Income" shall mean the combined pro forma net income (loss) of CMB
France, CMB Turkey, the German Plant and the U.K. Plant from January 1, 1998
to June 30, 1998 determined in accordance with the Hyperion reporting system
that services as the basis for the Base Balance Sheets attached hereto at
Schedule 1.2.6(c). "Net Working Capital as of the Base Balance Sheet Date"
and "Working Capital as of the Effective Date" shall respectively equal the
sum of inventories plus accounts receivables plus Intragroup receivables plus
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prepaid accounts plus other current and non-current assets minus accounts
payables minus Intragroup payables minus accruals minus other current and
non-current liabilities, as set forth on the respective Base Balance Sheets
or the Effective Date Balance Sheets, all as defined and determined in
accordance with Schedule 1.2.6(c) hereto. For the avoidance of doubt,
Schedule 1.2.6(c) hereto sets forth hypothetical determination of the Post-
Closing Adjustment Amount.
(d) The Post-Closing Adjustment shall be allocated among Seller
(with respect to the French and Turkish Shares), CMB Germany (with respect to
the German Plant), CMB U.K. (with respect to the U.K. Plant) and SPC (with
respect to the Aggregate Closing Date Intragroup Indebtedness), in accordance
with the respective individual adjustments comprising the Post-Closing
Adjustment, and shall be debited or credited, as the case may be, to Seller,
CMB Germany, CMB U.K. or SPC. Buyer shall apply such allocation of the Post-
Closing Adjustment
on a basis consistent with that determined pursuant to the above.
1.2.7 Payment of Purchase Price and Aggregate Closing Date
Intragroup Indebtedness. The Purchase Price and the Aggregate Closing Date
Intragroup Indebtedness shall be paid as follows:
(a) At the Closing, Buyer shall pay (or procure the payment of) to
Seller an amount equal to the Unadjusted Purchase Price plus estimated amount
of the Aggregate Closing Date Intragroup Indebtedness, all as set forth at
Section 1.2.1 above (such payment to be received by Seller as set forth in
Section 1.2.1(c) above).
(b) Within sixty (60) calendar days after Seller's delivery of the
Effective Date Balance Sheets to Buyer, the estimated amount of any Post-
Closing Adjustment Amount, minus any amount of any Disputed Items, shall be
paid to or by Seller, as the case may be. The remaining unpaid amount of any
Post-Closing Adjustment Amount, if any, shall be paid to or by Seller (such
payment to be paid or received by Seller as set forth in Section 1.2.1(c)
above), as the case may be, within ten (10) calendar days of the resolution
of all Disputed Items and determination of the Final Effective Date Balance
Sheets in accordance with Section 1.2.5 hereof together with interest
accruing on such amount, in U.S. Dollars and net of withholding tax, at the
rate per annum equal to LIBOR for deposits of three months duration plus one
hundred (100) basis points from the date on which the Post-Closing Adjustment
Amount was paid for undisputed items to and including the date the remaining
unpaid amounts in respect of Disputed Items of any Post-Closing Adjustment
Amount is paid. The Unadjusted Purchase Price as finally adjusted in
accordance with the terms hereof is hereinafter referred to as the "Purchase
Price" and the Aggregate Closing Date Intragroup Indebtedness as finally
adjusted in accordance with the terms hereof is hereinafter referred to as
the "Aggregate Closing Date Intragroup Indebtedness".
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1.2.8 Maximum Closing Date Third Party Financial Indebtedness and
Aggregate Closing Date Intragroup Indebtedness. (a) It is understood and
agreed that, to the extent Closing Date Third Party Financial Indebtedness
shall exceed the sum of (i) thirty-seven million five hundred thousand U.S.
Dollars (US$37,500,000) plus (ii) the maximum amount of Reimbursed Capital
Expenditures (as set forth in Section 1.2.1 above) plus (iii) the maximum
amount of Reimbursed Restructuring Costs (as set forth in Section 1.2.1
above) then (x) the Purchase Price will be equal to one U.S. Dollar (US$1.00)
and (y) the Aggregate Closing Date Intragroup Indebtedness shall be
transferred for consideration of one U.S. Dollar (US$1.00) and (z) Seller
shall relieve and hold harmless Buyer and its affiliates from any liability
for Closing Date Third Party Financial Indebtedness in excess of such sum.
(b) It is further understood and agreed that the maximum amount
payable in consideration of the Aggregate Closing Date Intragroup
Indebtedness shall not exceed the sum of (i) thirty-seven million five
hundred thousand U.S. Dollars (US$37,500,000) plus (ii) the maximum amount of
Reimbursed Capital Expenditures (as set forth in Section 1.2.1 above) plus
(iii) the maximum amount of Reimbursed Restructuring Costs (as set forth in
Section 1.2.1 above) minus (iv) the Closing Date Third Party Financial
Indebtedness.
1.2.9 Payment of Seller's and Seller's Affiliates Intragroup
Charges. Seller shall cause to be invoiced to and booked in the June 1998
accounts of CMB France, CMB Turkey, CMB U.K. (with respect to the U.K.
Plant), and CMB Germany (with respect to the German Plant), all
CarnaudMetalbox Intragroup charges (including without limitation accrued
interest on the Aggregate Closing Date Intragroup Indebtedness and
management, head office and other such charges).
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of Seller.
Except in the case of representations and warranties made as of a
specific date, which shall be deemed made as of such date, Seller's
representations and warranties are made as of the date hereof and as of the
Closing Date.
All representations and warranties made herein relating to CMB
Germany and CMB U.K. shall be deemed limited to Transferred Assets,
Transferred Liabilities and to the operations of the German Plant and the
U.K. Plant, as the case may be, exclusively, and, for the avoidance of doubt,
representations and warranties with respect to CMB U.K. shall as appropriate
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be deemed to relate to the business and assets of the U.K. Plant conducted
previously by CMB&C.
The parties hereby acknowledge that the Seller makes no
representations and gives no warranties as to the Transferred Assets,
Transferred Liabilities and operations of the U.K. Plant (the "U.K.
Representations and Warranties") provided that the Seller will procure that
CMB U.K. will make such U.K. Representations and give such U.K. Warranties to
the affiliate of Buyer party to the U.K. Asset Purchase Agreement in
accordance with the terms of the U.K. Asset Purchase Agreement.
2.1.1 Corporate Status.
(a) Seller. Seller is duly organized and validly existing under
the laws of France and has all requisite corporate power to own its
properties and carry on its business as now conducted.
(b) France, CMB U.K., CMB Germany and CMB Turkey. Each of CMB
France, CMB U.K., CMB Germany and CMB Turkey is duly organized and validly
existing under the laws of jurisdiction and has all requisite corporate power
to own its properties and carry on its businesses now conducted. A copy of
their memorandum, articles and by-laws as of the date hereof is annexed
hereto as Schedule 2.1.1(b). Except as disclosed in Schedule 2.1.1(b), all of
the statutory books, registers and corporate documents required by applicable
regulations of each of CMB France and CMB Turkey have been kept by them in
accordance with all applicable laws and regulations and are all up-to-date
and remain in their possession at their respective registered of rices.
(c) Except as disclosed in Schedule 2.1.1(c), the directors and
officers of each of CMB France and CMB Turkey have been validly appointed in
accordance with applicable laws and regulations and their respective
memorandum, articles and by-laws in each respective jurisdiction and all
board and shareholder resolutions have been validly adopted.
2.1.2 Share Capital of CMB France and CMB Turkey. The share
capital of each of CMB France and CMB Turkey is set forth in their
memorandum, articles and by-laws, respective copies of which are annexed
hereto as Schedule 2.1.1(b). Except pursuant hereto or as may be provided in
their memorandum, articles and by-laws, all of the shares of CMB France and
CMB Turkey are fully paid-up and validly issued and are not subject to any
calls or assessments and are not encumbered by any pledge or other charge of
whatsoever kind, are freely transferable and have never been the subject of
any litigation, claim or demand. Except pursuant hereto, no option, priority
right, preference or pre-emption arrangement exists over the shares of CMB
France and CMB Turkey. At the Closing, there will be no commitments providing
for the issuance of any additional shares of capital stock of CMB France or
CMB Turkey (with or without voting rights), or providing for the issuance of
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securities convertible into shares of capital stock or providing for the
issuance of other securities. CMB France and CMB Turkey have not made any
public offering of debt or equity securities.
2.1.3 Title to Shares, U.K. Plant and German Plant. At the
Closing, Seller will have full ownership and valid legal title to the French
Shares and the Turkish Shares and to all of the rights afforded thereby, free
of all options, guarantees and any other encumbrances. Except as set forth in
Schedule 2.1.3 hereto and except for Permitted Liens (as defined in Section
2.1.11 hereof), CMB U.K. will have full ownership and valid legal title to
the U.K. Plant free of all liens and encumbrances and CMB Germany will have
full ownership and valid legal title to the German Plant, free of all liens
and encumbrances.
2.1.4 Authority, Restrictions and Conflicts. (a) Seller, with
respect to the French and Turkish Shares, CMB U.K. with respect to the U.K.
Plant, CMB Germany with respect to the German Plant and SPC, with respect to
the Aggregate Closing Date Intragroup Indebtedness, have full corporate power
and authority to enter into this Agreement and any other documents
contemplated hereby and save as set out in Schedule 2.1.4(a) to transfer,
assign and deliver or cause to transfer, assign and deliver, as the case may
be, the Shares, the U.K. Plant, the German Plant and the Aggregate Closing
Date Intragroup Indebtedness as provided in this Agreement. Except as
disclosed in Schedule 2.1.4 (a) such delivery will convey to Buyer full
ownership and legal title to the Shares, the U.K. Plant, the German Plant and
the Aggregate Closing Date Intragroup Indebtedness.
(b) The consummation of the transactions contemplated by this
Agreement will not be in violation of the charter documents of the Seller,
SPC, CMB U.K. or CMB Germany.
(c) There is no lawsuit, arbitration or proceeding pending or, to
the Seller's knowledge, threatened against Seller, SPC, CMB U.K. or CMB
Germany which might prevent the consummation of any of the transactions
contemplated by this Agreement, and except as set forth in Schedule 2.1.4(c),
no approval or authorization of any Governmental Entity (as defined at
Section 3.3.5 hereof), or of any third party is required in connection with
the execution, delivery and performance of this Agreement and the other
documents contemplated hereby or thereby.
(d) Except as set forth at Schedule 2.1.4(d) hereto, neither the
execution nor performance of this Agreement will conflict with, or result in
a breach of, or give rise to an event of default under, or require the
consent of a person under, or enable a person to terminate, or relieve a
person from any obligation under an agreement, contract or commitment to
which CMB France or CMB Turkey is a party, or relating to the operation of
the U.K. Plant and the German Plant.
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2.1.5 Financial Statements. (a) Subject to any adjustment that
may be required pursuant to Section 1.2.4(ii)(B), the Base Balance Sheets
have been, and the Effective Date Balance Sheets will be prepared by Seller
in accordance with U.S. GAAP and Seller's Accounting Principles (as disclosed
to Buyer as part of the data room documents) applied consistently to the
preparation of the Base Balance Sheets and the Effective Date Balance Sheets.
Subject to any adjustment that may be required pursuant to Section
1.2.4(ii)(B), the Base Balance Sheets do and the Effective Date Balance
Sheets will fairly present, in accordance with U.S. GAAP, the financial
position of CMB France, CMB U.K. (with respect to the U.K. Plant), CMB
Germany (with respect to the German Plant) and CMB Turkey as of the
respective dates specified therein.
(b) Attached hereto at Schedule 2.1.5(b) are the respective
December 31, 1997 certified statutory accounts of each of CMB France and CMB
Turkey (the "Statutory Accounts"). The Statutory Accounts have been prepared
on a basis consistent with each such company's past practice and in
compliance with the law and applicable standards, principles and practices of
each respective jurisdiction.
(c) Except as disclosed in Schedule 2.1.5(c) or save to the extent
reserved against in the Base Balance Sheets or identified in the notes
thereto or as adjusted pursuant to Section 1.2.4(ii)(B), there are no
contingent or off-balance sheet liabilities (whether or not required to be
disclosed under U.S. GAAP) as of December 31, 1997 and no such liabilities
arising subsequent to such date and through the Closing Date.
2.1.6 Subsidiaries. Except as set forth in Schedule 2.1.6, none of
CMB France and CMB Turkey has any subsidiaries or directly or indirectly owns
any capital stock of or any other equity interests in any corporation,
partnership, or other person, or is a member of or a participant in any
partnership, joint venture or similar enterprise or any other entity of
whatsoever nature and have never held any shareholding in any entity in
respect of which the retiring shareholder remains liable vis-a-vis third
parties for the whole or part of the debts in such entity prior to its
departure.
2.1.7 Material Actions. Since December 31, 1997, except as set
forth in Schedule 2.1.7 hereto, or in this Agreement:
(a) each of CMB France, CMB U.K. with respect to the U.K. Plant,
CMB Turkey and CMB Germany with respect to the German Plant has been
reasonably managed ("en bon pere de famille") consistent with past practice,
and has:
(i) not incurred any obligation or liability or entered into any
transaction with a third party entailing an aggregate payment obligation
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or liability in excess of US$500,000 or with any officers, directors, or
affiliates;
(ii) not permitted or allowed any Real Property (as defined in
Section 2.1.9 hereof) or any Movable Property (as defined in Section
2.1.10 hereof) or any intangible property (including any fonds de
commerce) to be mortgaged, pledged or subjected to any other
encumbrance, except for any Permitted Liens;
(iii) not sold, transferred or purchased or committed to sell,
transfer or purchase (except as disclosed in Schedule 1.2.1(b)), any
fixed asset having a book value in excess of US$20,000 individually per
item, whether or not in the ordinary course of business;
(iv) not acquired or agreed to acquire any share capital or other
equity or debt securities of any other business or entered into any
licensing agreement or joint venture in relation to the operation of CMB
France, CMB U.K. (with respect to the U.K. Plant), CMB Turkey or CMB
Germany (with respect to the German Plant);
(v) not declared or paid dividends or any other distributions;
(vi) complied with all labor, tax, economic, customs, transport,
environment, hygiene or other regulations non-compliance with which
could have a material adverse effect on any of the operations of CMB
France, CMB U.K. with respect to the U.K. Plant, CMB Turkey or CMB
Germany with respect to the German Plant;
(vii) not recruited or dismissed any Executives (as defined in
Section 9.11 hereof), except as disclosed in Schedule 2.1.7 or
materially amended the terms of any employment contract with any
Executive;
(viii) not suffered any damage, destruction or casualty loss,
whether or not covered by insurance, adversely affecting the assets,
liabilities, business or prospects of each of CMB France, CMB U.K. with
respect to the U.K. Plant, CMB Turkey and CMB Germany with respect to
the German Plant;
(ix) not amended or modified the bylaws of any of CMB France and
CMB Turkey nor altered in any way any of its share capital;
(x) not changed its accounting methods or made or changed any
tax elections, changed any method of accounting with respect to taxes,
or settled or compromised any tax liability;
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(xi) not failed to pay premiums under, or have allowed coverage
to lapse, under the property, casualty and liability insurance policies
identified at Section 2.1.12(a)(xiii); or
(xii) not settled or compromised any claim brought against, or
by, CMB France or CMB Turkey or the Plants other than for fair value.
(b) There has been no Material Adverse Change (as defined in
Section 9.11 hereof).
2.1.8 Intellectual and Industrial Property. (a) Schedule 2.1.8(a)
hereto contains a true and complete list (including inter alia application
and registration dates, application and registration numbers, expiration
dates) of each requested or registered patent, trademark, design, copyright
and any other intellectual or industrial property rights including without
limitation molds ("Molds"), technology, and trade secrets, said list
identifying those items (i) owned by CMB France or CMB Turkey ("Owned
Intellectual Property Rights"), (ii) owned by Seller, any of Seller's
affiliates, CMB Germany or CMB U.K. and used in or necessary for the
operations of CMB France, CMB Turkey or the Plants as presently conducted
("Affiliated Intellectual Property Rights") and (iii) owned by any other
party and licensed to CMB France, CMB Turkey, CMB Germany or CMB U.K. or
otherwise used in the operations of CMB France, CMB Turkey or the Plants as
presently conducted ("Third Party Intellectual Property Rights")
(collectively referred to hereinafter as the "Intellectual Property Rights")
(it being understood and agreed between the parties that Buyer has relied,
without independent investigation, on Seller's representation as to the Owned
Intellectual Property, Affiliated Intellectual Property Rights and Third
Party Intellectual Property Rights, notwithstanding any documents delivered
by Seller to Buyer, in the due diligence process).
(b) The use of Owned Intellectual Property Rights, the Affiliated
Intellectual Property Rights and the Molds do not, and to Seller's knowledge,
the use of other Third Party Intellectual Property Rights do not, infringe
any other prior rights held by any other entity.
(c) CMB France and CMB Turkey have valid rights to their company
name, title to their trade names and title to the Owned Intellectual Property
Rights; Seller, Seller's affiliates, CMB Germany and CMB U.K. have valid
title to the Affiliated Intellectual Property Rights; and all of such
entities have carried out all necessary formalities, have paid all amounts
and taken all necessary steps to maintain and protect such Intellectual
Property Rights and except as set forth in Schedule 2.1.8(c), such
Intellectual Property Rights are not subject to any other charge,
restriction, tax, condition or payment obligation.
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(d) All licenses pursuant to which Affiliated Intellectual
Property Rights or Third Party Intellectual Property Rights are made
available to CMB France, CMB Turkey or the Plants are valid, binding and
enforceable, have not been pledged, encumbered or assigned, and none of CMB
France, CMB Turkey or the Plants is in default thereunder.
(e) No action, proceeding, claim, suit, threat or other similar
risk relating to the infringement or breach of any Intellectual Property
Rights has been initiated or filed by Seller, any of Seller's affiliates, or
CMB France, CMB U.K., CMB Turkey and CMB Germany against any third party.
(f) Except as set forth in Schedule 2.1.8(f), no action, claim,
suit or proceedings or notice of any such action, claim, suit, or proceedings
or any threat or similar risk relating to the infringement or breach of any
third party's intellectual or industrial property rights has been made
against CMB France, CMB U.K., CMB Turkey or CMB Germany or any other party
which may have an effect on CMB France, CMB Turkey or the Plants and to
Seller's knowledge none is threatened and no fact or omission may serve as a
basis for any such claim.
(g) None of the Owned Intellectual Property Rights nor the
Affiliated Intellectual Property Rights is mortgaged or pledged or is the
subject of co-ownership with third parties.
2.1.9 Real Property; Leases of Real Property. (a) Schedule
2.1.9(a) hereto contains a brief description of the real property which is
owned by CMB France, CMB U.K. (with respect to the U.K. Plant), CMB Turkey or
CMB Germany (with respect to the German Plant) indicating any mortgages
granted in respect thereof ("Owned Real Property") or leased by any of them
("Leased Real Property") (the Owned Real Property and the Leased Real
Property collectively herein the "Real Property"). The Real Property
constitutes all the real property which CMB France, CMB U.K. (with respect to
the U.K. Plant), CMB Turkey and CMB Germany (with respect to the German
Plant) use to perform their activities as they presently exist. Each of CMB
France, CMB U.K. (with respect to the U.K. Plant), CMB Turkey and CMB Germany
(with respect to the German Plant) has and as of the Closing will have, all
easements and rights of ingress and egress necessary for utilities and
services and for all operations conducted on the Real Property.
(b) Except as disclosed in Schedule 2.1.9(b), CMB France, CMB U.K.
(with respect to the U.K. Plant), CMB Turkey and CMB Germany (with respect to
the German Plant) have valid freehold or leasehold interests in, and quiet
enjoyment of, the Real Property.
(c) Except as set forth in Schedule 2.1.9(c), CMB France, CMB U.K.
(with respect to the U.K. Plant), CMB Turkey and CMB Germany (with respect to
the German Plant) have not granted any lease or sub-lease or any other right
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of occupation over the Real Property, all the Real Property being used for
their own needs and business activities and does not include any private
accommodation including employee accommodations and there is no person in
possession or occupation of or who has any right or interest in the Real
Property.
(d) Except as set forth in Schedule 2.1.9(d), CMB France, CMB U.K.
(with respect to the U.K. Plant), CMB Turkey and CMB Germany (with respect to
the German Plant) have no right or obligation to purchase, sell, lease or
have leased to them any real property whatsoever.
(e) Except as set forth in Schedule 2.1.9(e): CMB France enjoys
commercial ownership (propriete commerciale) in respect of the Leased Real
Property which is not subject to any financial lease and no Leased Real
Property has been tacitly renewed; and CMB France, CMB U.K. (with respect to
the U.K. Plant), CMB Turkey and CMB Germany (with respect to the German
Plant) have not been parties to any transfer of any leases for the five year
period preceding the Closing Date and CMB France, CMB U.K. (with respect to
the U.K. Plant), CMB Turkey and CMB Germany (with respect to the German
Plant) do not have any liabilities vis-a-vis third parties in respect of the
previous leases entered into by them.
(f) CMB France, CMB U.K. (with respect to the U.K. Plant), CMB
Turkey and CMB Germany (with respect to the German Plant) are and have been
in compliance with regulations relating to the construction, occupation and
use of the Real Property and, in particular, with all orders, specifications,
rules of co-ownership and internal regulations together with all relevant
legislation or regulations.
(g) Except as set forth in Schedule 2.1.9(g), no easement exists
over the Real Property other than those resulting from the natural position
of the Real Property and the town planning rules applying thereto and those
indicated in the title deeds of CMB France, CMB U.K. (with respect to the
U.K. Plant), CMB Turkey and CMB Germany (with respect to the German Plant).
(h) Except as set forth in Schedule 2.1.9(h), all demolition
permits, building permits and all other necessary declarations or
authorizations and approvals ("Permit") have been properly sought, obtained
and published as far as the building of each Real Property is concerned and
all works relating thereto, including any exceeding of any of the permitted
plot ratios and/or any legal density limits of any applicable laws,
regulations or decisions of any applicable authority. The Permits are not
subject to any objection or claim whatsoever (including any claim for
withdrawal or cancellation) by any third party during the legal time-limits
and all such legal time-limits have now expired. All corresponding
certificates of conformity relating to Permits issued within the past ten
years have been obtained.
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(i) Except as set forth in Schedule 2.1.9(i), the Real Property is
in a satisfactory state of repair, maintenance and functioning, normal wear
and tear excepted, free of all major defects and subject to appropriate
security measures. All reserves made at the time of the delivery of the Real
Property have been released. Each of the Real Property is in accordance with
the regulations currently in force (in particular with regard to security,
hygiene and work conditions as well as any opening authorizations) which are
applicable to the activities of CMB France, CMB U.K. (with respect to the
U.K. Plant), CMB Turkey and CMB Germany (with respect to the German Plant) as
they presently exist.
(j) Each Real Property is covered by the insurance policies fully
in force as described in Schedule 2.1.9(j), which policies will cover the
Real Property through but not beyond the Closing Date.
(k) CMB France, CMB U.K. (with respect to the U.K. Plant), CMB
Turkey and CMB Germany (with respect to the German Plant) are not in default
under any of their agreements in respect of Real Property, all such
agreements are valid, binding and enforceable by each of them, and further,
all rents, charges, property taxes, rental payments and other costs which may
be due or will become due by CMB France, CMB U.K. (with respect to the U.K.
Plant), CMB Turkey and CMB Germany (with respect to the German Plant) have
been paid or an appropriate provision has been made.
2.1.10 Movable Property. (a) Schedule 2.1.10(a) hereto contains
true and complete lists of the owned movable property (excluding inventory)
("Owned Movable Property") and leased movable property with annual lease
payments greater than US$50,000 ("Leased Movable Property") (Owned Movable
and Leased Movable Property, collectively the "Movable Property").
(b) Except as set forth in Schedule 2.1.10(b), all Owned Movable
Property included in the Base Balance Sheets or Effective Date Balance Sheets
with a non-nominal residual value and all Leased Movable Property and all
other leased movable property is in satisfactory working condition, normal
wear and tear and periodic repair and maintenance excepted, and has been
regularly and routinely maintained and complies with all applicable laws and
regulations.
(c) The Owned Movable Property and the Leased Movable Property
constitute substantially all the movable property necessary to conduct the
business of CMB France, CMB Turkey, the U.K. Plant and the German Plant as
presently conducted, and except as set forth at Schedule 2.1.10(c) there are
no other material items of movable property so necessary.
2.1.11 Title to Property. At the Closing, each of CMB France, CMB
U.K., CMB Turkey and CMB Germany will have full ownership and valid legal
title (immuable et incommutable) to all Owned Real Property and Owned Movable
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Property and CMB France will have full ownership and valid legal title
(immuable et incommutable) to its fonds de commerce and such fonds de
commerce shall be validly registered with the appropriate registry of
commerce. Except as set forth in Schedule 2.1.11, such Owned Real Property
and Owned Movable Property is freely transferable (without any restriction or
limitation whatsoever) and free of any lien, mortgage, pledge, security
interest, promise, option, right of pre-emption or any other encumbrance
except for Permitted Liens. As used in this Agreement, the term "Permitted
Liens" shall mean, collectively, any liens of any nature whatsoever and with
respect to Real Property, all easements, servitudes and rights of way,
arising and continuing in the ordinary course of business or by operation of
law for obligations which are not delinquent and which do not materially
affect the value of the property or the usefulness thereof to any of CMB
France, CMB U.K., CMB Turkey and CMB Germany. Permitted Liens shall not
include mortgages on real property, pledges of shares or nantissements de
fonds de commerce or analogous security interests.
2.1.12 Material Contracts and Commitments.
(a) Schedule 2.1.12(a) lists all contracts, obligations or
undertakings (excluding employee contracts which are the subject of Section
2.1.18 below and real property contracts which are the subject of Section
2.1.9 above) (copies of which have been made available to Buyer) entered into
by CMB France, CMB U.K. (with respect to the U.K. Plant), CMB Turkey or CMB
Germany (with respect to the German Plant) ("Material Contracts") which
remain in effect on the date hereof and which are:
(i) contracts made in the ordinary course of business involving
estimated total future payments or receipts on an annual basis in excess
of US$250,000;
(ii) consulting or personal services agreements which have an
aggregate future liability in excess of US$100,000;
(iii) any non-competition, confidentiality or secrecy agreements,
and any other agreements which restrict the carrying on of the business
of CMB France or CMB Turkey as conducted on the date hereof or, with
respect to the U.K. Plant and the German Plant, materially restricts the
use or exploitation of the Transferred Assets;
(iv) dealership, manufacturer's representative, distributor, or
agency agreements terminable upon notice of more than ninety (90) days
or requiring a termination indemnity;
(v) contracts or commitments for capital expenditures involving
estimated total future payments in excess of US$20,000;
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(vi) partnership or joint venture agreements;
(vii) mortgages, pledges, charges, conditional sales contracts,
security agreements, factoring agreements or other similar agreements
other than Permitted Liens;
(viii) agreements, contracts or other instruments under which CMB
France, CMB U.K. (with respect to the U.K. Plant), CMB Turkey or CMB
Germany (with respect to the German Plant) has borrowed any money from,
or issued any note, bond, debenture or other evidence of indebtedness
to, any person;
(ix) agreements, contracts or other instruments under which (i)
any person has directly or indirectly guaranteed, to Seller's knowledge,
any indebtedness, liabilities or obligations of CMB France, CMB U.K.
(with respect to the U.K. Plant), CMB Turkey and CMB Germany (with
respect to the German Plant) or (ii) CMB France, CMB U.K. (with respect
to the U.K. Plant), CMB Turkey or CMB Germany (with respect to the
German Plant) has directly or indirectly guaranteed any indebtedness,
liabilities or obligations of any person (in each case, other than
endorsements for the purpose of collection in the ordinary course of
business or product warranties);
(x) agreements, contracts or other instruments under which CMB
France, CMB U.K. (with respect to the U.K. Plant), CMB Turkey or CMB
Germany (with respect to the German Plant) has, directly or indirectly,
made any advance, loan, extension of credit (other than standard trade
credit) or capital contribution to, or other investment in, any person
in excess of US$50,000;
(xi) agreements, contracts, commitments or undertakings presently
in effect, whether or not fully performed, between CMB France, CMB U.K.
(with respect to the U.K. Plant), CMB Turkey and CMB Germany (with
respect to the German Plant) and any of their respective officers,
directors, Executives or affiliates;
(xii) agreements, contracts or other instruments including a
change of control provision;
(xiii) property, casualty and liability and other insurance
policies provided by third party carriers, coverage under which is
available to CMB France, CMB U.K. (with respect to the U.K. Plant), CMB
Turkey, or CMB Germany (with respect to the German Plant) which are in
effect up to but not beyond the Closing Date;
(xiv) agreements, obligations or undertakings that constitute
onerous or loss contracts which would be required to be reserved against
-19-
on the financial statements of any of such companies in accordance with
U.S. GAAP; or
(xv) grants or subsidies made to it by a body (including without
limitation any Governmental Entity).
(b) Except as disclosed at Schedule 2.1.12(b), the Material
Contracts are valid, binding and enforceable obligations of the parties
thereto; CMB France, CMB Turkey, CMB U.K. (with respect to the U.K. Plant)
and CMB Germany (with respect to the German Plant) are not in default under
any of the material terms of the Material Contracts (entailing a right to
termination, penalties, or modification of its terms); and to Seller's
knowledge, CMB France, CMB Turkey, CMB U.K. (with respect to the U.K. Plant)
and CMB Germany (with respect to the German Plant) are not in default under
any other contract or obligation other than the Material Contracts.
(c) Set forth in Schedule 2.1.12(c) is a list of sales by month,
since January 1, 1997 and through the month preceding the signature date
hereof, of the top twenty customers of CMB France, and the top ten customers
of each of CMB U.K. (with respect to the U.K. Plant), CMB Turkey and CMB
Germany (with respect to the German Plant). Not later than 7 calendar days
prior to the date hereof, Seller has made available to Buyer for inspection
copies of firm commitment letters of intent, bottle supply contracts, and
other relevant customer contracts, and shall make available to Buyer terms
and conditions of supply purchase and sale relating to such suppliers. Except
as disclosed in Schedule 2.1.12(c), Seller has no knowledge that any of such
suppliers has expressed its intention to suspend or materially reduce its
level of business with any of CMB France, CMB U.K. (with respect to the U.K.
Plant), CMB Turkey or CMB Germany (with respect to the German Plant) with the
effect of reducing annual sales revenue from that customer of CMB France, CMB
U.K. (with respect to the U.K. Plant), CMB Turkey and CMB Germany (with
respect to the German Plant) by more than 20% or by more than US$200,000 per
product.
(d) Except as set forth in Schedule 2.1.12(d), each of CMB France,
CMB U.K. (with respect to the U.K. Plant), CMB Turkey and CMB Germany (with
respect to the German Plant) is not liable to repay an investment or other
grant or subsidy made to it by a body (including without limitation any
Governmental Entity).
2.1.13 Inventory. (a) Save to the extent reserved against on the
Effective Date Balance Sheets, or as set forth in Schedule 2.1.13(a), the
inventory, including in particular all finished products, raw materials,
goods in production or processing, packaging materials and supplies, samples,
displays, publicity and promotional materials of CMB France and CMB Turkey
and the inventory of CMB U.K. and CMB Germany included in the Transferred
Assets ("Inventories"), all appropriately identified, will consist of items
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usable and saleable in the ordinary course and comply with specifications and
are not defective or unfit for their usual purpose. All finished goods that
have been shipped to customers comply with specifications and are not
defective or unfit for their usual purpose.
(b) as set forth in Schedule 2.1.13(b), since January 1, 1997,
there have not been any product returns that have generated claims in excess
of US$20,000, recalls, or any post-sale warnings issued by CMB France, CMB
U.K. (with respect to the U.K. Plant), CMB Turkey or CMB Germany (with
respect to the German Plant) nor any products which fail to comply with their
terms of sale.
2.1.14 No Lawsuits. (a) Except as set forth on Schedule
2.1.14(a), there is no pending claim that has been made by any person against
any of CMB France, CMB U.K. (with respect to the U.K. Plant), CMB Turkey or
CMB Germany (with respect to the German Plant) for an individual account of
more than twenty thousand U.S. Dollars (US$20,000).
(b) Except as set forth on Schedule 2.1.14(b), there is (and there
has been for the last two years) no lawsuit, arbitration or other proceeding
(civil or criminal or of any other nature) in any jurisdiction pending or, to
Seller's knowledge threatened, against or brought by any of CMB France, CMB
U.K. (with respect to the U.K. Plant), CMB Turkey and CMB Germany (with
respect to the German Plant) or, to Seller's knowledge, any person for whose
acts or defaults any of CMB France, CMB U.K. (with respect to the U.K.
Plant), CMB Turkey and CMB Germany (with respect to the German Plant) may be
vicariously liable, and sufficient provision has been made in the Base
Balance Sheets and will be made in the Effective Date Balance Sheets to cover
such risks.
(c) To the Seller's knowledge, no fact or circumstance exists
which might give rise to any proceeding of any nature in any jurisdiction
involving CMB France, CMB U.K. (with respect to the U.K. Plant), CMB Turkey
and CMB Germany (with respect to the German Plant)
or a person for whose acts or defaults CMB France, CMB U.K. (with respect to
the U.K. Plant), CMB Turkey and CMB Germany (with respect to the German
Plant) may be vicariously liable.
(d) Except as set forth on Schedule 2.1.14(d) there is no
outstanding judgment, order, decree, arbitral award or decision of a court,
tribunal, arbitrator or governmental agency in any jurisdiction against CMB
France, CMB U.K. (with respect to the U.K. Plant), CMB Turkey and CMB Germany
(with respect to the German Plant) or, to Seller's knowledge, a person for
whose acts or defaults CMB France, CMB U.K. (with respect to the U.K. Plant),
CMB Turkey and CMB Germany (with respect to the German Plant) may be
vicariously liable.
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(e) Except as disclosed in Schedule 2.1.14(e), there is and has
been no governmental or other investigation, inquiry or disciplinary
proceeding concerning CMB France, CMB U.K. (with respect to the U.K. Plant),
CMB Turkey and CMB Germany (with respect to the German Plant) in any
jurisdiction and none is pending or threatened. To the Seller's knowledge, no
fact or circumstance exists which might give rise to an investigation,
inquiry or proceeding of that type.
2.1.15 No Broker. Seller and its agents have incurred no
obligation or liability, contingent or otherwise, for brokerage or finders'
fees or agents' commissions or other similar payment in connection with this
Agreement.
2.1.16 Governmental Permits; Compliance with Laws. (a) Each of
the material permits and authorizations necessary to the conduct of the
business of CMB France, CMB U.K. (with respect to the U.K. Plant), CMB Turkey
and CMB Germany (with respect to the German Plant) as heretofore conducted is
listed on Schedule 2.1.16(a), and is valid and in full force and effect. At
the Closing Date, CMB France, CMB U.K. (with respect to the U.K. Plant), CMB
Turkey and CMB Germany (with respect to the German Plant) will hold all
governmental or regulatory permits and authorizations which are required for
the conduct of their business as currently being conducted. No notices have
been received by any of CMB France, CMB U.K. (with respect to the U.K.
Plant), CMB Turkey or CMB Germany (with respect to the German Plant) relating
to any modification, termination or cancellation of, and none of them is in
violation of the terms and conditions of, any such permits or authorizations.
Except as set forth in Schedule 2.1.16(a), the Seller is not aware that any
permits and authorizations necessary to the conduct of the business of NIB
France, CMB U.K. (with respect to the U.K. Plant), CMB Turkey and CMB Germany
(with respect to the German Plant) may be terminated in a period of one year
following the Closing Date. Except as set forth in Schedule 2.1.16(a), since
January 1, 1998, none of CMB France, CMB U.K. (with respect to the U.K.
Plant), CMB Turkey or CMB Germany (with respect to the German Plant) has
received any complaint, citation or notice of violation from any Governmental
Entity and, to the Seller's knowledge, none is threatened, alleging that any
of them has violated any laws or regulations of Governmental Entities
applicable to any of them. Furthermore, CMB France, CMB U.K. (with respect to
the U.K. Plant), CMB Germany (with respect to the German Plant) has not
received any complaint, citation or notice of violation from any Governmental
Entity before January 1, 1998 which remains unresolved. The representations
contained in this Section 2.1.16 as they relate to Environmental Laws (as
defined at Section 2.1.17(c) hereof) are qualified by the representations and
disclosures of Seller made pursuant to Section 2.1.17 hereunder.
(b) Each of CMB France, CMB U.K. (with respect to the U.K. Plant),
CMB Turkey and CMB Germany (with respect to the German Plant) has conducted
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its business and dealt with its assets in accordance with all applicable
legal and administrative requirements in any jurisdiction.
(c) Except as set forth in Schedule 2.1.16(c), neither the
execution nor performance of this Agreement will result in CMB France, CMB
U.K. (with respect to the U.K. Plant), CMB Turkey and CMB Germany (with
respect to the German Plant) losing the benefit of any permit, authorization,
or license listed in Schedule 2.1.16(a), subject to continued compliance with
terms thereof.
2.1.17 Environmental Matters. (a) Except as set forth in
Schedule 2.1.17(a) hereto which includes the Phase I surveys conducted at the
Xxxxx Plant, the Noeux Plant, the U.K. Plant and the German Plant dated 30
April 1998: (i) each of CMB France, CMB U.K. (with respect to the U.K.
Plant), CMB Turkey and CMB Germany (with respect to the German Plant) holds
and is in material compliance with, and as of the Closing each of them will
hold and will be in material compliance with, all permits and authorizations
required to conduct its business under Environmental Laws, (ii) no
proceedings have been initiated or to Seller's knowledge are pending which
would lead to their revocation, modification or suspension, (iii) each of CMB
France, CMB U.K. (with respect to the U.K. Plant), CMB Turkey and CMB Germany
(with respect to the German Plant) is in material compliance with, and at the
Closing will be in material compliance with all Environmental Laws, including
without limitation all restrictions, conditions, standards, limit values,
prohibitions, requirements, obligations, schedules and timetables contained
in the Environmental Laws, (iv) the state of preservation of asbestos used in
the construction of the Real Property is not such as to require removal or
other remediation works to be carried out pursuant to Environmental Laws, and
there is no asbestos in the materials stored or handled in the Real Property
and each of CMB France, CMB U.K. (with respect to the U.K. Plant), CMB Turkey
and CMB Germany (with respect to the German Plant) has complied with all
Environmental Laws in this respect, (v) none of CMB France, CMB U.K. (with
respect to the U.K. Plant), CMB Turkey and CMB Germany (with respect to the
German Plant) has received any written communication from any person,
including an Environmental Authority alleging that any of them is not in
compliance in any material respect with any Environmental Laws or otherwise
may be liable under any Environmental Law including, without limitation,
liability for Remedial Action, and (vi) no arbitral, judicial or
administrative proceedings have been initiated or are, to Seller's knowledge,
threatened to be initiated by any Environmental Authority (as defined in
Section 2.1.17(b) herein) or third party regarding any act or activity
carried out by CMB France, CMB U.K. (with respect to the U.K. Plant), CMB
Turkey or CMB Germany (with respect to the German Plant) which may have
caused pollution to the air, water, soil or subsoil or any other nuisance
which may affect the environment or create a hazard for health and safety.
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(b) Schedule 2.1.17(b) hereto contains: (i) a list of material
environmental permits and authorizations necessary for the conduct of the
business of CMB France, CMB U.K. (with respect to the U.K. Plant), CMB Turkey
and CMB Germany (with respect to the German Plant), (ii) a description of the
waste disposal practices of each of them, including the names of owners and
operators of each location to which waste had been sent for treatment,
storage or disposal, (iii) a list of Hazardous Materials used or generated by
each of them, (iv) copies of material environmental instructions by
Governmental Entities received by any of them, and (v) a list and description
of the location of all underground tanks, sumps or pits at the Real Property
currently or formerly used to contain Hazardous Materials or Contaminants (as
defined below), on a continuous basis. Seller and each of CMB France, CMB
U.K. (with respect to the U.K. Plant), CMB Turkey and CMB Germany (with
respect to the German Plant) have fully and accurately disclosed to Buyer all
material environmental studies, investigations and audits of which either of
them has knowledge concerning the Sites (as defined in Section 8.4(b))
including in particular, the ERM summary reports dated January, June and July
1996, copies of which were delivered to Buyer.
As used in this Agreement, the term "Environmental Laws" means any
and all applicable treaties, EU legislation, laws (which in England and Wales
shall include the common law), regulations, decrees, ministerial instructions
(including French "circulaires ministerielles" to the extent they are legally
binding), instructions of Environmental Authorities to the extent legally
binding, judgments, permits, authorizations, binding agreements relating to
the protection of the environment, health and safety, or common law nuisance,
in each case as in effect on the date hereof in France with respect to CMB
France, in the United Kingdom with respect to the U.K. Plant, in Turkey with
respect to CMB Turkey and in Germany with respect to the German Plant. As
used in this Agreement, the term "Environmental Authorities" means any local,
regional, national or federal department, agency, ministry or any similar
body having jurisdiction over environmental laws. As used in this Agreement,
the term "Contaminants" means those substances whose Releases (as defined
below) are regulated by, or form the basis of, liability under any
Environmental Laws. As used in this Agreement, the term "Hazardous Materials"
means all materials or substances regulated as explosive, flammable, toxic or
radioactive pursuant to any Environmental Laws. As used in this Agreement,
the term "Release" means any spill, emission, leaking, pumping, injection,
deposit, or discharge of any Contaminant in, onto, or through the environment
(including ambient air, surface water, groundwater, or soils).
2.1.18 Transferred Employees; Employee Benefits; Health and
Safety. (a) Schedule 2.1.18(a) hereto contains: (A) a true and complete
list identifying by age, seniority, classification and remuneration
(including all bonuses of whatever kind, payments in kind), (i) the employees
(including all directors and other officers) of CMB France (excluding,
however, Head Office Employees as-defined at Section 3.1.5), CMB Turkey and
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the Plants as of March 31, 1998 ("Transferred Employees"), and (ii) any
person working for CMB France, CMB Turkey or the Plants who has been provided
by a third party including any affiliate of the Seller. Such list indicates
the date of termination of the fixed term contracts (if any), and the date on
which contracts for employees provided by third parties terminate together
with the identity of such third party (if any) and any Transferred Employees
who have tendered their resignation. Furthermore, such list sets out the
period of time which remains, for any Transferred Employee subject to an
indeterminable contract who has been issued with or has issued a notice of
termination; (B) a true and complete list of any increase or decision to
increase, taken in the twelve (12) months prior to the date hereof, the
general level of compensation in addition to any increase or decision, taken
in the twelve (12) months prior to the date hereof, to increase the level of
individual compensation of a Transferred Employee by more than US$5,000 per
annum; (C) a true and complete list as of March 31, 1998 of (i) the
Transferred Employees having borrowed sums from any of CMB France, CMB U.K.,
CMB Turkey and CMB Germany or their affiliates, the amounts of such
borrowings and the outstanding principal amounts as of such date and (ii) all
protected Transferred Employees in accordance with any law or regulation of
CMB France, CMB U.K. (with respect to the U.K. Plant), CMB Turkey and CMB
Germany (with respect to the German Plant); (D) a definition of any and all
pension or retirement benefits, bonus, profit sharing, stock purchase or
stock option plans, company savings plans or employee funds concerning the
Transferred Employees together with particulars of any obligation of CMB
France, CMB U.K. (with respect to the U.K. Plant), CMB Turkey and CMB Germany
(with respect to the German Plant) to provide death, disability or medical
benefits put in place to the benefit of the Transferred Employees
(collectively, "Benefit Plans"); (E) a true and complete list of any
collective bargaining agreement or any other collective agreement, internal
rules, code of conduct or other manual containing internal procedures and
regulations with respect to the Transferred Employees; (F) a copy of the
contracts of employment (including amendments hereto) for the Executives who
are Transferred Employees; and (G) standard form of labor contracts.
(b) CMB France, CMB U.K. (with respect to the U.K. Plant), CMB
Turkey and CMB Germany (with respect to the German Plant) conform and have
conformed in all respects, to the law, applicable regulations and all
mandatory statutory or regulatory requirements (including all collective
agreements) with respect to the Transferred Employees (including, with
respect to the German Plant, Section 613a of the Burgerliches Gesetzbuch).
(c) The Benefit Plans (excluding the U.K. pension plan) conform
and have conformed with the law, applicable regulations and all mandatory or
statutory requirements and have not been subject, up to the Closing Date, to
any requalification or reassessment by any tax or any other social
administration. All contributions payable and due by CMB France, CMB U.K.
(with respect to the U.K. Plant), CMB Turkey and CMB Germany (with respect to
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the German Plant) for the Benefit Plans have been duly paid or provisions
have been duly made in respect thereof.
(d) The standard form of labor contracts contained in Schedule
2.1.18(a) have been applied consistently without any significant modification
and CMB France, CMB U.K. (with respect to the U.K. Plant), CMB Turkey and CMB
Germany (with respect to the German Plant) are not in breach of (i) any
clause of such standard form contracts and (ii) any of the contracts of
employment for the Executives which comply with all applicable law and
regulations and with the applicable collective agreements. All salaries,
commissions, bonuses, other payments and repayments and payment of expenses
and generally all sums due to the beneficiaries of such contracts, and, more
generally, to all of the Transferred Employees as at the Closing Date, have
been duly and fully paid or a provision has been duly made in respect
thereof. Save as reserved against on the Effective Date Balance Sheets, CMB
France, CMB U.K. (with respect to the U.K. Plant), CMB Turkey and CMB Germany
(with respect to the German Plant) have no outstanding obligations vis-a-vis
their former employees (including all directors and other officers).
(e) CMB France, CMB U.K. (with respect to the U.K. Plant), CMB
Turkey and CMB Germany (with respect to the German Plant) have not granted
any employment advantage, subsidy or bonus whatsoever except as set forth in
Schedule 2.1.18(a) and have not entered into any pay agreement outside their
usual field of business activities, and no Transferred Employee of CMB
France, CMB U.K. (with respect to the U.K. Plant), CMB Turkey and CMB Germany
(with respect to the German Plant) benefits from any particular advantage
(whether or not in case of termination of his contract) differing from the
general provisions of the standard form contracts or the contracts of
employment for the executives.
(f) CMB France, CMB U.K. (with respect to the U.K. Plant), CMB
Turkey and CMB Germany (with respect to the German Plant) have at all times,
up to the Closing Date complied with all social security regulations in
force. CMB France, CMB U.K. (with respect to the U.K. Plant), CMB Turkey and
CMB Germany (with respect to the German Plant) are up to date in the payment
of their contributions relating to social security, family allowances and the
various organizations dealing with retirement and unemployment and, more
generally, with all other contribution, installment or payment connected with
social welfare. No claim, investigation or dispute exists in connection with
any of the social welfare organizations as at the date hereof.
(g) France, CMB U.K. (with respect to the U.K. Plant), CMB Turkey
and CMB Germany (with respect to the German Plant) have at all times, up to
the Closing Date, complied with all the rules and regulations in force in
connection with personnel representation.
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(h) Except as disclosed at Schedule 2.1.18(h), CMB France, CMB
U.K. (with respect to the U.K. Plant), CMB Turkey and CMB Germany (in respect
of the German Plant) are not in the process of making any individual or group
redundancies or "social plan" or dismissing or transferring any of their
Transferred Employees for whatever reason and have not made any individual or
group redundancies or "social plan" or transferred any of their Transferred
Employees during the past twelve (12) months.
(i) Except as disclosed at Schedule 2.1.18(i), CMB France, CMB
U.K. (with respect to the U.K. Plant), CMB Turkey and CMB Germany (in respect
of the German Plant) have not made any binding offer for employment which
remains outstanding to any person who would have the status of Executive.
(j) Except as set forth in Schedule 2.1.18(j), there has not been
during the last three (3) years, nor is there currently pending or, to
Seller's knowledge, threatened, any strike or work stoppage.
(k) Except as set forth in Schedule 2.1.18(k), there is no
lawsuit, arbitration, formal or informal settlement or proceeding pending and
Seller has no knowledge of any such proceeding or settlement, threatened
against any of CMB France, CMB U.K. (with respect to the U.K. Plant), CMB
Turkey and CMB Germany (with respect to the German Plant) in connection with
any of the Transferred Employees, which would have an adverse effect on their
business, and sufficient provision has been made in the Base Balance Sheets
and will be made in the Effective Date Balance Sheets to cover such risks.
(l) Except as set forth in Schedule 2.1.18(1), each of CMB France,
CMB U.K. (with respect to the U.K. Plant), CMB Turkey and CMB Germany (with
respect to the German Plant) is in compliance with all health and safety laws
and regulations issued by any Governmental Entities.
2.1.19 Taxes. (a) Each of CMB France, CMB U.K. (with respect to
the U.K. Plant), CMB Turkey and CMB Germany (with respect to the German
Plant) are and have been for the applicable statute of limitations period in
complete compliance with all tax regulations.
(b) Except as set forth in Schedule 2.1.19(b)(i), each of CMB
France, CMB U.K. (with respect to the U.K. Plant), CMB Turkey and CMB Germany
(with respect to the German Plant) has filed with the appropriate
Governmental Entities all tax returns and all formalities or
documents imposed by the tax regulations required to be filed in respect of
their activities and each of them has paid all taxes shown or claimed to be
due (whether or not shown as due on such tax returns or documents) thereon
within the required time limits or have constituted, and will constitute,
sufficient or have registered and will register sufficient charges to be
paid, (excluding deferred taxes that reflect the difference between book
value and tax basis in assets and liabilities), in the Base Balance Sheets
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and in the Effective Date Balance Sheets. These returns or documents have for
the applicable statute of limitations period been and remain true and
complete and do not contain any errors, omissions or inaccurate statements.
Except as set forth in Schedule 2.1.19(b)(ii), none of CMB France, CMB U.K.
(with respect to the U.K. Plant), CMB Turkey and CMB Germany (with respect to
the German Plant) is a party to any action or proceeding by any Governmental
Entity for assessment and collection of taxes, nor has any of them received
notice of any claim for such assessment and collection of taxes in respect of
its activities.
(c) The basis and the amount of tax which each of CMB France, CMB
U.K. (with respect to the U.K. Plant), CMB Turkey, and CMB Germany (with
respect to the German Plant) has owed or still owes, have for the applicable
statute of limitations period been properly determined in compliance with the
tax regulations and are not liable to be corrected or reassessed.
(d) Each of CMB France, CMB Turkey, CMB U.K. (with respect to the
U.K. Plant) and CMB Germany (with respect to the German Plant) has available
all the documents needed to justify the information contained in the returns
or documents referred in paragraph (b) above as well as the applied tax
regulations. Each of CMB France and CMB Turkey has available all the
documents necessary to justify the existence and the amount of any tax losses
that remain available to be carried forward in accordance with the applicable
regulations (if any), whatever be the original financial year, of any tax
credits or claims it may have against any tax or administrative authority
whatsoever which it has used (by deduction or otherwise) or obtained
reimbursement in the past or which it could use (by deduction or otherwise)
or could obtain reimbursement in the future (it being understood that neither
of CMB France nor CMB Turkey shall be entitled to seek reimbursement or
compensation from Seller or any of Seller's affiliates of tax losses incurred
by any of them and transferred to a consolidated tax group during those tax
periods in which they were included in such consolidated tax group).
(e) None of CMB France, nor CMB Turkey have concluded any deed or
have been party to any transaction which is likely to be reassessed, rejected
or requalified for the reason that the company had attempted to evade,
circumvent or diminish its tax obligations or that of another person or was
not acting in its own corporate interest (acte anorrnal de gestion).
(f) CMB France and CMB Turkey have never been party to a transfer,
sale, exchange, contribution or transfer of any sort whatsoever for which
each or all of them would not have paid registration, contribution or
transfer taxes, stamp duties or real estate publicity taxes, that it would be
legally or contractually liable to pay after the Closing Date.
(g) Except as-set forth in Schedule 2.1.19(g), the transfer of the
Shares will not in and of itself involve any taxation at the expense of CMB
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France or CMB Turkey or the loss of carryforward tax losses or any rights of
a fiscal nature. CMB Turkey and CMB France do not benefit from any particular
tax regime which could cease or be questioned in particular by the transfer
of their Shares or by reason of any act or omission prior to the Closing
Date.
(h) CMB France and CMB Turkey do not benefit, nor have benefited
from, by reason of a transaction made prior to the Closing Date, a
suspension, postponement or deferral of tax.
(i) Except as set forth at Schedule 2.1.19(i), the value of the
assets and liabilities shown in the year-end 1997 statutory accounts of each
of CMB France and CMB Turkey corresponds to the fiscal value of the said
assets and liabilities at the date of establishment of such accounts.
(j) Each of CMB France and CMB Turkey are and always have been
exclusively resident in their countries of incorporation for tax purposes.
2.1.20 Disclosure. To the Seller's knowledge, none of the
information contained in the representations, warranties or covenants of
Seller set forth in this Agreement, in the Schedules hereto or in any of the
certificates, lists, documents, exhibits or other instruments delivered or to
be delivered to the Buyer as contemplated by any provision of this Agreement,
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary to make the statements contained
herein or therein, in light of the circumstances under which they were made
and when taken as a whole not misleading.
2.1.21 Bankruptcy and Liquidation. CMB France, CMB U.K., CMB
Turkey and CMB Germany are not and have never been subject to any winding up,
liquidation, administration or dissolution procedure of any nature and have
never had a suspension of their payments. CMB France, CMB U.K., CMB Turkey
and CMB Germany are not and have never been subject to any composition
procedure.
2.1.22 Competition. (a) Undertakers and orders. CMB France, CMB
U.K. (with respect to the U.K. Plant), CMB Turkey and CMB Germany (with
respect to the German Plant) have not given in the past two (2) years an
undertaking or written assurance which is still in force to a Governmental
Entity including any authority of the European Communities or of any
jurisdiction. CMB France, CMB U.K. (with respect to the U.K. Plant), CMB
Turkey and CMB Germany (with respect to the German Plant) are not currently
affected by an order or regulation made by a decision of the Commission of
the European Communities or by a competition authority Many jurisdiction.
(b) Investigations. CMB France, CMB U.K. (with respect to the U.K.
Plant), CMB Turkey and CMB Germany (with respect to the German Plant) have
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not received in the past two (2) years a communication or request for
information from or by the Commission of the European Communities or by or
from a competition authority of any other jurisdiction. No agreement,
arrangement or conduct (by omission or otherwise) of CMB France, CMB U.K.,
CMB Turkey and CMB Germany has been in the past two (2) years the subject of
an investigation, report or decision by any of those persons or bodies.
2.1.23 Binding Effect. This Agreement is a legal, valid, and
binding obligation of Seller, enforceable against it in accordance with its
terms.
2.2 Representations and Warranties of Buyer.
Except in the case of representations and warranties made as of a
specific date, which shall be deemed made as of such date, Buyer's
representations and warranties to Seller are made as of the date hereof and
as of the Closing Date.
2.2.1 Corporate Status. Buyer is a partnership duly organized and
validly existing under the laws of the State of Delaware (USA), and has all
requisite corporate power to own its properties and carry on its business as
now being conducted.
2.2.2 No Broker. Buyer and its agents have incurred no obligation
or liability, contingent or otherwise, for brokerage or finders' fees or
agents' commissions or other similar payment in connection with this
Agreement.
2.2.3 Authority and Restrictions. (a) Buyer has full corporate
power and authority to enter into this Agreement and any other documents
contemplated hereby and to pay the Purchase Price and the Aggregate Closing
Date Intragroup Indebtedness as provided in this Agreement.
(b) The consummation of the transactions contemplated by this
Agreement will not result in a breach in any material respect of, or give
rise to a right of termination of, any Material Contract, material permit or
authorization to which Buyer is subject or a party, or violate any of the
provisions of the charter documents of Buyer.
2.2.4 No Lawsuits; Consents. There is no lawsuit, arbitration or
proceeding pending or, to the knowledge of Buyer, threatened against Buyer
which might prevent the consummation of any of the transactions contemplated
by this Agreement, and except as set forth in Schedule 2.2.4, no approval or
authorization of any Governmental Entity or of any third party on the part of
Buyer is required in connection with the execution, delivery and performance
of this Agreement and the other documents contemplated hereby and thereby.
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2.2.5 Execution and Effect of Agreement. Buyer and its designated
affiliates, as the case may be, have the full corporate power and authority
to enter into this Agreement and the other documents contemplated hereby. The
execution and delivery of this Agreement, and other document contemplated
hereby and the consummation of the transactions contemplated hereby have been
duly authorized by the necessary corporate action of Buyer, and this
Agreement constitutes a valid and binding obligation of Buyer, enforceable
against Buyer in accordance with its terms.
2.2.6 Financial Capacity. Buyer and its designated affiliates, as
the case may be, have adequate financial resources to complete the
transactions contemplated hereby and pay the Purchase Price and Aggregate
Closing Date Intragroup Indebtedness and the commitments of Buyer herein are
not subject to the obtaining of third party financing.
2.2.7 Access to Data Room Documents. Buyer acknowledges that it
has enjoyed full and complete access to the documents made available to it in
the data room of Seller and has reviewed each of such documents; a list of
such documents is set forth at Schedule 2.2.7 hereto. Buyer also acknowledges
that it has had the opportunity to conduct a due diligence review of each of
CMB France, CMB Turkey, the U.K. Plant and the German Plant, that it has had
access to confidential documents, data and other materials pertaining to
CMB France, CMB Turkey, the U.K. Plant and the German Plant and that it has
visited the sites of each of CMB France, CMB Turkey, the U.K. Plant and the
German Plant and met with key employees.
ARTICLE 3
COVENANTS
3.1 Covenants of Seller. Seller hereby covenants and agrees as
follows:
3.1.1 Business in Ordinary Course. Except as contemplated by this
Agreement or as otherwise disclosed in Schedule 3.1.1, during the period from
the date hereof to the Closing Date, Seller will cause each of CMB France,
CMB U.K. (with respect to the U.K. Plant), CMB Turkey and CMB Germany (with
respect to the German Plant) to conduct their business in the ordinary course
of business consistent with past practice and to maintain their corporate
books, records and accounts in compliance with law. Without limiting the
generality of the foregoing and except as otherwise expressly provided in
this Agreement or as otherwise disclosed in Schedule 3.1.1, during the period
from the date hereof to the Closing Date, neither Seller nor CMB France, CMB
U.K. (with respect to the U.K. Plant), CMB Turkey and CMB Germany (with
respect to the German Plant) with respect to their businesses will take any
action which will cause the representations and warranties contained in
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Section 2.1.7 not to be true and correct as of the Closing Date, without the
prior written consent of Buyer, which consent Buyer agrees will not
unreasonably be withheld.
3.1.1 Perform Contracts; Comply with Permits. Except to the
extent performance would prove commercially unreasonable, and in such event
after prior consultation with Buyer, each of CMB France, CMB U.K. (with
respect to the U.K. Plant), CMB Turkey and CMB Germany (in respect of the
German Plant) shall perform or cause to be performed on a timely basis and in
compliance with the terms thereof all obligations to be performed under all
the contracts, leases and documents relating to their properties and business
and shall comply with all permits, authorizations and licenses.
3.1.2 Disclosure and Supplemental Disclosure. Seller has prepared
the Schedules and shall prepare any additional Schedules as set forth below
in good faith and with reasonable care and diligence. At any time prior to
the Closing Date, Seller shall be entitled to supplement or amend the
Schedules or add additional Schedules with respect to any matter herein,
necessary to supply, correct or update any information called for under this
Agreement. Seller shall provide to Buyer not less than five (5) days prior to
the Closing Date amended and supplemented Schedules with respect to matters
to be disclosed as of the date of delivery. No such Schedule addition,
supplement or amendment shall be deemed to qualify, supplement or amend
Seller's representations or warranties (including for a Material Adverse
Change) unless Seller shall agree to indemnify Buyer on a dollar for dollar
basis (without application of Section 7.4(b) with respect to such matters. If
the matters disclosed therein reflect or constitute, individually or in the
aggregate, a Material Adverse Change (as defined in Section 9.11 hereof):
Buyer's sole remedy in the event it shall not accept such addition,
supplement or amendment shall be the termination of this Agreement without
liability or indemnity in accordance with Section 6.1(b) hereof and Seller
shall have the termination right set forth at Section 4.2.4 below.
3.1.3 Repurchase of Certain Inventory. Seller hereby covenants
and agrees that in the event that Buyer is unable (despite its best
commercial efforts) to use, sell, market, or otherwise dispose of for value
those finished products and raw materials including "master batch" products
within six (6) months after the Closing Date, such products having been in
the inventories of CMB France, CMB U.K. (with respect to the U.K. Plant), CMB
Turkey or CMB Germany (with respect to the German Plant) on the Closing Date
and included on the Effective Date Balance Sheets, Buyer may submit a written
claim to Seller at the end of the above time period, and Seller upon receipt
of such written claim within the above time periods, shall repurchase or
procure the repurchase of the products within thirty (30) calendar days from
Buyer for value equal to net book value at the time of Closing. At Seller's
request, Buyer shall deliver the products to Seller or Seller's designated
affiliate within thirty (30) calendar days at Buyer's expense.
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3.1.4 Head Office. On or prior to the Closing Date, Seller shall
cause those employees of CMB France listed at Schedule 3.1.5 and who are
dedicated to Seller's head office ("Head Office Employees") to be transferred
to Seller or another of Seller's affiliates and shall hold Buyer harmless
without regard to the limitations set forth at Section 7.4 from and against
any liabilities in connection with such employees.
3.1.5 Interim Management Reports. During the period from the date
hereof up to the Closing Date, Seller shall deliver, or cause to be
delivered, to Buyer promptly upon their availability in accordance with
Seller's internal reporting practices the periodic monthly balance sheets and
income statements with respect to CMB France, CMB Turkey and the Plants.
3.1.6 Capital Expenditures and Restructuring Costs. Seller hereby
covenants and agrees that: (a) the sum of Reimbursed Capital Expenditures
plus other capital expenditures relating to the 1998 capital expenditure
projects identified at Schedule 1.2.1(b) (and including amounts disbursed as
deposits in respect thereof in 1997) committed but not invoiced plus
Reimbursed Restructuring Costs in respect of the Plants, CMB France and CMB
Turkey shall not exceed US$8,400,000 at the Closing Date; and (b) the sum of
Reimbursed Restructuring Costs plus other costs committed but not invoiced in
respect of the restructuring as more fully itemized at Schedule 1.2.1(b) of
CMB France and the German Plant shall not exceed US$3,000,000 at the Closing
Date.
3.1.7 Non-competition. Seller shall refrain, and shall cause its
affiliates to refrain, for a period equal to the duration of the respective
product design covered by the Molds, from competing, directly or indirectly,
with Buyer or its affiliates for customers orders in respect of such product
designs, provided, however, that such covenant shall not apply to shampoo and
shower gel packages and bottles.
3.1.8 Post-Closing Transitional Services. For a period of ninety
(90) days after the Closing, Buyer may request, and Seller shall provide,
such transitional, operational, commercial, financial and administrative
services at CMB France, CMB Turkey, the U.K. and German Plants as may be
reasonably required, at a mutually agreed rate reflecting Seller's actual
all-in costs. Seller agrees that Xx. Xxxxxxx, Xx. Xxxxxx and Xx. Xxxxxxx
shall be made available, where and when possible, to the Buyer for the
purposes of providing information and advice, which shall not conflict with
the business of Seller and particularly the personal care sector, during a
transition period commencing immediately after the Closing and ending on 30
September 1998. To the extent that any of the employees covered are still in
the employment of Seller Group, the Buyer shall pay the Seller's costs in
providing that information and advice.
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3.1.9 Real Estate Formalities. On or before November 30, 1998,
Seller undertakes to carry out the necessary formalities with the French
administration such as land registries, tax authorities and any other
administrative body so that the title of CMB France to the freehold
properties situated in Xxxxx, Noeux-les-Mines and Labourse is regular and
binding and enforceable vis-a-vis third parties and to bear all the
subsequent costs and fees which may be due in this respect. In the event that
the necessary formalities as referred to herein are not completed by December
31, 1998, a penalty of US$1,700 per week payable monthly in arrears will be
owed by Seller to Buyer until the last formalities have been completed
notwithstanding Schedule 7.4(e) hereto, unless Seller shall demonstrate that
such non-completion is not due to Seller's failure to take any required
action or carry out any required formality or that Buyer shall not have
rendered all assistance reasonably required in connection herewith.
3.1.10 Intellectual Property Formalities. On or before September
30, 1998, Seller undertakes to provide or to cause to provide to Buyer all
the necessary documents which will allow Buyer to register with INPI and any
other administrative body all the changes in respect of the ownership of the
French Patent number 89 06 814 including without limitation the original
merger agreement and copies of company searches and minutes of meetings
showing changes in the company name. Seller shall hold CMB France harmless
from and against for any damages, losses or expenses which result from the
fact that the above mentioned documents are not provided to Buyer thus
preventing the valid registration of the above-mentioned changes.
3.1.11 Release of Inscription. On or before October 31, 1998,
Seller shall undertake all formalities required to obtain the release
(mainlevee) of Inscription No 97PT1259 of July 30, 1997 for the benefits of
the French Treasury in the amount of FF 127,468 set forth in the Etat
Sommaire des Inscriptions of the Tribunal de Commerce of Xxxxx.
3.1.12 Transfer of share. On or before December 31, 1998, at the
latest, Seller shall cause to be transferred and conveyed to Buyer or Buyer's
designee, at Seller's sole cost and expense, one (1) share of CMB France
currently registered in the name of B.A.P. (a former affiliate of Seller, in
liquidation). Seller shall promptly undertake all necessary steps, including
with the Commissaire a Execution du plan and the juge commissaire, to
effectuate such transfer and conveyance.
3.1.13 Books and Records. Promptly after the date hereof, Seller
shall deliver and/or cause to be delivered to Buyer all such corporate books
and records (or excerpts thereof) as shall relate exclusively or
substantially exclusively to CMB France, CMB Turkey, the German Plant or the
U.K. Plant provided that Seller shall be entitled to retain copies of such
books and records to the extent necessary or appropriate for the purposes of
ongoing regulatory and tax reporting and compliance.
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3.1.14 ION Bottle Design License. Seller shall exert its best
efforts to cause CMB Germany to conclude negotiations with ION regarding the
bottle design commissioned for Kraft, pursuant to which CMB Germany shall
obtain a license assignable or sub-licensable to Seller's German affiliate
(with a sub-license to Seller's affiliate Xxxxxx as regards the closure),
without cost or expense to Buyer Group.
3.2 Covenants of Buyer.
3.2.1 Fulfillment of Assumed Liabilities. Buyer shall, and shall
cause its affiliates to, fulfill and perform the terms of the deed of
conveyance and the asset purchase agreements and to indemnify and hold
harmless Seller and its affiliates from and against any breach or violation
by Buyer or its affiliates of any and all contracts, liabilities, obligations
and undertakings transferred and assumed under the deed of conveyance and the
asset purchase agreements.
3.2.2 Change of Company Name and Discontinuation of Use of
Trademarks and Tradenames. (a) Buyer hereby covenants and agrees that,
Buyer and its affiliate shall not acquire hereunder any right to use the
"CMB", "CarnaudMetalbox", "Raku", "Crown" or "Carnaud" names and logos or the
stylized "R" logo utilized by CMB Germany ("CMB Names"), Buyer shall not and
shall procure that its affiliates do not send out invoices bearing the CMB
Names and that Buyer shall use its best commercial efforts to promptly remove
the CMB Names from all products, packaging, shipping materials, stationery,
literature, invoices, marketing materials and any other materials which are
sent by Buyer and/or Buyer's affiliates to third parties, and in any event
shall remove the CMB Names from all products, packaging, shipping materials,
stationery, literature, invoices, marketing materials and any other materials
no later than the six (6) month anniversary of this Agreement.
(b) Buyer covenants that it shall remove or cause to be removed
the CMB Names from all Moulds, it being understood by the parties that Buyer
shall remove the CMB Names from at least one (1) Mould per plant per week.
Buyer shall remove or cause to be removed within three (3) months after
signature of this Agreement any sign or other marking containing the CMB
Names from buildings, trucks or any other property.
(c) Buyer covenants that it shall take the necessary steps to
change the corporate name of CMB France and CMB Turkey promptly after the
Closing Date.
3.2.3 Best Commercial Efforts Regarding Certain Inventory. Buyer
hereby covenants and agrees that it shall or procure that its affiliates
shall take all actions necessary to use, sell, remarket or otherwise dispose
of for value the finished products, raw materials and the "master batch"
products and in the inventory of CMB France, CMB U.K. (with respect to the
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U.K. Plant), CMB Turkey and CMB Germany (with respect to the German Plant) as
reflected on the Effective Date Balance Sheets.
[3.2.4 reserved]
3.2.5 Capital Expenditures and Restructuring Costs. Buyer hereby
covenants and agrees to pay and satisfy, and/or to cause its affiliates to
pay and satisfy, those invoices, commitments or other payment obligations of
the Plants, CMB France and CMB Turkey in respect of the capital expenditures
and restructuring costs described at Section 3.1.7 above, subject to the
maximum amounts set forth therein.
3.3 Mutual Covenants. Each of Seller and Buyer covenants and
agrees as follows:
3.3.1 No Solicitation of Employees. Except for those employees
agreed to in writing by the parties hereto prior to Closing, for a period of
three (3) years after the Closing, the parties shall refrain, directly or
indirectly through their respective present or future affiliates, from
employing, engaging, soliciting or seeking to employ or engage any person who
at the Closing Date or within a period of eighteen (18) months prior to such
date had been an employee of the other party or any of the other party's
affiliates, unless such employee was previously terminated by the party or
any of the party's affiliates.
3.3.2 Environmental Remediation. Buyer hereby undertakes to carry
out, and Seller undertakes to fund, the environmental remediation with
respect to those items set forth in Schedule 3.3.2. Such schedule sets forth
the estimated cost of such remediation with respect to each such item. Seller
shall, as and when expenditures are incurred by Buyer or its affiliates in
respect of such remediation, reimburse such expenditures upon presentation of
reasonable documentation. Seller may, at its option, pay directly any third
party suppliers or contractors upon presentation of invoices. With respect to
direct costs of Buyer or its affiliates (employee costs, materials, etc.),
such direct costs shall be determined by mutual agreement but shall not
exceed Buyer's actual direct cost. Buyer shall carry out the remedial action
through the most cost effective means. Buyer shall reimburse to Seller any
amounts received by Buyer or its affiliates in excess of the actual costs
incurred and Seller shall in no event be required to fund or reimburse
aggregate remediation in excess of the aggregate agreed amount set forth in
Schedule 3.3.2; it being understood that any excess resulting from the actual
cost of a particular item being lower than its estimated cost may be used to
fund any other item above its estimated cost.
3.3.3 Publicity. Seller and Buyer agree that, from the date
hereof through the Closing Date, no public release or announcement concerning
the transactions contemplated hereby shall be issued by either party without
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the prior consent of the other party (which consent shall not be unreasonably
withheld), except as such release or announcement may be required by law or
the rules or regulations of any Governmental Entity, in which case the party
required to make the release or announcement shall allow the other party
reasonable time to comment on such release or announcement in advance of such
issuance. Notwithstanding the foregoing, Seller and Buyer shall be entitled
to proceed with all information and consultation procedures required under
relevant labor law regulations or collective bargaining agreements. Seller
and Buyer shall consult with each other concerning the means by which the
Seller's employees, customers, and suppliers and others having dealings with
the Seller will be informed of the contemplated transactional and Buyer will
have the right to be present for any such communication.
3.3.4 Commercially Reasonable Efforts. Subject to the terms and
conditions of this Agreement, each party shall use its commercially
reasonable efforts to cause each of the conditions to Closing to be
fulfilled, the Closing to occur and relations with customers, suppliers,
Transferred Employees and Governmental Entities to be coordinated, during the
transitional period.
3.3.5 Cooperation. (a) Each of Buyer and Seller shall furnish or
cause to be furnished after the Closing, upon reasonable written notice, to
the other and its employees, counsel, auditors and representatives access,
during normal business hours, to such information and assistance relating to
CMB France, CMB U.K., CMB Turkey and the German Plant as is reasonably
necessary for financial reporting and accounting matters, the preparation and
filing of any tax returns, reports or forms or the defense of any tax claim
or assessment as well as the preparation of any filing or submission which is
necessary under any applicable legislation, rules or regulations. Seller and
Buyer shall keep each other apprised of the status of any communication with,
and any inquiries or requests for additional information from, any foreign or
domestic antitrust or competition authority or Governmental Entity, and shall
comply promptly with any such inquiries or requests. Each of Seller and Buyer
shall use its best efforts to obtain any clearance required under any
applicable legislation, rules or regulations for the purchase and sale of the
Shares. All such antitrust and other requisite consents of Governmental
Entities as may be so required, are set forth in Schedule 3.3.5 hereto
(collectively, "Governmental Consents"). As used in this Agreement, the term
"Governmental Entity" means any State or local authority or any court of
competent jurisdiction, administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign, including any
court, administrative agency, commission or other organ of the European
Union. Each party shall reimburse the other for reasonable out-of-pocket
third party costs and expenses incurred in assisting the other pursuant to
this Section 3.3.5. Neither party shall be required by this Section 3.3.5 to
take any action that would unreasonably interfere with the conduct of its
business or unreasonably disrupt its normal operations (or, in the case of
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Buyer, the business or operations of CMB France, CMB U.K., CMB Turkey and CMB
Germany (with respect to the German Plant).
(b) To the extent that consent to the assignment of any contracts
of the U.K. Plant or the German Plant shall not have been obtained at the
Closing Date, Seller and Buyer shall cause their respective affiliates to
comply with the relevant terms of the U.K. Asset Purchase Agreement and the
German Asset Purchase Agreement, respectively.
3.3.6 Confidentiality. Each of the parties hereto shall treat the
contents of this Agreement as confidential and shall refrain from disclosing
this Agreement, in whole or in part to any third party, except as required by
any laws or regulations of Governmental Entities.
3.3.7 CMB Turkey. The parties shall cooperate with respect to the
calling of Board and Shareholders meetings of CMB Turkey to inter alia
acknowledge the resignation of directors, appoint new directors designated by
Buyers, change authorized signatories and bank powers and change the
corporate name.
[3.3.8 reserved]
[3.3.9 reserved
3.3.10 Filing on Form 8-K. Seller shall cooperate with Buyer in
connection with the preparation of combined financial statements for the year
ended December 31, 1997 for incorporation in the filing on Form 8-K which
Buyer (or Buyer's parent) is obligated to make with the United States
Securities and Exchange Commission. The audit of these combined financial
statements will be carried out by Price Waterhouse at Buyer's expense and
such financial statements shall be delivered to Buyer within sixty (60) days
after the Closing Date.
3.3.11 Regulatory Filings. The parties shall cooperate with
respect to all filings with any applicable foreign or domestic antitrust or
competition authority or Governmental Entity required for the transactions
contemplated hereby and shall comply with all supplemental information
requests in connection therewith in order to obtain the requisite approval
from the appropriate authorities on or prior to the Closing Date, and shall
make all filings with the competent authorities required for approval of a
foreign investment.
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ARTICLE 4
CONDITIONS
4.1 Conditions to Obligations of Buyer. The obligations of Buyer
to complete the purchase or cause the completion of the purchase of the
Shares, the Plants and the Aggregate Closing Date Intragroup Indebtedness on
the Closing Date are subject to the following conditions:
[4.1.1 reserved]
[4.1.2 reserved]
4.1.3 Required Consents. The material regulatory and contractual
consents, which the parties by mutual agreement deem necessary for purposes
of the continuity of operations of the U.K. Plant and the German Plant, as
set forth at Schedule 4.1.3 hereto ("Required Consents") shall have been
obtained.
4.2 Conditions to Obligations of Seller. The obligations of
Seller to complete or procure the completion of the sale of the Shares, the
Plants and the Aggregate Closing Date Intragroup Indebtedness on the Closing
Date are subject to the following conditions:
[4.2.1 reserved]
[4.2.2 reserved]
[4.2.3 reserved]
4.2.4 No Material Adverse Change. There shall have been no
Material Adverse Change since the date hereof (except that Seller shall not
be entitled to invoke this condition to the extent (a) it shall willfully and
wrongfully have caused such Material Adverse Change or (b) Buyer shall have
waived any right to indemnification with respect thereto).
4.3 Mutual Conditions.
4.3.1 Governmental Consents. All required Governmental Consents
shall have been obtained.
4.3.2 Related Agreements. The parties hereto shall have executed
the Related Agreements attached hereto as Exhibits I through V.
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ARTICLE 5
CLOSING
5.1 Closing. The closing hereunder ("Closing") shall take place at
the offices of Xxxxx, Day, Xxxxxx & Xxxxx, 000 xxxxxx Xxxxxx, Xxxxxxxx 0000,
Xxxxxxx, on July 23, 1998, or at such other place and at such other time and
date as may be mutually agreed upon in writing by Buyer and Seller ("Closing
Date").
5.2 Deliveries. At the Closing:
5.2.1 Seller's Deliveries. Seller shall deliver, or shall cause
to be delivered, to Buyer the following:
(a) Duly signed and completed share transfer forms in favor of
Buyer or its designee(s) for all of the French Shares and the share
certificates representing the Turkish Shares duly signed and endorsed in
favor of the Buyer or its nominee.
(b) The share transfer registers and the stockholder registers of
CMB France and the sharebook of CMB Turkey.
(c) The minutes of all meetings of shareholders and directors of
CMB France, CMB U.K., CMB Turkey, CMB Germany and SPC with respect to any
required corporate authorization for the transaction contemplated hereby.
(d) A letter of resignation signed by each of the directors of CMB
France and CMB Turkey.
(e) The notice calling a meeting of the Board of Directors of CMB
France on July 27, 1998, to inter alia: (A) acknowledge the resignation of
their directors, (B) appoint new directors, whose names shall be communicated
by Buyer to Seller, and (C) transfer the registered head office of CMB
France.
(f) Corporate approvals of CMB Germany and CMB U.K. approving the
sale of the German Plant and the U.K. Plant, respectively.
(g) [reserved]
(h) Certificate of a duly authorized officer of Seller attesting
that (i) all persons listed in Schedule S.2.1(h) duly authorized to perform
banking transactions for the account of CMB France or CMB Turkey at banks or
financial institutions in which CMB France or CMB Turkey has an account are
no longer authorized to perform such transactions, and (ii) all powers of
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attorney granted to persons listed in Schedule 5.2.1(h) empowering them to
act on behalf of CMB France or CMB Turkey have been revoked.
5.2.2 Buyer's Deliveries. Buyer shall deliver, or shall cause to
be delivered, to Seller the following:
(a) The payment of the Unadjusted Purchase Price by bank wire
transfer in immediately available funds or certified or bank check as set
forth at Section 1.2 hereof, to the account previously designated by Seller
to Buyer.
(b) The payment by bank wire transfer in immediately available
funds of the estimated amount of the Aggregate Closing Date Intragroup
Indebtedness as set forth in Section 1.2.1.
(c) [reserved]
5.2.3 Mutual Deliveries. Buyer and Seller shall deliver, or shall
cause to be delivered, to the other party the following:
(a) Executed counterparts of each of the Related Agreements.
(b) Copy of the approval of the transaction contemplated hereby by
the appropriate authorities.
(c) Duly executed powers of attorney or other evidence of
authority authorizing the signatory to execute all documents contemplated
hereby.
(d) Acte de Cession de Creance evidencing the transfer of
repayment obligations of the respective debtors for their portion of
Aggregate Closing Date Intragroup Indebtedness executed by the Seller and by
Buyer's designee(s).
ARTICLE 6
TERMINATION
6.1 Termination. This Agreement may only be terminated (a) by
mutual written consent of the parties hereto; (b) by Buyer, if any of the
conditions provided for in Sections 4.1 or 4.3 of this Agreement has not been
met by July 31, 1998 and has not been waived by Buyer by such date; or (c) by
Seller, if any of the conditions provided for in Sections 4.2 or 4.3 of this
Agreement has not been met by July 31, 1998 and has not been waived by Seller
by such date; in each such case, and save as otherwise provided at Section
6.2(c) below, such termination shall be without liability or indemnity.
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6.2 Consequences. If this Agreement is terminated and the
transactions contemplated hereby are abandoned as described in this Article
6:
(a) this Agreement shall become void and of no further force or
effect, except for the provisions of (i) Section 9.5 relating to certain
expenses, (ii) Section 3.3.3 relating to publicity, (iii) Sections 2.1.15 and
2.2.2 relating to broker's fees and (iv) this Section 6.2;
(b) all confidential information provided by either party to the
other shall be returned to such first party or, upon such first party's
instruction, destroyed; and
(c) neither party shall be liable to the other party, save for
willful and wrongful breach of covenant.
ARTICLE 7
INDEMNIFICATION
7.1 Indemnification by Seller Group. Subject to the terms and
conditions of this Agreement (and, with respect to Environmental
Indemnifiable Losses subject to Article 8 hereof), Seller Group (as defined
in Section 7.8) agrees to indemnify and hold Buyer Group (as defined in
Section 7.8) harmless from and against any liabilities, damages, losses or
costs resulting from any and all liabilities, obligations, damages
(excluding, however, incidental or consequential damages) (i.e. only dommage
direct), deficiencies, losses, claims, actions, lawsuits, proceedings,
judgments, demands, costs (including costs of posting bank guarantees and
securities) and penalties (including reasonable attorneys' fees)
("Indemnifiable Losses") suffered or incurred by Buyer Group and resulting
from (i) any breach of representation or warranty of Seller Group contained
in this Agreement (except to the extent waived in writing by Buyer Group
pursuant to this Agreement) or (ii) any breach of covenant on the part of
Seller Group whether or not a mutual covenant contained in this Agreement, it
being understood that Seller Group shall not be liable for any Indemnifiable
Loss resulting from a change in law after Closing, and that Buyer Group
waives any other remedy than those provided by this Article 7 and Article 8,
which shall constitute Buyer Group's exclusive remedy in respect of any
Indemnifiable Losses.
7.2 Indemnification by Buyer Group. Subject to the terms and
conditions of this Agreement (and, with respect to Environmental
Indemnifiable Losses, subject to Article 8 hereof), Buyer Group agrees to
indemnify and hold Seller Group harmless from and against any and all
Indemnifiable Losses suffered or incurred by Seller Group resulting from (i)
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any breach of representation or warranty of Buyer Group contained in this
Agreement (except to the extent waived in writing by Seller Group pursuant to
this Agreement), or (ii) any breach of covenant on the part of Buyer Group
contained in this Agreement whether or not a mutual covenant, it being
understood that Buyer Group shall not be liable for any Indemnifiable Loss
resulting from a change in the law after Closing and that Seller Group waives
any other remedy other than those provided by this Article 7 and Article 8,
which shall constitute Seller Group's exclusive remedy in respect of any
Indemnifiable Losses.
7.3 When Payable. (a) Indemnification under this Article 7 shall
be payable with respect to any claim concerning an Indemnifiable Loss upon
the later of (a) the date any payment is required to be made in respect of
any Third Party Claim (as defined in Article 7.5 hereof), (b) the resolution
of such claim by mutual agreement between Seller Group and Buyer Group, or
(c) the final settlement of such claim by the arbitration award as provided
pursuant to Section 9.4.
(b) Notwithstanding paragraph (a) above, with respect to Third
Party Claims, if the Indemnifying Party shall have acknowledged its
obligation to indemnify the Indemnified Party and shall have assumed the
defense of such Third Party Claim pursuant to Section 7.5(b) below, then the
Indemnifying Party shall be obligated to make all payments and post all such
bonds, guarantees and securities as may be required by administrative
authorities, courts or tribunals having jurisdiction.
7.4 Limitations on Indemnification. (a) Neither the
indemnification obligations of Seller Group under Section 7.1 above (save as
regards indemnification obligations of Seller Group for any Environmental
Indemnifiable Losses as to which Section 8.7 shall apply) nor the
indemnification obligations of Buyer Group under Section 7.2 (save as regards
indemnification obligations of Buyer Group for any Environmental
Indemnifiable Loss as to which Section 8.2 shall apply) shall exceed in the
aggregate three million two hundred thousand U.S. Dollars (US$3,200,000).
Notwithstanding the foregoing, any Indemnifiable Loss for: (i) breach of
representations and warranties under Section 2.1.19; (ii) Indemnifiable
Liabilities for Discontinued Operations; (iii) Non-Operational Indemnifiable
Liabilities for Continued Operation (as such terms are defined in Section
9.11); and (iv) Disclosed Indemnifiable Losses (as identified in Schedule
7.4(b) hereto) shall not be subject to the limitation set forth above.
(b) (i) No claim in respect of any individual event or occurrence
(it being understood that any series of events or occurrences arising out of
the same or substantially similar and related facts and circumstances shall
be treated as one individual event or occurrence) shall be deemed to give
rise to an Indemnifiable Loss (other than an Environmental Indemnifiable
Loss, as to which Section 8.7 shall apply) unless and until the liability,
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loss or damage claimed exceeds ten thousand U.S. Dollars (US$10,000),
(subject to clause (ii) below); and (ii) no party shall be entitled to make a
claim hereunder unless and until the aggregate amount of claims for
Indemnifiable Losses (other than an Environmental Indemnifiable Loss, as to
which Section 8.7 shall apply) under clause (i) above exceeds the equivalent
of two hundred thousand U.S. Dollars (US$200,000) and then only to the extent
of the excess. Notwithstanding the foregoing, Seller Group shall indemnify
and hold harmless Buyer Group on a dollar for dollar basis from and against
Disclosed Indemnifiable Losses (as identified in Schedule 7.4(b) hereto).
(c) Subject to paragraph (b) above, with respect to Non-
Operational Indemnifiable Liabilities for Continued Operations, Seller Group
shall indemnify and hold harmless Buyer Group for Indemnifiable Losses, up to
an aggregate amount of Indemnifiable Losses of five hundred thousand U.S.
Dollars (US$500,000). To the extent such Indemnifiable Losses exceed in the
aggregate five hundred thousand U.S. Dollars (US$500,000) but do not exceed
in the aggregate three million U.S. Dollars (US$3,000,000), Seller Group
shall indemnify and hold harmless Buyer Group for fifty percent of such
tranche of Indemnifiable Losses. To the extent such Indemnifiable Losses
exceed three million U.S. Dollars (US$3,000,000) in the aggregate, Seller
Group shall indemnify and hold harmless Buyer Group for one hundred percent
of such tranche of Indemnifiable Losses.
(d) Notwithstanding paragraphs (a) through (c) above, each party
shall indemnify and hold harmless the other party on a dollar for dollar
basis from and against Indemnifiable Losses arising out of any breach of
covenant.
7.5 Procedures Relating to Indemnification of Third Party Claims.
(a) In order for a party ("Indemnified Party") to be entitled to
any indemnification of any Indemnified Loss provided for under this Agreement
(including claims for Environmental Indemnifiable Losses) in respect of,
arising out of or involving a claim or demand made by any third party against
the Indemnified Party ("Third Party Claim"), such Indemnified Party must
notify the other party ("Indemnifying Party") in writing, and in reasonable
detail, of the Third Party Claim within thirty (30) business days after
receipt by such Indemnified Party of written notice of the Third Party Claim
provided that for the purpose of this Agreement, any tax reassessment notice
shall be considered as a Third Party Claim and any Third Party Claim relating
to tax shall be notified to the Indemnifying Party within ten (10) business
days of their receipt by the Indemnified Party. Thereafter, the Indemnified
Party shall deliver to the Indemnifying Party, within ten (10) business days
after the Indemnified Party's receipt thereof, copies of all notices and
documents (including court papers) received by the Indemnified Party from the
Third Party relating to the Third Party Claim, provided, however, that the
Indemnified Party's non-compliance with such notice periods shall not
-44-
preclude its right to indemnification if the interests of the Indemnifying
Party shall not have been prejudiced or adversely affected. If the
Indemnifying Party shall have suffered such prejudice or adverse effect, the
Indemnified Party may nevertheless claim partial indemnification if it
sustains the burden of proof that a portion of the Indemnifiable Loss was not
attributable to such non-compliance with notice periods.
(b) If a Third Party Claim is made against an Indemnified Party,
the Indemnifying Party shall be entitled to participate in the defense
thereof and, if it so chooses and acknowledges its obligation to indemnify
the Indemnified Party therefor, to assume the defense thereof with counsel
selected by the Indemnifying Party at its own expense; provided, however,
that such counsel is not reasonably objected to by the Indemnified Party.
Should the Indemnifying Party so elect to assume the defense of a Third Party
Claim, (x) the Indemnifying Party shall not be liable to the Indemnified
Party for legal expenses subsequently incurred by the Indemnified Party in
connection with the defense thereof and (y) the limitations on
indemnification set forth at Section 7.4(a) above shall not apply and the cap
set forth in Section 8.7 shall not apply (but the percentages set forth in
Schedule 8.7 shall continue to apply up to the cap amount). If the
Indemnifying Party assumes such defense, the Indemnified Party shall have the
right to participate in the defense thereof and to employ counsel, at its own
expense, separate from the counsel employed by the Indemnifying Party, it
being understood that the Indemnifying Party shall be liable for the fees and
expenses of counsel employed by the Indemnified Party for any period during
which the Indemnifying Party has failed to assume the defense thereof (other
than during the period prior to the time the Indemnified Party shall have
given notice of the Third Party Claim as provided above).
(c) If the Indemnifying Party so elects to assume the defense of
any Third Party Claim, all of the Indemnified Parties shall cooperate with
the Indemnifying Party in the defense or prosecution thereof. Such
cooperation shall include (upon the Indemnifying Party's request) the
retention and the provision to the Indemnifying Party of records and
information to the extent practicable which are reasonably relevant to such
Third Party Claim, and making employees available on a mutually convenient
basis to provide additional information and explanation of any material
provided hereunder. If the Indemnifying Party shall have assumed the defense
of a Third Party Claim, the Indemnified Party shall not admit any liability
with respect to, or settle, compromise or discharge, such Third Party Claim
without the Indemnifying Party's prior written consent (which consent shall
not be unreasonably withheld). If the Indemnifying Party shall have assumed
the defense of a Third Party Claim, the Indemnified Party shall agree to any
settlement, compromise or discharge of a Third Party Claim which the
Indemnifying Party may recommend and which by its terms obligates the
Indemnifying Party to pay the full amount of the liability in connection with
such Third Party Claim, which releases the Indemnified Parties completely in
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connection with such Third Party Claim and which would not otherwise
adversely affect the Indemnified Parties.
(d) If the Indemnifying Party does not elect to assume the defense
of the Third Party Claim, the Indemnified Party shall have the conduct of the
Third Party Claim and shall be entitled to settle such claim at such time and
upon such terms as the Indemnified Party deems fair and reasonable without
prejudice to any right of indemnification it may have against the
Indemnifying Party, provided that at least ten (10) business days before such
settlement becomes effective, the Indemnified Party notifies (the
"Notification") the Indemnifying Party of the amount of the proposed
settlement (the "Proposed Settlement Amount"). Within the ten (10) business
days following the sending of the Notification, the Indemnifying Party may
deliver to the Indemnified Party (a) a notice disputing the Proposed
Settlement Amount (a "Disapproval Notice") or (b) a notice approving the
Proposed Settlement Amount (an "Approval Notice"). If no notice is received
by the Indemnified Party within ten business days following the sending by it
of the Notification, the Indemnifying Party shall be deemed to have delivered
an Approval Notice. Delivery by the Indemnifying Party of an Approval Notice
shall constitute an admission by the Indemnifying Party of an obligation by
it to indemnify the Indemnified Party subject to the limitations set forth in
Section 7.4. If the Indemnified Party delivers a Disapproval Notice, it
shall immediately assume the defense of the Third Party Claim and in which
case the provisions of (b) and (c) above will apply.
(e) If the Indemnifying Party has not assumed defense of a Third
Party Claim and the liability of the Indemnified Party (or of CMB France,
U.K. Plant, CMB Turkey or the German Plant) in respect of such Third Party
Claim is determined by a judgment of a Court or Tribunal (which is not
final), the provisions of paragraph (d) above shall apply except that the
Indemnified Party shall inform the Indemnifying Party within ten (10)
business days of notification of the said judgment and the Proposed
Settlement Amount shall mean the amount determined in the said judgment. In
this event, the provisions of (d) shall also apply mutatis mutandis.
7.6 Survival of Indemnification. (a) The right of each of Seller
Group or Buyer Group to make a claim for a breach of the other party's
representations or warranties under this Agreement, shall survive the Closing
Date for a period expiring on July 31, 2000, provided
(i) claims for indemnification pursuant to representations relating to
Transferred Employees shall survive for a period of five (5) years after the
Closing Date; (ii) claims for breach of Section 2.1.3, Section 2.1.9(b)
(other than the representation as to quiet enjoyment, which shall be subject
to the general survival period stipulated above this proviso) and/or Section
2.1.19 shall survive for a period of three (3) months after the expiry of the
applicable statute of limitations; (iii) claims for Environmental
Indemnifiable Losses shall be governed by Section 8.8 hereof; (iv) claims for
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indemnification in respect of Indemnifiable Liabilities for Discontinued
Operations and Non-Operational Indemnifiable Liabilities for Continued
Operations shall survive for a period of seven (7) years after the Closing
Date and (v) Disclosed Indemnifiable Losses shall not be subject to any
survival limitation. Subject to Section 7.5 above as regards procedures for
Third Party Claims, in order for a party to claim indemnification hereunder,
it must notify the other party in writing, and in reasonable detail, of the
nature of the claim within thirty (30) business days of the date such first
party shall have actual knowledge of the facts or circumstances giving rise
to the claim, provided, however, that the Indemnified Party's noncompliance
with such notice periods shall not preclude its right to indemnification if
the interests of the Indemnifying Party shall not have been prejudiced or
adversely affected. If the Indemnifying Party shall have suffered such
prejudice or adverse effect, the Indemnified Party may nevertheless claim
partial indemnification if it sustains the burden of proof that a portion of
the Indemnifiable Loss was not attributable to such non-compliance with
notice periods.
(b) Any claim made in accordance with (a) above, shall survive the
expiry of the applicable statute of limitations period until final settlement
of such claim.
(c) The covenants of the parties contained in this Agreement shall
survive indefinitely, save to the extent a specific time period is identified
in the relevant covenant.
7.7 Miscellaneous Provisions. (a) The amount of any indemnity
payable hereunder on account of an Indemnifiable Loss shall be reduced by any
insurance proceeds actually received by the Indemnified Party with respect
thereto, and further reduced by the value of any net tax benefit or tax
savings realized by the Indemnified Party as a result of or related to the
foregoing (including without limitation a tax deduction or loss, basis
adjustment and/or shifting of income, deductions, gains, loss and/or
credits), and increased by any tax incurred by the Indemnified Party as a
result of or related to the foregoing so that the net amount retained by the
Indemnified Party after tax corresponds to the amount of the Indemnifiable
Loss (including without limitation any tax related to the inclusion, if
required by law, in gross income of insurance proceeds or a payment pursuant
hereto).
(b) The increase in tax incurred by the Indemnified Party shall be
determined by computing the tax with such increase and without such increase.
The reduction of the tax losses of the Indemnified Party should be treated as
an increase in tax for the purposes of this paragraph.
(c) The amount of any indemnity payable hereunder on account of
any Indemnifiable Loss shall be increased by interest calculated thereon as
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provided for in Section 1.2.2 in cash for the period which runs from the date
on which any Indemnifiable Loss was actually incurred by the Indemnified
Party to the date on which the indemnity is actually paid.
(d) Any indemnity payment by Seller Group to Buyer Group on
account of an Indemnifiable Loss shall be understood to constitute damages
and not a reduction in purchase price (except that such payments under the
U.K. Asset Purchase Agreement shall be deemed a reduction in purchase price).
Such payment by Seller Group shall be made to the Buyer Group or directly to
any other entity designated by the Buyer Group or in respect of a Third Party
Claim upon Buyer Group's request, directly to the third party claimant
concerned.
(e) None of CMB France or CMB Turkey shall be entitled to seek
reimbursement or compensation from Seller Group or any of Seller Group's
affiliates for tax losses incurred by any of them and transferred to a
consolidated tax group during those tax periods in which they were included
in such consolidated tax group.
7.8 Seller Group and Buyer Group. "Seller Group" shall include
the Seller, CMB Germany and CMB U.K. represented by Seller duly authorized.
"Buyer Group" shall include Buyer, Xxxxxx Packaging Europe S.A.S., Xxxxxx
Packaging Deutschland GmbH and Xxxxxx Packaging U.K. Limited represented by
Buyer duly authorized. For the purposes of indemnification, actions for
breach of representations and warranties contained in Article 2 hereof and
brought under this Article 7 or Article 8 hereunder, or for breach of any
covenant herein, it is understood and agreed between parties that the
respective Indemnifying Party and Indemnified Party shall be the member of
the Buyer Group and Seller Group, or Seller Group and Buyer Group, as the
case may be, with respect to which the Indemnifiable Loss is suffered and the
parties shall covenant to cause their respective affiliates to make or
receive indemnity payments accordingly. Any representations, warranties and
indemnities contained in the U.K. Asset Purchase Agreement and the German
Asset Purchase Agreement shall be deemed comprised within and subject to this
Article 7 and Article 8 hereunder, shall not modify or increase the Buyer
Group's or the Seller Group's aggregate obligations hereunder for breach of
representation or warranty and shall in no event give rise to a double-
recovery. Seller and Buyer each hereby covenant to cause the members of their
respective groups to fulfill the obligations contained on this Article 7 and
Article 8 hereunder and in the respective local asset purchase agreements,
and each of them hereby irrevocably and unconditionally guarantees such
fulfillment by them.
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ARTICLE 8
ENVIRONMENTAL INDEMNIFICATION
8.1 Environmental Indemnification by Seller Group. (a) Seller
Group agrees to indemnify and hold harmless Buyer Group from and against any
and all Environmental Indemnifiable Losses (as defined at Section 8.3 below)
suffered or incurred by Buyer Group resulting from (a) any breach of
representation or warranty of Seller Group, and (b) any Remedial Action (as
defined at Section 8.3 below) that is required to be taken on account of a
Third Party Claim for which responsibility is to be borne by Seller Group in
accordance with Section 8.4, it being understood that (i) Seller Group shall
not be liable for any Environmental Indemnifiable Loss resulting from a
change in Environmental Laws after Closing and that (ii) Buyer Group waives
any other remedy than those provided by this Article 8, which shall
constitute Buyer Group's exclusive remedy in respect of any Environmental
Indemnifiable Losses.
(b) Seller Group's liability for Environmental Indemnifiable
Losses with respect to or arising out of these items identified at Schedule
3.3.2 shall be as defined in Section 3.3.2 and such Section 3.2.2 shall
constitute Buyer Group's exclusive remedy in respect such items.
(c) Buyer Group and Seller Group hereby agree and acknowledge that
the Seller Group shall not be liable for any (i) environmental condition for
such time period during the survival period set forth at Section 8.8 below as
which such condition has not yet given rise to an action by any Environmental
Authorities or Third Party Claim, and that does not pose an immediate
significant hazard to human health or the environment, (ii) any unknown
environmental liability to the extent discovered through Non-Permitted
Testing (as defined below), or (ii) any response or corrective action which
is required or arises as a result of any decision to vacate, sell, convey,
shut down, reduce or cease operations at or modify any site after Closing, to
the extent such response or corrective action exceeds that which would have
been required had the site continued its existing industrial operations as
currently conducted. "Non-Permitted Testing" means any and all environmental
sampling, testing or analysis of the ambient air, soils, groundwater, surface
waters, interior of the building or any building component that is directly,
or indirectly, voluntarily initiated by Buyer Group or their affiliates that
is not required to respond to a manifest or patent environmental condition,
it being understood that any sampling, testing or analysis required under any
Environmental Law shall not constitute a Non-Permitted Testing.
(d) Notwithstanding the limitations set out in Section 8.7, Seller
Group agrees to indemnify and hold harmless Buyer Group against any breach of
Environmental Laws disclosed under Schedule 2.1.17(a) in relation to the
Asnieres Facility and agrees to bear without limitation all costs,
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consequences and liabilities arising therefrom including but not limited to
any Remedial Actions which may be required by Environmental Authorities upon
termination of activities on the Asnieres Facility; provided that operations
of CMB France at the Asnieres Facility shall have been wound up on or before
June 30, 1999, failing which the limitations set forth in Section 8.7 shall
apply.
8.2 Environmental Indemnification by Buyer Group. Buyer Group
agrees to indemnify and hold Seller Group harmless from and against any and
all Environmental Indemnifiable Losses suffered or incurred by Seller Group
resulting from any Remedial Action that is required to be taken on account of
a Third Party Claim for which responsibility is to be borne by Buyer Group in
accordance with Section 8.4, it being understood that Seller Group waives any
other remedy than those provided by this Article 8, which shall constitute
Seller Group's exclusive remedy in respect of any Environmental Indemnifiable
Losses.
8.3 Environmental Indemnifiable Losses. "Environmental
Indemnifiable Losses" shall mean and be deemed to include Indemnifiable
Losses required to be taken on account of Third Party Claims arising from any
breach of any of the representations and warranties set forth at Section
2.1.17 and more generally arising from any harm or damage to the environment,
including the atmosphere, ground soil, subsoil and surface and subsoil
waterbodies and any Remedial Action required under relevant Environmental Law
in connection herewith. "Remedial Action" shall mean the removal,
investigation, cure, containment, neutralization, or remediation of any
Release in each case as required by the relevant Environmental Laws or in
order to respond to a significant hazard to human health or the environment.
8.4 Responsibility for Remedial Action. (a) Seller Group shall
bear responsibility for any Remedial Action to the extent the Release(s)
giving rise to the requirement of Remedial Action relate solely to the
operation of the Sites (as defined at Section 8.4 (b)) prior to the Closing.
Buyer Group shall bear responsibility for Remedial Action pursuant to Section
8.2 to the extent the Release(s) giving rise to the requirement of Remedial
Action relate solely to the operation of the Sites after the Closing Date. To
the extent the Release(s) giving rise to the requirement of Remedial Action
relate to the operation of the Sites both prior to and after the Closing
Date, responsibility for such Remedial Action shall be allocated between
Seller Group and Buyer Group, Seller Group bearing responsibility for
Remedial Action with respect to that portion of Release(s) originating prior
to the Closing Date even though manifestations thereof occurred after the
Closing Date and Buyer Group bearing responsibility for Remedial Action with
respect to that portion of Release(s) originating subsequent to such date.
Any dispute regarding die allocation of responsibility under this Section 8.4
that cannot be resolved by good faith negotiation among the parties shall be
submitted to such independent environmental consulting group as may be
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mutually agreed between Buyer and Seller. Such consulting group shall make a
determination as to the appropriate allocation of responsibility for Remedial
Action, based upon its evaluation of the respective responsibilities of the
parties as regards the relevant Releases that are subject of the Remedial
Action. The fees and expenses of such consulting group shall be shared
equally by the parties. Any dispute regarding the choice of the environmental
consulting group shall be resolved according to the procedure set forth at
Section 9.4 below. The parties hereto agree that for the purposes of this
Agreement the appropriate remediation standard shall be the most cost
effective method to achieve the least stringent cleanup or remediation
imposed by the relevant Environmental Law.
(b) For the duration of Seller Group's indemnification obligation
hereunder, Buyer Group shall inform Seller Group of the results of all
measurements and sampling of Contaminants on the sites of Xxxxx, Noeux and
Asnieres in France, Wrexham in the United Kingdom, Bad Bevensen in Germany
and Istanbul in Turkey (the "Sites") as may be undertaken by Buyer Group,
pursuant to 8.4(a) above, but Buyer Group shall not undertake any action with
relevant Environmental Authorities that may give rise to an enquiry,
proceeding or claim with respect to Remedial Action or a potential
Environmental Indemnifiable Loss unless Buyer has previously informed Seller
in writing and consulted with Seller in such regard (except that Buyer shall
not be prohibited from taking such urgent actions as may be required to
comply with Environmental Laws or prevent an imminent hazard to human health
or the environment). Buyer shall inform Seller of any Release on the Sites
from and after the Closing Date, and any material changes in the use of raw
materials and/or industrial procedures or processes to the extent such
changes may be relevant to any required allocation of responsibility pursuant
to paragraph (a) above.
8.5 Procedures with respect to Remedial Actions. (a) Subject to
the terms and conditions of Section 7.5 of the Agreement, if a Third Party
Claim is made against an Indemnified Party with respect to an Environmental
Indemnifiable Loss or Remedial Action for which responsibility is to be borne
wholly or partially by the Indemnifying Party, the Indemnifying Party shall
be entitled to participate in discussions and negotiations conducted between
the Indemnified Party and the relevant third party or Environmental Authority
as regards the Third Party Claim and in particular as regards any proposed
Remedial Action. To this effect, the Indemnified Party shall promptly inform
the Indemnifying Party of any pending or threatened claim or enforcement
action, and notify in advance and afford the Indemnifying Party the
opportunity to participate in any proposed meeting or discussion with such
third party or Environmental Authority. The Indemnified Party shall also
provide to the Indemnifying Party all relevant information and documents
received from such third party or Environmental Authority as required by this
Agreement. In instances where the Indemnifying Party is the Seller, the
Indemnifying Party shall have the right to visit the Real Property of the
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Sites concerned and the premises concerned and to conduct or cause to be
conducted (at its own expense) an environmental inspection of the Real
Property of the Sites concerned.
(b) Before initiating any Remedial Action, the Indemnified Party
shall agree with the Indemnifying Party as regards the scope, nature,
methodology and cost of such Remedial Action in accordance with Environmental
Laws. To this effect, the Indemnified Party and the Indemnifying Party shall
mutually prepare a written document describing in detail the timing, scope,
nature, methodology and cost of Remedial Actions to be taken regarding the
Third Party Claim ("Claim"). The Plan shall also include the name of the
entity in charge of the conduct of the Remedial Actions. Any amendment to the
Plan shall be made through the written consent of both parties. The
Indemnifying Party shall not be liable to indemnify the Indemnified Party for
any and all Remedial Actions made outside the scope of the Plan. In case of
dispute regarding the Plan, the parties shall cause an independent
environmental consulting firm mutually agreeable to them, to conduct an
environmental inspection in order to set forth the nature, timing, scope,
methodology and cost of the Remedial Action. The Indemnifying Party shall be
entitled to monitor or cause an independent consultant of its choice to
monitor the conduct of the Remedial Actions until full completion. Any
dispute regarding the choice of the environmental consulting group shall be
resolved according to the procedure set forth at Section 9.4 below.
8.6 Access. Seller shall be entitled to visit the Real Property
and the premises concerned, at least four times a year at dates mutually
agreed with Buyer, during the period of survival of indemnification defined
at Section 8.7 below.
8.7 Limitations on Environmental Indemnification. (a) Except as
provided in Section 8.1(b),with respect to the Sites, Seller Group shall
indemnify and hold harmless Buyer Group for Environmental Indemnifiable
Losses in accordance with the percentages set forth in Schedule 8.7 hereto
(it being understood that any series of events or occurrences arising out of
the same or substantially similar events or occurrences shall be treated as
one individual event or occurrence) and up to and including an aggregate
amount of claims for Environmental Indemnifiable Losses of twelve million
U.S. Dollars (US$12,000,000).
8.8 Survival of Indemnification. The right of any party to make a
claim for Environmental Indemnifiable Losses shall survive the Closing Date
for a period of five (5) years, provided however that any representations and
warranties with respect to which a claim for breach has been notified by
Buyer within such five-year period shall survive the expiry of such period
until final settlement of such claim.
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ARTICLE 9
MISCELLANEOUS
9.1 Notices. Any notices or other communications required
or permitted hereunder shall be sufficiently given if in writing and
personally delivered or sent by registered or certified mail, return receipt
requested, postage prepaid, or if sent by facsimile transmission with
confirmation of receipt addressed as follows or to such other address as the
parties shall have given notice of pursuant hereto:
Buyer: Xxxxxx Packaging Company
0000 Xxxx Xxxxxxxx Xxxxxx, Xxxx, XX 00000, XXX
Attn: Xxxxxx X. Xxxxx
Telecopy: (0) 000-000-0000
With copy to: Xxxxxxxx Chance
000 xxxxxx Xxxxxx
00000 Xxxxx
Attn: Xxxx Xxxxxx
Telecopy: (00-0) 00-00-00-00
Seller: CarnaudMetalbox S.A.
00 xxx Xxxxx
00000 Xxxxx Xxxx
Attn: General Counsel
Telecopy: (00-0) 00-00-00-00
With copy to: Xxxxx, Day, Xxxxxx & Xxxxx
000, xxx xx Xxxxxxxx Xxxxx Xxxxxx
00000 Xxxxx
Attn: Xxxxxx X. Xxxxxxx, Xx. I i
Telecopy: (00-0) 00-00-00-00
9.2 Entire Agreement; Hierarchy of Agreements. (a) This
Agreement and the Schedules and the Exhibits hereto represent the entire
understanding and agreement of the parties and supersede all prior
agreements, understandings or arrangements among the parties hereto with
respect to the subject matter hereof and can be amended, supplemented or
changed, and any provision hereof can be waived, only by written instrument
making specific reference to this Agreement signed by the party against whom
enforcement of such amendment, supplement, modification or waiver is sought.
Buyer acknowledges that Seller has made no representation or warranty to
Buyer, and that Buyer has relied on no representation or warranty, other than
those specifically set forth herein.
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(b) In the event of any conflict or discrepancy between this
Agreement and the terms of any of the other agreements the forms of which are
set forth as Exhibits hereto, the terms of this Agreement shall prevail.
9.3 Section Headings. The section headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
9.4 Applicable Law/Disputes. This Agreement shall be governed by
and construed and enforced in accordance with the laws of France. All
disputes arising in connection with this Agreement shall be exclusively and
finally settled by arbitration as defined by the terms of an Arbitration
Agreement entered into on the date hereof to which the parties agree to be
bound. Save as regards the German Real Property, with respect to which the
jurisdiction of the competent German court shall apply, the parties shall
cause their respective German affiliates to subject any disputes to the
arbitration proceeding described in the Arbitration Agreement, to adhere to
the clause compromissoire set forth therein, and to refrain from taking any
action before the German courts.
9.5 Expenses. Whether or not the transactions contemplated hereby
are consummated, the parties hereto shall pay their own respective expenses
provided that all transfer taxes in connection with the purchase of the
Shares, the German Plant, the U.K. Plant and all notarial costs and expenses
in connection with the transactions contemplated by this Agreement be
allocated as set forth in Schedule 9.5 promptly after the date hereof (and
with respect to U.K. stamp duty to be borne by Seller, not later from ten
(10) days hereafter).
9.6 Waiver. Any party may, by written notice to another party:
(a) extend the time for the performance of any of the obligations or other
actions of such other party; (b) waive any inaccuracies in the
representations of such other party contained in this Agreement; or (c) waive
compliance with any of the agreements of such other party contained in this
Agreement or waive or consent to the modification of performance of any of
the obligations of such other party. Except as specifically provided in
Section 3.1.3, no other action taken pursuant to this Agreement, including
without limitation, any investigation by or on behalf of any party, shall be
deemed to constitute a waiver by the party taking such action of compliance
with any representation, warranty, condition, or agreement contained herein,
except if provided otherwise in writing by the parties.
9.7 Severability. If at any time subsequent to the date hereof,
any provisions of this Agreement shall be held by any court of competent
jurisdiction to be illegal, void or unenforceable, such provision shall be of
no force and effect, but if feasible the illegality or unenforceability of
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such provision shall have no effect upon and shall not impair the
enforceability of any other provision of this Agreement.
9.8 Incorporation by Reference; Disclosure Schedules. The
Schedules and Exhibits to this Agreement constitute integral parts of this
Agreement and are hereby incorporated into this Agreement by this reference.
A disclosure in a given Schedule (but not any documentary attachment) shall
be deemed a disclosure for the purposes of each other representation,
warranty and Schedule to which it may relate provided that the disclosure so
made in such Schedule is reasonably and substantially apparent. The Seller
agrees that no additional attachments to the Schedules disclosed after close
of business on Wednesday 22 July, 1998 with respect to the U.K. Plant shall
form part of the attachments to the Schedules except for Schedules 0.1,
1.2.1(b) and 1.2.1(c).
9.9 Counterparts. This Agreement shall be executed in two
counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.
9.10 Assignment. The rights and obligations under this Agreement
may not be assigned or delegated by any party hereto, in whole or in part, to
any third party without the prior written consent of the other party hereto;
provided however, that prior to the Closing Date, Buyer may assign its rights
and obligations hereunder to a wholly owned subsidiary if Buyer, as a
condition to such assignment, irrevocably and unconditionally guarantees the
full performance of the obligations of such assignee; provided further, that
any merger, consolidation, spin-off, liquidation or other corporate
reorganization with respect to CMB France, CMB Turkey or the Plants shall not
extinguish or limit Seller's obligations under the representations,
warranties, covenants and indemnities to the successors-in-interest of such
corporate reorganization provided that such successors-in-interest are, or
are wholly-owned and controlled by, affiliates of Buyer which are affiliates
as of the date hereof. It is further understood and agreed that CMB France
and CMB Turkey shall be third party beneficiaries (stipulation pour autrui)
of the representations, warranties and indemnities of Seller hereunder to the
extent any breach thereof constituted Indemnifiable Loss suffered by CMB
France or CMB Turkey.
9.11 Certain Definitions. For purposes of this Agreement, the
term:
(a) "affiliate" of any person means any other person that directly
or indirectly, through one or more intermediaries, controls, is controlled
by, or is under common control with, the first mentioned person. A person
shall be deemed to control another person if such person owns, directly or
indirectly, 50% or more of the voting rights of the second mentioned person,
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and the general partner of a partnership shall be deemed to control such
partnership;
(b) "business day" means any day other than a Saturday, Sunday or
a public bank holiday in France;
(c) "enforceability", "binding and enforceable in accordance with
its terms" or terms of similar import, where they describe an obligation of a
party to any agreement, shall be deemed in all cases to be subject to
applicable bankruptcy, fraudulent conveyance, insolvency, reorganization or
other similar laws now or hereafter in effect or by legal or equitable
principles relating to or limiting creditors' rights generally;
(d) "Executive" or "Executives" shall mean any Transferred
Employee with an annual base salary greater than US$50,000 or equivalent
thereof;
(e) "Indemnifiable Liabilities for Discontinued Operations" shall
mean any liabilities, including environmental liabilities, of CMB France or
CMB Turkey related to the operations of CMB France or CMB Turkey sold or
discontinued prior to the date hereof (including without limitation those
previously located at Nimes, Marseille and Vitrolles, France);
(f) "material" when used in the representations and warranties in
connection with CMB France, CMB U.K., CMB Turkey and/or the German Plant
shall mean material to any of the German Plant, the Xxxxx Plant, the Noeux
Plant or the U.K. Plant; "Material Adverse Change" shall mean any change in
the business of CMB France, the U.K. Plant, CMB Turkey and the German Plant
which, for the purposes hereof, shall be deemed not to comprise changes that
result from general economic or political conditions or other conditions
affecting the packaging industry generally that are materially adverse to the
financial condition or results of operations of any of the Xxxxx Plant, the
Noeux Plant, the U.K. Plant, CMB Turkey and the German Plant and that shall
not have been cured by Seller at or before the Closing Date;
(g) "Non-Operational Indemnifiable Liabilities for Continued
Operations" shall mean undisclosed contingent financial liabilities of CMB
France or CMB Turkey, that (i) constitute a breach of Section 2.1.5(c) hereof
but of no other representation or warranty hereunder; (ii) were incurred
outside of the ordinary course of their respective businesses; and (iii) were
either not authorized by board or shareholder actions or not recorded in the
books and accounting records of the respective business.
(h) "person" means an individual, corporation, partnership,
association, trust or any unincorporated organization;
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(i) "Related Agreements" means collectively the German Real
Property Deed of Conveyance, the German Asset Purchase Agreement, the U.K.
Real Property Deed of Conveyance, the U.K. Asset Purchase Agreement, the
License Agreement and the Arbitration Agreement, attached hereto in Exhibits
I through VI;
(j) "Tax" or "Taxation" used in this agreement means any taxes,
duties, rights, deductions, contributions, levies or charges, including
especially income tax withholding tax, deduction, indirect taxes, local
taxes, VAT, registration or stamp duties, custom duties imposed or collected
by any State or local authority, national or supra-national, or any other
organization and includes the interests, penalties, fines, reassessments and
other related charges;
(k) "Tax regulation" used in this agreement means tax or customs
laws as well as decrees, orders, memorandums or other texts of application or
interpretation of the said laws applicable in a given country as well as any
international treaty (including the derivative law -directives, regulations
or others -of this treaty);
(l) "to Seller's knowledge" or terms of similar import shall mean
Seller's after due inquiry of those individuals listed on Schedule 9.11(l);
9.12 Exchange rate.
(a) For purposes of establishing the Effective Date Balance Sheets
and the Closing Statements, the French franc, Turkish lira, British pound
sterling and German xxxx amounts shall be converted into U.S. Dollars at the
respective closing exchange rates applied by Seller for purposes of its
December 1997 month-end consolidated group closing. For purposes of
calculating the Post-Closing Adjustment Amount, the Base Balance Sheets shall
be restated in U.S. Dollar terms by applying such respective December 1997
month-end exchange rates to the French franc, Turkish lira, British pound
sterling and German xxxx amounts that formed the basis of the respective Base
Balance Sheets.
(b) For purposes of applying the various dollar limits to
Indemnifiable Losses and Environmental Indemnifiable Losses, claims brought
and denominated in French francs, Turkish lira, British pound sterling and
German xxxx amounts shall be converted into U.S. Dollars by applying the
respective December 1997 month-end exchange rates referred to above.
9.13 Guarantees of Buyer and Seller. (a) In consideration of the
Seller causing CMB UK to enter into the UK Asset Purchase Agreement the Buyer
hereby guarantees to the Seller on behalf of CMB U.K. the performance and
observance by Xxxxxx Packaging U.K. Limited (the "U.K. Buyer") of all its
obligations, undertakings, warranties, indemnities and covenants in
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accordance with the U.K. Asset Purchase Agreement. If and whenever the U.K.
Buyer defaults for any reason whatsoever in the performance of any obligation
or liability undertaken by it in accordance with the U.K. Asset Purchase
Agreement, the Buyer shall perform (or procure performance of) and satisfy
(or procure the satisfaction of) the obligation or liability in regard to
which such default has been made in the manner prescribed by this Agreement.
The guarantee is to be a continuing security to the Seller for all
obligations, commitments, warranties, undertakings, indemnities and covenants
on the part of the U.K. Buyer under or pursuant to the U.K. Asset Purchase
Agreement notwithstanding any settlement of account or other matter or thing
whatsoever.
(b) In consideration of Buyer causing Xxxxxx Packaging U.K.
Limited to enter into the U.K. Asset-Purchase Agreement, the Seller hereby
guarantees to the Buyer the performance and observance by CMB U.K. ("U.K.
Seller") of all its obligations, undertakings, warranties, indemnities and
covenants in accordance with the U.K. Asset Purchase Agreement. If and
whenever U.K. Seller defaults for any reason whatsoever in the performance of
any obligation or liability undertaken by it in accordance with the U.K.
Asset Purchase Agreement, the Seller shall perform (or procure performance
of) and satisfy (or procure the satisfaction of) the obligation or liability
in regard to which such default has been made in the manner prescribed by
this Agreement. The guarantee is to be a continuing security to the Buyer for
all obligations, commitments, warranties, undertakings, indemnities and
covenants on the part of the U.K. Seller under or pursuant to the U.K. Asset
Purchase Agreement notwithstanding any settlement of account or other matter
or thing whatsoever.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, as of the day and year first above written.
CarnaudMetalbox S.A.
By:_______________________
Title:_____________________
Xxxxxx Packaging Company
By:_______________________
Title:_____________________
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LIST OF EXHIBITS
Exhibit I: German Real Property Deed of Conveyance
Exhibit II: German Asset Purchase Agreement
Exhibit III: U.K. Asset Purchase Agreement (Short-form)
Exhibit IV: License Agreement
Exhibit V: Arbitration Agreement
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LIST OF SCHEDULES
Schedule 0.1: List of Plastic Products
Schedule 1.2.1(b): Reimbursed Capital Expenditures and Reimbursed
Restructuring Costs
Schedule 1.2.1(c): Allocation of the Unadjusted Purchase Price,
estimated Aggregate Closing Date Intragroup
Indebtedness and Post-Closing Adjustment
Schedule 1.2.3: Base Balance Sheets
Schedule 1.2.6(c): Hypothetical determination of Post-Closing
Adjustment Amount
Schedule 2.1.1(b): Memorandum, Articles and By-Laws of CMB France,
CMB U.K., CMB Germany and CMB Turkey
Schedule 2.1.1(c): Appointment of Directors and officers
Schedule 2.1.3: Title to Shares and Plants
Schedule 2.1.4(a): Restrictions on Title to Shares and Plants
Schedule 2.1.4(c): Governmental Approvals and Authorizations
Schedule 2.1.4(d): Event of Default
Schedule 2.1.5(b): Statutory Accounts of CMB France and CMB Turkey
Schedule 2.1.5(c): Contingent or Off-Balance Sheet Liabilities
Schedule 2.1.6: Subsidiaries
Schedule 2.1.7: Material Actions since December 31, 1997
Schedule 2.1.8(a): List of Intellectual Property Rights
Schedule 2.1.8(c): Restrictions on Intellectual Property Rights
Schedule 2.1.8(f): Intellectual Property Infringement Actions
Schedule 2.1.9(a): Description of Real Property
Schedule 2.1.9(b): Restrictions on Freehold Interests
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Schedule 2.1.9(c): Lease of Real Property, Use of Real Property,
etc.
Schedule 2.1.9(d): Purchase, Sale, Lease, Sub-Lease Obligations
relating to Real Property
Schedule 2.1.9(e): Transfer Lease
Schedule 2.1.9(g): Easements
Schedule 2.1.9(h): Building Permits
Schedule 2.1.9(i): State of Real Property
Schedule 2.1.9(j): Insurance Policies regarding Real Property
Schedule 2.1.10(a): List of Movable Property
Schedule 2.1.10(b): State of Owned Movable Property
Schedule 2.1.10(c): Other movable property
Schedule 2.1.11: List of Encumbrances on Owned Real Property or
Owned Movable Property
Schedule 2.1.12(a): List of Material Contracts
Schedule 2.1.12(b): List of invalid, non-binding, unenforceable
Material Contracts
Schedule 2.1.12(c) List of the Top Customer Orders and Products
Intention to Suspend or Reduce Level of Business
Schedule 2.1.12(d): Grants and Subsidies
Schedule 2.1.13(a): Certain Inventory
Schedule 2.1.13(b): List of Product Returns, Recalls or Post-Sale
Warnings
Schedule 2.1.14(a): List of Litigation over US$20,000
Schedule 2.1.14(b): Pending or Threatened Litigation; Vicarious
Liability Claims
Schedule 2.1.14(d): Outstanding Judgment; Vicarious Liability
Judgments
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Schedule 2.1.14(e): Governmental Investigation and Proceedings
Schedule 2.1.16(a): Governmental Permits and compliance with laws
Schedule 2.1.16(c): Permits which may be withdrawn or revoked
Schedule 2.1.17(a): Non-compliance with Environmental Laws and Phase
I Survey
Schedule 2.1.17(b): List of Environmental Permits and Environmental
Disclosure
Schedule 2.1.18(a): Transferred Employees, Employee Compensation and
Benefit Plans
Schedule 2.1.18(h): Social Plans
Schedule 2.1.18(i): Binding Offers to Executives
Schedule 2.1.18(l): Strike and Work Stoppage
Schedule 2.1.18(k): Employee Litigation
Schedule 2.1.18(1): Compliance with Health & Safety terms
Schedule 2.1.19(b)(i): Non-compliance with tax filing obligations
Schedule 2.1.19(b)(ii): Tax Assessment Actions or Proceedings
Schedule 2.1.19(g): Taxes Resulting from Transfer of Shares
Schedule 2.1.19(i): Fiscal Value
Schedule 2.2.4: Governmental Entity Consents
Schedule 2.2.7: List of Data Room Documents
Schedule 3.1.1: Business not in the Ordinary Course
Schedule 3.1.5: List of Seller's Head Office Employees
Schedule 3.3.2: Environmental Remedial Actions
Schedule 3.3.5: Governmental Consents
Schedule 3.3.7: Work Force Reduction Plans
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Schedule 3.3.11: Regulatory Filings
Schedule 4.1.3: Required Consents
Schedule 5.2.1(h): Persons authorized to perform banking
transactions; Powers of Attorney
Schedule 7.4(b): Disclosed Indemnifiable Losses
Schedule 8.7: Environmental Indemnification Schedule
Schedule 9.5: Allocation of Expenses
Schedule 9.1 l(j): Seller's Knowledge
[Exhibits and Schedules omitted. Schedules will be furnished supplementally
to the Commission upon request, subject to any request for
confidential treatment.]
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PURCHASE AGREEMENT
by and between
CarnaudMetalbox S.A.
and
Xxxxxx Packaging Company
Dated July 27, 1998
